Coca Cola 2013 Annual Report Download - page 130

In 2013, the Company recorded a charge of $140 million due to the Venezuelan government announcing a currency devaluation.
As a result of this devaluation, the Company remeasured the net assets related to its operations in Venezuela. Refer to Note 19
for the impact this charge had on our operating segments. The Company also recognized a gain of $139 million due to Coca-Cola
FEMSA issuing additional shares of its own stock at a per share amount 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 Coca-Cola FEMSA. Refer to Note 19 for the impact this charge had on our operating segments.
In 2012, the Company recognized a gain of $185 million as a result of the merger of Andina and Polar, with Andina being the
acquiring company. Prior to this transaction, the Company held an investment in Andina that we accounted for as an
available-for-sale security as well as an investment in Polar that we accounted for under the equity method of accounting. The
merger of the two companies was a noncash transaction that resulted in Polar shareholders exchanging their existing Polar shares
for newly issued shares of Andina at a specified exchange rate. As a result, the Company now holds an investment in Andina that
we account for as an equity method investment. This gain impacted the Corporate operating segment. Refer to Note 19. Refer to
Note 16 for additional information on the measurement of the gain.
On December 13, 2012, the Company and Coca-Cola FEMSA executed a share purchase agreement for the sale of a majority
ownership interest in our consolidated Philippine bottling operations. This transaction was completed on January 25, 2013. As a
result of this agreement, the Company was required to classify our Philippine bottling operations as held for sale in our
consolidated balance sheet as of December 31, 2012. We also recognized a loss of $108 million during the year ended
December 31, 2012, based on the agreed-upon sale price and related transaction costs. This loss impacted the Corporate operating
segment. Refer to Note 19.
The Company also recognized a gain of $92 million in 2012 as a result of Coca-Cola FEMSA issuing additional shares of its own
stock at a per share amount greater than the carrying value of the Company’s investment. Accordingly, the Company is required
to treat this type of transaction as if we sold a proportionate share of our investment in Coca-Cola FEMSA. This gain impacted
the Corporate operating segment. Refer to Note 19. Refer to Note 16 for additional information on the measurement of the gain.
During the year ended December 31, 2012, the Company recorded a charge of $82 million due to the acquisition of an ownership
interest in Mikuni for which we paid a premium over the publicly traded market price. Although the Company paid this premium
to obtain specific rights that have an economic and strategic value to the Company, they do not qualify as an asset and were
recorded as expense on the acquisition date. This charge impacted the Corporate operating segment. Refer to Note 19. The
Company accounted for our investment in Mikuni under the equity method of accounting prior to the merger of the four bottlers
into CCEJ discussed above.
The Company also recognized charges of $16 million during the year ended December 31, 2012, due to other-than-temporary
declines in the fair values of certain cost method investments. These charges impacted the Corporate operating segment. Refer to
Note 19.
In 2011, the Company recognized a net gain of $417 million, 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
noncash 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. Refer to Note 19.
The Company also recognized a net gain of $122 million during 2011, primarily as a result of Coca-Cola FEMSA 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 we sold a proportionate share of our investment in
Coca-Cola FEMSA. 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 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.
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