Goodwill and Purchased and Other Intangibles

6 Months Ended

May 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND PURCHASED AND OTHER INTANGIBLES

Goodwill as of May 31, 2013 and November 30, 2012 was $4.225 billion and $4.133 billion, respectively. The increase was primarily due to our acquisition of Behance. During the second quarter of fiscal 2013, we completed our annual goodwill impairment test associated with our three reporting units—Digital Media, Digital Marketing and Print and Publishing—and determined there was no impairment of goodwill.

Purchased and other intangible assets subject to amortization as of May 31, 2013 and November 30, 2012 were as follows (in thousands):



	2013							2012
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Purchased technology	$	358,512	$	(181,269	)	$	177,243	$	366,574	$	(161,538	)	$	205,036
Customer contracts and relationships	$	324,161	$	(91,564	)	$	232,597	$	318,027	$	(74,214	)	$	243,813
Trademarks	66,475		(23,443		)	43,032		53,293		(19,171		)	34,122
Acquired rights to use technology	152,817		(66,316		)	86,501		104,402		(56,782		)	47,620
Localization	7,226		(2,550		)	4,676		8,586		(4,654		)	3,932
Other intangibles	17,644		(10,428		)	7,216		18,742		(8,229		)	10,513
Total other intangible assets	$	568,323	$	(194,301	)	$	374,022	$	503,050	$	(163,050	)	$	340,000
Purchased and other intangible assets, net	$	926,835	$	(375,570	)	$	551,265	$	869,624	$	(324,588	)	$	545,036

In the first quarter of fiscal 2013, we acquired rights to use certain technology for approximately $51.8 million. Of this cost, an estimated $25.3 million was related to future licensing rights and has been capitalized and will be amortized on a straight-line basis over the estimated useful lives ranging from five to ten years. We estimated that the remaining cost of approximately $26.5 million was related to historical use of licensing rights and was expensed as cost of product revenue.

In the first quarter of fiscal 2013, certain purchased intangibles associated with our Omniture acquisition became fully amortized and were removed from the balance sheet. Excluding the expense associated with historical use of the acquired rights to use the technology discussed above, amortization expense related to purchased and other intangible assets was $37.5 million and $74.9 million for the three and six months ended May 31, 2013, respectively. Comparatively, amortization expense was $39.5 million and $72.6 million for the three and six months ended June 1, 2012, respectively. Of these amounts, $26.6 million and $53.0 million were included in cost of sales for the three and six months ended May 31, 2013, respectively, and $27.0 million and $48.6 million were included in cost of sales for the three and six months ended June 1, 2012, respectively.

As of May 31, 2013, we expect amortization expense in future periods to be as follows (in thousands):



Fiscal Year	Purchased Technology		Other Intangible Assets
Remainder of 2013	$	35,578	$	39,362
2014	66,544		67,134
2015	51,819		61,229
2016	13,136		55,605
2017	6,736		47,170
Thereafter	3,430		103,522
Total expected amortization expense	$	177,243	$	374,022

- 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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