Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

Intangible assets at December 31, 2012 and 2011 consisted of the following:



	December 31, 2012							December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	407,901	$	(269,100	)	$	138,801	$	409,489	$	(237,536	)	$	171,953
Supplier relationships	29,000		(22,113		)	6,887		29,000		(19,213		)	9,787
Software & technology	169,632		(151,628		)	18,004		170,286		(143,456		)	26,830
Trademarks & trade names	35,078		(32,615		)	2,463		33,908		(30,076		)	3,832
Non-compete agreements	7,471		(7,412		)	59		7,564		(7,363		)	201
Total intangible assets	$	649,082	$	(482,868	)	$	166,214	$	650,247	$	(437,644	)	$	212,603

Amortization expense for intangible assets was $45 million, $58 million and $61 million for the years ended December 31, 2012, 2011 and 2010, respectively. The future amortization expense for intangible assets as of December 31, 2012 was as follows:



Year ended December 31,
2013	$	37,634
2014	36,944
2015	33,763
2016	25,412
2017	11,491
Thereafter	20,970
Total	$	166,214

Actual amortization expense may differ from the amounts above due to, among other things, fluctuations in foreign currency exchange rates, impairments, future acquisitions and accelerated amortization.

Goodwill

In 2011, based on the results of our annual goodwill impairment review, management determined that the international operations of our Management Services segment (PBMSi) were impaired. The fair value of PBMSi was determined using a combination of techniques including the present value of future cash flows, derived from our long-term plans and historical experience, multiples of competitors and multiples from sales of like businesses. The inputs used to determine the fair value were classified as Level 3 in the fair value hierarchy. Based on the results of our impairment test, we recorded a goodwill impairment charge of $84 million and an intangible asset impairment charge of $5 million to write-down the carrying value of goodwill and intangible assets to their respective implied fair values.

The intangible asset impairment charge is included in restructuring changes and asset impairments in the Consolidated Statements of Income.

The changes in the carrying amount of goodwill, by reporting segment, for the years ended December 31, 2012 and 2011 were as follows:



	Gross value before accumulated impairment		Accumulated impairment			December 31, 2011		Impairment			Other ⁽²⁾			December 31, 2012
North America Mailing	$	352,897	$	—		$	352,897	$	—		$	2,977		$	355,874
International Mailing	176,285		—			176,285		—			(5,158		)	171,127
Small & Medium Business Solutions	529,182		—			529,182		—			(2,181		)	527,001
Production Mail	140,371		—			140,371		—			4,276			144,647
Software	667,124		—			667,124		—			4,094			671,218
Management Services	487,223		(84,500		)	402,723		—			1,176			403,899
Mail Services ⁽¹⁾	259,105		(45,650		)	213,455		(18,315		)	—			195,140
Marketing Services	194,233		—			194,233		—			—			194,233
Enterprise Business Solutions	1,748,056		(130,150		)	1,617,906		(18,315		)	9,546			1,609,137
Total	$	2,277,238	$	(130,150	)	$	2,147,088	$	(18,315	)	$	7,365		$	2,136,138



	Gross value before accumulated impairment		Accumulated impairment		December 31, 2010		Impairment			Other ⁽²⁾			December 31, 2011
North America Mailing	$	357,909	$	—	$	357,909	$	—		$	(5,012	)	$	352,897
International Mailing	193,761		—		193,761		—			(17,476		)	176,285
Small & Medium Business Solutions	551,670		—		551,670		—			(22,488		)	529,182
Production Mail	129,246		—		129,246		—			11,125			140,371
Software	678,111		—		678,111		—			(10,987		)	667,124
Management Services	494,432		—		494,432		(84,500		)	(7,209		)	402,723
Mail Services ⁽¹⁾	259,101		—		259,101		(45,650		)	4			213,455
Marketing Services	194,233		—		194,233		—			—			194,233
Enterprise Business Solutions	1,755,123		—		1,755,123		(130,150		)	(7,067		)	1,617,906
Total	$	2,306,793	$	—	$	2,306,793	$	(130,150	)	$	(29,555	)	$	2,147,088


(1)	Impairment charges for the Mail Services segment relate to IMS and have been classified as discontinued operations in the Consolidated Statements of Income. See Note 18.


(2)	Primarily foreign currency translation adjustments for the period.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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