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Intangible Assets
The following table summarizes the gross carrying amounts and accumulated amortization of the
Company’s intangible assets.
Gross
Accum
Amort Net Gross
Accum
Amort Net
December 31, 2010 December 31, 2009
Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . $ 41.8 $ (4.0) $ 37.8 $ 6.4 $(0.9) $ 5.5
Non-compete agreements . . . . . . . . . . . . . . . . 1.7 (0.4) 1.3 — — —
Technology and patents . . . . . . . . . . . . . . . . . . 99.8 (17.8) 82.0 20.8 (6.5) 14.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143.3 (22.2) 121.1 27.2 (7.4) 19.8
Intangible assets not subject to amortization:
In-process technology . . . . . . . . . . . . . . . . . . . 1.9 — 1.9 — — —
Trade names and trademarks . . . . . . . . . . . . . 32.3 — 32.3 — — —
Total ................................ 34.2 — 34.2 — — —
Total identifiable intangible assets . . . . . . . . . . $177.5 $(22.2) $155.3 $27.2 $(7.4) $19.8
Intangible assets acquired in a transaction accounted for as a business combination are initially
recognized at fair value. Intangible assets acquired in a transaction accounted for as an asset
acquisition are initially recognized at cost. Of the $177.5 million gross carrying amount, $156.7 million
were acquired in transactions accounted for as business combinations and $20.8 million were acquired in
transactions accounted for as asset acquisitions. The year-to-date increases in the intangible assets
above were driven by business combinations discussed in Note 4.
Amortization expense related to intangible assets was $14.9 million and $3.2 million for 2010 and 2009,
respectively. Amortization of Perceptive Software intangible assets was approximately 78% of 2010
amortization expense. The following table summarizes the estimated future amortization expense for
intangible assets that are currently being amortized.
Fiscal year:
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22.5
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.0
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121.1
In-process technology refers to research and development efforts that were in process on the date the
Company acquired Perceptive Software. Under the accounting guidance for intangible assets, in-process
research and development acquired in a business combination is considered an indefinite lived asset until
completion or abandonment of the associated research and development efforts. The asset is not
amortized while considered indefinite lived but must be tested for impairment. Upon completion of the
project, the asset will begin amortization over its useful life.
The Perceptive Software trade name and trademarks valued at $32.3 million are considered to have an
indefinite life taking into account their substantial recognition among customers, the intellectual property
rights are secure and can be maintained with relatively little cost and effort, and there are no current plans
to change or abandon usage of them. Costs to renew these registrations are insignificant and will be
expensed as incurred.
101