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Table of Contents
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fiscal Year 2008
On July 1, 2008, VMware acquired all of the outstanding capital stock of a privately-held application performance management software
company. The aggregate consideration transferred in this acquisition was $60.8 million, which includes cash of $58.4 million and the fair value
of stock options assumed attributed to pre-combination services of $2.4 million.
The following table summarizes the allocation of the consideration paid to the fair value of the tangible and intangible assets acquired and
liabilities assumed as of December 31, 2008, and reflect immaterial adjustments made in 2009 to finalize the purchase price allocation (table in
thousands):
In addition to the above acquisition, VMware acquired six companies during 2008 for aggregate cash consideration of $80.3 million, net of
cash acquired and including transaction costs. In connection with these acquisitions, the Company acquired technologies that are complementary
to VMware’
s core virtualization technology. Acquired intangibles totaled $23.9 million, consisted primarily of purchased technology, and have a
weighted-average estimated useful life of 7.1 years. The excess of the purchase price over the fair value of the net assets acquired was $67.2
million and is classified as goodwill on the consolidated balance sheet, which reflects adjustments made in 2009 to finalize the purchase price
allocations.
The purchase prices for the companies acquired in 2008 were allocated to the assets acquired and the liabilities assumed based on their
final fair value.
Goodwill
Goodwill is tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or
changes in circumstances that would indicate a reduction in the fair value of the goodwill below its carrying amount. Changes in the carrying
amount of goodwill for the years ended December 31, 2010 and 2009 consisted of the following (table in thousands):
90
Cash
$
216
Intangible assets
18,503
Goodwill
52,803
Assets acquired
5,511
Total assets acquired
77,033
Total liabilities assumed
(16,209
)
Fair value of identifiable assets acquired and liabilities assumed
$
60,824
December 31,
2010
2009
Balance, beginning of the year
$
1,115,769
$
771,088
Increase in goodwill related to business combinations
453,420
350,036
Deferred tax adjustments to purchase price allocations on previous acquisitions
2,062
(3,752
)
Other adjustments to purchase price allocations on previous acquisitions
(2,651
)
(1,603
)
Balance, end of the year
$
1,568,600
$
1,115,769