Cisco 2015 Annual Report Download - page 97

The following tables present details of the Company’s purchased intangible assets (in millions):
July 25, 2015 Gross
Accumulated
Amortization Net
Purchased intangible assets with finite lives:
Technology ........................................................... $ 3,418 $ (1,818) $ 1,600
Customer relationships .............................................. 1,699 (971) 728
Other ................................................................. 55 (24) 31
Total purchased intangible assets with finite lives ........................ 5,172 (2,813) 2,359
In-process research and development, with indefinite lives .............. 17 — 17
Total ................................................................. $ 5,189 $ (2,813) $ 2,376
July 26, 2014 Gross
Accumulated
Amortization Net
Purchased intangible assets with finite lives:
Technology ........................................................... $ 4,100 $ (1,976) $ 2,124
Customer relationships ................................................ 1,706 (720) 986
Other ................................................................. 51 (13) 38
Total purchased intangible assets with finite lives .......................... 5,857 (2,709) 3,148
In-process research and development, with indefinite lives .................. 132 — 132
Total .................................................................. $ 5,989 $ (2,709) $ 3,280
Purchased intangible assets include intangible assets acquired through business combinations as well as through direct purchases
or licenses. In fiscal 2015, the Company, along with a number of other companies, entered into an agreement to obtain a license
to the patents owned by the Rockstar Consortium, and the Company paid approximately $300 million, of which $188 million was
expensed to product cost of sales related to the settlement of patent infringement claims, and the remainder was capitalized as an
intangible asset to be amortized over its estimated useful life.
The following table presents the amortization of purchased intangible assets (in millions):
Years Ended July 25, 2015 July 26, 2014 July 27, 2013
Amortization of purchased intangible assets:
Cost of sales ....................................................... $ 814 $ 742 $ 606
Operating expenses ................................................. 359 275 395
Total .......................................................... $ 1,173 $ 1,017 $ 1,001
Amortization of purchased intangible assets for fiscal 2015 included impairment charges of approximately $175 million as a
result of declines in estimated fair value resulting from the reduction or elimination of expected future cash flows associated with
certain of the Company’s technology and IPR&D intangible assets. There were no impairment charges related to purchased
intangible assets during fiscal 2014 and 2013.
The estimated future amortization expense of purchased intangible assets with finite lives as of July 25, 2015 is as follows (in
millions):
Fiscal Year Amount
2016 ....................................................................................................... $ 770
2017 ....................................................................................................... 596
2018 ....................................................................................................... 453
2019 ....................................................................................................... 357
2020 ....................................................................................................... 140
Thereafter .................................................................................................. 43
Total .................................................................................................. $ 2,359
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