XML 36 R13.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Acquisitions and Divestitures | 12 Months Ended
--- | ---
Dec. 31, 2017
Business Combinations [Abstract] |
Acquisitions and Divestitures |
3. | Acquisitions and Divestitures
As part of The Coca‑Cola Company’s plans to refranchise its North American bottling territories, the Company recently concluded a series of transactions from April 2013 to October 2017 with The Coca‑Cola Company, CCR and United to significantly expand the Company’s distribution and manufacturing operations (the “System Transformation”). The System Transformation included acquisition and exchange of rights to serve Expansion Territories and related distribution assets, as well as the acquisition and exchange of Expansion Facilities and related manufacturing assets. A summary of the System Transformation transactions (the “System Transformation Transactions”) completed by the Company prior to 2017 is included in the Company’s Annual Report on Form 10‑K for 2016. During 2017, the Company closed the following System Transformation Transactions: System Transformation Transactions Completed in 2017 System Transformation Transactions completed with CCR in 2017 Anderson, Fort Wayne, Lafayette, South Bend and Terre Haute, Indiana Expansion Territories Acquisitions (“January 2017 Transaction”) On January 27, 2017, the Company acquired distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in Anderson, Fort Wayne, Lafayette, South Bend and Terre Haute, Indiana, pursuant to a distribution asset purchase agreement entered into by the Company and CCR on September 1, 2016 (the “September 2016 Distribution APA”). The Company completed the January 2017 Transaction for a cash purchase price of $32.1 million, which includes all post-closing adjustments. The cash purchase price increased $0.5 million as a result of post-closing adjustments made during 2017. Acquisition of Bloomington and Indianapolis, Indiana and Columbus and Mansfield, Ohio Expansion Territories and Indianapolis and Portland, Indiana Expansion Facilities (“March 2017 Transactions”) On March 31, 2017, the Company acquired (i) distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in Indianapolis and Bloomington, Indiana and Columbus and Mansfield, Ohio pursuant to the September 2016 Distribution APA and (ii) two Expansion Facilities located in Indianapolis and Portland, Indiana and related manufacturing assets pursuant to a manufacturing asset purchase agreement entered into by the Company and CCR on September 1, 2016 (the “September 2016 Manufacturing APA”). The Company completed the March 2017 Transactions for a cash purchase price of $104.6 million, which includes all post-closing adjustments. The cash purchase price decreased $4.1 million as a result of post-closing adjustments made during 2017. Acquisition of Akron, Elyria, Toledo, Willoughby and Youngstown, Ohio Expansion Territories and Twinsburg, Ohio Expansion Facility (“April 2017 Transactions”) On April 28, 2017, the Company acquired (i) distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in Akron, Elyria, Toledo, Willoughby and Youngstown, Ohio pursuant to a distribution asset purchase agreement entered into by the Company and CCR on April 13, 2017 (the “April 2017 Distribution APA”) and (ii) an Expansion Facility located in Twinsburg, Ohio and related manufacturing assets pursuant to a manufacturing asset purchase agreement entered into by the Company and CCR on April 13, 2017 (the “April 2017 Manufacturing APA”). The Company completed the April 2017 Transactions for a cash purchase price of $87.9 million. During the fourth quarter of 2017, the cash purchase price for the April 2017 Transactions decreased by $4.7 million as a result of net working capital and other fair value adjustments, which remains due from The Coca‑Cola Company. The cash purchase price for the April 2017 Transactions remains subject to post-closing adjustment in accordance with the April 2017 Distribution APA and the April 2017 Manufacturing