IBM 2006 Annual Report Download - page 78

(Dollars in millions)
ASCENTIAL
ORIGINAL
AMOUNT
DISCLOSED IN
AMORTIZATION SECOND PURCHASE TOTAL OTHER
2005 ACQUISITIONS LIFE (IN YEARS) QTR. 2005 ADJUSTMENTS* ALLOCATION ACQUISITIONS
Current assets $  $() $  $ 
Fixed assets/non-current  —  
Intangible assets:
Goodwill N/A    
Completed technology   —  
Client relationships   —  
Other identifiable intangible assets – — — — 
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
76 2006 Annual Report
2004
In 2004, the company completed 14 acquisitions at an aggregate cost
of $2,111 million. The cost of these acquisitions are reported in the
Consolidated Statement of Cash Flows net of acquired cash and cash
equivalents. The table on page 77 represents the purchase price allo-
cations for all 2004 acquisitions. The Candle Corporation (Candle)
and Maersk Data/DMdata acquisitions are shown separately given the
significant purchase price for each acquisition.
CANDLE – On June 7, 2004, the company acquired 100 percent of
the outstanding common shares of Candle for cash consideration of
$431 million. Candle provides services to develop, deploy and manage
enterprise infrastructure. The acquisition allows the company to pro-
vide its clients with an enhanced set of software solutions for managing
an on demand environment and complements the company’s existing
middleware solutions. Candle was integrated into the Software seg-
ment upon acquisition and Goodwill, as reflected in the table on page
77, has been entirely assigned to the Software segment. The overall
weighted-average useful life of the intangible assets acquired, excluding
Goodwill, is 5.9 years.
MAERSK DATA/DMDATA – On December 1, 2004, the company
purchased 100 percent of the outstanding common stock of Maersk
Data and 45 percent of the outstanding common stock of DMdata for
$792 million. Maersk Data owned the remaining 55 percent of
DMdata’s outstanding common stock. Maersk Data and DMdata are
located in Denmark. Maersk Data is a provider of IT solutions and
offers consultancy, application development, and operations and sup-
port to companies and organizations. DMdata is a provider of IT
operations and its core business areas include the operation of cen-
tralized and decentralized IT systems, network establishment and
operation, as well as print and security solutions for clients in a number
of different industries. These acquisitions significantly increased the
company’s capabilities in serving clients in the transportation and
logistics industry globally, while also enhancing its capabilities in areas
such as financial services, public sector, healthcare and the food and
agriculture industries. Maersk Data and DM Data were integrated
into the Global Technology Services and the Global Business Services
segments and Goodwill, as reflected in the table on page 77, has been
assigned to Global Technology Services segment for $269 million and
to Global Business Services segment for $157 million. The overall
weighted-average useful life of the intangible assets acquired, excluding
Goodwill, is 4.7 years.
OTHER ACQUISITIONS –The company acquired 12 additional com-
panies that are presented as Other Acquisitions in the table on page
77. Seven of the acquisitions were for technology services-related
companies, which were integrated into the Global Technology Services
segment and five were for software companies, which were integrated
into the Software segment. The purchase price allocations resulted in
aggregate Goodwill of $711 million, of which $329 million was assigned
to the Software segment and $382 million was assigned to the Global
Technology Services segment. The overall weighted-average useful life
of the intangible assets purchased, excluding Goodwill, is 4.8 years.
Consolidated Statements ......................................................... 
Notes .....................................................................................
A-G ......................................................................................... 62
A. Significant Accounting Policies ....................................... 62
B. Accounting Changes........................................................ 71
C. Acquisitions/Divestitures ................................................. 73
D. Financial Instruments (excluding derivatives) ................ 78
E. Inventories ....................................................................... 79
F. Financing Receivables ...................................................... 79
G. Plant, Rental Machines and Other Property ................... 79
H-M ......................................................................................... 80
N-S .......................................................................................... 88
T-X .......................................................................................... 96
Black
MAC
390 CG10