Quarterly report pursuant to Section 13 or 15(d)

Business Combinations and Asset Acquisitions (Tables)

v3.22.2.2
Business Combinations and Asset Acquisitions (Tables)
 9 Months Ended
May 26, 2022
Feb. 14, 2022
Sep. 24, 2022
Business Combination and Asset Acquisition [Abstract]      
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The purchase consideration was preliminarily allocated as follows:
(In millions)
Cash and cash equivalents $ 111 
Accounts receivable 31 
Inventory 66 
Prepaid expenses and other current assets 43 
Property and equipment 11 
Deferred tax assets 22 
Acquisition-related intangibles 349 
Total Assets 633 
Accounts payable 15 
Accrued and other liabilities 61 
Total Liabilities 76 
Fair value of net assets acquired 557 
Goodwill 1,098 
Total purchase consideration $ 1,655 
The purchase consideration was preliminarily allocated as follows:
(In millions)
Cash and cash equivalents $ 2,366 
Short-term investments 1,582 
Accounts receivable 299 
Inventories 539 
Prepaid expenses and other current assets 61 
Property and equipment 692 
Operating lease right-of-use assets 61 
Acquisition-related intangibles 27,308 
Deferred tax assets 11 
Other non-current assets 418 
Total Assets 33,337 
Accounts payable 116 
Accrued liabilities 633 
Other current liabilities 191 
Long-term debt 1,474 
Long-term operating lease liabilities 45 
Deferred tax liabilities 4,346 
Other long-term liabilities 533 
Total Liabilities 7,338 
Fair value of net assets acquired 25,999 
Goodwill 22,794 
Total purchase consideration $ 48,793 
 
Business Acquisition, Pro Forma Information    
Supplemental Unaudited Pro Forma Information
Following are the supplemental consolidated financial results of the Company, Xilinx and Pensando on an unaudited pro forma basis, as if the acquisitions had been consummated as of the beginning of the fiscal year 2021 (i.e., December 27, 2020).
Three Months Ended Nine Months Ended
September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
(In millions)
Net revenue $ 5,565  $ 5,258  $ 18,518  $ 14,290 
Net income (loss) $ 397  $ 224  $ 1,928  $ (369)
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination
Following are details of the purchase consideration allocated to acquired intangible assets:
Fair Value Weighted-average estimated useful life
(In millions) (In years)
Developed technology (1)
$ 60  4 years
Customer relationships (2)
34  3 years
Customer backlog (3)
16  1 year
Product trademarks (4)
19  5 years
Identified intangible assets subject to amortization 129 
In-process research and development (IPR&D) not subject to amortization (5)
220  N/A
Total identified intangible assets acquired $ 349 
Following are details of the purchase consideration allocated to acquired intangible assets:
Fair Value Weighted-average estimated useful life
(In millions) (In years)
Developed technology (1)
$ 12,295  16 years
Customer relationships (2)
12,290  14 years
Customer backlog (3)
793  1 year
Corporate trade name (4)
65  1 year
Product trademarks (4)
895  12 years
Identified intangible assets subject to amortization 26,338 
In-process research and development (IPR&D) not subject to amortization (5)
970  N/A
Total identified intangible assets acquired $ 27,308 
(1)The fair value of developed technology was determined using the income approach, specifically, the multi-period excess earnings method.
(2)Customer relationships represent the fair value of existing contractual relationships and customer loyalty determined based on existing relationships using the income approach, specifically the with and without method.
(3)Customer backlog represents the fair value of non-cancellable customer contract orders using the income approach, specifically the multi-period excess earnings method.
(4)Corporate trade name and product trademarks primarily relate to the Xilinx brand and product-related trademarks, respectively, and the fair values were determined by applying the income approach, specifically the relief from royalty method.
(5)The fair value of IPR&D was determined using the income approach, specifically the multi-period excess earnings method.
The fair value of the identified intangible assets subject to amortization are amortized over the assets’ estimated useful lives based on the pattern in which the economic benefits are expected to be received to cost of sales and operating expenses.
IPR&D consists of projects that have not yet reached technological feasibility as of the acquisition date. Accordingly, the Company recorded an indefinite-lived intangible asset of $970 million for the fair value of these projects, which will initially not be amortized. Instead, these projects will be tested for impairment annually and whenever events or changes in circumstances indicate that these projects may be impaired. Once the project reaches technological feasibility, the Company will begin to amortize the intangible assets over their estimated useful life.