Oracle 2009 Annual Report Download - page 196

During fiscal 2010, we acquired other companies and purchased certain technology and development assets to expand our product and
services offerings. These acquisitions were not significant individually or in the aggregate. We have included the financial results of these
companies in our consolidated results from their respective acquisition dates. The preliminary purchase price allocations for each of these
acquisitions were based upon a preliminary valuation and our estimates and assumptions for certain of these acquisitions are subject to
change as we obtain additional information for our estimates during the respective measurement periods. The primary areas of those purchase
price allocations that are not yet finalized relate to identifiable intangible assets, certain legal matters, income and non-income based taxes
and residual goodwill.
Separately, in the fourth quarter of fiscal 2010, we agreed to acquire Phase Forward Incorporated, a provider of applications for life sciences
companies and healthcare providers, for $17.00 per share in cash, amounting to approximately $810 million. Our proposed acquisition of
Phase Forward is subject to stockholder and regulatory approval and other customary closing conditions. In addition, we agreed to acquire
certain other companies for amounts that are not material to our business.
Fiscal 2009 Acquisitions
During fiscal 2009, we acquired several companies and purchased certain technology and development assets to expand our product
offerings. These acquisitions were not individually significant. We have included the financial results of these companies in our consolidated
results from their respective acquisition dates. In the aggregate, the total purchase price for these acquisitions was approximately $1.2 billion,
which consisted of approximately $1.2 billion in cash, $1 million for the fair value of stock options and restricted stock-based awards
assumed and $13 million for transaction costs. In allocating the total purchase price for these acquisitions based on estimated fair values, we
recorded $708 million of goodwill, $587 million of identifiable intangible assets, $96 million of net tangible liabilities (resulting primarily
from deferred tax and restructuring liabilities assumed as a part of these transactions) and $10 million of in-process research and
development.
Fiscal 2008 Acquisitions
BEA Systems, Inc.
We acquired BEA Systems, Inc. on April 29, 2008 by means of a merger of one of our wholly-owned subsidiaries with and into BEA such
that BEA became a wholly-owned subsidiary of Oracle. We acquired BEA to, among other things, expand our offering of middleware
products. We have included the financial results of BEA in our consolidated financial results effective April 29, 2008.
The total purchase price for BEA was $8.6 billion which consisted of $8.3 billion in cash paid to acquire the outstanding common stock of
BEA, $225 million for the fair value of BEA stock options and restricted stock-based awards assumed and $10 million for acquisition related
transaction costs. In allocating the purchase price based on estimated fair values, we recorded approximately $4.5 billion of goodwill, $3.3
billion of identifiable intangible assets, $733 million of net tangible assets and $17 million of in-process research and development.
Other Fiscal 2008 Acquisitions
During fiscal 2008, we acquired several other companies and purchased certain technology and development assets. Our fiscal 2008
acquisitions, other than BEA, were not significant individually or in the aggregate. We have included the effects of these transactions in our
results of operations prospectively from the respective dates of the acquisitions.
Unaudited Pro Forma Financial Information
The unaudited pro forma financial information in the table below summarizes the combined results of operations for Oracle, Sun and certain
other companies that we acquired since the beginning of fiscal 2009 (which were collectively significant for the purposes of unaudited pro
forma financial information disclosure) as though the companies were combined as of the beginning of fiscal 2009. The pro forma financial
information for all periods presented also includes the business combination accounting effects resulting from these acquisitions including
our amortization charges from acquired intangible assets (certain of which are preliminary), the elimination of certain goodwill and
intangible asset impairment charges incurred by Sun, stock-based compensation charges for unvested stock options and restricted stock-based
awards assumed, adjustments to interest expense for borrowings and the related tax effects as though the aforementioned companies were
combined as of the beginning of fiscal 2009. The pro forma financial information as presented below is for informational purposes only and
is not indicative of the results of operations that would have been achieved if the acquisitions and any borrowings undertaken to finance these
acquisitions had taken place at the beginning of fiscal 2009.
The unaudited pro forma financial information for fiscal 2010 combined the historical results of Oracle for fiscal 2010, the historical results
of Sun for the eight months ended September 27, 2009 (due to differences in reporting periods) and the historical results for certain other
companies that we acquired since the beginning of fiscal 2010 based upon their respective previous reporting periods, the dates that these
companies were acquired by us, and the effects of the pro forma adjustments listed above.
The unaudited pro forma financial information for fiscal 2009 combined the historical results of Oracle for fiscal 2009, the historical results
of Sun for the year ended June 30, 2009 (due to differences in reporting periods) and the historical results of certain other companies that we
acquired since the beginning of fiscal 2009 based upon their respective previous reporting periods and the dates these companies were
acquired by us, and the effects of the pro forma adjustments listed above. The unaudited pro forma financial information was as follows for
fiscal 2010 and 2009:
Year Ended May 31,
(in millions, except per share data) 2010 2009
Total revenues $ 33,550 $ 34,831
Net income $ 5,656 $ 4,639
Basic earnings per share $ 1.13 $ 0.91
Diluted earnings per share $ 1.11 $ 0.90
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