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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
48
6. Intangible Assets and Goodwill
Intangible assets
Intangible assets at December 31, 2011 and 2010 consisted of the following:
December 31, 2011 December 31, 2010
Gross
Carrying
Amount
Accumulated
Amortization Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Customer relationships $ 409,489 $ (237,536) $ 171,953 $ 453,523 $ (229,143) $ 224,380
Supplier relationships 29,000 (19,213) 9,787 29,000 (16,192) 12,808
Mailing software
and technology 170,286 (143,456) 26,830 172,188 (118,390) 53,798
Trademarks
and trade names 33,908 (30,076) 3,832 36,322 (30,224) 6,098
Non-compete
agreements 7,564 (7,363) 201 7,845 (7,486) 359
$ 650,247 $ (437,644) $ 212,603 $ 698,878 $ (401,435) $ 297,443
In 2011, intangible asset impairment charges of $12 million associated with our International Mailing Services operations (IMS)
within our Mail Services segment and $5 million associated with the international operations of our Management Services segment
(PBMSi) were recorded. Theses charges were recorded to restructuring charges and asset impairments in the Consolidated Statements
of Income. See Goodwill section below and Note 14 for further details.
Amortization expense for intangible assets was $58 million, $61 million and $69 million for the years ended December 31, 2011, 2010
and 2009, respectively. The future amortization expense related to intangible assets as of December 31, 2011 is as follows:
Year ended December 31, Amount
2012 $ 45,213
2013 41,530
2014 37,111
2015 32,974
2016 18,824
Thereafter 36,951
$ 212,603
Actual amortization expense may differ from the amounts above due to, among other things, future acquisitions, impairments,
accelerated amortization or fluctuations in foreign currency exchange rates.
Goodwill
In 2011, goodwill impairment charges of $130 million were recorded. Due to continuing underperformance of our international
mailing services (IMS) operations and based on information developed during the early stages of our annual budgeting and long-term
planning process started in the third quarter, a goodwill impairment charge of $46 million was recorded. In addition, based on the
results of our annual goodwill impairment review, management determined that goodwill for PBMSi was impaired and an impairment
charge of $84 million was recorded. See Note 1 for a description of our goodwill impairment policy.