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This excerpt taken from the MRVL 8-K filed Jul 2, 2007. 3. Pro forma adjustments The pro forma adjustments included in the unaudited pro forma condensed combined financial statements are as follows: (a) Adjustment to eliminate historical net assets against retained earnings of the Business as follows:
(b) Adjustment to record net assets acquired at fair value and goodwill, representing the excess of purchase price over the fair value of net tangible and intangible assets acquired. (c) Adjustment to record cash paid for acquisition of $600.0 million, net of proceeds of $400.0 million from term loan obligation. (d) Adjustment to record direct transaction costs of $5.9 million. (e) Adjustment to record the fair value of supply contract liability of $219.0 million. In connection with the acquisition of the Intel Business, Marvell entered into a product supply agreement with Intel. Under the terms of the agreement Marvell has contractually committed to purchase and Intel has agreed to supply a minimum number of wafers through June 2008. Based on Marvell’s assessment of the supply agreement, the prices being charged by Intel when compared to prices that market participants would be able to obtain in the open market are above market pricing. (f) Adjustment to record term loan obligation of $400.0 million. Amounts borrowed under the credit agreement bear interest at the higher of the lender’s prime rate or 0.5% per 8 annum above the Federal Funds Effective Rate, as defined in the agreement, plus a 1% margin. Marvell pays interest and principal amounts equal to 0.25% of the aggregate principal amount of loans on a quarterly basis on the last business day of each March, June, September and December. The interest rate as of January 27, 2007 was 7.35%. The remaining balance of the term loan is due in November 2009. (g) Adjustment to record in-process research and development charge of $77.8 million. This adjustment is a non-recurring charge and therefore has been reflected in the pro forma balance sheet only. (h) Adjustment to record depreciation on acquired property and equipment for difference in depreciation as a result of adjustment to fair value and lives. (i) Adjustment to record amortization of the acquired intangible assets. (j) Adjustment to reduce interest income for cash used in acquisition. (k) Adjustment to record interest expense incurred from term loan obligation. (l) Adjustment to record the income tax effect of the difference in depreciation of fixed assets. This excerpt taken from the MRVL 8-K filed Jan 13, 2006. 3. Pro forma adjustments
The pro forma adjustments included in the unaudited pro forma condensed combined consolidated financial statements are as follows:
(a) Adjustment to remove corporate goodwill of $0.3 million allocated to the Business by QLogic.
(b) Adjustment to record payment of $184.0 million in cash.
(c) Adjustment to record increase in shareholders’ equity of Marvell as a result of the issuance of common shares.
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(d) Adjustment to record estimated transaction costs of $2.9 million and to remove the deferred rent liability of $0.8 million.
(e) Adjustment to record intangible assets of $123.3 million.
(f) Adjustment to record goodwill.
(g) Adjustment to record amortization of the acquired intangible assets.
(h) Adjustment to record in-process research and development charge of $4.3 million. This adjustment is a non-recurring charge and therefore has been reflected in the pro forma balance sheet only.
(i) Adjustment to record inventory at fair value.
(j) Adjustment to reduce interest income for cash used in acquisition.
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