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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
63
The net carrying amounts of intangible assets other than goodwill as of December 31, 2012, and 2011, are as follows (in
millions):
December 31, 2012 December 31, 2011
Gross Accumulated Net Gross Accumulated Net
Amount Amortization Amount Amount Amortization Amount
Intangible assets with
indefinite lives:
Brands(1) $ 2,652 $ — $ 2,652 $ 2,648 $ — $ 2,648
Distribution rights 14 — 14 8—8
Intangible assets with finite
lives:
Brands 29 (25) 4 29 (24) 5
Distribution rights 5 (1) 4 3—3
Customer relationships 76 (67) 9 76 (64) 12
Bottler agreements 19 (18) 1 19 (18) 1
Total $ 2,795 $ (111) $ 2,684 $ 2,783 $ (106) $ 2,677
____________________________
(1) In 2012, brands with indefinite lives increased due to a $4 million change in foreign currency translation.
As of December 31, 2012, the weighted average useful life of intangible assets with finite lives was nine years in total,
consisting of five years for distribution rights, 10 years for both brands and customer relationships and 15 years for bottler
agreements. Amortization expense for intangible assets was $5 million, $9 million and $16 million for the years ended December
31, 2012, 2011 and 2010, respectively.
Amortization expense of these intangible assets over the next five years is expected to be the following (in millions):
Year
Aggregate
Amortization
Expense
2013 $ 6
2014 5
2015 5
2016 2
2017 —
In accordance with U.S. GAAP, the Company conducts impairment tests of goodwill and indefinite lived intangible assets
annually, as of December 31, or more frequently if circumstances indicate that the carrying amount of an asset may not be
recoverable. For purposes of impairment testing, DPS assigns goodwill to the reporting unit that benefits from the synergies arising
from each business combination and also assigns indefinite lived intangible assets to its reporting units. The Company defines
reporting units as Beverage Concentrates, Latin America Beverages and Packaged Beverages' two reporting units, DSD and WD.
The impairment test for indefinite lived intangible assets encompasses calculating a fair value of an indefinite lived intangible
asset and comparing the fair value to its carrying value. If the carrying value exceeds the estimated fair value, impairment is
recorded. The impairment tests for goodwill include comparing a fair value of the respective reporting unit with its carrying value,
including goodwill and considering any indefinite lived intangible asset impairment charges ("Step 1"). If the carrying value
exceeds the estimated fair value, impairment is indicated and a second step analysis must be performed.