Sara Lee 2011 Annual Report Download - page 92

NOTES TO FINANCIAL STATEMENTS
North North
American American International International
In millions Retail Foodservice Beverage Bakery Total Net book value at
June 27, 2009
Gross goodwill $103 $«729 $322 $«705 $«1,859 Accumulated
impairment losses – (489) (92) (524) (1,105)
Net goodwill 103 240 230 181 754 Foreign exchange/other – – (16) (19) (35) Net book value at
July 3, 2010
Gross goodwill 103 729 306 686 1,824 Accumulated
impairment losses – (489) (92) (524) (1,105)
Net goodwill 103 240 214 162 719 Foreign exchange/other – – 38 26 64 Acquisitions 36 – 23 – 59 Held for sale – (31) – – (31) Net book value at
July 2, 2011
Gross goodwill 139 698 367 712 1,916 Accumulated
impairment losses – (489) (92) (524) (1,105)
Net goodwill $139 $«209 $275 $«188 $÷÷811 Note 4 – Impairment Charges The corporation recognized impairment charges in 2011, 2010 and 2009 and the significant impairments are reported on the “Impairment charges” line of the Consolidated Statements of Income. The tax benefit is determined using the statutory tax rates for the tax jurisdiction in which the impairment occurred. The impact of these charges is summarized in the following tables:
Pretax
Impairment After Tax
In millions Charge Tax Benefit Charge 2011 North American Foodservice $÷15 $÷5 $÷10 International Beverage 624 Total impairments – 2011 $÷21 $÷7 $÷14 2010 North American Foodservice $÷15 $÷5 $÷10 International Bakery 1349 Total impairments – 2010 $÷28 $÷9 $÷19 2009 North American Foodservice $107 $÷– $107 International Bakery 207 25 182 Total impairments – 2009 $314 $25 $289
The year-over-year change in the value of trademarks and brand
names and customer relationships is primarily due to changes in foreign currency exchange rates and the impact of acquisitions during the year. In 2011, the North American Retail and International Beverage segments acquired companies that created $47 million of trademarks and brand names, $34 million of customer rela- tionships and $5 million of other contractual agreements. The amortization expense reported in continuing operations for intangible assets subject to amortization was $62 million in 2011, $55 million in 2010 and $59 million in 2009. 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: $44 million in 2012, $40 million in 2013, $36 million in 2014, $31 million in 2015 and $14 million in 2016. At July 2, 2011, the weighted average remaining useful life for trade- marks is 18 years; customer relationships is 13 years; computer software is 4 years; and other contractual agreements is 8 years.
During 2009, the corporation recognized impairment charges
of $79 million related to certain trademarks associated with the International Bakery segment. These charges are more fully described in Note 4 to the Consolidated Financial Statements, “Impairment Charges.” In 2009, trademarks of $8 million and customer relation- ships and other contractual agreements of $3 million were recognized with the acquisition of the Café Moka, a Brazilian based producer and wholesaler of coffee. Goodwill In November 2010, the International Beverage segment acquired Damasco, a Brazilian coffee company, for $32 million and assumed debt of $27 million and recognized $23 million of goodwill. In May 2011, the North American Retail segment acquired Aidells, a gourmet sausage company, for $87 million and recognized $36 mil- lion of goodwill. In 2009 the International Beverage segment acquired Café Moka, a Brazilian coffee company, for $10 million and assumed debt of $20 million and recognized $18 million of goodwill.
In 2009, non-deductible goodwill of $107 million and $124 million
was impaired in the North American foodservice beverage and Spanish bakery reporting units, respectively. These charges are more fully described in Note 4 to the Consolidated Financial Statements, “Impairment Charges.”
The goodwill reported in continuing operations associated with
each business segment and the changes in those amounts during 2011 and 2010 are as follows: