INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Aug. 31, 2011

Notes to Condensed Consolidated Financial Statements

5.	INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2012 and the net book value of intangible assets at August 31, 2011 and May 31, 2011 were as follows:


	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net
(Dollars in millions)	May 31, 2011		Additions		August 31, 2011		May 31, 2011			Expense			August 31, 2011			May 31, 2011		August 31, 2011		Weighted Average Useful Life
Software support agreements and related relationships	$	5,177	$	28	$	5,205	$	(2,745	)	$	(144	)	$	(2,889	)	$	2,432	$	2,316		9 years
Hardware systems support agreements and related relationships		760		8		768		(147	)		(29	)		(176	)		613		592		7 years
Developed technology		6,034		68		6,102		(3,728	)		(234	)		(3,962	)		2,306		2,140		5 years
Core technology		2,295		253		2,548		(1,272	)		(80	)		(1,352	)		1,023		1,196		6 years
Customer relationships		2,063		28		2,091		(926	)		(89	)		(1,015	)		1,137		1,076		7 years
Trademarks		528		9		537		(229	)		(16	)		(245	)		299		292		7 years
Total intangible assets subject to amortization		16,857		394		17,251		(9,047	)		(592	)		(9,639	)		7,810		7,612
In-process research and development		50		—		50		—			—			—			50		50		N.A.
Total intangible assets, net	$	16,907	$	394	$	17,301	$	(9,047	)	$	(592	)	$	(9,639	)	$	7,860	$	7,662

Total amortization expense related to our intangible assets was $592 million and $603 million for the three months ended August 31, 2011 and 2010, respectively. As of August 31, 2011, estimated future amortization expenses related to intangible assets were as follows (in millions):


Remainder of Fiscal 2012	$	1,737
Fiscal 2013		1,967
Fiscal 2014		1,619
Fiscal 2015		1,220
Fiscal 2016		717
Fiscal 2017		176
Thereafter		176
Total intangible assets subject to amortization		7,612
In-process research and development		50
Total intangible assets, net	$	7,662

The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, for our operating segments for the three months ended August 31, 2011 were as follows:


(in millions)		New Software Licenses		Software License Updates and Product Support		Hardware Systems Support		Other(2)		Total
Balances as of May 31, 2011		$	6,785	$	12,052	$	1,009	$	1,707	$	21,553
Goodwill from acquisitions			56		46		183		31		316
Goodwill adjustments(1)			(31)		(6)		—		(1)		(38)
Balances as of August 31, 2011		$	6,810	$	12,092	$	1,192	$	1,737	$	21,831

(1)	Pursuant to our business combinations accounting policy, we record goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period (up to one year from the date of an acquisition). Goodwill adjustments were not significant to our previously reported operating results or financial position.
(2)	Represents goodwill allocated to our other operating segments.

- 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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