Philip Morris International Inc. | 2013 | FY | 3


Goodwill and Other Intangible Assets, net:
Goodwill and other intangible assets, net, by segment were as follows:
 
Goodwill
 
Other Intangible Assets, net
(in millions)
December 31, 2013
 
December 31, 2012
 
December 31, 2013
 
December 31, 2012
European Union
$
1,472

 
$
1,448

 
$
604

 
$
647

Eastern Europe, Middle East & Africa
617

 
637

 
228

 
242

Asia
3,960

 
4,791

 
1,251

 
1,542

Latin America & Canada
2,844

 
3,024

 
1,110

 
1,188

Total
$
8,893

 
$
9,900

 
$
3,193

 
$
3,619









































47
Goodwill is due primarily to PMI’s acquisitions in Canada, Indonesia, Mexico, Greece, Serbia, Colombia and Pakistan, as well as the business combination in the Philippines. The movements in goodwill were as follows:
(in millions)
 
European
Union
 
Eastern Europe,
Middle East
&
Africa
 
Asia
 
Latin
America &
Canada
 
Total
Balance at January 1, 2012
 
$
1,392

 
$
666

 
$
4,966

 
$
2,904

 
$
9,928

Changes due to:
 
 
 
 
 
 
 
 
 
 
Currency
 
56

 
(29
)
 
(175
)
 
120

 
(28
)
Balances, December 31, 2012
 
1,448

 
637

 
4,791

 
3,024

 
9,900

Changes due to:
 
 
 
 
 
 
 
 
 
 
Currency
 
24

 
(20
)
 
(831
)
 
(180
)
 
(1,007
)
Balance at December 31, 2013
 
$
1,472

 
$
617

 
$
3,960

 
$
2,844

 
$
8,893

Additional details of other intangible assets were as follows:
 
December 31, 2013
 
December 31, 2012
(in millions)
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Gross
Carrying
Amount

 
Accumulated
Amortization

Non-amortizable intangible assets
$
1,798

 
 
 
$
2,046

 
 
Amortizable intangible assets
1,940

 
$
545

 
2,046

 
$
473

Total other intangible assets
$
3,738

 
$
545

 
$
4,092

 
$
473



Non-amortizable intangible assets substantially consist of trademarks from PMI’s acquisitions in Indonesia in 2005 and Mexico in 2007. Amortizable intangible assets primarily consist of certain trademarks, distribution networks and non-compete agreements associated with business combinations. The gross carrying amount, range of useful lives as well as the weighted-average remaining useful life of amortizable intangible assets at December 31, 2013, were as follows:
Description (in millions)
Gross
Carrying
Amount
Initial Estimated
Useful Lives
    
Weighted-Average
Remaining Useful Life
Trademarks
$
1,586

2 - 40 years
    
24 years
Distribution networks
160

20 - 30 years
    
14 years
Non-compete agreements
135

3 - 10 years
    
1 year
Other (including farmer contracts and intellectual property rights)
59

12.5 - 17 years
    
12 years
 
$
1,940

 
 
 


Pre-tax amortization expense for intangible assets during the years ended December 31, 2013, 2012 and 2011, was $93 million, $97 million and $98 million, respectively. Amortization expense for each of the next five years is estimated to be approximately $93 million, assuming no additional transactions occur that require the amortization of intangible assets.

The decrease in the gross carrying amount of other intangible assets from December 31, 2012, was due primarily to currency movements.

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