APA. Acquisition of Arkansas Expansion Territories and Memphis, Tennessee and West Memphis, Arkansas Expansion Facilities in exchange for the Company’s Deep South and Somerset Distribution Territories and Mobile, Alabama Manufacturing Facility (the “CCR Exchange Transaction”) On October 2, 2017, the Company (i) acquired from CCR distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in central and southern Arkansas and two Expansion Facilities located in Memphis, Tennessee and West Memphis, Arkansas and related manufacturing assets (collectively, the “CCR Exchange Business”) in exchange for which the Company (ii) transferred to CCR distribution rights and related assets in territories previously served by the Company through its facilities and equipment located in portions of southern Alabama, southeastern Mississippi, southwestern Georgia and northwestern Florida and in and around Somerset, Kentucky and a regional manufacturing facility located in Mobile, Alabama and related manufacturing assets (collectively, the “Deep South and Somerset Exchange Business”), pursuant to an asset exchange agreement entered into by the Company, certain of its wholly-owned subsidiaries and CCR on September 29, 2017 (the “CCR AEA”). During 2017, the Company paid CCR $15.9 million toward the closing of the CCR Exchange Transaction, representing an estimate of the difference between the value of the CCR Exchange Business acquired by the Company and the value of the Deep South and Somerset Exchange Business acquired by CCR. During the fourth quarter of 2017, the Company recorded certain adjustments to this settlement amount as a result of changes in estimated net working capital and other fair value adjustments, which are included in accounts payable to The Coca‑Cola Company. The final closing price for the CCR Exchange Transaction remains subject to final resolution pursuant to the CCR AEA. The payment for the CCR Exchange Transaction reflected the application of $4.8 million of the Expansion Facilities Discount (as described below). Acquisition of Memphis, Tennessee Expansion Territories (“Memphis Transaction”) On October 2, 2017, the Company acquired distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in and around Memphis, Tennessee, including portions of northwestern Mississippi and eastern Arkansas, pursuant to an asset purchase agreement entered by the Company and CCR on September 29, 2017 (the “September 2017 APA”). The Company completed this acquisition for a cash purchase price of $39.6 million, which remains subject to post-closing adjustment in accordance with the September 2017 APA. System Transformation Transactions completed with United in 2017 Acquisition of Spartanburg and Bluffton, South Carolina Expansion Territories in exchange for the Company’s Florence and Laurel Territories and Piedmont’s Northeastern Georgia Territories (“United Exchange Transaction”) On October 2, 2017, the Company and Piedmont completed exchange transactions in which (i) the Company acquired from United distribution rights and related assets in Expansion Territories previously served by United through United’s facilities and equipment located in and around Spartanburg, South Carolina and a portion of United’s territory located in and around Bluffton, South Carolina and Piedmont acquired from United similar rights, assets and liabilities, and working capital in the remainder of United’s Bluffton, South Carolina territory (collectively, the “United Distribution Business”), in exchange for which (ii) the Company transferred to United distribution rights and related assets in territories previously served by the Company through its facilities and equipment located in parts of northwestern Alabama, south-central Tennessee and southeastern Mississippi previously served by the Company’s distribution centers located in Florence, Alabama and Laurel, Mississippi (collectively, the “Florence and Laurel Distribution Business”) and Piedmont transferred to United similar rights, assets and liabilities, and working