Coca Cola 2011 Annual Report Download - page 67

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13 Includes a tax benefit of $34 million (or a reduction of 12.5 percent on our effective tax rate) related to the remeasurement of our equity
investment in CCE to fair value upon our acquisition of CCE’s North American business. The tax benefit reflects the impact of reversing deferred
tax liabilities associated with our equity investment in CCE prior to the acquisition. Refer to Note 2 of Notes to Consolidated Financial Statements.
14 Includes a tax benefit of $99 million related to charges associated with the write-off of preexisting relationships with CCE. Refer to Note 2 of Notes
to Consolidated Financial Statements.
15 Includes a tax expense of $261 million (or a 0.4 percent impact on our effective tax rate) related to the sale of our Norwegian and Swedish bottling
operations. Refer to Note 2 of Notes to Consolidated Financial Statements.
16 Includes a tax benefit of $223 million (or a 0.4 percent impact on our effective tax rate), primarily related to the Company’s productivity,
integration and restructuring initiatives, transaction costs and charitable contributions. Refer to Note 17 of Notes to Consolidated Financial
Statements.
17 Includes a tax benefit of $114 million (or a 0.5 percent impact on our effective tax rate) related to charges associated with the repurchase of certain
long-term debt and costs associated with the settlement of treasury rate locks issued in connection with the debt tender offer, the loss related to the
remeasurement of our Venezuelan subsidiary’s net assets, other-than-temporary impairment charges and a donation of preferred shares in one of
our equity method investees. Refer to Note 17 of Notes to Consolidated Financial Statements.
18 Includes a tax expense of $31 million (or a 0.2 percent impact on our effective tax rate) related to amounts required to be recorded for changes to
our uncertain tax positions, including interest and penalties, and other tax matters in certain domestic jurisdictions.
19 Includes a tax benefit of $16 million (or a reduction of 0.2 percent on our effective tax rate) related to amounts required to be recorded for
changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions.
20 Includes a tax benefit of $17 million (or a 0.1 percent impact on our effective tax rate) related to charges recorded by our equity method investees.
Refer to Note 17 of Notes to Consolidated Financial Statements.
21 Includes a tax benefit of $16 million (or a 0.6 percent impact on our effective tax rate) related to restructuring charges and asset impairments.
Refer to Note 17 of Notes to Consolidated Financial Statements.
22 Includes a zero percent effective rate (or a reduction of 0.2 percent on our effective tax rate) related to the sale of all or a portion of certain
investments. Refer to Note 3 of Notes to Consolidated Financial Statements.
23 Includes a zero percent effective rate (or a 0.1 percent impact on our effective tax rate) related to an other-than-temporary impairment of a cost
method investment. Refer to Note 17 of Notes to Consolidated Financial Statements.
In 2010, the Company recorded a $4,978 million pre-tax remeasurement gain associated with the acquisition of CCE’s North
American business. This remeasurement gain was not recognized for tax purposes and therefore no tax expense was recorded on
this gain. Also, as a result of this acquisition, the Company was required to reverse $34 million of deferred tax liabilities which
were associated with our equity investment in CCE prior to the acquisition. In addition, the Company recognized a $265 million
charge related to the settlement of preexisting relationships with CCE, and we recorded a tax benefit of 37 percent related to this
charge. The tax impact of the remeasurement gain, reversal of the net deferred tax liabilities on our equity investment and the
settlement of preexisting relationships with CCE will not impact our future effective tax rate.
As of December 31, 2011, the gross amount of unrecognized tax benefits was $320 million. If the Company were to prevail on all
uncertain tax positions, the net effect would be a benefit to the Company’s effective tax rate of $149 million, exclusive of any
benefits related to interest and penalties. The remaining $171 million, which was recorded as a deferred tax asset, primarily
represents tax benefits that would be received in different tax jurisdictions in the event the Company did not prevail on all
uncertain tax positions. Refer to Note 14 of Notes to Consolidated Financial Statements.
A reconciliation of the changes in the gross balance of unrecognized tax benefit amounts is as follows (in millions):
Year Ended December 31, 2011 2010 2009
Beginning balance of unrecognized tax benefits $ 387 $ 354 $ 369
Increases related to prior period tax positions 926 49
Decreases related to prior period tax positions (19) (10) (28)
Increases related to current period tax positions 633 16
Decreases related to current period tax positions (1) ——
Decreases related to settlements with taxing authorities (5) — (27)
Reductions as a result of a lapse of the applicable statute of limitations (46) (1) (73)
Increase related to acquisition of CCE’s North American business —6—
Increases (decreases) from effects of foreign currency exchange rates (11) (21) 48
Ending balance of unrecognized tax benefits $ 320 $ 387 $ 354
65