GOODWILL AND PURCHASED AND OTHER INTANGIBLES
During fiscal 2013, 2012 and 2011, we modified our segments due to changes in how we operate our business. See Note 18 for further information regarding our segment changes. Prior year information in the tables below has been reclassified to reflect these changes.
Goodwill by reportable segment and activity for the years ended November 29, 2013 and November 30, 2012 was as follows (in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2011 | | Acquisitions | | Other(1) | | 2012 | | Acquisitions | | Other(1) | | 2013 |
Digital Media | | $ | 1,958,941 |
| | $ | — |
| | $ | (611 | ) | | $ | 1,958,330 |
| | $ | 91,355 |
| | $ | 41 |
| | $ | 2,049,726 |
|
Digital Marketing | | 1,631,725 |
| | 291,422 |
| | (6,679 | ) | | 1,916,468 |
| | 526,739 |
| | 20,621 |
| | 2,463,828 |
|
Print and Publishing | | 258,551 |
| | — |
| | (90 | ) | | 258,461 |
| | — |
| | (34 | ) | | 258,427 |
|
Goodwill | | $ | 3,849,217 |
| | $ | 291,422 |
| | $ | (7,380 | ) | | $ | 4,133,259 |
| | $ | 618,094 |
| | $ | 20,628 |
| | $ | 4,771,981 |
|
_________________________________________
| |
(1) | Amounts primarily consist of foreign currency translation adjustments. |
Purchased and other intangible assets, net by reportable segment as of November 29, 2013 and November 30, 2012 were as follows (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Digital Media | | $ | 170,213 |
| | $ | 148,215 |
|
Digital Marketing | | 433,245 |
| | 396,786 |
|
Print and Publishing | | 1,796 |
| | 35 |
|
Purchased and other intangible assets, net | | $ | 605,254 |
| | $ | 545,036 |
|
Purchased and other intangible assets subject to amortization as of November 29, 2013 and November 30, 2012 were as follows (in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 |
| Cost | | Accumulated Amortization | | Net | | Cost | | Accumulated Amortization | | Net |
Purchased technology | $ | 423,237 |
| | $ | (220,414 | ) | | $ | 202,823 |
| | $ | 366,574 |
| | $ | (161,538 | ) | | $ | 205,036 |
|
Customer contracts and relationships | $ | 389,800 |
| | $ | (111,416 | ) | | $ | 278,384 |
| | $ | 318,027 |
| | $ | (74,214 | ) | | $ | 243,813 |
|
Trademarks | 67,546 |
| | (27,933 | ) | | 39,613 |
| | 53,293 |
| | (19,171 | ) | | 34,122 |
|
Acquired rights to use technology | 155,322 |
| | (76,740 | ) | | 78,582 |
| | 104,402 |
| | (56,782 | ) | | 47,620 |
|
Localization | 3,404 |
| | (2,172 | ) | | 1,232 |
| | 8,586 |
| | (4,654 | ) | | 3,932 |
|
Other intangibles | 16,447 |
| | (11,827 | ) | | 4,620 |
| | 18,742 |
| | (8,229 | ) | | 10,513 |
|
Total other intangible assets | $ | 632,519 |
| | $ | (230,088 | ) | | $ | 402,431 |
| | $ | 503,050 |
| | $ | (163,050 | ) | | $ | 340,000 |
|
Purchased and other intangible assets, net | $ | 1,055,756 |
| | $ | (450,502 | ) | | $ | 605,254 |
| | $ | 869,624 |
| | $ | (324,588 | ) | | $ | 545,036 |
|
In the first quarter of fiscal 2013, we acquired rights to use certain technology for approximately $51.8 million. Of this cost, an estimated $25.3 million was related to future licensing rights and has been capitalized and will be amortized on a straight-line basis over the estimated useful lives ranging from five to ten years. We estimated that the remaining cost of approximately $26.5 million was related to historical use of licensing rights and was expensed as cost of product revenue.
Purchased intangibles associated with certain of our prior year acquisitions became fully amortized and were removed from the balance sheet in the first quarter of fiscal 2013. Excluding the expense associated with historical use of the acquired rights to use the technology discussed in the paragraph above, amortization expense related to purchased and other intangible assets was $156.9 million, $146.2 million and $131.5 million for fiscal 2013, 2012 and 2011, respectively. Of these amounts, for fiscal 2013, 2012 and 2011, $111.0 million, $98.3 million and $88.3 million, respectively, were included in cost of sales.
Purchased and other intangible assets are amortized over their estimated useful lives of 1 to 14 years. As of November 29, 2013, we expect amortization expense in future periods to be as follows (in thousands):
|
| | | | | | | | |
Fiscal Year | | Purchased Technology | | Other Intangible Assets |
2014 | $ | 74,811 |
| | $ | 75,239 |
|
2015 | 61,273 |
| | 68,041 |
|
2016 | 22,808 |
| | 62,061 |
|
2017 | 15,350 |
| | 52,771 |
|
2018 | 8,961 |
| | 41,779 |
|
Thereafter | 19,620 |
| | 102,540 |
|
Total expected amortization expense | $ | 202,823 |
| | $ | 402,431 |
|
