Bcom Disclosure Summary Final

7/29/2019 Bcom Disclosure Summary Final

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National Professional Services Group

Business Combinations andNoncontrolling InterestsFinancial Statement Disclosure Summary

2010


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Table of Contents

Overview 3 -

Section I - Analysis of 2009 Filings 6 - 1Section II - Financial Statement Disclosures

Index of Topics

Examples

1

20 - 9

Index of Companies 9

PwC Contacts 10


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PwC Business Combinations and Noncontrolling Interests Financial Statement Disclosure Summary

OverviewWelcome to PricewaterhouseCoopers' Business Combinations andNoncontrolling Interests Financial Statement Disclosure Summaryfor 2010 (the"Summary"). The primary objective of this Summary is to provide data, analysisand insights on how certain of the financial statement disclosure requirementsunder U.S. Generally Accepted Accounting Principles (U.S. GAAP) related tobusiness combinations and noncontrolling interests have been applied in practic

The disclosure information in this Summary is provided solely to increaseawareness and understanding of the types of disclosures that individual

companies have made in particular situations. The disclosure examples illustratehow certain companies applied the current accounting standards in the first yearin which the standards were effective. The examples come from companies ofvarying sizes in multiple industries. There is no suggestion implied in thisinformation that all disclosures analyzed are consistent with PwC's views in allcircumstances, or are intended to represent best practices. Whether any of thedisclosures comply with U.S. GAAP depends on the judgment applied to theunique facts and circumstances of each case.

We hope that you find this summary useful in understanding how companieshave applied the standards.


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Disclosure principles

The U.S. GAAP disclosure requirements1 are

intended to enable users of financial statements toevaluate the nature and financial effects of:

Business combinations that occur either duringthe current reporting period or after the reportingperiod, but before the financial statements areissued;

Adjustments recognized in the current reportingperiod that relate to business combinations thatoccurred in current and previous reportingperiods; andRelationships between the parent and a

subsidiary or investee when the parent does nothave 100 percent ownership or control

These disclosures should be made in the period in which the business combination occurs,and should be reported for each material business combination. Companies should alsoinclude the disclosures in subsequent financial statements if an acquisition occurred in aprevious reporting period and that period is presented in the financial statements.

Companies are also required to disclose information about acquisitions made after thebalance sheet date, but before the financial statements are issued. If the initial accounting fothe business combination is incomplete, the company should describe which disclosurescould not be made and the reasons why they could not be made.

Companies are also required to disclose gains or losses arising from the deconsolidation of business when the company loses control of that business.

Contents

The Summary is divided into two primary sections as described below.

Section I - Analysis of 2009 Filings

The first section titled "Analysis of 2009 Filings" presents findings and PwC insights from ananalysis of 185 transactions that were disclosed in 2009 quarterly and annual filings made bpublic companies.

This section also presents the summary data from which the findings were derived. The

summary data was accumulated based on our review of the filings and is included as a poinof reference to support our analysis. The percentages presented in the findings were derive

1The U.S. GAAP accounting standards applicable to business combinations are ASC 805, Business Combinations, and

ASC 810, Consolidation (the "standards"). The disclosures that are required for all material business combinations tha

occur during the reporting period can be found in ASC 805-10-50-2. Additionally, ASC 805-10-50-2(e)-(h), ASC 805-20

50-1(a)-(e), and ASC 805-30-50-1(a)-(f) provide disclosure requirements for individually immaterial acquisitions that

are collectively material, in the period in which the business combinations occur. The disclosures that are required fo

noncontrolling interests can be found in ASC 810-10-50.


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from the underlying summarized data; however, there may be limitations in the use ofpercentages due to the small sample involved in our analysis.

The companies and transactions were generally selected based on those with the largestpurchase price. Not all of the transactions reviewed were material to a specific acquirer andaccordingly, some disclosures were omitted from the financial statements.

The results of the analysis may not be indicative of longer-term trends. This may be due toseveral reasons, such as the relatively short length of time that the new standards have beein effect, the weaker macro-economic conditions in the U.S. compared to historical norms,and a decrease in acquisition activity in 2009 compared to recent years.

Section II - Financial Statement Disclosures

The second section titled "Financial Statement Disclosures" presents example disclosures foeach of the topics that have been summarized in the "Analysis of 2009 Filings" section.

Additionally, the "Financial Statement Disclosures" section presents example disclosures foother topics related to business combinations and noncontrolling interests (e.g., reverseacquisitions, deferred revenue, indemnification assets). The disclosure examples presentedwere taken from public filings and have not been modified.

PwC clients who have questions on this publication should contact their engagementpartner. Prospective clients and other interested parties should contact the managinpartner of the PwC office nearest you, which can be found at www.pwc.com.


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I. Analysis of 2009 Filings

Commentary and PwC insights on the more significant findings noted in the analysis are

presented in this section. Certain comments provide possible explanations for the results thwere noted; however, these explanations are not based on an in-depth analysis of the factsand circumstances affecting the companies involved or of the historical data.


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Form of consideration

The new standard requires that the value of equity consideration be measured as of the date

that control is obtained. Previously, the value of equity consideration was generally measureon the date the deal was announced. We noted that the form of the acquisition consideratiowas heavily weighted toward either cash or cash and shares. This finding may indicate thatequity was a less attractive acquisition currency because of generally lower stock pricescompared to prices in recent history or companies were seeking to avoid the inherentvolatility in pricing that could occur when consideration includes shares.


Contingent considerationUnder the standard, contingent consideration arrangements may increase post-acquisitionearnings volatility compared to previous guidance. Despite this fact, the percentage of dealsincluded in our analysis that disclosed contingent consideration arrangements was relativelyconsistent with prior years. For example, 15%, 16%, and 21% of the deals disclosed in 2002007, and 2008, respectively, included contingent consideration arrangements. This mayindicate that the accounting implications were not a determining factor in structuring dealconsideration.

56%31%

7%

6% Cash

Cash and shares

Shares

Did not disclose


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Was contingent consideration disclosed?

Classification of contingent consideration

For the transactions that included contingent consideration, the majority of acquirersclassified the contingent consideration arrangement as a liability. This classification requirea company to remeasure the liability at fair value each reporting period and record anyadjustment in earnings. While many companies may desire to avoid the resulting incomestatement volatility, equity classification (which does not require subsequent remeasuremenis generally more difficult to achieve under the standard. However, we observed that 11% ocompanies disclosed equity-classified contingent consideration. Additionally, four of the

companies that disclosed a contingent payment arrangement also disclosed that someportion of the arrangement would be accounted for as compensation expense in the post-combination earnings of the acquirer.

Classification of contingent consideration

19%

81%

Yes

No

53%

11%3%

11%

22%

Liability

Equity

Mix

Compensation

Did not disclose


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Bargain purchase

The standard requires a company to record a "bargain purchase gain" in earnings at the tim

of acquisition if the fair value of the net assets acquired exceeds the acquisitionconsideration. The standard indicates that such instances are expected to be infrequent. Spercent of companies disclosed bargain purchase gains. It is likely that these bargainpurchase gains were attributable to the economic downturn in the U.S. that continuedthroughout 2009 along with the consolidation of weaker competitors that was observed incertain industry sectors. These conditions may change as the economy strengthens. Thus,the results of this analysis may not be indicative of longer-term trends that may develop.

Was a bargain purchase gain disclosed?

Acquisition costs

We found that approximately half of the companies in the analysis disclosed acquisitioncosts. The standard requires companies to expense acquisition costs, such as legal,advisory, and consulting fees, as incurred. Previously, direct costs of acquisitions werecapitalized. Companies must also disclose material acquisition costs recorded in earnings.This requirement may create some inherent sensitivity for companies incurring material duediligence costs for possible acquisitions.

94%

6%

No

Yes


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Were acquisition costs disclosed?

Classification of acquisition costs

The majority of companies (85%) classified acquisition costs as a component of income fromoperations in the income statement. The standard requires disclosure of the line item in theincome statement where the costs are recorded.

Classification of acquisition costs

Disclosure of purchase price allocation

One of the requirements of both the previous and current standards is the disclosure of theamounts recognized as of the acquisition date for each major class of assets acquired andliabilities assumed (commonly called the "purchase price allocation"). The overwhelmingmajority of the transactions included in our sample disclosed this allocation in a schedule,while the rest disclosed the allocation in a narrative.

