Current report filing

INTANGIBLE ASSETS (Tables)

v3.5.0.2
INTANGIBLE ASSETS (Tables)
 12 Months Ended
Dec. 31, 2015
INTANGIBLE ASSETS [Abstract]  
Indefinite-lived intangible assets
The following table summarizes information related to indefinite-lived intangible assets (in millions):
December 31,
2015

 
2014

Trademarks1
$
5,989

 
$
6,533

Bottlers' franchise rights2,3
6,000

 
6,689

Goodwill
11,289

 
12,100

Other
164

 
170

Indefinite-lived intangible assets
$
23,442

 
$
25,492

1 The decrease in 2015 was primarily due to the sale of our energy brands to Monster, an impairment charge recorded related to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and the impairment of a Venezuelan trademark primarily due to changes in exchange rates as a result of the establishment of the new open market exchange system. Refer to Note 2 for additional information on the Monster Transaction and Note 1 for additional information on the Venezuela currency change.
2 
The decrease in 2015 was primarily related to North America refranchising and the transfer of intangible assets to assets held for sale as a result of our entering into an agreement to merge our German bottling operations to form CCEP. These decreases were partially offset by the acquisition of the Company's rights to distribute Monster products in expanded territories as a result of the Monster Transaction. The carrying value of these rights as of December 31, 2015 was $640 million. These distribution rights are governed by an agreement with an initial term of 20 years, after which it will continue to remain in effect unless otherwise terminated by either party and there are no future costs of renewal. The Company anticipates that these assets will be used indefinitely. Refer to Note 2 for additional information.
3 The Company has agreements with Dr Pepper Snapple Group, Inc. ("DPSG") to distribute Dr Pepper trademark brands in the United States, Canada Dry in the Northeastern United States, and Canada Dry and C' Plus in Canada. As of December 31, 2015, the agreements have remaining terms of 15 years, with automatic 20-year renewal periods unless otherwise terminated under the terms of the agreements and there are no significant costs to renew the agreements. The Company anticipates that these assets will be used indefinitely. The carrying values of these rights as of December 31, 2015 and 2014, were $652 million and $784 million, respectively. The decrease is related to North America refranchising. Refer to Note 2 for additional information.
Carrying value of goodwill by operating segment
The following table provides information related to the carrying value of our goodwill by operating segment (in millions):
 
Europe, Middle East & Africa

 
Latin
America

 
North
America

 
Asia Pacific

 
Bottling
Investments

 
Total

2014
 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1
$
858

 
$
156

 
$
8,568

 
$
117

 
$
2,613

 
$
12,312

Effect of foreign currency translation
(62
)
 
(9
)
 
—

 
(2
)
 
(26
)
 
(99
)
Acquisitions1
—

 
—

 
—

 
16

 
14

 
30

Adjustments related to the finalization
   of purchase accounting1
(47
)
 
—

 
—

 
—

 
(14
)
 
(61
)
Divestitures, deconsolidations and other1
(3
)
 
—

 
—

 
—

 
(79
)
 
(82
)
Balance as of December 31
$
746

 
$
147

 
$
8,568

 
$
131

 
$
2,508

 
$
12,100

2015
 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1
$
746

 
$
147

 
$
8,568

 
$
131

 
$
2,508

 
$
12,100

Effect of foreign currency translation
(105
)
 
(24
)
 
—

 
2

 
(37
)
 
(164
)
Acquisitions1
—

 
—

 
26

 
—

 
1

 
27

Adjustments related to the finalization
   of purchase accounting1
—

 
—

 
—

 
—

 
4

 
4

Impairment
—

 
—

 
—

 
—

 
(4
)
 
(4
)
Divestitures, deconsolidations and other1,2
(3
)
 
—

 
(283
)
 
—

 
(388
)
 
(674
)
Balance as of December 31
$
638

 
$
123

 
$
8,311

 
$
133

 
$
2,084

 
$
11,289

1
Refer to Note 2 for information related to the Company's acquisitions and divestitures.
2 
The decrease in 2015 for the North America operating segment was primarily due to the derecognition of goodwill as a result of the sale of our energy business to Monster. The 2015 decrease in the Bottling Investments segment was primarily due to the transfer of our German bottling operations to assets held for sale as a result of the Company entering into an agreement to merge the operations to form CCEP and North America refranchising. Refer to Note 2 for additional information on these transactions.
Definite-lived intangible assets
The following table summarizes information related to definite-lived intangible assets (in millions):
 
December 31, 2015
 
December 31, 2014
 
Gross Carrying Amount

Accumulated Amortization

Net

 
Gross Carrying Amount

Accumulated Amortization

Net

Customer relationships1
$
493

$
(199
)
$
294

 
$
597

$
(229
)
$
368

Bottlers' franchise rights1
604

(412
)
192

 
664

(375
)
289

Trademarks
211

(44
)
167

 
222

(39
)
183

Other
97

(60
)
37

 
96

(56
)
40

Total
$
1,405

$
(715
)
$
690

 
$
1,579

$
(699
)
$
880


1 
The decrease in 2015 was primarily due to the derecognition of intangible assets as a result of the North America refranchising and the transfer of our German bottling operations to assets held for sale as a result of the Company entering into an agreement to merge the operations to form CCEP. Refer to Note 2 for additional information.
Estimated amortization expense for the next five years
Based on the carrying value of definite-lived intangible assets as of December 31, 2015, we estimate our amortization expense for the next five years will be as follows (in millions):
 
 
Amortization
Expense

2016
 
$
149

2017
 
113

2018
 
60

2019
 
57

2020
 
52