Computer Associates 2013 Annual Report Download - page 85

was allocated as follows: $26 million to purchased software, $17 million to goodwill, $4 million to finite-lived intangible
assets and $5 million to deferred tax liabilities. The allocation of purchase price to acquired identifiable assets, including
intangible assets, is preliminary because the Company has not completed its analysis of fair value and historical tax records
of Nolio. The goodwill relating to the Company’s acquisition of Nolio was allocated to the Enterprise Solutions segment and
is not expected to be deductible for tax purposes. Transaction costs for the acquisition were immaterial.
The Company’s other acquisitions during fiscal year 2013 were immaterial, both individually and in the aggregate. The
proforma effects of the fiscal year 2013 acquisitions on the Company’s revenues and results of operations during fiscal years
2013 and 2012 were considered immaterial.
During fiscal year 2012, the Company acquired 100% of the voting equity interest of Interactive TKO, Inc. (ITKO), a
privately held provider of service simulation solutions for developing applications in composite and cloud environments. The
acquisition expands solutions the Company offers enterprises and service providers for using and providing cloud computing
to deliver business services. The total purchase price of the acquisition was approximately $315 million. The Company’s
other acquisitions during fiscal year 2012 were immaterial, both individually and in the aggregate.
The proforma effects of the Company’s fiscal year 2012 acquisitions on the Company’s revenues and results of operations
during fiscal years 2012 and 2011 were considered immaterial. The purchase price allocation of the Company’s fiscal year
2012 acquisitions is as follows:
OTHER FISCAL YEAR ESTIMATED
(dollars in millions) ITKO 2012 ACQUISITIONS USEFUL LIFE
Finite-lived intangible assets(1) $ 16 $ 11 3-15 years
Purchased software 190 8 7 years
Goodwill 159 20 Indefinite
Deferred tax liabilities (70) (3) —
Other assets net of other liabilities assumed 20(2) 3—
Purchase price $ 315 $ 39
(1) Includes customer relationships and trade names.
(2) Includes approximately $20 million of cash acquired relating to ITKO.
Transaction costs for acquisitions were immaterial for fiscal year 2012. The excess purchase price over the estimated value of
the net tangible and identifiable intangible assets was recorded to goodwill. The allocation of a significant portion of the
purchase price to goodwill was predominantly due to synergies the Company expects from marketing and integration with
other products of the Company and intangible assets that are not separable, such as assembled workforce and going
concern. The goodwill relating to the Company’s second quarter fiscal year 2012 acquisition of ITKO was not deductible for
tax purposes and was allocated to the Enterprise Solutions segment. A majority of the goodwill relating to the Company’s
other fiscal year 2012 acquisitions was deductible for tax purposes and was primarily allocated to the Services segment.
The Company had approximately $14 million and $24 million of accrued acquisition-related costs at March 31, 2013 and
2012, respectively, related to purchase price amounts withheld subject to indemnification protections.
Note 3 — Divestitures
In the first quarter of fiscal year 2012, the Company sold its Internet Security business for approximately $14 million and
recognized a gain on disposal of approximately $23 million, including tax expense of approximately $18 million. In the first
quarter of fiscal year 2011, the Company sold its Information Governance business, consisting primarily of the CA Records
Manager and CA Message Manager software offerings and related professional services for approximately $19 million and
recognized a loss on disposal of approximately $5 million, including tax expense of approximately $4 million.
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