Coca Cola 2010 Annual Report Download - page 106

The following table reconciles the total purchase price of the Company’s acquisition of CCE’s North American business
(in millions):
October 2,
2010
Fair value of our equity investment in CCE1$ 5,373
Cash consideration21,321
Fair value of share-based payment awards3154
Total purchase price $ 6,848
1Represents the fair value of our 33 percent ownership interest in the outstanding common stock of CCE based on the closing price
of CCE’s common stock on the last day the New York Stock Exchange was open prior to the acquisition date. The fair value
reflects our indirect ownership interest in both CCE’s North American business and European operations.
2Primarily related to the debt shortfall and working capital adjustments.
3Represents the portion of the total fair value of the replacement awards associated with services rendered prior to the business
combination, net of tax.
The following table presents the preliminary allocation of the purchase price by major class of assets and liabilities as of
October 2, 2010 (in millions):
Cash and cash equivalents $49
Marketable securities 7
Trade accounts receivable11,194
Inventories 696
Other current assets 744
Property, plant and equipment 5,385
Bottlers’ franchise rights with indefinite lives25,100
Other intangible assets31,032
Other noncurrent assets 261
Total identifiable assets acquired 14,468
Accounts payable and accrued expenses 1,826
Loans and notes payable4266
Long-term debt49,345
Pension and other postretirement liabilities51,313
Other noncurrent liabilities62,603
Total liabilities assumed 15,353
Net liabilities assumed (885)
Goodwill77,746
6,861
Less: Noncontrolling interests 13
Net assets acquired $ 6,848
1The gross amount due under receivables we acquired was $1,226 million, of which $32 million is expected to be uncollectible.
2Represents reacquired franchise rights that had previously provided CCE with exclusive and perpetual rights to manufacture and/or
distribute certain beverages in specified territories. These rights have been determined to have indefinite lives; and therefore, are
not amortized.
3Other intangible assets primarily relate to franchise rights that had previously provided CCE with exclusive rights to manufacture
and/or distribute certain beverages in specified territories for a finite period of time; and therefore, have been classified as definite-
lived intangible assets. The estimated fair value of franchise rights with definite lives was $605 million as of the acquisition date.
These franchise rights will be amortized over a weighted-average life of approximately 8 years, which is equal to the weighted-
average remaining contractual term of the franchise rights. Other intangible assets also include $380 million of customer
relationships, which will be amortized over approximately 20 years.
4Refer to Note 10 for additional information.
5The assumed pension and other postretirement liabilities consisted of benefit obligations of $3,544 million and plan assets of
$2,231 million. Refer to Note 13 for additional information related to pension and other postretirement plans assumed from CCE.
6Primarily relates to deferred tax liabilities recorded on franchise rights. Refer to Note 14.
7The goodwill recognized as part of this acquisition is not tax deductible and has been assigned to the North America operating
segment. The goodwill recognized in conjunction with our acquisition of CCE’s North American business is primarily related to
synergistic value created from having a unified operating system that will strategically position us to better market and distribute
our nonalcoholic beverage brands in North America. It also includes certain other intangible assets that do not qualify for separate
recognition, such as an assembled workforce.
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