NVIDIA 2015 Annual Report Download - page 149

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
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settlement of the Trustee’s claims against us. This conditional settlement was subject to a confirmation process through a
vote of creditors and the review and approval of the Bankruptcy Court. The conditional settlement called for a payment by
NVIDIA of $30.6 million to the 3dfx estate. Under the settlement, $5.6 million related to various administrative expenses
and Trustee fees, and $25.0 million related to the satisfaction of debts and liabilities owed to the general unsecured creditors
of 3dfx. Accordingly, during the three month period ended October 30, 2005, we recorded $5.6 million as a charge to
settlement costs and $25.0 million as additional purchase price for 3dfx. The Trustee advised that he intended to object to
the settlement.
The conditional settlement never progressed substantially through the confirmation process. On December 20, 2010,
the District Court issued an Order affirming the Bankruptcy Court's entry of summary judgment in NVIDIA's favor, and
on January 19, 2011, the Trustee filed a Notice of Appeal to the United States Court of Appeals for the Ninth Circuit. Oral
argument on the appeal was held on October 8, 2014. On November 6, 2014, the Ninth Circuit affirmed the District Court’s
decision upholding the ruling of the Bankruptcy Court. As a result, we paid $5.6 million in related legal expenses. The case
concluded on February 5, 2015 and we reversed the $25.0 million liability for additional contingent consideration and
reduced the goodwill related to our 3dfx acquisition by the same amount as of January 25, 2015.
Please refer to Note 12 of these Notes to the Consolidated Financial Statements for further information regarding this
litigation.
Note 5 - Goodwill
The carrying amount of goodwill is as follows:
January 25,
2015 January 26, 2014
(In thousands)
Icera.................................................................................................................................. $ 271,186 $ 271,186
PortalPlayer...................................................................................................................... 104,896 104,896
3dfx................................................................................................................................... 50,326 75,326
Mental Images.................................................................................................................. 59,252 59,252
MediaQ............................................................................................................................. 35,167 35,167
ULi ................................................................................................................................... 31,115 31,115
Hybrid Graphics............................................................................................................... 27,906 27,906
Ageia ................................................................................................................................ 19,198 19,198
Portland Group Inc........................................................................................................... 2,149 2,149
Other................................................................................................................................. 16,984 16,984
Total goodwill......................................................................................................... $ 618,179 $ 643,179
The $25.0 million decrease in goodwill as of January 25, 2015, when compared to January 26, 2014 is due to conclusion
of the 3dfx case without requiring additional contingent consideration. Please refer to Note 4 of these Notes to the
Consolidated Financial Statements for further discussion regarding the 3dfx case.
The amount of goodwill allocated to our GPU and Tegra Processor segments as of January 25, 2015 was $209.7 million
and $408.5 million, respectively, and as of January 26, 2014 was $230.4 million and $412.8 million, respectively. Please
refer to Note 16 of these Notes to the Consolidated Financial Statements for further discussion regarding segments.
We allocate goodwill to our reporting units and perform our annual impairment test during the fourth quarter of our
fiscal year, or earlier if indicators of potential impairment exist. For the purposes of completing our impairment test,