Business Combinations

12 Months Ended

Jul. 28, 2012

Business Combinations

3. Business Combinations

(a) Acquisition Summary

The Company completed seven business combinations during fiscal 2012. A summary of the allocation of the total purchase consideration is presented as follows (in millions):

Fiscal 2012	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Lightwire, Inc.	$	239	$	(15	)	$	97	$	157
All others		159		(24	)		103		80
Total acquisitions	$	398	$	(39	)	$	200	$	237

The Company acquired Lightwire, Inc. (“Lightwire”) in the third quarter of fiscal 2012. With its acquisition of Lightwire, a developer of advanced optical interconnect technology for high-speed networking applications, the Company aims to develop and deliver cost-effective, high-speed networks with the next generation of optical connectivity.

The total purchase consideration related to the Company’s business combinations completed during fiscal 2012 consisted of either cash consideration or cash consideration along with vested share-based awards assumed. The total cash and cash equivalents acquired from these business combinations were immaterial. Total transaction costs related to the Company’s business combination activities during fiscal 2012, 2011, and 2010 were $15 million, $10 million, and $32 million, respectively. These transaction costs were expensed as incurred as general and administrative (“G&A”) expenses.

The Company continues to evaluate certain assets and liabilities related to business combinations completed during the recent periods. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill.

The goodwill generated from the Company’s business combinations completed during the year ended July 28, 2012 is primarily related to expected synergies. The goodwill is not deductible for U.S. federal income tax purposes.

Fiscal 2011 and 2010

Allocation of the purchase consideration for business combinations completed in fiscal 2011 is summarized as follows (in millions):

Fiscal 2011	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Total acquisitions	$	288	$	(10	)	$	114	$	184

Allocation of the purchase consideration for business combinations completed in fiscal 2010 is summarized as follows (in millions):

Fiscal 2010	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
ScanSafe, Inc.	$	154	$	2		$	31	$	121
Starent Networks, Corp.		2,636		(17	)		1,274		1,379
Tandberg ASA		3,268		17			980		2,271
All others		128		2			95		31
Total acquisitions	$	6,186	$	4		$	2,380	$	3,802

The Consolidated Financial Statements include the operating results of each business combination from the date of acquisition. Pro forma results of operations for the acquisitions completed during fiscal 2012, 2011, and 2010 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results.

(b) Acquisition of NDS Group Limited

On July 30, 2012, the Company completed its acquisition of NDS Group Limited (“NDS”), a leading provider of video software and content security solutions that enable service providers and media companies to securely deliver and monetize new video entertainment experiences. NDS uses the combination of a software platform and services to create differentiated video offerings for service providers that enable subscribers to intuitively view, search, and navigate digital content. Under the terms of the acquisition agreement, the Company paid total cash consideration of approximately $5.0 billion, which included the repayment of approximately $1.0 billion of debt, to acquire all of the business and operations of NDS.

The acquisition of NDS is expected to complement and accelerate the delivery of Cisco Videoscape, the Company’s comprehensive platform that enables service providers and media companies to deliver next-generation entertainment experiences. With the NDS acquisition, the Company aims to broaden its opportunities in the service provider market and to expand its reach into emerging markets such as China and India, where NDS has an established customer presence. The Company has not completed its purchase accounting for the NDS acquisition and therefore has not included a detailed purchase price allocation in this note. The Company expects that most of the purchase price will be allocated to goodwill and purchased intangible assets with finite lives.