XML 30 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Acquisitions and Divestitures | 12 Months Ended
--- | ---
Jan. 01, 2017
Business Combinations [Abstract] |
Acquisitions and Divestitures |
3. | Acquisitions and Divestitures
Since April 2013, as a part of The Coca‑Cola Company’s plans to refranchise its North American bottling territories, the Company has engaged in a series of transactions with The Coca‑Cola Company and Coca‑Cola Refreshments USA, Inc. (“CCR”), a wholly-owned subsidiary of The Coca‑Cola Company, to expand the Company’s distribution operations significantly through the acquisition of rights to serve additional distribution territories previously served by CCR (the “Expansion Territories”) and of related distribution assets (the “Distribution Territory Expansion Transactions”). During 2015, the Company completed the remaining Distribution Territory Expansion Transactions announced as part of the April 2013 letter of intent signed with The Coca‑Cola Company. These completed acquisitions include Expansion Territories in parts of Tennessee, Kentucky and Indiana. On May 12, 2015, the Company and The Coca‑Cola Company entered into a non-binding letter of intent (the “May 2015 LOI”) pursuant to which CCR would in two phases (i) grant the Company certain exclusive rights for the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and -licensed products in additional territories served by CCR and (ii) sell the Company certain assets that included rights to distribute those cross‑licensed brands distributed in the territories by CCR as well as the assets used by CCR in the distribution of the cross‑licensed brands and The Coca‑Cola Company brands. The major markets that would be served by the Company as part of the expansion contemplated by the May 2015 LOI include: Baltimore, Maryland; Alexandria, Norfolk and Richmond, Virginia; the District of Columbia; Cincinnati, Columbus and Dayton, Ohio; and Indianapolis, Indiana. On September 23, 2015, the Company and CCR entered into an asset purchase agreement (the “September 2015 APA”) for the first phase of the additional distribution territory contemplated by the May 2015 LOI including: (i) eastern and northern Virginia, (ii) the entire state of Maryland, (iii) the District of Columbia, and (iv) parts of Delaware, North Carolina, Pennsylvania and West Virginia. Following is a summary of key closing dates for the transactions covered by the September 2015 APA:
| • | October 30, 2015 – The first closing under the September 2015 APA occurred for territories served by distribution facilities in Norfolk, Fredericksburg and Staunton, Virginia and Elizabeth City, North Carolina.
| • | January 29, 2016 – The second closing under the September 2015 APA occurred for territories served by distribution facilities in Easton and Salisbury, Maryland and Richmond and Yorktown, Virginia.
| • | April 1, 2016 – The third closing under the September 2015 APA occurred for territories served by distribution facilities in Alexandria, Virginia and Capitol Heights and La Plata, Maryland.
| • | April 29, 2016 – The final closing for under the September 2015 APA occurred for territories served by distribution facilities in Baltimore, Hagerstown and Cumberland, Maryland.
The May 2015 LOI contemplated that The Coca‑Cola Company would work collaboratively with the Company and certain other expanding participating bottlers in the U.S. to implement a national product supply system. As a result of subsequent discussions with The Coca‑Cola Company, on September 23, 2015, the Company and The Coca‑Cola Company entered into a non-binding letter of intent (the “September 2015 LOI”) pursuant to which CCR would sell six manufacturing facilities (“Regional Manufacturing Facilities”) and related manufacturing assets (collectively, “Manufacturing Assets”) to the Company as the Company becomes a regional producing bottler (“Regional Producing Bottler”) in the national product supply system (the “Manufacturing Facility Expansion Transactions” and, together with the Distribution Territory Expansion Transactions, the “Expansion Transactions”). Similar to, and as an integral part of, the Distribution Territory Expansion Transactions described in the May 2015 LOI, the September 2015 LOI contemplated that the sale of the Manufacturing Assets by CCR to the Company would be accomplished in two phases: (i) the first phase would include three Regional Manufacturing Facilities located in Sandston, Virginia; Silver Spring, Maryland; and Baltimore, Maryland that serve certain of the distribution territories acquired by the Company under the September 2015 APA and (ii) the second phase would include three Regional Manufacturing Facilities located in Indianapolis, Indiana; Portland, Indiana; and Cincinnati, Ohio that serve the distribution territories in central and southern Ohio, northern Kentucky and parts of Indiana and Illinois. On October 30, 2015, the Company and CCR entered into an asset purchase agreement (the “October 2015 APA”) for the first phase of the Manufacturing Facility Expansion Transactions contemplated by the September 2015 LOI, including Regional Manufacturing Facilities located in Sandston, Virginia; Silver Spring, Maryland; and Baltimore, Maryland. Following is a summary of key closing dates for the transactions covered by the October 2015 APA:
| • | January 29, 2016 – The first closing under the October 2015 APA occurred for the Sandston, Virginia facility.
| • | April 29, 2016 – The interim and final closings under the October 2015 APA occurred for the Silver Spring, Maryland facility and the Baltimore, Maryland facility.
