Dell 2008 Annual Report Download - page 86

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
included ASAP in its software and peripherals line of business for product revenue reporting purposes. Goodwill, which represents the excess of the
purchase price over the net tangible and intangible assets acquired, is expected to be deductible for tax purposes.
Other Acquisitions in Fiscal 2008
Dell acquired three other companies in Fiscal 2008, Everdream Corporation, Silverback Technologies Inc., and Zing Systems Inc. Dell also
purchased CIT Group Inc.'s remaining 30% interest in DFS during Fiscal 2008. Total consideration for these purchases was approximately
$553 million, which included direct transaction costs and certain liabilities recorded in connection with these acquisitions. The largest of these
transactions was the purchase of CIT's 30% minority interest in DFS for approximately $306 million, which resulted in recognition of $245 million
of goodwill and gave Dell 100% ownership of DFS. With these acquisitions Dell expects to be able to broaden its services and financing offerings to
customers while simplifying IT. Dell originally recorded approximately $438 million of goodwill and $78 million of amortizable intangible assets in
connection with these other acquisitions. Dell also expensed approximately $8 million of IPR&D related to these acquisitions in Fiscal 2008.
The following table summarizes the purchase price allocations of all Fiscal 2008 acquisitions, including original estimates and adjusted allocations:
Original Adjusted
Allocations Allocations
(in millions)
Cash, cash equivalents, and short- term investments $ 31 $ 31
Other tangible assets 239 358
Liabilities (382) (455)
Total net liabilities assumed (112) (66)
Amortizable intangible assets 735 725
Indefinite lived intangible assets 27 25
Total purchased intangibles 762 750
Goodwill 1,538 1,510
IPR&D 83 83
Total purchase price $ 2,271 $ 2,277
The amortizable intangible assets are being amortized over their estimated useful lives based upon their expected future cash flows. The following
table summarizes the original and adjusted cost of amortizable intangible assets related to Fiscal 2008 acquisitions and their weighted-average useful
lives:
Original Original Adjusted
Estimated Weighted-Average Adjusted Weighted-Average
Cost Useful Life Cost Useful Life
(in millions) (years) (in millions) (years)
Technology $ 484 5.8 $ 480 5.7
Customer relationships 220 9.4 212 9.0
Covenants not-to-compete 22 3.9 22 4.9
Tradenames 8 5.3 10 5.3
Other 1 3.4 1 3.4
Total amortizable intangible assets $ 735 6.8 $ 725 6.6
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