Kraft 2006 Annual Report Download - page 66

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At December 31, 2006 and 2005, goodwill by reportable segment was as follows (in millions):
2006
2005
North America Beverages $ 1,372 $ 1,372
North America Cheese & Foodservice 4,218 4,216
North America Convenient Meals 2,167 2,167
North America Grocery 3,058 3,058
North America Snacks & Cereals 8,696 8,990
European Union 5,004 3,858
Developing Markets, Oceania & North Asia 1,038 987
Total goodwill $ 25,553 $ 24,648
Intangible assets at December 31, 2006 and 2005, were as follows (in millions):
2006
2005
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Non-amortizable intangible assets $ 10,150 $ 10,482
Amortizable intangible assets 94 $ 67 95 $ 61
Total intangible assets $ 10,244 $ 67 $ 10,577 $ 61
Non-amortizable intangible assets consist substantially of brand names purchased through the Nabisco acquisition. Amortizable intangible assets consist
primarily of certain trademark licenses and non-compete agreements. Amortization expense for intangible assets was $7 million, $10 million and $11 million for
the years ended December 31, 2006, 2005 and 2004, respectively. Amortization expense for each of the next five years is currently estimated to be approximately
$10 million or less.
The movement in goodwill and gross carrying amount of intangible assets is as follows:
2006
2005
Goodwill
Intangible
Assets
Goodwill
Intangible
Assets
(in millions)
Balance at January 1 $ 24,648 $ 10,577 $ 25,177 $ 10,685
Changes due to:
Currency 454 1 (508) 10
Acquisitions 734 217
Divestitures (196) (356) (18)
Asset impairment (40) (131) (13) (118)
Other (47) (64) 10
Balance at December 31 $ 25,553 $ 10,244 $ 24,648 $ 10,577
The increase in goodwill and intangible assets from acquisitions is related to preliminary allocations of purchase price for the Company's acquisition of
certain United Biscuits operations and Nabisco trademarks as discussed in Note 6.Acquisitions. The allocations are based upon preliminary estimates and
assumptions and are subject to revision when appraisals are finalized, which is expected to occur during the first half of 2007.
61
Source: KRAFT FOODS INC, 10-K, March 01, 2007