Coca Cola 2008 Annual Report Download - page 139

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20: ACQUISITIONS AND INVESTMENTS (Continued)
December 31, 2008. As a result of the acquisition, the Company owns 100 percent of the outstanding stock of
CCBPI. The final amount of purchase price allocated to property, plant and equipment was approximately
$319 million; franchise rights was approximately $285 million; and goodwill was approximately $199 million. The
goodwill is not deductible for tax purposes. The franchise rights have been assigned an indefinite life.
Management finalized a plan to improve the efficiency of CCBPI, which included the closing of eight production
facilities during the third quarter of 2007. The acquisition of CCBPI was accounted for as a business
combination, with the results of the acquired entity included in the Bottling Investments operating segment as of
the acquisition date.
First quarter 2007 acquisition and investing activities also included approximately $327 million related to
the purchases of Fuze and Leao Junior S.A. (‘‘Leao Junior’’), a Brazilian tea company, which are included in the
North America and Latin America operating segments, respectively. The final amount of purchase price, related
to these acquisitions, allocated to property, plant and equipment was approximately $19 million; identifiable
intangible assets, primarily indefinite-lived trademarks, was approximately $265 million; and goodwill was
approximately $57 million.
The acquisitions of the 18 German bottling and distribution operations, glac´ eau, CCBPI, Fuze, Leao Junior,
NORSA, our 34 percent investment in Tokyo CCBC and our 50 percent investment in Jugos del Valle in 2007
were primarily financed through the issuance of commercial paper and long-term debt.
Assuming the results of the businesses acquired in 2007 had been included in operations beginning on
January 1, 2006, the estimated pro forma net operating revenues of the Company for the years ended
December 31, 2007 and 2006 would have been approximately $29.6 billion and $25.9 billion, respectively. The
estimated pro forma net income, excluding the effect of interest expense as a result of financing the acquisitions,
for the years ended December 31, 2007 and 2006 would not have been significantly different than the reported
amounts.
During 2006, our Company’s acquisition and investment activity, including the acquisition of trademarks,
totaled approximately $901 million. In the third quarter of 2006, our Company acquired a controlling
shareholding interest in Kerry Beverages Limited (‘‘KBL’’). KBL was formed by the Company and the Kerry
Group in 1993 and has a majority ownership in 11 joint ventures that manufacture and distribute Company
products across nine provinces in China. KBL also has a minority interest in the joint venture bottler in Beijing.
Subsequent to the acquisition, the Company changed KBL’s name to Coca-Cola China Industries Limited
(‘‘CCCIL’’). As a result of the transaction, the Company owned 89.5 percent of the outstanding shares of
CCCIL. The Company purchased the remaining 10.5 percent of the outstanding shares during the fourth quarter
of 2008 at the same price per share as the initial purchase price plus interest. This transaction was accounted for
as a business combination, and the results of CCCIL’s operations have been included in the Company’s
consolidated financial statements since August 29, 2006. CCCIL is included in the Bottling Investments
operating segment.
In the third quarter of 2006, our Company signed agreements with J. Bruce Llewellyn and Brucephil, Inc.
(‘‘Brucephil’’), the parent company of The Philadelphia Coca-Cola Bottling Company, for the potential
purchase of the remaining shares of Brucephil not then owned by the Company. The agreements provide for the
Company’s purchase of the shares upon the election of Mr. Llewellyn or the election of the Company. Based on
the terms of these agreements, the Company concluded that it must consolidate Brucephil under Interpretation
No. 46(R) effective September 29, 2006. During the third quarter of 2008, the Company purchased all remaining
shares not previously owned by the Company. As a result, the Company owned 100 percent of Brucephil as of
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