Coca Cola 2008 Annual Report Download - page 95

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: BOTTLING INVESTMENTS (Continued)
In 2007, the Company and Coca-Cola FEMSA jointly acquired Jugos del Valle, S.A.B. de C.V. (‘‘Jugos del
Valle’’), the second largest producer of packaged juices, nectars and fruit-flavored beverages in Mexico and the
largest producer of such beverages in Brazil. The total purchase price was approximately $370 million plus the
assumption of approximately $85 million in debt and was split equally between the Company and Coca-Cola
FEMSA. The Company’s investment in Jugos del Valle is accounted for under the equity method. Equity income
(loss)—net includes our proportionate share of the results of Jugos del Valle’s operations beginning November
2007 and is included in the Latin America operating segment. Refer to Note 20.
During 2007, the Company acquired a 34 percent interest in Tokyo Coca-Cola Bottling Company (‘‘Tokyo
CCBC’’). The Company’s investment in Tokyo CCBC is accounted for under the equity method. Equity income
(loss)—net includes our proportionate share of the results of Tokyo CCBC’s operations beginning July 2007 and
is included in the Bottling Investments operating segment. In the third quarter of 2007, the Company also
acquired an additional interest in Nordeste Refrigerantes S.A. (‘‘NORSA’’). After this acquisition, the Company
owned approximately 60 percent of NORSA. The Company began consolidating this entity from the date we
acquired the additional 11 percent interest. The combined purchase price for these third quarter acquisitions
was approximately $203 million. NORSA is included in the Bottling Investments operating segment. Refer to
Note 20.
In 2007, the Company sold a portion of its interest in Coca-Cola Amatil for proceeds of approximately
$143 million. As a result of this transaction, we recognized a gain of approximately $73 million, which impacted
the Corporate operating segment and was included in other income (loss)—net in our consolidated statement of
income. Our ownership interest in the total outstanding shares of Coca-Cola Amatil was reduced from
approximately 32 percent to 30 percent. Refer to Note 19.
During 2007, the Company sold substantially all of its interest in Vonpar Refrescos S.A. (‘‘Vonpar’’), a
bottler headquartered in Brazil. Total proceeds from the sale were approximately $238 million, and we
recognized a gain on this sale of approximately $70 million, which impacted the Corporate segment and is
included in other income (loss)—net in our consolidated statements of income. Prior to this sale, our Company
owned approximately 49 percent of Vonpar’s outstanding common stock and accounted for the investment using
the equity method. Refer to Note 19.
In 2007, our equity income was also reduced by approximately $62 million in the Bottling Investments
operating segment related to our proportionate share of an impairment recorded by Coca-Cola Amatil as a
result of the sale of its bottling operations in South Korea. Refer to Note 19.
Equity income in 2007 was reduced by approximately $99 million in the Bottling Investments operating
segment related to our proportionate share of asset write-downs recorded by Coca-Cola Bottlers
Philippines, Inc. (‘‘CCBPI’’). The asset write-downs primarily related to excess and obsolete bottles and cases at
CCBPI. Refer to Note 19.
In 2003, one of our Company’s equity method investees, Coca-Cola FEMSA, consummated a merger with
another of the Company’s equity method investees, Panamerican Beverages, Inc. At the time of the merger, the
Company and Fomento Economico Mexicano, S.A.B. de C.V. (‘‘FEMSA’’), the major shareowner of Coca-Cola
FEMSA, reached an understanding under which this shareowner could purchase from our Company an amount
of Coca-Cola FEMSA shares sufficient for this shareowner to regain majority ownership interest in Coca-Cola
FEMSA. That understanding expired in May 2006; however, in the third quarter of 2006, the Company and the
shareowner reached an agreement under which the Company would sell a number of shares representing
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