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These excerpts taken from the GIS 10-K filed Jul 11, 2008. Goodwill and Other Intangible
Assets Goodwill is not amortized, and is
tested for impairment annually and whenever events or changes in
circumstances indicate that impairment may have occurred.
Impairment testing is performed for each of our reporting units.
We compare the carrying value of a reporting unit, including
goodwill, to the fair value of the unit. Carrying value is based
on the assets and liabilities associated with the operations of
that reporting unit, which often requires allocation of shared
or corporate items among reporting units. If the carrying amount
of a reporting unit exceeds its fair value, we revalue all
assets and liabilities of the reporting unit, excluding
goodwill, to determine if the fair value of the net assets is
greater than the net assets including goodwill. If the fair
value of the net assets is less than the net assets including
goodwill, impairment has occurred. Our estimates of fair value
are determined based on a discounted cash flow model. Growth
rates for sales and profits are determined using inputs from our
annual long-range planning process. We also make estimates of
discount rates, perpetuity growth assumptions, market
comparables, and other factors.
We evaluate the useful lives of our other intangible assets,
primarily intangible assets associated with the
Pillsbury, Totino’s, Progresso,
Green Giant, Old El Paso, Häagen-Dazs,
and Uncle Tobys brands, to determine if they are
finite or indefinite-lived. We determine useful lives by
considering future effects of obsolescence, demand, competition,
other economic factors (such as the stability of the industry,
known technological advances, legislative action that results in
an uncertain or changing regulatory environment, and expected
changes in distribution channels), the level of required
maintenance expenditures, and the expected lives of other
related groups of assets.
Our indefinite-lived intangible assets, primarily brands, also
are tested for impairment annually, and whenever events or
changes in circumstances indicate that their carrying value may
not be recoverable. We performed our fiscal 2008 assessment of
our brand intangibles as of December 1, 2007. Our estimate
of the fair value of the brands was based on a discounted cash
flow model using inputs which included: projected revenues from
our annual long-range plan; assumed royalty rates that could be
payable if we did not own the brands; and a discount rate.
Goodwill and Other Intangible Assets Goodwill is not amortized, and is tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. Impairment testing is performed for each of our reporting units. We compare the carrying value of a reporting unit, including goodwill, to the fair value of the unit. Carrying value is based on the assets and liabilities associated with the operations of that reporting unit, which often requires allocation of shared or corporate items among reporting units. If the carrying amount of a reporting unit exceeds its fair value, we revalue all assets and liabilities of the reporting unit, excluding goodwill, to determine if the fair value of the net assets is greater than the net assets including goodwill. If the fair value of the net assets is less than the net assets including goodwill, impairment has occurred. Our estimates of fair value are determined based on a discounted cash flow model. Growth rates for sales and profits are determined using inputs from our annual long-range planning process. We also make estimates of discount rates, perpetuity growth assumptions, market comparables, and other factors. We evaluate the useful lives of our other intangible assets, primarily intangible assets associated with the Pillsbury, Totino’s, Progresso, Green Giant, Old El Paso, Häagen-Dazs, and Uncle Tobys brands, to determine if they are finite or indefinite-lived. We determine useful lives by considering future effects of obsolescence, demand, competition, other economic factors (such as the stability of the industry, known technological advances, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance expenditures, and the expected lives of other related groups of assets. Our indefinite-lived intangible assets, primarily brands, also are tested for impairment annually, and whenever events or changes in circumstances indicate that their carrying value may not be recoverable. We performed our fiscal 2008 assessment of our brand intangibles as of December 1, 2007. Our estimate of the fair value of the brands was based on a discounted cash flow model using inputs which included: projected revenues from our annual long-range plan; assumed royalty rates that could be payable if we did not own the brands; and a discount rate. This excerpt taken from the GIS 10-Q filed Mar 20, 2008. (4) Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill during fiscal 2008 were as follows:
The changes in the carrying amount of other intangible assets during fiscal 2008 were as follows:
This excerpt taken from the GIS 10-Q filed Dec 19, 2007. (4) Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill during fiscal 2008 were as follows:
The changes in the carrying amount of other intangible assets during fiscal 2008 were as follows:
This excerpt taken from the GIS 10-Q filed Jan 8, 2007. Goodwill and Other Intangible Assets.
Accordingly, we concluded that we had a material weakness in our internal control over financial reporting as of August 27, 2006.
