v2.4.0.6

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.

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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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 350

-SubTopic 30

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16373-109275



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 350

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-URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16265-109275



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-Name Accounting Standards Codification

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-URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16323-109275



Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 142

-Paragraph 42, 43, 44, 45, 46, 47

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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-Section 50

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-URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267



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-Publisher FASB

-Name Accounting Standards Codification

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