Seagate 2009 Annual Report Download - page 89

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During fiscal year 2009, the Company determined that the adverse change in the business climate discussed under "Goodwill" above was
also an indicator requiring the testing of its other long-lived assets for recoverability. The Company determined that the asset group to be tested
for recoverability was at the reporting unit level as it was the lowest level at which cash flows were identifiable. The Company tested the other
long-lived assets of both the Hard Disk Drive and Services reporting units for recoverability and concluded that the carrying value of the Hard
Disk Drive reporting unit was recoverable while that of the Services reporting unit was not.
The Company recorded impairment charges of $3 million for the property and equipment and intangible assets of the Services reporting
unit during fiscal year 2009. The Company recorded these impairment charges in Impairment of goodwill and other long-lived assets, net of
recoveries in the Consolidated Statement of Operations. No impairment charge was recorded for the intangible assets or property, equipment and
leasehold improvements of the Hard Disk Drive reporting unit.
Other intangible assets consist primarily of existing technology, customer relationships and trade names acquired in business combinations.
Acquired intangibles are amortized on a straight-line basis over the respective estimated useful lives of the assets. Amortization of the existing
technology intangible asset is charged to Cost of revenue while the amortization of the other intangible assets is included in Operating expenses
in the Consolidated Statements of Operations. In fiscal years 2010, 2009 and 2008, amortization expense for other intangible assets was
$35 million, $69 million and $94 million, respectively.
The carrying value of intangible assets as of July 2, 2010 is set forth in the following table:
The carrying value of intangible assets as of July 3, 2009 is set forth in the following table:
4. Restructuring and Exit Costs
During fiscal year 2010, the Company recorded restructuring and other charges of $66 million mainly comprised of charges related to its
AMK restructuring plan announced in the first quarter of fiscal year 2010 and additional restructuring charges related to its Pittsburgh facility
and facilities acquired as a part of the Maxtor Corporation ("Maxtor") acquisition. The Company's significant restructuring plans are
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(Dollars in millions, except years) Gross Carrying
Amount Accumulated Amortization Net Carrying Amount Weighted Average
Remaining Useful Life
Existing technology
$
181
$
(177
)
$
4
0.6
Customer relationships
156
(153
)
3
0.9
Trade names
37
(37
)
—
—
Patents and licenses
9
(9
)
—
—
Total acquired identifiable
intangible assets
$
383
$
(376
)
$
7
1.0
(Dollars in millions, except years)
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Weighted Average
Remaining Useful Life
Existing technology
$
181
$
(169
)
$
12
1.5
Customer relationships
156
(134
)
22
1.2
Trade names
37
(29
)
8
0.9
Patents and licenses
9
(9
)
—
—
Total acquired identifiable
intangible assets
$
383
$
(341
)
$
42
1.3