18. Goodwill and other intangible assets

As of December 31, the acquisition cost and accumulated amortization of intangible assets consisted of the following:

ACQUISITION COST


€ in millions As of Jan. 1, 2010 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2010
Goodwill 10,356 587 355 4 162 0 11,464
Patents, product and distribution rights 538 35 4 39 2 1 617
Tradenames 161 12 - - - 0 173
Technology 69 6 8 0 0 0 83
Non-compete agreements 157 12 20 - - 5 184
Management contracts 153 13 0 0 -162 0 4
Other 423 32 15 35 - 21 484
Goodwill and other intangible assets 11,857 697 402 78 2 27 13,009

€ in millions As of Jan. 1, 2010 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2010
Goodwill 10,356 587 355 4 162 0 11,464
Patents, product and distribution rights 538 35 4 39 2 1 617
Tradenames 161 12 - - - 0 173
Technology 69 6 8 0 0 0 83
Non-compete agreements 157 12 20 - - 5 184
Management contracts 153 13 0 0 -162 0 4
Other 423 32 15 35 - 21 484
Goodwill and other intangible assets 11,857 697 402 78 2 27 13,009

AMORTIZATION


€ in millions As of Jan. 1, 2010 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2010
Goodwill 0 0 0 0 0 0 0
Patents, product and distribution rights 93 4 - 43 - 1 139
Tradenames 0 0 0 0 0 0 0
Technology 12 1 0 6 0 0 19
Non-compete agreements 109 8 0 13 - 5 125
Management contracts 0 0 0 0 0 0 0
Other 234 22 - 43 - 21 278
Goodwill and other intangible assets 448 35 - 105 - 27 561

€ in millions As of Jan. 1, 2010 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2010
Goodwill 0 0 0 0 0 0 0
Patents, product and distribution rights 93 4 - 43 - 1 139
Tradenames 0 0 0 0 0 0 0
Technology 12 1 0 6 0 0 19
Non-compete agreements 109 8 0 13 - 5 125
Management contracts 0 0 0 0 0 0 0
Other 234 22 - 43 - 21 278
Goodwill and other intangible assets 448 35 - 105 - 27 561

ACQUISITION COST


€ in millions As of Jan. 1, 2009 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2009
Goodwill 10,383 -252 220 5 - 0 10,356
Patents, product and distribution rights 540 -14 - 12 1 1 538
Tradenames 166 -5 0 - - - 161
Technology 71 -2 0 0 0 0 69
Non-compete agreements 158 -5 3 1 0 0 157
Management contracts 158 -5 0 0 - 0 153
Other 361 -4 11 54 6 5 423
Goodwill and other intangible assets 11,837 -287 234 72 7 6 11,857

€ in millions As of Jan. 1, 2009 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2009
Goodwill 10,383 -252 220 5 - 0 10,356
Patents, product and distribution rights 540 -14 - 12 1 1 538
Tradenames 166 -5 0 - - - 161
Technology 71 -2 0 0 0 0 69
Non-compete agreements 158 -5 3 1 0 0 157
Management contracts 158 -5 0 0 - 0 153
Other 361 -4 11 54 6 5 423
Goodwill and other intangible assets 11,837 -287 234 72 7 6 11,857

AMORTIZATION


€ in millions As of Jan. 1, 2009 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2009
Goodwill 4 0 -4 0 0 0 0
Patents, product and distribution rights 54 -1 - 41 - 1 93
Tradenames 0 0 0 0 0 0 0
Technology 8 0 0 4 0 0 12
Non-compete agreements 102 -4 0 11 - 0 109
Management contracts 0 0 0 0 0 0 0
Other 212 -2 - 31 - 7 234
Goodwill and other intangible assets 380 -7 -4 87 - 8 448

€ in millions As of Jan. 1, 2009 Foreign currency translation Changes in entities consolidated Additions Reclassifications Disposals As of Dec. 31, 2009
Goodwill 4 0 -4 0 0 0 0
Patents, product and distribution rights 54 -1 - 41 - 1 93
Tradenames 0 0 0 0 0 0 0
Technology 8 0 0 4 0 0 12
Non-compete agreements 102 -4 0 11 - 0 109
Management contracts 0 0 0 0 0 0 0
Other 212 -2 - 31 - 7 234
Goodwill and other intangible assets 380 -7 -4 87 - 8 448

CARRYING AMOUNTS

€ in millions Dec. 31, 2010 Dec. 31, 2009
Goodwill 11,464 10,356
Patents, product and distribution rights 478 445
Tradenames 173 161
Technology 64 57
Non-compete agreements 59 48
Management contracts 4 153
Other 206 189
Goodwill and other intangible assets 12,448 11,409

