EMC 2011 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2011 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 145

  • 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
  • 145

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
seven acquisitions was $539.8 million which consisted of $536.6 million of cash consideration, net of cash acquired and $3.2 million for the fair value of our
stock options granted in exchange for the acquirees' stock options. The consideration paid was allocated to the fair value of the assets acquired and liabilities
assumed based on estimated fair values as of the respective acquisition dates. The allocation to goodwill, intangibles and net assets was approximately $375.8
million, $157.1 million and $6.9 million, respectively. The results of these acquisitions have been included in the consolidated financial statements from the
respective dates of purchase. Pro forma results of operations have not been presented, as the results of the acquired companies were not material, individually
or in the aggregate, to our consolidated results of operations for the years ended December 31, 2011, 2010 and 2009.
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 3.2 years) $ 97,500
Customer relationships (weighted-average useful life of 4.0 years) 58,400
Tradename and trademark (weighted-average useful life of 2.6 years) 1,200
Total intangible assets $ 157,100
The total weighted-average amortization period for the intangible assets is 3.5 years. The intangible assets are being amortized based upon the pattern in
which the economic benefits of the intangible assets are being utilized.
2010 Acquisitions
Acquisition of Isilon Systems, Inc.
In the fourth quarter of 2010, we acquired all of the outstanding capital stock of Isilon Systems, Inc. ("Isilon"), a "scale-out NAS" (network attached
storage) systems company. This acquisition further complemented and expanded our Information Storage business.
The purchase price for Isilon, net of cash and investments, was $2,327.9 million, which consisted of $2,301.1 million of cash consideration and $26.8
million for the fair value of our stock options granted in exchange for existing Isilon options. We incurred $0.6 million of transaction costs for legal and
accounting services, which are included in restructuring and acquisition-related charges in our consolidated income statement. The fair value of our stock
options issued to employees of Isilon was estimated using a Black-Scholes option pricing model.
The purchase price was allocated to the assets acquired and the liabilities assumed based on estimated fair values as of the acquisition date.
The following represents the allocation of the Isilon purchase price (table in thousands):
Trade accounts receivable (approximates contractual value) $ 38,565
Other current assets 17,448
Property and equipment 8,678
Intangible assets:
Developed technology (weighted-average useful life of 3.1 years) 115,300
Customer maintenance relationships (weighted-average useful life of 6.6 years) 142,900
Customer product relationships (weighted-average useful life of 4.3 years) 159,600
Tradename (weighted-average useful life of 2.4 years) 7,700
IPR&D 43,900
Total intangible assets 469,400
Goodwill 1,974,536
Current liabilities (51,910)
Income tax payable (272)
Deferred revenue (37,800)
Deferred income taxes (90,758)
Total purchase price $ 2,327,887
59