National Oilwell Varco 2011 Annual Report Download - page 72

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Index to Financial Statements
Identified intangible assets with determinable lives consist primarily of customer relationships, trademarks, trade names, patents, and technical drawings acquired in
acquisitions, and are being amortized on a straight-line basis over the estimated useful lives of 2-30 years. Amortization expense of identified intangibles is expected to be
approximately $280 million in each of the next five years. Included in intangible assets are approximately $643 million of indefinite-lived trade names.
The net book value of identified intangible assets are identified by segment as follows (in millions):
Rig
Technology
Petroleum
Services &
Supplies Distribution &
Transmission Total
Balance at December 31, 2009 $ 416 $ 3,630 $ 6 $ 4,052
Additions to intangible assets 291 8 299
Amortization (38) (206) (1) (245)
Currency translation adjustments (3) (3)
Balance at December 31, 2010 666 3,432 5 4,103
Additions to intangible assets 70 176 27 273
Amortization (60) (213) (3) (276)
Currency translation adjustments and other (22) (4) (1) (27)
Balance at December 31, 2011 $ 654 $ 3,391 $ 28 $ 4,073
Identified intangible assets by major classification consist of the following (in millions):
Gross Accumulated
Amortization Net Book
Value
December 31, 2010:
Customer relationships $ 2,933 $ (536) $ 2,397
Trademarks 677 (95) 582
Indefinite-lived trade names 643 643
Other 655 (174) 481
Total identified intangibles $ 4,908 $ (805) $ 4,103
December 31, 2011:
Customer relationships $ 3,044 $ (717) $ 2,327
Trademarks 716 (122) 594
Indefinite-lived trade names 643 643
Other 751 (242) 509
Total identified intangibles $ 5,154 $ (1,081) $ 4,073
2009 Asset Impairment
During the second quarter of 2009, the worldwide average rig count was 2,009 rigs, down 41% from the fourth quarter 2008 average of 3,395 and down 25% from the first
quarter 2009 average of 2,681. The second quarter 2009 average rig count represented the lowest quarterly average in the past six years. In addition, the Companys updated
forecast was behind the Companys previous forecast completed at the beginning of 2009. While operating profit for the first quarter of 2009 was in line with the Companys
first quarter 2009 operating profit forecast, the Companys consolidated operating profit for the second quarter of 2009 was below its second quarter 2009 forecast. As a result
of the substantial decline in the worldwide rig count, and the decline in actual/forecasted results compared to the original 2009 forecast, the Company concluded that events or
circumstances had occurred indicating that goodwill and other indefinite-lived intangible assets might be impaired as described in ASC Topic 350, Intangibles  Goodwill
and Other (ASC Topic 350).
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