Intel 2012 Annual Report Download - page 76

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The unaudited pro forma financial results for 2011 and 2010 combine the historical results of Intel for 2011 and 2010,
respectively, along with the historical results of the businesses acquired during 2011 for 2011 and 2010, respectively. The
results include the effects of pro forma adjustments as if businesses acquired in 2011 were acquired on December 27,
2009. The 2010 pro forma results include a non-recurring adjustment of $307 million, which reduces net income due to
the revaluation of McAfee’s historic deferred revenue to fair value.
The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected
benefits of the acquisitions. This is presented for informational purposes only and is not indicative of future operations or
results that would have been achieved had the acquisitions been completed as of December 27, 2009.
(In Millions, Except Per Share
Amounts—Unaudited)
2011
2010
Net revenue................................................................................
$ 54,738
$ 47,350
Net income .................................................................................
$ 13,028
$ 11,190
Diluted earnings per share .........................................................
$ 2.41
$ 1.96
2010 Acquisitions
During 2010, we completed three business acquisitions qualifying as business combinations in exchange for aggregate
net cash consideration of $218 million. Substantially all of the consideration was allocated to goodwill and acquisition-
related developed technology intangible assets. The completed acquisitions in 2010, both individually and in the
aggregate, were not significant to our consolidated results of operations.
Note 14: Divestitures
In the first quarter of 2011, we completed the divestiture of our Digital Health Group by entering into an agreement with
GE to form an equally owned joint venture to create a new healthcare company focused on independent living and
delivery of health-related services via telecommunications. The new company, Care Innovations, was formed by
combining assets of GE Healthcare’s Home Health division and Intel’s Digital Health Group. During the first quarter of
2011, as a result of the formation of Care Innovations, we recognized a gain of $164 million, within interest and other, net.
For further information, see “Note 10: Equity Method and Cost Method Investments.”
Note 15: Goodwill
Goodwill activity for the years ended December 29, 2012 and December 31, 2011 was as follows:
(In Millions)
PC Client
Group
Data Center
Group
Other Intel
Architecture
Operating
Segments
Software and
Services
Operating
Segments
Total
December 25, 2010 .............................................
$ 2,234
$ 1,459
$ 582
$ 256
$ 4,531
Additions due to McAfee acquisition.....................
746
—
—
3,553
4,299
Additions due to other acquisitions.......................
24
94
176
223
517
Transfers ..............................................................
(86)
—
86
—
—
Effect of exchange rate fluctuations .....................
—
—
—
(93)
(93)
December 31, 2011 .............................................
$ 2,918
$ 1,553
$ 844
$ 3,939
$ 9,254
Additions due to other acquisitions.......................
44
286
78
44
452
Impairments..........................................................
—
—
(6)
—
(6)
Effect of exchange rate fluctuations .....................
—
—
—
10
10
December 29, 2012 .............................................
$ 2,962
$ 1,839
$ 916
$ 3,993
$ 9,710
We completed the acquisition of McAfee during the first quarter of 2011. The goodwill recognized from this acquisition
was allocated between the McAfee operating segment and our PC Client Group based on the relative expected fair value
provided by the acquisition, which reflected the estimated synergistic value generated within the PC Client Group from
incorporating McAfee’s security expertise, reputation, and customer base. The goodwill recognized from our other
acquisitions during 2011 was allocated to McAfee, the Software and Services Group, Intel Mobile Communications, the
Data Center Group, the Phone Group (formerly the Ultra-Mobility Group), and the PC Client Group. McAfee and the
Software and Services Group are included in the software and services operating segments category in the preceding
table, while Intel Mobile Communications and the Phone Group are included in the other Intel architecture operating
segments category. For further information about our acquisitions during 2011 see “Note 13: Acquisitions.”