capital of Piedmont’s in territory located in parts of northeastern Georgia (the “Northeastern Georgia Distribution Business”), pursuant to an asset exchange agreement between the Company, certain of its wholly-owned subsidiaries and United dated September 29, 2017 (the “United AEA”) and an asset exchange agreement between Piedmont and United dated September 29, 2017 (the “Piedmont – United AEA”). At closing, the Company and Piedmont paid United $3.4 million toward the closing of the United Exchange Transaction, representing an estimate of (i) the difference between the value of the portion of the United Distribution Business acquired by the Company and the value of the Florence and Laurel Distribution Business acquired by United, plus (ii) the difference between the value of the portion of the United Distribution Business acquired by Piedmont and the value of the Northeastern Georgia Distribution Business acquired by United, which such amounts remain subject to final resolution pursuant to the United AEA and the Piedmont – United AEA, respectively. Expansion Facilities Discount and Legacy Facilities Credit Letter Agreement In connection with the Company’s acquisitions of the Expansion Facilities and the impact on transaction value from certain adjustments made by The Coca‑Cola Company pursuant to a regional manufacturing agreement with The Coca‑Cola Company entered into on March 31, 2017 (as amended, the “RMA”) to the authorized pricing on sales of certain beverages produced by the Company under trademarks of The Coca‑Cola Company at the Expansion Facilities and sold to The Coca‑Cola Company and certain U.S. Coca‑Cola bottlers, the Company and The Coca‑Cola Company also entered into a letter agreement on March 31, 2017 (as amended, the “Manufacturing Facilities Letter Agreement”), pursuant to which The Coca‑Cola Company agreed to provide the Company with an aggregate valuation adjustment discount of $33.1 million (the “Expansion Facilities Discount”) on the purchase prices for the Expansion Facilities. The parties agreed to apply $22.9 million of the total Expansion Facilities Discount upon the Company’s acquisition of Expansion Facilities in March 2017 and agreed to apply an additional $5.4 million of the total Expansion Facilities Discount upon the Company’s acquisition of an Expansion Facility in April 2017. The parties agreed to apply the remaining $4.8 million of the total Expansion Facilities Discount upon the Company’s acquisition of two additional Expansion Facilities as part of the CCR Exchange Transaction, after which time no amounts remain outstanding under the Manufacturing Facilities Letter Agreement. The Manufacturing Facilities Letter Agreement also establishes a mechanism to compensate the Company with a payment or credit for the net economic impact to the manufacturing facilities the Company served prior to the System Transformation (the “Legacy Facilities”) of the changes made by The Coca‑Cola Company to the authorized pricing under the RMA on sales of certain Coca‑Cola products produced by the Company at the Legacy Facilities and sold to The Coca‑Cola Company and certain U.S. Coca‑Cola bottlers versus the Company’s historical returns for products produced at the Legacy Facilities prior to the conversion on March 31, 2017 of the Company’s then-existing manufacturing agreements with The Coca‑Cola Company to the RMA (the “Legacy Facilities Credit”). The Company and The Coca‑Cola Company agreed that the amount of the Legacy Facilities Credit to be paid to the Company by The Coca‑Cola Company was $43.0 million, pursuant to a letter agreement between the Company and The Coca‑Cola Company dated December 26, 2017. The Coca‑Cola Company paid the Legacy Facilities Credit, in the amount of $43.0 million, to the Company in December 2017. The Company recognized $12.4 million of the Legacy Facilities Credit during 2017, representing the portion of the credit applicable to the Mobile, Alabama facility which the Company transferred to CCR as part of the CCR Exchange