Avon 2009 Annual Report Download - page 98

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Various other lawsuits and claims, arising in the ordinary course of
business or related to businesses previously sold, are pending or
threatened against Avon. In management’s opinion, based on its
review of the information available at this time, the total cost of
resolving such other contingencies at December 31, 2009, should
not have amaterial adverse effect on our consolidated financial
position, results of operations or cash flows.
NOTE 16. Goodwill and Intangible
Assets
On April 2, 2007, we acquired our licensee in Egypt for approx-
imately $17 in cash. The acquired business is being operated by a
new wholly-owned subsidiary and is included in our Western
Europe, Middle East &Africa operating segment. The purchase
price allocation resulted in goodwill of $9.3 and customer relation-
ships of $1.0 with aseven-year useful life.
In August 2006, we purchased all of the remaining 6.155% out-
standing shares in our two joint-venture subsidiaries in China from
the minority interest shareholders for approximately $39.1. We
previously owned 93.845% of these subsidiaries and consolidated
their results, while recording minority interest for the portion not
owned. Upon completion of the transaction, we eliminated the
minority interest in the net assets of these subsidiaries. The pur-
chase of these shares did not have amaterial impact on our con-
solidated net income. Avon China is astand-alone operating
segment. The purchase price allocation resulted in goodwill of
$33.3 and customer relationships of $1.9 with aten-year
weighted-average useful life.
Goodwill
Latin
America
Western
Europe,
Middle East
&Africa
Central
&Eastern
Europe
Asia
Pacific China Total
Balance at December 31, 2008 $94.9 $33.3 $8.8 $12.4 $75.1 $224.5
Adjustments –––(.4) –(.4)
Foreign exchange –.6.1(.1) .1 .7
Balance at December 31, 2009 $94.9 $33.9 $8.9 $11.9 $75.2 $224.8
Intangible assets
2009 2008
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Amortized Intangible Assets
Customer relationships $38.5 $(31.0) $38.4 $(25.6)
Licensing agreements 42.3 (37.5) 42.4 (28.3)
Noncompete agreements 7.4 (5.9) 7.4 (5.7)
Total $88.2 $(74.4) $88.2 $(59.6)
Aggregate Amortization Expense:
2009 $14.8
2008 16.4
2007 16.4
Estimated Amortization Expense:
2010 $2.3
2011 2.3
2012 2.3
2013 2.3
2014 1.6