Salesforce.com 2015 Annual Report Download - page 99

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 were based on management’s estimates and assumptions. During fiscal 2015, the
Company finalized its assessment of fair value of the assets and liabilities assumed at acquisition date. The
adjustments made were not material and are not reflected above.
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.
Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of net
tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather tested for impairment at
least annually during the fourth quarter.
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