SanDisk 2010 Annual Report Download - page 208

Notes To Consolidated Financial Statements
Note 5: Intangible Assets and Goodwill
Intangible Assets.Intangible asset balances are presented below (in thousands):
January 2, 2011
Gross
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Core technology ............................................ $ 79,800 $ (57,546) $ 22,254
Developed product technology ................................. 11,400 (8,075) 3,325
Acquisition-related intangible assets ........................ 91,200 (65,621) 25,579
Technology licenses and patents ............................... 31,340 (19,515) 11,825
Total ............................................. $ 122,540 $ (85,136) $ 37,404
January 3, 2010
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Core technology ............................................ $ 79,800 $ (44,974) $ 34,826
Developed product technology ................................. 11,400 (6,446) 4,954
Acquisition-related intangible assets ........................ 91,200 (51,420) 39,780
Technology licenses and patents ............................... 31,340 (13,044) 18,296
Total ............................................. $ 122,540 $ (64,464) $ 58,076
Amortization expense of intangible assets totaled $20.7 million, $20.2 million and $78.8 million in fiscal
years 2010, 2009 and 2008, respectively.
In fiscal year 2008, the Company recorded a $175.8 million impairment on certain of its core technology
and customer relationships acquisition-related intangible assets. The impairment was based upon forecasted
discounted cash flows which considered factors including a reduced business outlook primarily due to NAND
flash memory industry pricing conditions.
The annual expected amortization expense of intangible assets as of January 2, 2011 is presented below (in
thousands):
Estimated Amortization Expense
Fiscal periods
Acquisition-related
Intangible Assets
Technology Licenses
and Patents
2011 ....................................................... $ 20,463 $ 4,619
2012 ....................................................... 5,116 3,971
2013 ....................................................... — 2,670
2014 ....................................................... — 565
Total ................................................... $ 25,579 $ 11,825
Goodwill. Goodwill is not amortized, but instead is reviewed and tested for impairment at least annually and
whenever events or circumstances occur which indicate that goodwill might be impaired. Impairment of goodwill
is tested at the Company’s reporting unit level by comparing the carrying amount, including goodwill, to the fair
value. In performing the analysis, the Company uses the best information available, including reasonable and
supportable assumptions and projections. If the carrying amount of the Company exceeds its implied fair value,
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