Coca Cola 2008 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2008 Coca Cola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 168

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168

Income Taxes
Our effective tax rate reflects tax benefits derived from significant operations outside the United States,
which are generally taxed at rates lower than the U.S. statutory rate of 35 percent. A change in the mix of pretax
income from these various tax jurisdictions can have a significant impact on the Company’s periodic effective tax
rate.
Our effective tax rate of approximately 21.9 percent for the year ended December 31, 2008, included the
following:
• an approximate 20 percent combined effective tax rate on restructuring charges, other-than-temporary
impairments of available-for-sale securities, contract termination fees, productivity initiatives and asset
impairments recorded by the Company (refer to Note 18 and Note 19 of Notes to Consolidated Financial
Statements);
• an approximate 23 percent combined effective tax rate on our proportionate share of asset impairment
and restructuring charges recorded by equity method investees, primarily related to impairment charges
recorded by CCE (refer to Note 3 and Note 19 of Notes to Consolidated Financial Statements);
• an approximate 24 percent combined effective tax rate on gains from divestitures (refer to Note 19 of
Notes to Consolidated Financial Statements);
• a tax charge of approximately $10 million related to the recognition of a valuation allowance on deferred
tax assets (refer to Note 17 of Notes to Consolidated Financial Statements); and
• a net tax benefit of approximately $5 million, primarily related to amounts required to be recorded for
changes to our uncertain tax positions under Interpretation No. 48, including interest and penalties (refer
to Note 17 of Notes to Consolidated Financial Statements).
Our effective tax rate of approximately 24.0 percent for the year ended December 31, 2007, included the
following:
• an approximate 18 percent combined effective tax rate on restructuring charges and asset impairments
recorded by the Company (refer to Note 18 and Note 19 of Notes to Consolidated Financial Statements);
• an approximate 14 percent combined effective tax rate on our proportionate share of restructuring
charges and tax rate changes recorded by CCE, and asset impairments recorded by CCBPI and
Coca-Cola Amatil (refer to Note 19 of Notes to Consolidated Financial Statements);
• an approximate 58 percent combined effective tax rate on the sale of a portion of our equity interest in
Coca-Cola Amatil and Vonpar (refer to Note 19 of Notes to Consolidated Financial Statements);
• a tax benefit of approximately $19 million related to tax rate changes in Germany (refer to Note 17 of
Notes to Consolidated Financial Statements); and
• a tax charge of approximately $96 million related to amounts required to be recorded for changes to our
uncertain tax positions under Interpretation No. 48, including interest and penalties (refer to Note 17 of
Notes to Consolidated Financial Statements).
Our effective tax rate of approximately 22.8 percent for the year ended December 31, 2006, included the
following:
• an approximate 16 percent combined effective tax rate on asset impairments, impairments of investments
in our bottling operations, contract termination fees and restructuring charges recorded by the Company
(refer to Note 19 of Notes to Consolidated Financial Statements);
59