Apple 2002 Annual Report Download - page 54

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Amortization expense related to acquired intangible assets is as follows (in millions):
Net income (loss) and net income (loss) per share adjusted to exclude amortization of goodwill in fiscal periods prior to 2002 follows (in
millions, except per share amounts):
Acquisition of Emagic
During the fourth quarter of 2002, the Company acquired Emagic GmbH, a provider of professional software solutions for computer based
music production, for approximately $30 million in cash; $26 million of which was paid immediately upon closing of the deal and $4 million
of which was held-back for future payment contingent on continued employment by certain employees that will be allocated to future
compensation expense in the appropriate periods over the next 3 years. The acquisition has been accounted for as a purchase. The portion of the
purchase price allocated to purchased in-process research and development (IPR&D) was expensed immediately, and the portion of the
purchase price allocated to
68
acquired technology and to tradename will be amortized over their estimated useful lives of 3 years. Total consideration was allocated as
follows (in millions):
2006
3
Thereafter
9
Total expected annual amortization expense
$
34
2002
2001
2000
Goodwill amortization
$
—
$
16
$
21
Other acquired intangible assets amortization
1
3
3
Acquired technology amortization
5
2
—
Total amortization
$
6
$
21
$
24
2002
2001
2000
Net income (loss), as reported
$
65
$
(25
)
$
786
Add: goodwill amortization
$
—
$
16
$
21
Net income (loss), as adjusted
$
65
$
(9
)
$
807
Basic earnings (loss) per share, as reported
$
0.18
$
(0.07
)
$
2.42
Add: goodwill amortization
$
—
$
0.04
$
0.06
Basic earnings (loss) per share, as adjusted
$
0.18
$
(0.03
)
$
2.48
Diluted earnings (loss) per share, as reported
$
0.18
$
(0.07
)
$
2.18
Add: goodwill amortization
$
—
$
0.04
$
0.06
Diluted earnings (loss) per share, as adjusted
$
0.18
$
(0.03
)
$
2.24
Net tangible assets acquired
$
2.3
Acquired technology
3.8
Tradename
0.8
In
-
process research and development
0.5
Goodwill
18.6
Total consideration $
26.0