52%

48%

Yes

No

52%

8%

25%

3%5%

7%SG&A expense -Operating

Other expenses -Operating

Separate line -Operating

Other expenses -Non-Operating

Separate line -Non-Operating

Did not disclose


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Was the purchase price allocation disclosed

Status of purchase price allocation

Historically, many companies disclosed that their initial purchase price allocation waspreliminary and subject to adjustment. Any adjustments to the initial allocation were typicallrecorded prospectively. Under the new guidance, material adjustments to the initial allocatiomust be reflected retroactively in the comparative financial statements. Some believed thatthis change would cause companies to make greater efforts to finalize allocations in theacquisition period to reduce the possibility of a need to recast previous period results.However, the results of our analysis indicate that the majority of companies continue todescribe allocations as preliminary. Further, our analysis indicated that many of thesecompanies did not specify which particular asset or liability balances remain subject to

possible future adjustment. Of the companies that did specify, the most common items notewere intangible assets, income tax liabilities, accrued liabilities, and pre-acquisition contingeliabilities. When companies disclosed the allocation as final, the deals had been closed in thfirst month of the quarter.

Status of purchase price allocation

74%

4%

22%Preliminary

Final

Did not

disclose

82%

10%

8% Yes -schedule

Yes -narrative

No


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In-Process Research and Development (IPR&D) costs

The standard requires that IPR&D be initially measured at fair value and classified as an

indefinite-lived intangible asset on the date of acquisition. For those companies thatdisclosed IPR&D and also disclosed the methodology used to initially value the IPR&D, themethod used in all cases was a discounted cash flow (DCF) income approach.

IPR&D valuation method

Measurement of acquired contingencies

Of the acquired contingencies that were disclosed, some were initially measured andrecorded at fair value, while others were initially measured and recorded at management'sbest estimate if determined to be probable and reasonably estimable (the "legacy" approachThe standard allows for such a legacy approach only when fair value cannot be determinedduring the measurement period. For example, under the standard there is an expectationthat most companies would use the legacy approach for measuring some of the morecommon types of contingent liabilities, such as litigation, given the many factors and inherenuncertainties in determining fair value for such an item. Another expectation is that the fairvalue of warranty liabilities generally would be determinable. Our analysis supports both ofthese notions. Litigation was measured using a legacy approach. Additionally, warrantyliabilities and certain other contractual contingencies were measured at fair value.

43%

57%

DCF income approach

Method not disclosed


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Approach to recording certain types of contingencies

Noncontrolling interests

We analyzed the measurement technique used to determine the fair value of thenoncontrolling interest (NCI) in partial acquisitions (situations in which the buyer acquires acontrolling interest of more than 50% but less than 100% of the equity interest in theacquiree). Of the transactions that resulted in recognition of an NCI, the most commonvaluation technique used to measure the fair value of the NCI was the closing market price othe acquired company's shares on the acquisition date.

In addition, for those acquisitions with an NCI, the vast majority of acquirers began theconsolidated statement of cash flows with the caption "net income."

Caption beginning the statement of cash flows for companies with NCI

When NCI was disclosed, the classification of the NCI in the statement of financial positionwas predominantly in equity. In a limited number of instances, mezzanine classification wasused because the NCI was redeemable outside of the control of the controlling interest.

88%

10% Net Income (NI)

NI of the company

NI of common shareholders

2%

12%

23%

17%18%

12%

12%

6%Legacy-Litigation

Legacy-Other non-litigation

Legacy-Environmental

FV-Environmental

FV-Warranty

FV-Contractual

FV-Not disclosed


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Classification of the NCI

Public company disclosures

Public companies are required to disclose the amount of revenue and earnings of theacquiree since the acquisition date included in the acquirer's consolidated income statementThere is also a requirement to disclose supplemental pro forma revenue and earnings of thecombined entity for the current and prior reporting periods. If these disclosures are deemedimpracticable, the acquirer must disclose that fact and explain why it is impracticable. Of thecompanies that disclosed pro forma information, the most common items affecting the proforma results included:

Additional depreciation expense for fixed assets

Additional amortization expense for intangible assetsAdditional interest expense related to the financing of the acquisitionAdditional employee benefits expenseExclusion of acquisition costsExclusion of integration costs

Many companies specifically disclosed that the acquiree results since acquisition and the prforma information were not disclosed because the acquisition was not considered material.No companies adjusted the pro forma results for expected post-acquisition synergies.Several companies specifically disclosed that no adjustments to the pro forma results hadbeen made for the conforming of acquirer and acquiree accounting policies.

90%

7%

3%

Equity

Mezzanine

Equity and mezzanine


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Were acquiree results since acquisition disclosed?

Was pro forma information disclosed?

40%

60%

Yes

No

44%

56%

Yes

No


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Other findings

In addition, we noted the following:

Only one of the companies in the analysis specifically disclosed the presence of"defensive" assets, which are defined as assets that an acquirer does not intend toactively use but intends to hold (lock up) to prevent others from gaining access to them.These assets may present unique accounting and valuation challenges, such asdetermining an initial fair value from the perspective of a market participant anddetermining an appropriate amortization period. Other companies in the analysis mayalso have acquired defensive assets, but did not disclose them separately from otherintangible assets.

None of the companies in the analysis specifically disclosed the presence of a reacquireright, which is defined as a right that the acquirer had previously granted to the acquiree

to use one or more of the acquirer's recognized or unrecognized assets. Similar todefensive assets, reacquired rights may present unique valuation challenges, such asdetermining their initial fair value. Companies in the analysis may have recordedreacquired rights, but did not disclose them separately from other intangible assets.

Of the companies in the analysis, 39% closed their deals during the first month of thequarter. Of the companies in the analysis, 18% closed deals during the first 10 days ofthe quarter. These percentages are slightly greater than the percentages that would beexpected under an assumption that deals have an equal probability of closing on eachday in a quarter. This may indicate that companies are timing deals to allow for the mosamount of time possible before having to report financial information that includes theinitial acquisition accounting.

Less than 2% of the companies in the analysis disclosed subsequent measurementperiod adjustments to the amounts originally recorded. This may be the result of thelimited length of time that has passed since the acquisition dates in the analysis. Thismay also be indicative of companies performing more robust due diligence procedures inadvance of closing deals and more timely valuations after closing deals.

None of the companies in the analysis specifically disclosed adjustments to tax accountbalances that had been recorded in prior years related to old deals. The standard nowrequires any such adjustments to be recorded in earnings rather than as an adjustment goodwill on the balance sheet.

Presented on the following pages is summarized data derived from the quarterly analysesthat were performed.


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Summary data

Data Point Q1 Q2 Q3 Q4 Cumulative Percenta

Form of consideration Sample Size 20 55 55 55 185 100What was the form of the consideration theacquirer transferred in exchange for controlof the acquiree?

Cash 14 30 33 29 106 56

Cash and shares 3 14 21 20 58 31

Shares 3 5 0 6 14 7

Did not disclose 0 6 1 0 7 6

Contingent consideration Sample Size 20 55 55 55 185 100

Was any portion of the acquisitionconsideration contingent in nature?

Yes 5 12 9 10 36 19

No 15 43 46 45 149 81

Classification of contingentconsideration

Sample Size 5 12 9 10 36 100

If present, how was the contingentconsideration classified in the financial

statements?

Liability 1 8 5 5 19 53

Equity 1 3 0 0 4 11

Mix 0 0 1 0 1 3

Compensation 1 1 0 2 4 11


Bargain purchase Sample Size 20 55 55 55 185 100

Was there a bargain purchase gaindisclosed as a result of the acquisition?

No 15 53 52 53 173 94

Yes 5 2 3 2 12 6

Acquisition costs Sample Size 20 55 55 55 185 100

Did the acquirer disclose the amount ofacquisition costs incurred in the period?

Yes 9 25 30 32 96 52

No 11 30 25 23 89 48

Classification of acquisition costs Sample Size 9 25 30 32 96 100

In which line item of the statement ofoperations were acquisition related costsreported?

SG&A expense - Ops 4 13 15 18 50 52Other expense - Ops 0 0 6 1 7 8

Separate line - Ops 5 5 3 11 24 25

Other expense - Non-Ops 0 3 0 0 3 3

Separate line - Non-Ops 0 4 1 0 5 5


Disclosure of purchase price allocation Sample Size 20 55 55 55 185 100

Did the acquirer disclose the allocation ofconsideration to the net assets acquired?

