Salesforce.com 2014 Annual Report Download - page 90

The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition (in thousands):
Fair Value
Current and noncurrent tangible assets ................. $ 4,462
Intangible assets ................................... 32,300
Goodwill ......................................... 107,165
Current and noncurrent liabilities ...................... (666)
Deferred tax liability ............................... (9,539)
Net assets acquired ................................. $133,722
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 assets acquired, liabilities assumed and
identifiable intangible assets are based on management’s estimates and assumptions. The estimated fair values of
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 technology ........................ $31,030 5-6 years
Customer relationships ....................... 560 5years
Trade name and trademark .................... 710 5years
Total intangible assets subject to amortization . . . $32,300
Developed technology represents the estimated fair value of EdgeSpring’s end-to-end business intelligence
exploration technology. Customer relationships represent the fair values of the underlying relationships with
EdgeSpring customers. The goodwill balance is primarily attributed to the assembled workforce and expanded
market opportunities when integrating EdgeSpring’s business intelligence technology with the Company’s other
offerings. The goodwill balance is not deductible for U.S. income tax purposes.
The Company assumed unvested equity awards for shares of EdgeSpring’s common stock with a fair value
of $4.7 million. Of the total consideration, $1.6 million was allocated to the purchase consideration and
$3.1 million was allocated to future services and will be expensed over the remaining service periods on a
straight-line basis.
Other Fiscal 2014 Business Combinations
During fiscal 2014, the Company acquired three other companies for an aggregate of $31.7 million in cash,
net of cash acquired, and has included the financial results of these companies in its consolidated financial
statements from the date of each respective acquisition. The Company accounted for these transactions as
business combinations. In allocating the purchase consideration based on estimated fair values, the Company
recorded $14.6 million of acquired intangible assets with useful lives of three to five years, $20.6 million of
goodwill, $2.8 million of net tangible assets, including cash acquired, and $4.4 million of deferred tax liabilities.
Some of this goodwill balance is deductible for U.S. income tax purposes. The three aforementioned business
combinations and EdgeSpring were not included in the pro forma combined historical results of operations of the
Company as they are not material.
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