Goodwill and Intangible Assets (Notes)

3 Months Ended

May 03, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 7 — GOODWILL AND INTANGIBLE ASSETS

Goodwill

During the first quarter of Fiscal 2014, Dell completed the reorganization of its reportable segments from the customer-centric segments it maintained through Fiscal 2013 to the following four product and services reportable segments: End-User Computing, the Enterprise Solutions Group, the Dell Software Group, and Dell Services. See Note 14 of the Notes to the Consolidated Financial Statements for additional information on Dell's reportable segments.

As a direct result of this segment change, in the first quarter of Fiscal 2014, the Company's goodwill reporting units also changed. As a result of this change, goodwill was re-allocated to the new reporting units on a relative fair value basis as of February 1, 2013. Dell did not incur any impairment charges to goodwill as a result of this change in reporting units.

The following table presents goodwill allocated to Dell's current reportable segments as of May 3, 2013, and February 1, 2013, and changes in the carrying amount of goodwill for the three months ended May 3, 2013:



	End User Computing			Enterprise Solutions Group			Dell Software Group			Dell Services			Total
	(in millions)
Balance at February 1, 2013	$	1,499		$	2,244		$	890		$	4,671		$	9,304
Goodwill acquired during the period	—			—			—			—			—
Adjustments	(3		)	(3		)	(1		)	(8		)	(15		)
Balance at May 3, 2013	$	1,496		$	2,241		$	889		$	4,663		$	9,289

Goodwill is tested for impairment on an annual basis during the second fiscal quarter, or sooner if an indicator of impairment occurs. No other events have transpired since the second quarter of Fiscal 2013 that would indicate a potential impairment of goodwill as of May 3, 2013. In addition, Dell did not have any accumulated goodwill impairment charges as of May 3, 2013.

Intangible Assets

Dell's intangible assets associated with completed acquisitions at May 3, 2013, and February 1, 2013, were as follows:



	May 3, 2013							February 1, 2013
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
	(in millions)
Customer relationships	$	2,180	$	(790	)	$	1,390	$	2,184	$	(721	)	$	1,463
Technology	2,502		(932		)	1,570		2,513		(827		)	1,686
Non-compete agreements	75		(57		)	18		75		(54		)	21
Trade names	159		(65		)	94		159		(59		)	100
Amortizable intangible assets	4,916		(1,844		)	3,072		4,931		(1,661		)	3,270
In-process research and development	78		—			78		78		—			78
Indefinite lived intangible assets	26		—			26		26		—			26
Total intangible assets	$	5,020	$	(1,844	)	$	3,176	$	5,035	$	(1,661	)	$	3,374

Amortization expense related to finite-lived intangible assets was approximately $196 million and $110 million during the three months ended May 3, 2013, and May 4, 2012, respectively. There were no material impairment charges related to intangible assets for the three months ended May 3, 2013, and May 4, 2012.

Estimated future annual pre-tax amortization expense of finite-lived intangible assets as of May 3, 2013, over the next five fiscal years and thereafter is as follows:



Fiscal Years	(in millions)
2014 (remaining nine months)	$	574
2015	680
2016	612
2017	514
2018	370
Thereafter	322
Total	$	3,072

- 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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