HP 2009 Annual Report Download - page 115

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6: Acquisitions (Continued)
for depreciation expense for property, plant and equipment, adjustments to interest expense and related
tax effects.
In millions, except per share data 2008
Net revenue ........................................................... $136,022
Net earnings .......................................................... $ 7,828
Basic net earnings per share ............................................... $ 3.15
Diluted net earnings per share ............................................. $ 3.05
Other acquisitions in fiscal 2008
HP also completed eight other acquisitions and a minority interest purchase during fiscal 2008.
Total consideration for the acquisitions and the minority interest purchase was $1.6 billion, which
includes direct transaction costs, the fair value of stock options assumed and certain liabilities recorded
in connection with these transactions. HP recorded $1.0 billion of goodwill, $600 million of purchased
intangibles and $15 million of IPR&D related to these transactions.
The largest of these transactions was the acquisition of Exstream Software, LLC, which has been
integrated into HP’s Imaging and Printing Group. The total purchase price paid was $720 million,
which included direct transaction costs as well as certain debt that was repaid at the acquisition date. In
connection with this acquisition, HP recorded $434 million of goodwill, $235 million of purchased
intangibles and expensed $11 million for IPR&D. HP is amortizing the purchased intangibles on a
straight-line basis over a weighted-average estimated life of 6.8 years.
Note 7: Goodwill and Purchased Intangible Assets
Goodwill
Goodwill allocated to HP’s business segments as of October 31, 2009 and 2008 and changes in the
carrying amount of goodwill during the fiscal year ended October 31, 2009 are as follows:
Enterprise Imaging
Storage Personal and HP
and HP Systems Printing Financial Corporate
Services Servers Software Group Group Services Investments Total
In millions
Balance at October 31, 2008 ..... $16,284 $4,745 $6,162 $2,493 $2,463 $144 $44 $32,335
Goodwill acquired during the
period .................. — 315 — — — — — 315
Goodwill adjustments ......... 545 (55) (22) (6) (3) — — 459
Balance at October 31, 2009 ..... $16,829 $5,005 $6,140 $2,487 $2,460 $144 $44 $33,109
During fiscal 2009, HP recorded adjustments of approximately $306 million to the estimated fair
values of EDS’s intangible assets and net liabilities acquired resulting in an increase to EDS’s goodwill,
which is allocated to the Services segment. These changes in the estimated fair values relate primarily
to restructuring liabilities, fixed assets, net deferred tax liabilities and intangible assets. In addition,
goodwill increased approximately $255 million as a result of currency translation related to certain of
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