Microsoft Corporation Annual Report 2005
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NOTES TO FINANCIAL STATEMENTS

NOTE 9   INTANGIBLE ASSETS

The components of finite-lived intangible assets were as follows:

(In millions)
June 30 2007   2006
  Gross
carrying
amount
spacer Accumulated
amortization
spacer Net carrying
amount
spacer Gross
carrying
amount
spacer Accumulated
amortization
spacer Net carrying
amount
spacer
Contract-based $0,988   $0,(727)   $261   $0,954   $(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 spacer Weighted
average life
spacer Amount spacer Weighted
average life
spacer
spacer
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.

Acquired intangibles are generally amortized on a straight-line basis over weighted average lives. Intangible assets amortization expense was $236 million for fiscal year 2007, $127 million for fiscal year 2006, and $161 million for fiscal year 2005. The estimated future amortization expense related to intangible assets as of June 30, 2007 is as follows:

(In millions)

Year Ended June 30 Amount
spacer
2008 $263
2009 229
2010 184
2011 111
2012 and thereafter 91
    Total $878
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