HP 2008 Annual Report Download - page 113

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6: Acquisitions (Continued)
process outsourcing, including health claims, financial processing, CRM and HR outsourcing; and
applications, including development, modernization and management.
The total preliminary estimated purchase price for EDS was approximately $13.0 billion and was
comprised of:
In millions
Acquisition of approximately 507 million shares of outstanding common stock of EDS at
$25 per share in cash .................................................. $12,670
Estimated fair value of outstanding stock options and restricted stock units assumed ...... 328
Estimated direct transaction costs ........................................... 34
Total preliminary estimated purchase price .................................... $13,032
In connection with the acquisition, HP assumed options to purchase approximately 8 million shares
of HP’s common stock at a weighted-average exercise price of approximately $50 per share. HP also
assumed approximately 11 million restricted stock units with a weighted-average grant date fair value of
$45. See Note 2 for a further discussion on stock compensation in relation to EDS.
Direct transaction costs include investment banking, legal and accounting fees and other external
costs directly related to the acquisition.
The purchase price allocations as of the date of the acquisition in the table below reflect various
preliminary estimates and analyses, including preliminary work performed by third-party valuation
specialists, and are subject to change during the purchase price allocation period (generally one year
from the acquisition date) as valuations are finalized.
In millions
Cash and short-term investments ........................................... $ 3,034
Accounts receivable ..................................................... 2,549
Property, plant and equipment ............................................. 3,203
Other tangible assets .................................................... 3,126
Notes payable and debt .................................................. (3,298)
Pension liability (Note 15) ................................................ (2,243)
Restructuring liability (Note 8) ............................................. (1,515)
Net deferred tax liabilities ................................................ (1,427)
Other liabilities assumed ................................................. (5,370)
Total net tangible liabilities .............................................. $(1,941)
Amortizable intangible assets:
Customer contracts and related relationships ................................. 3,199
Developed technology and trade name ...................................... 1,349
Goodwill ............................................................. 10,395
IPR&D .............................................................. 30
Total preliminary estimated purchase price ................................... $13,032
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