On February 8, 2016, the Company and The Coca‑Cola Company entered into a non-binding letter of intent (the “February 2016 LOI”) pursuant to which CCR would (i) grant the Company exclusive rights for the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and -licensed products in additional territories served by CCR in northern Ohio, (ii) sell the Company certain assets that included rights to distribute those cross-licensed brands distributed in the territories by CCR as well as the assets used by CCR in the distribution of the cross-licensed brands and The Coca‑Cola Company brands, and (iii) sell to the Company an additional Regional Manufacturing Facility currently owned by CCR located in Twinsburg, Ohio and related Manufacturing Assets. The transactions proposed in the February 2016 LOI would provide exclusive distribution rights for the Company in the following major markets: Akron, Elyria, Toledo, Willoughby, and Youngstown County in Ohio. On June 14, 2016, the Company and The Coca‑Cola Company entered into a non-binding letter of intent (the “CCR June 2016 LOI”) pursuant to which CCR would (i) grant the Company exclusive rights for the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and –licensed products in additional territories in northeastern Kentucky and southwestern West Virginia served by CCR’s distribution center in Louisa, Kentucky, (ii) sell the Company certain assets that included rights to distribute those cross-licensed brands distributed in the territories by CCR as well as the assets used by CCR in the distribution of the cross-licensed brands and The Coca‑Cola Company brands and (iii) exchange exclusive rights and associated distribution assets and working capital of CCR relating to the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and –licensed products and certain cross-licensed brands in territory in parts of Arkansas, southwestern Tennessee and northwestern Mississippi served by CCR and two additional Regional Manufacturing Facilities currently owned by CCR located in Memphis, Tennessee and West Memphis, Arkansas and related Manufacturing Assets for exclusive rights and associated distribution assets and working capital of the Company relating to the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and –licensed products and certain cross-licensed brands in territory in southern Alabama, southern Mississippi and southern Georgia currently served by the Company and a Regional Manufacturing Facility currently owned by the Company in Mobile, Alabama and related Manufacturing Assets. The transactions proposed by the CCR June 2016 LOI would provide exclusive distribution rights for the Company in the following major markets: Little Rock, West Memphis and southern Arkansas; Memphis, Tennessee; and Louisa, Kentucky. On June 14, 2016, the Company and Coca-Cola Bottling Company United, Inc. (“United”), which is an independent bottler and unrelated to the Company, entered into a non-binding letter of intent pursuant to which the Company would exchange exclusive rights and associated distribution assets and working capital relating to the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and –licensed products and certain cross-licensed brands in certain territory in south-central Tennessee, northwest Alabama and northwest Florida currently served by the Company’s distribution centers located in Florence, Alabama and Panama City, Florida, for certain of United’s exclusive rights and associated distribution assets and working capital relating to the distribution, promotion, marketing and sale of The Coca‑Cola Company-owned and –licensed products and certain cross-licensed brands in certain territory in and around Spartanburg and Bluffton, South Carolina currently served by United’s distribution centers located in Spartanburg, South Carolina and Savannah, Georgia. On September 1, 2016, the Company and CCR entered into an asset purchase agreement (the “September 2016 Distribution APA”) for the second phase of the additional distribution territory contemplated by the May 2015 LOI and for a portion of the additional distribution territory contemplated by the CCR June 2016 LOI, including territories located in (i) central and southern Ohio, (ii) northern Kentucky, (iii) large portions of Indiana and (iv) parts of Illinois and West Virginia that are currently served by CCR. Following is a summary of key closing dates for the transactions covered by the September 2016 Distribution APA:
| • | October 28, 2016 – The first closing under the September 2016 Distribution APA occurred for territories served by distribution facilities in Cincinnati, Dayton, Lima and Portsmouth, Ohio.
| • | January 27, 2017 – Subsequent to the end of 2016, the second closing under the September 2016 Distribution APA occurred for territories served by distribution facilities in Anderson, Fort Wayne, Lafayette, South Bend and Terre Haute, Indiana.
