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.

Nonamortizable Intangible Assets

We did not recognize any impairment charges for goodwill in each of the fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013. In 2015, we performed the impairment analysis for goodwill for all of our reporting units using the qualitative approach and concluded that it was more likely than not that the estimated fair values of our reporting units were greater than their carrying amounts. After reaching this conclusion, no further testing was performed.

We recognized no material impairment charges for nonamortizable intangible assets in each of the fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013. In 2014, we recognized pre-tax impairment charges in ESSA for nonamortizable intangible assets of $23 million. Based on our year-end assessment, the estimated fair values of our indefinite-lived reacquired and acquired franchise rights recorded at NAB exceed their carrying values. However, there could be an impairment of the carrying value of NAB’s reacquired and acquired franchise rights if future revenues and their contribution to the operating results of NAB’s CSD business do not achieve our estimated future cash flows or if macroeconomic conditions result in a future increase in the weighted-average cost of capital used to estimate fair value. We have also analyzed the impact of the recent economic and political developments in Russia on the estimated fair value of our indefinite-lived intangible assets in Russia and have concluded that there is no impairment as of December 26, 2015. However, a further deterioration in these conditions in Russia could potentially require us to record an impairment charge for these assets in the future. For additional information on our policies for nonamortizable intangible assets, see Note 2 to our consolidated financial statements.

The change in the book value of nonamortizable intangible assets is as follows:



	Balance, Beginning 2014		Translation and Other			Balance, End of 2014		Translation and Other			Balance, End of 2015
FLNA
Goodwill	$	305	$	(14	)	$	291	$	(24	)	$	267
Brands	29		(2		)	27		(5		)	22
	334		(16		)	318		(29		)	289
QFNA
Goodwill	175		—			175		—			175

NAB
Goodwill	9,894		(48		)	9,846		(92		)	9,754
Reacquired franchise rights	7,281		(88		)	7,193		(151		)	7,042
Acquired franchise rights	1,551		(13		)	1,538		(31		)	1,507
Brands	108		—			108		—			108
	18,834		(149		)	18,685		(274		)	18,411
Latin America ^(a)
Goodwill	709		(65		)	644		(123		)	521
Brands	244		(21		)	223		(86		)	137
	953		(86		)	867		(209		)	658
ESSA ^(b)
Goodwill	5,027		(1,488		)	3,539		(497		)	3,042
Reacquired franchise rights	760		(189		)	571		(83		)	488
Acquired franchise rights	230		(31		)	199		(9		)	190
Brands	4,071		(1,408		)	2,663		(451		)	2,212
	10,088		(3,116		)	6,972		(1,040		)	5,932
AMENA
Goodwill	503		(33		)	470		(52		)	418
Brands	127		(10		)	117		(12		)	105
	630		(43		)	587		(64		)	523

Total goodwill	16,613		(1,648		)	14,965		(788		)	14,177
Total reacquired franchise rights	8,041		(277		)	7,764		(234		)	7,530
Total acquired franchise rights	1,781		(44		)	1,737		(40		)	1,697
Total brands	4,579		(1,441		)	3,138		(554		)	2,584
	$	31,014	$	(3,410	)	$	27,604	$	(1,616	)	$	25,988


(a)	The change in 2015 includes a reduction of $41 million of nonamortizable brands arising from the Venezuela deconsolidation.


(b)	The change in 2015 and 2014 primarily reflects the depreciation of the Russian ruble.