Coca Cola 2008 Annual Report Download - page 136

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19: SIGNIFICANT OPERATING AND NONOPERATING ITEMS (Continued)
Equity income was increased in 2007 by approximately $11 million in the Bottling Investments operating
segment, primarily consisting of our proportionate share of tax benefits recorded by CCE, partially offset by our
proportionate share of restructuring charges recorded by CCE. Refer to Note 3.
In 2006, our Company recorded charges of approximately $606 million related to our proportionate share
of charges recorded by our equity method investees. Of this amount, approximately $602 million related to our
proportionate share of an impairment charge recorded by CCE for its North American franchise rights. Our
proportionate share of CCE’s charges also included approximately $18 million due to restructuring charges
recorded by CCE. These charges were partially offset by approximately $33 million related to our proportionate
share of changes in certain of CCE’s state and Canadian federal and provincial tax rates. The charges were
recorded in the line item equity income (loss)—net in the consolidated statement of income. All of these charges
and changes impacted our Bottling Investments operating segment. Refer to Note 3.
During 2006, our Company also recorded charges of approximately $112 million, primarily related to the
impairment of assets and investments in our bottling operations, approximately $53 million for contract
termination costs related to production capacity efficiencies and approximately $24 million related to other
restructuring costs. These charges impacted the Eurasia and Africa, Europe, Pacific, Bottling Investments and
Corporate operating segments. None of these charges was individually significant. Approximately $4 million of
these charges was recorded in the line item cost of goods sold and approximately $185 million of these charges
was recorded in the line item other operating charges in the consolidated statement of income. Refer to Note 21
for the impact on our operating segments.
The Company made a $100 million donation to The Coca-Cola Foundation in 2006, which resulted in a
charge to the consolidated statement of income line item selling, general and administrative expenses and
impacted the Corporate operating segment.
In 2006, the Company sold a portion of its Coca-Cola FEMSA shares to FEMSA and recorded a pretax
gain of approximately $175 million in the consolidated statement of income line item other income (loss)—net,
which impacted the Corporate operating segment. Refer to Note 3.
The Company sold a portion of our investment in Coca-Cola Icecek in an initial public offering in 2006. Our
Company received net cash proceeds of approximately $198 million and realized a pretax gain of approximately
$123 million, which was recorded as other income (loss)—net in the consolidated statement of income and
impacted the Corporate operating segment. Refer to Note 3.
NOTE 20: ACQUISITIONS AND INVESTMENTS
On September 3, 2008, we announced our intention to make cash offers to purchase Huiyuan. The making
of the offers is subject to preconditions relating to Chinese regulatory approvals. Refer to Note 13.
During 2008, our Company’s acquisition and investment activities totaled approximately $759 million,
primarily related to the purchase of trademarks, brands and licenses. Included in these investment activities was
the acquisition of brands and licenses in Denmark and Finland from Carlsberg Group Beverages (‘‘Carlsberg’’)
for approximately $225 million. None of the other acquisitions or investments was individually significant.
During 2007, our Company’s acquisition and investment activity, including the acquisition of trademarks,
totaled approximately $5,653 million.
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