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Goodwill and Intangible Assets
 12 Months Ended
Jun. 24, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill
The Company’s reporting units for goodwill impairment testing are:
•
Wolfspeed
•
LED Products
•
Lighting Products
Based on the revision of the Company's long-range business strategy that was announced February 26, 2018, the Company determined there was a triggering event and performed an impairment test in connection with the preparation of its financial statements for the period ended March 25, 2018. The Company derived the Lighting Products reporting unit's fair value through a combination of the market approach (a guideline transaction method) and the income approach (a discounted cash flow analysis). The Company utilized a discount rate from the capital asset pricing model for the discounted cash flow analysis. The Company recognized a $247.5 million impairment charge in the fiscal third quarter as a result of the impairment test.
As of the first day of the fourth quarter of fiscal 2018, the Company performed a qualitative impairment test for LED Products segment and Wolfspeed segment and concluded that it is more likely than not that the fair value of its reporting units exceed their carrying amounts and a quantitative test was not required.
The Company derived each reporting unit's fair value through a combination of the market approach (a guideline transaction method) and the income approach (a discounted cash flow analysis). The Company utilized a discount rate from the capital asset pricing model for the discounted cash flow analysis. Once the reporting unit fair values were calculated, the Company reconciled the reporting units' relative fair values to the Company's market capitalization as of the testing date.
Goodwill by reporting unit as of June 24, 2018 was as follows (in thousands):
 
Wolfspeed
 
LED Products
 
Lighting Products
 
Consolidated Total
Balance at June 25, 2017

$100,769

 

$180,278

 

$337,781

 

$618,828

Acquisition
248,957

 
—

 
—

 

$248,957

Goodwill impairment charges
—

 
—

 
(247,455
)
 

($247,455
)
Balance at June 24, 2018

$349,726

 

$180,278

 

$90,326

 

$620,330


Intangible Assets
The following table presents the components of intangible assets, net (in thousands):
 
June 24, 2018
 
June 25, 2017
 
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Intangible assets with finite lives:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships

$233,420

 

($92,770
)
 

$140,650

 

$141,420

 

($84,673
)
 

$56,747

Developed technology
226,728

 
(154,467
)
 
72,261

 
181,728

 
(132,747
)
 
48,981

Non-compete agreements
22,475

 
(11,386
)
 
11,089

 
10,475

 
(10,398
)
 
77

Trade names, finite-lived
520

 
(520
)
 
—

 
520

 
(520
)
 
—

Patent and licensing rights
159,297

 
(72,923
)
 
86,374

 
151,985

 
(63,155
)
 
88,830

Total intangible assets with finite lives
642,440

 
(332,066
)
 
310,374

 
486,128

 
(291,493
)
 
194,635

Trade names, indefinite-lived
79,680

 
 
 
79,680

 
79,680

 
 
 
79,680

Total intangible assets

$722,120

 

($332,066
)
 

$390,054

 

$565,808

 

($291,493
)
 

$274,315


Total amortization of finite-lived intangible assets was $43.3 million, $39.8 million and $40.4 million for the years ended June 24, 2018, June 25, 2017 and June 26, 2016, respectively. Beginning in the third quarter of fiscal 2016, the Company started amortizing IPR&D assets acquired in the APEI acquisition that were completed during the respective period.
As of the first day of the fourth quarter of fiscal 2018, the Company performed a step one quantitative impairment assessment on each of the Company’s indefinite-lived trade names.  The Company determined that the fair value of each indefinite-lived trade name was greater than its carrying value and therefore a step two quantitative impairment assessment was not required. 
The Company invested $10.1 million, $12.4 million and $14.4 million for the years ended June 24, 2018, June 25, 2017 and June 26, 2016, respectively, for patent and licensing rights. For the fiscal years ended June 24, 2018, June 25, 2017 and June 26, 2016, the Company recognized $1.0 million, $1.2 million and $6.7 million, respectively, in impairment charges related to its patent portfolio.
Total future amortization expense of finite-lived intangible assets is estimated to be as follows (in thousands): 
Fiscal Year Ending
 
June 30, 2019

$38,281

June 28, 2020
32,826

June 27, 2021
31,379

June 26, 2022
28,038

June 25, 2023
22,809

Thereafter
157,041

Total future amortization expense

$310,374