Baker Hughes 2009 Annual Report Download - page 125

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2009 Form 10-K 51
Intangible assets are amortized either on a straight-line
basis with estimated useful lives ranging from 1 to 20 years,
or on a basis that reflects the pattern in which the economic
benefits of the intangible assets are expected to be realized,
which range from 15 to 30 years.
Amortization expense included in net income for the years
ended December 31, 2009, 2008 and 2007 was $31 million,
$20 million and $21 million, respectively. Estimated amortization
expense for each of the subsequent five fiscal years is expected
to be as follows: 2010 – $24 million; 2011 – $19 million; 2012 –
$18 million; 2013 – $17 million; and 2014 – $16 million.
NOTE 10. FAIR VALUE OF CERTAIN FINANCIAL
ASSETS AND LIABILITIES
We measure certain financial assets and liabilities at fair
value. Fair value is defined as the price that would be received
to sell an asset or paid to transfer a liability (an exit price) in an
orderly transaction between market participants at the reporting
date. We use the fair value hierarchy that prioritizes the
inputs used to measure fair value into three broad levels
as described below:
• Level 1: Quoted prices in active markets for identical assets
or liabilities (these are observable market inputs). The fair
value hierarchy gives the highest priority to Level 1 inputs.
• Level 2: Observable prices that are based on inputs not
quoted on active markets (includes quoted market prices
for similar assets or identical or similar assets in markets in
which there are few transactions, prices that are not current
or vary substantially).
• Level 3: Unobservable inputs that reflect the entity’s own
assumptions in pricing the asset or liability (used when little
or no market data is available).
Financial assets and liabilities included in our financial
statements and measured at fair value as of December 31,
2009 and 2008 are classified based on the valuation hierarchy
in the table below:
Fair Value Measurement at December 31, 2009
Description Total Level 1 Level 2 Level 3
Assets:
Non-qualified defined contribution plan assets $ 146 $ 146 $ – $ –
Liabilities:
Non-qualified defined contribution plan liabilities $ 146 $ 146 $ – $ –
Fair Value Measurement at December 31, 2008
Description Total Level 1 Level 2 Level 3
Assets:
Auction rate securities $ 11 $ – $ – $ 11
Non-qualified defined contribution plan assets 112 112 – –
Total assets at fair value $ 123 $ 112 $ – $ 11
Liabilities:
Non-qualified defined contribution plan liabilities $ 112 $ 112 $ – $ –