Sara Lee 2009 Annual Report Download - page 70

Notes to financial statements
Dollars in millions except per share data
The year-over-year change in the value of trademarks and brand
names is primarily due to changes in foreign currency exchange rates.
The amortization expense reported in continuing operations for
intangible assets subject to amortization was $112 in 2009, $120
in 2008 and $112 in 2007. The estimated amortization expense
for the next five years, assuming no change in the estimated useful
lives of identifiable intangible assets or changes in foreign exchange
rates, is as follows: $107 in 2010, $105 in 2011, $56 in 2012,
$44 in 2013 and $34 in 2014. At June 27, 2009, the weighted
average remaining useful life for trademarks is 15 years; customer
relationships is 16 years; computer software is 3 years; and other
contractual agreements is 2 years.
During 2009, the corporation recognized impairment charges of
$79 related to certain trademarks associated with the International
Bakery segment. These charges are more fully described in Note 3
to the Consolidated Financial Statements, “Impairment Charges.”
In 2009, trademarks of $8 and customer relationships and other
contractual agreements of $3 were recognized with the acquisition
of the Café Moka beverage business in Brazil.
During 2008, the corporation recognized impairment charges of $13
related to certain trademarks that are related to the North American
Retail segment. These charges are more fully described in Note 3 to
the Consolidated Financial Statements, “Impairment Charges.”
During 2007, the corporation recognized impairment charges
of $26 and $16 related to certain trademarks that are used in the
International Beverage and North American Fresh Bakery segments,
respectively. These charges are more fully described in Note 3 to the
Consolidated Financial Statements, “Impairment Charges.” In addi-
tion, as a result of the annual impairment review, the corporation
concluded that certain trademarks were no longer indefinite-lived
and amortization was initiated. Trademarks of $28 and certain other
intangible assets of $2 were acquired in 2007 in the International
Household and Body Care segment.
68 Sara Lee Corporation and Subsidiaries
Goodwill In 2009, the International Beverage segment acquired
Café Moka, a Brazilian based producer and wholesaler of coffee,
and recognized $18 of goodwill.
In 2009, non-deductible goodwill of $107 and $124 was
impaired in the North American foodservice beverage and Spanish
bakery reporting units, respectively. These charges are more fully
described in Note 3 to the Consolidated Financial Statements,
“Impairment Charges.”
In 2008, non-deductible goodwill of $382 and $400 was
impaired in the North American foodservice bakery and Spanish
bakery reporting units, respectively. These charges are more fully
described in Note 3 to the Consolidated Financial Statements,
“Impairment Charges.”
In 2008, the corporation determined that the amount of goodwill
attributed to certain reporting units needed to be revised. Goodwill
has been reallocated based upon the relative fair value of the
reporting units that existed at the time the corporation realigned
its business units into new segments during 2006. During 2006
and through the first quarter of 2008, the goodwill allocated to the
International Bakery segment had been denominated in U.S. dollars.
In the second quarter of 2008, the corporation determined that
goodwill allocated to its International Bakery segment should have
been denominated in European euros and subject to translation
into the company’s reporting currency from 2006 to present. While
the adjustment related to the reallocation of goodwill had no impact
on the corporation’s total goodwill value, the adjustment related
to the redenomination of goodwill had the impact of increasing
the corporation’s total value of goodwill and increasing the total
currency translation adjustment included in the accumulated other
comprehensive income section of stockholders’ equity and other
comprehensive income.
The goodwill reported in continuing operations associated with
each business segment and the changes in those amounts during
2009 and 2008 are as follows:
North International
North American North Household
American Fresh American International International and
Retail Bakery Foodservice Beverage Bakery Body Care Total
Net book value at June 30, 2007 $102 $284 $«954 $193 $«622 $543 $2,698
Impairments – – (382) – (400) – (782)
Reclass to net assets held for sale – – (19) – – – (19)
Reallocation – 3 48 – (51) – –
Redenomination – – – 24 63 19 106
Foreign exchange/other – – – 46 110 64 220
Net book value at June 28, 2008 $102 $287 $«601 $263 $«344 $626 $2,223
Impairments – – (107) – (124) – (231)
Acquisition –––18––18
Foreign exchange/other 1 – – (51) (39) (58) (147)
Net book value at June 27, 2009 $103 $287 $«494 $230 $«181 $568 $1,863