Microsoft 2008 Annual Report Download - page 51

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PAGE 50
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As a result of the FAST acquisition, we recorded $981 million of goodwill in our Microsoft Business Division. Of
the $266 million of acquired intangible assets, $35 million was assigned to in-process research and development
assets and was expensed. The remaining acquired intangible assets include $27 million of customer relationships
with a weighted average life of seven years, $134 million of technology-based intangible assets with a weighted
average life of five years, and $70 million of other intangible assets with a weighted average life of six years.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the
dates of the aQuantive and FAST acquisitions:
(In millions)
aQuantive as of
August 10, 2007
FAST as o
f
April 24, 2008
Cash and cash equivalents $ 342 $91
Accounts receivable, net 273 46
Other current assets 6 7
Property, plant and equipment 50 30
Intangible assets 939 266
Goodwill 5,189 981
Deferred income taxes 179 –
Other long-term assets 7 5
Total assets acquired $ 6,985 $
1
,426
Accrued compensation 37 39
Other current liabilities 683 38
Deferred income taxes 338 65
Other long-term liabilities 70 10
Total liabilities assumed $ 1,128 $152
Net assets acquired $ 5,857 $
1
,274
In addition to aQuantive and FAST, we acquired 19 other entities during fiscal year 2008 for total
consideration of $1.6 billion which was paid primarily in cash and included:
• Danger, Inc. (“Danger”), a software-as-a-service company that provides mobile operators with an
integrated end-to-end solution to deliver mobile data and Internet services to their subscribers. We
acquired Danger for approximately $500 million in cash; and
• 18 other entities specializing in areas such as application security, desktop, and advertising solutions.
As a result of our acquisition of Danger and the 18 other entities, we recorded $1.2 billion of goodwill. In
addition, $37 million was assigned to in-process research and development assets and was expensed. All of the
entities have been consolidated into our results of operations since their respective acquisition dates. The
purchase price allocations for these acquisitions are preliminary and subject to revision as more detailed analyses
are completed and additional information about fair value of assets and liabilities becomes available. Any change
in the estimated fair value of the net assets of the acquired companies will change the amount of the purchase
price allocable to goodwill. Pro forma results of operations have not been presented because the effects of
Danger and the 18 other acquisitions, individually and in aggregate, were not material.