Oracle 2009 Annual Report Download - page 108

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2010
set forth below. The excess of the purchase price over the preliminary net tangible assets and 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 within the measurement period
(up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of
certain tangible assets and liabilities acquired, certain legal matters, income and non-income based taxes and residual goodwill. We expect to continue to obtain
information to assist us in determining the fair values of the net assets acquired at the acquisition date during the measurement period. Our preliminary purchase
price allocation for Sun is as follows:
(in millions)
Cash, cash equivalents and marketable securities $ 2,571
Trade receivables 1,120
Inventories 331
Goodwill 1,291
Intangible assets 3,347
In-process research and development 415
Other assets 2,035
Deferred tax assets, net 1,250
Accounts payable and other liabilities (3,950)
Deferred revenues (1,115)
Total preliminary purchase price $ 7,295
We generally do not expect the goodwill recognized to be deductible for income tax purposes.
Valuations of Intangible Assets Acquired
The following table sets forth the components of intangible assets acquired in connection with the Sun acquisition:
(Dollars in millions) Fair Value Useful Life
Hardware systems support agreements and related relationships $ 771 7 years
Developed technology 1,349 4 years
Core technology 534 4 years
Customer relationships 467 3 years
Trademarks 226 7 years
Total intangible assets subject to amortization 3,347
In-process research and development 415 N.A.
Total intangible assets $ 3,762
Hardware systems support agreements and related relationships and customer relationships represent the fair values of the underlying relationships and
agreements with Sun’s customers. Developed technology represents the fair values of Sun products that have reached technological feasibility and are a part of
Sun’s product lines. Core technology represents the fair values of the Sun processes, patents and trade secrets related to the design and development of Sun’s
products. This proprietary know-how can be leveraged to develop new technology and improve our existing products. Trademarks represent the fair values of
brand and name recognition associated with the marketing of Sun’s products and services. In-process research and development represents the fair values of
incomplete Sun research and development projects that had not reached technological feasibility as of the date of acquisition.
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