Coca Cola 2008 Annual Report Download - page 96

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: BOTTLING INVESTMENTS (Continued)
8 percent of the capital stock of Coca-Cola FEMSA to FEMSA. As a result of this sale, which occurred in the
fourth quarter of 2006, the Company received cash proceeds of approximately $427 million and realized a gain
of approximately $175 million, which was recorded in the consolidated statement of income line item other
income (loss)—net and impacted the Corporate operating segment. Also as a result of this sale, our ownership
interest in Coca-Cola FEMSA was reduced from approximately 40 percent to approximately 32 percent. Refer
to Note 19.
In 2006, our Company sold a portion of our investment in Coca-Cola Icecek, an equity method investee
bottler incorporated in Turkey, in an initial public offering. Our Company received cash proceeds of
approximately $198 million and realized a gain of approximately $123 million, which was recorded in the
consolidated statement of income line item other income (loss)—net and impacted the Corporate operating
segment. As a result of this public offering, our Company’s interest in Coca-Cola Icecek decreased from
approximately 36 percent to approximately 20 percent. Refer to Note 19.
Effective December 31, 2006, our equity method investees other than CCE, also adopted SFAS No. 158.
Our proportionate share of the impact of the adoption of SFAS No. 158 by our equity method investees other
than CCE was an approximate $18 million pretax ($12 million after tax) reduction in the carrying value of our
investments in those equity method investees and our AOCI. Refer to Note 9 and Note 16.
If valued at the December 31, 2008, quoted closing prices of shares actively traded on stock markets, the
value of our equity method investments in publicly traded bottlers other than CCE would have exceeded our
carrying value by approximately $2.4 billion.
As of December 31, 2008, the carrying value of the Company’s investment in Coca-Cola Hellenic exceeded
its fair value by approximately $256 million. The carrying value has exceeded its fair value in each of the last
three months of 2008; however, the amount by which our carrying value has exceeded its fair value has decreased
in each of those three months. As is the case with most of our equity method investees, we have both the ability
and intent to hold our investment in Coca-Cola Hellenic as a long-term investment. Furthermore, under the
terms of a shareholders agreement between the Company and another significant shareholder of Coca-Cola
Hellenic, the Company is required, unless both parties agree to the contrary, to maintain no less than a
20 percent ownership interest in Coca-Cola Hellenic through at least December 31, 2018. Additionally, we
believe that the countries in which Coca-Cola Hellenic has bottling and distribution rights, through direct
ownership or joint ventures, have positive growth opportunities. We also believe that the recent volatility of
Coca-Cola Hellenic’s fair value is at least partly attributable to the volatility in the global financial markets and
not necessarily indicative of a change in long-term value. Based on these factors, management has concluded
that the decline in fair value of our investment in Coca-Cola Hellenic is temporary in nature. We will continue to
monitor our investment in future periods.
Net Receivables and Dividends from Equity Method Investees
The total amount of net receivables due from equity method investees, including CCE, was approximately
$823 million and $933 million as of December 31, 2008 and 2007, respectively. The total amount of dividends
received from equity method investees, including CCE, was approximately $254 million, $216 million and
$226 million for the years ended December 31, 2008, 2007 and 2006, respectively.
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