Goodwill and Purchased Intangible Assets

9 Months Ended

Apr. 29, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Purchased Intangible Assets


(a)	Goodwill

The following table presents the goodwill allocated to the Company’s reportable segments as of and during the nine months ended April 29, 2017 (in millions):



	Balance at						Balance at
	July 30, 2016		Acquisitions		Other		April 29, 2017
Americas	$	16,529	$	1,986	$	13	$	18,528
EMEA	6,269		724		8		7,001
APJC	3,827		155		5		3,987
Total	$	26,625	$	2,865	$	26	$	29,516

“Other” in the table above primarily consists of foreign currency translation, as well as immaterial purchase accounting adjustments.


(b)	Purchased Intangible Assets

The following table presents details of the Company’s intangible assets acquired through acquisitions completed during the nine months ended April 29, 2017 (in millions, except years):



	FINITE LIVES									INDEFINITE LIVES		TOTAL
	TECHNOLOGY			CUSTOMER RELATIONSHIPS			OTHER			IPR&D		TOTAL
	Weighted- Average Useful Life (in Years)	Amount		Weighted- Average Useful Life (in Years)	Amount		Weighted- Average Useful Life (in Years)	Amount		Amount		Amount
CloudLock	6.0	$	32	4.0	$	3	1.5	$	1	$	—	$	36
AppDynamics	4.0	525		7.0	235		2.3	25		—		785
Others (two in total)	3.0	5		0.0	—		0.0	—		—		5
Total		$	562		$	238		$	26	$	—	$	826

The following tables present details of the Company’s purchased intangible assets (in millions):



April 29, 2017	Gross		Accumulated Amortization			Net
Purchased intangible assets with finite lives:
Technology	$	3,345	$	(1,485	)	$	1,860
Customer relationships	1,353		(714		)	639
Other	82		(31		)	51
Total purchased intangible assets with finite lives	4,780		(2,230		)	2,550
In-process research and development, with indefinite lives	154		—			154
Total	$	4,934	$	(2,230	)	$	2,704



July 30, 2016	Gross		Accumulated Amortization			Net
Purchased intangible assets with finite lives:
Technology	$	3,038	$	(1,391	)	$	1,647
Customer relationships	1,793		(1,203		)	590
Other	85		(43		)	42
Total purchased intangible assets with finite lives	4,916		(2,637		)	2,279
In-process research and development, with indefinite lives	222		—			222
Total	$	5,138	$	(2,637	)	$	2,501

Purchased intangible assets include intangible assets acquired through acquisitions as well as through direct purchases or licenses.

Impairment charges related to purchased intangible assets for the three and nine months ended April 29, 2017 were zero and $42 million, respectively. Impairment charges were primarily as a result of declines in estimated fair values of certain purchased intangible assets resulting from the reduction or elimination of expected future cash flows associated with certain of the Company’s technology and IPR&D intangible assets. Of these impairment charges, $38 million was recorded to restructuring and other charges in connection with the Company's decision to exit certain product lines, and the corresponding elimination of future associated cash flows. Impairment charges related to purchased intangible assets for the three and nine months ended April 30, 2016 were $7 million and $44 million, respectively.

The following table presents the amortization of purchased intangible assets, including impairment charges (in millions):



	Three Months Ended				Nine Months Ended
	April 29, 2017		April 30, 2016		April 29, 2017		April 30, 2016
Amortization of purchased intangible assets:
Cost of sales	$	141	$	134	$	394	$	419
Operating expenses
Amortization of purchased intangible assets	59		81		201		221
Restructuring and other charges	—		—		38		—
Total	$	200	$	215	$	633	$	640

The estimated future amortization expense of purchased intangible assets with finite lives as of April 29, 2017 is as follows (in millions):



Fiscal Year	Amount
2017 (remaining three months)	$	211
2018	770
2019	681
2020	462
2021	266
Thereafter	160
Total	$	2,550

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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