Business Combinations

9 Months Ended

Oct. 31, 2011

Business Combinations

(4) Business Combinations—For each business we acquire, the excess of the fair value of the consideration transferred over the fair value of the net tangible assets acquired and net tangible liabilities assumed has been allocated to various identifiable intangible assets and goodwill. Identifiable intangible assets typically consist of purchased technology and customer-related intangibles, which are amortized to expense over their useful lives. Goodwill, representing the excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets, is not amortized.

During the nine months ended October 31, 2011, we exchanged one of our product lines for a controlling interest in a privately-held company. The exchange was accounted for as a business combination. Prior to acquiring this controlling interest, we had a noncontrolling investment, which was accounted for under the equity method of accounting. As a result of this transaction, we recognized a gain of $1,519 to adjust the carrying value of our equity method investment in the company to its fair value based on an income approach valuation method. The gain was included in other income (expense), net, in our condensed consolidated statement of operations. We recorded $8,900 for the fair value of the net assets of the acquired business. See Note 2. “Summary of Significant Accounting Policies,” for a description of our accounting for the noncontrolling interest.

Additionally, during the nine months ended October 31, 2011, we acquired another privately-held company, which was not material, for a total consideration of $1,890.

The separate results of operations for the acquisition during the nine months ended October 31, 2011 were not material compared to our overall results of operations and accordingly, pro-forma financial statements of the combined entities have been omitted.