Intel 2008 Annual Report Download - page 93

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12: Divestitures
During the first quarter of 2008, we completed the divestiture of a portion of the telecommunications-related assets of our
optical platform division that were included in the Digital Enterprise Group operating segment. Consideration for the
divestiture was approximately $85 million, including $75 million in cash and common shares of the acquiring company with
an estimated value of $10 million at the date of purchase. We entered into an agreement with the acquiring company to
provide certain manufacturing and transition services for a limited time that has since been completed. During the first quarter
of 2008, as a result of this divestiture, we recorded a net gain of $39 million within interest and other, net. During the second
quarter of 2008, we completed the sale of the remaining portion of our optical platform division for common shares of the
acquiring company with an estimated value of $27 million at the date of purchase. Overall, approximately 100 employees of
our optical products business became employees of the acquiring company.
During the second quarter of 2008, we completed the divestiture of our NOR flash memory business. We exchanged certain
NOR flash memory assets and certain assets associated with our phase change memory initiatives with Numonyx for a note
receivable with a contractual amount of $144 million and a 45.1% ownership interest in the form of common stock, together
valued at $821 million. We retain certain rights to intellectual property included within the divestiture. Approximately
2,500 employees of our NOR flash memory business became employees of Numonyx. STMicroelectronics contributed certain
assets to Numonyx for a note receivable with a contractual amount of $156 million and a 48.6% ownership interest in the form
of common stock. Francisco Partners paid $150 million in cash in exchange for the remaining 6.3% ownership interest in the
form of preferred stock and a note receivable with a contractual amount of $20 million. In addition, they received a payout
right that is preferential relative to the investments of Intel and STMicroelectronics. We did not incur a gain or loss upon
completion of the transaction in the second quarter of 2008, as we had recorded asset impairment charges in quarters prior to
deal closure. For further discussion, see “Note 15: Restructuring and Asset Impairment Charges.” Subsequent to the
divestiture, in the third quarter of 2008 we recorded a $250 million impairment charge on our investment in Numonyx within
gains (losses) on equity method investments. For further discussion on our investment and the terms of the divestiture, see
“Note 6: Equity Method and Cost Method Investments.”
During the third quarter of 2006, we completed the divestiture of our media and signaling business and associated assets that
were included in the Digital Enterprise Group operating segment. We received $75 million in cash consideration.
Approximately 375 employees of our media and signaling business became employees of the acquiring company. As a result
of this divestiture, we recorded a reduction of goodwill of $4 million. Additionally, we recorded a net gain of $52 million
within interest and other, net.
During the third quarter of 2006, we completed the divestiture of certain product lines and associated assets of our optical
networking components business that were included in the Digital Enterprise Group operating segment. Consideration for the
divestiture was $115 million, including $86 million in cash, and shares of the acquiring company with an estimated value of
$29 million. Approximately 55 employees of our optical networking components business became employees of the acquiring
company. As a result of this divestiture, we recorded a reduction of goodwill of $6 million. Additionally, we recorded a net
gain of $77 million within interest and other, net.
During the fourth quarter of 2006, we completed the divestiture of certain assets of our communications and application
processor business to Marvell Technology Group, Ltd. for a cash purchase price of $600 million plus the assumption of certain
liabilities. We included the operating results associated with the divested assets of our communications and application
processor business in the Mobility Group operating segment. Intel and Marvell also entered into an agreement whereby we
provided certain manufacturing and transition services to Marvell. Approximately 1,300 employees of our communications
and application processor business who were involved in a variety of functions, including engineering, product testing and
validation, operations, and marketing, became employees of Marvell. As a result of this divestiture, we recorded a reduction of
goodwill of $2 million. Additionally, we recorded a net gain of $483 million within interest and other, net.
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