Xerox 2007 Annual Report Download - page 95

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
the intangibles acquired as part of the acquisition was $16
for 2007. The primary elements that generated goodwill
are the value of the acquired assembled workforce,
specialized processes and procedures and operating
synergies, none of which qualify as a separate intangible
asset.
The fair values of assets acquired and liabilities
assumed at the acquisition date as reflected in the
financial statements are as follows:
As of
May 9,
2007
Weighted-
Average
Useful
Life
Current assets (includes cash
of$2) .......................... $ 291
Other long-term assets ............. 41
Goodwill .......................... 1,323 n/a
Intangible assets:
Customer relationships ........ 189 12years
Tradenames .................. 174 20years
Total assets acquired .............. 2,018
Current liabilities .................. (162)
Long-term liabilities ................ (325)
Net assets acquired ................ $1,531
The unaudited pro forma results presented below
include the effects of the GIS acquisition as if it had been
consummated as of January 1, 2006. The pro-forma
results include the amortization associated with the
estimated value of acquired intangible assets and interest
expense associated with debt used to fund the acquisition.
However, pro forma results do not include any anticipated
synergies or other expected benefits of the acquisition.
Accordingly, the unaudited pro forma financial
information below is not necessarily indicative of either
future results of operations or results that might have
been achieved had the acquisition been consummated as
of January 1, 2006.
Year Ended
December 31,
2007 2006
Revenue .......................... $17,619 $16,992
Net income ....................... 1,139 1,222
Basic earnings per share ........... 1.22 1.26
Diluted earnings per share ......... 1.20 1.23
Advectis, Inc: In October 2007, we acquired Advectis,
Inc. (“Advectis”), a privately-owned provider of a
web-based solution to electronically manage the process
needed to underwrite, audit, collaborate, deliver and
archive mortgage loan documents for $30 in cash. The
purchase agreement requires us to pay the sellers an
additional $11 if certain performance conditions are
achieved over the next three years. The operating results
of Advectis are not material to our financial statements,
and are included within our Other segment from the date
of acquisition. The purchase price is expected to be
primarily allocated to intangible assets and goodwill and
will be based on management’s estimates which have not
yet been finalized.
GIS Acquisitions: In the latter half of 2007, GIS
acquired four businesses that provide office-imaging
solutions and related services for $39 in cash. The
operating results of these entities are not material to our
financial statements, and are included within our Office
segment from the date of acquisition as part of GIS. The
purchase prices are expected to be primarily allocated to
intangible assets and goodwill and will be based on
management’s estimates which have not yet been
finalized.
De Lage Landen Joint Venture: In July 2007, we
purchased De Lage Landen’s (“DLL”) 51% ownership
interest in our lease financing joint venture in the
Netherlands. Refer to Note 4 – Receivables, Net for more
information regarding this purchase.
XMPie, Inc: In November 2006, we acquired the stock
of XMPie, Inc. (“XMPie”), a provider of variable
information software, for $54 in cash, including
transaction costs. XMPie’s software enables printers and
marketers to create and print personalized and customized
marketing materials to help improve response rates. We
had an existing relationship with XMPie, as its largest
reseller, and its software is primarily sold together with our
Production systems including the iGen3.
The operating results of XMPie are not material to
our financial statements, and are included within our
Production segment from the date of acquisition. The
purchase price was allocated to Goodwill $48, Intangible
assets, net $9 and Deferred tax liabilities $(3). The
primary element that generated the Goodwill is the value
Xerox Annual Report 2007 93