Coca Cola 2006 Annual Report Download - page 90

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6: GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS (Continued)
Goodwill by operating segment was as follows (in millions):
December 31, 2006 2005
Africa $—$—
East, South Asia and Pacific Rim 22 22
European Union 696 593
Latin America 119 82
North America 141 141
North Asia, Eurasia and Middle East 21 21
Bottling Investments 404 188
$ 1,403 $ 1,047
In 2006, our Company recorded impairment charges of approximately $41 million primarily related to
trademarks for beverages sold in the Philippines and Indonesia. The Philippines and Indonesia are components
of our East, South Asia and Pacific Rim operating segment. The amount of these impairment charges was
determined by comparing the fair values of the intangible assets to their respective carrying values. The fair
values were determined using discounted cash flow analyses. Because the fair values were less than the carrying
values of the assets, we recorded impairment charges to reduce the carrying values of the assets to their
respective fair values. These impairment charges were recorded in the line item other operating charges in the
consolidated statement of income. Refer to Note 18.
In 2005, our Company recorded an impairment charge related to trademarks for beverages sold in the
Philippines of approximately $84 million. The carrying value of our trademarks in the Philippines, prior to the
recording of the impairment charges in 2005, was approximately $268 million. The impairment was the result of
our revised outlook for the Philippines, which had been unfavorably impacted by declines in volume and income
before income taxes resulting from the continued lack of an affordable package offering and the continued
limited availability of these trademark beverages in the marketplace. We determined the amount of this
impairment charge by comparing the fair value of the intangible assets to the carrying value. Fair values were
derived using discounted cash flow analyses with a number of scenarios that were weighted based on the
probability of different outcomes. Because the fair value was less than the carrying value of the assets, we
recorded an impairment charge to reduce the carrying value of the assets to fair value. This impairment charge
was recorded in the line item other operating charges in the consolidated statement of income.
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