INTANGIBLE ASSETS AND GOODWILL

6 Months Ended

Nov. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

5.	INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2017 and the net book value of intangible assets as of November 30, 2016 and May 31, 2016 were as follows:

	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net				Weighted Average
(in millions)	May 31, 2016		Additions		November 30, 2016		May 31, 2016			Expense			November 30, 2016			May 31, 2016		November 30, 2016		Useful Life⁽¹⁾
Developed technology	$	3,661	$	1,515	$	5,176	$	(1,876	)	$	(280	)	$	(2,156	)	$	1,785	$	3,020	8 years
Software support agreements and related relationships		2,419		—		2,419		(1,287	)		(63	)		(1,350	)		1,132		1,069	N.A.
SaaS, PaaS and IaaS agreements and related relationships		2,034		2,005		4,039		(704	)		(148	)		(852	)		1,330		3,187	10 years
Customer relationships and contract backlog		1,399		—		1,399		(1,121	)		(36	)		(1,157	)		278		242	N.A.
Hardware support agreements and related relationships		1,010		—		1,010		(797	)		(38	)		(835	)		213		175	N.A.
Trademarks and other		1,043		118		1,161		(838	)		(48	)		(886	)		205		275	9 years
Total intangible assets, net	$	11,566	$	3,638	$	15,204	$	(6,623	)	$	(613	)	$	(7,236	)	$	4,943	$	7,968	9 years

⁽¹⁾	Represents weighted-average useful lives of intangible assets acquired during fiscal 2017.

Total amortization expense related to our intangible assets was $302 million and $613 million, respectively, for the three and six months ended November 30, 2016, respectively, and $423 million and $875 million for the three and six months ended November 30, 2015, respectively. As of November 30, 2016, estimated future amortization expenses related to intangible assets were as follows (in millions):

Remainder of fiscal 2017	$	723
Fiscal 2018		1,331
Fiscal 2019		1,222
Fiscal 2020		1,035
Fiscal 2021		861
Fiscal 2022		758
Thereafter		2,038
Total intangible assets, net	$	7,968

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for the six months ended November 30, 2016 were as follows:

(in millions)	Cloud Software and On-Premise Software			Software License Updates and Product Support		Hardware Support		Consulting		Other, net⁽²⁾		Total Goodwill, net
Balances as of May 31, 2016	$	15,747		$	14,439	$	2,367	$	1,759	$	278	$	34,590
Goodwill from acquisitions		815			—		—		—		6,696		7,511
Goodwill adjustments, net⁽¹⁾		(286	)		—		—		—		268		(18	)
Balances as of November 30, 2016	$	16,276		$	14,439	$	2,367	$	1,759	$	7,242	$	42,083

⁽¹⁾

Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition).

⁽²⁾	Represents goodwill allocated to our other operating segments and, as of November 30, 2016, approximately $6.7 billion of NetSuite goodwill that will be allocated based upon the finalization of purchase accounting valuations.

- 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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