Yes - schedule form 14 40 48 50 152 82

Yes - narrative form 3 6 6 4 19 10

No 3 9 1 1 14 8

Status of purchase price allocation Sample Size 17 46 54 54 171 100If the purchase price allocation wasdisclosed, were the amounts presented asbeing final or preliminary?

Preliminary 10 35 45 37 127 74

Final 4 0 1 1 6 4



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Data Point

In-Process Research and Development(IPR&D) costs

Sample Size

Q1

5

Q2

8

Q3

11

Q4

13

Cumulative

37

Percenta

100

If the acquirer disclosed the presence ofIPR&D, how was it valued?

DCF incomeapproach 0 3 6 7 16 43

Method not disclosed 5 5 5 6 21 57

Measurement of acquiredcontingencies

Sample Size 3 3 4 7 17 100

If disclosed, which basis was used tomeasure certain types of liabilities?

Legacy - Litigation 1 0 0 1 2 12

Legacy - Other non-litigation 1 1 0 2 4 23

Legacy -Environmental 0 1 0 2 3 17

FV - Environmental 0 0 1 2 3 18

FV - Warranty 0 0 2 0 2 12

FV - Contractual 1 0 1 0 2 12

FV - Not disclosed 0 1 0 0 1 6

Noncontrolling interests Sample Size 2 20 20 25 67 100

If the acquirer disclosed a noncontrollinginterest, what line item was the starting pointfor the statement of cash f lows?

Net income (NI) 1 19 18 21 59 88

NI of the company 0 1 2 4 7 10

NI of commonshareholders

1 0 0 0 1 2

Noncontrolling interests Sample Size 2 20 20 25 67 100

If the acquirer disclosed a noncontrollinginterest, where in the statement of financialposition was it classified?

Equity 2 18 18 22 60 90

Mezzanine 0 0 2 3 5 7

Equity and mezzanine 0 2 0 0 2 3

Public company disclosures Sample Size 20 55 55 55 185 100

Did the acquirer disclose the amount ofacquire results included in the acquirerresults since the acquisition date?

Yes 9 27 17 21 74 40

No 11 28 38 34 111 60

Public company disclosures Sample Size 20 55 55 55 185 100

Did the acquirer disclose the required proforma financial information?

Yes 10 14 26 31 81 44

No 10 41 29 24 104 56


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II. Financial statement presentation and disclosure examples

Contents Page

Form of consideration 20

Contingent consideration - Liability classification 24

Contingent consideration - Equity classification 30

Contingent consideration - Liability and equity classifications 32

Contingent consideration - Subsequent period adjustments 33

Contingent compensation payments 34

Bargain purchase 35

Acquisition and restructuring costs 40

Disclosure of purchase price allocation - Preliminary 44

Disclosure of purchase price allocation - Final 49

In-Process and Development (IPR&D) costs 51Acquired contingencies - Fair value 55

Acquired contingencies - Legacy approach 56

Acquired contingencies - Fair value and legacy approach 58

Noncontrolling interests 59

Noncontrolling interests - Step acquisitions 62

Noncontrolling interests - Mezzanine classification 67

Public company disclosures - Actual results of the acquiree 70

Public company disclosures - Pro forma results 72

Other disclosures:

Acquisition date 75

Reverse acquisitions 77

Preexisting relationships 77

Acquired loans 80

Inventories 83

Defensive assets 84

Intangible assets 86

Indemnification assets 91

Goodwill 93

Deferred revenue 95

Income taxes 96

Measurement period adjustments 97


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Gilead Sciences Inc

Filing: 10-Q, 6/30/09

The aggregate consideration transferred to acquire CV Therapeutics was $1.39 billion, andconsisted of cash paid for common stock and other equity instruments at or prior to closing o$1.38 billion and the fair value of vested stock options assumed of $15.7 million.

In accordance with the merger agreement, the number of Gilead stock options and restrictedstock units into which assumed CV Therapeutics stock options and restricted stock unitswere converted was determined based on the option conversion ratio, which is the per shareacquisition price of $20.00 divided by the average closing price of our common stock for thefive consecutive trading days immediately preceding (but not including) the closing date of

April 17, 2009, which was $46.24 per share. The fair value of stock options assumed wascalculated using a Black-Scholes valuation model with the following assumptions: marketprice of $44.54 per share, which was the closing price of our common stock on the acquisitiodate; expected term ranging from 0.1 to 5.2 years; risk-free interest rate ranging from 0.1% t1.7%; expected volatility ranging from 37.4% to 43.2%; and no dividend yield. The fair valueof restricted stock units assumed was calculated using the acquisition-date closing price of$44.54 per share for our common stock. We included the fair value of vested stock optionsassumed by us of $15.7 million in the consideration transferred for the acquisition. Therewere no vested restricted stock units assumed by us. The estimated fair value of unvestedstock options and restricted stock units assumed by us of $11.2 million was not included inthe consideration transferred and is being recognized as stock-based compensation expensover the remaining future vesting period of the awards.

Westway Group

Filing: 10-Q, 6/30/09

On May 28, 2009, we completed the acquisition of the bulk liquid storage and feedsupplements businesses by effecting mergers of two of our wholly-owned subsidiaries withWestway Terminal Company, Inc. and Westway Feed Products, Inc., which were two formerdomestic subsidiaries of ED&F Man, and by purchasing the equity interests of certain foreignsubsidiaries of ED&F Man engaged in the bulk liquid storage and liquid feed supplementsbusinesses. The consideration we paid in connection with the closing of the business

Consideration transferred is generally measured at fair value. Consideration transferred is thesum of the acquisition-date fair values of the assets transferred, the liabilities incurred by the

acquirer to the former owners of the acquiree, and the equity interests issued by the acquirer to

the former owners of the acquiree.


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combination consisted of approximately 12.6 million newly-issued shares of our Class Bcommon stock (fair value of $63.1 million), approximately 30.9 million newly-issued shares o

our Series A Preferred Stock (fair value of $177.3 million), including 12.2 million escrowedshares for contingent earn-out payments that are to be released from escrow only if theCompany achieves certain earnings or share price targets, and $103.0 million in cash, pluscertain post closing adjustments for working capital of $3.4 million. If the targets are achievein the form of shares released from escrow, the Company estimates the aggregate value ofthe consideration to be $346.9 million.

On May 28, 2009, the Company delivered to an escrow agent for deposit into an escrowaccount 12,181,818 of the 30,886,830 newly issued shares of Series A Preferred Stockissued to Westway Holdings Corporation as part of consideration for the businesscombination, pursuant to a stock escrow agreement. These shares will be released to ED&Man only upon the achievement by the Company of certain earnings or share price targets adetermined in the Stock Escrow Agreement.

Penseco Financial Services Corp

Filing: 10-Q, 6/30/09

The following table summarizes the consideration paid for Old Forge Bank and theidentifiable assets acquired and liabilities assumed at acquisition date

Cash $17,405

Common Stock issued - 1,128,079 shares of the Company, net ofissuance costs of $184 38,058

Fair value of consideration transferred $55,463

The fair value of the 1,128,079 common shares of the Company issued as part of theconsideration paid to former Old Forge Bank shareholders was $38,058, determined by useof the weighted average price of Company shares traded on March 31, 2009 ($33.90 pershare). The Company believes that the weighted average price of the Company stock tradedon March 31, 2009 is the best indication of value since the Company's common stock is not heavily traded security.

SCM Microsystems, IncFiling: 10-Q, 6/30/09

In exchange for all of the outstanding capital stock of Hirsch, SCM paid approximately $14.2million in cash, issued approximately 9.4 million shares of SCM common stock at the closingand issued warrants to purchase approximately 4.7 million shares of SCM common stock atan exercise price of $3.00 with a five-year term, exercisable for two years following the thirdanniversary of the closing date. In addition, each warrant to purchase shares of Hirsch


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common stock outstanding immediately prior to the effective date of the acquisition wasconverted into a warrant to purchase the number of shares of SCM common stock equal to

the number of shares of Hirsch common stock that could have been purchased upon the fullexercise of such warrants, multiplied by the conversion ratio (as defined below), roundeddown to the nearest whole share.

