Coca Cola 2010 Annual Report Download - page 84
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Foreign currency exchange gains and losses are primarily the result of the remeasurement of monetary assets and
liabilities from certain currencies into functional currencies. The effects of the remeasurement of these assets and
liabilities are partially offset by the impact of our economic hedging program for certain exposures on our consolidated
balance sheets. Refer to Note 5 of Notes to Consolidated Financial Statements. Foreign currency exchange gains and
losses are included as a component of other income (loss) — net in our consolidated financial statements. Refer to the
heading ‘‘Operations Review — Other Income (Loss) — Net.’’ The Company recorded foreign currency losses of
$148 million and $34 million in 2010 and 2009, respectively. The Company recorded a foreign currency gain of
$24 million in 2008.
The remeasurement loss recorded in 2010 was primarily related to our Venezuelan subsidiary. Subsequent to
December 31, 2009, the Venezuelan government announced a currency devaluation, and Venezuela was determined to
be a hyperinflationary economy. As a result, our local subsidiary was required to use the U.S. dollar as its functional
currency and we recorded a net remeasurement loss of approximately $103 million during the first quarter of 2010, in
the line item other income (loss) — net in our consolidated statement of income.
The Company will continue to manage its foreign currency exposure to mitigate, over time, a portion of the impact of
exchange rate changes on net income and earnings per share.
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