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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
67
The net carrying amounts of intangible assets other than goodwill as of December 31, 2014 and 2013 are as follows (in
millions):
December 31, 2014 December 31, 2013
Gross Accumulated Net Gross Accumulated Net
Amount Amortization Amount Amount Amortization Amount
Intangible assets with
indefinite lives:
Brands(1) $ 2,643 $ — $ 2,643 $ 2,652 $ — $ 2,652
Distribution rights(2) 27 — 27 24 — 24
Intangible assets with finite
lives:
Brands 29 (28) 1 29 (27) 2
Distribution rights 13 (4) 9 12 (3) 9
Customer relationships 76 (72) 4 76 (69) 7
Bottler agreements 19 (19) — 19 (19) —
Total $ 2,807 $ (123) $ 2,684 $ 2,812 $ (118) $ 2,694
____________________________
(1) In 2014, brands with indefinite lives decreased due to $9 million impact of foreign currency translation.
(2) In 2014, distribution rights included $3 million indefinite-lived distribution rights associated with the purchase of Davis. See
Note 3 for further information related to the acquisition.
As of December 31, 2014, the weighted average useful life of intangible assets with finite lives was 10 years for distribution
rights, brands, customer relationships and in total. Amortization expense for intangible assets was $5 million, $7 million and $5
million for the years ended December 31, 2014, 2013 and 2012, respectively.
Amortization expense of these intangible assets over the next five years is expected to be the following (in millions):
Year
Aggregate
Amortization
Expense
2015 $ 6
2016 3
2017 1
2018 1
2019 —
In accordance with U.S. GAAP, the Company conducts impairment tests of goodwill and indefinite-lived intangible assets
annually, as of October 1, 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.