Cisco 2012 Annual Report Download - page 105

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The estimated future amortization expense of purchased intangible assets with finite lives as of July 28, 2012 is
as follows (in millions):
Fiscal Year Amount
2013 .............................................. $ 706
2014 .............................................. 523
2015 .............................................. 444
2016 .............................................. 217
2017 .............................................. 69
Total .......................................... $1,959
5. Restructuring and Other Charges
In fiscal 2011, the Company initiated a number of key targeted actions to address several areas in its business
model. These actions were intended to simplify and focus the Company’s organization and operating model,
align the Company’s cost structure given transitions in the marketplace, divest or exit underperforming
operations, and deliver value to the Company’s shareholders. The Company is taking these actions to align its
business based on its five foundational priorities: leadership in its core business (routing, switching, and
associated services), which includes comprehensive security and mobility solutions; collaboration; data center
virtualization and cloud; video; and architectures for business transformation.
Pursuant to the restructuring that the Company announced in July 2011, the Company has incurred cumulative
charges of approximately $1.0 billion (included as part of the charges discussed below). The Company expects
that the total pretax charges pursuant to these restructuring actions will be approximately $1.1 billion, and it
expects the remaining charges to be incurred primarily in the first quarter of fiscal 2013. The following table
summarizes the activities related to the restructuring and other charges pursuant to the Company’s July 2011
announcement related to the realignment and restructuring of the Company’s business as well as certain
consumer product lines as announced during April 2011 (in millions):
Voluntary Early
Retirement Program
Employee
Severance
Goodwill and
Intangible Assets Other Total
Gross charges in fiscal 2011 ....................... $453 $247 $ 71 $ 28 $799
Cash payments ................................. (436) (13) — — (449)
Non-cash items ................................. — — (71) (17) (88)
Balance as of July 30, 2011 ....................... 17 234 — 11 262
Gross charges in fiscal 2012 ...................... — 299 — 54 353
Change in estimate related to fiscal 2011 charges .... — (49) — — (49)
Cash payments ................................ (17) (401) — (18) (436)
Non-cash items ................................ — — — (20) (20)
Balance as of July 28, 2012 ....................... $ — $ 83 $ — $ 27 $ 110
During fiscal 2012, the Company incurred net restructuring charges within operating expenses of $304 million,
consisting of $250 million of employee severance charges and $54 million of other restructuring charges. Other
charges incurred during fiscal 2012 were primarily for the consolidation of excess facilities, as well as an
incremental charge related to the sale of the Company’s Juarez, Mexico manufacturing operations, which sale
was completed in the first quarter of fiscal 2012.
During fiscal 2011, the Company incurred a charge of approximately $63 million related to a reduction to
goodwill as a result of the sale of its Juarez manufacturing operations and also recorded an intangible asset
impairment of $8 million in connection with the restructuring of the Company’s consumer business related to the
exit of the Flip Video camera product line. See Note 4. Other charges incurred during fiscal 2011 were primarily
related to the consolidation of excess facilities and other charges associated with the realignment and
restructuring of the Company’s consumer business.
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