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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 to intangible assets (table in thousands):
Developed technology (weighted-average useful life of 5.5 years) $ 65,335
Customer relationships (weighted-average useful life of 6.8 years) 53,224
Tradename and trademark (weighted-average useful life of 8.8 years) 27,270
Non-competition agreement (weighted-average useful life of 2.5 years) 2,463
Backlog (weighted-average useful life of 1.0 year) 800
Assembled workforce (weighted-average useful life of 4.9 years) 5,455
IPR&D 85,780
Total intangible assets $ 240,327
The total weighted-average amortization period for the intangible assets is 6.4 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 $485.6
million.
The IPR&D was written off at the respective dates of each acquisition because the IPR&D had no alternative uses and had not reached technological
feasibility. The value assigned to IPR&D was determined utilizing the income approach by determining cash flow projections relating to identified IPR&D
projects. The stage of completion of each in-process project was estimated to determine the discount rates to be applied to the valuation of the in-process
technology. Based upon the level of completion and the risk associated with in-process technology, we applied discount rates that ranged from 20% to 60% to
value the IPR&D projects acquired.
Pro forma Effects of the Acquisitions
The following gives pro forma effect as if the 2010 acquisitions, 2009 acquisitions and the 2008 acquisitions had been consummated as of the
beginning of the prior fiscal year. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisitions
been in effect for the periods presented (table in thousands, except per share data):
(unaudited)
For the Year Ended December 31,
2010 2009 2008
Revenue $ 17,081,006 $ 14,413,370 $ 15,202,624
Net income attributable to EMC Corporation $ 1,826,452 $ 998,963 $ 1,162,891
Net income per weighted average share, basic attributable to EMC Corporation common shareholders $ 0.89 $ 0.49 $ 0.56
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders $ 0.85 $ 0.49 $ 0.56
The pro forma impact on reported net income per weighted average share was primarily attributable to amortization of acquired intangible assets,
foregone interest income on cash paid for the acquisitions and expensing of IPR&D for transactions consummated in 2008.
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