Cisco 2010 Annual Report Download - page 52

Notes to Consolidated Financial Statements
Allocation of the purchase consideration for business combinations completed in fiscal 2010 is summarized as follows (in millions):
Shares Issued
Purchase
Consideration
Net Tangible
Assets Acquired/
(Liabilities
Assumed)
Purchased
Intangible
Assets GoodwillFiscal 2010
ScanSafe, Inc. — $ 154 $ 2 $ 31 $ 121
Starent Networks, Corp. — 2,636 (17) 1,274 1,379
Tandberg ASA — 3,268 17 980 2,271
CoreOptics Inc. — 86 (2) 70 18
Other — 42 4 25 13
Total — $ 6,186 $ 4 $ 2,380 $ 3,802
The total purchase consideration related to the Company’s business combinations completed during fiscal 2010 consisted of one,
or both, of cash consideration and vested share-based awards assumed. Total cash and cash equivalents acquired from business
combinations completed during fiscal 2010 were approximately $760 million.
Pursuant to the revised accounting guidance related to business combinations, transaction costs for the business combinations
completed during fiscal 2010 were expensed as incurred. Such transaction costs, totaling $40 million for fiscal 2010, were
recorded as G&A expenses. In addition, IPR&D of $199 million for fiscal 2010 has been capitalized at fair value as an intangible
asset with an indefinite life (see Note 4) and is assessed for impairment in subsequent periods. Upon completion of development,
the underlying R&D intangible asset will be amortized over its estimated useful life. Prior to the adoption of the revised accounting
guidance, IPR&D was expensed upon acquisition if it had no alternative future use.
The Company continues to evaluate certain assets and liabilities related to business combinations completed during the
period. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become
known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition
date. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill.
The goodwill generated from the Company’s business combinations completed during the year ended July 31, 2010 is
primarily related to expected synergies. The goodwill is generally not deductible for U.S. federal income tax purposes.
Fiscal 2009
Allocation of the purchase consideration for business combinations completed in fiscal 2009 is summarized as follows (in millions):
Fiscal 2009 Shares Issued
Purchase
Consideration
Net Tangible
Assets Acquired/
(Liabilities
Assumed)
Purchased
Intangible
Assets Goodwill IPR&D
PostPath, Inc. — $ 197 $ (10) $ 52 $ 152 $ 3
Pure Digital Technologies, Inc. 27 533 (9) 191 299 52
Pure Networks, Inc. — 105 (4) 30 79 —
Tidal Software, Inc. — 92 (3) 52 35 8
Other — 54 (2) 23 33 —
Total 27 $ 981 $ (28) $ 348 $ 598 $ 63
Fiscal 2008
Allocation of the purchase consideration for business combinations completed in fiscal 2008 is summarized as follows (in millions):
Fiscal 2008 Shares Issued
Purchase
Consideration
Net Tangible
Assets Acquired/
(Liabilities
Assumed)
Purchased
Intangible
Assets Goodwill IPR&D
Navini Networks, Inc. — $ 276 $ (4) $ 108 $ 172 $ —
Securent, Inc. — 75 (5) 24 56 —
Other — 61 7 14 37 3
Total — $ 412 $ (2) $ 146 $ 265 $ 3
The Consolidated Financial Statements include the operating results of each business from the date of acquisition. Pro forma
results of operations for the acquisitions completed during fiscal 2010, 2009, and 2008 have not been presented because the
effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results.
50 Cisco Systems, Inc.