Microsoft 2007 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2007 Microsoft annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 69

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69

PAGE 47
evaluated for impairment between annual tests.
During fiscal year 2007, we acquired the following entities for total consideration of $1.34 billion, which was
primarily paid in cash:
• Softricity, Inc., a provider of application virtualization and dynamic streaming technologies;
• TellMe Networks, Inc., a company specializing in speech-recognition technology providing an outsourced,
network-based, voice application platform; and
• 11 other entities specializing in areas such as application security, desktop, and data management.
As a result of these acquisitions, we recorded $983 million of goodwill, none of which is expected to be
deductible for tax purposes. All of the entities were consolidated with Microsoft since their respective acquisition
dates. The purchase price allocations for these acquisitions are preliminary and subject to revision as more
detailed analyses are completed and additional information about fair value of assets and liabilities becomes
available. Any change in the estimated fair value of the net assets of the acquired companies will change the
amount of the purchase price allocable to goodwill. Pro forma results of operations have not been presented
because the effects of these acquisitions, individually and in aggregate, were not material.
NOTE 9 INTANGIBLE ASSETS
The components of finite-lived intangible assets were as follows:
(In millions)
June 30 2007 2006
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Contract-based $ 988 $ (727) $261 $ 954 $(661) $293
Technology-based 916 (407) 509 458 (255) 203
Marketing-related 57 (39) 18 42 (32) 10
Customer-related 122 (32) 90 54 (21) 33
Total $2,083 $(1,205) $878 $1,508 $(969) $539
During fiscal year 2007 and 2006, we recorded additions to intangible assets of $473 million and $189 million,
respectively. We estimate that we have no significant residual value related to our intangible assets. The
components of finite-lived intangible assets acquired during fiscal years 2007 and 2006 were as follows:
(In millions)
Year Ended June 30 2007 2006
Amount
Weighted
average life Amount
Weighted
average life
Contract-based $ 57 5 years $ 36 4 years
Technology-based 333 4 years 140 4 years
Marketing-related 14 4 years 5 3 years
Customer-related 69 5 years 8 4 years
Total $473 $189
Intangible asset additions include $170 million of technology-based intangible assets with a weighted-average life
of 4 years, and $84 million of other intangible assets with a weighted-average life of 4.9 years, related to the
acquisitions of Softricity Inc., TellMe Networks, Inc., and the remaining 11 entities acquired.