Kraft 2013 Annual Report Download - page 55

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Note 4. Goodwill and Intangible Assets
Goodwill by reportable segment at December 28, 2013 and December 29, 2012 was:
December 28, 2013 December 29, 2012
(in millions)
Beverages $ 1,290 $ 1,290
Cheese 3,000 3,000
Refrigerated Meals 985 985
Meals & Desserts 1,572 1,572
Enhancers & Snack Nuts 2,644 2,644
Canada 1,141 1,225
Other Businesses 873 883
Goodwill $ 11,505 $ 11,599
Intangible assets were $2.2 billion at December 28, 2013 and December 29, 2012 and consisted primarily of
indefinite-lived trademarks.
Changes in goodwill and intangible assets consisted of:
2013 2012
Goodwill Intangible assets, at cost Goodwill Intangible assets, at cost
(in millions)
Balance at beginning of year $ 11,599 2,228 11,569 2,227
Acquisitions — 1 — —
Changes due to foreign currency (94) — 30 1
Balance at end of year $ 11,505 $ 2,229 $ 11,599 $ 2,228
There were no impairments of goodwill or indefinite-lived intangible assets in 2013, 2012, or 2011. During our 2013
intangible asset impairment review, we noted that a $261 million trademark within our Enhancers business had an
excess fair value over its carrying value of 12%. While this trademark passed the first step of the impairment test, if
its forecasted operating income were to decline significantly, it could adversely affect the estimated fair value of the
trademark, leading to a potential impairment of a portion of the trademark in the future.
Note 5. Cost Savings Initiatives
Cost savings initiatives related to reorganization activities including severance, asset disposals, and other activities
that do not qualify for special accounting treatment as exit or disposal activities. Included within cost saving
initiatives are activities related to the previously disclosed multi-year $650 million restructuring program approved by
Kraft’s Board of Directors on October 29, 2012 (the “Restructuring Program”). We have reduced our estimate of the
total Restructuring Program costs to $625 million.
Restructuring Program:
Our Restructuring Program consists of approximately $270 million of restructuring costs, approximately $285 million
of implementation costs, and approximately $70 million of Spin-Off transition costs. We expect approximately one-
half of these costs will be cash expenditures. Restructuring costs reflect primarily severance, asset disposals, a
voluntary early retirement program and other manufacturing-related costs. Implementation costs are directly
attributable to the Restructuring Program; however, they do not qualify for special accounting treatment as exit or
disposal activities. These costs primarily relate to reorganization costs related to our sales function, the information
systems infrastructure, and accelerated depreciation on assets. Spin-Off transition costs have not been allocated to
the segments because they consist mostly of professional service fees within the finance, legal, and information
systems functions.