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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for fiscal
2015 and 2014 were as follows:
111
(in millions)
New Software
Licenses and
Cloud
Software
Subscriptions
Software
License
Updates and
Product
Support
Hardware
Systems
Support
Consulting
Other, net
Total Goodwill,
net
Balances as of May 31, 2013
$
10,533
$
12,474
$
1,259
$
1,584
$
1,493
$
27,343
Allocation of goodwill
875
—
380
13
(1,268
)
—
Goodwill from acquisitions
1,721
4
436
134
—
2,295
Goodwill adjustments, net
10
(6
)
7
2
1
14
Balances as of May 31, 2014
13,139
12,472
2,082
1,733
226
29,652
Goodwill from acquisitions
2,086
1,991
269
27
240
4,613
Goodwill adjustments, net
(8
)
(2
)
19
(1
)
—
8
Goodwill impairment
—
—
—
—
(
186
)
(186
)
Balances as of May 31, 2015
$
15,217
$
14,461
$
2,370
$
1,759
$
280
$
34,087
Represents the allocation of goodwill to our operating segments upon completion of our intangible asset valuations.
Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period
(up to one year from the date of an acquisition). Goodwill adjustments were not significant to our previously reported operating results or financial position.
During fiscal 2015, we recorded a $186 million goodwill impairment loss to our hardware systems products reporting unit. We considered several approaches to determine the fair value
of our hardware systems reporting unit as of March 1, 2015 and concluded the most appropriate to be the income approach. The fair value of our hardware systems products reporting unit
pursuant to the income approach was impacted by lower forecasted operating results for this reporting unit, primarily caused by lower forecasted revenues and our continued investment
in hardware products research and development activities. We compared the implied fair value of goodwill in our hardware systems products reporting unit to its carrying value, which
resulted in the $186 million goodwill impairment loss and represented the aggregate amount of goodwill for our hardware systems products reporting unit. The aggregate hardware
systems reporting unit goodwill that was impaired in fiscal 2015 resulted from our acquisitions of Pillar Data Systems, Inc., Xsigo Systems, Inc., GreenBytes, Inc. and MICROS Systems,
Inc. Such impairment loss was recorded to acquisition related and other expenses in our fiscal 2015 consolidated statement of operations. We did not recognize any goodwill impairment
losses in fiscal 2014 or 2013.
Represents goodwill allocated to our other operating segments. The balance as of May 31, 2013 included unallocated goodwill for certain of our acquisitions that was subsequently
allocated based upon the finalization of valuations during fiscal 2014.
(4)
(1)
(2)
(2)
(3)
(1)
(2)
(3)
(4)