Goodwill and Intangible Assets
Changes in the carrying amount of goodwill are summarized as follows:
|
| | | | | | | | | | | |
(in millions) | Government Systems | | Commercial Systems | | Total |
Balance at September 30, 2011 | $ | 514 |
| | $ | 266 |
| | $ | 780 |
|
Foreign currency translation adjustments | — |
| | — |
| | — |
|
Balance at September 30, 2012 | 514 |
| | 266 |
| | 780 |
|
Reclassification of KOSI goodwill to assets held-for-sale | (3 | ) | | — |
| | (3 | ) |
Foreign currency translation adjustments | 2 |
| | — |
| | 2 |
|
Balance at September 30, 2013 | $ | 513 |
| | $ | 266 |
| | $ | 779 |
|
The Company performs an annual impairment test of goodwill and indefinite-lived intangible assets during the second quarter of each fiscal year, or at any time there is an indication of potential impairment. The Company's 2013 and 2012 impairment tests resulted in no impairment.
Intangible assets are summarized as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2013 | | September 30, 2012 |
(in millions) | Gross | | Accum Amort | | Net | | Gross | | Accum Amort | | Net |
Intangible assets with finite lives: | | | | | | | | | | | |
Developed technology and patents | $ | 222 |
| | $ | (175 | ) | | $ | 47 |
| | $ | 221 |
| | $ | (159 | ) | | $ | 62 |
|
Customer relationships: | |
| | | | | | | | | | |
Acquired | 89 |
| | (60 | ) | | 29 |
| | 91 |
| | (57 | ) | | 34 |
|
Up-front sales incentives | 241 |
| | (35 | ) | | 206 |
| | 212 |
| | (26 | ) | | 186 |
|
License agreements | 13 |
| | (8 | ) | | 5 |
| | 13 |
| | (8 | ) | | 5 |
|
Trademarks and tradenames | 15 |
| | (14 | ) | | 1 |
| | 15 |
| | (13 | ) | | 2 |
|
Intangible assets with indefinite lives: | |
| | | | | | | | | | |
Trademarks and tradenames | — |
| | — |
| | — |
| | 2 |
| | — |
| | 2 |
|
Intangible assets | $ | 580 |
| | $ | (292 | ) | | $ | 288 |
| | $ | 554 |
| | $ | (263 | ) | | $ | 291 |
|
As of September 30, 2012, intangible assets with indefinite lives included $2 million associated with trademarks and tradenames of the KOSI business. As of September 30, 2013, the $2 million carrying value of this intangible asset is classified as held-for-sale within Other current assets, as described in Note 4.
As described in Note 23, Restructuring and Asset Impairment Charges, Net, the Company's Commercial Systems business impaired a license agreement in 2012 that resulted in a $4 million reduction to Intangible assets and a related charge that was recorded within Cost of Sales.
Amortization expense for intangible assets for 2013, 2012 and 2011 was $31 million, $39 million and $36 million, respectively. As of September 30, 2013, the weighted average amortization period remaining for up-front sales incentives was approximately 10 years.
|
| | | | | | | | | | | | | | | | | | | | | | | |
(in millions) | 2014 |
| | 2015 |
| | 2016 |
| | 2017 |
| | 2018 |
| | Thereafter |
Anticipated amortization expense for up-front sales incentives | $ | 11 |
| | $ | 17 |
| | $ | 21 |
| | $ | 23 |
| | $ | 25 |
| | $ | 109 |
|
Anticipated amortization expense for all other intangible assets | 19 |
| | 16 |
| | 12 |
| | 12 |
| | 5 |
| | 18 |
|
Total | $ | 30 |
| | $ | 33 |
| | $ | 33 |
| | $ | 35 |
| | $ | 30 |
| | $ | 127 |
|
