Goodwill and Intangible Assets
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Jan. 31, 2012
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Goodwill and Intangible Assets |
7. Goodwill and Intangible Assets
At January 31, 2012 and 2011, we had goodwill of $63.6 million and $64.7 million, respectively. The change in the carrying amount of goodwill for the years ended January 31, 2012 and 2011 are as follows:
The Goodwill balance excludes $594,000 of goodwill assigned based on a relative fair value calculation to the divestiture of the broadcast servers and storage business unit that is included in non-current assets related to discontinued operations in the Consolidated Balance Sheet.
As of August 1, 2011, we reviewed the recoverability of goodwill associated with our previously reported three segments, Software, Servers and Storage, and Media Services, and determined that there was no goodwill impairment. Following the divestiture of a portion of the broadcast servers and storage product lines, the Software and VOD server product line was organized in the one business reporting segment. Reportable segments were determined based upon the nature of the products offered to customers, the market characteristics of each operating segment and the Company’s management structure. During the fourth quarter of fiscal 2012, we evaluated the impairment analysis and updated for the change in its estimates from August 1, 2011 to January 31, 2012. While no impairment charges resulted from the analyses performed during the fourth quarter of fiscal 2012, impairment charges may occur in the future due to changes in projected revenue growth rates, projected operating margins or estimated discount rates, among other factors.
At January 31, 2012 and 2011, we have recorded net intangible assets of $ 23.8 million and $30.3 million respectively, consisting of patents, customer contracts, non-compete agreements, completed technology, in-process research and development and trademarks.
Intangible assets, net, consisted of the following:
Estimated useful lives and the amortization basis for the intangible assets are as follows:
Amortization expense for intangible assets was $6.1 million, $5.4 million and $3.5 million for fiscal 2012, 2011 and 2010, respectively. In fiscal 2012, 2011 and 2010, $2.2 million, $2.0 million, and $638,000, respectively, were charged to cost of product revenues. In fiscal 2012, 2011 and 2010, $3.9 million, $3.4 million and $2.8 million, respectively, were charged to operating expense. The total amortization expense for each of the next five fiscal years is as follows:
Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, potential impairment, accelerated amortization, or other events. |