On September 1, 2016, the Company and CCR also entered into an asset purchase agreement (the “September 2016 Manufacturing APA”) for the second phase of the Regional Manufacturing Facility acquisitions contemplated by the September 2015 LOI, including Regional Manufacturing Facilities located in Indianapolis, Indiana; Portland, Indiana; and Cincinnati, Ohio that serve the distribution territories in central and southern Ohio, northern Kentucky and parts of Indiana and Illinois to be acquired by the Company under the September 2016 Distribution APA. On October 28, 2016, the first closing under the September 2016 Manufacturing APA occurred for the Cincinnati, Ohio facility. At the closings of each of the Distribution Territory Expansion Transactions (excluding the exchange for the Lexington Expansion Territory, as described below), the Company signed a Comprehensive Beverage Agreement (“CBA”) with The Coca‑Cola Company and CCR for each of the applicable Expansion Territories which has a term of ten years and is automatically renewed for successive additional terms of ten years unless the Company gives notice to terminate at least one year prior to the expiration of a ten-year term or unless earlier terminated as provided therein. Under the CBAs, the Company makes a quarterly sub-bottling payment to CCR on a continuing basis for the grant of exclusive rights to distribute, promote, market and sell specified covered beverages and related products, as defined in the agreements. The quarterly sub-bottling payment, which is accounted for as contingent consideration, is based on sales of certain beverages and beverage products that are sold under the same trademarks that identify a covered beverage, related product or certain cross-licensed brands (as defined in the CBAs). The CBAs impose certain obligations on the Company with respect to serving the Expansion Territories and failure to meet these obligations could result in termination of a CBA if the Company fails to take corrective measures within a specified time frame. 2014 Expansion Territories On May 23, 2014, the Company acquired distribution rights and related assets for the Johnson City and Morristown, Tennessee territory, and on October 24, 2014, the Company acquired distribution rights and related assets for the Knoxville, Tennessee territory from CCR. The cash purchase price for the 2014 Expansion Territories was $43.1 million, which includes all post-closing adjustments. 2015 Expansion Territories During 2015, the Company acquired distribution rights and related assets for the following territories: Cleveland and Cookeville, Tennessee; Louisville, Kentucky and Evansville, Indiana; Paducah and Pikeville, Kentucky; Norfolk, Fredericksburg and Staunton, Virginia; and Elizabeth City, North Carolina (the “2015 Expansion Territories”). The Company also acquired a make-ready center in Annapolis, Maryland in 2015. During the fourth quarter of 2015, the Company made certain measurement period adjustments as a result of purchase price changes to reflect the revised opening balance sheets for the Cleveland and Cookeville, Tennessee and Louisville, Kentucky and Evansville, Indiana territories. The details of the transactions are included below. Cleveland and Cookeville, Tennessee Territory Acquisitions On December 5, 2014, the Company and CCR entered into an asset purchase agreement related to the territory served by CCR through CCR’s facilities and equipment located in Cleveland and Cookeville, Tennessee (the “January 2015 Expansion Territory”). The closing of this transaction occurred on January 30, 2015, for a cash purchase price of $13.2 million, which includes all post-closing adjustments. Louisville, Kentucky and Evansville, Indiana Territory Acquisitions On December 17, 2014, the Company and CCR entered into an asset purchase agreement related to the territory served by CCR through CCR’s facilities and equipment located in Louisville, Kentucky and Evansville, Indiana (the “February 2015 Expansion Territory”). The closing of this transaction occurred on February 27, 2015, for a cash purchase price of $18.0 million, which includes all post-closing adjustments. Paducah and Pikeville, Kentucky Territory Acquisitions On February 13, 2015, the Company and CCR entered into an asset purchase agreement (the “February 2015 APA”) related to the territory served