Goodwill And Intangible Assets

Note 4. Goodwill and Intangible Assets

Goodwill consists of the following:


	(in thousands)
Balance at October 31, 2009	$	932,691
Additions		329,496
Other adjustments(1)		3,656

Balance at October 31, 2010	$	1,265,843
Additions		30,717
Other adjustments(2)		(7,274	)

Balance at October 31, 2011	$	1,289,286

(1)	Adjustments relate to reduction of merger costs and income tax adjustments for acquisitions.

(2)	Adjustments relate to changes in estimates for acquisitions that closed in the prior fiscal year for which the purchase price allocation was still preliminary and achievement of certain milestones for an acquisition that closed prior to fiscal 2010.

Intangible assets as of October 31, 2011 consisted of the following:


	Gross Assets(1)		Accumulated Amortization(1)		Net Assets
	(in thousands)
Core/developed technology	$	226,928	$	104,391	$	122,537
Customer relationships		80,238		31,250		48,988
Contract rights intangible		33,300		19,801		13,499
Covenants not to compete		2,530		2,105		425
Trademarks and trade names		6,400		2,561		3,839
In-process research and development (IPR&D)(2)		3,425		—		3,425
Capitalized software development costs		11,245		7,927		3,318

Total	$	364,066	$	168,035	$	196,031

(1)	Intangible assets as of October 31, 2011 decreased as compared to October 31, 2010 primarily due to the retirement of fully amortized assets.

(2)	IPR&D is reclassified to core/developed technology upon completion.

Intangible assets as of October 31, 2010 consisted of the following:


	Gross Assets		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	263,592	$	118,587	$	145,005
Customer relationships		113,020		55,040		57,980
Contract rights intangible		30,400		9,522		20,878
Covenants not to compete		2,200		1,884		316
Trademarks and trade names		6,200		1,541		4,659
In-process research and development (IPR&D)		17,525		—		17,525
Capitalized software development costs		8,873		5,580		3,293

Total	$	441,810	$	192,154	$	249,656

Total amortization expense related to intangible assets is set forth in the table below:


	Year Ended October 31,
		2011		2010		2009
		(in thousands)
Core/developed technology		$	44,869	$	33,232	$	29,644
Customer relationships			13,030		9,325		11,109
Contract rights intangible			10,279		3,861		3,399
Covenants not to compete			222		637		741
Trademarks and trade names			1,020		630		581
Capitalized software development costs(1)			2,964		2,964		2,948

Total		$	72,384	$	50,649	$	48,422

(1)	Amortization of capitalized software development costs is included in cost of license revenue in the consolidated statements of operations.

The following table presents the estimated future amortization of intangible assets:


Fiscal Year	(in thousands)
2012	$	66,266
2013		53,228
2014		33,127
2015		18,663
2016		13,314
2017 and thereafter		8,008
IPR&D (to be amortized upon project completion or written off upon abandonment)(1)		3,425

Total	$	196,031

(1)	IPR&D projects are estimated to be completed within two years as of October 31, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

- 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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