Intel 2013 Annual Report Download - page 84

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In January 2011, we entered into a long-term patent cross-license agreement with NVIDIA. Under the agreement,
we received a license to all of NVIDIA’s patents with a capture period that runs through March 2017 while NVIDIA
products are licensed to our patents, subject to exclusions for x86 products, certain chipsets, and certain flash
memory technology products. The agreement also included settlement of the existing litigation between the
companies, as well as broad mutual general releases. We agreed to make payments totaling $1.5 billion to NVIDIA
over six years ($300 million in each of January 2011, 2012, and 2013; and $200 million in each of January 2014,
2015, and 2016), which resulted in a liability totaling approximately $1.4 billion, on a discounted basis. In the fourth
quarter of 2010, we recognized an expense of $100 million related to the litigation settlement. In the first quarter of
2011, we recognized the remaining amount of $1.3 billion as licensed technology, which will be amortized into cost
of sales over its estimated useful life of 17 years. The initial recognition of the intangible asset and associated
liability for future payments to NVIDIA was treated as a non-cash transaction and, therefore, had no impact on our
consolidated statements of cash flows. Future payments are treated as cash used for financing activities. As of
December 28, 2013, the remaining liability of $587 million is classified within other accrued liabilities and other long-
term liabilities, based on the expected timing of the underlying payments.
We recorded amortization expense on the consolidated statements of income as follows: amortization of
acquisition-related developed technology and licensed technology and patents is included in cost of sales,
amortization of acquisition-related customer relationships and trade names is included in amortization of acquisition-
related intangibles, and amortization of other intangible assets is recorded as a reduction of revenue.
Amortization expenses for each period were as follows:
(In Millions) 2013 2012 2011
Acquisition-related developed technology $ 576 $ 557 $ 482
Acquisition-related customer relationships 279 296 250
Acquisition-related trade names 12 12 10
Licensed technology and patents 272 214 181
Other intangible assets 103 86 —
Total amortization expenses $ 1,242 $ 1,165 $ 923
Based on identified intangible assets that are subject to amortization as of December 28, 2013, we expect future
amortization expense for each period to be as follows:
(In Millions) 2014 2015 2016 2017 2018
Acquisition-related developed technology $ 579 $ 303 $ 211 $ 63 $ 41
Acquisition-related customer relationships 268 251 233 142 29
Acquisition-related trade names 10 9 3 — —
Licensed technology and patents 270 252 238 199 158
Total future amortization expenses $ 1,127 $ 815 $ 685 $ 404 $ 228
Note 12: Other Long-Term Assets
Other long-term assets at the end of each period were as follows:
(In Millions) Dec 28, 2013 Dec 29, 2012
Equity method investments $ 1,038 $ 992
Non-marketable cost method investments 1,270 1,202
Non-current deferred tax assets 434 358
Loans receivable 952 644
Other 1,795 952
Total other long-term assets $ 5,489 $ 4,148
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INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)