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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2016
Total amortization expense related to our intangible assets was $1.6 billion, $2.1 billion and $2.3 billion in fiscal 2016, 2015 and 2014, respectively. As of May 31,
2016, estimated future amortization expenses related to intangible assets were as follows (in millions):
Fiscal 2017 $ 1,026
Fiscal 2018 878
Fiscal 2019 770
Fiscal 2020 621
Fiscal 2021 476
Thereafter 1,172
Total intangible assets, net $ 4,943
The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for fiscal 2016 and 2015 were
as follows:
(in millions)
Cloud
Software and
On-Premise
Software
Software
License
Updates and
Product
Support
Hardware
Support Consulting Other, net Total Goodwill, net
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
Goodwill from acquisitions 518 — — — — 518
Goodwill adjustments, net 12 (22) (3) — (2) (15)
Balances as of May 31, 2016 $ 15,747 $ 14,439 $ 2,367 $ 1,759 $ 278 $ 34,590
Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified,
provided that any such change is within the measurement period (up to one year from the date of the acquisition).
During fiscal 2015, we recorded a $186 million goodwill impairment loss to our hardware products reporting unit. We considered several approaches to determine the fair value of our hardware products
reporting unit as of March 1, 2015 and concluded the most appropriate to be the income approach. The fair value of our hardware 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 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 products reporting unit. The aggregate hardware products 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 2016 or fiscal 2014.
Represents goodwill allocated to our other operating segments.
110
(3)
(1)
(2)
(1)
(1)
(2)
(3)