Goodwill and Intangible Assets, Net

12 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Note 9 — Goodwill and Intangible Assets, Net

The following table presents details of the Company’s total goodwill:


As of October 1, 2014	$	1,925,225
Goodwill resulting from acquisitions(1)		123,987
Other		(119	)

As of September 30, 2015		2,049,093
Goodwill resulting from acquisitions(2)		164,506
Other		(1,960	)

As of September 30, 2016	$	2,211,639

(1)

Mainly relates to the acquisition of a substantial majority of the BSS assets of Comverse. In allocating the total purchase price of the acquired assets based on estimated fair values, the Company recorded $117,693 of goodwill, $97,000 of core technology to be amortized over a weighted average of approximately four years and $38,639 of customer relationships to be amortized over a weighted average of approximately five years.

(2)

Mainly relates to the acquisitions of Vindicia, Brite:Bill and Pontis. In allocating the total preliminary purchase price of Vindicia based on estimated fair values, the Company recorded $64,004 of goodwill, $20,091 of core technology to be amortized over approximately three years, $11,623 of customer relationships to be amortized over approximately five years and $1,103 of other intangible assets to be amortized over approximately two years. In allocating the total preliminary purchase price of Brite:Bill based on estimated fair values, the Company recorded $55,430 of goodwill, $20,917 of core technology to be amortized over approximately three years, $9,638 of customer relationships to be amortized over approximately seven years and $773 of other intangible assets to be amortized over approximately two years. In allocating the total preliminary purchase price of Pontis based on estimated fair values, the Company recorded $36,985 of goodwill, $24,361 of core technology to be amortized over approximately four years and $20,993 of customer relationships to be amortized over approximately six years.

The Company performs an annual goodwill impairment test during the fourth quarter of each fiscal year, or more frequently if impairment indicators are present. The Company operates in one operating segment, and this segment comprises its only reporting unit. In calculating the fair value of the reporting unit, the Company uses its market capitalization and a discounted cash flow methodology. There was no impairment of goodwill in fiscal years 2016, 2015 or 2014.

The following table presents details regarding the Company’s total definite-lived purchased intangible assets:


	Estimated Useful Life (in years)		Gross		Accumulated Amortization			Net
September 30, 2016
Core technology		2-8	$	604,673	$	(451,169	)	$	153,504
Customer relationships		1-15		491,639		(370,658	)		120,981
Intellectual property rights and purchased computer software		—		51,996		(51,996	)		—
Other		2-10		33,542		(26,500	)		7,042

Total			$	1,181,850	$	(900,323	)	$	281,527

September 30, 2015
Core technology		2-8	$	531,669	$	(398,898	)	$	132,771
Customer relationships		3-15		439,435		(328,747	)		110,688
Intellectual property rights and purchased computer software		—		51,996		(51,996	)		—
Other		3-10		31,666		(22,608	)		9,058

Total			$	1,054,766	$	(802,249	)	$	252,517

The following table presents the amortization expense of the Company’s definite-lived purchased intangible assets, included in each financial statement caption reported in the consolidated statements of income:


	Year Ended September 30,
	2016		2015		2014
Cost of revenue	$	1,609	$	1,609	$	1,609
Amortization of definite-lived purchased intangible assets		96,465		65,017		55,799

Total	$	98,074	$	66,626	$	57,408

The estimated future amortization expense of definite-lived purchased intangible assets as of September 30, 2016 is as follows:


	Amount
Fiscal year:
2017	$	109,520
2018		78,502
2019		52,593
2020		21,748
2021		9,280
Thereafter		9,884

Total	$	281,527

- 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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