AMD 2012 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2012 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

The assets acquired and liabilities assumed based on the estimated fair value of SeaMicro were as follows:
March 23,
2012 Estimated useful lives
(In millions)
Purchase consideration
Cash ...................................... $293
Vested portion of the replacement grants ......... 19
Total purchase consideration .................. $312
Tangible assets acquired .......................... $ 24
Identified intangible assets acquired
Developed technology ....................... 86 8years
In-process research and development ............ 11
Customer relationships ....................... 4 4years
Trade name ................................ 1 4years
Total assets acquired ............................. 126
Liabilities assumed .............................. 8
Deferred tax liabilities ........................... 36
Total liabilities assumed .......................... 44
Goodwill ...................................... $230
The developed technology of SeaMicro relates to SeaMicro’s SM10000 server offerings, which is built
around a parallel array of independent ultra-low power processors, and it serves to integrate computation,
switching, server management, and load balancing. In addition to developed technology, SeaMicro had in-
process research and development projects, which were incomplete at the time of the acquisition. The value of
developed technology and in-process research and development was determined based on the present value of
estimated expected cash flows attributable to the technology. The customer relationships related to the ability to
sell existing, in-process and future versions of the technology to SeaMicro’s existing customers and were valued
based on incremental cash flows generated from the existing customer base. The trade name related to the
SeaMicro brand names. The goodwill was primarily attributed to premiums paid for synergies between AMD and
SeaMicro and the assembled workforce and is not deductible for tax purposes. The acquired developed
technology, customer relationships and trade name are amortized on a straight-line basis over their estimated
useful lives. The acquired in-process research and development and goodwill associated with the acquisition are
categorized as indefinite-lived intangible assets and subject to impairment review. Capitalized acquired in-
process research and development costs will remain capitalized until such time as the projects are complete, at
which point they will be amortized, or they will be written off when it is probable the projects will not be
completed. As of December 29, 2012, approximately $5 million of in-process research and development projects
were completed and classified as developed technology, and the Company started to amortize these projects on a
straight-line basis over their estimated useful lives.
81