EMC 2010 Annual Report Download - page 62

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
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
The total weighted-average amortization period for the intangible assets is 4.9 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 was $2,189.2
million.
In-process Research and Development
We acquired four IPR&D projects in 2009 as part of the Configuresoft and Data Domain acquisitions. One of the products valued at $58.1 million was
completed in the fourth quarter of 2009. The three remaining projects were completed in 2010.
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 17% to 21% to determine the value of the IPR&D projects. Each IPR&D project is capitalized and will be assessed
for impairment until completed. Upon completion, each project will be amortized over its estimated useful life over the pattern in which the economic benefits
of the intangible assets are being utilized.
2008 Acquisitions
During 2008, we acquired twelve companies. EMC acquired six of the companies for its Information Infrastructure business. These acquisitions have
helped us further enhance and expand our Information Storage and Information Intelligence Group segments. VMware acquired six of the companies. In
connection with these acquisitions, VMware acquired technologies that are complementary to VMware's core virtualization technology.
The aggregate purchase price, net of cash acquired for all 2008 acquisitions was $759.6 million, which consisted of $743.5 million of cash, $4.1 million
in fair value of our stock options issued in exchange for the acquirees' stock options and $12.0 million of transaction costs, which primarily consisted of fees
incurred by us for financial advisory, legal and accounting services. None of these acquisitions were individually material to EMC. The fair value of our stock
options was estimated assuming no expected dividends and the following weighted-average assumptions:
Expected term (in years) 2.2
Expected volatility 38.2%
Risk-free interest rate 2.4%
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