Coca Cola 2011 Annual Report Download - page 137

Company’s proportionate share of asset impairments and restructuring charges recorded by equity method investees. Refer to
Note 19 for the impact these charges had on our operating segments.
In 2010, the Company recorded a net charge of $66 million in equity income (loss) — net. This net charge primarily represents
the Company’s proportionate share of unusual tax charges, asset impairments, restructuring charges and transaction costs recorded
by equity method investees. The unusual tax charges primarily relate to an additional tax liability recorded by Coca-Cola Hellenic
as a result of the Extraordinary Social Contribution Tax levied by the Greek government. The transaction costs represent our
proportionate share of certain costs incurred by CCE in connection with our acquisition of CCE’s North American business and
the sale of our Norwegian and Swedish bottling operations to New CCE. Refer to Note 2 for additional information related to
these transactions. These charges were partially offset by our proportionate share of a foreign currency remeasurement gain
recorded by an equity method investee. The components of the net charge were individually insignificant. Refer to Note 19 for the
impact these charges had on our operating segments.
During 2009, the Company recorded charges of $86 million in equity income (loss) — net. These charges primarily represent the
Company’s proportionate share of asset impairments and restructuring charges recorded by equity method investees. Refer to
Note 19 for the impact these charges had on our operating segments.
Other Income (Loss) — Net
In 2011, the Company recognized a net gain of $417 million in other income (loss) — net, primarily as a result of the merger of
Arca and Contal, two bottling partners headquartered in Mexico, into a combined entity known as Arca Contal. Prior to this
transaction the Company held an investment in Contal that we accounted for under the equity method of accounting. The merger
of the two companies was a non-cash transaction that resulted in Contal shareholders exchanging their existing Contal shares for
new shares in Arca Contal at a specified exchange rate. Refer to Note 16 for additional information on the measurement of the
gain. As a result, the Company now holds an investment in Arca Contal that we account for as an available-for-sale security. This
net gain impacted the Corporate operating segment.
The Company also recognized a net gain of $122 million during 2011, primarily as a result of an equity method investee issuing
additional shares of its own stock at per share amounts greater than the carrying value of the Company’s per share investment.
Accordingly, the Company is required to treat this type of transaction as if the Company sold a proportionate share of its
investment in the equity method investee. The gains the Company recognized as a result of the previous transactions were
partially offset by charges associated with certain of the Company’s equity method investments in Japan. In addition, the Company
recognized a gain of $102 million during 2011 related to the sale of our investment in Embonor. Refer to Note 2 for additional
information. Refer to Note 19 for the impact these items had on our operating segments.
During 2011, the Company recorded charges of $41 million due to the impairment of an investment in an entity accounted for
under the equity method of accounting and $17 million due to other-than-temporary declines in the fair value of certain of the
Company’s available-for-sale securities. Refer to Note 16 for additional fair value information related to these impairments. The
Company also recorded a charge of $5 million related to the finalization of working capital adjustments associated with the sale of
our Norwegian and Swedish Bottling operations to New CCE during the fourth quarter of 2010. This charge reduced the amount
of our previously reported gain on the sale of these bottling operations. Refer to Note 19 for the impact these charges had on our
operating segments.
In 2010, the Company recognized gains of $4,978 million related to the remeasurement of our equity investment in CCE to fair
value; $597 million due to the sale of all our ownership interests in our Norwegian and Swedish bottling operations to New CCE;
and $23 million as a result of the sale of 50 percent of our investment in Le˜ ao Junior, which was a wholly owned subsidiary of the
Company prior to this transaction. Refer to Note 2 for additional information related to our acquisition of CCE’s North American
business and the sale of all our ownership interests in our Norwegian and Swedish bottling operations to New CCE. The gain on
the Le˜ ao Junior transaction consisted of two parts: (1) the difference between the consideration received and 50 percent of the
carrying value of our investment and (2) the fair value adjustment for our remaining 50 percent ownership. We have accounted
for our remaining investment in Le˜ ao Junior under the equity method of accounting since the close of this transaction. The gains
related to these transactions were recorded in other income (loss) — net and impacted our Corporate operating segment. Refer to
Note 16 for fair value disclosures related to these transactions.
During 2010, in addition to the transaction gains, the Company recorded charges of $265 million related to preexisting
relationships with CCE and $103 million due to the remeasurement of our Venezuelan subsidiary’s net assets. The charges related
to preexisting relationships with CCE were primarily due to the write-off of our investment in infrastructure programs with CCE.
Refer to Note 6 for additional information related to our preexisting relationships with CCE. The remeasurement loss related to
our Venezuelan subsidiary’s net assets was due to the Venezuelan government announcing a currency devaluation and Venezuela
becoming a hyperinflationary economy subsequent to December 31, 2009. As a result, our local subsidiary was required to use the
U.S. dollar as its functional currency, and the remeasurement gains and losses were recorded in other income (loss) — net. This
charge impacted the Corporate operating segment.
Also during 2010, the Company recorded charges of $48 million in other income (loss) — net related to other-than-temporary
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