Ingram Micro 2013 Annual Report Download - page 46

Table of Contents
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
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Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives noted below. We also capitalize
computer software costs that meet both the definition of internal-use software and defined criteria for capitalization. Leasehold improvements are amortized over
the shorter of the lease term or the estimated useful life. Depreciable lives of property and equipment are as follows:
Buildings 30-40 years
Leasehold improvements 3-17 years
Distribution equipment 5-10 years
Computer equipment and software 3-10 years
Maintenance, repairs and minor renewals are charged to expense as incurred. Additions, major renewals and betterments to property and equipment are
capitalized.
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We assess potential impairments to our long-lived and intangible assets when events or changes in circumstances indicate that the carrying amount may
not be fully recoverable. If required, an impairment loss is recognized as the difference between the carrying value and the fair value of the assets. The gross
carrying amounts of finite-lived identifiable intangible assets of $496,789 and $445,385 at December 28, 2013 and December 29, 2012, respectively, are
amortized over their remaining estimated lives ranging up to 20 years with the predominant amounts having lives of 3 to 10 years. The net carrying amount
was $375,423 and $372,482 at December 28, 2013 and December 29, 2012, respectively. Amortization expense was $48,480, $20,711 and $12,550 for
2013, 2012 and 2011, respectively. Future minimum amortization expense of finite-lived identifiable intangible assets that we expect to recognize over the next
five years and thereafter are as follows:
2014 $ 57,038
2015 54,702
2016 48,189
2017 48,094
2018 47,259
Thereafter 120,141
$375,423
There were no impairments to our long-lived and other identifiable intangible assets in 2013, 2012 and 2011.
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Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in an acquisition and is reviewed annually
for potential impairment, or when circumstances warrant.
Additions to goodwill in 2013 were due to our acquisitions of SoftCom, Inc. ("SoftCom"), CloudBlue Technologies, Inc. ("CloudBlue") and Shipwire,
Inc. ("Shipwire") in North America during the third and fourth quarters of 2013. Additionally, we adjusted goodwill in 2013 to reflect the finalization of the
allocation of purchase price related to the fourth quarter 2012 acquisitions of BrightPoint, Aptec Holdings Ltd. ("Aptec") and Promark Technology Inc.
("Promark"). The adjustments include the finalization of the valuation of a noncontrolling interest in one of the acquired BrightPoint subsidiaries as well as the
assessment of certain tax matters (see Note 4 "Acquisitions, Goodwill and Intangible Assets").
Goodwill is required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that goodwill may be
impaired. We perform our annual goodwill impairment review during our fiscal fourth quarter, using a combination of the income and market approach. Our
annual review indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying
values, including goodwill. In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in
recoverability of goodwill, including a deterioration in general economic conditions, an increased competitive environment, a change in management,
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