Blackberry 2016 Annual Report Download - page 91

BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
23
existing security solutions, help customers identify the latest cybersecurity threats, develop risk appropriate mitigation
strategies, implement and maintain IT security standards and techniques, and defend against the risk of future attacks.
The following table summarizes the preliminary fair value allocations of the acquisition price of the assets acquired and
liabilities assumed during fiscal 2016:
Good AtHoc WatchDox Encription Total
Non-cash assets acquired
Current assets $ 33 $ 11 $ 3 $ 1 $ 48
Property, plant and equipment, net and other long term
assets 9 3 — — 12
Intangible assets
Acquired technology 148 55 30 — 233
Customer relationships 88 40 4 — 132
Brand 31 3 — — 34
Other 9 — — — 9
Goodwill(1) 313 191 28 8 540
631 303 65 9 1,008
Liabilities assumed
Current liabilities 54 6 3 1 64
Debt 88 — — — 88
Deferred revenue(2) 156 15 7 — 178
Deferred tax liability 7 42 — — 49
305 63 10 1 379
Net non-cash assets acquired 326 240 55 8 629
Cash acquired 23 — 4 — 27
Restricted cash acquired 10 — — — 10
Net assets acquired 359 240 59 8 666
Settlement of acquiree debt(3) 88 — — — 88
Elimination of bridge loan(4) (30) — — — (30)
417 240 59 8 724
Consideration
Cash consideration 329 240 59 8 636
Settlement of acquiree debt(3) 88 — — — 88
Total consideration 417 240 59 8 724
Acquisition-related costs (included in selling, general and
administration expenses for the fiscal year ended February 29,
2016) 2 — — — 2
Future post-combination employment expense 6 10 — — 16
Total purchase price $ 425 $ 250 $ 59 $ 8 $ 742
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(1) Goodwill represents the excess of the acquisition price over the fair value of net assets acquired, which is not
expected to be deductible for tax purposes when goodwill results from share purchases.
(2) The fair value of deferred revenue represents the costs to service the assumed obligations, plus a normal profit
margin as required under purchase accounting.
(3) $88 million in cash was paid to Good’s existing debt holders to settle Good’s debt outstanding at acquisition.
(4) During the three months ended November 28, 2015 and following the signing of the definitive purchase agreement
on September 4, 2015, the Company provided Good with a bridge financing loan of $30 million in cash. The cash
was reacquired on acquisition and the loan was eliminated.
The weighted average amortization period of the acquired technology and customer relationships related to the business
acquisitions completed during the year ended February 29, 2016 is approximately six years and seven years respectively.