Dell 2009 Annual Report Download - page 80
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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6 — GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill allocated to Dell's business segments as of January 29, 2010, and January 30, 2009, and changes in the carrying amount of
goodwill for the respective periods, were as follows:
January 29, January 30,
Fiscal Year Ended 2010 2009
Small and
Large Medium
Enterprise Public Business Consumer Total Total
(in millions)
Balance at beginning of period $ 677 $ 411 $ 354 $ 295 $ 1,737 $ 1,648
Goodwill acquired during the period 679 1,613 35 - 2,327 136
Adjustments 5 2 - 3 10 (47)
Balance at end of period $ 1,361 $ 2,026 $ 389 $ 298 $ 4,074 $ 1,737
Goodwill is tested annually during the second fiscal quarter and whenever events or circumstances indicate an impairment may have
occurred. If the carrying amount of goodwill exceeds its fair value, estimated based on discounted cash flow analyses, an impairment
charge would be recorded. Based on the results of the annual impairment tests, no impairment of goodwill existed at July 31, 2009, and
for the fiscal year ended January 29, 2010. Further, no triggering events have transpired since July 31, 2009, that would indicate a
potential impairment of goodwill as of January 29, 2010. Dell does not have any accumulated goodwill impairment charges as of
January 29, 2010. The goodwill adjustments are primarily the result of contingent purchase price considerations related to prior period
acquisitions and the effects of foreign currency fluctuations.
Intangible Assets
Dell's intangible assets associated with completed acquisitions at January 29, 2010 and January 30, 2009, are as follows:
January 29, 2010 January 30, 2009
Accumulated Accumulated
Gross Amortization Net Gross Amortization Net
(in millions)
Customer relationships $ 1,324 $ (117) $ 1,207 $ 243 $ (38) $ 205
Technology 568 (196) 372 524 (82) 442
Non-compete agreements 64 (8) 56 26 (6) 20
Tradenames 51 (17) 34 41 (9) 32
Amortizable intangible assets 2,007 (338) 1,669 834 (135) 699
Indefinite lived intangible assets 25 - 25 25 - 25
Total intangible assets $ 2,032 $ (338) $ 1,694 $ 859 $ (135) $ 724
During Fiscal 2010 and Fiscal 2009, Dell recorded additions to intangible assets of $1.2 billion and $64 million, respectively. The
$1.2 billion in additions to intangible assets in Fiscal 2010 all relates to the acquisition of Perot Systems. See Note 5 of Notes to
Consolidated Financial Statements for additional information on the acquisition of Perot Systems. Amortization expense related to finite-
lived intangible assets was approximately $205 million and $103 million in Fiscal 2010 and in Fiscal 2009, respectively. During the fiscal
years ended January 29, 2010, and January 30, 2009, Dell did not record any impairment charges as a result of its analysis of its
intangible assets.
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