2. GOODWILL AND INTANGIBLE ASSETS
Time Warner has a significant number of intangible assets, acquired film and television libraries and other copyrighted products and tradenames. Certain intangible assets are deemed to have finite lives and, accordingly, are amortized over their estimated useful lives, while others are deemed to be indefinite-lived and therefore are not amortized. Goodwill and indefinite-lived intangible assets, primarily certain tradenames, are tested annually for impairment during the fourth quarter, or earlier upon the occurrence of certain events or substantive changes in circumstances.
Goodwill
The following summary of changes in the Company's Goodwill during the years ended December 31, 2013 and 2012, by reportable segment, is as follows (millions):
| December 31, 2011 | Acquisitions, Dispositions and Adjustments | Translation Adjustments | December 31, 2012 | Acquisitions, Dispositions and Adjustments | Translation Adjustments | December 31, 2013 | ||||||||||||||||
| Turner | ||||||||||||||||||||||
| Gross goodwill | $ | 27,201 | $ | 129 | $ | (1) | $ | 27,329 | $ | 7 | $ | (18) | $ | 27,318 | ||||||||
| Impairments | (13,277) | (61) | - | (13,338) | - | - | (13,338) | |||||||||||||||
| Net goodwill | 13,924 | 68 | (1) | 13,991 | 7 | (18) | 13,980 | |||||||||||||||
| Home Box Office | ||||||||||||||||||||||
| Gross goodwill | 7,309 | - | - | 7,309 | 122 | - | 7,431 | |||||||||||||||
| Impairments | - | - | - | - | - | - | - | |||||||||||||||
| Net goodwill | 7,309 | - | - | 7,309 | 122 | - | 7,431 | |||||||||||||||
| Warner Bros. | ||||||||||||||||||||||
| Gross goodwill | 9,754 | 328 | 5 | 10,087 | (9) | 3 | 10,081 | |||||||||||||||
| Impairments | (4,091) | - | - | (4,091) | - | - | (4,091) | |||||||||||||||
| Net goodwill | 5,663 | 328 | 5 | 5,996 | (9) | 3 | 5,990 | |||||||||||||||
| Time Inc. | ||||||||||||||||||||||
| Gross goodwill | 18,421 | (7) | 24 | 18,438 | - | 12 | 18,450 | |||||||||||||||
| Impairments | (15,288) | - | - | (15,288) | - | - | (15,288) | |||||||||||||||
| Net goodwill | 3,133 | (7) | 24 | 3,150 | - | 12 | 3,162 | |||||||||||||||
| Time Warner | ||||||||||||||||||||||
| Gross goodwill | 62,685 | 450 | 28 | 63,163 | 120 | (3) | 63,280 | |||||||||||||||
| Impairments | (32,656) | (61) | - | (32,717) | - | - | (32,717) | |||||||||||||||
| Net goodwill | $ | 30,029 | $ | 389 | $ | 28 | $ | 30,446 | $ | 120 | $ | (3) | $ | 30,563 | ||||||||
The performance of the Company's annual impairment analysis did not result in any impairments of Goodwill in 2013, 2012 or 2011. Refer to Note 1 for a discussion of the 2013 annual impairment test. For the year ended December 31, 2012, the Turner segment recognized impairments of Goodwill related to the shutdown of Imagine (see Note 3 for additional information).
The increase in Goodwill for the year ended December 31, 2013 at the Home Box Office segment is primarily related to the acquisition of HBO Asia and South Asia (see Note 3 for additional information). The increase in Goodwill for the year ended December 31, 2012 at the Turner segment is primarily related to the acquisition of Bleacher Report (see Note 3 for additional information). The increase in Goodwill for the year ended December 31, 2012 at the Warner Bros. segment is primarily related to contingent consideration earned by the former shareholders of TT Games Limited, which was acquired by the Company in 2007, upon achieving certain earnings targets specified in the acquisition agreement. Such amount has been accounted for in accordance with business combination guidance in place at the time of the acquisition.
Intangible Assets
The Company recorded noncash impairments of intangible assets during the years ended December 31, 2013, 2012 and 2011 by reportable segment, as follows (millions):
| Year Ended December 31, | ||||||||||
| 2013 | 2012 | 2011 | ||||||||
| Turner | $ | 18 | $ | 79 | $ | 5 | ||||
| Warner Bros. | 1 | 1 | 1 | |||||||
| Time Inc. | 78 | - | 13 | |||||||
| Time Warner | $ | 97 | $ | 80 | $ | 19 | ||||
For the year ended December 31, 2013, the Company recorded an impairment of intangible assets at the Time Inc. segment in connection with the performance of its annual impairment analysis as well as in connection with triggering events affecting two of its tradenames. For the year ended December 31, 2012, the Turner segment recognized impairments of both Goodwill and intangible assets related to the shutdown of Imagine (see Note 3 for additional information). The impairments noted above did not result in non-compliance with respect to any debt covenants.
The Company's intangible assets subject to amortization and related accumulated amortization consisted of the following (millions):
| December 31, 2013 | December 31, 2012 | ||||||||||||||||||
| Gross | Accumulated Amortization(a) | Net | Gross | Accumulated Amortization(a) | Net | ||||||||||||||
| Intangible assets subject to | |||||||||||||||||||
| amortization: | |||||||||||||||||||
| Film library | $ | 3,452 | $ | (2,494) | $ | 958 | $ | 3,452 | $ | (2,345) | $ | 1,107 | |||||||
| Brands, tradenames and other | |||||||||||||||||||
| intangible assets | 2,156 | (1,194) | 962 | 2,145 | (1,144) | 1,001 | |||||||||||||
| Total | $ | 5,608 | $ | (3,688) | $ | 1,920 | $ | 5,597 | $ | (3,489) | $ | 2,108 | |||||||
| ____________ | |||||||||||||||||||
(a) The film library is amortized using a film forecast computation methodology. Amortization of brands, tradenames and other intangible assets subject to amortization is provided generally on a straight-line basis over their respective useful lives.
Effective January 1, 2014, certain tradenames at the Time Inc. segment with a carrying value totaling approximately $586 million that were previously assigned indefinite lives have been assigned finite lives of 17 years and will begin to be amortized starting in January 2014.
The Company recorded amortization expense of $251 million in 2013 compared to $248 million in 2012 and $269 million in 2011. Amortization may vary as acquisitions and dispositions occur in the future and as purchase price allocations are finalized. The Company's estimated amortization expense for the succeeding five years ended December 31 is as follows (millions):
| 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||
| Estimated amortization expense | $ | 274 | $ | 259 | $ | 249 | $ | 241 | $ | 236 | ||||||