IBM 2008 Annual Report Download - page 83


Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
2007 ACQUISITIONS
($  )
Amortization
Life (in Years) Acquisitions
Current assets $ 184
Fixed assets/noncurrent 31
Intangible assets:
Goodwill N/A 999
Completed technology 3 to 7 93
Client relationships 3 to 7 91
Other 2 to 5 17
Total assets acquired 1,415
Current liabilities (136)
Noncurrent liabilities (135)
Total liabilities assumed (271)
TOTAL PURCHASE PRICE $1,144
N/A—Not applicable
2006
In , the company completed  acquisitions at an aggregate cost
of $, million, which was paid in cash. The cost of these acquisi-
tions are reported in the Consolidated Statement of Cash Flows net
of acquired cash and cash equivalents. The tables on pages  and 
represent the purchase price allocations for all of the  acquisitions.
The Micromuse Inc., FileNet Corporation, Internet Security Systems,
Inc. and MRO Software, Inc. acquisitions are shown separately given
their significant purchase prices.
MICROMUSE, INC. (MICROMUSE)—On February , , the com-
pany acquired  percent of the outstanding common shares of
Micromuse for cash consideration of $ million. Micromuse is a
leading provider of network management software used by banks,
telecommunications carriers, governments, retailers and other orga-
nizations to monitor and manage their sophisticated technology
infrastructures. The software helps customers manage increasingly
complex IT systems that support the proliferation of voice, data and
video traffic due to the growing adoption of voice over IP (VoIP)-
based audio and video services delivered over the Internet. The
combination of Micromuse’s software and the company’s IT services
management technology can provide a comprehensive approach to
help customers reduce the complexity of their IT environments,
lower operational costs and address compliance mandates. Micromuse
was integrated into the Software segment upon acquisition and good-
will, as reflected in the table on page , has been entirely assigned
to the Software segment. The overall weighted-average useful life of
the intangible assets purchased, excluding goodwill, is . years.
In the fourth quarter of , as a result of completing the inte-
gration of Micromuse’s legal and intercompany structure into the
company’s legal structure, the company recorded an increase in
current assets and current liabilities with a corresponding offset in
goodwill totaling $ million. These increases relate to an increase
in both deferred tax assets and current tax liabilities. These adjust-
ments are reflected in the table on page .
FILENET CORPORATION (FILENET)—On October , , the com-
pany acquired  percent of the outstanding common shares of
FileNet for cash consideration of $, million. FileNet is a leading
provider of business process and content management solutions that
help companies simplify critical and everyday decision making pro-
cesses and give organizations a competitive advantage. The FileNet
acquisition enhances the company’s ability to meet increasing client
demand for a combination of content- and process-centric business
process management capabilities, which is driven by changing gover-
nance and compliance mandates, as well as the need to integrate
content-centric business processes with enterprise applications. The
company has integrated its business process management and service
oriented architecture (SOA) technologies with the FileNet platform
to allow customers to access content wherever it may reside and use
it in the context of business processes. FileNet was integrated into
the Software segment upon acquisition and goodwill, as reflected in
the table on page , has been entirely assigned to the Software seg-
ment. The overall weighted-average useful life of the intangible
assets purchased, excluding goodwill, is . years.
INTERNET SECURITY SYSTEMS, INC. (ISS)—On October ,
, the company acquired  percent of the outstanding com-
mon shares of ISS for cash consideration of $, 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