Oracle 2009 Annual Report Download - page 201

INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL
(USD $)
12 Months Ended
05/31/2010
INTANGIBLE ASSETS AND GOODWILL 7. INTANGIBLE ASSETS AND GOODWILL
The changes in intangible assets for fiscal 2010 and the net book value of intangible assets at May 31, 2010 and
2009 were as follows:
(Dollars in
millions)
Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted
Average
Useful
Life
May 31,
2009
Additions May 31,
2010
May 31,
2009
Expense May 31,
2010
May 31,
2009
May 31,
2010
Software
support
agreements
and related
relationships
$ 5,012 $ 66 $ 5,078$ (1,601) $ (574) $ (2,175)$ 3,411 $ 2,903 9 years
Hardware
systems
support
agreements
and related
relationships
— 759 759 — (29) (29) — 730 7 years
Developed
technology
3,844 1,494 5,338 (1,925) (811) (2,736) 1,919 2,602 5 years
Core
technology
1,502 609 2,111 (687) (277) (964) 815 1,147 5 years
Customer
relationships
1,284 481 1,765 (320) (234) (554) 964 1,211 7 years
Trademarks 273 231 504 (113) (48) (161) 160 343 7 years
Total
intangible
assets subject
to
amortization
11,915 3,640 15,555 (4,646) (1,973) (6,619) 7,269 8,936
In-process
research and
development
— 385 385 — — — — 385 N.A.
Total $ 11,915 $ 4,025 $ 15,940$ (4,646) $ (1,973) $ (6,619)$ 7,269 $ 9,321
Total amortization expense related to our intangible assets was $2.0 billion, $1.7 billion and $1.2 billion in fiscal
2010, 2009 and 2008, respectively. As of May 31, 2010, estimated future amortization expense related to our
intangible assets subject to amortization was $2.3 billion in fiscal 2011, $2.0 billion in fiscal 2012, $1.6 billion in
fiscal 2013, $1.4 billion in fiscal 2014, $1.0 billion in fiscal 2015 and $638 million thereafter.
The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, by operating
segment for fiscal 2010 and 2009 were as follows:
(in millions) New
Software
Licenses
Software
License
Updates and
Product
Support
Hardware
Systems
Support
Services Other(1) Total
Balances as of May 31, 2008 $ 4,058 $ 8,028 $ — $ 1,550 $ 4,355 $ 17,991
Allocation of goodwill(1) 1,258 2,907 — 190 (4,355) —
Goodwill from acquisitions 373 283 — 56 — 712
Goodwill adjustments(2) 27 116 — (4) — 139
Balances as of May 31, 2009 5,716 11,334 — 1,792 — 18,842
Goodwill from acquisitions 217 490 891 2 — 1,600
Goodwill adjustments for
acquisitions consummated
since the beginning of fiscal
2010(2)
7 17 32 — — 56
Goodwill adjustments for
acquisitions consummated
prior to fiscal 2010(2)
55 (39) — (89) — (73)
Balances as of May 31, 2010 $ 5,995 $ 11,802 $ 923 $ 1,705 $ — $ 20,425
(1) Represents the goodwill allocation associated with certain acquisitions that was allocated to our software
business operating segments and services business upon the completion of certain valuations.
(2) Pursuant to our business combinations accounting policy, we record goodwill adjustments for the effect on
goodwill of changes to net assets acquired during the measurement or purchase price allocation period (either
of which can be up to one year from the date of an acquisition). Goodwill adjustments for our services
business includes $82 million that primarily relates to the reclassification of goodwill associated with certain
acquired product offerings to our new software licenses operating segment. Goodwill adjustments for
acquisitions consummated since the beginning of fiscal 2010 were generally balance sheet related with
insignificant effects to our previously reported operating results.
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