Seagate 2012 Annual Report Download - page 84

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which
each intangible asset will be amortized:
During fiscal year 2012, the Company recorded adjustments to the fair value of certain assets acquired and liabilities assumed with the
Samsung HDD business that resulted in a net decrease of $5 million to goodwill. These adjustments included a $7 million increase in other
assets for spare parts and a $3 million increase to equipment, offset by a $3 million increase in warranty liability and a $2 million increase in
other liabilities related to certain assumed vendor obligations. These adjustments were based on information about facts and circumstances that
existed at the acquisition date.
The $432 million of goodwill recognized is attributable primarily to the benefits the Company expects to derive from enhanced scale and
efficiency to better serve its markets and expanded customer presence in China and Southeast Asia. Except for approximately $4 million of
goodwill relating to assembled workforce in Korea, none of the goodwill is expected to be deductible for income tax purposes.
The Company incurred a total of $22 million of expenses related to the acquisition of Samsung in fiscal year 2012, which are included
within Marketing and administrative expense on the Consolidated Statement of Operations.
The amounts of revenue and earnings of the acquired assets of Samsung's HDD business included in the Company's Consolidated Statement
of Operations from the acquisition date to the period ended June 29, 2012, were as follows:
The unaudited pro forma financial results presented below for fiscal years ended June 29, 2012 and July 1, 2011, include the effects of pro
forma adjustments as if the acquisition date occurred as of the beginning of the prior fiscal year on July 3, 2010. The pro forma results combine
the historical results of the Company for the fiscal years ended June 29, 2012 and July 1, 2011, respectively, and the historical results of the
acquired assets and liabilities of Samsung's HDD business, and include the effects of certain fair value adjustments and the elimination of certain
activities excluded from the transaction. The pro forma financial information is presented for informational purposes only and is not necessarily
indicative
77
(Dollars in millions)
Fair Value
Weighted
-
Average
Amortization
Period
Existing technology
$
137
2.0 years
Customer relationships
399
5.8 years
Total amortizable intangible assets acquired
536
4.8 years
In
-
process research and development
44
Total acquired identifiable intangible assets
$
580
(Dollars in millions)
Revenue
$
970
Net income
$
104