by CCR through CCR’s facilities and equipment located in Paducah and Pikeville, Kentucky (the “May 2015 Expansion Territory”). The closing of this transaction occurred on May 1, 2015, for a cash purchase price of $7.5 million, which will remain subject to adjustment in accordance with the terms and conditions of the February 2015 APA. Norfolk, Fredericksburg and Staunton, Virginia; and Elizabeth City, North Carolina Territory Acquisitions On September 23, 2015, the Company and CCR entered into the September 2015 APA related, in part, to the territory served by CCR through CCR’s facilities and equipment located in Norfolk, Fredericksburg and Staunton, Virginia, and Elizabeth City, North Carolina (the “October 2015 Expansion Territory”). The closing of this transaction occurred on October 30, 2015, for a cash purchase price of $26.7 million, which includes all post-closing adjustments. Annapolis, Maryland Make-Ready Center Acquisition As a part of the Expansion Transactions, on October 30, 2015, the Company acquired from CCR a “make-ready center” in Annapolis, Maryland (the “Annapolis MRC”) for a cash purchase price of $5.4 million, which includes all post-closing adjustments. The Company recorded a bargain purchase gain of approximately $2.0 million on this transaction after applying a deferred tax liability of approximately $1.3 million. The Company uses the make-ready center to deploy and refurbish vending and other sales equipment for use in the marketplace. The fair value of acquired assets and assumed liabilities, which for the May 2015 Expansion Territory remains subject to adjustment in accordance with the terms and conditions of the February 2015 APA, of the 2015 Expansion Territories and the Annapolis MRC as of the acquisition dates is summarized as follows:
(in thousands) |  | January 2015 Expansion Territory |  |  | February 2015 Expansion Territory |  |  | May 2015 Expansion Territory |  |  | October 2015 Expansion Territory |  |  | Annapolis MRC |  |  | Total 2015 Expansion Territories |
Cash |  | $ | 59 |  |  | $ | 105 |  |  | $ | 45 |  |  | $ | 160 |  |  | $ | - |  |  | $ | 369 |
Inventories |  |  | 1,238 |  |  |  | 1,268 |  |  |  | 1,045 |  |  |  | 2,563 |  |  |  | 109 |  |  |  | 6,223 |
Prepaid expenses and other current assets |  |  | 714 |  |  |  | 1,108 |  |  |  | 224 |  |  |  | 1,306 |  |  |  | - |  |  |  | 3,352 |
Accounts receivable from The Coca-Cola Company |  |  | 322 |  |  |  | 740 |  |  |  | 294 |  |  |  | 824 |  |  |  | - |  |  |  | 2,180 |
Property, plant and equipment |  |  | 6,291 |  |  |  | 15,656 |  |  |  | 6,210 |  |  |  | 24,832 |  |  |  | 8,492 |  |  |  | 61,481 |
Other assets (including deferred taxes) |  |  | 336 |  |  |  | 1,352 |  |  |  | 494 |  |  |  | 4,392 |  |  |  | - |  |  |  | 6,574 |
Goodwill |  |  | 1,388 |  |  |  | 1,520 |  |  |  | 1,027 |  |  |  | 6,723 |  |  |  | - |  |  |  | 10,658 |
Other identifiable intangible assets |  |  | 12,950 |  |  |  | 20,350 |  |  |  | 1,700 |  |  |  | 49,100 |  |  |  | - |  |  |  | 84,100 |
Total acquired assets |  | $ | 23,298 |  |  | $ | 42,099 |  |  | $ | 11,039 |  |  | $ | 89,900 |  |  | $ | 8,601 |  |  | $ | 174,937 |
Current liabilities (acquisition related contingent consideration) |  | $ | 843 |  |  | $ | 1,659 |  |  | $ | 281 |  |  | $ | 547 |  |  | $ | - |  |  | $ | 3,330 |
Other current liabilities |  |  | 125 |  |  |  | 974 |  |  |  | 494 |  |  |  | 4,222 |  |  |  | - |  |  |  | 5,815 |
Other liabilities |  |  | - |  |  |  | 823 |  |  |  | 10 |  |  |  | - |  |  |  | 1,265 |  |  |  | 2,098 |
Other liabilities (acquisition related contingent consideration) |  |  | 9,131 |  |  |  | 20,625 |  |  |  | 2,748 |  |  |  | 58,925 |  |  |  | - |  |  |  | 91,429 |
Total assumed liabilities |  | $ | 10,099 |  |  | $ | 24,081 |  |  | $ | 3,533 |  |  | $ | 63,694 |  |  | $ | 1,265 |  |  | $ | 102,672 |
The fair value of the acquired identifiable intangible assets of the 2015 Expansion Territories as of the acquisition dates is as follows:
(in thousands) |  | January 2015 Expansion Territory |  |  | February 2015 Expansion Territory |  |  | May 2015 Expansion Territory |  |  | October 2015 Expansion Territory |  |  | Total 2015 Expansion Territories |  |  | Estimated Useful Lives
Distribution agreements |  | $ | 12,400 |  |  | $ | 19,200 |  |  | $ | 1,500 |  |  | $ | 47,900 |  |  | $ | 81,000 |  |  | 40 years
