Intel 2000 Annual Report Download - page 28

Net goodwill and other acquisition-related intangibles at fiscal year-ends were as follows:
Other intangibles include items such as trademarks, workforce-in-
place and customer lists. The total balances presented above are net of total
accumulated amortization of $2.0 billion and $471 million at December 30, 2000 and December 25, 1999, respectively.
Amortization of goodwill and other acquisition-related intangibles and costs was $1.6 billion for 2000. This includes $1.3 billion of
amortization of goodwill and $248 million of amortization of other acquisition-related intangibles (a majority of which was related to
developed technology). In addition, the total includes $26 million of amortization of acquisition-related stock compensation costs (see
"Acquisition-related unearned stock compensation") and $2 million of amortization of other acquisition-related costs.
Revenue recognition The company generally recognizes net revenues upon the transfer of title. However, certain of the company's sales
are made to distributors under agreements allowing price protection and/or right of return on merchandise unsold by the distributors. Because
of frequent sales price reductions and rapid technological obsolescence in the industry, Intel defers recognition of revenues on shipments to
distributors until the distributors sell the merchandise. Management believes that the company's revenue recognition policies are in accordance
with the Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101).
Advertising Cooperative advertising obligations are accrued and the costs expensed at the same time the related revenues are recognized.
All other advertising costs are expensed as incurred. Advertising expense was $2.0 billion, $1.7 billion and $1.3 billion in 2000, 1999 and
1998, respectively.
Interest Interest as well as gains and losses related to contractual agreements to hedge certain investment positions and debt (see
"Derivative financial instruments") are recorded as net interest income or expense within interest and other, net.
Earnings per share The shares used in the computation of the company's basic and diluted earnings per common share are reconciled as
follows:
Weighted average common shares outstanding, assuming dilution, includes the incremental shares that would be issued upon the assumed
exercise of stock options, as well as the assumed conversion of the convertible notes and the incremental shares for the step-
up warrants, for the
respective periods the notes and warrants were outstanding. Put warrants outstanding had no dilutive effect on diluted earnings per common
share for the periods presented. For the three-
year period ended December 30, 2000, certain of the company's stock options were excluded from
the calculation of diluted earnings per share because they were antidilutive, but these options could be dilutive in the future. Net income for
the purpose of computing diluted earnings per common share was not materially affected by the assumed conversion of the convertible notes.
(See "Long-term debt" under "Borrowings.")
Stock distribution On July 30, 2000, the company effected a two-for-one stock split in the form of a special stock distribution to
stockholders of record as of July 2, 2000. As a result of the stock split in 2000, approximately $3 million was reclassified from retained
earnings to common stock, representing the par value of the newly issued shares. On April 11, 1999, the company effected a two-for-one stock
split in the form of a special stock distribution to stockholders of record as of March 23, 1999. All share, per share, common stock, stock option
and warrant amounts herein have been restated to reflect the effects of these splits.
(In millions)
Life in years
2000 1999
Goodwill
2
-
6
$
4,977
$
4,124
Developed technology
3
-
6
779
612
Other intangibles
2
-
6
185
198
$
5,941
$
4,934
(In millions) 2000 1999 1998
Weighted average common shares outstanding
6,709
6,648
6,672
Dilutive effect of:
Employee stock options
272
289
318
Convertible notes
5
3
—
1998 step
-
up warrants
—
—
45
Weighted average common shares outstanding, assuming
dilution
6,986
6,940
7,035