Transaction. The $12.4 million portion of the Legacy Facilities Credit related to the Mobile, Alabama facility was recorded to gain (loss) on exchange transactions in the Company’s consolidated financial statements. The remaining $30.6 million of the Legacy Facilities Credit was recorded as a deferred liability and will be amortized as a reduction to cost of sales over a period of 40 years. Gain on Exchange Transactions Upon closing the CCR Exchange Transaction and the United Exchange Transaction, the fair value of net assets acquired exceeded the carrying value of net assets exchanged, which resulted in a gain of $0.5 million recorded to gain (loss) on exchange transactions in the Company’s consolidated financial statements. This amount remains subject to final resolution pursuant to the CCR AEA, the United AEA and the Piedmont – United AEA. The $0.5 million gain on the CCR Exchange Transaction and the United Exchange Transaction, combined with the $12.4 million portion of the Legacy Facilities Credit related to the Mobile, Alabama facility, resulted in a total gain on exchange transactions of $12.9 million in 2017. The fair value of acquired assets and assumed liabilities in the 2017 System Transformation Transactions as of the acquisition dates is summarized as follows:
(in thousands) |  | January 2017 Transaction |  |  | March 2017 Transactions |  |  | April 2017 Transactions |  |  | October 2017 Transactions Acquisitions |  |  | Total 2017 Transactions |
Cash |  | $ | 107 |  |  | $ | 211 |  |  | $ | 103 |  |  | $ | 191 |  |  | $ | 612 |
Inventories |  |  | 5,953 |  |  |  | 20,952 |  |  |  | 14,554 |  |  |  | 14,850 |  |  |  | 56,309 |
Prepaid expenses and other current assets |  |  | 1,155 |  |  |  | 5,117 |  |  |  | 4,068 |  |  |  | 4,754 |  |  |  | 15,094 |
Accounts receivable from The Coca-Cola Company |  |  | 1,042 |  |  |  | 1,807 |  |  |  | 2,552 |  |  |  | 2,391 |  |  |  | 7,792 |
Property, plant and equipment |  |  | 25,708 |  |  |  | 81,638 |  |  |  | 52,263 |  |  |  | 70,645 |  |  |  | 230,254 |
Other assets (including deferred taxes) |  |  | 1,158 |  |  |  | 3,227 |  |  |  | 4,369 |  |  |  | 889 |  |  |  | 9,643 |
Goodwill |  |  | 1,544 |  |  |  | 2,527 |  |  |  | 17,804 |  |  |  | 13,992 |  |  |  | 35,867 |
Distribution agreements |  |  | 22,000 |  |  |  | 46,750 |  |  |  | 19,500 |  |  |  | 124,750 |  |  |  | 213,000 |
Customer lists |  |  | 1,500 |  |  |  | 1,750 |  |  |  | 1,000 |  |  |  | 4,950 |  |  |  | 9,200 |
Total acquired assets |  | $ | 60,167 |  |  | $ | 163,979 |  |  | $ | 116,213 |  |  | $ | 237,412 |  |  | $ | 577,771 |
Current liabilities (acquisition related contingent consideration) |  | $ | 1,350 |  |  | $ | 2,958 |  |  | $ | 1,546 |  |  | $ | 1,458 |  |  | $ | 7,312 |
Other current liabilities |  |  | 324 |  |  |  | 3,760 |  |  |  | 2,860 |  |  |  | 6,492 |  |  |  | 13,436 |
Other liabilities (acquisition related contingent consideration) |  |  | 26,377 |  |  |  | 49,739 |  |  |  | 26,604 |  |  |  | 18,848 |  |  |  | 121,568 |
Other liabilities |  |  | 43 |  |  |  | 2,953 |  |  |  | 2,005 |  |  |  | 95 |  |  |  | 5,096 |
Total assumed liabilities |  | $ | 28,094 |  |  | $ | 59,410 |  |  | $ | 33,015 |  |  | $ | 26,893 |  |  | $ | 147,412 |
As part of the “October 2017 Transactions Acquisitions,” which include the Expansion Territories and the Expansion Facilities acquired in the CCR Exchange Transaction (the “CCR Exchange Transaction Acquisitions”), the Memphis Transaction and the United Exchange Transaction (the “United Exchange Transaction Acquisitions”), the Company’s acquired assets and assumed liabilities as of the acquisition dates are summarized as follows:
(in thousands) |  | CCR Exchange Transaction Acquisitions |  |  | Memphis Transaction |  |  | United Exchange Transaction Acquisitions |  |  | October 2017 Transactions Acquisitions |
Cash |  | $ | 91 |  |  | $ | 100 |  |  | $ | - |  |  | $ | 191 |
Inventories |  |  | 10,667 |  |  |  | 3,354 |  |  |  | 829 |  |  |  | 14,850 |