Customer lists |  |  | 550 |  |  |  | 1,150 |  |  |  | 200 |  |  |  | 1,200 |  |  |  | 3,100 |  |  | 12 years
Total acquired identifiable intangible assets |  | $ | 12,950 |  |  | $ | 20,350 |  |  | $ | 1,700 |  |  | $ | 49,100 |  |  | $ | 84,100 |  |  |
The goodwill of $1.4 million, $1.5 million, $1.0 million and $6.7 million for the January 2015 Expansion Territory, February 2015 Expansion Territory, May 2015 Expansion Territory and October 2015 Expansion Territory, respectively, is all included in the Nonalcoholic Beverages segment and is primarily attributed to the workforce acquired. Goodwill of $1.1 million, $0.2 million and $0.2 million is expected to be deductible for tax purposes for the January 2015 Expansion Territory, May 2015 Expansion Territory and October 2015 Expansion Territory, respectively. No goodwill is expected to be deductible for tax purposes for the February 2015 Expansion Territory. 2015 Asset Exchange Agreement On October 17, 2014, the Company and CCR entered into an agreement (the “Asset Exchange Agreement”) pursuant to which CCR agreed to exchange certain assets of CCR relating to the marketing, promotion, distribution and sale of Coca‑Cola and other beverage products in the territory served by CCR’s facilities and equipment located in Lexington, Kentucky (the “Lexington Expansion Territory”), including the rights to produce such beverages in the Lexington Expansion Territory, in exchange for certain assets of the Company relating to the marketing, promotion, distribution and sale of Coca‑Cola and other beverage products in the territory served by the Company’s facilities and equipment located in Jackson, Tennessee, including the rights to produce such beverages in that territory (the “Asset Exchange Transaction”). The Company and CCR closed the Asset Exchange Transaction on May 1, 2015. The net assets received by the Company in the exchange, after deducting the value of certain retained assets and retained liabilities, was approximately $15.3 million. The fair value of acquired assets and assumed liabilities related to the Lexington Expansion Territory as of the exchange date are summarized as follows:
|  | Lexington |
|  | Expansion |
(in thousands) |  | Territory |
Cash |  | $ | 56 |
Inventories |  |  | 2,231 |
Prepaid expenses and other current assets |  |  | 345 |
Accounts receivable from The Coca-Cola Company |  |  | 362 |
Property, plant and equipment |  |  | 12,216 |
Other assets |  |  | 48 |
Franchise rights |  |  | 23,700 |
Goodwill |  |  | 1,856 |
Other identifiable intangible assets |  |  | 1,100 |
Total acquired assets |  | $ | 41,914 |
Current liabilities |  | $ | 926 |
The fair value of the acquired identifiable intangible assets is as follows:
|  | Lexington |  |  |
|  | Expansion |  |  | Estimated
(in thousands) |  | Territory |  |  | Useful Lives
Franchise rights |  | $ | 23,700 |  |  | Indefinite
Distribution agreements |  |  | 300 |  |  | 40 years
Customer lists |  |  | 800 |  |  | 12 years
Total acquired identifiable intangible assets |  | $ | 24,800 |  |  |
The goodwill of $1.9 million related to the Lexington Expansion Territory, which is included in the Nonalcoholic Beverages segment, is primarily attributed to the workforce of the territories and is expected to be deductible for tax purposes. During the second quarter of 2016, the net assets received in the Asset Exchange Transaction, after deducting the value of certain retained assets and retained liabilities, increased by $4.2 million as a result of completing the post-closing adjustment under the Asset Exchange Agreement. In addition, the gain on the exchange was reduced by $0.7 million during the second quarter of 2016. The carrying value of assets exchanged related to the Jackson, Tennessee territory exchanged in the Asset Exchange Transaction was $17.5 million, resulting in a gain on the exchange of $8.8 million in the second quarter of 2015. The amount of goodwill and franchise rights allocated to the Jackson, Tennessee territory was determined using a relative fair value approach comparing the fair value of the Jackson, Tennessee territory to the fair value of the overall Nonalcoholic Beverages reporting unit. 2016 Expansion Transactions During 2016, the Company acquired distribution rights and related assets for the following territories: Easton, Salisbury, Capitol Heights, La Plata, Baltimore, Hagerstown and