EMC 2009 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2009 EMC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The total weighted-average amortization period for intangible assets is 4.3 years. The intangible assets are being amortized over the pattern in which the
economic benefits of the intangible assets are being utilized, which in general reflects the cash flows generated from such assets. The goodwill associated with
this acquisition is reported within our Information Storage segment. None of the goodwill is deductible for tax purposes. The goodwill results from expected
synergies from the transaction, including complementary products that will enhance our overall product portfolio, which we believe will result in incremental
revenue and profitability.
Other 2009 Acquisitions
In the second quarter of 2009, we acquired all of the outstanding capital stock of Configuresoft, Inc. ("Configuresoft"), a provider of server
configuration, change and compliance management software. The acquisition complements and expands our server configuration management solutions
within the Information Storage segment.
In the third quarter of 2009, we acquired all of the capital stock of FastScale Technology, Inc., a provider of software platforms and solutions that
optimize deployments for physical, virtual and cloud infrastructures. This acquisition complements and expands our Information Storage segment.
In the third quarter of 2009, we acquired all of the capital stock of Kazeon Systems, Inc., a provider of eDiscovery products and solutions which allow
corporations, legal service providers and law firms to efficiently search, classify and analyze the growing volumes of information dispersed through their
networks. This acquisition complements and expands our Content Management and Archiving segment.
In the third quarter of 2009, VMware acquired the remaining outstanding capital stock of SpringSource Global, Inc. ("SpringSource"), a leader in
enterprise and web application development and management. Through the acquisition of SpringSource, VMware plans to deliver new solutions that enable
companies to more efficiently build, run and manage applications within both internal and external cloud architectures that can host both existing and new
applications. These solutions will extend VMware's strategy to deliver solutions that can be hosted at customer datacenters or at service providers. This
acquisition will also support VMware's mission to simplify enterprise information technology and make customer environments more efficient, scalable and
easier to manage. The purchase price for SpringSource, net of cash acquired, was approximately $372.5 million, which consisted of $356.3 million of cash
consideration and $16.2 million for the fair value of VMware stock options granted in exchange for existing SpringSource options.
In connection with our acquisitions, we had adjustments to the fair value of previously held interests in Data Domain and SpringSource of $25.8 million
which were recognized in other income.
The aggregate purchase price, net of cash acquired for all 2009 acquisitions, excluding Data Domain, was $730.6 million, which consisted of $730.2
million of cash and $0.4 million in fair value of our stock options issued in exchange for the acquirees' stock options.
The fair value of our stock options for all acquisitions in 2009 was estimated assuming no expected dividends and the following weighted-average
assumptions:
Expected term (in years) 2.3
Expected volatility 37.2%
Risk-free interest rate 1.2%
The following represents the aggregate allocation of the purchase price for all the aforementioned acquisitions to intangible assets (table in thousands):
Developed technology (weighted-average useful life of 3.5 years) $141,000
Customer relationships (weighted-average useful life of 6.1 years) 291,800
Tradename and trademark (weighted-average useful life of 5.6 years) 13,770
Non-competition agreements (weighted-average useful life of 2.5 years) 1,200
IPR&D 174,600
Total intangible assets $622,370
57