Quantum Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Mar. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5: INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Acquired intangible assets are amortized over their estimated useful lives, which generally range from one to eight years. In estimating the useful lives of intangible assets, we considered the following factors:

The cash flow projections used to estimate the useful lives of the intangible assets showed a trend of growth that was expected to continue for an extended period of time;
Our tape automation products, disk systems and software, in particular, have long development cycles; these products have experienced long product life cycles; and
Our ability to leverage core technology into data protection and big data and archive solutions and, therefore, to extend the lives of these technologies.

Acquired IPR&D is amortized over its estimated useful life once technological feasibility is reached. If IPR&D is determined to not have technological feasibility or is abandoned, we write off the IPR&D in that period.

Following is the weighted average amortization period for our amortizable intangible assets:

		Amortization (Years)
Purchased technology		6.2
Trademarks		6.0
Customer lists		7.1
All intangible assets		6.5

Intangible amortization within our Consolidated Statements of Operations for the years ended March 31, 2012, 2011 and 2010 follows (in thousands):

	For the year ended March 31,
	2012		2011		2010
Purchased technology	$	7,583	$	14,862	$	22,469
Trademarks		700		810		810
Non-compete agreements		32		100		100
Customer lists		12,428		12,609		12,765
	$	20,743	$	28,381	$	36,144

The following tables provide a summary of the carrying value of amortizable intangible assets (in thousands):

	As of March 31,
	2012							2011
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Purchased technology	$	182,922	$	(176,893	)	$	6,029	$	188,167	$	(176,350	)	$	11,817
Trademarks		3,900		(3,656	)		244		27,260		(26,316	)		944
Non-compete agreements		—		—			—		500		(468	)		32
Customer lists		106,419		(86,929	)		19,490		106,419		(74,501	)		31,918
	$	293,241	$	(267,478	)	$	25,763	$	322,346	$	(277,635	)	$	44,711

The total expected future amortization related to intangible assets is provided in the table below (in thousands):

	Amortization
Fiscal 2013	$	13,283
Fiscal 2014		8,849
Fiscal 2015		3,541
Fiscal 2016		90
Total as of March 31, 2012	$	25,763

We did not have impairment indicators for our long-lived assets in fiscal 2012, fiscal 2011 and fiscal 2010. In fiscal 2012, we wrote off $30.9 million of fully amortized intangible assets related to fiscal 2002 and 2003 acquisitions.

Goodwill

The following provides a summary of the carrying value of goodwill (in thousands):

	Goodwill		Accumulated Impairment Losses			Net Amount
Balance March 31, 2010	$	385,770	$	(339,000	)	$	46,770
Fiscal 2011 activity		—		—			—
Balance March 31, 2011		385,770		(339,000	)		46,770
Pancetera acquisition		8,843		—			8,843
Balance March 31, 2012	$	394,613	$	(339,000	)	$	55,613

Our annual impairment evaluation for goodwill in the fourth quarter of fiscal 2012 and fiscal 2011 did not indicate any impairment of our goodwill for fiscal 2012 or fiscal 2011.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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