The per share exercise price for each new warrant to purchase SCM common stock wasdetermined by dividing the per share exercise price of the Hirsch common stock subject toeach warrant as in effect immediately prior to the effective date of the acquisition by theconversion ratio, and rounding that result up to the nearest cent. As used in this QuarterlyReport on Form 10-Q, conversion ratio means the quotient obtained by dividing theestimated aggregate value of the acquisition consideration per share of Hirsch commonstock, by the 30-day volume weighted average price of SCMs common stock (as reported othe NASDAQ Stock Market during the 30 days preceding the day prior to the day of theeffective date of the acquisition).

The total purchase consideration was determined to be $38.0 million as of the acquisitiondate. The following table summarizes the consideration paid for Hirsch and the amounts ofthe assets acquired and liabilities assumed at the acquisition date. The fair value of theshares of SCM common stock issued in connection with the acquisition was determined usinthe closing price of SCMs common stock as of the acquisition date of $2.37 per share.

Fair value of consideration transferred (in thousands):

Cash paid for Hirsch common $14,167

Fair value of common stock 22,258

Fair value of warrants issued 1,327

Fair value of warrants converted 200

Total purchase consideration $37,952

Inverness Medical Innovation, Inc

Filing: 10-Q, 6/30/09

The preliminary aggregate purchase price for the Second Territory Business wasapproximately $192.9 million ($190.9 million present value), which consisted of an initial cas

payment totaling $105.0 million and deferred purchase price consideration payable in cashand common stock with an aggregate fair value of $87.9 million. Included in our consolidatedstatements of operations for the three and six months ended June 30, 2009 is revenuetotaling approximately $8.7 million related to the Second Territory Business. The operatingresults of the Second Territory Business are included in our professional diagnostics reportinunit and business segment.

During the remainder of 2009, we will pay $1.5 million in cash and an amount equal to $57.5million in shares of our common stock as settlement of a portion of the deferred purchase


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price consideration. The deferred payments made in 2009 will bear interest at a rate of 4%.The remainder of the purchase price will be due in two installments, each comprising 7.5% o

the total purchase price, or approximately $28.9 million, on the dates 15 and 30 months aftethe acquisition date. These amounts do not bear interest and may be paid in cash or acombination of cash and up to approximately 29% of each of these payments in shares of ocommon stock. For purposes of determining the preliminary aggregate purchase price of$190.9 million, we present valued the final two installment payments totaling $28.9 millionusing a discount rate of 4% resulting in a reduction in the deferred purchase priceconsideration of approximately $2.0 million.

Bottomline Technologies, Inc.

Filing: 10-Q, 9/30/09

On September 14, 2009, the Company completed the purchase of substantially all of theassets and related operations of PayMode from Bank of America (the Bank). PayModefacilitates the electronic exchange of payments and invoices between organizations and thesuppliers and is operated as a Software as a Service (SaaS) offering. There are currently inexcess of 90,000 vendors participating in the PayMode network.

As a result of the acquisition the Company acquired the PayMode operations including thevendor network, application software, intellectual property rights and other assets, propertiesand rights used exclusively or primarily in the PayMode business. As purchase considerationthe Company paid the Bank cash of $17.0 million and issued the Bank a warrant to purchase1,000,000 shares of common stock of the Company at an exercise price of $8.50 per share.The warrants were exercisable upon issuance and were valued at $10.5 million using a Blac

Scholes valuation model that used the following inputs:Dividend yield 0%

Expected term 10 years

Risk free interest 3.42%

Volatility 78%

The expected term of ten years equates to the contractual life of the warrants. Volatility wasbased on the Companys actual stock price over a ten year historic period.

Atheros Communications, Inc.

Filing: 10-K, 12/31/09

Under the terms of the merger agreement, the Company paid an aggregate of $113,627,000in cash ($70,701,000 net of cash acquired) and exchanged 4,500,000 shares of theCompanys common stock and equivalents for 32,503,000 of Intellons outstanding commonstock and equivalents, valued at $140,348,000 to Intellon shareholders upon closing,resulting in total acquisition consideration of $253,975,000. The Company issued to Intellon


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employees on December 15, 2009, options to purchase 631,000 shares of the Companyscommon stock, 189,000 restricted stock units (RSUs) of the Companys common stock and

16,000 restricted stock awards with an aggregate value of approximately $18,183,000, inexchange for their options to purchase shares, restricted stock units, and restricted stockawards of Intellon. Of this amount, 272,000 stock options and 28,000 RSUs were earnedprior to the acquisition date, and therefore, the Company recorded $5,189,000 as part of theacquisition consideration. The remaining 359,000 stock options, 161,000 RSUs and 16,000restricted stock awards will result in compensation expense of $12,994,000, which will berecognized over the remaining vesting period of these equity awards, which ranges from oneday to four years, subject to adjustment based on estimated forfeitures. Additionally, onDecember 15, 2009, the Company issued 356,000 restricted stock units of the Companyscommon stock to employees of Intellon valued at $11,456,000, subject to adjustment basedon estimated forfeitures, and will recognize this amount as compensation expense over aperiod ranging from one to four years. The value of the Companys common stock andequivalents issued was determined based on the Companys closing share price on

December 15, 2009 (the acquisition date), or $32.18 per share.

Contingent consideration - Liability classification

Riverbed Technology, Inc

Filing: 10-Q, 3/31/09

The total acquisition date fair value of the consideration transferred is estimated at $33.0million, which includes the initial payments totaling $23.1 million in cash and the estimatedfair value of acquisition-related contingent consideration to be paid to Mazu shareholderstotaling $9.9 million. The total acquisition date fair value of consideration transferred isestimated as follows:

(in thousands)

Payment to Mazu shareholders $23,051

Acquisition related contingent consideration 9,909

Total acquisition date fair value $32,960

In accordance with SFAS No. 141(R), a liability was recognized for an estimate of theacquisition date fair value of the acquisition-related contingent consideration based on the

Contingent consideration is measured at its acquisition-date fair value. A contingent

consideration arrangement that is required to be settled in cash or other assets should be

classified as a liability. A contingent consideration arrangement that is required to be (or at the

issuer's option can be) settled in shares may be classified as a liability or as equity depending

on an analysis of the specific facts and circumstances of the arrangement and a consideration

of all relevant U.S. GAAP.


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probability of achievement of the bookings target. Any change in the fair value of theacquisition-related contingent consideration subsequent to the acquisition date, including

changes from events after the acquisition date, such as changes in our estimate of thebookings targets, will be recognized in earnings in the period the estimated fair value changeThe fair value estimate is based on the probability weighted bookings to be achieved over thearn-out period. Actual achievement of bookings below $16.0 million would reduce the liabilto zero and achievement of bookings of $35.0 million or more would increase the liability to$16.6 million. A change in fair value of the acquisition-related contingent consideration couldhave a material affect on the statement of operations and financial position in the period ofthe change in estimate.

We estimated the fair value of the acquisition-related contingent consideration using aprobability-weighted discounted cash flow model. This fair value measurement is based onsignificant inputs not observed in the market and thus represents a Level 3 measurement asdefined by SFAS No. 157. Level 3 instruments are valued based on unobservable inputs th

are supported by little or no market activity and reflect our own assumptions in measuring favalue. The estimated fair value of acquisition-related contingent consideration of $9.9 millioincludes amounts to be distributed directly to shareholders, discounted at 13%, but excludesa fair value estimate of $3.8 million to be paid to former employees of Mazu. As of March 312009, there were no significant changes in the estimated fair value of the contingentconsideration recognized as a result of the acquisition of Mazu.

The estimated fair value of acquisition-related contingent consideration of $3.8 million to bepaid to the former employees of Mazu is considered compensatory and will be recognized acompensation cost, recorded in operating expense, over the Earn-Out period providedgenerally that such former Mazu employees are employees of Riverbed at the time theacquisition-related contingent consideration is earned.

Exar Corporation

Filing: 10-Q, 6/28/09

We expect to pay $4.95 million in cash for Galazar, representing the fair value of totalconsideration transferred. This amount includes $1.0 million contingent consideration, thatfor purposes of valuation was assigned a 95% probability or a fair value of $0.95 million. Thcontingent consideration is expected to be paid within the next six months and is included inthe Other accrued expenses line item in our condensed consolidated balance sheets.


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ev3 Inc.

