Salesforce.com 2014 Annual Report Download - page 88

The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition (in thousands):
Fair Value
Cash, cash equivalents and marketable securities ........ $ 91,549
Accounts receivable .............................. 63,320
Other current assets ............................... 20,355
Customer contract asset, current and noncurrent ........ 205,033
Property and equipment ........................... 64,782
Other noncurrent assets ............................ 4,379
Intangible assets ................................. 706,064
Goodwill ....................................... 1,848,653
Accounts payable, accrued expenses and other
liabilities ..................................... (65,636)
Deferred revenue, current and noncurrent ............. (46,615)
Customer liability, current and noncurrent ............. (144,792)
Other liabilities, noncurrent ........................ (3,104)
Deferred tax liability .............................. (159,462)
Net assets acquired ............................... $2,584,526
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets
acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets
acquired and liabilities assumed are based on management’s estimates and assumptions. The deferred tax liability
established was primarily a result of the difference in the book basis and tax basis related to the identifiable
intangible assets. The estimated fair values of assets acquired and liabilities assumed, specifically current and
noncurrent income taxes payable and deferred taxes, may be subject to change as additional information is
received and certain tax returns are finalized. Thus the provisional measurements of fair value set forth above are
subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one-
year from the acquisition date.
The following table sets forth the components of identifiable intangible assets acquired and their estimated
useful lives as of the date of acquisition (in thousands):
Fair Value Useful Life
Developed technologies .......................... $307,200 4 - 7 years
Customer relationships .......................... 362,200 6 - 8 years
Trade name and trademark ....................... 29,400 10 years
Other purchased intangible assets .................. 7,264 3 - 4 years
Total intangible assets subject to amortization .... $706,064
Developed technologies represent the estimated fair value of ExactTarget’s digital marketing technology.
Customer relationships represent the estimated fair values of the underlying relationships with ExactTarget
customers. The goodwill balance is primarily attributed to the assembled workforce and expanded market
opportunities when integrating ExactTarget’s digital marketing technology with the Company’s other offerings.
The goodwill balance is not deductible for U.S. income tax purposes.
The Company assumed unvested options and restricted stock with an estimated fair value of $102.2 million.
Of the total consideration, $17.4 million was allocated to the purchase consideration and $84.8 million was
allocated to future services and will be expensed over the remaining service periods on a straight-line basis.
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