IBM 2010 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2010 IBM annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 83
2009 Acquisitions
($ in millions)
Amortization Other
Life (in Years) SPSS Acquisitions
Current assets $ 397 $ 13
Fixed assets/noncurrent 20 1
Intangible assets:
Goodwill N/A 748 255
Completed technology 4 to 7 105 39
Client relationships 5 to 7 30 20
Other identifiable assets 1 to 7 36 1
Total assets acquired 1,336 330
Current liabilities (157) (34)
Noncurrent liabilities (2) (0)
Total liabilities assumed (160) (35)
Total purchase price $1,177 $295
N/A—Not applicable
2009
In 2009, the company completed six acquisitions at an aggregate
cost of $1,471 million.
SPSS, Inc. (SPSS)—On October 2, 2009, the company acquired
100 percent of the outstanding common shares of SPSS for cash
consideration of $1,177 million. SPSS is a leading global provider
of predictive analytics software and solutions and this acquisition
strengthened the company’s business analytics and optimization
capabilities. SPSS was integrated into the Software segment upon
acquisition, and goodwill, as reflected in the table below, was
entirely assigned to the Software segment. Substantially all of the
goodwill is not deductible for tax purposes. The overall weighted
average useful life of the identified intangible assets acquired,
excluding goodwill, is 7.0 years.
The acquisitions were accounted for as business combinations
using the acquisition method, and accordingly, the identifiable
assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquired entities were recorded at their estimated
fair values at the date of acquisition. The primary items that generated
the goodwill are the value of the synergies between the acquired
companies and IBM and the acquired assembled workforce, neither
Other Acquisitions—The Software segment also completed acqui-
sitions of four privately held companies: in the second quarter,
Outblaze Limited, a messaging software provider, and Exeros, Inc.,
a data discovery firm; in the third quarter, security provider Ounce
Labs, Inc.; and in the fourth quarter, Guardium, Inc., a database
security company. Global Technology Services completed an
acquisition in the fourth quarter: RedPill Solutions PTE Limited, a
privately held company focused on business analytics.
Purchase price consideration for the “Other Acquisitions,” as
reflected in the table below, was paid primarily in cash. All acqui-
sitions were reported in the Consolidated Statement of Cash Flows
net of acquired cash and cash equivalents.
of which qualify as an amortizable intangible asset. For the “Other
Acquisitions,” the overall weighted-average life of the identified intan-
gible assets acquired was 6.5 years. With the exception of goodwill,
these identified intangible assets will be amortized on a straight-line
basis over their useful lives. Goodwill of $255 million was assigned
to the Software ($246 million) and GTS ($10 million) segments.
Substantially all of the goodwill is not deductible for tax purposes.