Prepaid expenses and other current assets |  |  | 3,218 |  |  |  | 1,222 |  |  |  | 314 |  |  |  | 4,754 |
Accounts receivable from The Coca-Cola Company |  |  | 1,092 |  |  |  | 1,089 |  |  |  | 210 |  |  |  | 2,391 |
Property, plant and equipment |  |  | 47,066 |  |  |  | 20,795 |  |  |  | 2,784 |  |  |  | 70,645 |
Other assets (including deferred taxes) |  |  | 624 |  |  |  | 265 |  |  |  | - |  |  |  | 889 |
Goodwill |  |  | 6,378 |  |  |  | 4,917 |  |  |  | 2,697 |  |  |  | 13,992 |
Distribution agreements |  |  | 80,500 |  |  |  | 30,300 |  |  |  | 13,950 |  |  |  | 124,750 |
Customer lists |  |  | 3,200 |  |  |  | 1,200 |  |  |  | 550 |  |  |  | 4,950 |
Total acquired assets |  | $ | 152,836 |  |  | $ | 63,242 |  |  | $ | 21,334 |  |  | $ | 237,412 |
Current liabilities (acquisition related contingent consideration) |  | $ | - |  |  | $ | 1,458 |  |  | $ | - |  |  | $ | 1,458 |
Other current liabilities |  |  | 2,760 |  |  |  | 3,241 |  |  |  | 491 |  |  |  | 6,492 |
Other liabilities (acquisition related contingent consideration) |  |  | - |  |  |  | 18,848 |  |  |  | - |  |  |  | 18,848 |
Other liabilities |  |  | 1 |  |  |  | 94 |  |  |  | - |  |  |  | 95 |
Total assumed liabilities |  | $ | 2,761 |  |  | $ | 23,641 |  |  | $ | 491 |  |  | $ | 26,893 |
The goodwill for the 2017 System Transformation Transactions is included in the Nonalcoholic Beverages segment and is primarily attributed to operational synergies and the workforce acquired. Goodwill of $11.6 million, $6.4 million, $6.6 million and $2.7 million is expected to be deductible for tax purposes for the April 2017 Transactions, the CCR Exchange Transaction Acquisitions, the Memphis Transaction and the United Exchange Transaction Acquisitions, respectively. No goodwill is expected to be deductible for tax purposes for the January 2017 Transaction or the March 2017 Transactions. Identifiable intangible assets acquired by the Company in the 2017 System Transformation Transactions consist of distribution agreements and customer lists, which have an estimated useful life of 40 years and 12 years, respectively. The Company has preliminarily allocated the purchase prices of the April 2017 Transactions, the CCR Exchange Transaction, the Memphis Transaction and the United Exchange Transaction to the individual acquired assets and assumed liabilities. The valuations are subject to adjustment as additional information is obtained. Any adjustments made beyond one year from each transaction’s acquisition date are recorded through the Company’s consolidated statements of operations. The carrying value of assets and liabilities in the Deep South and Somerset Exchange Business divested in the CCR Exchange Transaction and the Florence and Laurel Distribution Business divested in the United Exchange Transaction (together, the “October 2017 Divestitures”) are summarized as follows:
(in thousands) |  | October 2017 Divestitures |
Cash |  | $ | 303 |
Inventories |  |  | 13,717 |
Prepaid expenses and other current assets |  |  | 1,199 |
Property, plant and equipment |  |  | 44,380 |
Other assets (including deferred taxes) |  |  | 604 |
Goodwill |  |  | 13,073 |
Distribution agreements |  |  | 65,043 |
Total divested assets |  | $ | 138,319 |
Other current liabilities |  | $ | 5,683 |
Pension and postretirement benefit obligations |  |  | 16,855 |
Total divested liabilities |  | $ | 22,538 |
The October 2017 Divestitures were recorded in the Company’s Nonalcoholic Beverages segment prior to divestiture. System Transformation Transactions Completed in 2016 During 2016, the Company acquired from CCR distribution rights and related assets for the following Expansion 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 Expansion Facilities and related manufacturing assets in Sandston, Virginia; Silver Spring and Baltimore, Maryland; and Cincinnati, Ohio during 2016. Collectively, these are the “2016 System Transformation Transactions.” Details of the 2016 System Transformation Transactions are included below. Easton and Salisbury, Maryland and Richmond and Yorktown, Virginia