Filing: 10-Q, 7/5/09

We issued 5,060,510 shares of our common stock, with an estimated fair value of $53.2million. The estimated fair value per share of common stock of $10.51 was based on theclosing price of our common stock on the date of the acquisition, June 23, 2009. The cashconsideration, net of cash acquired, was approximately $24.7 million. We have also incurredapproximately $1.0 million in direct acquisition costs, all of which were expensed as incurred

In addition, we have agreed to pay an additional milestone-based payment of cash and equupon the FDA pre-market approval of the Pipeline device. This milestone-based contingentpayment could range from: (1) $75 million upon FDA approval prior to October 1, 2011, (2)$75 million less $3.75 million per month upon FDA approval from October 1, 2011 throughDecember 31, 2012 and (3) no payment required if FDA approval is not obtained by

December 31, 2012. The milestone-based payment of up to $75.0 million will consist of cashand equity paid in the form of shares of our common stock ranging from 30% cash and 70%equity to 85% cash and 15% equity, of the total required payment. In accordance with SFAS141(R), we have recorded the acquisition-date estimated fair value of the contingentmilestone payment of $37.3 million as a component of the consideration transferred inexchange for the equity interests of Chestnut.

The acquisition-date fair value was measured based on the probability adjusted present valuof the consideration expected to be transferred. The fair value of the contingent milestonepayment was remeasured as of July 5, 2009 at $37.5 million and is reflected in Other long-term liabilities in our consolidated balance sheets. The change in fair value of approximatel$196,000 is reflected as Contingent consideration in our consolidated statements of

operations for the three and six months ended July 5, 2009.

McAfee

Filing: 10-Q, 9/30/09

On September 1, 2009, we acquired 100% of the outstanding shares of MX Logic, Inc. (MXLogic), a Software-as-a-Service provider of on-demand email, web security and archivingsolutions for $138.5 million. The MX Logic purchase agreement provides for earn-outpayments totaling up to $30.0 million contingent upon the achievement of certain MX Logicrevenue targets. The $24.6 million fair value of the earn-out payments has been accrued fortotal purchase price of $163.1 million.

The MX Logic contingent consideration arrangement requires payments up to $30.0 millionthat will be due and payable if certain criteria in relation to revenue recognized on the sale oMX Logic products are met during the three-year period subsequent to the close of theacquisition. The fair value of the contingent consideration arrangement of $24.6 million wasdetermined using the income approach with significant inputs that are not observable in themarket. Key assumptions include discount rates consistent with the level of risk ofachievement and probability adjusted revenue amounts. The expected outcomes were


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recorded at net present value. Subsequent changes in the fair value of the liability will berecorded in earnings. As of September 30, 2009, the range of outcomes and the assumption

used to develop the estimates had not changed significantly, and the amount accrued in thefinancial statements increased by $1.0 million. The increase in fair value was due to expecteachievement of the earn-out payments at an earlier date than originally assumed and anincrease in the net present value of the liability due to the passage of time.

DivX, Inc.

Filing: 10-Q, 9/30/09

The total consideration for the net assets acquired is up to $15.0 million, consisting of aninitial cash payment of $7.5 million, which the Company made in August 2009, and additionaconsideration of up to $7.5 million upon the achievement of certain technical productdevelopment milestones and certain revenue and distribution milestones. The totalacquisition date fair value of the consideration was estimated at $12.5 million as follows (inthousands):

Initial cash payment to AnySource $7,500

Estimated fair value of contingent milestone consideration 4,974

Total consideration $12,474

On the acquisition date, a liability was recognized for an estimate of the acquisition date fairvalue of the contingent milestone consideration based on the probability of achieving the

milestones and the probability weighted discount on cash flows. Any change in the fair valueof the contingent milestone consideration subsequent to the acquisition date will berecognized in the statements of income.

This fair value measurement is based on significant inputs not observed in the market andthus represents a Level 3 measurement. Level 3 instruments are valued based onunobservable inputs that are supported by little or no market activity and reflect theCompanys own assumptions in measuring fair value. Discount rates considered in theassessment of the acquisition date fair value for the contingent milestones totaling $5.0million range from approximately 6% to 23%. A change in fair value of the contingentmilestone consideration, as a result of changes in significant inputs such as the discount rateand estimated probabilities of milestone achievements, could have a material effect on thestatement of income and financial position in the period of the change.

Inverness Medical Innovations, Inc.

Filing: 10-Q, 9/30/09

The preliminary aggregate purchase price was $127.4 million, which consisted of an initialcash payment totaling $105.3 million and a contingent consideration obligation with a fair


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value of $22.1 million. In addition, we assumed and immediately repaid debt totalingapproximately $1.3 million.

We determined the acquisition date fair value of the contingent consideration obligationbased on a probability-weighted income approach derived from 2010 revenue and EBITDA(earnings before interest, taxes, depreciation and amortization) estimates and a probabilityassessment with respect to the likelihood of achieving the various earn-out criteria. The fairvalue measurement is based on significant inputs not observable in the market and thusrepresents a Level 3 measurement as defined in fair value measurement accounting. Theresultant probability-weighted cash flows were then discounted using a discount rate of 13%

At each reporting date, we revalue the contingent consideration obligation to its fair value anrecord increases and decreases in the fair value as income or expense in our consolidatedstatements of operations. Increases or decreases in the fair value of the contingentconsideration obligations may result from changes in discount periods and rates, changes inthe timing and amount of revenue estimates and changes in probability assumptions with

respect to the likelihood of achieving the various earn-out criteria. We recorded expense ofapproximately $15,000 in our consolidated statements of operations during the three and ninmonths ended September 30, 2009, as a result of a decrease in the discount period since thacquisition date. As of September 30, 2009, the fair value of the contingent considerationobligation was approximately $22.1 million.

A summary of the preliminary aggregate purchase price allocation for this acquisition is asfollows (in thousands):

Current assets $ 17,183

Property, plant and equipment 1,224

Goodwill 80,766Intangible assets 59,100

Other non-current assets 807

Total assets acquired $159,080

Current liabilities 8,042

Non-current liabilities 23,640

Total liabilities assumed $ 31,682

Net assets acquired 127,398

Less:

Fair value of contingent consideration obligation 22,097

Cash consideration $105,301


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The Company may be required to issue up to an additional 1.6 million shares of commonstock and pay up to an additional $15.9 million cash to the former holders of RMI capital stocas earn-out consideration based upon achieving specified percentages of revenue targets foeither the 12-month period from October 1, 2009 through September 30, 2010, or the 12-month period from November 1, 2009 through October 31, 2010, whichever period results inthe higher percentage of the revenue target. The additional earn-out consideration, if any, neof applicable indemnity claims, will be paid on or before December 31, 2010.

Issuance of Netlogic common stock to RMI preferred shareholders $188,527

Payments to RMI common shareholders in cash 12,582

Acquisition-related contingent consideration 9,679

Other adjustments (837)

Total $209,951

In accordance with ASC 805 Business Combinations, a liability was recognized for theestimated merger date fair value of the acquisition-related contingent consideration based othe probability of the achievement of the revenue target. Any change in the fair value of theacquisition-related contingent consideration subsequent to the merger date, includingchanges from events after the acquisition date, such as changes in the Companys estimateof the revenue expected to be achieved and changes in its stock price, will be recognized inearnings in the period the estimated fair value changes. The fair value estimate assumesprobability-weighted revenues are achieved over the earn-out period. Actual achievement ofrevenues at or below 75% of the revenue range for this assumed earn-out period wouldreduce the liability to zero. If actual achievement of revenues is at or above 100% of the

revenue target, the RMI stockholders will receive the maximum consideration of 1.6 millionshares and $15.9 million in cash. If the amount of revenue recognized is greater than 75%but less than 100% of the revenue target, the RMI stockholders will receive an earn-outconsideration that increases as the percentage gets closer to 100%. A change in the fairvalue of the acquisition-related contingent consideration could have a material impact on theCompanys statement of operations and financial position in the period of the change inestimate.

