Goodwill and Intangible Assets

9 Months Ended

Jun. 29, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

We have two operating and reportable segments: (1) Software Products and (2) Professional Services. We assess goodwill for impairment at the reporting unit level. Our reporting units are determined based on the components of our operating segments that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by segment management. Our reporting units are the same as our operating segments.

As of June 29, 2019, goodwill and acquired intangible assets in the aggregate attributable to our Software Products segment was $1,382.2 million and attributable to our Professional Services segment was $46.1 million. As of September 30, 2018, goodwill and acquired intangible assets in the aggregate attributable to our Software Products segment was $1,352.4 million and attributable to our Professional Services segment was $30.2 million. Acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

We completed our annual goodwill impairment review as of June 29, 2019 based on a qualitative assessment. Our qualitative assessment included company specific (financial performance and long-range plans), industry, and macroeconomic factors, and consideration of the fair value of each reporting unit relative to its carrying value at the last valuation date. Based on our qualitative assessment, we believe it is more likely than not that the fair values of our reporting units exceed their carrying values and no further impairment testing is required.

Goodwill and acquired intangible assets consisted of the following:



	June 29, 2019						September 30, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in thousands)
Goodwill (not amortized)					$	1,245,084					$	1,182,457
Intangible assets with finite lives (amortized) (1):
Purchased software	$	379,459	$	273,371	$	106,088	$	362,679	$	254,059	$	108,620
Capitalized software	22,877		22,877		—		22,877		22,877		—
Customer lists and relationships	359,361		286,059		73,302		357,586		270,272		87,314
Trademarks and trade names	19,012		15,222		3,790		19,054		14,786		4,268
Other	3,972		3,972		—		4,003		4,003		—
	$	784,681	$	601,501	$	183,180	$	766,199	$	565,997	$	200,202
Total goodwill and acquired intangible assets					$	1,428,264					$	1,382,659

(1) The weighted-average useful lives of purchased software, customer lists and relationships, and trademarks and trade names with a remaining net book value are 9 years, 10 years, and 11 years, respectively.

Goodwill

Changes in goodwill presented by reportable segments were as follows:



	Software Products			Professional Services			Total
	(in thousands)
Balance, October 1, 2018	$	1,152,720		$	29,737		$	1,182,457
Frustum acquisition	53,673			—			53,673
Other acquisitions	—			12,645			12,645
Foreign currency translation adjustment	(3,598		)	(93		)	(3,691		)
Balance, June 29, 2019	$	1,202,795		$	42,289		$	1,245,084

Amortization of Intangible Assets

The aggregate amortization expense for intangible assets with finite lives was classified in our Consolidated Statements of Operations as follows:



	Three months ended				Nine months ended
	June 29, 2019		June 30, 2018		June 29, 2019		June 30, 2018
	(in thousands)
Amortization of acquired intangible assets	$	5,920	$	7,850	$	17,786	$	23,566
Cost of license revenue	6,873		6,798		20,432		20,029
Total amortization expense	$	12,793	$	14,648	$	38,218	$	43,595