Expansion Territories Acquisitions and Sandston, Virginia Expansion Facility Acquisition (“January 2016 Transactions”) An asset purchase agreement entered into by the Company and CCR in September 2015 (the “September 2015 APA”) contemplated, in part, the Company’s acquisition of distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in Easton and Salisbury, Maryland and Richmond and Yorktown, Virginia. In addition, an asset purchase agreement entered into by the Company and CCR in October 2015 (the “October 2015 APA”) contemplated, in part, the Company’s acquisition of an Expansion Facility and related manufacturing assets in Sandston, Virginia. The closing of the January 2016 Transactions occurred on January 29, 2016. The cash purchase price for the January 2016 Transactions was $75.9 million, which includes all post-closing adjustments. Of the total cash purchase price, $10.2 million was settled beyond one year from the transaction closing date and was recorded as other expense on the Company’s consolidated statements of operations. Alexandria, Virginia and Capitol Heights and La Plata, Maryland Territories Acquisitions (“April 1, 2016 Transaction”) The September 2015 APA also contemplated the Company’s acquisition of distribution rights and related assets in Expansion Territories previously served by CCR through CCR’s facilities and equipment located in Alexandria, Virginia and Capitol Heights and La Plata, Maryland. The closing of the April 1, 2016 Transaction occurred on April 1, 2016. The cash purchase price for the April 1, 2016 Transaction was $34.8 million, which includes all post-closing adjustments. Of the total cash purchase price, $0.8 million was settled beyond one year from the transaction closing date and was recorded as other income on the Company’s consolidated statements of operations. Baltimore, Hagerstown and Cumberland, Maryland Expansion Territories Acquisitions and Silver Spring and Baltimore, Maryland Expansion Facilities Acquisitions (“April 29, 2016 Transactions”) 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 previously served by CCR through CCR’s facilities and equipment located in Baltimore, Hagerstown and Cumberland, Maryland, and (ii) the October 2015 APA, by acquiring Expansion Facilities and related manufacturing assets in Silver Spring and Baltimore, Maryland. The cash purchase price for the April 29, 2016 Transactions was $68.5 million, which includes all post-closing adjustments. Of the total cash purchase price, $0.5 million was settled beyond one year from the transaction closing date and was recorded as other income on the Company’s consolidated statements of operations. Cincinnati, Dayton, Lima and Portsmouth, Ohio and Louisa, Kentucky Expansion Territories Acquisitions and Cincinnati, Ohio Expansion Facility Acquisition (“October 2016 Transactions”) 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 Expansion Territories previously 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 an Expansion Facility and related manufacturing assets located in Cincinnati, Ohio. The closing of the October 2016 Transactions occurred for a cash purchase price of $99.7 million, which includes all post-closing adjustments. The cash purchase price increased $1.5 million as a result of post-closing adjustments made during 2017. The fair value of acquired assets and assumed liabilities of the 2016 System Transformation Transactions as of the acquisition dates is summarized as follows:
(in thousands) |  | January 2016 Transactions |  |  | April 1, 2016 Transaction |  |  | April 29, 2016 Transactions |  |  | October 2016 Transactions |  |  | Total 2016 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 |  |  |  | 4,228 |  |  |  | 12,722 |
Accounts receivable from The Coca-Cola Company |  |  | 1,121 |  |  |  | 1,162 |  |  |  | 1,126 |  |  |  | 1,327 |  |  |  | 4,736 |
Property, plant and equipment |  |  | 46,149 |  |  |  | 54,135 |  |  |  | 57,738 |  |  |  | 67,943 |  |  |  | 225,965 |
