Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS (Tables)

v3.6.0.2
INTANGIBLE ASSETS (Tables)
 12 Months Ended
Dec. 31, 2016
INTANGIBLE ASSETS [Abstract]  
Indefinite-lived intangible assets
The following table summarizes information related to indefinite-lived intangible assets (in millions):
December 31,
2016

 
2015

Trademarks
$
6,097

 
$
5,989

Bottlers' franchise rights1,2,3
3,676

 
6,000

Goodwill
10,629

 
11,289

Other
128

 
164

Indefinite-lived intangible assets
$
20,530

 
$
23,442

1 The decrease in 2016 was primarily the result of additional North America bottling territories being refranchised or reclassified as held for sale as well as the Company's China bottling operations being reclassified as held for sale. Refer to Note 2.
2 
In 2015, the Company acquired rights to distribute Monster products in expanded territories as a result of the Monster Transaction. The carrying values of these rights as of December 31, 2016 and 2015 were $298 million and $640 million, respectively. 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. The decrease in 2016 is related to North America refranchising. Refer to Note 2.
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, 2016, the agreements have remaining terms of 14 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, 2016 and 2015 were $576 million and $652 million, respectively. The decrease in 2016 is related to North America refranchising. Refer to Note 2.
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

2015
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
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
(3
)
 
—

 
(283
)
 
—

 
(388
)
 
(674
)
Balance at end of year
$
638

 
$
123

 
$
8,311

 
$
133

 
$
2,084

 
$
11,289

2016
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
638

 
$
123

 
$
8,311

 
$
133

 
$
2,084

 
$
11,289

Effect of foreign currency translation
(10
)
 
(6
)
 
—

 
(11
)
 
(6
)
 
(33
)
Acquisitions1
—

 
—

 
—

 
6

 
—

 
6

Adjustments related to the finalization
   of purchase accounting1
—

 
—

 
10

 
—

 
—

 
10

Impairment
—

 
—

 
—

 
—

 
(10
)
 
(10
)
Divestitures, deconsolidations and other1,2
—

 
—

 
—

 
—

 
(633
)
 
(633
)
Balance at end of year
$
628

 
$
117

 
$
8,321

 
$
128

 
$
1,435

 
$
10,629

1
Refer to Note 2 for information related to the Company's acquisitions and divestitures.
2 
The 2016 decrease in the Bottling Investments segment was primarily a result of additional North America bottling territories being refranchised or reclassified as held for sale as well as the Company's China bottling operations being reclassified as held for sale. Refer to Note 2.
Definite-lived intangible assets
The following table summarizes information related to definite-lived intangible assets (in millions):
 
December 31, 2016
 
December 31, 2015
 
Gross Carrying Amount

Accumulated Amortization

Net

 
Gross Carrying Amount

Accumulated Amortization

Net

Customer relationships1
$
392

$
(185
)
$
207

 
$
493

$
(199
)
$
294

Bottlers' franchise rights1
487

(381
)
106

 
604

(412
)
192

Trademarks
228

(64
)
164

 
211

(44
)
167

Other2
179

(58
)
121

 
97

(60
)
37

Total
$
1,286

$
(688
)
$
598

 
$
1,405

$
(715
)
$
690


1 
The decrease in 2016 was primarily due to the derecognition of intangible assets as a result of the North America refranchising. Refer to Note 2.
2 
The increase in 2016 related to our acquisition of China Green.
Estimated amortization expense for the next five years
Based on the carrying value of definite-lived intangible assets as of December 31, 2016, we estimate our amortization expense for the next five years will be as follows (in millions):
 
 
Amortization
Expense

2017
 
$
111

2018
 
65

2019
 
63

2020
 
57

2021
 
48