Coca Cola 2011 Annual Report Download - page 40

Other Assets
Our Company invests in infrastructure programs with our bottlers that are directed at strengthening our bottling system and
increasing unit case volume. Additionally, our Company advances payments to certain customers to fund future marketing
activities intended to generate profitable volume and expenses such payments over the periods benefited. Advance payments are
also made to certain customers for distribution rights. Payments under these programs are generally capitalized and reported in
the line items prepaid expenses and other assets or other assets, as appropriate, in our consolidated balance sheets. When facts
and circumstances indicate that the carrying value of these assets (or asset groups) may not be recoverable, management assesses
the recoverability of the carrying value by preparing estimates of sales volume and the resulting gross profit and cash flows. These
estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment
loss recognized is the amount by which the carrying amount exceeds the fair value.
As a result of our acquisition of CCE’s North American business, the Company recorded charges of $266 million related to
preexisting relationships. These charges were primarily related to the write-off of our investment in infrastructure programs with
CCE. Our investment in these infrastructure programs with CCE did not meet the criteria to be recognized as an asset subsequent
to the acquisition. Refer to Note 2 and Note 6 of Notes to Consolidated Financial Statements.
Property, Plant and Equipment
As of December 31, 2011, the carrying value of our property, plant and equipment, net of depreciation, was $14,939 million, or
19 percent of our total assets. Certain events or changes in circumstances may indicate that the recoverability of the carrying
amount or remaining useful life of property, plant and equipment should be assessed, including, among others, the manner or
length of time in which the Company intends to use the asset, a significant decrease in market value, a significant change in the
business climate in a particular market, or a current period operating or cash flow loss combined with historical losses or
projected future losses. When such events or changes in circumstances are present and an impairment review is performed, we
estimate the future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition. These
estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment
loss recognized is the amount by which the carrying amount exceeds the fair value. We use a variety of methodologies to
determine the fair value of property, plant and equipment, including appraisals and discounted cash flow models, which are
consistent with the assumptions we believe hypothetical marketplace participants would use.
Goodwill, Trademarks and Other Intangible Assets
Intangible assets are classified into one of three categories: (1) intangible assets with definite lives subject to amortization;
(2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. For intangible assets with definite lives,
tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible
assets with indefinite lives and goodwill, tests for impairment must be performed at least annually or more frequently if events or
circumstances indicate that assets might be impaired. The following table presents the carrying values of intangible assets included
in our consolidated balance sheet (in millions):
Percentage
Carrying of Total
December 31, 2011 Value Assets
Goodwill $ 12,219 15%
Bottlers’ franchise rights with indefinite lives 7,770 10
Trademarks with indefinite lives 6,430 8
Definite-lived intangible assets, net 1,137 1
Other intangible assets not subject to amortization 113 *
Total $ 27,669 35%
* Accounts for less than 1 percent of the Company’s total assets.
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