Baker Hughes 2007 Annual Report Download - page 138

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2007 Form 10-K 55
We perform an annual impairment test of goodwill as of October 1 of every year. There were no impairments of goodwill in
2007, 2006 or 2005 related to the annual impairment test.
Intangible assets are comprised of the following at December 31:
2007 2006
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Amortization Net Amount Amortization Net
Technology-based $ 240.6 $ (105.1) $ 135.5 $ 236.7 $ (87.2) $ 149.5
Contract-based 15.1 (9.2) 5.9 13.8 (6.6) 7.2
Marketing-related 5.7 (5.7) – 5.7 (5.7) –
Customer-based 13.6 (3.8) 9.8 13.7 (2.4) 11.3
Other 0.3 (0.3) – 0.7 (0.4) 0.3
Total amortizable intangible assets 275.3 (124.1) 151.2 270.6 (102.3) 168.3
Marketing-related intangible assets
with an indefinite useful life 25.4 – 25.4 22.1 – 22.1
Total $ 300.7 $ (124.1) $ 176.6 $ 292.7 $ (102.3) $ 190.4
Intangible assets are amortized either on a straight-line basis with estimated useful lives ranging from 1 to 20 years, or on a
basis that reflects the pattern in which the economic benefits of the intangible assets are expected to be realized, which range from
15 to 30 years.
Amortization expense included in net income for the years ended December 31, 2007, 2006 and 2005 was $20.8 million,
$20.0 million and $15.2 million, respectively. Estimated amortization expense for each of the subsequent five fiscal years is expected
to be as follows: 2008 – $19.1 million; 2009 – $18.3 million; 2010 – $14.8 million; 2011 – $13.8 million and 2012 – $13.5 million.
NOTE 11. INDEBTEDNESS
Total debt consisted of the following at December 31:
2007 2006
6.25% Notes due January 2009 with an effective interest rate of 4.72%,
net of unamortized discount and debt issuance costs of $0.3 at
December 31, 2007 ($0.7 at December 31, 2006) $ 330.0 $ 334.8
6.00% Notes due February 2009 with an effective interest rate of 6.11%,
net of unamortized discount and debt issuance costs of $0.2 at
December 31, 2007 ($0.4 at December 31, 2006) 199.8 199.6
8.55% Debentures due June 2024 with an effective interest rate of 8.76%,
net of unamortized discount and debt issuance costs of $2.3 at
December 31, 2007 ($2.4 at December 31, 2006) 147.7 147.6
6.875% Notes due January 2029 with an effective interest rate of 7.08%,
net of unamortized discount and debt issuance costs of $8.1 at
December 31, 2007 ($8.3 at December 31, 2006) 391.9 391.7
Other debt 15.4 1.4
Total debt 1,084.8 1,075.1
Less short-term debt and current maturities 15.4 1.3
Long-term debt $ 1,069.4 $ 1,073.8