Goldman Sachs 2007 Annual Report Download - page 122

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Notes to Consolidated Financial Statements
The estimated future amortization for existing identifiable
intangible assets through 2012 is set forth below:
(in millions)
2008 $186
2009 164
2010 149
2011 140
2012 131
Substantially all of the firm’s identifiable intangible assets are
considered to have finite lives and are amortized over their
estimated useful lives. The weighted average remaining life of
the firm’s identifiable intangibles is approximately 12 years.
Amortization expense associated with identifiable intangible
assets was $251 million, $246 million and $165 million for the years
ended November 2007, November 2006 and November 2005,
respectively. Amortization expense associated with the firm’s
consolidated power generation facilities is reported within “Cost
of power generation” in the consolidated statements of earnings.
Identifiable Intangible Assets
The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of the firm’s
identifiable intangible assets:
As of November
(in millions) 2007 2006
Customer lists
(1) Gross carrying amount $1,086 $1,034
Accumulated amortization (354) (297)
Net carrying amount $ 732 $ 737
New York Stock Exchange (NYSE) specialist rights Gross carrying amount $ 714 $ 714
Accumulated amortization (212) (172)
Net carrying amount $ 502 $ 542
Insurance-related assets
(2) Gross carrying amount $ 461 $ 396
Accumulated amortization (89) (34)
Net carrying amount $ 372 $ 362
Exchange-traded fund (ETF) specialist rights Gross carrying amount $ 138 $ 138
Accumulated amortization (38) (33)
Net carrying amount $ 100 $ 105
Power contracts
(3) Gross carrying amount $ 33 $ 750
Accumulated amortization (13) (83)
Net carrying amount $ 20 $ 667
Other
(4) Gross carrying amount $ 327 $ 335
Accumulated amortization (282) (246)
Net carrying amount $ 45 $ 89
Total Gross carrying amount $2,759 $3,367
Accumulated amortization (988) (865)
Net carrying amount $1,771 $2,502
(1) Primarily includes the firm’s clearance and execution and NASDAQ customer lists related to SLK and financial counseling customer lists related to Ayco.
(2) Consists of VOBA and DAC. VOBA represents the present value of estimated future gross profits of the variable annuity and life insurance business. DAC results from
commissions paid by the firm to the primary insurer (ceding company) on life and annuity reinsurance agreements as compensation to place the business with the firm and
to cover the ceding company’s acquisition expenses. VOBA and DAC are amortized over the estimated life of the underlying contracts based on estimated gross profits, and
amortization is adjusted based on actual experience. The weighted average remaining amortization period for VOBA and DAC is seven years as of November 2007.
(3) The reduction in power contracts from November 2006 is due to the sale of the majority of the firm’s ownership interests in 14 power generation facilities during 2007.
(4) Primarily includes marketing and technology-related assets.
120 Goldman Sachs 2007 Annual Report