HP 2007 Annual Report Download - page 113

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6: Acquisitions (Continued)
also included the estimated fair value of earned unvested stock options and out-of-the-money vested stock options assumed
by HP.
Based on valuations prepared using estimates and assumptions provided by management, the purchase price allocation as
of the date of acquisition has been allocated as follows:
In millions
Cash and short-term investments............................................................................................................................. $830
Other tangible assets ................................................................................................................................................ 541
Notes payable .......................................................................................................................................................... (303)
Other liabilities assumed.......................................................................................................................................... (954)
Total net assets...................................................................................................................................................... 114
Amortizable intangible assets .................................................................................................................................. 1,079
Goodwill .................................................................................................................................................................. 3,480
IPR&D..................................................................................................................................................................... 181
Total purchase price................................................................................................................................................. $4,854
Note 8 contains information related to the cost of restructuring programs for Mercury employees, which was also
included as part of other liabilities assumed.
HP has included Mercury in the OpenView business within the HP Software segment. Goodwill, which represents the
excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes. The
amortizable intangible assets are being amortized over their estimated useful lives as follows:
In millions
Weighted-
average
useful life
Technology .................................................................................................................................... $592 4.2 years
Customer relationships .................................................................................................................. 243 7.0 years
Maintenance contracts ................................................................................................................... 239 6.8 years
Trademarks .................................................................................................................................... 5 6.0 years
Total amortizable intangible assets................................................................................................ $1,079 5.4 years
Opsware Acquisition
On September 17, 2007, HP completed its tender offer for Opsware Inc. (“Opsware”), a leader in data center automation,
and acquired more than 90% of Opsware’ s common shares for cash consideration of $14.25 per share. On September 21,
2007, HP acquired all remaining outstanding Opsware shares and Opsware became a wholly owned subsidiary of HP which
will be included in the HP Software segment.
The aggregate purchase price of approximately $1.7 billion consisted of cash paid for outstanding stock, vested in-the-
money stock options and direct transaction costs. In addition, the purchase price also included the estimated fair value of
earned unvested stock options and out-of-the-money vested stock options assumed by HP. In connection with this
acquisition, HP recorded approximately
99