Acquisition-related charges

9 Months Ended

Sep. 30, 2013

Business Combination, Separately Recognized Transactions [Abstract]

Acquisition-related charges

Acquisition-related charges

We completed the acquisition of National Semiconductor Corporation (National) in September 2011. Various costs incurred as a result of that acquisition are included in Other, consistent with how management measures the performance of its segments. These total acquisition-related charges are as follows:

	For Three Months Ended September 30,				For Nine Months Ended September 30,
	2013		2012		2013		2012
Acquisition charges:
Amortization of intangible assets	$	81	$	81	$	244	$	244
Retention bonuses	2		5		5		53
Severance and other benefits	—		3		—		17
Stock-based compensation	3		4		8		14
Transaction and other costs	—		13		—		35
As recorded in Acquisition charges	86		106		257		363
Distributor contract termination recorded in COR	—		—		—		21
Total acquisition-related costs	$	86	$	106	$	257	$	384

The amount of recognized amortization of acquired intangible assets resulting from the National acquisition is based on estimated useful lives varying between two and ten years. See Note 6 for additional information.

Retention bonuses reflect amounts already or expected to be paid to former National employees who fulfill agreed-upon service period obligations and are recognized ratably over the required service period.

Severance and other benefits costs were for former National employees who were terminated after the closing date. About 350 jobs were eliminated by the end of 2012 as a result of redundancies and cost efficiency measures. As of September 30, 2013, a total of $86 million in cumulative charges have been recognized, of which $82 million has been paid.

Stock-based compensation was recognized for the accelerated vesting of equity awards upon the termination of employees, with additional compensation being recognized over the applicable vesting period for the remaining grantees.

Transaction and other costs include various expenses incurred in connection with the National acquisition.

In 2011, we discontinued using one of National’s distributors. We acquired the distributor’s inventory at fair value, resulting in an incremental charge of $21 million to COR upon sale of the inventory in 2012.