Current debt liabilities assumed

[Table of Contents](#iedfcb48a3788458f95ee4009debca3d0_7)FORTINET, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)  
determined based on the technology cycle related to each developed technology, as well as the cash flows over the forecast period.  
Customer relationships represent the fair value of future projected revenue that will be derived from sales to existing customers of Alaxala. Customer contracts and related relationships were valued using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated by the customer contracts and relationships less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on historical customer turnover rates.  
Trade name relates to the “Alaxala” trade name. The fair value was determined by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue under the trade name. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecast period.  
Customer backlog relates to the unfulfilled customer contract orders. Backlog was valued using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated by the execution of the unfulfilled customer contract orders less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on the anticipated contract orders’ execution timeframe.  
In connection with our acquisition of Alaxala, we assumed certain current debt liabilities of $20.2 million as of August 31, 2021. We concluded that the fair value of this debt approximated its book value as of the acquisition date. We repaid this debt in full in September and October 2021. During the post-acquisition period from September 1, 2021 through the repayment dates, interest expense related to Alaxala debt was not material.  
The following unaudited pro forma financial information presents the combined results of operations of Fortinet, Inc. and Alaxala, as if Alaxala had been acquired as of the beginning of business on January 1, 2020. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business that would have been achieved if the acquisition had taken place at the beginning of business on January 1, 2020, or of the results of our future operations of the combined business. The following unaudited pro forma financial information for all periods presented includes purchase accounting adjustments for amortization of acquired intangible assets, depreciation of acquired property and equipment, the purchase accounting effect on inventory acquired and related tax effects (in millions):  


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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended |  |  |
|  | March 31,2021 |  | March 31,2020 |  |  |  |  |
| Pro forma revenue | $ | 746.6  |  |  | $ | 612.6  |  |  |  |  |  |
| Pro forma net income attributable to Fortinet, Inc. | $ | 107.6  |  |  | $ | 101.4  |  |  |  |  |  |

  
ShieldX Networks, Inc.  
On March 10, 2021, we closed an acquisition of certain assets and liabilities of ShieldX Networks Inc. (“ShieldX”), a provider of a security platform focusing on protecting multi-cloud data centers from the risk of lateral movement that can lead to attacks such as ransomware, data loss and service disruption, for $10.8 million in cash, of which, $6.2 million was allocated to goodwill.  
  
8.     GOODWILL AND OTHER INTANGIBLE ASSETS—Net  
Goodwill  
The following table presents the changes in the carrying amount of goodwill (in millions):

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Amount |
| Balance—December 31, 2021 | $ | 125.1  |  |
| Foreign currency translation adjustments | (1.3) |  |
| Balance—March 31, 2022 | $ | 123.8  |  |

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