Google 2015 Annual Report Download - page 82

Table of Contents Alphabet Inc. and Google Inc.
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was attributed to net assets acquired. The goodwill of $388 million is primarily attributable to the synergies expected
to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.
Other Acquisitions
During the year ended December 31, 2014, we completed other acquisitions and purchases of intangible assets
for total consideration of approximately $1,466 million, which includes the fair value of our previously held equity interest
of $33 million. In aggregate, $65 million was cash acquired, $405 million was attributed to intangible assets, $1,045
million was attributed to goodwill, and $49 million was attributed to net liabilities assumed. These acquisitions generally
enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional
areas. The amount of goodwill expected to be deductible for tax purposes is approximately $55 million.
Pro forma results of operations for these acquisitions have not been presented because they are not material to
the consolidated results of operations, either individually or in aggregate.
For all acquisitions and purchases completed during the year ended December 31, 2014, patents and developed
technology have a weighted-average useful life of 5.1 years, customer relationships have a weighted-average useful
life of 4.5 years, and trade names and other have a weighted-average useful life of 6.9 years.
Note 7. Collaboration Agreement
On September 18, 2013, we announced the formation of Calico, a life science company with a mission to harness
advanced technologies to increase our understanding of the biology that controls lifespan. Calico's results of operations
and statement of financial position are included in our consolidated financial statements. As of December 31, 2015,
Google has contributed $240 million to Calico in exchange for Calico convertible preferred units. As of December 31,
2015, Google has also committed to fund an additional $490 million on an as-needed basis.
In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration
intended to help both companies discover, develop, and bring to market new therapies for patients with age-related
diseases, including neurodegeneration and cancer. As of December 31, 2015, AbbVie has contributed $750 million to
fund the collaboration pursuant to the agreement, which reflects its total commitment. As of December 31, 2015, Calico
has contributed $250 million and committed up to an additional $500 million.
Calico will use its scientific expertise to establish a world-class research and development facility, with a focus
on drug discovery and early drug development; and AbbVie will provide scientific and clinical development support
and its commercial expertise to bring new discoveries to market. Both companies will share costs and profits equally.
AbbVie's contribution has been recorded as a liability on Calico's financial statements, which is reduced and reflected
as a reduction to research and development expense as eligible research and development costs are incurred by
Calico over the next few years.
Note 8. Goodwill and Other Intangible Assets
Goodwill
In conjunction with the Alphabet reorganization we are implementing a new operating structure. Consequently,
beginning in the fourth quarter of 2015, we have multiple operating segments and reporting units, representing the
individual businesses run separately under the Alphabet structure. Refer to Note 16 for further information. In conjunction
with the changes to reporting units, we allocated goodwill to each reporting unit based on their relative fair values. The
changes in the carrying amount of goodwill allocated to our disclosed segments for the years ended December 31,
2014 and 2015 were as follows (in millions):