The estimated initial earn-out liability was based on the Companys probability assessment oRMIs revenue achievements during the earn-out period. In developing these estimates, theCompany considered the revenue projections of RMI management, RMIs historical results,and general macro-economic environment and industry trends. This fair value measurementis based on significant revenue inputs not observed in the market and thus represents a Lev3 measurement as defined by ASC 820 Fair Value Measurements and Disclosures. Level 3instruments are valued based on unobservable inputs that are supported by little or no markactivity and reflect the Companys own assumptions in measuring fair value. The Companyassumed a probability-weighted revenue achievement of approximately 80% of target. TheCompany determined that the resulting earn-out consideration would be 244,000 shares of icommon stock and cash payment of approximately $0.4 million. The Company then appliedits closing stock price of $38.01 as of October 30, 2009 to the 244,000 shares and added$0.4 million to arrive at an initial earn-out liability of $9.7 million.

Netlogic Microsystems Inc.

Filing: 10-K, 12/31/09


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Contingent consideration - Equity classification

Equity One, Inc

Filing: 10-Q, 3/31/09

On January 14, 2009 (the Acquisition Date) in accordance with the Stock ExchangeAgreement between us and Homburg Invest Inc. and Homburg (Neth) Beheer B.V.(collectively, Homburg), dated January 9, 2009 (the DIM Exchange Agreement), weacquired ownership of 15.1% of the outstanding DIM ordinary shares in exchange for 866,37shares of our common stock. In addition, we obtained from Homburg voting rights withrespect to an additional 9.4 % of the outstanding DIM ordinary shares over which Homburghas voting power but does not currently own (the Future Shares) resulting, together with th65.2% of DIM ordinary shares owned by us, in voting control over 74.6% of the outstandingDIM ordinary shares. Prior to the Acquisition Date, we accounted for our 48% interest in DIMon December 31, 2008 as an available-for-sale security because of our inability to exertsignificant influence over DIMs operating or financial policies and, based on DIMs

organizational and capital structure, we were unable to participate in the affairs of DIMssupervisory board.

The DIM Exchange Agreement provides for us to acquire from Homburg the Future Shares,and when Homburg has acquired ownership thereof, in consideration for 536,601 shares ofour common stock or, at our option, $11.50 per share in cash adjusted for any dividends paion our shares and the Future Shares. The fair value of the Future Shares transaction of$323,000 was determined using Monte-Carlo simulation methodology to estimate fair valuesof the securities involved. These valuations of the securities considers various assumptions,including time to maturity, applicable market volatility factors, and current market and sellingprices for the underlying securities which are traded on the open market. The value of theDIM Exchange Agreement of approximately $323,000 will be classified as contingentconsideration within stockholders equity until consummation of the Future Shares acquisition

This contingent stock exchange requires us to issue Homburg 536,601 shares of ourcommon stock in exchange for 766,573 of DIM's ordinary shares if our common stock istrading below $20.00. Likewise, the contingent stock exchange requires Homburg to providus with 766,573 DIM ordinary shares in exchange for 536,601 shares of our common stock our stock is trading above $16.50. The Agreement provides for a time-sensitive cashsettlement option, solely and absolutely at our discretion, that takes precedence over theaforementioned stock exchange. This cash settlement option provides us the ability to pay


consideration arrangement that is required to be (or at the issuer's option can be) settled in

shares may be classified as a liability or as equity depending on an analysis of the specific facts

and circumstances of the arrangement and a consideration of all relevant U.S. GAAP.


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Homburg cash of $11.50 per DIM ordinary share, adjusted for a dividend formula thatconsiders our dividend and DIM's dividend, if any.

The following table summarizes the Acquisition Date fair value of the consideration paid forthe controlling interest in DIM (in thousands):

Acquisition Date Fair Value

(In Thousands)

Previous equity interest $36,945

Value of our common stock exchange 12,234

Contingent consideration 323

Total $49,502

EQUITY ONE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

March 31, 2009 (Unaudited) and December 31, 2008

(In thousands)

March31,

2009

December 31,

2008

Equity:

Stockholders equity of Equity One

Preferred stock, $0.01 par value 10,000 shares authorized butunissued

Common stock, $0.01 par value,10,000 shares authorized butunissued Preferred stock, $0.01 par value ,100,000 sharesauthorized 76,655 and 76,198 shares issued and outstanding as o

March 31, 2009 and December 31, 2008, respectively $ 769 $ 762Additional paid in capital 977,515 967,514

Distributions in excess of retained earnings (15,926) (36,617)

Contingent consideration 323 -

Accumulated other comprehensive income (loss 404 (22,161)

Total stockholders equity of Equity One) 963,085 909,498

Noncontrolling interest 26,187 989

Total stockholders' equity 989,272 910,487

Total Liabilities And Stockholders Equity $2,370,069 $2,036,263


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First Solar, Inc.

Filing: 10-Q, 7/31/09

Pursuant to the Merger Agreement, of the 2,972,420 Merger Shares, as of April 3, 2009,355,096 shares were Holdback Shares that were issuable to OptiSolar Holdings uponsatisfaction of conditions relating to certain then-existing liabilities of OptiSolar. The estimatefair value of this contingent consideration was $47.4 million and $47.7 million on June 27,2009 and April 3, 2009, respectively, and has been classified separately within stockholdersequity. As of June 27, 2009, 2,409 Holdback Shares had been issued to OptiSolar HoldingsSubsequent to June 27, 2009, an additional 331,523 Holdback Shares were issued toOptiSolar Holdings.

Contingent consideration - Liability and equityclassifications

BioClinica, Inc.

Filing: 10-Q, 9/30/09

On September 15, 2009, BioClinica acquired substantially all of the assets of TourtellotteSolutions, Inc. (Tourtellotte). Tourtellotte provides software applications and consultingservices which support clinical trials in the pharmaceutical industry. The purchase price forTourtellotte was $2.1 million in cash. Pursuant to the acquisition agreement, the Companyagreed to pay up to an additional $3.2 million in cash and 350,000 shares of our commonstock based upon achieving certain milestones, which include certain product developmentand revenue targets. (the earn-out). The fair value of the cash earn-out of $2.8 million hasbeen accrued for and the fair value of the 350,000 shares of $1.3 million has been classifiedseparately within stockholders equity as contingent consideration for a total purchase price $6.2 million. The Company used cash from operations to fund the cash purchase price forTourtellotte.

The following table summarizes the consideration transferred to acquire CardioNow andTourtolette at the respective acquisition dates:


consideration arrangement that is required to be settled in cash or other assets should be

classified as a liability. A contingent consideration arrangement that is required to be (or at the

issuer's option can be) settled in shares may be classified as a liability or as equity depending

on an analysis of the specific facts and circumstances of the arrangement and a consideration

of all relevant U.S. GAAP.


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CardioNow Tourtellotte

Cash $1,000 $2,100

Estimated earnout payments: Contingent consideration to be settled in cash 2,700

Contingent consideration to be settled in stock 1,300

Working capital adjustment 94

Total purchase price $1,000 $6,194

The contingent consideration of 350,000 shares of our common stock for the earn-out as paof the Tourtellotte acquisition was excluded from the computation of basic and dilutedearnings per share. Based on the authoritative literature for earnings per share, these shareare not considered contingently issued because all of the necessary conditions for thecontingent criteria have not been satisfied as of the reporting date.

Contingent consideration - Subsequent periodadjustments

Endo Pharmaceuticals Holdings, Inc.

Filing: 10-Q, 9/30/09

During the three months ended September 30, 2009, the fair value of the acquisition-relatedcontingent consideration, as determined in accordance with accounting principles generallyaccepted in the United States, decreased by approximately $23 million reflectingmanagements current assessment in light of the FDAs ongoing review of the application for

AveedTM. The decrease in the liability was recorded as a gain and is included in the

acquisition-related costs line item in the accompanying Condensed Consolidated Statementof Operations. During the nine months ended September 30, 2009, the fair value of theacquisition-related contingent consideration increased by $3.2 million and was recorded as acharge to earnings and is included in the acquisition-related costs line item in theaccompanying Condensed Consolidated Statements of Operations.

Contingent consideration is measured at its acquisition-date fair value. The accounting for

subsequent changes in the fair value of contingent consideration depends upon the

classification of the contingent consideration. Changes in the fair value of contingent

consideration not classified as equity generally impact earnings in the postcombination period.


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Riverbed Technology, Inc.

