Coca Cola 2004 Annual Report Download - page 36

The following table presents the difference between calculated fair values, based on quoted closing prices of
publicly traded shares, and our Company’s carrying values for significant publicly traded bottlers accounted for
as equity method investees (in millions):
Fair Carrying
December 31, 2004 Value Value Difference
Coca-Cola Enterprises Inc. $ 3,522 $ 1,569 $ 1,953
Coca-Cola FEMSA, S.A. de C.V. 1,720 792 928
Coca-Cola Amatil Limited 1,539 736 803
Coca-Cola Hellenic Bottling Company S.A. 1,353 1,067 286
Grupo Continental, S.A. 298 174 124
Coca-Cola Embonor S.A. 156 153 3
Coca-Cola Bottling Company Consolidated 142 63 79
Coca-Cola West Japan Company Ltd. 104 132 (28)1
Embotelladoras Polar S.A. 59 46 13
$ 8,893 $ 4,732 $ 4,161
1The current decline in value is considered to be temporary.
Other Assets. Our Company invests in infrastructure programs with our bottlers that are directed at
strengthening our bottling system and increasing unit case volume. Additionally, our Company advances
payments to certain customers to fund future marketing activities intended to generate profitable volume and
expenses such payments over the applicable period. Advance payments are also made to certain customers for
distribution rights. Payments under these programs are generally capitalized and reported as other assets in our
consolidated balance sheets. Management periodically evaluates the recoverability of these assets by preparing
estimates of sales volume, gross profit, cash flows and other factors. If the assets are assessed to be recoverable,
they are amortized over the periods benefited. If the carrying value of these assets is considered to be not
recoverable, such assets are written down as appropriate.
Property, Plant and Equipment. Certain events or changes in circumstances may indicate that the
recoverability of the carrying amount of property, plant and equipment should be assessed. Such events or
changes may include a significant decrease in market value, a significant change in the business climate in a
particular market, or a current-period operating or cash flow loss combined with historical losses or projected
future losses. If an event occurs or changes in circumstances are present, we estimate the future cash flows
expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash
flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment
loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value.
Goodwill, Trademarks and Other Intangible Assets. Statement of Financial Accounting Standards (‘‘SFAS’’)
No. 142, ‘‘Goodwill and Other Intangible Assets,’’ classifies intangible assets into three categories: (1) intangible
assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to
amortization; and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed
if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite
lives and goodwill, tests for impairment must be performed at least annually or more frequently if events or
circumstances indicate that assets might be impaired. Such tests for impairment are also required for intangible
assets recorded by our equity method investees.
Our trademarks and other intangible assets determined to have definite lives are amortized over their
useful lives. In accordance with SFAS No. 142, if conditions exist that indicate the carrying value may not be
recoverable, we review such trademarks and other intangible assets with definite lives for impairment to ensure
they are appropriately valued. Such conditions may include an economic downturn in a market or a change in
the assessment of future operations. Trademarks and other intangible assets determined to have indefinite useful
lives are not amortized. We test such trademarks and other intangible assets with indefinite useful lives for
impairment annually, or more frequently if events or circumstances indicate that assets might be impaired.
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