IBM 2007 Annual Report Download - page 82

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80
Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
Management Discussion ..................................14
Consolidated Statements ..................................58
Notes ........................................................... 64
A-F ............................................................. 64
A. Significant Accounting Policies ..................64
B. Accounting Changes ...................................73
C. Acquisitions/Divestitures ...................... 76
D. Financial Instruments
(excluding derivatives).................................82
E. Inventories ...................................................83
F. Financing Receivables .................................83
G-M ..................................................................84
N-S ...................................................................94
T-W ................................................................102
($ in millions)
ASCENTIAL
ORIGINAL AMOUNT
DISCLOSED
AMORTIZATION IN SECOND PURCHASE TOTAL OTHER
2005 ACQUISITIONS LIFE (IN YEARS) QTR. 2005 ADJUSTMENTS* ALLOCATION ACQUISITIONS
Current assets $ 526 $ (1) $ 525 $ 137
Fixed assets/noncurrent 20 — 20 28
Intangible assets:
Goodwill N/A 639 1 640 791
Completed technology 3 56 — 56 35
Client relationships 5 46 — 46 22
Other identifiable intangible assets 1– 5 — — — 5
In-process R&D — — — 1
Total assets acquired 1,287 — 1,287 1,019
Current liabilities (112) (4) (116) (89)
Noncurrent liabilities (35) 4 (31) (48)
Total liabilities assumed (147) — (147) (137)
Total purchase price $1,140 $ — $1,140 $ 882
* Adjustments primarily relate to acquisition costs, deferred taxes and other accruals.
N/A — Not applicable
Divestitures
2007
In January 2007, the company announced an agreement with Ricoh Company Limited (“Ricoh”), a publicly traded company, to form a joint
venture company based on the Printing System Division (a division of the Systems and Technology segment).
businesses by providing a single, agile infrastructure for delivering
accurate, consistent, timely and coherent information. Ascential 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 3.9 years.
Other Acquisitions — The company acquired 15 additional com-
panies that are presented as Other Acquisitions in the table below.
Four of the acquisitions were technology services-related companies
that were integrated into the Global Technology Services segment:
Network Solutions; Classic Blue; Corio; and Equitant. One of the
acquisitions, HealthLink, was integrated into the Global Business
Services segment. Nine of the acquisitions were software-related
companies that were integrated into the Software segment: iPhrase;
Data Power Technology, Inc.; Bowstreet; Collation Inc.; DWL;
Isogon Corporation; PureEdge Solutions, Inc.; SRD; and Gluecode.
One acquisition, Meiosys, was integrated into the Systems and
Technology segment. The purchase price allocations resulted in
aggregate Goodwill of $791 million, of which $456 million was
assigned to the Software segment; $239 million was assigned to the
Global Technology Services segment; $62 million was assigned to
the Global Business Services segment and $34 million was assigned
to the Systems and Technology segment. The overall weighted-
average useful life of the intangible assets purchased, excluding
Goodwill, is 3.1 years.