IBM 2011 Annual Report Download - page 93

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 91
The table below reflects the purchase price related to the 2010 acquisitions and the resulting purchase price allocations as of December 31, 2010.
2010 Acquisitions
($ in millions)
Amortization
Life (in Years) Netezza
Sterling
Commerce
Other
Acquisitions
Current assets $ 218 $ 196 $ 377
Fixed assets/noncurrent assets 73 106 209
Intangible assets
Goodwill N/A 1,410 1,032 2,312
Completed technology 3 to 7 202 218 493
Client relationships 2 to 7 52 244 293
In-process R&D 5 4 — 17
Patents/trademarks 1 to 7 16 14 27
Total assets acquired 1,975 1,810 3,728
Current liabilities (9) (129) (161)
Noncurrent liabilities (120) (266) (291)
Total liabilities assumed (128) (395) (452)
Total purchase price $1,847 $1,415 $3,277
N/A—Not applicable
Unica, a leading provider of software and services used to automate
marketing processes, will expand the company’s ability to help
organizations analyze and predict customer preferences and develop
more targeted marketing campaigns. PSS Systems is a leading
provider of legal information governance and information management
software. OpenPages is a leading provider of software that helps
companies more easily identify and manage risk and compliance
activities across the enterprise through a single management system.
Clarity Systems delivers financial governance software that enables
organizations to automate the process of collecting, preparing,
certifying and controlling financial statements for electronic filing.
Wilshire’s mortgage servicing platform will continue the strategic
focus on the mortgage services industry and strengthens the
commitment to deliver mortgage business process outsourcing
solutions. National Interest Security Company will strengthen the
ability to deliver advanced analytics and IT solutions to the public
sector. Storwize, a provider of in-line data compression appliance
solutions, will help the company to make it more affordable for clients
to analyze massive amounts of data in order to provide new insights
and business outcomes. BLADE provides server and top-of-rack
switches as well as software to virtualize and manage cloud
computing and other workloads.
Purchase price consideration for the “Other Acquisitions” as
reflected in the table above, is paid primarily in cash. All acquisitions
are reported in the Consolidated Statement of Cash Flows net of
acquired cash and cash equivalents. For the “Other Acquisitions,”
the overall weighted-average life of the identified intangible assets
acquired is 6.4 years. These identified intangible assets will be
amortized on a straight-line basis over their useful lives. Goodwill of
$2,312 million has been assigned to the Software ($1,653 million),
GTS ($32 million), GBS ($252 million) and STG ($375 million) segments.
It is expected that approximately 10 percent of the goodwill will be
deductible for tax purposes.
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 on the next page,
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.