Cumberland, Maryland; Richmond, Yorktown and Alexandria, Virginia; Cincinnati, Dayton, Lima and Portsmouth, Ohio; and Louisa, Kentucky. The Company also acquired the Regional Manufacturing Facilities and related Manufacturing Assets in Sandston, Virginia; Silver Spring and Baltimore, Maryland; and Cincinnati, Ohio during 2016. Collectively, these are the “2016 Expansion Transactions.” The details of the 2016 Expansion Transactions are included below. Easton and Salisbury, Maryland and Richmond and Yorktown, Virginia Territory Acquisitions and Sandston, Virginia Regional Manufacturing Facility Acquisition The September 2015 APA contemplated, in part, the Company’s acquisition of distribution rights and related assets in the territory served by CCR through CCR’s facilities and equipment located in Easton and Salisbury, Maryland and Richmond and Yorktown, Virginia and the October 2015 APA contemplated, in part, the Company’s acquisition of the Regional Manufacturing Facility and related Manufacturing Assets in Sandston, Virginia (the “January 2016 Expansion Transactions”). The closing of the January 2016 Expansion Transactions occurred on January 29, 2016, for a cash purchase price of $65.7 million, which will remain subject to adjustment in accordance with the terms and conditions of the September 2015 APA and October 2015 APA. Alexandria, Virginia and Capitol Heights and La Plata, Maryland Territory Acquisitions The September 2015 APA also contemplated the Company’s acquisition of distribution rights and related assets in the territory served by CCR through CCR’s facilities and equipment located in Alexandria, Virginia and Capitol Heights and La Plata, Maryland (the “April 1, 2016 Expansion Transaction”). The closing of the April 1, 2016 Expansion Transaction occurred on April 1, 2016, for a cash purchase price of $35.6 million, which will remain subject to adjustment in accordance with the terms and conditions of the September 2015 APA. Baltimore, Hagerstown and Cumberland, Maryland Territory Acquisitions and Silver Spring and Baltimore, Maryland Regional Manufacturing Facilities Acquisitions On April 29, 2016, the Company completed the remaining transactions contemplated by (i) the September 2015 APA, by acquiring distribution rights and related assets in Expansion Territories served by CCR through CCR’s facilities and equipment located in Baltimore, Hagerstown and Cumberland, Maryland, and (ii) the October 2015 APA, by acquiring the Regional Manufacturing Facilities and related Manufacturing Assets in Silver Spring and Baltimore, Maryland (the “April 29, 2016 Expansion Transactions”). The closing of the April 29, 2016 Expansion Transactions occurred for a cash purchase price of $69.0 million, which will remain subject to adjustment in accordance with the terms and conditions of the September 2015 APA and October 2015 APA. Cincinnati, Dayton, Lima and Portsmouth, Ohio and Louisa, Kentucky Territory Acquisitions and Cincinnati, Ohio Regional Manufacturing Facility Acquisition On October 28, 2016, the Company completed the initial transactions contemplated by (i) the September 2016 Distribution APA, by acquiring distribution rights and related assets in the Expansion Territories served by CCR through CCR’s facilities and equipment located in Cincinnati, Dayton, Lima and Portsmouth, Ohio and Louisa, Kentucky, and (ii) the September 2016 Manufacturing APA, by acquiring the Regional Manufacturing Facility and related manufacturing assets located in Cincinnati, Ohio (the “October 2016 Expansion Transactions”). The closing of the October 2016 Expansion Transactions occurred for a cash purchase price of $98.2 million, which will remain subject to adjustment in accordance with the terms and conditions of the September 2016 Distribution APA and the September 2016 Manufacturing APA. The fair value of acquired assets and assumed liabilities of the 2016 Expansion Transactions as of the acquisition dates is summarized as follows:
(in thousands) |  | January 2016 Expansion Transactions |  |  | April 1, 2016 Expansion Transaction |  |  | April 29, 2016 Expansion Transactions |  |  | October 2016 Expansion Transactions |  |  | Total 2016 Expansion Transactions |
Cash |  | $ | 179 |  |  | $ | 219 |  |  | $ | 161 |  |  | $ | 150 |  |  | $ | 709 |
Inventories |  |  | 10,159 |  |  |  | 3,748 |  |  |  | 13,850 |  |  |  | 18,513 |  |  |  | 46,270 |