Filing: 10-Q, 9/30/09

We estimated the fair value of the acquisition-related contingent consideration using aprobability-weighted discounted cash flow model. This fair value measurement is based onsignificant inputs not observed in the market and thus represents a Level 3 measurement.Level 3 instruments are valued based on unobservable inputs that are supported by little orno market activity and reflect our own assumptions in measuring fair value. The fair value ofthe acquisition-related contingent consideration to be distributed directly to the Mazu sellingshareholders was originally estimated at the acquisition date to be $9.9 million. As ofSeptember 30, 2009, the estimated fair value of the acquisition-related contingentconsideration liability was reduced to $4.1 million, primarily due to a reduction in theprobability-weighted bookings estimate, discounted at 13%. The reduction in our fair valueestimate resulted in a net gain of $3.0 million and $5.8 million for the three and nine monthsended September 30, 2009, respectively, which was recorded in Acquisition-related costs inthe Condensed Consolidated Statement of Operations.

Ev3, Inc.

Filing: 10-Q, 10/04/09

In addition, we have agreed to pay an additional milestone-based payment of cash and equupon the FDA pre-market approval of the Pipeline device. This milestone-based contingentpayment could range from: (1) $75 million upon FDA approval prior to October 1, 2011, (2)$75 million less $3.75 million per month upon FDA approval from October 1, 2011 through

December 31, 2012 and (3) no payment required if FDA approval is not obtained byDecember 31, 2012. The milestone-based payment of up to $75.0 million will consist of cashand equity paid in the form of shares of our common stock ranging from 30% cash and 70%equity to 85% cash and 15% equity, of the total required payment. We have recorded theacquisition-date estimated fair value of the contingent milestone payment of $37.3 million asa component of the consideration transferred in exchange for the equity interests of ChestnuThe acquisition-date fair value was measured based on the probability-adjusted present valuof the consideration expected to be transferred. The fair value of the contingent milestonepayment was remeasured as of October 4, 2009 at $39.7 million and is reflected in Otherlong-term liabilities in our consolidated balance sheets. The change in fair value for the threand nine months ended October 4, 2009 of $2.3 million and $2.5 million, respectively, isreflected as Contingent consideration in our consolidated statements of operations.

Contingent compensation payments

Arrangements that include contingent consideration need to be assessed to determine if the

consideration is for postcombination services based on the nature of the arrangements. If the

consideration is for postcombination services, it is recognized as compensation expense in the

postcombination period.


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GSI Commerce Inc.

Filing: 10-K, 1/2/10

As consideration for the acquisition of RCI, the Company paid cash of $92,133 and issued4,572 shares of the Companys common stock valued at $93,945 based on the closing sharprice on the acquisition date. In addition, the Company is obligated to pay additionalpayments of up to $170,000 over a three year period beginning with RCI fiscal year 2010contingent on RCIs achievement of certain financial performance targets, of which theCompany has the ability to pay up to $44,100 with shares of the Companys common stock.To reach the maximum earnout, RCI will need to achieve earnings before interest, taxes,depreciation and amortization (EBITDA) of $51,900 in fiscal year 2012, excludingcompensation expense on the earnout payment and certain other adjustments as defined inthe RCI merger agreement. A maximum of $46,200 of the earnout will be paid to RCIemployees based on performance conditions, which will be treated as compensationexpense. The remaining $123,800 of the earnout will be accounted for as additionalacquisition consideration. On the acquisition date, the Company recorded a liability of$60,012 which represents the fair value of the portion of the earnout that will be accounted fas additional acquisition consideration. Any adjustment to the fair value of the Companysestimate of the earnout payment will impact changes in fair value of deferred acquisitionpayments on the Companys Consolidated Statements of Operations and could have amaterial impact to its financial results.

Resources Connection Inc.

Filing: 10-Q, 11/28/09

In addition, under the terms of the Membership Interest Purchase Agreement and GoodwillPurchase Agreement, up to 20% of the contingent consideration is payable to the employeeof the acquired business at the end of the measurement period to the extent certain EBITDAgrowth targets are met. The Company will record the estimated fair value of the contractualobligation to pay the employee portion of contingent consideration as compensation expenseover the service period as it is deemed probable that such amount is payable. The estimateof the fair value of the employee portion of contingent consideration payable requires verysubjective assumptions to be made of future operating results, discount rates andprobabilities assigned to various potential operating results scenarios. Future revisions tothese assumptions could materially change the estimate of the fair value of the employeeportion of contingent consideration and therefore materially affect the Companys futurefinancial results.

Bargain purchase

Any excess of the value assigned to the net identifiable assets acquired over the fair value of

the acquirers interest in the acquiree (i.e., consideration transferred and any previously held

equity interest in the acquiree) and any noncontrolling interest is a bargain purchase gain and

should be recognized in earnings.


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SonoSite

Filing: 10-Q, 9/30/09

The following table summarizes the acquisition-date fair value of the assets acquired and theliabilities assumed in connection with the business combination (in thousands):

August 14, 2009

Assets

Current assets:

Cash and cash equivalents $ 2,511

Accounts receivable 2,560

Inventories 2,799

Deferred income taxes 5,376

Prepaid expenses and other current assets 95

Total current assets 13,341

Property and equipment, net 1,001Identifiable intangible assets 12,400

Other assets 158

Total assets 26,900

Liabilities

Current liabilities:

Accounts payable 2,459

Accrued expenses and other current liabilities 2,191

Total current liabilities 4,650

Long-term debt 5,500

Deferred tax liability 4,538

Other non-current liabilities 437

Total liabilities 15,125

Net assets acquired 11,775Acquisition consideration 10,697

Gain on bargain purchase $ 1,078

When there is a gain on a bargain purchase, accounting standards require a reassessment determine all assets acquired, liabilities assumed, and consideration transferred. We haveperformed a reassessment and have still concluded that we have a gain on a bargainpurchase. Because the cost of acquisition is less than the fair value of the net assets of thesubsidiary acquired, the excess of the value of the net assets acquired over the purchaseprice has been recorded as a gain on bargain purchase.

SonoSite, Inc.

Condensed Consolidated Statements of Income (unaudited)Three Months Ended

September 30,Nine Months Ended

September 30,

(In thousands, except net (loss) income per share) 2009

2008

as adjusted 2009

20

as adjuste

Revenue $53,571 $61,633 $157,661 $173,36

Cost of revenue 16,021 18,562 48,033 50,96

Gross margin 37,550 43,071 109,628 122,40

Operating expenses:

Research and development 6,497 7,440 21,569 20,57


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Sales, general and administrative 28,874 28,254 81,682 86,71

Licensing income and litigation settlement (2,643) (924) (2,64

Acquisition costs, net of bargain purchase (gain) (110) 469

Total operating expenses $35,261 $33,051 $102,796 $104,64

SonoSite, Inc.Condensed Consolidated Statements of Cash Flows (unaudited)

Nine Months EndedSeptember 30,

(In thousands) 2009200

as adjuste

Operating activities:

Net income $1,048 $5,25

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 3,647 3,08

Stock-based compensation 5,201 5,20Deferred income tax provision 1,216 2,52

Amortization of net discounts on investment securities (284) (443

Amortization of debt discount and debt issuance costs 3,792 6,58

Accretion of contingent purchase consideration 720 67

Excess tax benefit from exercise of stock based awards (961

Net loss on investments and derivatives 123 22

Gain on convertible note repurchase (1,339)

Non-cash gain on litigation settlement (643

Loss on disposal of property and equipment 31

Gain on bargain purchase of CardioDynamics (1,078)

Assured Guaranty Ltd.

Filing: 10-Q, 9/30/09

The following table represents the allocation of the purchase price to the net assets of theAcquired Companies. The bargain purchase gain results from the difference between thepurchase price and the net assets fair value estimates.


