Coca Cola 2014 Annual Report Download - page 83

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81
Shipping and Handling Costs
Shipping and handling costs related to the movement of finished goods from manufacturing locations to our sales distribution centers
are included in the line item cost of goods sold in our consolidated statements of income. Shipping and handling costs incurred
to move finished goods from our sales distribution centers to customer locations are included in the line item selling, general and
administrative expenses in our consolidated statements of income. During the years ended December 31, 2014, 2013 and 2012, the
Company recorded shipping and handling costs of $2.7 billion, $2.7 billion and $2.8 billion, respectively, in the line item selling, general
and administrative expenses. Our customers do not pay us separately for shipping and handling costs related to finished goods.
Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding
during the reporting period. Diluted net income per share is computed similarly to basic net income per share, except that it includes
the potential dilution that could occur if dilutive securities were exercised. Approximately 38 million, 28 million and 34 million stock
option awards were excluded from the computations of diluted net income per share in 2014, 2013 and 2012, respectively, because the
awards would have been antidilutive for the years presented.
Cash Equivalents
We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of
purchase as cash equivalents. We manage our exposure to counterparty credit risk through specific minimum credit standards,
diversification of counterparties and procedures to monitor our credit risk concentrations.
Short-Term Investments
We classify time deposits and other investments that have maturities of greater than three months but less than one year as short-term
investments.
Investments in Equity and Debt Securities
We use the equity method to account for our investments in equity securities if our investment gives us the ability to exercise significant
influence over operating and financial policies of the investee. We include our proportionate share of earnings and/or losses of our
equity method investees in equity income (loss) — net in our consolidated statements of income. The carrying value of our equity
investments is reported in equity method investments in our consolidated balance sheets. Refer to Note 6.
We account for investments in companies that we do not control or account for under the equity method either at fair value or under
the cost method, as applicable. Investments in equity securities, other than investments accounted for under the equity method, are
carried at fair value if the fair value of the security is readily determinable. Equity investments carried at fair value are classified as
either trading or available-for-sale securities with their cost basis determined by the specific identification method. Realized and
unrealized gains and losses on trading securities and realized gains and losses on available-for-sale securities are included in other
income (loss) — net in our consolidated statements of income. Unrealized gains and losses, net of deferred taxes, on available-for-
sale securities are included in our consolidated balance sheets as a component of accumulated other comprehensive income (loss)
(“AOCI”), except for the change in fair value attributable to the currency risk being hedged, if applicable, which is included in other
income (loss) — net in our consolidated statements of income. Trading securities are reported as either marketable securities or other
assets in our consolidated balance sheets. Securities classified as available-for-sale are reported as either marketable securities, other
investments or other assets in our consolidated balance sheets, depending on the length of time we intend to hold the investment.
Refer to Note 3.
Investments in equity securities that we do not control or account for under the equity method and do not have readily determinable
fair values for are accounted for under the cost method. Cost method investments are originally recorded at cost, and we record
dividend income when applicable dividends are declared. Cost method investments are reported as other investments in our
consolidated balance sheets, and dividend income from cost method investments is reported in the line item other income (loss) — net
in our consolidated statements of income.
Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company
has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in
debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale.