Lexmark 2011 Annual Report Download - page 117

Perceptive Software in 2010, including the $2.2 million and $5.0 million net impact of measurement
period adjustments recorded in 2011 and 2010, respectively, related to income taxes. Refer to Note 4
for additional details regarding business combinations occurring in 2011 and 2010. The Company does
not have any accumulated impairment charges as of December 31, 2011.
Intangible Assets
The following table summarizes the gross carrying amounts and accumulated amortization of the
Company’s intangible assets.
December 31, 2011 December 31, 2010
Accum Accum
Gross Amort Net Gross Amort Net
Intangible assets subject to amortization:
Customer relationships ................... $ 49.0 $ (9.3) $ 39.7 $ 41.8 $ (4.0) $ 37.8
Non-compete agreements ................. 1.8 (0.9) 0.9 1.7 (0.4) 1.3
Technology and patents .................. 110.1 (35.4) 74.7 99.8 (17.8) 82.0
Trade names and trademarks .............. 2.5 (0.1) 2.4 — — —
Total .................................. 163.4 (45.7) 117.7 143.3 (22.2) 121.1
Intangible assets not subject to amortization:
In-process technology .................... 1.2 — 1.2 1.9 — 1.9
Trade names and trademarks .............. 32.3 — 32.3 32.3 — 32.3
Total .................................. 33.5 — 33.5 34.2 — 34.2
Total identifiable intangible assets .......... $196.9 $(45.7) $151.2 $177.5 $(22.2) $155.3
Intangible assets acquired in a transaction accounted for as a business combination are initially
recognized at fair value. Intangible assets acquired in a transaction accounted for as an asset
acquisition are initially recognized at cost. Of the $196.9 million gross carrying amount, $176.1 million
were acquired in transactions accounted for as business combinations and $20.8 million were acquired
in transactions accounted for as asset acquisitions. The year-to-date increases in the intangible assets
above were driven by business combinations discussed in Note 4.
Amortization expense related to intangible assets was $23.7 million, $14.9 million and $3.2 million for
2011, 2010 and 2009, respectively. Amortization of intangible assets in the Perceptive Software
segment was approximately 87% and 78% of amortization expense in 2011 and 2010, respectively.
The following table summarizes the estimated future amortization expense for intangible assets that
are currently being amortized.
Fiscal year:
2012 ........................................................................ $ 26.4
2013 ........................................................................ 26.1
2014 ........................................................................ 25.8
2015 ........................................................................ 17.2
2016 ........................................................................ 9.6
Thereafter ................................................................... 12.6
Total ........................................................................ $117.7
In-process technology refers to research and development efforts that were in process on the dates the
Company acquired Perceptive Software and Pallas Athena. Under the accounting guidance for
intangible assets, in-process research and development acquired in a business combination is
considered an indefinite lived asset until completion or abandonment of the associated research and
development efforts. The Company began amortizing its in-process technology asset, valued
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