Dunkin' Donuts 2011 Annual Report Download - page 93

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During the fourth quarter of 2011, management concluded that indicators of potential impairment were present
related to our investment in BR Korea based on continued declines in the operating performance and future
projections of the Korea Dunkin’ Donuts business. Accordingly, the Company engaged an independent third-
party valuation specialist to assist the Company in determining the fair value of our investment in BR Korea. The
valuation was completed using a combination of discounted cash flow and income approaches to valuation.
Based in part on the fair value determined by the independent third-party valuation specialist, the Company
determined that the carrying value of the investment in BR Korea exceeded fair value by $19.8 million, and as
such the Company recorded an impairment charge in that amount in the fourth quarter of 2011. The impairment
charge was allocated to the underlying goodwill, intangible assets, and long-lived assets of BR Korea, and
therefore resulted in a reduction in depreciation and amortization, net of tax, of $1.0 million, in fiscal year 2011,
which is recorded within equity in net income (loss) of joint ventures in the consolidated statements of
operations.
Total estimated amortization expense, net of deferred tax benefits, to be included in equity in net income of joint
ventures for fiscal years 2012 through 2016 is as follows (in thousands):
Fiscal year:
2012 ................................................ $710
2013 ................................................ 634
2014 ................................................ 553
2015 ................................................ 467
2016 ................................................ 375
(7) Goodwill and other intangible assets
The changes and carrying amounts of goodwill by reporting unit were as follows (in thousands):
Goodwill
Dunkin’
Donuts U.S.
Dunkin’
Donuts
International
Baskin-
Robbins
International Total
Balances at December 26, 2009:
Goodwill .................................... $1,148,016 10,275 24,037 1,182,328
Accumulated impairment charges ................. (270,441) — (24,037) (294,478)
Net balance at December 26, 2009 .................... 877,575 10,275 — 887,850
Goodwill acquired ............................. 780 — — 780
Effects of foreign currency adjustments ............ — 25 — 25
Balances at December 25, 2010:
Goodwill .................................... 1,148,796 10,300 24,037 1,183,133
Accumulated impairment charges ................. (270,441) — (24,037) (294,478)
Net balance at December 25, 2010 .................... 878,355 10,300 — 888,655
Goodwill acquired ............................. 2,344 — — 2,344
Effects of foreign currency adjustments ............ — (7) — (7)
Balances at December 31, 2011:
Goodwill .................................... 1,151,140 10,293 24,037 1,185,470
Accumulated impairment charges ................. (270,441) — (24,037) (294,478)
Net balance at December 31, 2011 .................... $ 880,699 10,293 — 890,992
The goodwill acquired during fiscal years 2011 and 2010 is related to the acquisition of certain company-owned
points of distribution.
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