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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
102
Others—On June 30, 2014, the company completed the dives-
titures of its solidDB suite of products to UNICOM Systems, Inc.
and its Human Capital Management business line in France to
Sopra Group.
On August 31, 2014, the company completed the divestiture of
its Cognos Finance product to UNICOM Systems, Inc.
On September 30, 2014, the company completed the divesti-
tures of its IMS Tools Suite of products to Rocket Software, Inc.,
its Sterling Transportation Management System to Kewill Inc., and
its ILOG JViews and Elixir Visualization products to Rogue Wave
Software, Inc.
On December 31, 2014, the company completed the dives-
titure of its Focal Point and PurifyPlus product suite to UNICOM
Systems, Inc.
All of the above transactions closed in 2014 and the financial
terms related to these transactions were not material. Overall, the
company recorded a pre-tax gain of $132 million related to these
transactions in 2014.
2013
Customer Care—On September10, 2013, IBM and SYNNEX
announced a definitive agreement in which SYNNEX would
acquire the company’s worldwide customer care business
process outsourcing services business for $501 million, consist-
ing of approximately $430 million in cash, net of balance sheet
adjustments, and $71 million in SYNNEX common stock, which
represented less than 5percent equity ownership in SYNNEX. As
part of the transaction, SYNNEX entered into a multi-year agree-
ment with the company, and Concentrix, SYNNEX’s outsourcing
business, has become an IBM strategic business partner for global
customer care business process outsourcing services.
The initial closing of the transaction was completed on Janu-
ary31, 2014, with subsequent closings occurring in 2014. In the
fourth quarter of 2014, the company continued to work toward res-
olution of the required final balance sheet adjustments. A charge
in the amount of $10 million was recorded to reflect the expected
resolution. For the full year of 2014, the company recorded a pre-
tax gain of $202 million related to this transaction.
Others—In the first quarter of 2013, the company completed the
divestiture of its Showcase Reporting product set to Help/Sys-
tems. Showcase Reporting, which was acquired by the company
through the SPSS acquisition in 2009, is an enterprise-class busi-
ness intelligence platform that enables customers to build and
manage analytical reporting environments.
In the fourth quarter of 2013, the company completed two
divestitures, the Applicazioni Contabili Gestionali (ACG) business
and the Cognos Application Development Tools (ADT) business.
The ACG business was purchased by TeamSystem. The ACG
product is an Italian Enterprise Resource Planning solution for
small- and medium-sized companies. The Cognos ADT busi-
ness was purchased by UNICOM Systems, Inc. The Cognos ADT
product suite represents a legacy family of products that pro-
vide application development environments that would enable
programmers to develop COBOL applications at a higher pro-
ductivity level.
Financial terms of each transaction did not have a material
impact in the consolidated financial results.
2012
Retail Stores—On April17, 2012, the company announced that it
had signed a definitive agreement with Toshiba TEC for the sale of
its Retail Store Solutions business. As part of the transaction, the
company agreed to transfer the maintenance business to Toshiba
TEC within three years of the original closing of the transaction.
In the fourth quarter of 2014, the company completed the fourth
phase of the transfer of the maintenance workforce to Toshiba.
A subsequent wave closing is scheduled to be completed in the
first quarter of 2015. The parts and inventory transfer to Toshiba
will commence in the first quarter of 2015 and is expected to be
completed by the third quarter of 2015. The workforce transfer
and an assessment of the ongoing contractual terms of the overall
transaction resulted in the recognition of an additional pre-tax gain
of $6 million in the fourth quarter of 2014.
The company expects to close the final phase of the divestiture
in the third quarter of 2015. Overall, the company expects to rec-
ognize a cumulative total pre-tax gain on the sale of approximately
$517 million, of which $511 million has been recognized through
December 31, 2014.