AMD 2013 Annual Report Download - page 85

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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 the
Company 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 28, 2013, 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.
NOTE 5: Sale and Leaseback Transactions
In September 2013, the Company sold a light industrial building in Singapore and leased back a portion of
the original space. The Company received net cash proceeds of $46 million in connection with the sale, which
resulted in a $17 million gain in the third quarter of 2013 and a $14 million deferred gain as of September 28,
2013 that will be amortized over the initial operating lease term. The initial operating lease term expires in
September 2023 and provides for options to extend the lease for 4 years, at the end of the initial operating lease
term, and for an additional 3.5 years thereafter.
In September 2013, the Company also sold an office building in Austin, Texas. The Company received net
cash proceeds of $10 million in connection with the sale and recorded a $5 million gain in the third quarter of
2013.
77