OfficeMax 2008 Annual Report Download - page 66

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(2) During 2007, adjustments were necessary to reflect the reversal of income tax reserves that were recorded in purchase
accounting.
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. As discussed above, the carrying
values of trade names were reviewed in connection with the Company’s interim impairment reviews
in 2008, and approximately $107.1 million was written off in 2008 as part of the impairment charges
described above. No other impairments of intangible assets were required or recorded in 2008,
2007 or 2006. 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:
2008
Gross Carrying Accumulated Net Carrying
Amount Amortization Amount
(thousands)
Trade names .......................... $ 66,000 $ — $ 66,000
Customer lists and relationships ............ 34,767 (21,848) 12,919
Noncompete agreements ................. 12,844 (12,844) —
Exclusive distribution rights ................ 5,255 (2,381) 2,874
$118,866 $(37,073) $81,793
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
Intangible asset amortization expense totaled $5.4 million in 2008, $7.0 million in 2007 and
$7.3 million in 2006. The estimated amortization expense is $1.6 million in 2009 and 2010,
$1.3 million in 2011 and $1.2 million in 2012 to 2014.
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