Goodwill and Intangible Assets
Goodwill
As a result of the acquisition of Dust during the second quarter of fiscal year 2012 the Company recorded $4.9 million in goodwill. The goodwill balance was reduced by $2.7 million during the quarter ended April 1, 2012 to recognize the expected benefit of Dust's net operating loss carryforwards, which can be offset against future Linear taxable income and so were recorded as deferred tax assets. The Company annually evaluates goodwill for impairment as well as whenever events or changes in circumstances might suggest that the carrying value of goodwill may not be recoverable. The Company expects that none of the goodwill will be deductible for tax purposes. The goodwill balance of $2.2 million at June 30, 2013 is attributable to the Dust acquisition in fiscal 2012. There were no changes to the goodwill balance for the fiscal year ended June 30, 2013.
Intangible Assets
As a result of the acquisition of Dust during the second quarter of fiscal year 2012 the Company recorded the following intangible assets: $13.1 million of intellectual property and $4.0 million of customer relationships. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of assets may not be recoverable. Finite-intangible assets are amortized on a straight-line basis over their estimated useful lives that is expected to reflect the estimated pattern of economic use.
Amortization expense related to technology licenses that were not acquired as part of the Dust acquisition was $3.8 million for fiscal year ended June 30, 2013.
The remaining amortization expense, related to finite-lived intangible assets, will be recognized over a weighted-average period of approximately 7.3 years. The useful lives of amortizable intangible assets are as follows:
|
| | |
Assets | | Life |
Intellectual property | | 5-10 years |
Customer relationships | | 10 years |
Technology licenses | | 10 years |
Intangible assets consisted of the following:
|
| | | | | | | | | | | | |
In thousands | | June 30, 2013 |
| | Original Cost | | Accumulated Amortization | | Net |
Intellectual property | | $ | 13,100 |
| | $ | (2,700 | ) | | $ | 10,400 |
|
Customer relationships | | 4,000 |
| | (600 | ) | | 3,400 |
|
Technology licenses | | 56,570 |
| | (56,570 | ) | | — |
|
Total intangible assets | | $ | 73,670 |
| | $ | (59,870 | ) | | $ | 13,800 |
|
|
| | | | | | | | | | | | |
In thousands | | July 1, 2012 |
| | Original Cost | | Accumulated Amortization | | Net |
Intellectual property | | $ | 13,100 |
| | $ | (900 | ) | | $ | 12,200 |
|
Customer relationships | | 4,000 |
| | (200 | ) | | 3,800 |
|
Technology licenses | | 56,570 |
| | (52,799 | ) | | 3,771 |
|
Total intangible assets | | $ | 73,670 |
| | $ | (53,899 | ) | | $ | 19,771 |
|
Amortization expense associated with intangible assets for fiscal year 2013, 2012 and 2011 was $6.0 million, $6.8 million and $5.7 million, respectively. Amortization expense for intangible assets is estimated to be $2.2 million in fiscal year 2014, $2.2 million in fiscal year 2015, $2.2 million in fiscal year 2016, $1.7 million in fiscal year 2017, $1.2 million in fiscal year 2018 and $4.3 million thereafter.
