Identified Intangible Assets
|9 Months Ended|
Oct. 01, 2011
|Identified Intangible Assets [Abstract]|
|Identified Intangible Assets [Text Block]||
Note 18: Identified Intangible Assets
Identified intangible assets consisted of the following as of October 1, 2011 and December 25, 2010:
As a result of our acquisition of McAfee during the first quarter of 2011, we recorded $3.6 billion of identified intangible assets. In addition, as a result of our other acquisitions during the first nine months of 2011, we recorded $1.3 billion of identified intangible assets, most of which was from the acquisition of the WLS business of Infineon. For further information about identified intangible assets recorded as a result of acquisitions during the first nine months of 2011, see “Note 15: Acquisitions.”
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 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. As of October 1, 2011, the remaining liability of $1.2 billion is classified within other accrued liabilities and other long-term liabilities, based on the expected timing of the underlying payments. The intangible asset and associated liability for future payments to NVIDIA are treated as a noncash transaction and, therefore, have no impact on our consolidated condensed statements of cash flows for the nine months ended October 1, 2011. These future payments will be treated as cash used for financing activities.
For identified intangible assets that are subject to amortization, we recorded amortization expense on the consolidated condensed statements of income as follows:
Based on the identified intangible assets that are subject to amortization as of October 1, 2011, we expect future amortization expense to be as follows:
The entire disclosure for all or part of the information related to intangible assets.
Reference 1: http://www.xbrl.org/2003/role/presentationRef