Goodwill and Other Intangible Assets

3 Months Ended

Jun. 28, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended June 28, 2013:



(Amounts in millions)	GBS			GIS			NPS			Total
Goodwill, gross *	$	1,319		$	2,149		$	793		$	4,261
Accumulated impairment losses *	(671		)	(2,074		)	—			(2,745		)
Balance as of March 29, 2013, net	648			75			793			1,516

Deductions	(12		)	—			(43		)	(55		)
Foreign currency translation	(17		)	—			—			(17		)

Goodwill, gross	1,290			2,149			750			4,189
Accumulated impairment losses	(671		)	(2,074		)	—			(2,745		)
Balance as of June 28, 2013, net	$	619		$	75		$	750		$	1,444

* Both the gross goodwill and accumulated impairment losses amounts have been adjusted by $19 million, to reflect the fully impaired goodwill associated with the fiscal 2013 divested enterprise systems integration business.

As described in Note 13, at the beginning of fiscal 2014, the Company changed its operating model, which resulted in changes to the Company's reportable segments. Concurrent with the change in the reportable segments, the Company reassigned goodwill to its reporting units, using a relative fair value allocation approach. As a result of this reassignment, $50 million of goodwill was reallocated from the former MSS segment to the new GBS segment. The reallocated goodwill is reflected in the goodwill balances as of March 29, 2013, noted above.

The deductions in goodwill relate to classification of a portion of NPS' goodwill to assets held for sale in connection with the sale of ATD and the divestiture of GBS' flood insurance BPO business (see Notes 3 and 18). The foreign currency translation amount reflects the impact of currency movements on non-U.S. dollar-denominated goodwill balances.

The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Due to the segment reorganization described above, the Company performed the first step of the goodwill impairment test for all reporting units as of the beginning of the first quarter of fiscal 2014. Based on the results of the first step of the impairment test, the Company concluded that the fair value of each reporting unit exceeded its carrying value and therefore the second step of the goodwill impairment test was not required.

Due to the disposal of the flood insurance BPO business during May 2013, the Company performed an assessment to determine whether the remaining goodwill of GBS' Industry Software and Solutions (IS&S) reporting unit, which contained the divested business, might be impaired. The Company determined that no impairment existed. In addition, due to the classification of the ATD as discontinued operations during May 2013, CSC performed the first step of the goodwill impairment test for the remaining business of the NPS reporting unit. The fair value of the reporting unit exceeded its carrying value, and the second step of the goodwill impairment test was not required.

At the end of the first quarter of fiscal 2014, the Company assessed whether there were events or change in circumstances that would more likely than not reduce the fair value of any of its reporting units below their carrying amounts. There were no such indicators for any of the reporting units with goodwill, and therefore, it was unnecessary to perform the first step of the two-step impairment testing process as of June 28, 2013. The fair values of all of our reporting units were substantially in excess of their carrying values based on the step one performed in conjunction with our first quarter fiscal 2014 goodwill reallocation and impairment testing. None of our reporting units were at risk of failing step one at that time.

Other Intangible Assets

A summary of amortizable intangible assets is as follows:



	As of June 28, 2013
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Outsourcing contract costs	$	1,483	$	996	$	487
Software	2,187		1,576		611
Customer and other intangible assets	501		288		213
Total intangible assets	$	4,171	$	2,860	$	1,311



	As of March 29, 2013
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Outsourcing contract costs	$	1,473	$	968	$	505
Software	2,134		1,523		611
Customer and other intangible assets	512		281		231
Total intangible assets	$	4,119	$	2,772	$	1,347

Amortization related to intangible assets was $98 million and $98 million for the quarters ended June 28, 2013, and June 29, 2012, respectively, including reductions of revenue for amortization of outsourcing contract cost premiums of $9 million and $10 million and for amortization of contract related intangible assets of $3 million and $3 million in each of the respective quarters. Amortization expense related to capitalized software was $45 million and $44 million for the quarters ended June 28, 2013, and June 29, 2012, respectively.

Estimated amortization expense related to intangible assets as of June 28, 2013, for the remainder of fiscal 2014 is $282 million, and for each of the fiscal years 2015, 2016, 2017 and 2018, is as follows: $328 million, $239 million, $175 million and $128 million, respectively.

- 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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