Apple 2006 Annual Report Download - page 98

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 4—Consolidated Financial Statement Details (in millions) (Continued)
Other Income and Expense
(1)
See Note 2, “Restatement of Consolidated Financial Statements.”
Note 5—Goodwill and Other Intangible Assets
The Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from 3 to 10 years.
The following table summarizes the components of gross and net intangible asset balances (in millions):
As of September 30, 2006, and September 24, 2005, the weighted-average amortization period for acquired technology was 8.5 years and 5.5
years, respectively.
During 2006, the Company sold certain assets related to its PowerSchool web-based student information system operations. In connection with
this sale, the Company reduced goodwill by $31 million for the outstanding balance from the acquisition of PowerSchool, Inc. in 2001 and
recognized a $4 million pre-tax gain, which is reflected in other income and expense in the consolidated statement of operations.
During 2005, the Company recorded an adjustment of approximately $11 million to goodwill relating to a reduction of valuation allowances
that were recorded at the time certain net operating loss carryforwards (“NOLs”) were acquired in previous business combinations. During
2005, these NOLs were deemed to be more likely than not to be realized and accordingly the valuation allowances were reversed against the
related goodwill that was recognized at the time of the acquisitions.
97
2006
2005
2004
Gains on non-current investments, net
$
—
$
—
$
4
Interest income
$
394
$
183
$
64
Interest expense
—
—
(
3
)
Other income (expense), net
(29
)
(18
)
(8
)
Total interest and other income, net
365
165
53
Total other income and expense
$
365
$
165
$
57
September 30, 2006
September 24, 2005
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Goodwill
$
38
$
—
$
38
$
69
$
—
$
69
Acquired technology
181
(42
)
139
61
(34
)
27
Total acquired intangible assets
$
219
$
(42
)
$
177
$
130
$
(34
)
$
96