UPS 2007 Annual Report Download - page 86

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amortization of intangible assets was $236, $255, and $255 million during 2007, 2006 and 2005, respectively.
Expected amortization of finite-lived intangible assets recorded as of December 31, 2007 for the next five years is
as follows (in millions): 2008—$167; 2009—$109; 2010—$67; 2011—$23; 2012—$20. Amortization expense in
future periods will be affected by business acquisitions, software development, and other factors.
NOTE 7. BUSINESS ACQUISITIONS AND DISPOSITIONS
In December 2004, we agreed with Sinotrans Air Transportation Development Co., Ltd. (“Sinotrans”) to
acquire direct control of the international express operations in 23 cities within China, and to purchase
Sintotrans’ interest in our current joint venture in China. As of December 31, 2006, we had made all cash
payments under the purchase agreement, a total of $114 million, and had taken direct control of operations in all
23 locations. The operations acquired are reported within our International Package reporting segment.
In May 2005, we acquired Messenger Service Stolica S.A. (“Stolica”), one of the leading parcel and express
delivery companies in Poland. Stolica’s operating results are included in our International Package reporting segment.
In August 2005, we acquired Overnite Corporation (“Overnite”) for approximately $1.225 billion in cash.
Overnite offers a variety of LTL and TL services to more than 60,000 customers in North America. The
operating results of Overnite, which is now known as UPS Freight, are included in our Supply Chain & Freight
reporting segment.
In September 2005, we acquired Lynx Express Ltd. (“Lynx”) for approximately $68 million in cash. Lynx
Express was one of the largest independent parcel carriers in the United Kingdom. Lynx also offers customers a
broad suite of logistics and spare parts logistics services. The operating results of Lynx are included in our
International Package reporting segment.
Pro forma results of operations have not been presented for any of these acquisitions because the effects of
these transactions were not material on either an individual or aggregate basis. The results of operations of each
acquired company are included in our statements of consolidated income from the date of acquisition. The
purchase price allocations of acquired companies can be modified up to one year after the date of acquisition.
NOTE 8. DEBT OBLIGATIONS AND COMMITMENTS
Debt obligations, as of December 31, consist of the following (in millions):
2007 2006
8.38% debentures .................................................. $ 761 $ 731
Commercial paper .................................................. 7,366 791
Floating rate senior notes ............................................ 441 441
Capital lease obligations ............................................. 479 230
Facility notes and bonds ............................................. 435 437
UPS Notes ........................................................ 513 379
Pound Sterling notes ................................................ 989 979
Other debt ........................................................ 34 128
Total debt ......................................................... 11,018 4,116
Less current maturities .............................................. (3,512) (983)
Long-term debt .................................................... $ 7,506 $3,133
F-23