Intangible Assets and Goodwill

12 Months Ended

Jun. 28, 2014

Intangible Assets

The primary components of the intangible assets reported in continuing operations and the related amortization expense are as follows:



In millions	Gross Value		Accumulated Amortization		Net Book Value
2014
Intangible assets subject to amortization
Trademarks and brand names	$	87	$	5	$	82
Customer relationships	131		49		82
Computer software	143		123		20
Other contractual agreements	13		1		12
	$	374	$	178	196
Trademarks and brand names not subject to amortization					44
Net book value of intangible assets					$	240
2013
Intangible assets subject to amortization
Trademarks and brand names	31		4		27
Customer relationships	72		46		26
Computer software	133		112		21
Other contractual agreements	3		—		3
	$	239	$	162	77
Trademarks and brand names not subject to amortization					44
Net book value of intangible assets					$	121

The company made two acquisitions during 2014 to further broaden its product offerings and to facilitate extension into additional categories. On September 6, 2013, the Retail segment acquired 100% of the common stock of Formosa Meat Company, Inc. (“Golden Island”) for $35 million. On May 15, 2014, the Retail segment acquired 100% of the capital stock of Healthy Frozen Food, Inc. (“Van's”) for approximately $165 million, net of cash acquired. As a result of the acquisitions, the company recognized a total of $104 million of goodwill and $125 million of brand names, customer relationships, and other intangibles.

The year-over-year change in the value of trademarks and brand names and customer relationships is primarily due to the acquisitions of Golden Island and Van's and the impact of amortization during the year. The amortization expense reported in continuing operations for intangible assets subject to amortization was $19 million in 2014, $17 million in 2013 and $21 million in 2012. 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: $22 million in 2015, $14 million in 2016, $14 million in 2017, $14 million in 2018 and $11 million in 2019. At June 28, 2014, the weighted average remaining useful life for trademarks is 19 years; customer relationships is 17 years; computer software is 2 years; and other contractual agreements is 9 years.

Goodwill

The goodwill reported in continuing operations associated with each business segment and the changes in those amounts during 2014 and 2013 are as follows:



In millions	Retail		Foodservice/Other			Total
Net Book Value at June 30, 2012
Gross goodwill	$	139	$	591		$	730
Accumulated impairment losses	—		(382		)	(382		)
Net goodwill	139		209			348
Net Book Value at June 29, 2013
Gross goodwill	139		591			730
Accumulated impairment losses	—		(382		)	(382		)
Net goodwill	139		209			348
Acquisitions	104		—			104
Net Book Value at June 28, 2014
Gross goodwill	243		591			834
Accumulated impairment losses	—		(382		)	(382		)
Net goodwill	$	243	$	209		$	452

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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