Coca Cola 2006 Annual Report Download - page 57

positions, or 5 percent of its total workforce. CCE expects this restructuring will result in a charge of
approximately $300 million, with the majority to be recognized in 2007 and 2008. The Company’s equity income
in 2007 and 2008 will reflect our proportionate share of the restructuring charges recorded by CCE.
Our Company’s share of income from equity method investments for 2005 totaled $680 million compared to
$621 million in 2004, an increase of $59 million or 10 percent, primarily due to the overall improving health of
the Coca-Cola bottling system in most of the world and the joint acquisition of Multon in April 2005. The
increase was offset by approximately $33 million related to our proportionate share of certain charges recorded
by CCE. These charges included approximately $51 million, primarily related to the tax liability resulting from
the repatriation of previously unremitted foreign earnings under the Jobs Creation Act, and approximately
$18 million due to restructuring charges recorded by CCE. These charges were offset by approximately
$37 million from CCE’s HFCS lawsuit settlement and changes in certain of CCE’s state and provincial tax rates.
Other Income (Loss)—Net
Other income (loss)—net was a net income of $195 million for 2006 compared to a net loss of $93 million
for 2005, a difference of $288 million. In 2006, other income (loss)—net included a gain of approximately
$175 million resulting from the sale of a portion of our Coca-Cola FEMSA shares to FEMSA and a gain of
approximately $123 million resulting from the sale of a portion of our investment in Coca-Cola Icecek shares in
an initial public offering. Refer to Note 18 of Notes to Consolidated Financial Statements. This line item in 2006
also included $15 million in foreign currency exchange losses, the accretion of $58 million for the discounted
value of our liability to purchase CCEAG shares (refer to Note 8 of Notes to Consolidated Financial
Statements) and the minority shareowners’ proportional share of net income of certain consolidated
subsidiaries.
Other income (loss)—net amounted to a net loss of $93 million for 2005 compared to a net loss of
$82 million for 2004, a difference of $11 million. The difference was primarily related to a reduction in foreign
exchange losses. This line item in 2005 primarily consisted of $23 million in foreign currency exchange losses, the
accretion of $60 million for the discounted value of our liability to purchase CCEAG shares (refer to Note 8 of
Notes to Consolidated Financial Statements) and the minority shareowners’ proportional share of net income of
certain consolidated subsidiaries.
Gains on Issuances of Stock by Equity Method Investees
When one of our equity method investees issues additional shares to third parties, our percentage
ownership interest in the investee decreases. In the event the issuance price per share is higher or lower than our
average carrying amount per share, we recognize a noncash gain or loss on the issuance, when appropriate. This
noncash gain or loss, net of any deferred taxes, is recognized in our net income in the period the change of
ownership interest occurs.
In 2006, our equity method investees did not issue any additional shares to third parties that resulted in our
Company recording any noncash pretax gains.
In 2005, our Company recorded approximately $23 million of noncash pretax gains on the issuances of stock
by equity method investees. The issuances primarily related to Coca-Cola Amatil’s issuance of common stock in
connection with the acquisition of SPC Ardmona Pty. Ltd., an Australian packaged fruit company. These
issuances of common stock reduced our ownership interest in the total outstanding shares of Coca-Cola Amatil
from approximately 34 percent to approximately 32 percent.
In 2004, our Company recorded approximately $24 million of noncash pretax gains on issuances of stock by
CCE. The issuances primarily related to the exercise of CCE stock options by CCE employees at amounts
greater than the book value per share of our investment in CCE. These issuances of stock reduced our
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