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Notes to the Consolidated
Financial Statements
(in millions, except per share data and
unless otherwise indicated)
Note 8 – Goodwill and Intangible Assets, Net
Goodwill
The following table presents the changes in the carrying amount of goodwill, by reportable segment, for the three years ended
December 31, 2008:
Production Office Other Total
Balance at December 31, 2005 $ 745 $ 807 $ 119 $1,671
Foreign currency translation adjustment 99 69 1 169
Acquisition of Amici LLC — — 136 136
Acquisition of XMPie, Inc. 48 — — 48
Balance at December 31, 2006 $ 892 $ 876 $ 256 $2,024
Foreign currency translation adjustment 21 17 — 38
Acquisition of GIS — 1,218 105 1,323
Acquisition of Advectis, Inc. — — 26 26
GIS Acquisitions — 30 3 33
Other — —4 4
Balance at December 31, 2007 $ 913 $2,141 $ 394 $3,448
Foreign currency translation adjustment (233) (161) (1) (395)
Acquisition of Veenman B.V. — 44 — 44
GIS acquisitions — 73 — 73
Purchase Price allocation adjustment – GIS — 120 (108) 12
Balance at December 31, 2008 $ 680 $2,217 $ 285 $3,182
In 2008, we finalized the GIS purchase price allocation. As a result, the $108 of Goodwill reflected in our Other segment in 2007 was
reallocated to our Office segment. This adjustment aligned goodwill to the reporting unit benefiting from the synergies of the purchase.
Intangible Assets, Net
Intangible assets primarily relate to the Office operating segment. Intangible assets were comprised of the following as of December 31,
2008 and 2007:
Weighted
Average
Amortization
Period
December 31, 2008 December 31, 2007
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Customer base 14 years $492 $155 $337 $462 $118 $344
Distribution network 25 years 123 44 79 123 39 84
Trademarks 20 years 191 15 176 175 6 169
Technology, patents and non-compete 6 years 40 22 18 39 15 24
Total $846 $236 $610 $799 $178 $621
Amortization expense related to intangible assets was $58, $46, and $45 for the years ended December 31, 2008, 2007 and 2006,
respectively, and, excluding the impact of additional acquisitions, is expected to approximate $58 annually from 2009 through 2013.
Amortization expense is primarily recorded in Other expenses, net, with the exception of amortization expense associated with licensed
technology, which is recorded in Cost of sales and Cost of service, outsourcing and rentals, as appropriate.
Xerox 2008 Annual Report 65