Plantronics 2010 Annual Report Download - page 78

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70
9. INTANGIBLES
The following tables present the carrying value of acquired intangible assets with remaining net book values as of the periods:
Gross
As of March 31, 2009 (in thousands)
Carrying
Amount
Accumulated
Amortization Net Amount Useful Life
tion 500 (56) 444 3 years
$ 6,500 $ (4,064) $ 2,436 3-10 years
Patents 720 (660) 60 7 years
Customer relationships 1,705 (765) 940 3-8 years
OEM relationships 27 (14) 13 7 years
Total $ 8,952 $ (5,503) $ 3,449
Technology $ 9,460 $ (5,728) $ 3,732 3-10 years
Patents 1,420 (1,257) 163 7 years
Customer relationships 4,405 (787) 3,618 3-8 years
Trade name - inMo
Trade name - Altec Lansing 18,600 - 18,600 Indefinite
OEM relationships 27 (9) 18 7 years
Total $ 34,412 $ (7,837) $ 26,575
Gross
As of March 31, 2010 (in thousands)
Carrying
Amount
Accumulated
Amortization Net Amount Useful Life
Technology
The consolidated aggregate amortization expense in both continuing and discontinued operations relating to intangible assets for fiscal
2008, 2009 and 2010 was $8.1 million, $6.2 million and $1.8 million, respectively.
During the third quarter of fiscal 2009, the Company considered the effect of the current economic environment and determined that
sufficient indicators existed requiring it to perform an interim impairment review of the Company’s two reporting segments, ACG and
AEG. The indicators primarily consisted of (1) a decline in revenue and operating margins during the current quarter and the
projected future operating results, (2) deteriorating industry and economic trends, and (3) the decline in the Plantronics’ stock price for
a sustained period.
The Company tests its indefinite lived assets for impairment by comparing the fair value of the intangible asset with its carrying value.
If the fair value is less than its carrying value, an impairment charge is recognized for the difference. The Company used the income
approach to test the Altec Lansing trademark and trade name for impairments in the third quarter of fiscal 2009 with the following
assumptions: the current economic downturn would continue through fiscal 2010, followed by a recovery period in fiscal 2011 and
2012 and then growth in line with industry estimated revenues for royalties and each of the major AEG product lines (Docking Audio
and PC Audio). A 5% growth factor was used to calculate the terminal value, consistent with the rate used in the prior year. The
discount rate was adjusted from 14% to 15% reflecting the current volatility of the stock prices of public companies within the
consumer electronics industry. This resulted in a partial impairment of the Altec Lansing trademark and trade name; therefore, the
Company recognized a non-cash impairment charge of $40.5 million in the third quarter of fiscal 2009 which is included in
discontinued operations on the Consolidated statement of operations. The Company recognized a deferred tax benefit of $15.4 million
associated with this impairment charge.