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This excerpt taken from the PBG 8-K filed Sep 16, 2009. Annual Impairment
Testing – The Company completes its
impairment testing of goodwill in accordance with
SFAS No. 142, “Goodwill and Other Intangible
Assets” annually, or more frequently as indicators warrant.
Goodwill and intangible assets with indefinite lives are not
amortized; however, they are evaluated for impairment at least
annually or more frequently if facts and circumstances indicate
that the assets may be impaired. In previous years the Company
completed this test in the fourth quarter using a measurement
date of third quarter-end. During the second quarter ended
June 14, 2008, the Company changed its impairment testing
of goodwill to the third quarter, using a measurement date at
the beginning of the third quarter. With the exception of
Mexico’s intangible assets, the Company has also changed
its impairment testing of intangible assets with indefinite
useful lives to the third quarter, using a measurement date at
the beginning of the third quarter. Impairment testing of
Mexico’s intangible assets with indefinite useful lives was
completed in the fourth quarter to coincide with the completion
of the strategic review of the business.
As a result of this testing, the Company recorded a
$412 million non-cash impairment charge ($277 million
net of tax and noncontrolling interests). The impairment charge
relates primarily to distribution rights and brands for
Electropura water business in Mexico. The impairment charge
relating to these intangible assets was determined based upon
the findings of an extensive strategic review and the
finalization of certain restructuring plans for our Mexican
business. In light of weakening macroeconomic conditions and our
outlook for the business in Mexico, we lowered our expectations
of the future performance, which reduced the value of these
intangible assets and triggered an impairment charge. The fair
value of our franchise rights and distribution rights was
estimated using a multi-period excess earnings method that is
based upon estimated discounted future cash flows. The fair
value of our brands was estimated using a multi-period royalty
savings method, which reflects the savings realized by owning
the brand and, therefore, not having to pay a royalty fee to a
third party.
These excerpts taken from the PBG 10-K filed Feb 20, 2009. Annual Impairment
Testing – The Company completes its
impairment testing of goodwill in accordance with
SFAS No. 142, “Goodwill and Other Intangible
Assets” annually, or more frequently as indicators warrant.
Goodwill and intangible assets with indefinite lives are not
amortized; however, they are evaluated for impairment at least
annually or more frequently if facts and circumstances indicate
that the assets may be impaired. In previous years the Company
completed this test in the fourth quarter using a measurement
date of third quarter-end. During the second quarter ended
June 14, 2008, the Company changed its impairment testing
of goodwill to the third quarter, using a measurement date at
the beginning of the third quarter. With the exception of
Mexico’s intangible assets, the Company has also changed
its impairment testing of intangible assets with indefinite
useful lives to the third quarter, using a measurement date at
the beginning of the third quarter. Impairment testing of
Mexico’s intangible assets with indefinite useful lives was
completed in the fourth quarter to coincide with the completion
of the strategic review of the business.
As a result of this testing, the Company recorded a
$412 million non-cash impairment charge ($277 million
net of tax and minority interest). The impairment charge relates
primarily to distribution rights and brands for Electropura
water business in Mexico. The impairment charge relating to
these intangible assets was determined based upon the findings
of an extensive strategic review and the finalization of certain
restructuring plans for our Mexican business. In light of
weakening macroeconomic conditions and our outlook for the
business in Mexico, we lowered our expectations of the future
performance, which reduced the value of these intangible assets
and triggered an impairment charge. The fair value of our
franchise rights and distribution rights was estimated using a
multi-period excess earnings method that is based upon estimated
discounted future cash flows. The fair value of our brands was
estimated using a multi-period royalty savings method, which
reflects the savings realized by owning the brand and,
therefore, not having to pay a royalty fee to a third party.
Annual Impairment Testing – The Company completes its impairment testing of goodwill in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” annually, or more frequently as indicators warrant. Goodwill and intangible assets with indefinite lives are not amortized; however, they are evaluated for impairment at least annually or more frequently if facts and circumstances indicate that the assets may be impaired. In previous years the Company completed this test in the fourth quarter using a measurement date of third quarter-end. During the second quarter ended June 14, 2008, the Company changed its impairment testing of goodwill to the third quarter, using a measurement date at the beginning of the third quarter. With the exception of Mexico’s intangible assets, the Company has also changed its impairment testing of intangible assets with indefinite useful lives to the third quarter, using a measurement date at the beginning of the third quarter. Impairment testing of Mexico’s intangible assets with indefinite useful lives was completed in the fourth quarter to coincide with the completion of the strategic review of the business. As a result of this testing, the Company recorded a $412 million non-cash impairment charge ($277 million net of tax and minority interest). The impairment charge relates primarily to distribution rights and brands for Electropura water business in Mexico. The impairment charge relating to these intangible assets was determined based upon the findings of an extensive strategic review and the finalization of certain restructuring plans for our Mexican business. In light of weakening macroeconomic conditions and our outlook for the business in Mexico, we lowered our expectations of the future performance, which reduced the value of these intangible assets and triggered an impairment charge. The fair value of our franchise rights and distribution rights was estimated using a multi-period excess earnings method that is based upon estimated discounted future cash flows. The fair value of our brands was estimated using a multi-period royalty savings method, which reflects the savings realized by owning the brand and, therefore, not having to pay a royalty fee to a third party. | EXCERPTS ON THIS PAGE:
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