Coca Cola 2014 Annual Report Download - page 58

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56
Interest Income
Year Ended December 31, 2014 versus Year Ended December 31, 2013
Interest income was $594 million in 2014, compared to $534 million in 2013, an increase of $60 million, or 11 percent. The increase
primarily reflects higher cash balances and higher average interest rates in certain of our international locations, partially offset by the
unfavorable impact of fluctuations in foreign currency exchange rates due to a stronger U.S. dollar against most major currencies.
Year Ended December 31, 2013 versus Year Ended December 31, 2012
Interest income was $534 million in 2013, compared to $471 million in 2012, an increase of $63 million, or 13 percent. The increase
primarily reflects higher cash balances and an increased return on investments in certain of our international locations as well as
additional investments in debt securities and money market funds in connection with the Company’s overall cash management
strategy.
Interest Expense
Year Ended December 31, 2014 versus Year Ended December 31, 2013
Interest expense was $483 million in 2014, compared to $463 million in 2013, an increase of $20 million, or 4 percent. The increase
primarily reflects the impact of additional long-term debt the Company issued during late 2013 and 2014 as well as the unfavorable
impact of interest rate swaps. In addition, interest expense in 2013 included charges related to the Company’s early extinguishment
of long-term debt. Refer to Note 5 of Notes to Consolidated Financial Statements for additional information related to the Company’s
hedging program. Refer to the heading “Liquidity, Capital Resources and Financial Position — Cash Flows from Financing Activities —
Debt Financing” below for additional information related to the Company’s long-term debt.
Year Ended December 31, 2013 versus Year Ended December 31, 2012
Interest expense was $463 million in 2013, compared to $397 million in 2012, an increase of $66 million, or 17 percent. This increase
is primarily due to charges of $53 million the Company recorded on the early extinguishment of certain long-term debt, as well as
an overall higher average long-term debt balance in 2013. These charges include both the difference between the reacquisition price
and the net carrying amount of the debt extinguished as well as hedge accounting adjustments reclassified from accumulated other
comprehensive income to earnings. These increases were partially offset by the favorable impact of interest rate swaps. Refer to
Note 5 of Notes to Consolidated Financial Statements for additional information related to the Company’s hedging program. Refer
to the heading “Liquidity, Capital Resources and Financial Position — Cash Flows from Financing Activities — Debt Financing”
below for additional information related to the Company’s long-term debt.
Equity Income (Loss) — Net
Year Ended December 31, 2014 versus Year Ended December 31, 2013
Equity income (loss) — net represents our Company’s proportionate share of net income or loss from each of our equity method
investees. In 2014, equity income was $769 million, compared to equity income of $602 million in 2013, an increase of $167 million, or
28 percent. This increase was primarily due to more favorable operating results reported by several of our equity method investees, a
decrease in the impact of unusual or infrequent charges recorded by certain of our equity method investees, and the deconsolidation
of our Brazilian bottling operations during 2013, which is now an equity method investee. This increase was partially offset by the
unfavorable impact of foreign currency fluctuations.
Year Ended December 31, 2013 versus Year Ended December 31, 2012
In 2013, equity income was $602 million, compared to equity income of $819 million in 2012, a decrease of $217 million, or 27 percent.
This decrease reflects, among other items, the unfavorable impact of the challenging economic conditions around the world where
many of our equity method investees operate, the impact of unusual or infrequent charges recorded by certain of our equity method
investees and fluctuations in foreign currency exchange rates due to a stronger U.S. dollar against most major currencies. Equity
income (loss) — net was also impacted by the consolidation of innocent, previously an equity method investee, and the deconsolidation
of our Philippine and Brazilian bottling operations, which are now equity method investees. Refer to Note 2 of Notes to Consolidated
Financial Statements for additional information about these transactions.