Apple 2011 Annual Report Download - page 63

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Note 4 – Goodwill and Other Intangible Assets
The Company is currently amortizing its acquired intangible assets with definite lives over periods generally ranging between three to seven
years. The following table summarizes the components of gross and net intangible asset balances as of September 24, 2011 and September 25,
2010 (in millions):
During 2011 and 2010, the Company completed various business acquisitions. In 2011, the aggregate cash consideration, net of cash acquired,
was $244 million, of which $167 million was allocated to goodwill and $77 million to acquired intangible assets. In 2010, the aggregate cash
consideration, net of cash acquired, was $638 million, of which $535 million was allocated to goodwill and $107 million to acquired intangible
assets.
During 2011, the Company, as part of a consortium, acquired Nortel Networks Corporation’
s patent portfolio for an overall purchase price of
$4.5 billion, of which the Company’
s contribution was approximately $2.6 billion. The majority of the acquisition price has been recorded in
acquired intangible assets, which the Company expects to amortize over seven years. The Department of Justice is reviewing this transaction.
The Company’
s gross carrying amount of goodwill was $896 million and $741 million as of September 24, 2011 and September 25, 2010,
respectively. The Company did not have any goodwill impairment during 2011, 2010 or 2009. The Company’
s goodwill is allocated primarily to
the Americas and Europe reportable operating segments.
Amortization expense related to acquired intangible assets was $192 million, $69 million and $53 million in 2011, 2010 and 2009, respectively.
As of September 24, 2011 the weighted-
average amortization period for acquired intangible assets was 6.2 years. The expected annual
amortization expense related to acquired intangible assets as of September 24, 2011, is as follows (in millions):
61
2011
2010
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Definite lived and amortizable acquired intangible assets
$
3,873
$
(437
)
3,436
$
487
$
(245
)
$
242
Indefinite lived and non
-
amortizable trademarks
100
0
100
100
0
100
Total acquired intangible assets
$
3,973
$
(437
)
3,536
$
587
$
(245
)
$
342
Years
2012
$
520
2013
596
2014
608
2015
441
2016
426
Thereafter
845
Total
$
3,436