AGILENT TECHNOLOGIES, INC. - 10-K filing on 2017-12-21

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Oct. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

9. GOODWILL AND OTHER INTANGIBLE ASSETS

The goodwill balances at October 31, 2017, 2016 and 2015 and the movements in 2017 and 2016 for each of our reportable segments are shown in the table below:



	Life Sciences and Applied Markets		Diagnostics and Genomics			Agilent CrossLab		Total
	(in millions)
Goodwill as of October 31, 2015	$	650	$	1,234		$	482	$	2,366
Foreign currency translation impact	3		(11		)	3		(5		)
Goodwill arising from acquisitions	137		—			19		156
Goodwill as of October 31, 2016	$	790	$	1,223		$	504	$	2,517
Foreign currency translation impact	2		10			—		12
Goodwill arising from acquisitions	26		52			—		78
Goodwill as of October 31, 2017	$	818	$	1,285		$	504	$	2,607

As of September 30, 2017, we assessed goodwill impairment for our reporting units and no impairment was indicated.

The component parts of other intangible assets at October 31, 2017 and 2016 are shown in the table below:



	Other Intangible Assets ⁽¹⁾
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
As of October 31, 2016:
Purchased technology	$	823	$	572	$	251
Backlog	1		1		—
Trademark/Tradename	149		61		88
Customer relationships	263		211		52
Total amortizable intangible assets	$	1,236	$	845	$	391
In-Process R&D	17		—		17
Total	$	1,253	$	845	$	408
As of October 31, 2017:
Purchased technology	$	855	$	646	$	209
Trademark/Tradename	149		73		76
Customer relationships	151		112		39
Total amortizable intangible assets	$	1,155	$	831	$	324
In-Process R&D	24		—		24
Total	$	1,179	$	831	$	348

(1) We also purchase technology and licenses from third parties, separately from business combinations. As of October 31, 2017 and 2016, the net balance of these intangibles not included in this table was $13 million and $8 million, respectively.

In 2017, we acquired Cobalt Light Systems (“Cobalt”), an Oxfordshire, U.K. based provider of differentiated Raman spectroscopic instruments for the pharmaceutical industry, applied markets and public safety, for approximately $53 million in cash and Multiplicom NV (“Multiplicom”), a leading European diagnostics company with state-of-the-art genetic testing technology and products, for approximately $72 million in cash. We have not included the pro forma impact of these acquisitions since they are not material to our current or prior period results. During 2017, we recorded additions to goodwill of $78 million and to other intangible assets of $52 million related to these acquisitions. During 2017, other intangible assets increased $5 million, due to the impact of foreign exchange translation.

During 2017, we also wrote-off the gross carrying amount of $132 million and the related accumulated amortization of fully amortized intangible assets which were no longer being used.

In 2016, we acquired Seahorse Bioscience, a leader in providing instruments and assay kits for measuring cell metabolism and bioenergetics, for $242 million and iLab Solutions LLC ("iLab"), a cloud-based solutions provider for core laboratory management for $26 million. In 2016, we recorded additions to goodwill of $156 million and to intangible assets of $121 million related to these acquisitions. During the year other intangible assets decreased $2 million, due to the impact of foreign exchange translation.

There were no impairments of other intangible assets recorded during 2017. In addition, we recorded impairments of other intangibles related to the cancellation of in-process research and development projects of $4 million and $3 million during 2016 and 2015, respectively.

Amortization expense of intangible assets was $120 million in 2017, $154 million in 2016, and $158 million in 2015.

Future amortization expense related to existing finite-lived purchased intangible assets associated with business combinations for the next five fiscal years and thereafter is estimated below:



Estimated future amortization expense:
	(in millions)
2018	$	94
2019	$	69
2020	$	57
2021	$	43
2022	$	32
Thereafter	$	42