8.	Intangible Assets other than Goodwill


	2012			2011
Trademarks and trademark rights:
Trademarks as at January 1, net	$	457,381		$	627,221
Impairment charge		(39,224	)		(127,692	)
Acquisitions during the period		0			17,473
Depreciation charge for the year		(1,137	)		0
Foreign exchange impact		37,543			(59,621	)

Trademarks as at December 31, net	$	454,563		$	457,381

Other amortizable intangible assets:
Customer relationship as at January 1, net	$	6,467		$	121
Acquisitions during the period		0			8,200
Depreciation charge for the year		(1,059	)		(1,139	)
Impairment charge		(5,828	)		0
Foreign exchange impact		420			(715	)

Customer relationships as at December 31, net	$	0		$	6,467

Intangible assets as at December 31, net	$	454,563		$	463,848

The impairment charge for the years ended December 31, 2012 and December 31, 2011 amounts to $45 million (including $39.2 million for trademarks and $5.8 million for customer relationship) and $127.7 million, respectively.

Accumulated impairment related to trademarks as of December 31, 2012 and December 31, 2011 amounts to $319.0 million and $279.8 million, respectively.

Impairment test on trademarks performed as of December 31, 2012

At December 31, 2012, the Company performed its annual impairment test of trademarks, and in order to support its value the Company calculated the fair value of trademarks using a discounted cash flow approach based on the following assumptions:

•

Risk free rates for Poland, Russia and Hungary used for calculation of discount rate were based on the yield of long term bonds denominated in U.S. dollars issued by Polish, Russian and Hungarian governments as of December 31, 2012. When estimating discount rates to be used for the calculation we have taken into account current market conditions in Poland, Russia and Hungary separately. As a result of our assumptions and calculations, discount rates of 9.32%, 9.86% and 11.41% for Poland, Russia and Hungary, respectively have been determined. These inputs were determined utilizing primarily Level 1 inputs.

•

The Company estimated the growth rates in projecting cash flows for each of trademarks separately, based on five year plan related to each trademark. These inputs were determined utilizing primarily Level 2 inputs.

•

The Company estimated the terminal value growth rates of 2.5% for Polish trademarks, from 0.0% to 4.0% for Russian trademarks and at 2.7% in relation to Hungarian trademark. These inputs were determined utilizing primarily Level 2 inputs.

Based upon the above analysis performed and due to the continued lower performance of certain Russian brands, the Company has determined that the fair market value of these trademarks is below its carrying value. As a result, the Company recorded an impairment charge of $39.2 million on the following trademarks: Zhuravli, Parliament, Marusya, Urozhay and Kauffman.

The change in the recorded book value of trademarks between December 31, 2012 and December 31, 2011 resulted mainly from the recognized impairment charge described above and foreign exchange translation differences of $37.5 million caused by appreciation of the Polish zloty and Russian ruble against the U.S. dollar.

Based on sensitivity analysis of Green Mark, the increase of WACC by 1 p.p. would result in no impairment charge. If the EBITDA is lower than budgeted by 1 p.p. this would not change our impairment test results as well.

Based on sensitivity analysis of Absolwent and Bols trademarks, the increase of WACC by 1 p.p. would result in no impairment charge. If the EBITDA was lower by 1 p.p. this would no change our impairment test results as well.

Estimated future amortization expense related to amortizable intangible assets at December 31, 2012 amounts to $3.0 million of which $1.1 will be charged in 2013, $0.9 in 2014, $0.5 in 2015 and $0.5 in subsequent years.