Goodwill and Intangible Assets

Note 4. Goodwill and Intangible Assets

Goodwill consists of the following:


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

Balance at October 31, 2011	$	1,289,286
Additions		687,195
Other adjustments(1)		506

Balance at October 31, 2012	$	1,976,987

(1)	Adjustments primarily 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, 2012 consisted of the following:


	Gross Assets(1)		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	367,321	$	159,691	$	207,630
Customer relationships		179,657		48,368		131,289
Contract rights intangible		142,641		43,843		98,798
Covenants not to compete		2,530		2,354		176
Trademarks and trade names		10,900		3,793		7,107
In-process research and development (IPR&D)(2)		17,696		—		17,696
Capitalized software development costs		14,581		10,955		3,626

Total	$	735,326	$	269,004	$	466,322

(1)	Included $370.7 million of intangible assets acquired during fiscal 2012.

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

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


	Gross Assets		Accumulated Amortization		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)(1)		3,425		—		3,425
Capitalized software development costs		11,245		7,927		3,318

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

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

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


	Year Ended October 31,
	2012		2011		2010
	(in thousands)
Core/developed technology	$	57,124	$	44,869	$	33,232
Customer relationships		17,141		13,030		9,325
Contract rights intangible		24,113		10,279		3,861
Covenants not to compete		248		222		637
Trademarks and trade names		1,233		1,020		630
Capitalized software development costs(1)		2,994		2,964		2,964

Total	$	102,853	$	72,384	$	50,649

(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)
2013	$	128,596
2014		106,745
2015		89,863
2016		56,170
2017		24,489
2018 and thereafter		42,763
IPR&D (to be amortized upon project completion or written off upon abandonment)(1)		17,696

Total	$	466,322

(1)	IPR&D projects are estimated to be completed within two years as of October 31, 2012. Amortization begins upon project completion or the asset is 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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