CISCO SYSTEMS, INC. | 2013 | FY | 3

Goodwill and Purchased Intangible Assets
(a)
Goodwill
The following table presents the goodwill allocated to the Company’s reportable segments as of July 27, 2013 and July 28, 2012, as well as the changes to goodwill during fiscal 2013 and 2012 (in millions):

 
Balance at
July 28, 2012
 
NDS Acquisition
 
Other Acquisitions
 
Other
 
Balance at
July 27, 2013
Americas
$
11,755

 
$
1,230

 
$
828

 
$
(13
)
 
$
13,800

EMEA
3,287

 
1,327

 
411

 
12

 
5,037

APJC
1,956

 
887

 
230

 
9

 
3,082

Total
$
16,998

 
$
3,444

 
$
1,469

 
$
8

 
$
21,919

 
Balance at
July 30, 2011
 
 
 
Acquisitions
 
Other
 
Balance at
July 28, 2012
Americas
$
11,627

 
 
 
$
136

 
$
(8
)
 
$
11,755

EMEA
3,272

 
 
 
64

 
(49
)
 
3,287

APJC
1,919

 
 
 
37

 
—

 
1,956

Total
$
16,818

 
 
 
$
237

 
$
(57
)
 
$
16,998

In fiscal 2013, the column entitled “Other” primarily includes purchase accounting adjustments and a goodwill reduction related to divestiture activity. In fiscal 2012, “Other” primarily includes foreign currency translation and purchase accounting adjustments.
(b)
Purchased Intangible Assets
The following tables present details of the Company’s intangible assets acquired through business combinations completed during fiscal 2013 and 2012 (in millions, except years):
 
FINITE LIVES
 
INDEFINITE
LIVES
 
TOTAL
 
TECHNOLOGY
 
CUSTOMER
RELATIONSHIPS
 
OTHER
 
IPR&D
 
Fiscal 2013
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Amount
 
Amount
NDS Group Limited
6.4
 
$
807

 
6.7
 
$
818

 
7.4

 
$
27

 
$
94

 
$
1,746

Meraki, Inc.
8.0
 
259

 
6.0
 
30

 
—

 
—

 
—

 
289

Intucell, Ltd.
5.0
 
59

 
5.0
 
11

 
—

 
—

 
36

 
106

Ubiquisys Limited
4.0
 
66

 
5.0
 
7

 
—

 
—

 
50

 
123

All others (nine in total)
4.7
 
95

 
5.8
 
17

 
5.0

 
1

 
14

 
127

Total
 
 
$
1,286

 
 
 
$
883

 
 
 
$
28

 
$
194

 
$
2,391

 
FINITE LIVES
 
INDEFINITE
LIVES
 
TOTAL
 
TECHNOLOGY
 
CUSTOMER
RELATIONSHIPS
 
OTHER
 
IPR&D
 
Fiscal 2012
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Weighted-
Average Useful
Life (in Years)
 
Amount
 
Amount
 
Amount
Lightwire, Inc.
5.0
 
$
97

 
—

 
$
—

 
—

 
$
—

 
$
—

 
$
97

All others
3.5
 
102

 
3.0

 
1

 
—

 
—

 
—

 
103

Total

 
$
199

 

 
$
1

 

 
$
—

 
$
—

 
$
200



The following tables present details of the Company’s purchased intangible assets (in millions): 
July 27, 2013
 
Gross
 
Accumulated Amortization
 
Net
Purchased intangible assets with finite lives:
 
 
 
 
 
 
Technology
 
$
3,563

 
$
(1,366
)
 
$
2,197

Customer relationships
 
1,566

 
(466
)
 
1,100

Other
 
30

 
(10
)
 
20

Total purchased intangible assets with finite lives
 
5,159

 
(1,842
)
 
3,317

In-process research and development, with indefinite lives
 
86

 
—

 
86

Total
 
$
5,245

 
$
(1,842
)
 
$
3,403

 
July 28, 2012
 
Gross
 
Accumulated
Amortization
 
Net
Purchased intangible assets with finite lives:
 
 
 
 
 
 
Technology
 
$
2,267

 
$
(908
)
 
$
1,359

Customer relationships
 
2,261

 
(1,669
)
 
592

Other
 
49

 
(41
)
 
8

Total
 
$
4,577

 
$
(2,618
)
 
$
1,959



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 27, 2013
 
July 28, 2012
 
July 30, 2011
Amortization of purchased intangible assets:
 
 
 
 
 
 
Cost of sales
 
$
606

 
$
424

 
$
492

Operating expenses:
 
 
 
 
 
 
Amortization of purchased intangible assets
 
395

 
383

 
520

Restructuring and other charges
 
—

 
—

 
8

Total
 
$
1,001

 
$
807

 
$
1,020


There were no impairment charges related to purchased intangible assets during fiscal 2013. Amortization of purchased intangible assets for fiscal 2012 and 2011 included impairment charges of approximately $12 million and $164 million, respectively. The impairment charges of $12 million for fiscal 2012 were due to declines in estimated fair value resulting from reductions in expected future cash flows associated with certain of the Company’s technology assets. For fiscal 2011, the $164 million in impairment charges consisted of $64 million of charges to product cost of sales, $92 million of charges to amortization of purchased intangibles, and $8 million of charges to restructuring and other charges. These impairment charges were primarily due to declines in estimated fair value resulting from reductions in expected future cash flows associated with certain of the Company’s consumer products and were categorized as follows: $97 million in technology assets, $40 million in customer relationships, and $27 million in other purchased intangible assets.
The estimated future amortization expense of purchased intangible assets with finite lives as of July 27, 2013 is as follows (in millions):
Fiscal Year
Amount
2014
$
903

2015
820

2016
593

2017
440

2018
294

Thereafter
267

Total
$
3,317

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