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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 85
2008 Acquisitions
($ in millions)
Amortization Other
Life (in Years) Cognos Telelogic Acquisitions
Current assets $ 504 $ 242 $ 185
Fixed assets/noncurrent 126 7 75
Intangible assets:
Goodwill N/A 4,207 690 676
Completed technology 3 to 7 534 108 94
Client relationships 3 to 7 512 127 39
In-process R&D N/A — — 24
Other 3 to 7 78 15 19
Total assets acquired 5,960 1,189 1,112
Current liabilities (798) (141) (233)
Noncurrent liabilities (141) (163) (14)
Total liabilities assumed (939) (304) (247)
Settlement of preexisting litigation — — 24
Total purchase price $5,021 $ 885 $ 889
N/A—Not applicable
The table above reflects the purchase price related to these
acquisitions and the resulting purchase price allocations as of
Decem ber 31, 2008.
The acquisitions were accounted for as purchase transactions,
and accordingly, the assets and liabilities of the acquired entities
were recorded at their estimated fair values at the date of acquisi-
tion. 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 of which qualify as an
amortizable intangible asset. For the “Other Acquisitions,” the over-
all weighted-average life of the identified intangible assets acquired
is 4.3 years. These identified intangible assets will be amortized on
a straight-line basis over their useful lives. Goodwill of $676 million
was assigned to the Software ($328 million), GTS ($68 million) and
STG ($280 million) segments. Substantially, all of the goodwill
related to “Other Acquisitions” is not deductible for tax purposes.
Divestitures
2010
On March 31, 2010, the company completed the sale of its activities
associated with the sales and support of Dassault Systemes’
(Dassault) product lifecycle management (PLM) software, including
customer contracts and related assets to Dassault. The company
received net proceeds of $459 million and recognized a net gain
of $591 million on the transaction in the first quarter of 2010. The
gain was net of the fair value of certain contractual terms, certain
transaction costs and the assets and liabilities sold. The gain was
recorded in other (income) and expense in the Consolidated
Statement of Earnings and the net proceeds are reflected in
proceeds from disposition of marketable securities and other
investments within cash flow from investing activities in the
Consolidated Statement of Cash Flows.