Mondelez 2013 Annual Report Download - page 86

Table of Contents
Intangible assets at December 31, 2013 and 2012 were:
Non-amortizable intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings
Corp., the Spanish and Portuguese operations of United Biscuits, the global LU Biscuit business of Groupe Danone S.A. and
Cadbury Limited. Amortizable intangible assets consist primarily of trademarks, customer-related intangibles, process technology,
licenses and non-compete agreements. At December 31, 2013, the weighted-average life of our amortizable intangible assets was
13.3 years.
Amortization expense for intangible assets was $217 million in 2013, $217 million in 2012 and $225 million in 2011. We currently
estimate amortization expense for each of the next five years to be approximately $217 million.
Changes in goodwill and intangible assets consisted of:
Changes to goodwill and intangible assets were:
In 2013, 2012 and 2011, there were no impairments of goodwill. In connection with our 2013 annual impairment testing, we noted
one reporting unit which was more sensitive to near-term changes in discounted cash flow assumptions: U.S. Confections with
$2,177 million of goodwill as of December 31, 2013 and fair value in excess of its carrying value of net assets of 12%. While the
reporting unit passed the first step of the impairment test, if the segment operating income or another valuation assumption were to
deteriorate significantly in the future, it could adversely affect the estimated fair value of the reporting unit. If we are unsuccessful in
our plans to increase the profitability of this business, the estimated fair value could decline and lead to a potential goodwill
impairment in the future.
79
2013
2012
(in millions)
Non-amortizable intangible assets
$
20,067
$
20,408
Amortizable intangible assets
2,852
2,861
22,919
23,269
Accumulated amortization
(925
)
(717
)
Intangible assets, net
$
21,994
$
22,552
2013
2012
Intangible
Intangible
Goodwill
Assets, at cost
Goodwill
Assets, at cost
(in millions)
Balance at January 1
$
25,740
$
23,269
$
37,234
$
25,712
Changes due to:
Foreign currency
(336
)
(390
)
438
262
Divestitures
(13
)
(7
)
(11,932
)
(2,669
)
Asset impairments
–
–
–
(
52
)
Acquisitions
209
48
–
14
Other
(3
)
(1
)
–
2
Balance at December 31
$
25,597
$
22,919
$
25,740
$
23,269
• Divestitures - In 2013, we reduced goodwill by $13 million and intangible assets by $7 million due to the divestitures of a
chocolate business in Spain, a salty snacks business in Turkey and a confectionery business in South Africa. In 2012,
we reduced goodwill by $11,911 million and intangible assets by $2,666 million due to the divestiture of Kraft Foods
Group. In 2012, we also reduced goodwill by $21 million and intangible assets by $3 million primarily related to the
divestitures in Germany, Belgium and Italy.
• Asset Impairments - In 2013, we did not record any goodwill or intangible asset impairment charges. In 2012, we
recorded $52 million of charges related to a trademark on a Japanese chewing gum product within our Asia Pacific
segment which had significantly lower revenue. The fair value of the intangible asset was determined under a relief of
royalty valuation, which models the cash flows from the trademark assuming royalties were received under a licensing
arrangement. The charges were calculated as the excess of the carrying value of the intangible asset over its estimated
fair value and were recorded within asset impairment and exit costs.
• Acquisitions - In 2013, we increased goodwill by $209 million and intangible assets by $48 million due to the acquisition of our remaining interest in a biscuit operation in Morocco. In 2012, we increased intangible assets by $14 million related
to an acquisition of a license in Pakistan and an acquisition of a trademark in Europe.