Goodwill and Purchased and Other Intangibles

6 Months Ended

Jun. 02, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND PURCHASED AND OTHER INTANGIBLES

Goodwill as of June 2, 2017 and December 2, 2016 was $5.79 billion and $5.41 billion, respectively. The increase was due to our acquisition of TubeMogul, offset in part by foreign currency translation adjustments during the six months ended June 2, 2017. During the second quarter of fiscal 2017, we completed our annual goodwill impairment test associated with our reporting units and determined there was no impairment of goodwill.

Purchased and other intangible assets subject to amortization as of June 2, 2017 and December 2, 2016 were as follows (in thousands):



	2017							2016
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Purchased technology	$	235,998	$	(105,679	)	$	130,319	$	149,253	$	(82,091	)	$	67,162
Customer contracts and relationships	$	573,651	$	(315,707	)	$	257,944	$	541,366	$	(274,380	)	$	266,986
Trademarks	76,255		(51,655		)	24,600		76,355		(46,846		)	29,509
Acquired rights to use technology	72,167		(50,545		)	21,622		87,403		(60,929		)	26,474
Localization	736		(531		)	205		631		(177		)	454
Other intangibles	38,694		(19,550		)	19,144		38,693		(14,873		)	23,820
Total other intangible assets	$	761,503	$	(437,988	)	$	323,515	$	744,448	$	(397,205	)	$	347,243
Purchased and other intangible assets, net	$	997,501	$	(543,667	)	$	453,834	$	893,701	$	(479,296	)	$	414,405

Amortization expense related to purchased and other intangible assets was $39.1 million and $77.2 million for the three and six months ended June 2, 2017, respectively. Comparatively, amortization expense related to purchased and other intangible assets was $37.8 million and $75.4 million for the three and six months ended June 3, 2016, respectively. Of these amounts $19.5 million and $38.2 million were included in cost of sales for the three and six months ended June 2, 2017, respectively, and $18.5 million and $37.4 million for the three and six months ended June 3, 2016, respectively.

As of June 2, 2017, we expect amortization expense in future periods to be as follows (in thousands):



Fiscal Year	Purchased Technology		Other Intangible Assets
Remainder of 2017	$	21,851	$	53,883
2018	37,696		96,712
2019	32,911		69,058
2020	30,701		39,337
2021	6,346		17,003
Thereafter	814		47,522
Total expected amortization expense	$	130,319	$	323,515

- 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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