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July 1, 20

(in thousand

Purchase price:

Cash $ 545,9

Fair value of common stock issued (based upon June 30, 2009 closing price of AGO common stock) 275,8

Total purchase price 821,8

Identifiable assets acquired:

Investments 5,950,0

Cash 86,9

Premiums receivable, net 854,1

Ceded unearned premium reserve 1,727,6

Deferred tax asset, net 888,1

Financial guaranty variable interest entities assets 1,879,4

Other assets 662,4

Total assets 12,048,9

Liabilities assumed:

Unearned premium reserves 7,286,3

Long-term debt 396,1

Note payable to related party 164,4

Credit derivative liabilities 920,0

Financial guaranty variable interest entities liabilities 1,878,5

Other liabilities 348,9

Total liabilities 10,994,5

Net assets resulting from acquisition 1,054,4

Bargain purchase gain resulting from the FSAH Acquisition $ 232,5

The bargain purchase gain was recorded within "Goodwill and settlement of pre-existingrelationship" in the Company's consolidated statements of operations in the three-monthperiod ended September 30, 2009 ("Third Quarter 2009"). The bargain purchase results fromthe unprecedented credit crisis, which resulted in a significant decline in FSAH's franchisevalue due to material insured losses, ratings downgrades and significant losses at FSAH'sparent company, which resulted in government intervention in its affairs and resultingmotivation to sell FSAH, and the absence of potential purchasers of FSAH due to thefinancial crisis. The initial difference between the purchase price of $822 million and FSAH'srecorded net assets of $2.1 billion was reduced significantly by the recognition of additionalliabilities related to FSAH's insured portfolio on a fair value basis as required by purchaseaccounting. The Company and FSAH had a pre-existing reinsurance relationship before theacquisition. Under GAAP, this pre-existing relationship must be effectively settled at fairvalue. The loss relating to this pre-existing relationship results from the effective settlement reinsurance contracts at fair value and the write-off of previously recorded assets andliabilities relating to this relationship recorded in the Company's historical accounts. The loss

related to the contract settlement results from contractual premiums that were less than theCompany's estimate of what a market participant would demand currently, estimated in amanner similar to how the value of the Acquired Companies insurance policies were valued,as described above.

A summary of goodwill and settlements of pre-existing relationship included in theconsolidated statement of operations follows:


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Nine montend

September 3

20(in thousand

Goodwill impairment associated with reinsurance assumed line of business $ 85,4

Gain on bargain purchase of FSAH (232,55

Settlement of pre-existing relationship in conjunction with the FSAH Acquisition 170,4

Goodwill and settlement of pre-existing relationship $ 23,3

Westamerica Bancorporation

Filing: 10-Q, 3/31/09

On February 6, 2009, Westamerica Bank purchased substantially all the assets and assumesubstantially all the liabilities of County Bank from the Federal Deposit Insurance Corporatio(FDIC), as Receiver of County Bank. County Bank operated 39 commercial bankingbranches primarily within Californias central valley region between Sacramento and FresnoThe FDIC took County Bank under receivership upon County Banks closure by the CalifornDepartment of Financial Institutions at the close of business February 6, 2009. WestamericaBank submitted a bid for the acquisition of County Bank with the FDIC on February 3, 2009.The FDIC approved Westamerica Banks bid upon reviewing three competing bids anddetermining Westamerica Banks bid would be the least costly to the Deposit Insurance FunWestamerica Banks bid included the purchase of substantially all County Bank assets at a

cost of assuming all County Bank deposits and certain other liabilities. No cash or otherconsideration was paid by Westamerica Bank.

The County Bank acquisition was accounted for under the purchase method of accounting inaccordance with FAS 141R. The statement of net assets acquired as of February 6, 2009 anthe resulting bargain purchase gain are presented in the following table. The purchasedassets and assumed liabilities were recorded at their respective acquisition date fair values,and identifiable intangible assets were recorded at fair value. Fair values are preliminary andsubject to refinement for up to one year after the closing date of a merger as informationrelative to closing date fair values becomes available.

A bargain purchase gain totaling $48.8 million resulted from the acquisition and is includedas a component of noninterest income on the statement of income. The amount of the gain iequal to the amount by which the fair value of assets purchased exceeded the fair value ofliabilities assumed. The acquisition resulted in a gain due to County Banks impaired capitalcondition at the time of the acquisition. The operations of County Bank provided revenue of$11.5 million and net income of $1.2 million for the period of February 6, 2009 to March 31,2009, and is included in the consolidated financial statements. County Banks results ofoperations prior to the acquisition are not included in Westamericas statement of income.


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estamerica Bancorporation Consolidated Statements of Income (Unaudited)

Three months ended March 31,

2009 2008

(In thousands, except per share data)

Net Interest Income After Provision For Loan Losses $52,552 41,966

Noninterest Income:

Service charges on deposit accounts $8,422 7,296

Merchant credit card 2,432 2,580

Debit card 856 904

Trust fees 364 303

Financial services commissions 154 230

Other 2,896 2,367

FAS 141R gain 48,844 -

Gain on sale of Visa common stock - 5,698

Total Noninterest Income $63,968 19,378

Acquisition and restructuring costs

Riverbed Technology, Inc.

Filing: 10-Q, 3/31/09

Acquisition-related costs recognized in the three months ended March 31, 2009 includetransaction costs, integration-related costs and changes in the fair value of the acquisition-related contingent consideration. During the three months ended March 31, 2009, transactiocosts such as legal, accounting, valuation and other professional services were $0.6 millionand integration-related costs were $0.8 million.

An acquirer in a business combination typically incurs acquisition-related costs, such as

advisory, legal, or valuation fees. Acquisition-related costs are considered separate

transactions and should not be included as part of the consideration transferred, but rather

expensed as incurred or when the service is received.

Restructuring costs are recognized separately from a business combination and generally

expensed as incurred. Liabilities related to restructurings or exit activities of the acquiree should

only be recognized at the acquisition date if, from the acquirer's perspective, an obligation to

incur the costs associated with these activities existed as of the acquisition date in accordance

with U.S. GAAP.


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The following table summarizes the acquisition-related costs, including the acquisition-relatecontingent consideration to be paid to the former employees of Mazu, recognized in the thre

months ended March 31, 2009 and 2008.

(in thousands)


2009 2008

Sales and marketing $ 151 $

Research and development 133

General and administrative 83

Acquisition-related costs 1,520

Total other acquisition-related costs $1,887 $

Bank of America

Filing: 10-Q, 3/31/09

Merger and restructuring charges are recorded in the Consolidated Statement of Income andinclude incremental costs to integrate the operations of the Corporation, Merrill Lynch,Countrywide, LaSalle and U.S. Trust Corporation. These charges represent costs associatewith these one-time activities and do not represent ongoing costs of the fully integratedcombined organization. The following table presents severance and employee-relatedcharges, systems integrations and related charges, and other merger-related charges.

(Dollars in millions)


2009(1)

2008(2)

Severance and employee-related charges $491 $45

Systems integrations and related charges 192 90

Other 82 35

Total merger and restructuring charges $765 $170

During the three months ended March 31, 2009, the $513 million merger-related charges for

the Merrill Lynch acquisition included $432 million for severance and other employee-relatedcosts, $38 million of system integration costs and $43 million in other merger-related costs.

1. Included for the three months ended March 31, 2009 are merger-related charges of $513 mill ion, $193 million and $59 million

related to the Merrill Lynch, Countrywide and LaSalle mergers, respectively.

2. Included for the three months ended March 31, 2008 are merger-related charges of $129 mill ion and $41 million related to the

LaSalle and U.S Trust Corporation mergers.


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Dow Chemical Company

Filing: 10-Q, 6/30/09

During the second quarter of 2009, pretax charges totaling $52 million ($100 million duringthe first six months of 2009) were recorded for legal expenses and other transaction costsrelated to the April 1, 2009 acquisition of Rohm and Haas. These charges were expensed inaccordance with SFAS 141R, recorded in Acquisition-related expenses and reflected inCorporate. An additional $34 million of acquisition-related retention expenses were incurredduring the second quarter of 2009 and recorded in Cost of sales, Research anddevelopment expenses, and Selling, general and administrative expenses and reflected inCorporate.

M&T Bank Corporation

Filing: 10-Q, 6/30/09

Merger-related expenses associated with the acquisition of Provident were $66 million and$69 million during the three- and six-month periods ended June 30, 2009, respectively. Suchexpenses were for professional services and other temporary help fees associated with theconversion of systems and/or integration of operations; costs related to branch and officeconsolidations; costs related to termination of existing Provident contractual arrangements fovarious services; initial marketing and promotion expenses designed to introduce M&T Bankto Providents customers; severance and incentive compensation costs; travel costs; andprinting, supplies and other costs of commencing operations in new markets and offices. The

Company expects to incur additional merger-related expenses, although such costs areexpected to be substantially less than the amount incurred in the first six months of 2009. Asof June 30, 2009, the remaining unpaid portion of merger-related expenses was $33 million.

A summary of merger-related expenses included in the consolidated statement of incomefollows:

Three monthsended

June 30, 2009

Six monthsended

June 30, 2009

(in thousands)

Salaries a

Documents

Bcom Disclosure Summary Final