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10. Goodwill and Intangible Assets
Goodwill
Changes in the carrying amount of goodwill by segment are as follows:
OfficeMax, OfficeMax,
Contract Retail Total
Balance at December 31, 2005 .................... $523,537 $ 694,663 $ 1,218,200
Effect of foreign currency translation ................ 6,423 — 6,423
Businesses acquired ............................ 1,114 — 1,114
Purchase accounting adjustments .................. (2,984) (6,721) (9,705)
Balance at December 30, 2006 .................... 528,090 687,942 1,216,032
Effect of foreign currency translation ................ 28,032 — 28,032
Businesses acquired ............................ 763 — 763
Purchase accounting adjustments .................. — (28,023) (28,023)
Balance at December 29, 2007 .................... $556,885 $659,919 $1,216,804
During 2007, adjustments were necessary to reflect the reversal of income tax reserves that
were recorded in purchase accounting. For additional information on the tax reserve adjustment see
Note 6, Income Taxes. During 2006, adjustments were necessary to reflect the recognition of certain
identifiable assets acquired in a 2005 transaction in the contract segment and the reversal of a
portion of the EITF 95-3 liability recorded in purchase accounting related to the retail segment.
Acquired Intangible Assets
Intangible assets represent the values assigned to trade names, customer lists and
relationships, noncompete agreements and exclusive distribution rights of businesses acquired. The
trade name assets have an indefinite life and are not amortized. All other intangible assets are
amortized on a straight-line basis over their expected useful lives. Customer lists and relationships
are amortized over three to 20 years, noncompete agreements over their terms, which are generally
three to five years, and exclusive distribution rights over ten years. Intangible assets consisted of
the following at year end:
2007
Gross Carrying Accumulated Net Carrying
Amount Amortization Amount
(thousands)
Trade names .......................... $173,150 $ — $ 173,150
Customer lists and relationships ............ 43,381 (23,072) 20,309
Noncompete agreements ................. 12,884 (10,842) 2,042
Exclusive distribution rights ................ 6,977 (2,758) 4,219
$236,392 $(36,672) $199,720
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