Plantronics 2008 Annual Report Download - page 72

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66
use of the Altec Lansing trade name applying a 12% discount rate. Considering the recognition of the brand, its long history, and
management’s intent to use the brand indefinitely, the remaining useful life of the Altec Lansing name was determined to be indefinite
and is being treated as an indefinite-lived asset in accordance with SFAS No. 142.
In-process technology involves products which fall under the definitions of research and development as defined by SFAS No. 2,
“Accounting for Research and Development Costs” (“SFAS No. 2”). Altec Lansing’s in-process technology products were at a stage
of development that required further research and development to reach technological feasibility and commercial viability. The fair
value was calculated based on the present value of the future estimated cash flows applying a 15% discount rate, and adjusted for the
estimated cost to complete and the risk of not achieving technological feasibility. Because the in-process technology, which has been
valued at $0.9 million, was not yet complete, there was risk that the developments would not be completed; therefore, this amount was
immediately expensed at acquisition to research, development and engineering expense.
The unaudited pro forma information set forth below represents the revenues, net income and earnings per share of the Company
including Altec Lansing as if the acquisition were effective as of the beginning of the periods presented and includes certain pro forma
adjustments, including the amortization expense of acquired intangible assets, interest income to reflect net cash used for the purchase,
and the related income tax effects of these adjustments. Plantronics has excluded non-recurring items consisting of the amortization of
the capitalized manufacturing profit and the immediate write-off of the in-process technology asset. The acquisition is included in the
Company’s financial statements from the date of acquisition.
The unaudited pro forma information is not intended to represent or be indicative of the consolidated results of operations of the
Company that would have been reported had the acquisition been completed as of the beginning of the periods presented and should
not be taken as representative of the future consolidated results of operations or financial condition of the Company.
Pro forma Fiscal Year Ended
March 31,
(in thousands except per share data) 2006
Net revenues $ 806,893
Operating income $ 118,922
Net income $ 84,107
Basic net income per common share $ 1.78
Diluted net income per common share $ 1.72
As Reported Fiscal Year Ended
March 31,
(in thousands except per share data) 2006
Net revenues $ 750,394
Operating income $ 110,362
Net income $ 81,150
Basic net income per common share $ 1.72
Diluted net income per common share $ 1.66
7. GOODWILL
The changes in the carrying value of goodwill during the fiscal years ended March 31, 2007 and 2008 by segment were as follows: