Goodwill And Acquisition-Related Intangibles, Net

9 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Acquisition-Related Intangibles, Net

(7) GOODWILL AND ACQUISITION-RELATED INTANGIBLES, NET

The changes in the carrying amount of goodwill for the nine months ended December 31, 2017 are as follows (in millions):



	As of March 31, 2017			Activity		Effects of Foreign Currency Translation		As of December 31, 2017
Goodwill	$	2,075		$	167	$	5	$	2,247
Accumulated impairment	(368		)	—		—		(368		)
Total	$	1,707		$	167	$	5	$	1,879

Goodwill represents the excess of the purchase price over the fair value of the underlying acquired net tangible and intangible assets.

During the three months ended December 31, 2017, we estimated, on a preliminary basis, goodwill acquired in our acquisition of Respawn. The Company expects to finalize the valuation of the Respawn acquisition as soon as practicable, but not later than one year from the acquisition date. Once completed, there may be material adjustments to our goodwill amounts.

Acquisition-related intangibles consisted of the following (in millions):



	As of December 31, 2017							As of March 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Acquisition- Related Intangibles, Net		Gross Carrying Amount		Accumulated Amortization			Acquisition- Related Intangibles, Net
Developed and core technology	$	419	$	(412	)	$	7	$	412	$	(412	)	$	—
Trade names and trademarks	153		(103		)	50		106		(98		)	8
Registered user base and other intangibles	5		(5		)	—		5		(5		)	—
Carrier contracts and related	85		(85		)	—		85		(85		)	—
In-process research and development	24		—			24		—		—			—
Total	$	686	$	(605	)	$	81	$	608	$	(600	)	$	8

During the three months ended December 31, 2017, we estimated, on a preliminary basis, the fair value of acquisition-related intangible assets of $78 million in connection with the Respawn acquisition, of which $47 million was allocated to trade names and trademarks, $24 million are allocated to in-process research and development, and $7 million was allocated to developed and core technology. Excluding the in-process research and development assets, the weighted-average useful life of the Respawn acquired intangible assets was approximately 7.1 years.

Amortization of intangibles for the three and nine months ended December 31, 2017 and 2016 are classified in the Condensed Consolidated Statement of Operations as follows (in millions):



	Three Months Ended December 31,				Nine Months Ended December 31,
	2017		2016		2017		2016
Cost of service and other	$	—	$	—	$	—	$	16
Cost of product	1		18		1		27
Operating expenses	1		2		4		5
Total	$	2	$	20	$	5	$	48

Acquisition-related intangible assets are amortized using the straight-line method over the lesser of their estimated useful lives or the agreement terms, ranging from 1 to 14 years. As of December 31, 2017 and March 31, 2017, the weighted-average remaining useful life for acquisition-related intangible assets was approximately 6.7 years and 1.4 years, respectively.

As of December 31, 2017, future amortization of acquisition-related intangibles that will be recorded in the Condensed Consolidated Statement of Operations is estimated as follows (in millions):



Fiscal Year Ending March 31,
2018 (remaining three months)	$	5
2019	13
2020	6
2021	6
2022	6
2023	6
Thereafter	15
Total	$	57

- 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.

+ References + Details