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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2007
Acquisition related transaction costs: Acquisition related transaction costs include estimated investment
banking fees, legal and accounting fees and other external costs directly related to the acquisition.
Preliminary Purchase Price Allocation
Under business combination accounting, the total purchase price was allocated to Hyperion’s net tangible and
identifiable intangible assets based on their estimated fair values as of April 13, 2007 as set forth below. The
excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill.
The preliminary allocation of the purchase price was based upon a preliminary valuation and our estimates
and assumptions are subject to change. The primary areas of the purchase price allocation that are not yet
finalized relate to restructuring costs, the valuation of consulting contract obligations assumed, the valuation
of intangible assets acquired, certain legal matters, income and non-income based taxes and residual goodwill.
(in millions)
Cash and marketable securities $ 518
Trade receivables 227
Goodwill 1,673
Intangible assets 1,460
Other assets 105
Accounts payable and other liabilities (248)
Restructuring (see Note 3) (108)
Deferred tax liabilities, net (358)
Deferred revenues (74)
In-process research and development 56
Total purchase price $ 3,251
Intangible Assets
In performing our preliminary purchase price allocation, we considered, among other factors, our intention for
future use of acquired assets, analyses of historical financial performance and estimates of future performance
of Hyperion’s products. The fair value of intangible assets was based, in part, on a valuation completed by a
third party valuation firm using an income approach and estimates and assumptions provided by management.
The rates utilized to discount net cash flows to their present values were based on our weighted average cost
of capital and ranged from 10% to 22%. These discount rates were determined after consideration of our rate
of return on debt capital and equity and the weighted average return on invested capital. The following table
sets forth the components of intangible assets associated with the Hyperion acquisition:
(Dollars in millions) Fair Value Useful Life
Software support agreements and related relationships $ 500 9 years
Developed technology 521 5 years
Core technology 211 7 years
Customer relationships 182 9 years
Trademarks and other 46 10 years
Total intangible assets $ 1,460
Customer relationships and software support agreements and related relationships represent the underlying
relationships and agreements with Hyperion’s installed customer base. Developed technology, which
comprises
79
Source: ORACLE CORP, 10-K, June 29, 2007 Powered by Morningstar® Document Research℠