HP 2011 Annual Report Download - page 109

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7: Goodwill and Purchased Intangible Assets (Continued)
As a result, HP recorded a goodwill impairment charge of $813 million. Both the goodwill impairment
charge and the intangible asset impairment charge were included in the Impairment of Goodwill and
Purchased Intangible Assets line item in the Consolidated Statement of Earnings. On December 9,
2011, HP announced that it had determined to contribute the webOS software to the open source
community and support its development going forward. HP is currently evaluating the impact that this
decision will have on the $273 million in related intangible assets and goodwill recorded on the
Consolidated Balance Sheet.
During fiscal 2010, HP recorded approximately $5.2 billion of goodwill related to acquisitions
based on its preliminary estimated fair value of the assets acquired and liabilities assumed. In addition,
HP recorded goodwill adjustments primarily related to an increase to the deferred tax liability on
outside basis differences of the foreign subsidiaries of Electronic Data Systems Corporation (‘‘EDS’’) at
acquisition. HP also recorded an increase to goodwill as a result of currency translation related to an
acquired subsidiary whose functional currency is not the U.S. dollar. These increases to goodwill were
partially offset by tax adjustments primarily related to tax deductible stock-based awards for certain
acquisitions for which the acquisition date preceded the effective date of the new accounting standard
for business combinations.
Purchased Intangible Assets
HP’s purchased intangible assets associated with completed acquisitions for each of the following
fiscal years ended October 31 are composed of:
2011 2010
Accumulated Accumulated
Gross Amortization Net Gross Amortization Net
In millions
Customer contracts, customer lists
and distribution agreements ...... $ 6,346 $(2,376) $ 3,970 $ 7,075 $(3,436) $3,639
Developed and core technology and
patents ..................... 7,226 (1,944) 5,282 3,797 (1,418) 2,379
Product trademarks .............. 336 (121) 215 199 (92) 107
Total amortizable purchased
intangible assets .............. 13,908 (4,441) 9,467 11,071 (4,946) 6,125
IPR&D ...................... 9 — 9 301 — 301
Compaq trade name ............. 1,422 — 1,422 1,422 — 1,422
Total purchased intangible assets .... $15,339 (4,441) 10,898 $12,794 $(4,946) $7,848
For fiscal 2011, HP recorded approximately $4.7 billion of purchased intangible assets and IPR&D
related to acquisitions based on its preliminary estimated fair value of the assets acquired and liabilities
assumed. For fiscal 2010, HP recorded approximately $2.7 billion of purchased intangible assets and
IPR&D related to acquisitions based on its preliminary estimated fair value of the assets acquired and
liabilities assumed. During fiscal 2011, HP reclassified approximately $290 million of IPR&D as
developed technology.
101