Adaptec 2001 Annual Report Download - page 59

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59
agreements. Based on 2001 purchases, the Company is not entitled to a refund from these
suppliers in 2002. If the Company does not receive back the balance of its deposits during the
term of the agreements, then the outstanding deposits will be refunded to the Company at the
termination of the agreements.
Property and equipment, net. Property and equipment are stated at cost, net of write-downs for
impairment, and depreciated using the straight-line method over the estimated useful lives of
the assets, ranging from two to five years, or the applicable lease term, w hichever is shorter.
The components of property and equipment are as follows:
Goodwill and other intangible assets. Goodw ill, developed technology and other intangible assets
are carried at cost less accumulated amortization, which has been computed on a straight-line
basis over the economic lives, ranging from three to seven years, of the respective assets.
The components of goodwill and other intangible assets, net of write-downs for impairment,
that arose through acquisitions are as follows:
In 2001, the Company recorded a total impairment charge of $269.8 million related to goodwill
(see Note 3) and $925,000 related to developed technology and other intangible assets.
Impairment of long-lived assets. The Company periodically reviews its long-lived assets and
certain intangible assets for impairment whenever events or changes in circumstances indicate
that the carrying value of such assets may not be recoverable. To determine recoverability, the
Company compares the carrying value of the assets to the estimated future undiscounted cash
flows. Measurement of an impairment loss for long-lived assets or certain identifiable
intangible assets held for use is based on the fair value of the asset. Long-lived assets and
December 31,
(in thousands) 2001 2000
Goodwill 93,119$ 362,946$
Developed technology 9,311 9,830
Other 1,294 1,700
103,724 374,476
Accumulated amortization (94,204) (48,326)
9,520$ 326,150$
(in thousands) 2001 2000
Machinery and equipment 172,735$ 170,757$
Land 14,507 14,090
Leasehold improvements 13,176 13,794
Furniture and fixtures 13,971 13,612
Building 701 701
Construction-in-progress 1,027 2,256
216,117 215,210
Less accumulated depreciation and amortization (126,402) (87,676)
Total 89,715$ 127,534$
December 31,