Goodwill and Purchased Intangible Assets
Goodwill
The following table presents the goodwill activity allocated to the Company's reportable segments (in millions):
|
| | | | | | | | | | | |
| PSD | | SSD | | Total |
December 31, 2011 | $ | 1,795.6 |
| | $ | 2,132.5 |
| | $ | 3,928.1 |
|
Additions due to business combinations | 70.7 |
| | 59.6 |
| | 130.3 |
|
Adjustments to goodwill | — |
| | (0.6 | ) | | (0.6 | ) |
December 31, 2012 | 1,866.3 |
| | 2,191.5 |
| | 4,057.8 |
|
Reclassifications | (249.6 | ) | | 249.6 |
| | — |
|
Foreign currency translation adjustment | (0.1 | ) | | — |
| | (0.1 | ) |
December 31, 2013 | $ | 1,616.6 |
| | $ | 2,441.1 |
| | $ | 4,057.7 |
|
The additions to goodwill in 2012 were based on the purchase price allocations of the acquisitions completed during 2012. The adjustments to goodwill during 2012 were related to adjustments to net tangible assets assumed from certain businesses acquired in 2010 and 2011. The Company also recorded adjustments to net tangible assets assumed related to the acquisitions completed in 2012.
During 2013, goodwill of $179.0 million associated with security products previously reported under the PSD segment was reclassified to the SSD segment in connection with the Company's product realignment of all security products. In addition, the Company realigned its Contrail products from the PSD segment to the SSD segment resulting in a reclassification of goodwill of $70.6 million. Goodwill was reclassified based on the relative fair value allocation of the reporting units affected.
There were no impairments to goodwill during the years ended December 31, 2013, 2012, and 2011.
Purchased Intangible Assets
The Company’s purchased intangible assets were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| Gross | | Accumulated Amortization | |
Impairments and Other Charges | | Net |
As of December 31, 2013 | | | | | | | |
Intangible assets with finite lives: | | | | | | | |
Technologies and patents | $ | 581.4 |
| | $ | (453.4 | ) | | $ | (30.5 | ) | | $ | 97.5 |
|
Customer contracts, support agreements, and related relationships | 74.3 |
| | (62.7 | ) | | (2.2 | ) | | 9.4 |
|
Total purchased intangible assets | $ | 655.7 |
| | $ | (516.1 | ) | | $ | (32.7 | ) | | $ | 106.9 |
|
| | | | | | | |
As of December 31, 2012 | | | | | | | |
Intangible assets with finite lives: | | | | | | | |
Technologies and patents | $ | 554.1 |
| | $ | (425.0 | ) | | $ | (30.5 | ) | | $ | 98.6 |
|
Customer contracts, support agreements, and related relationships | 74.3 |
| | (59.2 | ) | | (2.2 | ) | | 12.9 |
|
Total intangible assets with finite lives | 628.4 |
| | (484.2 | ) | | (32.7 | ) | | 111.5 |
|
IPR&D with indefinite lives | 17.4 |
| | — |
| | — |
| | 17.4 |
|
Total purchased intangible assets | $ | 645.8 |
| | $ | (484.2 | ) | | $ | (32.7 | ) | | $ | 128.9 |
|
During 2013, research and development efforts were completed and IPR&D accounted for as an indefinite-lived asset was reclassified as an amortizable finite-lived asset.
The following table presents the amortization of intangible assets included in the Consolidated Statements of Operations (in millions):
|
| | | | | | | | | | | |
| Years Ended December 31, |
| 2013 | | 2012 | | 2011 |
Cost of revenues | $ | 27.3 |
| | $ | 27.6 |
| | $ | 21.7 |
|
Operating expenses: | | | | | |
Sales and marketing | 3.4 |
| | 3.5 |
| | 4.1 |
|
General and administrative | 1.2 |
| | 1.2 |
| | 1.3 |
|
Total operating expenses | 4.6 |
| | 4.7 |
| | 5.4 |
|
Total | $ | 31.9 |
| | $ | 32.3 |
| | $ | 27.1 |
|
In connection with the restructuring plan in 2012 discussed in Note 9, Restructuring and Other Charges, the Company assessed the value and remaining useful life of certain intangible assets and determined intangible assets of $5.4 million were impaired and such assets were written-down to their fair value of zero. These assets were measured at fair value primarily using discounted cash flow projections. Additionally, the Company determined other intangible assets of $10.7 million were no longer utilized. As a result, the Company recorded $16.1 million in charges related to these items during the year ended December 31, 2012, which were included in cost of revenues in the Consolidated Statements of Operations. There were no impairment charges to purchased intangible assets during the years ended December 31, 2013 and 2011.
As of December 31, 2013, the estimated future amortization expense of purchased intangible assets with finite lives is as follows (in millions):
|
| | | |
Years Ending December 31, | Amount |
2014 | $ | 36.2 |
|
2015 | 32.6 |
|
2016 | 18.5 |
|
2017 | 10.5 |
|
2018 | 3.7 |
|
Thereafter | 5.4 |
|
Total | $ | 106.9 |
|
