EMC 2008 Annual Report Download - page 70

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The following represents the aggregate allocation of the purchase price for the aforementioned acquisitions to other intangible assets (table in thousands):
Developed technology (weighted-average useful life of 5.5 years) $ 65,335
Customer relationships (weighted-average useful life of 6.8 years) 53,224
Tradename and trademark (weighted-average useful life of 8.8 years) 27,270
Non-competition agreement (weighted-average useful life of 2.5 years) 2,463
Backlog (weighted-average useful life of 1.0 year) 800
Assembled workforce (weighted-average useful life of 4.9 years) 5,455
Acquired in-process research and development ("IPR&D") 85,780
Total intangible assets $240,327
The fair value of intangible assets was primarily based upon the income approach. The rates used to discount the net cash flows to their present values for
each acquisition were based upon weighted average costs of capital that ranged from 15% – 30%. The discount rates were determined after consideration of
market rates of return on debt and equity capital, the weighted average returns on invested capital and the risk associated with achieving forecasted sales
related to the technology and assets acquired. The total weighted average amortization period for the intangible assets is 6.4 years. The intangible assets are
being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized.
The IPR&D was written off at the respective dates of each acquisition because the IPR&D had no alternative uses and had not reached technological
feasibility. The value assigned to IPR&D was determined utilizing the income approach by determining cash flow projections relating to identified IPR&D
projects. The stage of completion of each in-process project was estimated to determine the discount rates to be applied to the valuation of the in-process
technology. Based upon the level of completion and the risk associated with in-process technology, we applied discount rates that ranged from 20% to 60% to
value the IPR&D projects acquired.
2007 Acquisitions
In the first quarter of 2007, we acquired all of the outstanding capital stock of Valyd Software Private Limited, a provider of solutions for entity-wide
data protection for a variety of database management systems. This acquisition further expands and strengthens our Security offerings.
In the first quarter of 2007, we acquired all of the outstanding capital stock of Indigo Stone Limited, a provider of software for business continuity, server
migration and bare metal recovery. This acquisition further expands our Information Storage solutions.
In the second quarter of 2007, we acquired all of the outstanding capital stock of Verid, Inc., a leader in information security technology that delivers
knowledge-based authentication. The technology from this acquisition provides protection, visibility and business acceleration at every point of the user
verification process and further strengthens our Security solutions.
In the second quarter of 2007, we acquired Geniant, a services provider in the area of technology strategy, enterprise architecture, application
development and integration, server and desktop design and lifecycle management services. This acquisition further enhances and expands our Information
Storage segment.
In the second quarter of 2007, we acquired all of the outstanding capital stock of X-Hive Corporation B.V., a provider of XML database and Content
Management solutions. This acquisition allows us to enable organizations of all sizes to transform the way they compete and create value from information.
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