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(1) Includes goodwill related to the Handheld business unit. Goodwill related to the Digital Television business
unit of $973 million has been excluded due to its discontinued operations classification.
(2) Adjustments to goodwill primarily represented changes in assumed pre-acquisition income tax liabilities as
a result of the ATI acquisition, which were applied to goodwill until ultimately settled with the tax
authorities and prior to the adoption of the provisions of the new accounting standard related to business
combinations at the beginning of 2009. Future changes will be recorded in the statement of operations.
(3) The Company’s Chief Operating Decision Maker (CODM) does not consider certain expenses, including
goodwill impairment, in evaluating the performance of reportable segments. Accordingly, the Computing
Solutions and Graphics impairment charges are not included in Computing Solutions and Graphics
operating income (loss) in the Company’s segment disclosures in Note 13.
(4) Includes reclassifications due to change in segments and goodwill adjustments.
2010 and 2009 Impairment Analyses
In the fourth quarters of 2010 and 2009, the Company conducted its annual impairment tests of
goodwill. The Company considered the income and market approaches in determining the implied fair value of
the goodwill. The income approach required estimates of future operating results and cash flows of each of the
reporting units discounted using estimated discount rates of approximately 22% in 2010 and from 15% to 18% in
2009. Based on the results of the Company’s annual analysis of goodwill in 2010 and 2009, the fair values
exceeded their carrying values by a significant amount, indicating that there was no goodwill impairment. As of
December 25, 2010 and December 26, 2009, the Company did not have any reporting units that were at risk of
failing Step 1 of the goodwill impairment test.
2008 Impairment Analyses
Goodwill
During 2008, the Company concluded that the carrying amount of goodwill associated with its Handheld
business unit was impaired and recorded an impairment charge of $336 million related to the Handheld business
unit. In addition, the Company concluded that the carrying amounts of goodwill assigned to the Graphics and
Computing Solutions segments exceeded their implied fair values and recorded impairment charges of $161
million and $461 million, respectively. The Company considered the income and market approaches in
determining the implied fair value of the goodwill. The income approach required estimates of future operating
results and cash flows of each of the reporting units discounted using applicable estimated discount rates ranging
from 19% to 30%. The conclusion was also due to the deterioration in the price of the Company’s common stock
and the resulting reduced market capitalization. The Company included these amounts in the caption
“Impairment of goodwill and acquired intangible assets” in its 2008 consolidated statement of operations.
The Company further concluded that the carrying amount of goodwill associated with its Digital Television
business unit was impaired and recorded impairment charges of $473 million related to the Digital Television
(DTV) business unit, which is included in the caption “Income (loss) from discontinued operations, net of tax” in
its 2008 consolidated statement of operations. The assumptions used for the assessment of the DTV business unit
were consistent with those used for the Handheld business unit described above.
Acquisition-related intangible assets
The outcome of the Company’s 2008 goodwill impairment analyses indicated that the carrying amount of
certain acquisition-related intangible assets or asset groups may not be recoverable. The Company assessed the
recoverability of the acquisition-related intangible assets or asset groups, as appropriate, by determining whether
the unamortized balances could be recovered through undiscounted future net cash flows. The Company
determined that certain of the acquisition-related intangible assets associated with our Computing Solutions and
Graphics segments and its Handheld business unit were impaired primarily due to the revised lower revenue
forecasts associated with the products incorporating the developed product technology, the customer
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