Goodwill and Intangible Assets
Goodwill
Goodwill was $2,399 million and $2,405 million as of March 31, 2026 and March 31, 2025, respectively. The $6 million decrease in the carrying amount of goodwill was attributable to the Company's sale of contracts in the third quarter of fiscal 2026.
Intangible Assets
Intangible assets consisted of the following:
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| | | March 31, 2026 | | March 31, 2025 |
| | | Gross Carrying Value | | Accumulated Amortization | | Net Carrying Value | | Gross Carrying Value | | Accumulated Amortization | | Net Carrying Value |
| Amortizable intangible assets: | | | | | | | | | | | | | |
| Customer contracts and related customer relationships | | | $ | 619 | | | $ | 365 | | | $ | 254 | | | $ | 619 | | | $ | 305 | | | $ | 314 | |
| Software | | | 202 | | | 137 | | | 65 | | | 168 | | | 109 | | | 59 | |
| Total amortizable intangible assets | | | $ | 821 | | | $ | 502 | | | $ | 319 | | | $ | 787 | | | $ | 414 | | | $ | 373 | |
| Unamortizable intangible assets: | | | | | | | | | | | | | |
| Trade name | | | $ | 190 | | | $ | — | | | $ | 190 | | | $ | 190 | | | $ | — | | | $ | 190 | |
| Total | | | $ | 1,011 | | | $ | 502 | | | $ | 509 | | | $ | 977 | | | $ | 414 | | | $ | 563 | |
Amortization expense for fiscal 2026, 2025, and 2024 was $95 million, $95 million, and $93 million, respectively.
The following table summarizes the estimated annual amortization expense for future periods:
| | | | | |
| For the Fiscal Year Ended March 31, |
| 2027 | $ | 81 | |
| 2028 | 65 | |
| 2029 | 53 | |
| 2030 | 42 | |
| 2031 | 35 | |
| Thereafter | 43 | |
| Total estimated amortization expense | $ | 319 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.