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NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In computing fair value of our reporting units, we use estimates of future revenues, costs and cash flows from such units. The
amount of goodwill allocated to our GPU, MCP, Handheld GPU, Consumer Electronics, and All Other segments as of January 28,
2007, was $99.3 million, $46.2 million, $137.7 million, $11.9 million, and $6.3 million, respectively. As of January 29, 2006, the
amount of goodwill allocated to our GPU, MCP, Handheld GPU, Consumer Electronics, and All Other segments, was $99.3 million,
$15.1 million, $12.7 million, $11.9 million, and $6.3 million, respectively. Please refer to Note 14 of the Notes to Consolidated
Financial Statements for further segment information.
Note 6 − Amortizable Intangible Assets
We are currently amortizing our intangible assets with definitive lives over periods ranging from 1 to 5 years on a straight−line
basis. The components of our amortizable intangible assets are as follows:
January 28, 2007 January 29, 2006
Gross
Carrying
Amount Accumulated
Amortization Net Carrying
Amount
Gross
Carrying
Amount Accumulated
Amortization Net Carrying
Amount
(In thousands)
Technology licenses $ 37,516 $ (20,480) $ 17,036 $ 21,586 $ (13,595) $ 7,991
Patents 34,623 (24,569) 10,054 23,750 (19,911) 3,839
Acquired intellectual property 50,212 (31,894) 18,318 27,086 (24,516) 2,570
Trademarks 11,310 (11,310) − 11,310 (10,807) 503
Other 1,494 (1,391) 103 1,494 (976) 518
Total intangible assets $ 135,155 $ (89,644) $ 45,511 $ 85,226 $ (69,805) $ 15,421
The increase in the gross carrying amount of acquired intellectual property as of January 28, 2007 as compared to January 29,
2006 is primarily related to $3.1 million, $8.4 million and $11.6 million of intangible assets that resulted from our acquisitions of ULi,
Hybrid Graphics and PortalPlayer, respectively, during fiscal 2007. Please refer to Note 4 of our Notes to Consolidated Financial
Statements for further information. In addition, the $10.9 million increase in the gross carrying amount of patents is related primarily
to patents licensed from Opti Incorporated, or Opti, for $8.0 million as a result of the license and settlement agreements described in
Note 12 of our Notes to Consolidated Financial Statements.
During fiscal 2007, we entered into a confidential patent licensing arrangement. As part of this arrangement, we recorded a
charge of $16.0 million to the cost of revenue category in our statement of income related to past usage of certain patents subject to
the arrangement. Our commitment for future license payments under this arrangement could range from $97.0 million to $110.0
million over a ten year period; however, the net outlay under this arrangement may be reduced by the occurrence of certain events
covered by the arrangement. The increase in the gross carrying amount of technology licenses as of January 28, 2007 when compared
to January 29, 2006 is primarily related to approximately $14.4 million committed by us during fiscal 2007 under this arrangement.
Amortization expense associated with intangible assets for fiscal years 2007, 2006 and 2005 was $19.8 million, $16.9 million
and $19.7 million, respectively. Future amortization expense for the net carrying amount of intangible assets at January 28, 2007 is
estimated to be $17.1 million in fiscal 2008, $11.1 million in fiscal 2009, $6.9 million in fiscal 2010, $2.8 million in fiscal 2011, $2.0
million in fiscal 2012, and $5.6 million in fiscal 2013 and thereafter.
78
Source: NVIDIA CORP, 10−K, March 16, 2007