Prepaid expenses and other current assets |  |  | 2,775 |  |  |  | 1,945 |  |  |  | 3,774 |  |  |  | 4,181 |  |  |  | 12,675 |
Accounts receivable from The Coca-Cola Company |  |  | 1,135 |  |  |  | 1,176 |  |  |  | 1,140 |  |  |  | 1,253 |  |  |  | 4,704 |
Property, plant and equipment |  |  | 46,149 |  |  |  | 54,135 |  |  |  | 58,679 |  |  |  | 68,130 |  |  |  | 227,093 |
Other assets (including deferred taxes) |  |  | 2,351 |  |  |  | 1,536 |  |  |  | 5,146 |  |  |  | 666 |  |  |  | 9,699 |
Goodwill |  |  | 9,388 |  |  |  | 1,956 |  |  |  | 7,795 |  |  |  | 7,133 |  |  |  | 26,272 |
Other identifiable intangible assets |  |  | 1,300 |  |  |  | - |  |  |  | 23,450 |  |  |  | 66,500 |  |  |  | 91,250 |
Total acquired assets |  | $ | 73,436 |  |  | $ | 64,715 |  |  | $ | 113,995 |  |  | $ | 166,526 |  |  | $ | 418,672 |
Current liabilities (acquisition related contingent consideration) |  | $ | 361 |  |  | $ | 742 |  |  | $ | 1,307 |  |  | $ | 3,318 |  |  | $ | 5,728 |
Other current liabilities |  |  | 591 |  |  |  | 4,231 |  |  |  | 5,482 |  |  |  | 7,165 |  |  |  | 17,469 |
Accounts payable to The Coca-Cola Company |  |  | 650 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 650 |
Other liabilities |  |  | - |  |  |  | 266 |  |  |  | 2,635 |  |  |  | 761 |  |  |  | 3,662 |
Other liabilities (acquisition related contingent consideration) |  |  | 6,144 |  |  |  | 23,924 |  |  |  | 35,561 |  |  |  | 57,066 |  |  |  | 122,695 |
Total assumed liabilities |  | $ | 7,746 |  |  | $ | 29,163 |  |  | $ | 44,985 |  |  | $ | 68,310 |  |  | $ | 150,204 |
The fair value of the acquired identifiable intangible assets as of the acquisition dates is as follows:
(in thousands) |  | January 2016 Expansion Transactions |  |  | April 29, 2016 Expansion Transactions |  |  | October 2016 Expansion Transactions |  |  | Total 2016 Expansion Transactions |  |  | Estimated Useful Lives
Distribution agreements |  | $ | 750 |  |  | $ | 22,000 |  |  | $ | 63,900 |  |  | $ | 86,650 |  |  | 40 years
Customer lists |  |  | 550 |  |  |  | 1,450 |  |  |  | 2,600 |  |  |  | 4,600 |  |  | 12 years
Total acquired identifiable intangible assets |  | $ | 1,300 |  |  | $ | 23,450 |  |  | $ | 66,500 |  |  | $ | 91,250 |  |  |
The goodwill of $9.4 million, $2.0 million, $7.8 million and $7.1 million for the January 2016 Expansion Transactions, April 1, 2016 Expansion Transaction, April 29, 2016 Expansion Transactions and October 2016 Expansion Transactions, respectively, is all included in the Nonalcoholic Beverages segment and is primarily attributed to operational synergies and the workforce acquired. Goodwill of $5.9 million and $13.1 million is expected to be deductible for tax purposes for the January 2016 Expansion Transactions and October 2016 Expansion Transactions, respectively. No goodwill is expected to be deductible for the April 1, 2016 Expansion Transaction or the April 29, 2016 Expansion Transactions. The Company has preliminarily allocated the purchase price of the May 2015 Expansion Territory and the 2016 Expansion Transactions to the individual acquired assets and assumed liabilities. The valuations are subject to adjustment as additional information is obtained. The anticipated range of amounts the Company could pay annually under the acquisition related contingent consideration arrangements for the Expansion Transactions is between $14 million and $25 million. Expansion Transactions Financial Results The financial results of the 2016 Expansion Transactions, the 2015 Expansion Territories, the 2015 Asset Exchange and the 2014 Expansion Territories have been included in the Company’s consolidated financial statements from their respective acquisition or exchange dates. These territories contributed the following amounts to the Company’s consolidated statement of operations:
|  | Fiscal Year |
(in thousands) |  | 2016 |  |  | 2015 |  |  | 2014 |
Net sales from 2014 Expansion Territories |  | $ | 161,482 |  |  | $ | 158,393 |  |  | $ | 45,120 |
Net sales from 2015 Expansion Territories & 2015 Asset Exchange |  |  | 469,440 |  |  |  | 278,691 |  |  |  | - |
Net sales from 2016 Expansion Transactions |  |  | 592,329 |  |  |  | - |  |  |  | - |
Total expansion transactions impact to net sales |  | $ | 1,223,251 |  |  | $ | 437,084 |  |  | $ | 45,120 |