Other assets (including deferred taxes) |  |  | 2,351 |  |  |  | 1,541 |  |  |  | 5,514 |  |  |  | 682 |  |  |  | 10,088 |
Goodwill |  |  | 9,396 |  |  |  | 1,962 |  |  |  | 8,368 |  |  |  | 8,473 |  |  |  | 28,199 |
Distribution agreements |  |  | 750 |  |  | - |  |  |  | 22,000 |  |  |  | 79,900 |  |  |  | 102,650 |
Customer lists |  |  | 550 |  |  | - |  |  |  | 1,450 |  |  |  | 2,750 |  |  |  | 4,750 |
Total acquired assets |  | $ | 73,430 |  |  | $ | 64,712 |  |  | $ | 113,981 |  |  | $ | 183,966 |  |  | $ | 436,089 |
Current liabilities (acquisition related contingent consideration) |  | $ | 361 |  |  | $ | 742 |  |  | $ | 1,307 |  |  | $ | 3,973 |  |  | $ | 6,383 |
Other current liabilities |  |  | 591 |  |  |  | 4,231 |  |  |  | 5,482 |  |  |  | 8,513 |  |  |  | 18,817 |
Accounts payable to The Coca-Cola Company |  |  | 650 |  |  | - |  |  | - |  |  | - |  |  |  | 650 |
Other liabilities (acquisition related contingent consideration) |  |  | 6,144 |  |  |  | 23,924 |  |  |  | 35,561 |  |  |  | 71,237 |  |  |  | 136,866 |
Other liabilities |  | - |  |  |  | 266 |  |  |  | 2,635 |  |  |  | 573 |  |  |  | 3,474 |
Total assumed liabilities |  | $ | 7,746 |  |  | $ | 29,163 |  |  | $ | 44,985 |  |  | $ | 84,296 |  |  | $ | 166,190 |
The goodwill for the 2016 System Transformation Transactions is all included in the Nonalcoholic Beverages segment and is primarily attributed to operational synergies and the workforce acquired. Goodwill of $14.9 million and $15.8 million is expected to be deductible for tax purposes for the January 2016 Transactions and October 2016 Transactions, respectively. No goodwill is expected to be deductible for the April 1, 2016 Transaction or the April 29, 2016 Transactions. System Transformation Transactions Completed in 2015 During 2015, the Company acquired from CCR distribution rights and related assets for the following Expansion Territories: Cleveland and Cookeville, Tennessee; Louisville, Kentucky and Evansville, Indiana; Paducah and Pikeville, Kentucky; Norfolk, Fredericksburg and Staunton, Virginia; and Elizabeth City, North Carolina and acquired a make-ready center in Annapolis, Maryland (the “2015 Expansion Territories”). In 2015, the Company also acquired from CCR distribution rights and related assets for distribution territory in Lexington, Kentucky in exchange for distribution territory previously served by the Company in Jackson, Tennessee (the “2015 Asset Exchange”). The aggregate cash purchase price for the 2015 Expansion Territories and the 2015 Asset Exchange was $85.6 million, which includes all post-closing adjustments. The Company recognized a gain of $8.1 million as a result of the 2015 Asset Exchange, which was recorded to gain (loss) on exchange transactions in the consolidated financial statements. In addition, the Company recognized a bargain purchase gain of $2.0 million after applying a deferred tax liability of $1.3 million as a result of the acquisition of the make-ready center in Annapolis, Maryland, which was recorded to bargain purchase gain, net of tax in the consolidated financial statements. System Transformation Transactions Completed in 2014 During 2014, the Company acquired from CCR distribution rights and related assets for the following Expansion Territories: Johnson City, Knoxville and Morristown, Tennessee (the “2014 Expansion Territories”). The aggregate cash purchase price for the 2014 Expansion Territories was $43.1 million, which includes all post-closing adjustments. System Transformation Transactions Financial Results The financial results of the 2017 System Transformation Transactions, the 2016 System Transformation Transactions, the 2015 Expansion Territories and the 2015 Asset Exchange have been included in the Company’s consolidated financial statements from their respective acquisition dates. These System Transformation Transactions contributed the following amounts to the Company’s consolidated statement of operations:
|  | Fiscal Year |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Net sales from 2015 Expansion Territories & 2015 Asset Exchange |  | $ | 484,485 |  |  | $ | 469,440 |  |  | $ | 278,691 |