€ in millions Dec. 31, 2010 Dec. 31, 2009
Goodwill 11,464 10,356
Patents, product and distribution rights 478 445
Tradenames 173 161
Technology 64 57
Non-compete agreements 59 48
Management contracts 4 153
Other 206 189
Goodwill and other intangible assets 12,448 11,409

The split of intangible assets into amortizable and non-amortizable intangible assets is shown in the following tables:

AMORTIZABLE INTANGIBLE ASSETS


  Dec. 31, 2010 Dec. 31, 2009
€ in millions Acquisition cost Accumulated amortization Carrying amount Acquisition cost Accumulated amortization Carrying amount
Patents, product and distribution rights 617 139 478 538 93 445
Technology 83 19 64 69 12 57
Non-compete agreements 184 125 59 157 109 48
Other 484 278 206 423 234 189
Total 1,368 561 807 1,187 448 739

  Dec. 31, 2010 Dec. 31, 2009
€ in millions Acquisition cost Accumulated amortization Carrying amount Acquisition cost Accumulated amortization Carrying amount
Patents, product and distribution rights 617 139 478 538 93 445
Technology 83 19 64 69 12 57
Non-compete agreements 184 125 59 157 109 48
Other 484 278 206 423 234 189
Total 1,368 561 807 1,187 448 739

NON-AMORTIZABLE INTANGIBLE ASSETS


  Dec. 31, 2010 Dec. 31, 2009
€ in millions Acquisition cost Accumulated amortization Carrying amount Acquisition cost Accumulated amortization Carrying amount
Tradenames 173 0 173 161 0 161
Management contracts 4 0 4 153 0 153
Goodwill 11,464 0 11,464 10,356 0 10,356
Total 11,641 0 11,641 10,670 0 10,670

  Dec. 31, 2010 Dec. 31, 2009
€ in millions Acquisition cost Accumulated amortization Carrying amount Acquisition cost Accumulated amortization Carrying amount
Tradenames 173 0 173 161 0 161
Management contracts 4 0 4 153 0 153
Goodwill 11,464 0 11,464 10,356 0 10,356
Total 11,641 0 11,641 10,670 0 10,670

In the second quarter of 2010, administrative services agreements of Fresenius Medical Care in an amount of US$215 million (€162 million) were reclassified from the category management contracts to goodwill due to a change in New York state regulations that allowed Fresenius Medical Care, beginning in April 2010, to directly own the managed facilities in that state.

Amortization on intangible assets amounted to €105 million and €87 million for the years 2010 and 2009, respectively. It is allocated within cost of sales, selling, general and administrative expenses and research and development expenses, depending upon the use of the asset.

Estimated regular amortization expenses of intangible assets for the next five years are shown in the following table:

€ in millions 2011 2012 2013 2014 2015
Estimated amortization expenses 97 90 85 80 71

€ in millions 2011 2012 2013 2014 2015
Estimated amortization expenses 97 90 85 80 71

The carrying amount of goodwill has developed as follows:


€ in millions Fresenius Medical Care Fresenius Kabi Fresenius Helios Fresenius Vamed Corporate/Other Fresenius Group
Carrying amount as of January 1, 2009 5,253 3,511 1,565 44 6 10,379
Additions 125 43 61 0 0 229
Foreign currency translation -164 -88 0 0 0 -252
Carrying amount as of December 31, 2009 5,214 3,466 1,626 44 6 10,356
Additions 324 30 1 4 0 359
Reclassifications 162 0 0 0 0 162
Foreign currency translation 392 195 0 0 0 587
Carrying amount as of December 31, 2010 6,092 3,691 1,627 48 6 11,464

€ in millions Fresenius Medical Care Fresenius Kabi Fresenius Helios Fresenius Vamed Corporate/Other Fresenius Group
Carrying amount as of January 1, 2009 5,253 3,511 1,565 44 6 10,379
Additions 125 43 61 0 0 229
Foreign currency translation -164 -88 0 0 0 -252
Carrying amount as of December 31, 2009 5,214 3,466 1,626 44 6 10,356
Additions 324 30 1 4 0 359
Reclassifications 162 0 0 0 0 162
Foreign currency translation 392 195 0 0 0 587
Carrying amount as of December 31, 2010 6,092 3,691 1,627 48 6 11,464

As of December 31, 2010 and December 31, 2009, the carrying amounts of the other non-amortizable intangible assets were €161 million and €299 million, respectively, for Fresenius Medical Care as well as €16 million and €15 million, respectively, for Fresenius Kabi.

Continue reading:
19. Other accrued expenses

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