Business Combinations and Asset Acquisitions (Tables)

6 Months Ended

May 26, 2022

Feb. 14, 2022

Jun. 25, 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	59
Total Liabilities	74
Fair value of net assets acquired	559
Goodwill	1,110
Total preliminary purchase consideration	$	1,669

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				Six Months Ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
	(In millions)
Net revenue	$	6,567	$	4,734	$	12,953	$	9,032
Net income (loss)	$	808	$	(80)	$	1,527	$	(605)

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 will be 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.