NVIDIA 2004 Annual Report Download - page 46

Purchase Agreement, the cash consideration due at the closing was $70.0 million, less $15.0 million that was loaned to 3dfx pursuant
to a Credit Agreement dated December 15, 2000. The Asset Purchase Agreement also provided, subject to the other provisions
thereof, that if 3dfx properly certified that all its debts and other liabilities had been provided for, then we would have been obligated
to pay 3dfx two million shares of NVIDIA common stock. If 3dfx could not make such a certification, but instead properly certified
that its debts and liabilities could be satisfied for less than $25.0 million, then 3dfx could have elected to receive a cash payment equal
to the amount of such debts and liabilities and a reduced number of shares of our common stock, with such reduction calculated by
dividing the cash payment by $25.00 per share. If 3dfx could not certify that all of its debts and liabilities had been provided for, or
could not be satisfied, for less than $25.0 million, we would not be obligated under the agreement to pay any additional consideration
for the assets. We are currently party to litigation relating to certain aspects of the asset purchase and 3dfx’s subsequent bankruptcy in
October 2002. Please refer to Note 13 of the Notes to the Consolidated Financial Statements for further information regarding this
litigation.
The 3dfx asset purchase price of $70.0 million and direct transaction costs of $4.2 million were allocated based on fair values
presented below. Upon the adoption of Statement of Financial Accounting Standards No. 142, or SFAS No. 142, approximately $3.0
million of intangible assets previously allocated to workforce in place were reclassified into goodwill in fiscal 2003. In addition,
amortization of goodwill ceased in accordance with SFAS No. 142.
Fair Market
Value
Straight−Line
Amortization
Period
(In
thousands) (Years)
Property and equipment $ 2,433 1−2
Trademarks 11,310 5
Goodwill 60,418 −−
Total $ 74,161
The final allocation of the purchase price of the 3dfx assets is contingent upon the amount of additional consideration, if any, paid to
3dfx upon the final satisfaction of their liabilities.
Note 4 – Goodwill
The carrying amount of goodwill is as follows:
January 25, 2004 January 26, 2003
(In thousands)
3dfx $ 50,326 $ 50,326
MediaQ 53,695 −−
Other 4,888 3,901
Total goodwill $ 108,909 $ 54,227
Note 5 – Amortizable Intangible Assets
We are currently amortizing our intangible assets with definitive lives over periods ranging from 1 to 5 years. The components of our
amortizable intangible assets are as follows:
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NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 25, 2004 January 26, 2003
Gross
Carrying Accumulated Amortization Net Carrying Amount Gross Carrying Accumulated Amortization Net Carrying Amount