IBM 2006 Annual Report Download - page 76

(Dollars in millions)
MICROMUSE, INC.
ORIGINAL
AMOUNT
DISCLOSED IN
AMORTIZATION FIRST PURCHASE TOTAL FILENET
2006 ACQUISITIONS LIFE (IN YEARS) QTR. 2006 ADJUSTMENTS* ALLOCATION CORPORATION
Current assets $  $  $  $ 
Fixed assets/non-current  —  
Intangible assets:
Goodwill N/A    
Completed technology  to   —  
Client relationships  to   —  
Other identifiable intangible assets  to   —  
In-process R&D  —  
Total assets acquired ,  , ,
Current liabilities () () () ()
Non-current liabilities () — () ()
Total liabilities assumed () () () ()
Total purchase price $  $ — $  $,
* Adjustments primarily relate to acquisition costs, deferred taxes and other accruals.
N/A—Not applicable
the context of business processes. FileNet was integrated into the
Software segment upon acquisition and Goodwill, as reflected in the
table below, has been entirely assigned to the Software segment. The
overall weighted-average useful life of the intangible assets purchased,
excluding Goodwill, is 5.9 years.
INTERNET SECURITY SYSTEMS, INC.– On October 20, 2006, the
company acquired 100 percent of the outstanding common shares of
Internet Security Systems, Inc. (ISS) for cash consideration of $1,368
million. ISS provides security solutions to thousands of the world’s lead-
ing companies and governments, helping to proactively protect against
Internet threats across networks, desktops and servers. ISS software,
appliances and services monitor and manage network vulnerabilities
and rapidly respond in advance of potential threats. The acquisition
advances the company’s strategy to utilize IT services, software and
consulting expertise to automate labor-based processes into standard-
ized, software-based services that can help clients optimize and transform
their businesses. ISS was integrated into the Global Technology
Services segment upon acquisition and Goodwill, as reflected in the
table on page 75, has been entirely assigned to the Global Technology
Services segment. The overall weighted-average useful life of the
intangible assets purchased, excluding Goodwill, is 5.6 years.
MRO SOFTWARE INC.– On October 5, 2006, the company acquired
100 percent of the outstanding common shares of MRO Software, Inc.
for cash consideration of $739 million. MRO’s asset and service manage-
ment software and consulting services are used by many of the world’s
top companies to effectively manage how they buy, maintain and retire
assets—such as production equipment, facilities, transportation and
information technology hardware and software—in a wide variety of
industries including utilities, manufacturing, energy, pharmaceutical
and telecommunications. The acquisition builds upon the company’s
strategy to leverage business consulting, IT services, and software to
develop repeatable tools that help clients optimize and transform their
business. MRO was integrated into the Software, Global Technology
Services and Global Business Services segments upon acquisition and
Goodwill, as reflected in the table on page 75, has been assigned to
the Software segment for $337 million, Global Technology Services
segment for $49 million and Global Business Services segment for
$122 million. The overall weighted-average useful life of the intangible
assets purchased, excluding Goodwill, is 5.6 years.
OTHER ACQUISITIONS – The company acquired nine additional
companies that are presented as Other Acquisitions in the table on
page 75. Three of the acquisitions were Global Services-related com-
panies: two were integrated into the Global Technology Services
segment: Viacore, Inc. and Palisades Technology Partners, LLP; the
third, Valchemy, Inc., was integrated into the Global Business Services
segment. Six of the acquisitions were software-related companies that
were integrated into the Software segment: Cims Lab; Language
Analysis Systems, (LAS) Inc.; Buildforge; Unicorn Solutions, Inc.;
Rembo Technology; and Webify Solutions. The purchase price allo-
cations resulted in aggregate Goodwill of $211 million, of which $161
million was assigned to the Software segment and $51 million was
assigned to the Global Technology Services segment. The overall
weighted-average useful life of the intangible assets purchased in these
acquisitions, excluding Goodwill, is 3.4 years.
See note A, “Significant Accounting Policies,” on page 66 for
further description of the company’s accounting policies related to
business combinations and intangible assets, including Goodwill.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
74 2006 Annual Report
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