Net sales from 2016 System Transformation Transactions |  |  | 1,011,638 |  |  |  | 592,329 |  |  |  | - |
Net sales from 2017 System Transformation Transactions |  |  | 740,259 |  |  |  | - |  |  |  | - |
Total System Transformation Transactions impact to net sales |  | $ | 2,236,382 |  |  | $ | 1,061,769 |  |  | $ | 278,691 |
Income from operations from 2015 Expansion Territories & 2015 Asset Exchange |  | $ | 1,540 |  |  | $ | 1,907 |  |  | $ | 3,364 |
Income from operations from 2016 System Transformation Transactions |  |  | 18,930 |  |  |  | 22,373 |  |  |  | - |
Income from operations from 2017 System Transformation Transactions |  |  | 10,754 |  |  |  | - |  |  |  | - |
Total System Transformation Transactions impact to income from operations |  | $ | 31,224 |  |  | $ | 24,280 |  |  | $ | 3,364 |
The Company incurred transaction related expenses for these System Transformation Transactions of $6.8 million in 2017, $6.1 million in 2016 and $5.8 million in 2015. These expenses are included within selling, delivery and administrative expenses on the consolidated statements of operations. 2017 System Transformation Transactions and 2016 System Transformation Transactions Pro Forma Financial Information The purpose of the pro forma disclosures is to present the net sales and the income from operations of the combined entity as though the 2017 System Transformation Transactions and the 2016 System Transformation Transactions had occurred as of the beginning of 2016. 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 2016. 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 tables represent the Company’s unaudited pro forma net sales and unaudited pro forma income from operations for the 2017 System Transformation Transactions and the 2016 System Transformation Transactions.
|  | Fiscal Year |
(in thousands) |  | 2017 |  |  | 2016 |
Net sales as reported |  | $ | 4,323,668 |  |  | $ | 3,156,428 |
Pro forma adjustments (unaudited) |  |  | 196,224 |  |  |  | 1,153,358 |
Net sales pro forma (unaudited) |  | $ | 4,519,892 |  |  | $ | 4,309,786 |
|  | Fiscal Year |
(in thousands) |  | 2017 |  |  | 2016 |
Income from operations as reported |  | $ | 96,179 |  |  | $ | 127,859 |
Pro forma adjustments (unaudited) |  |  | 5,391 |  |  |  | 76,906 |
Income from operations pro forma (unaudited) |  | $ | 101,570 |  |  | $ | 204,765 |
The net sales pro forma and the income from operations pro forma reflect adjustments for (i) the inclusion of historic results of operations for the Expansion Territories and the Expansion Facilities acquired in the System Transformation Transactions for the period prior to the Company’s acquisition of the applicable territories or facility, for each year presented, (ii) the elimination of historic results of operations for the October 2017 Divestitures for the period prior to the Company’s divestiture of the associated Expansion Territories and Expansion Facility and (iii) the elimination of net sales made in the normal course of business between the Company and the selling entity (CCR or United) involved in the applicable System Transformation Transactions. In addition, the income from operations pro forma reflects adjustments for the elimination of cost of sales associated with intercompany sales and an adjustment for additional depreciation expense and amortization expense for property, plant and equipment and intangible assets, respectively, as a result of the change in fair value of the assets’ useful lives upon acquisition. 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 in 2015, which was recorded to gain on sale of business in the consolidated financial statements. BYB contributed the following amounts to the Company’s consolidated statement of operations:
(in thousands) |  | 2015 |
Net sales |  | $ | 23,875 |
Income from operations |  |  | 1,809 |

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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration