Hormel Foods 2014 Annual Report Download - page 48

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46
The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below. In
fiscal 2014, customer relationships of $21.6 million were acquired during the fourth quarter related to CytoSport and $2.6 million
were acquired during the first quarter related to the China based SKIPPY® peanut butter business. Customer relationships of $25.1
million were acquired during the second quarter of fiscal 2013 related to the United States based SKIPPY® peanut butter business.
October 26, 2014 October 27, 2013
Gross Weighted- Gross Weighted-
Carrying Accumulated Avg Life Carrying Accumulated Avg Life
(in thousands) Amount Amortization (in Years) Amount Amortization (in Years)
Customer lists/relationships $ 67,540 $ (19,336) 11.0 $ 43,340 $ (14,719) 11.0
Formulas & recipes 17,854 (15,955) 8.8 17,854 (13,824) 8.8
Proprietary software & technology 14,820 (13,542) 10.2 14,820 (12,024) 10.2
Other intangibles 4,746 (4,503) 7.4 9,386 (7,999) 7.7
Total $ 104,960 $ (53,336) 10.4 $ 85,400 $ (48,566) 10.1
Note G
Investments In and Receivables from Affiliates
The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company
owns a minority interest, and for which there are no other indicators of control, are accounted for under the equity or cost
method. These investments, along with any related receivables from affiliates, are included in the Consolidated Statements of
Financial Position as investments in and receivables from affiliates.
Investments in and receivables from affiliates consists of the following:
October 26, October 27,
(in thousands) Segment % Owned 2014 2013
MegaMex Foods, LLC Grocery Products 50% $ 208,221 $ 203,413
Foreign Joint Ventures International & Other Various (26 – 50%) 56,230 67,196
Total $ 264,451 $ 270,609
Equity in earnings of affiliates consists of the following:
(in thousands) Segment 2014 2013 2012
MegaMex Foods, LLC Grocery Products $ 14,415 $ 17,261 $ 35,762
Foreign Joint Ventures International & Other 3,170 3,252 2,929
Total $ 17,585 $ 20,513 $ 38,691
Amortization expense for the fiscal years ended October 26,
2014, October 27, 2013, and October 28, 2012, was $9.4 mil-
lion, $9.5 million, and $9.0 million, respectively.
Estimated annual amortization expense for the five fiscal
years after October 26, 2014, is as follows:
(in thousands)
2015 $7,554
2016 5,591
2017 5,118
2018 4,876
2019 4,833
The carrying amounts for indefinite-lived intangible assets are
in the following table. The increase in fiscal 2014 represents
the fair value of the tradenames and website/domain names
acquired with CytoSport.
October 26, October 27,
(in thousands) 2014 2013
Brand/tradename/trademarks $ 495,282 $ 333,275
Other intangibles 7,984 7,984
Total $ 503,266 $ 341,259
During the fourth quarter of fiscal years 2014 and 2013, the
Company completed the required annual impairment tests of
indefinite-lived intangible assets and goodwill, with no impair-
ment indicated. Useful lives of intangible assets were also
reviewed during this process, with no changes identified.