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Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2011

Notes To Condensed Consolidated Financial Statements [Abstract]

6. Intangible Assets and Goodwill

Intangible assets

Intangible assets at December 31, 2011 and 2010 consisted of the following:

	December 31, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	409,489	$	(237,536)	$	171,953	$	453,523	$	(229,143)	$	224,380
Supplier relationships		29,000		(19,213)		9,787		29,000		(16,192)		12,808
Mailing software and technology		170,286		(143,456)		26,830		172,188		(118,390)		53,798
Trademarks and trade names		33,908		(30,076)		3,832		36,322		(30,224)		6,098
Non-compete agreements		7,564		(7,363)		201		7,845		(7,486)		359
	$	650,247	$	(437,644)	$	212,603	$	698,878	$	(401,435)	$	297,443

In 2011, intangible asset impairment charges of $12 million associated with our International Mailing Services operations (IMS) within our Mail Services segment and $5 million associated with the international operations of our Management Services segment (PBMSi) were recorded. Theses charges were recorded to restructuring charges and asset impairments in the Consolidated Statements of Income. See Goodwill section below and Note 14 for further details.

Amortization expense for intangible assets was $58 million, $61 million and $69 million for the years ended December 31, 2011, 2010 and 2009, respectively. The future amortization expense related to intangible assets as of December 31, 2011 is as follows:

Year ended December 31,	Amount
2012	$	45,213
2013		41,530
2014		37,111
2015		32,974
2016		18,824
Thereafter		36,951
	$	212,603

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

Goodwill

In 2011, goodwill impairment charges of $130 million were recorded. Due to continuing underperformance of our international mailing services (IMS) operations and based on information developed during the early stages of our annual budgeting and long-term planning process started in the third quarter, a goodwill impairment charge of $46 million was recorded. In addition, based on the results of our annual goodwill impairment review, management determined that goodwill for PBMSi was impaired and an impairment charge of $84 million was recorded. See Note 1 for a description of our goodwill impairment policy.

The changes in the carrying amount of goodwill, by reporting segment, for the years ended December 31, 2011 and 2010 are as follows:

	Balance at December 31, 2010 (1)		Impairment		Other (2)		Balance at December 31, 2011
North America Mailing	$	357,918	$	-	$	(5,021)	$	352,897
International Mailing		181,530		-		(5,245)		176,285
Small & Medium Business Solutions		539,448		-		(10,266)		529,182

Production Mail		141,476		-		(1,105)		140,371
Software		678,101		-		(10,977)		667,124
Management Services		494,433		(84,500)		(7,210)		402,723
Mail Services		259,102		(45,650)		3		213,455
Marketing Services		194,233		-		-		194,233
Enterprise Business Solutions		1,767,345		(130,150)		(19,289)		1,617,906
Total	$	2,306,793	$	(130,150)	$	(29,555)	$	2,147,088

	Balance at December 31, 2009 (1)		Acquired during the period		Other (2)		Balance at December 31, 2010
North America Mailing	$	366,683	$	-	$	(8,765)	$	357,918
International Mailing		188,180		-		(6,650)		181,530
Small & Medium Business Solutions		554,863		-		(15,415)		539,448

Production Mail		143,619		-		(2,143)		141,476
Software		633,938		47,354		(3,191)		678,101
Management Services		500,055		-		(5,622)		494,433
Mail Services		259,632		-		(530)		259,102
Marketing Services		194,797		-		(564)		194,233
Enterprise Business Solutions		1,732,041		47,354		(12,050)		1,767,345
Total	$	2,286,904	$	47,354	$	(27,465)	$	2,306,793

(1) Prior year amounts have been reclassified to conform to the current year presentation.
(2) Other includes foreign currency translation and purchase price allocation adjustments.

- 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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