Goodwill and Intangible Assets

6 Months Ended

Apr. 30, 2013

Note 6. Goodwill and Intangible Assets

Goodwill as of April 30, 2013 consisted of the following:


	(in thousands)
Balance at October 31, 2012	$	1,976,987
Adjustment(1)		3,025

Balance at April 30, 2013	$	1,980,012

(1)	Adjustments relate to changes in estimates for acquisitions that closed in the prior fiscal year for which the purchase price allocation was still preliminary and effects of foreign currency fluctuations.

Intangible assets as of April 30, 2013 consisted of the following:


	Gross Assets		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	373,938	$	194,017	$	179,921
Customer relationships		176,878		59,041		117,837
Contract rights intangible		140,269		61,837		78,432
Covenants not to compete		2,530		2,420		110
Trademarks and trade names		10,877		4,761		6,116
In-process research and development (IPR&D)(1)		10,975		—		10,975
Capitalized software development costs		16,369		12,541		3,828

Total	$	731,836	$	334,617	$	397,219

(1)	IPR&D is reclassified to core/developed technology upon completion or is written off upon abandonment.

Intangible assets as of October 31, 2012 consisted of the following:


	Gross Assets		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	367,321	$	159,691	$	207,630
Customer relationships		179,657		48,368		131,289
Contract rights intangible		142,641		43,843		98,798
Covenants not to compete		2,530		2,354		176
Trademarks and trade names		10,900		3,793		7,107
In-process research and development (IPR&D)(1)		17,696		—		17,696
Capitalized software development costs		14,581		10,955		3,626

Total	$	735,326	$	269,004	$	466,322

(1)	IPR&D is reclassified to core/developed technology upon completion or is written off upon abandonment.

Amortization expense related to intangible assets consisted of the following:


	Three Months Ended April 30,				Six Months Ended April 30,
	2013		2012		2013		2012
	(in thousands)
Core/developed technology	$	17,222	$	16,520	$	34,356	$	27,896
Customer relationships		5,363		4,539		10,736		7,739
Contract rights intangible		9,171		7,175		18,549		9,182
Covenants not to compete		33		70		66		141
Trademarks and trade names		484		300		970		555
Capitalized software development costs(1)		799		746		1,585		1,488

Total	$	33,072	$	29,350	$	66,262	$	47,001

(1)	Amortization of capitalized software development costs is included in cost of license revenue in the unaudited condensed consolidated statements of operations.

The following table presents the estimated future amortization of intangible assets:


Fiscal Year	(in thousands)
Remainder of fiscal 2013	$	63,398
2014		108,230
2015		90,798
2016		57,018
2017		24,949
2018 and thereafter		41,851
IPR&D(1)		10,975

Total	$	397,219

(1)	IPR&D projects are estimated to be completed within two years as of April 30, 2013. Amortization will begin upon project completion or the asset will be written off upon abandonment.

- 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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