EMC 2010 Annual Report Download - page 58

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The new accounting guidance for revenue recognition is not expected to have a significant effect on revenue when applied to our multiple element
arrangements based on our current go-to-market strategies due to the existence of VSOE of fair value for the typical undelivered elements in most of our
product and service offerings in the future.
The new accounting standards, if applied to the year ended December 31, 2009, would not have had a material impact on our revenue for that year.
B. Non-controlling Interest in VMware, Inc.
The non-controlling interests' share of equity in VMware is reflected as Non-controlling interest in VMware, Inc. in the accompanying consolidated
balance sheets and was $762.7 million and $510.6 million as of December 31, 2010 and 2009, respectively. At December 31, 2010, EMC held approximately
97% of the combined voting power of VMware's outstanding common stock and approximately 80% of the economic interest in VMware.
The effects of changes in our ownership interest in VMware on our equity were as follows (table in thousands):
For the Twelve Months Ended
December 31, 2010 December 31, 2009
Net income attributable to EMC Corporation $ 1,899,995 $ 1,088,077
Transfers (to) from the non-controlling interest in VMware, Inc.:
Increase in EMC Corporation's additional paid-in-capital for VMware's equity issuances 151,274 85,226
Decrease in EMC Corporation's additional paid-in-capital for VMware's other equity activity (337,451) (59,657)
Net transfers (to) from non-controlling interest (186,177) 25,569
Change from net income attributable to EMC Corporation and transfers from the non-controlling interest in VMware,
Inc. $ 1,713,818 $ 1,113,646
C. Acquisitions
2010 Acquisitions
Acquisition of Isilon Systems, Inc.
In the fourth quarter of 2010, we acquired all of the outstanding capital stock of Isilon Systems, Inc. ("Isilon"), a "scale-out NAS" (network attached
storage) systems company. This acquisition further complements and expands our Information Storage business.
The purchase price for Isilon, net of cash and investments, was $2,327.9 million, which consisted of $2,301.1 million of cash consideration and $26.8
million for the fair value of our stock options granted in exchange for existing Isilon options. We incurred $0.6 million of transaction costs for legal and
accounting services, which are included in restructuring and acquisition-related charges in our Consolidated Income Statements. The fair value of our stock
options issued to employees of Isilon was estimated using a Black-Scholes option pricing model.
The purchase price has been allocated to the assets acquired and the liabilities assumed based on estimated fair values as of the acquisition date.
56