UPS 2009 Annual Report Download - page 92

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Intangible Assets
The following is a summary of intangible assets at December 31, 2009 and 2008 (in millions):
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Value
Weighted-Average
Amortization
Period (in years)
December 31, 2009:
Trademarks, licenses, patents, and other ..... $ 132 $ (9) $123 5.0
Customer lists ......................... 107 (52) 55 9.0
Franchise rights ........................ 109 (46) 63 20.0
Capitalized software .................... 1,812 (1,457) 355 3.2
Total Intangible Assets, Net .............. $2,160 $(1,564) $596 4.4
December 31, 2008:
Trademarks, licenses, patents, and other ..... $ 47 $ (40) $ 7
Customer lists ......................... 113 (48) 65
Franchise rights ........................ 110 (41) 69
Capitalized software .................... 1,728 (1,358) 370
Total Intangible Assets, Net .............. $1,998 $(1,487) $511
All of our recorded intangible assets other than goodwill are deemed to be finite-lived intangibles, and are
thus amortized over their estimated useful lives. Impairment tests for these intangible assets are only performed
when a triggering event occurs that indicates that the carrying value of the intangible may not be recoverable. In
2008, as a result of weak performance in our domestic package operations in the United Kingdom, we reviewed
our long-lived assets, including intangible assets, for impairment within our U.K. domestic package entity. Based
on recent performance and near-term projections, the value assigned to the customer list intangible asset acquired
within the U.K. domestic package business was determined to be impaired. This was the result of both higher
than anticipated customer turnover and reduced operating margins associated with the acquired business.
Accordingly, an intangible asset impairment charge of $27 million was recorded for the year ended
December 31, 2008, which is included in the caption “other expenses” in the consolidated income statement.
There were no impairments of intangible assets in 2009 or 2007.
Amortization of intangible assets was $185, $202, and $236 million during 2009, 2008 and 2007,
respectively. Expected amortization of finite-lived intangible assets recorded as of December 31, 2009 for the
next five years is as follows (in millions): 2010—$219; 2011—$160; 2012—$102; 2013—$39; 2014—$27.
Amortization expense in future periods will be affected by business acquisitions, software development, and
other factors.
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