Intel 2013 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2013 Intel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

75
The goodwill of $4.3 billion arising from the acquisition is primarily attributed to synergies to enable a single
company to combine security and hardware for the protection of online devices, as well as the assembled workforce
of McAfee. Substantially all of the goodwill recognized is not deductible for tax purposes. For information on the
assignment of goodwill to our operating segments for the acquisition, see “Note 10: Goodwill.”
The identified intangible assets assumed in the acquisition of McAfee were recognized as follows based upon their
fair value as of February 28, 2011:
Fair Value
(In Millions)
Estimated
Useful Life
(In Years)
Developed technology $ 1,221 4
Customer relationships 1,418 2 – 7
Total identified intangible assets subject to amortization $ 2,639
In-process research and development 92
Trade names 821
Total identified intangible assets $ 3,552
Acquired developed technology represents the fair value of McAfee products that have reached technological
feasibility and were part of McAfee’s product offerings at the date of acquisition. Customer relationships represent
the fair value of the underlying relationships and agreements with McAfee’s customers. In-process R&D represents
the fair value of incomplete McAfee R&D projects that had not reached technological feasibility as of the date of
acquisition. Incremental costs incurred for those projects are expensed as incurred in R&D. Since the acquisition
was completed, most of the projects have been completed and the associated costs are being amortized. Trade
names are indefinite-lived intangible assets and represent the fair value of brand and name recognition associated
with the marketing of McAfee’s products and services.
Other 2011 Acquisitions
During 2011, in addition to the McAfee acquisition, we completed 13 acquisitions qualifying as business
combinations in exchange for total consideration of $2.1 billion, substantially all cash consideration. Total net cash
consideration to acquire the Wireless Solutions (WLS) business of Infineon Technologies AG, which operated as
Intel Mobile Communications (IMC), was $1.4 billion. The WLS business offers mobile phone components such as
baseband processors, radio frequency transceivers, and power management integrated circuits. In addition to
managing the existing WLS business, the objective of the acquisition was to provide solutions that enable wireless
connectivity for a broad range of computing applications. In 2013, we completed a reorganization of IMC into our
Multi-Comm and existing Phone Group operating segments, see "Note 27: Operating Segments and Geographic
Information."
The fair value of the assets acquired and liabilities assumed by major class in the acquisitions completed during
2011, excluding McAfee, was allocated as follows:
(In Millions)
Fair value of net tangible assets acquired $ 206
Goodwill 517
Identified intangible assets 1,409
Total $ 2,132
For information on the assignment of goodwill to our operating segments for the acquisitions, see “Note 10:
Goodwill.”
Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)