North Face 2004 Annual Report Download - page 45

85vf corporation 2004 Annual Report
Amortization expense was $15.4 million in 2004
(including an impairment charge of $1.1 million for
a miscellaneous intangible asset) and $3.6 million in
2003. Estimated amortization expense for the years
2005 through 2009 is $14.6 million, $14.2 million,
$13.5 million, $10.4 million and $8.1 million,
respectively.
note h – goodwill
Activity is summarized by business segment as follows:
note i – other assets
Outdoor
Jeanswear Apparel and Intimate
In thousands Apparel Equipment Apparel Imagewear Sportswear Other
Balance, December 2001 $ 253,841 $ 110,036 $ 221,343 $ 351,374 $ – $ 61,452
Change in accounting policy (Note A) (63,199) – (109,751) (295,128) – (59,176)
Adjustments to purchase price allocation (275) (924) – – – –
Impairment loss (Note C) –––––(2,276)
Currency translation 6,038 – – – – –
Balance, December 2002 196,405 109,112 111,592 56,246 – –
2003 acquisitions ––––217,178 –
Currency translation 10,439 – – – – –
Balance, December 2003 206,844 109,112 111,592 56,246 217,178 –
2004 acquisitions – 310,175 6,000 – 24 –
Adjustments to purchase price allocation ––––(2,934) –
Currency translation 4,411 12,946 – – – –
Balance, December 2004 $ 211,255 $ 432,233 $ 117,592 $ 56,246 $ 214,268 $ –
In thousands 2004 2003
Investment securities held for deferred compensation plans $ 167,715 $ 158,074
Other investment securities 45,116 36,800
Computer software, net of accumulated amortization
of $45,057 in 2004 and $35,343 in 2003 63,810 61,499
Pension plan intangible asset (Note N) 46,960 17,919
Other 46,265 34,007
$ 369,866 $ 308,299
note g – intangible assets
December 2004
Weighted Gross Carrying Accumulated Net Carrying
Dollars in thousands Average Life Amount Amortization Amount
Amortizable intangible assets*:
License agreements 25 years $ 114,623 $ 7,343 $ 107,280
Customer relationships 21 years 71,305 2,797 68,508
Trademarks, backlog and other 6 years 13,111 7,646 5,465
Amortizable intangible assets, net 181,253
Indefinite-lived intangible assets:
Trademarks and tradenames 458,267
Intangible assets, net $ 639,520
December 2003
Amortizable intangible assets*:
License agreements 30 years $ 89,500 $ 1,148 $ 88,352
Customer relationships 24 years 10,200 233 9,967
Trademarks, backlog and other 5 years 5,090 2,175 2,915
Amortizable intangible assets, net 101,234
Indefinite-lived intangible assets:
Trademarks and tradenames 217,400
Intangible assets, net $ 318,634
*Amortization of license agreements and customer relationships – accelerated methods; other– straight-line method.
In thousands 2004 2003
Land $ 52,989 $ 52,124
Buildings and improvements 502,369 479,725
Machinery and equipment 984,132 1,027,997
1,539,490 1,559,846
Less accumulated depreciation 967,236 968,166
$ 572,254 $ 591,680
note f – property, plant and equipment
Investment securities held for deferred compensation
plans consist of marketable securities and life
insurance contracts. These securities substantially
mirror the participant-directed investment selections
underlying the deferred compensation liabilities
(Note M). These securities, held in an irrevocable
trust, are recorded at fair value. Realized and
unrealized gains and losses on these investment
securities are recorded in the Consolidated
Statements of Income and substantially offset
changes in deferred compensation liabilities
to participants.
Other investment securities are held primarily to
support liabilities under the supplemental defined
benefit pension plan (Note M). These securities,
held in an irrevocable trust, are recorded at fair
value. Realized gains and losses are recorded in the
Consolidated Statements of Income, and unrealized
gains and losses, net of income taxes, are recorded in
Accumulated Other Comprehensive Income (Loss).
VF is the beneficiary of life insurance policies
mentioned above on certain current and former
members of VF management. Policy loans against
the cash value of these policies are not significant.