Cisco 2011 Annual Report Download - page 103

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The following tables present details of the Company’s purchased intangible assets (in millions):
July 30, 2011 Gross
Accumulated
Amortization Net
Purchased intangible assets with finite lives:
Technology ...................................... $1,961 $ (561) $1,400
Customer relationships ............................ 2,277 (1,346) 931
Other ........................................... 123 (91) 32
Total purchased intangible assets with finite lives .. 4,361 (1,998) 2,363
IPR&D, with indefinite lives ............................ 178 — 178
Total ................................................ $4,539 $(1,998) $2,541
July 31, 2010 Gross
Accumulated
Amortization Net
Purchased intangible assets with finite lives:
Technology ....................................... $2,396 $ (686) $1,710
Customer relationships .............................. 2,326 (1,045) 1,281
Other ............................................ 172 (85) 87
Total purchased intangible assets with finite lives ..... 4,894 (1,816) 3,078
IPR&D, with indefinite lives ............................. 196 — 196
Total ................................................ $5,090 $(1,816) $3,274
Purchased intangible assets include intangible assets acquired through business combinations as well as through
direct purchases or licenses.
The following table presents the amortization of purchased intangible assets (in millions):
Years Ended July 30, 2011 July 31, 2010 July 25, 2009
Amortization of purchased intangible assets:
Cost of sales ................................... $ 492 $ 277 $ 211
Operating expenses:
Amortization of purchased intangible assets . . 520 491 533
Restructuring and other charges ............ 8——
Total ................................ $1,020 $768 $744
Amortization of purchased intangible assets for fiscal 2011, 2010 and 2009 included impairment charges of
approximately $164 million, $28 million and $95 million, respectively. For fiscal 2011, the impairment charges
were categorized as $97 million impairment in technology assets, $40 million impairment in customer
relationships, and $27 million impairment in other. These impairments were primarily due to declines in the
estimated fair value of intangible assets associated with certain of the Company’s consumer products as a result
of reductions in the expected future cash flows of such consumer products, and a portion of these impairment
charges was recorded under restructuring and other charges upon the Company’s decision to exit its Flip Video
cameras product line. The fair value for purchased intangible assets for which the carrying amount was not
deemed to be recoverable was determined using the future discounted cash flows that the assets were expected to
generate. For fiscal 2010 and 2009, the impairment charges were due to reductions in expected future cash flows
related to certain of the Company’s technologies and customer relationships, and were recorded as amortization
of purchased intangible assets.
95