E-Z-GO 2008 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2008 E-Z-GO annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Notes to the Consolidated Financial Statements
58
the component exceeding its estimated fair value, potentially resulting in an impairment charge. At January 3, 2009, the goodwill allocated to this
component totaled approximately $141 million.
Our market capitalization at January 3, 2009 was approximately $3.7 billion, compared with approximately $17.9 billion at December 29, 2007.
This market capitalization is less than the sum of the fair values of our Manufacturing group reporting units calculated in connection with our
annual impairment test. We believe that the differences between the fair value estimates of our manufacturing reporting units and our market
capitalization are primarily due to the market’s view of risk in the Finance segment. As noted above, we have fully impaired goodwill at the Finance
segment. We believe that our fair value estimates for our Manufacturing group reporting units are consistent with market participant assumptions.
Acquired Intangible Assets
Our acquired intangible assets are summarized below:
January 3, 2009 December 29, 2007
Weighted-
Average
Amortization Gross Gross
Period Carrying Accumulated Carrying Accumulated
(Dollars in millions) (In years) Amount Amortization Net Amount Amortization Net
Customer agreements and
contractual relationships 13 $ 407 $ (43) $ 364 $ 393 $ (7) $ 386
Patents and technology 10 112 (35) 77 111 (22) 89
Trademarks 20 37 (12) 25 34 (10) 24
Other 7 18 (13) 5 27 (14) 13
$ 574 $ (103) $ 471 $ 565 $ (53) $ 512
Amortization expense totaled $53 million in 2008, $23 million in 2007 and $7 million in 2006. Amortization expense is estimated to be
approximately $52 million, $52 million, $51 million, $50 million and $47 million in 2009, 2010, 2011, 2012 and 2013, respectively.
2007 Business Acquisitions
In 2007, we acquired four businesses for cash totaling $1.1 billion. The results of operations for these acquired businesses are included in our
statement of operations since the date of each respective acquisition. Pro forma information has not been included as the amounts are immaterial.
On November 14, 2007, we acquired a majority ownership interest in United Industrial Corporation (UIC), a publicly held company (NYSE: UIC),
pursuant to a cash tender offer for $81 per share. UIC operates through its wholly owned subsidiary, AAI Corporation (AAI). AAI is a leading
provider of intelligent aerospace and defense systems, including unmanned aircraft and ground control stations, aircraft and satellite test
equipment, training systems and countersniper devices. UIC has been integrated into our Textron Systems segment, where we believe it adds
important capabilities to our existing aerospace and defense businesses and advances our strategy to deliver broader and more integrated
solutions to our customers. In December 2007, we completed the acquisition and obtained 100% ownership of UIC.