Pepsi 2015 Annual Report Download - page 108
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Table of Contents
91
Note 4 — Property, Plant and Equipment and Intangible Assets
A summary of our property, plant and equipment is as follows:
Average
Useful Life
(Years) 2015 2014 2013
Property, plant and equipment, net
Land $ 1,184 $ 1,288
Buildings and improvements 15 – 44 8,061 8,114
Machinery and equipment, including fleet and software 5 – 15 24,764 25,146
Construction in progress 1,738 1,752
35,747 36,300
Accumulated depreciation (19,430) (19,056)
$ 16,317 $ 17,244
Depreciation expense $ 2,248 $ 2,441 $ 2,472
Property, plant and equipment is recorded at historical cost. Depreciation and amortization are recognized
on a straight-line basis over an asset’s estimated useful life. Land is not depreciated and construction in
progress is not depreciated until ready for service.
A summary of our amortizable intangible assets is as follows:
2015 2014 2013
Amortizable intangible assets, net
Average
Useful Life
(Years) Gross
Accumulated
Amortization Net Gross
Accumulated
Amortization Net
Acquired franchise rights 56 – 60 $ 820 $ (92) $ 728 $ 879 $ (89) $ 790
Reacquired franchise rights 5 – 14 105 (99) 6 107 (95) 12
Brands 20 – 40 1,298 (987) 311 1,361 (1,004) 357
Other identifiable intangibles 10 – 24 526 (301) 225 595 (305) 290
$ 2,749 $ (1,479) $ 1,270 $ 2,942 $ (1,493) $ 1,449
Amortization expense $ 75 $ 92 $ 110
Amortization of intangible assets for each of the next five years, based on existing intangible assets as of
December 26, 2015 and using average 2015 foreign exchange rates, is expected to be as follows:
2016 2017 2018 2019 2020
Five-year projected amortization $ 65 $ 60 $ 59 $ 56 $ 55
Depreciable and amortizable assets are only evaluated for impairment upon a significant change in the
operating or macroeconomic environment. In these circumstances, if an evaluation of the undiscounted cash
flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted
future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have
occurred which indicate the need for revision. For additional unaudited information on our policies for
amortizable brands, see “Our Critical Accounting Policies” in Management’s Discussion and Analysis of
Financial Condition and Results of Operations.