Cisco 2012 Annual Report Download - page 102

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The goodwill generated from the Company’s business combinations completed during the year ended July 28,
2012 is primarily related to expected synergies. The goodwill is not deductible for U.S. federal income tax
purposes.
Fiscal 2011 and 2010
Allocation of the purchase consideration for business combinations completed in fiscal 2011 is summarized as
follows (in millions):
Fiscal 2011
Purchase
Consideration
Net Tangible
Assets Acquired/
(Liabilities
Assumed)
Purchased
Intangible
Assets Goodwill
Total acquisitions .................................... $288 $(10) $114 $184
Allocation of the purchase consideration for business combinations completed in fiscal 2010 is summarized as
follows (in millions):
Fiscal 2010
Purchase
Consideration
Net Tangible
Assets Acquired/
(Liabilities
Assumed)
Purchased
Intangible
Assets Goodwill
ScanSafe, Inc. ....................................... $ 154 $ 2 $ 31 $ 121
Starent Networks, Corp. ............................... 2,636 (17) 1,274 1,379
Tandberg ASA ...................................... 3,268 17 980 2,271
All others ........................................... 128 2 95 31
Total acquisitions ................................ $6,186 $ 4 $2,380 $3,802
The Consolidated Financial Statements include the operating results of each business combination from the date
of acquisition. Pro forma results of operations for the acquisitions completed during fiscal 2012, 2011, and 2010
have not been presented because the effects of the acquisitions, individually and in the aggregate, were not
material to the Company’s financial results.
(b) Acquisition of NDS Group Limited
On July 30, 2012, the Company completed its acquisition of NDS Group Limited (“NDS”), a leading provider of
video software and content security solutions that enable service providers and media companies to securely
deliver and monetize new video entertainment experiences. NDS uses the combination of a software platform
and services to create differentiated video offerings for service providers that enable subscribers to intuitively
view, search, and navigate digital content. Under the terms of the acquisition agreement, the Company paid total
cash consideration of approximately $5.0 billion, which included the repayment of approximately $1.0 billion of
debt, to acquire all of the business and operations of NDS.
The acquisition of NDS is expected to complement and accelerate the delivery of Cisco Videoscape, the
Company’s comprehensive platform that enables service providers and media companies to deliver next-
generation entertainment experiences. With the NDS acquisition, the Company aims to broaden its opportunities
in the service provider market and to expand its reach into emerging markets such as China and India, where
NDS has an established customer presence. The Company has not completed its purchase accounting for the
NDS acquisition and therefore has not included a detailed purchase price allocation in this note. The Company
expects that most of the purchase price will be allocated to goodwill and purchased intangible assets with finite
lives.
94