TERADATA CORP /DE/ | 2013 | FY | 3


Note 3 Goodwill and Acquired Intangible Assets

The following table identifies the activity relating to goodwill by operating segment:

 

In millions    Balance
December 31,
2012
     Additions      Currency
Translation
Adjustments
    Balance
December 31,
2013
 

Goodwill

          

Americas

   $ 616       $ 12       ($ 2   $ 626   

International

     316         4         0        320   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total goodwill

   $ 932       $ 16       ($ 2   $ 946   
  

 

 

    

 

 

    

 

 

   

 

 

 

The change in goodwill for the twelve months ended December 31, 2013 was primarily due to immaterial acquisitions that were completed during the period. In the fourth quarter of 2013, the Company performed its annual impairment test of goodwill and determined that no impairment to the carrying value of goodwill was necessary, as the fair value of each reporting unit exceeded their respective carrying amounts, including goodwill. Teradata reviewed four reporting units in its 2013 goodwill impairment assessment, as both geographic operating segments consisted of separate reporting units for data warehouse and application software activities.

 

Acquired intangible assets were specifically identified when acquired, and are deemed to have finite lives. The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows:

 

            December 31, 2013     December 31, 2012  
In millions    Amortization
Life (in Years)
     Gross Carrying
Amount
     Accumulated
Amortization
and Currency
Translation
Adjustments
    Gross Carrying
Amount
     Accumulated
Amortization
and Currency
Translation
Adjustments
 

Acquired intangible assets

             

Intellectual property/developed technology

     1 to 7       $ 153       $ (70   $ 153       $ (48

Customer relationships

     3 to 10         77         (23     77         (14

Trademarks/trade names

     1 to 5         15         (7     15         (2

In-process research and development

     5         5         (1     5         0   

Non-compete agreements

     1 to 3         1         (1     1         (1
     

 

 

    

 

 

   

 

 

    

 

 

 

Total

     1 to 10       $ 251       $ (102   $ 251       $ (65
     

 

 

    

 

 

   

 

 

    

 

 

 

The gross carrying amount of acquired intangible assets was reduced by certain intangible assets previously acquired that became fully amortized and were removed from the balance sheet. This decrease was offset by the addition of newly acquired intangible assets associated with immaterial acquisitions in the current year.

The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is:

 

     Actual      For the year ended (estimated)  
In millions    2013      2014      2015      2016      2017      2018  

Amortization expense

   $ 44       $ 45       $ 37       $ 27       $ 18       $ 7   

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