Boeing 2007 Annual Report Download - page 55

52
Notes to Consolidated Financial Statements
Note 2 – Goodwill and Acquired Intangibles
Changes in the carrying amount of goodwill by reportable seg-
ment for the years ended December 31, 2007, 2006 and 2005
were as follows:
Commercial
Airplanes
Precision
Engagement
and Mobility
Systems
Network
and Space
Systems
Support
Systems Total
Balance at January 1, 2005
Goodwill Adjustments
Divestitures
Balance at December 31, 2005
Aviall acquisition 1
Other 2
Balance at December 31, 2006
Goodwill Adjustments
Acquisition 3
Balance at December 31, 2007
$÷«282
21
(23)
$÷«280
1,014
71
$1,365
(25)
60
$1,400
$616
(13)
$603
$603
$603
$924
(18)
(2)
$904
(3)
$901
$901
$126
11
$137
41
$178
(1)
$177
$1,948
1
(25
$1,924
1,055
68
$3,047
(26
60
$3,081
)
)
1 On September 20, 2006, we acquired all of the outstanding shares of Aviall, Inc. (Aviall) for $1,780. The acquisition of Aviall was accounted for under the purchase
method of accounting. The purchase price was allocated to the net assets acquired based on their fair values and finalized in the fourth quarter of 2006.
2 The increase in goodwill is primarily the result of an acquisition in the second quarter 2006. The purchase price allocation for this acquisition was finalized in the
fourth quarter of 2006.
3 The increase in goodwill is primarily the result of an acquisition in the first quarter 2007. The purchase price allocation for this acquisition was finalized in the fourth
quarter of 2007.
As of December 31, 2007 and 2006, we had indefinite- Note 3 – Earnings Per Share
lived intangible assets with carrying amounts of $499 relating The weighted-average number of shares outstanding (in mil-
to tradenames. lions) for the years ended December 31, used to compute
Amortization expense for acquired finite-lived intangible assets earnings per share are as follows:
for the years ended December 31, 2007 and 2006 was $152 2007 2006 2005
and $100. Estimated amortization expense for the five suc- Weighted-average shares outstanding 750.5 760.5 779.4
ceeding years are as follows: 2008–$209; 2009– $207; Participating securities 8.8 10.5 9.1
2010– $183; 2011 –$134 and 2012– $124. Basic weighted-average
The gross carrying amounts and accumulated amortization of shares outstanding 759.3 771.0 788.5
our other acquired finite-lived intangible assets were as follows Diluted potential common shares 13.2 16.6 14.4
at December 31: Diluted weighted-average
shares outstanding 772.5 787.6 802.9
2007 2006
Gross Gross
The numerator used to compute diluted earnings per share is
Carrying Accumulated Carrying Accumulated
Amount Amortization Amount Amortization as follows:
Developed technology $«÷640 $432 $«÷615 $369 2007 2006 2005
Product know-how 308 74 308 64
Net earnings $4,074 $2,215 $2,572
Customer base 325 77 307 51
Expense related to diluted shares 2 27
Distribution rights 796 40 295 8
Total numerator $4,076 $2,242 $2,572
Other 249 101 241 75
$2,318 $724 $1,766 $567
Expense related to diluted shares in the amount of $2 and $27
in 2007 and 2006 represented mark-to-market adjustment of
Acquired finite-lived intangibles of $342 remain unpaid as of December 31, 2007. vested performance shares to employees terminated as of
December 31, 2005.
The Boeing Company and Subsidiaries