SanDisk 2007 Annual Report Download - page 137

Net Tangible Assets. The allocation of the msystems’ purchase price to the tangible assets acquired and
liabilities assumed is summarized below (in thousands). In the year ended December 30, 2007, the Company
booked adjustments to the net tangible assets acquired of approximately $53.8 million largely related to a revised
estimate of other assets.
Cash ............................................................... $ 41,657
Short-term investments ................................................. 100,341
Accounts receivable ................................................... 163,705
Inventory ........................................................... 134,677
Property and equipment, net ............................................. 35,872
Other assets ......................................................... 108,889
Total assets acquired ................................................... 585,141
Accounts payable ..................................................... (133,263)
Other liabilities ....................................................... (184,068)
Total liabilities assumed ................................................ (317,331)
Net tangible assets acquired.............................................. $267,810
Purchase Price Allocation. In accordance with SFAS 141, the total purchase price was allocated to msystems
net tangible and intangible assets based upon their estimated fair values as of November 19, 2006. The excess
purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. The fair
values assigned to tangible and intangible assets acquired and liabilities assumed are based on estimates and
assumptions of management.
The following represents the allocation of the purchase price to the acquired net assets of msystems (in
thousands):
Net tangible assets acquired ............................................. $ 267,810
Goodwill . . . ........................................................ 693,730
Other identifiable intangible assets:
Core technology .................................................... 235,500
Trademarks ....................................................... 4,000
Customer relationships ............................................... 66,000
Backlog . . ........................................................ 5,000
Supply agreement .................................................. 2,000
Total other identifiable intangible assets ................................ 312,500
Acquired in-process technology .......................................... 186,000
Deferred tax liability .................................................. (19,641)
Assumed unvested share-based awards to be expensed ......................... 55,339
Total purchase price................................................... $1,495,738
Acquisition-Related Restructuring. During the fourth quarter of fiscal year 2006, the Company established
its plans to integrate the msystems operations, which included the involuntary termination of approximately
100 employees and the exiting of duplicative facilities, and recorded $1.6 million for acquisition-related restruc-
turing activities, of which $0.3 million relates to excess lease obligations and $1.3 million is related to personnel.
The lease obligations extend through the end of the lease term in fiscal year 2009. These acquisition-related
restructuring liabilities were included in the purchase price allocation of the cost to acquire msystems. In the twelve
months ended December 30, 2007, the Company reversed through goodwill approximately $0.6 million of the
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Notes to Consolidated Financial Statements — (Continued)