INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Aug. 31, 2013

Intangible Assets and Goodwill [Abstract]

INTANGIBLE ASSETS AND GOODWILL

5.    INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2014 and the net book value of intangible assets at August 31, 2013 and May 31, 2013 were as follows:

		Intangible Assets, Gross						Accumulated Amortization						Intangible Assets, Net				Weighted
		May 31,				August 31,		May 31,				August 31,		May 31,		August 31,		Average
(Dollars in millions)		2013		Additions		2013		2013		Expense		2013		2013		2013		Useful Life(1)
Software support agreements and related relationships		$	5,298	$	—	$	5,298	$	(3,912)	$	(145)	$	(4,057)	$	1,386	$	1,241	N.A.
Hardware systems support agreements and related relationships			817		152		969		(387)		(35)		(422)		430		547	9 years
Developed technology			7,466		571		8,037		(5,477)		(190)		(5,667)		1,989		2,370	8 years
Core technology			2,579		—		2,579		(1,938)		(83)		(2,021)		641		558	N.A.
Customer relationships and contract backlog			2,435		45		2,480		(1,637)		(92)		(1,729)		798		751	6 years
Cloud software subscriptions and related relationships			1,227		—		1,227		(155)		(32)		(187)		1,072		1,040	N.A.
Trademarks			635		29		664		(356)		(18)		(374)		279		290	11 years
Total intangible assets subject to amortization			20,457		797		21,254		(13,862)		(595)		(14,457)		6,595		6,797	8 years
In-process research and development			45		72		117		—		—		—		45		117	N.A.
Total intangible assets, net		$	20,502	$	869	$	21,371	$	(13,862)	$	(595)	$	(14,457)	$	6,640	$	6,914
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(1)	Represents weighted average useful lives of intangible assets acquired during fiscal 2014.

Total amortization expense related to our intangible assets was $595 million and $619 million for the three months ended August 31, 2013 and 2012, respectively. As of August 31, 2013, estimated future amortization expenses related to intangible assets were as follows (dollars in millions):

Remainder of Fiscal 2014	$	1,637
Fiscal 2015		1,763
Fiscal 2016		1,193
Fiscal 2017		622
Fiscal 2018		496
Fiscal 2019		411
Thereafter		675
Total intangible assets subject to amortization		6,797
In-process research and development		117
Total intangible assets, net	$	6,914

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, 2013 were as follows:

(Dollars 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, 2013	$	10,533	$	12,474	$	1,259	$	3,077	$	27,343
Allocation of goodwill(1)		875		—		380		(1,255)		—
Goodwill from acquisitions		—		—		—		615		615
Goodwill adjustments(2)		3		—		2		2		7
Balances as of August 31, 2013	$	11,411	$	12,474	$	1,641	$	2,439	$	27,965

__________

(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 approximately $615 million of goodwill for certain of our acquisitions that will be allocated based upon the finalization of valuations.