EMC 2010 Annual Report Download - page 60

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The following represents the aggregate allocation of the purchase price for all the aforementioned acquisitions, excluding Isilon, to intangible assets
(table in thousands):
Developed technology (weighted-average useful life of 4.7 years) $ 158,860
Customer relationships (weighted-average useful life of 6.4 years) 74,280
Tradename and trademark (weighted-average useful life of 2.5 years) 12,620
Other (weighted-average useful life of 2.1 years) 3,379
Total intangible assets $ 249,139
The total weighted-average amortization period for the intangible assets is 4.6 years. The intangible assets are being amortized based upon the pattern in
which the economic benefits of the intangible assets are being utilized. The total goodwill recognized from the aforementioned acquisitions, including Isilon,
was $2,605.9 million.
In-process Research and Development
We acquired two IPR&D projects in 2010 as part of the Isilon acquisition. Both projects, totaling $43.9 million, are expected to be completed in 2012.
The value assigned to the IPR&D projects was determined utilizing the income approach by determining cash flow projections relating to the projects.
We applied discount rates ranging from 19% to 22% to determine the value of the IPR&D projects. Under new business combination guidance effective in
2009, each IPR&D project is capitalized and will be assessed for impairment until completed. Upon completion, the project will be amortized over its
estimated useful life over the pattern in which the economic benefits of the intangible assets are being utilized.
2009 Acquisitions
Acquisition of Data Domain, Inc.
In the third quarter of 2009, we acquired all of the outstanding capital stock of Data Domain, Inc. ("Data Domain"), a provider of storage solutions for
backup and archive applications based on deduplication technology. Data Domain deduplication storage systems are designed to deliver reliable, efficient and
cost-effective solutions that enable enterprises of all sizes to manage, retain and protect their data. This acquisition further complements and expands our
Information Storage business.
The purchase price for Data Domain, net of cash and investments, was $2,017.3 million, which consisted of $1,933.9 million of cash consideration and
$83.4 million for the fair value of our stock options granted in exchange for existing Data Domain options. We incurred $12.0 million of transaction costs for
financial advisory, legal and accounting services, which are included in restructuring and acquisition-related charges in our Consolidated Income Statements.
The fair value of our stock options issued to employees of Data Domain was estimated using a Black-Scholes option pricing model.
The consolidated financial statements include the results of Data Domain from the date of acquisition. The purchase price has been allocated to the
assets acquired and the liabilities assumed based on estimated fair values as of the acquisition date.
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