Kraft 2009 Annual Report Download - page 74

Intangible assets at December 31, 2009 and 2008 were:
2009 2008
(in millions)
Non-amortizable intangible assets $ 13,262 $ 12,758
Amortizable intangible assets 278 254
13,540 13,012
Accumulated amortization (111) (86)
Intangible assets, net $ 13,429 $ 12,926
Non-amortizable intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., LU Biscuit
and the Spanish and Portuguese operations of United Biscuits. Amortizable intangible assets consist primarily of trademark licenses,
customer-related intangibles and non-compete agreements.
The movements in goodwill and intangible assets were:
2009 2008
Goodwill
Intangible
Assets, at cost Goodwill
Intangible
Assets, at cost
(in millions)
Balance at January 1 $ 27,581 $ 13,012 $ 31,193 $ 12,262
Changes due to:
Foreign currency 1,200 544 (1,062) (516)
Acquisitions - - (1,187) 1,356
Divestitures (17) - (1,272) (37)
Asset impairments - (12) (35) (53)
Other - (4) (56) -
Balance at December 31 $ 28,764 $ 13,540 $ 27,581 $ 13,012
Changes to goodwill and intangible assets during 2009 were:
• Divestitures - We reduced goodwill by $17 million due to the divestiture of our Balance bar operations in the U.S.
• Asset impairments - During our 2009 review of goodwill and non-amortizable intangible assets, we recorded a $12 million charge for
the impairment of intangible assets in the Netherlands.
Changes to goodwill and intangible assets during 2008 were:
• Acquisitions - We decreased goodwill by $1,187 million and increased intangible assets by $1,356 million primarily due to refinements
of preliminary allocations of the purchase price for our acquisition of LU Biscuit. The allocations were based upon appraisals that were
finalized in the third quarter of 2008.
• Divestitures - We reduced goodwill by $1,234 million due to the split-off of our Post cereals business, and we reduced goodwill by $38
million and intangible assets by $37 million due to the divestiture of an operation in Spain.
• Asset impairments - We recorded asset impairment charges of $34 million to goodwill and $1 million to intangible assets in connection
with the divestiture of a Nordic and Baltic snacks operation. We also recorded asset impairment charges of $1 million to goodwill and
$8 million to intangible assets in connection with the anticipated divestiture of a juice operation in Brazil. In addition, during our 2008
review of goodwill and non-amortizable intangible assets, we recorded a $44 million charge for the impairment of intangible assets in
the Netherlands, France and Puerto Rico.
• Other - We reduced goodwill by $56 million primarily related to a reconciliation of our inventory of deferred tax items that also resulted
in a write-down of our net deferred tax liabilities.
Amortization expense for intangible assets was $26 million in 2009, $23 million in 2008 and $13 million in 2007. We currently estimate
amortization expense for each of the next five years to be approximately $15 million or less.
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Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