Operating income from 2014 Expansion Territories |  | $ | 4,933 |  |  | $ | 3,553 |  |  | $ | 3,417 |
Operating income from 2015 Expansion Territories & 2015 Asset Exchange |  |  | 1,907 |  |  |  | 3,364 |  |  |  | - |
Operating income from 2016 Expansion Transactions |  |  | 22,373 |  |  |  | - |  |  |  | - |
Total expansion transactions impact to operating income |  | $ | 29,213 |  |  | $ | 6,917 |  |  | $ | 3,417 |
The Company incurred $6.1 million, $5.8 million and $5.3 million in transaction related expenses for the Expansion Transactions in 2016, 2015 and 2014, respectively. These expenses are included within Selling, delivery and administrative expenses on the Consolidated Statements of Operations. 2016 Expansion Transactions and 2015 Expansion Territories Pro Forma Financial Information The purpose of the pro forma is to present the net sales and the income from operations of the combined entity as though the current year acquisitions had occurred as of the beginning of each period presented. The pro forma combined net sales and income from operations do not necessarily reflect what the combined Company’s net sales and income from operations would have been had the acquisitions occurred at the beginning of each period presented. The pro forma financial information also may not be useful in predicting the future financial results of the combined company. The actual results may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The following table represents the unaudited pro forma net sales for the Company for the 2016 Expansion Transactions and the 2015 Expansion Territories.
|  | Fiscal Year |
(in thousands) |  | 2016 |  |  | 2015 |
Net sales as reported |  | $ | 3,156,428 |  |  | $ | 2,306,458 |
Pro forma adjustments (unaudited) |  |  | 441,642 |  |  |  | 1,026,245 |
Net sales pro forma (unaudited) |  | $ | 3,598,070 |  |  | $ | 3,332,703 |
The following table represents the unaudited pro forma income from operations for the Company for the 2016 Expansion Transactions. The income from operations for the 2015 Expansion Territories are not presented as these are considered impracticable for disclosure.
|  | Fiscal Year |
(in thousands) |  | 2016 |  |  | 2015 |
Income from operations as reported |  | $ | 127,859 |  |  | $ | 98,144 |
Pro forma adjustments (unaudited) |  |  | 27,263 |  |  |  | 39,178 |
Income from operations pro forma (unaudited) |  | $ | 155,122 |  |  | $ | 137,322 |
Glacéau Distribution Termination Agreement On June 29, 2016, the Company entered into an agreement with The Coca‑Cola Company and CCR which authorizes the Company to market, promote, distribute and sell glacéau vitaminwater, glacéau smartwater and glacéau vitaminwater zero drops in certain geographic territories including the District of Columbia and portions of Delaware, Maryland and Virginia, beginning on January 1, 2017. Pursuant to the agreement, the Company made a payment to The Coca‑Cola Company of $15.6 million on February 16, 2017, which was recorded in Accounts payable to The Coca‑Cola Company as of January 1, 2017, and represented a portion of the total payment made by The Coca‑Cola Company to terminate a distribution arrangement with a prior distributor in this territory. Additionally, the Company recorded a $5.4 million acquisition related contingent consideration in Other liabilities related to this agreement. The total of $21.0 million, which represents the Company’s rights to market, promote, distribute and sell glacéau products in certain geographic territories, was recorded as a Distribution agreement intangible asset as of January 1, 2017. Sale of BYB Brands, Inc. On August 24, 2015, the Company sold BYB Brands, Inc. (“BYB”), a wholly owned subsidiary of the Company to The Coca‑Cola Company. Pursuant to the stock purchase agreement dated July 22, 2015, the Company sold all issued and outstanding shares of capital stock of BYB for a cash purchase price of $26.4 million. As a result of the sale, the Company recognized a gain of $22.7 million, which was recorded to Gain on sale of business in the consolidated financial statements in 2015. BYB contributed the following amounts to the Company’s consolidated statement of operations:
|  | Fiscal Year |
(in thousands) |  | 2015 |  |  | 2014 |
Net sales |  | $ | 23,875 |  |  | $ | 34,089 |
Operating income (loss) |  |  | 1,809 |  |  |  | (357 | )

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration