Amount of transfer in goodwill

[Table of Contents](#ica158fb683c247fdb170955b492f9216_7)HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)On September 25, 2019, the Company completed the acquisition of Cray, a global supercomputer leader. Cray's results of operations are included within the HPC & AI segment. The acquisition date fair value consideration of $1.5 billion consisted of cash paid for outstanding common stock, vested in-the-money stock awards and amount attributable to pre-acquisition service of the replacement awards. In connection with this acquisition, the Company recorded approximately $702 million of goodwill, $425 million of intangible assets and $141 million of in-process research and development. The Company is amortizing the intangible assets on a straight-line basis over an estimated weighted-average useful life of four years. Note 11: Goodwill and Intangible Assets GoodwillGoodwill and related changes in the carrying amount by reportable segment were as follows:

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|   | Compute |  | HPC & AI  |  | Storage  |  | Intelligent Edge |  | FinancialServices |  | Corporate Investments & Other |  |  | Total |
|  | In millions |
| Balance at October 31, 2019 (1)(2) | $ | 7,532  |  |  | $ | 4,478  |  |  | $ | 3,945  |  |  | $ | 1,994  |  |  | $ | 144  |  |  | $ | 213  |  |  |  | $ | 18,306  |  |
| Goodwill from acquisitions | —  |  |  | —  |  |  | —  |  |  | 572  |  |  | —  |  |  | —  |  |  |  | 572  |  |
| Impairment of goodwill | —  |  |  | (865) |  |  | —  |  |  | —  |  |  | —  |  |  | —  |  |  |  | (865) |  |
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| Goodwill adjustments | —  |  |  | 3  |  |  | 1  |  |  | —  |  |  | —  |  |  | —  |  |  |  | 4  |  |
| Balance at October 31, 2020 (1)(2) | 7,532  |  |  | 3,616  |  |  | 3,946  |  |  | 2,566  |  |  | 144  |  |  | 213  |  |  |  | 18,017  |  |
| Goodwill from acquisitions | —  |  |  | 86  |  |  | 214  |  |  | —  |  |  | —  |  |  | —  |  |  |  | 300  |  |
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| Goodwill adjustments | —  |  |  | —  |  |  | —  |  |  | (11) |  |  | —  |  |  | —  |  |  |  | (11) |  |
| Balance at October 31, 2021 (1)(2) | $ | 7,532  |  |  | $ | 3,702  |  |  | $ | 4,160  |  |  | $ | 2,555  |  |  | $ | 144  |  |  | $ | 213  |  |  |  | $ | 18,306  |  |



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(1)As a result of the organizational realignments which were effective as of November 1, 2020, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $213 million of goodwill was reallocated from the Storage segment to the Software reporting unit within Corporate Investments and Other as of the beginning of the period using a relative fair value approach.(2)Goodwill is net of accumulated impairment losses of $953 million. Of this amount, $865 million related to HPC & AI which was recorded during the second quarter of fiscal 2020 and $88 million related to the CMS reporting unit within Corporate Investments and Other was recorded during fiscal 2018. There is no goodwill remaining in the CMS reporting unit.Goodwill Impairments    Goodwill is tested for impairment at the reporting unit level. As of October 31, 2021, our reporting units with goodwill are consistent with the reportable segments identified in Note 2, "Segment Information" to the Consolidated Financial Statements, with the exception of Corporate Investments and Other which contains three reporting units, Software, CMS and A&PS. Based on the results of the Company's interim and annual impairment tests in fiscal 2021, the Company determined that no impairment of goodwill existed. As of our annual test date, performed at the beginning of the fourth quarter, the excess of fair value over carrying amount for our reporting units ranged from approximately 8% to 133% of the respective carrying amounts. In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10% decrease all of the reporting units had an excess of fair value over carrying amount, with the exception of the HPC & AI reporting unit. As of the annual test date, the HPC & AI reporting unit had goodwill of $3.7 billion and an excess of fair value over carrying value of net assets of 8%. The fair value of the HPC & AI reporting unit is based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. The HPC & AI business is facing challenges on the current and projected future results as revenue growth is dependent on timing of delivery and related achievement of customer acceptance milestones. If the Company is not successful in addressing these challenges, the projected revenue growth rates or operating margins could decline resulting in a decrease in the fair value of the HPC & AI reporting unit. The fair value of the HPC & AI reporting unit could also be negatively impacted by changes in its weighted average cost of capital, changes in management's business strategy or significant and sustained declines in the stock price, which could result in an indicator of impairment.109