Solely as a result of the aforementioned material weakness, our Chief Executive Officer and Chief Financial Officer have now
concluded that our disclosure controls and procedures were not effective as of August 27, 2006. As of January 4, 2007, we believe
we have remediated the material weakness by changing our policies and procedures to require the performance of a separate annual
impairment assessment of the brand intangibles, and we have completed that assessment. Our assessments for fiscal years 2004, 2005,
2006 and 2007 have confirmed that the fair value of brand intangibles exceeded their carrying value in all years. Therefore, there
were no changes to our consolidated financial statements presented in this report or in our Annual Report on Form 10-K for the
fiscal year ended May 28, 2006.
There were no changes in our internal control over financial reporting during our fiscal quarter ended August 27, 2006, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Page 3
Part II. OTHER INFORMATION
* Previously filed with the Initial Report.
Page 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Page 5
This excerpt taken from the GIS 10-Q filed Jan 5, 2007. Goodwill and Other Intangible Assets Goodwill represents the difference between the purchase prices of acquired companies and the related fair values of net assets acquired. Goodwill is not subject to amortization and is tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. Impairment testing is performed for each of our reporting units. We compare the carrying amount of goodwill for a reporting unit with its fair value and if the carrying amount of goodwill exceeds its fair value, impairment has occurred. Our estimates of fair value are determined based on a discounted cash flow model using inputs from our annual long-range planning process. We also make estimates of discount rates, perpetuity growth assumptions and other factors. Finite and indefinite-lived assets, primarily intangible assets associated with the Pillsbury, Totino’s, Progresso, Green Giant, Old El Paso and Häagen-Dazs brands, are also tested for impairment annually and whenever events or changes in circumstances indicate that their carrying value may not be recoverable. In December 2006, we completed our fiscal 2007 assessment of our brand intangibles as of December 1, 2006. Our estimate of the fair value of the brands was based on a discounted cash flow model using inputs which included: (1) projected revenues from our annual long-range plan, (2) assumed royalty rates which could be payable if we did not own the brands, and (3) a discount rate. All brand intangibles had fair values in excess of their carrying values by at least 20 percent, except for the Pillsbury brand, which we estimated had a fair value less than three percent higher than its carrying value. This brand comprises nearly one-half of our total indefinite-lived intangible assets. If the growth rate for the global revenue from all uses of the Pillsbury brand decreases 50 basis points from the current planned growth rate, fair value would be reduced by approximately $165 million, assuming all other components of the fair value estimate remain unchanged. If the assumed royalty rate for all uses of the Pillsbury brand decreases by 50 basis points, fair value would be reduced by approximately $130 million, assuming all other components of the fair value estimate remain unchanged. If the applicable discount rate increases by 50 basis points, fair value of the Pillsbury brand would be reduced by approximately $175 million, assuming all other components of the fair value estimate remain unchanged. This excerpt taken from the GIS 8-K filed Jan 5, 2007. Goodwill and
Other Intangible Assets. Accordingly, we concluded that we had a material weakness in our internal
control over financial reporting as of May 28, 2006. As of January 4, 2007, we believe we have remediated the material weakness by
changing our policies and procedures to require the performance of a separate annual impairment assessment of the brand
intangibles, and we have completed that assessment.
We have completed the required annual assessment for fiscal years 2004, 2005, 2006 and 2007, and confirmed that the fair value of brand intangibles exceeded their carrying value in all years. Therefore, there were no changes to our consolidated financial statements presented in the Form 10-K or in our Quarterly Report on Form 10-Q for the fiscal quarter ended August 27, 2006 (the “Form 10-Q”).
On January 4, 2007, the Audit Committee of our Board of Directors, after consultation with management and KPMG LLP, our independent registered public accounting firm, concurred with management’s conclusion that we had a material weakness in our internal control over financial reporting and determined that neither management’s report nor KPMG LLP’s report regarding the effectiveness of our internal control over financial reporting contained in the Form 10-K should be relied upon. As a result of this determination, we intend to file an amendment to the Form 10-K to reflect a change in management’s assessment of our disclosure controls and procedures as of May 28, 2006 and to restate Management’s Report on Internal Control Over Financial Reporting. In addition, the amended Form 10-K will include a restated Report of Independent Registered Public Accounting Firm Regarding Internal Control Over Financial Reporting. The amended Form 10-K will not change our consolidated financial statements or the Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements and Related Financial Statement Schedule dated July 27, 2006, included in the Form 10-K.
We also intend to file an amendment to the Form 10-Q to reflect a change in management’s assessment of our disclosure controls and procedures as of August 27, 2006. The amended Form 10-Q will not change our consolidated financial statements included in the Form 10-Q.
The Audit Committee of our Board of Directors has discussed these matters with KPMG LLP.
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