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INTANGIBLE ASSETS AND GOODWILL
6 Months Ended
Nov. 30, 2012
Intangible Assets and Goodwill [Abstract]  
INTANGIBLE ASSETS AND GOODWILL

5.

INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2013 and the net book value of intangible assets at November 30, 2012 and May 31, 2012 were as follows:

 

Intangible Assets, Gross

Accumulated Amortization

Intangible Assets, Net

Weighted

 

May 31,

 

November 30,

May 31,

 

November 30,

May 31,

November 30,

Average

(Dollars in millions)

2012

Additions

2012

2012

Expense

2012

2012

2012

Useful Life(1)

Software support agreements and related relationships

$

5,294

$

             4

$

          5,298

$

(3,330)

$

(292)

$

(3,622)

$

1,964

 $

1,676

5 years

Hardware systems support agreements and related relationships

 

768

 

8

 

776

 

       (266)

 

(60)

 

(326)

 

502

 

450

5 years

Developed technology

 

6,908

 

77

 

6,985

 

    (4,651)

 

(424)

 

(5,075)

 

2,257

 

1,910

6 years

Core technology

 

2,549

 

7

 

2,556

 

    (1,609)

 

(164)

 

(1,773)

 

940

 

783

5 years

Customer relationships and contract backlog

 

2,260

 

20

 

2,280

 

    (1,287)

 

(180)

 

(1,467)

 

973

 

813

3 years

Cloud software subscriptions and related relationships

 

989

 

58

 

1,047

 

(42)

 

(52)

 

(94)

 

947

 

953

6 years

Trademarks

 

          597

 

3

 

600

 

       (292)

 

(31)

 

(323)

 

305

 

277

7 years

Total intangible assets subject to amortization

 

19,365

 

177

 

19,542

 

(11,477)

 

(1,203)

 

(12,680)

 

7,888

 

6,862

6 years

In-process research and development

 

11

 

 

11

 

          —

 

 

 

11

 

11

N.A.

Total intangible assets, net

$

19,376

$

        177

$

         19,553

$

(11,477)

$

(1,203)

$

(12,680)

$       

7,899

$

6,873

 

 

(1)

Represents weighted average useful lives of intangible assets acquired during fiscal 2013.

 

Total amortization expense related to our intangible assets was $584 million and $1.2 billion for the three and six months ended November 30, 2012, respectively, and $592 million and $1.2 billion for the three and six months ended November 30, 2011, respectively. As of November 30, 2012, estimated future amortization expenses related to intangible assets were as follows (in millions):

 

Remainder of Fiscal 2013

$

    1,140

Fiscal 2014

 

1,972

Fiscal 2015

 

1,522

Fiscal 2016

 

967

Fiscal 2017

 

408

Fiscal 2018

 

284

Thereafter

 

569

Total intangible assets subject to amortization

 

6,862

In-process research and development

 

11

Total intangible assets, net

$

    6,873

 

The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, for our operating segments for the six months ended November 30, 2012 were as follows: 

 

(in millions)

 

New Software Licenses and Cloud Software Subscriptions

 

Software License Updates and Product Support

 

Hardware Systems Support

 

Other(3)

 

Total

Balances as of May 31, 2012

 

$

7,367

 

$

           12,479

 

$

1,193

 

$

           4,080

 

$

25,119

Allocation of goodwill (1)

 

 

2,346

 

 

 

 

 

 

(2,346)

 

Goodwill from acquisitions

 

 

297

 

 

19

 

 

61

 

 

72

 

449

Goodwill adjustments(2)

 

 

(93)

 

 

(23)

 

 

4

 

 

2

 

 

(110)

Balances as of November 30, 2012

 

$

9,917

 

$

           12,475

 

$

1,258

 

$

           1,808

 

$

25,458

 

(1)

Represents the allocation of goodwill to our operating segments upon completion of our intangible asset valuations.

(2)

Pursuant to our business combinations accounting policy, we recorded 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.

(3)

Represents goodwill allocated to our other operating segments and goodwill to be allocated to our operating segments upon completion of our intangible asset valuations, if any.