OfficeMax 2011 Annual Report Download - page 89

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estimated future undiscounted cash flows derived from the assets was less than those assets’ carrying amount and
therefore impairment existed for those store assets. The second step of impairment testing was performed to
calculate the amount of the impairment loss. The loss was measured as the excess of the carrying value over the fair
value of the assets, with the fair value determined based on estimated future discounted cash flows. As a result, we
wrote off $11.2 million, $11.0 million and $17.6 million of store assets in 2011, 2010 and 2009, respectively.
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:
2011
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(thousands)
Trade names ................................................... $ 66,000 $ — $66,000
Customer lists and relationships ................................... 27,676 (15,327) 12,349
Exclusive distribution rights ...................................... 7,287 (4,116) 3,171
Total ......................................................... $100,963 $(19,443) $81,520
2010
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(thousands)
Trade names ................................................... $ 66,000 $ — $66,000
Customer lists and relationships ................................... 27,807 (13,789) 14,018
Exclusive distribution rights ...................................... 7,302 (4,089) 3,213
Total ......................................................... $101,109 $(17,878) $83,231
Intangible amortization expense totaled $1.7 million, $2.0 million and $1.6 million in 2011, 2010 and 2009
respectively. The estimated amortization expense is approximately $1.4 to $1.7 million in each of the next five years.
The changes in the intangible carrying amounts were as follows:
Trade names
Customer
lists and
relationships
Exclusive
distribution
rights Total
(thousands)
Net carrying amount, December 27, 2008 ................ $66,000 $12,919 $2,874 $81,793
Amortization ....................................... — (1,271) (363) (1,634)
Effect of foreign currency translation .................... — 2,897 750 3,647
Net carrying amount, December 26, 2009 ................ $66,000 $14,545 $3,261 $83,806
Amortization ....................................... — (1,542) (413) (1,955)
Effect of foreign currency translation .................... — 1,015 365 1,380
Net carrying amount, December 25, 2010 ................ $66,000 $14,018 $3,213 $83,231
Amortization ....................................... — (1,649) (37) (1,686)
Effect of foreign currency translation .................... — (20) (5) (25)
Net carrying amount, December 31, 2011 ................ $66,000 $12,349 $3,171 $81,520
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