Coca Cola 2015 Annual Report Download - page 41

Investments classified as trading securities are not assessed for impairment, since they are carried at fair value with the change in fair value included in net
income. We review our investments in equity and debt securities that are accounted for using the equity method or cost method or that are classified as
available-for-sale or held-to-maturity each reporting period to determine whether a significant event or change in circumstances has occurred that may have
an adverse effect on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared to our cost basis in the
investment. We also perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair value. The fair values of
most of our Company's investments in publicly traded companies are often readily available based on quoted market prices. For investments in nonpublicly
traded companies, management's assessment of fair value is based on valuation methodologies including discounted cash flows, estimates of sales proceeds
and appraisals, as appropriate. We consider the assumptions that we believe hypothetical marketplace participants would use in evaluating estimated future
cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict future cash
flows, especially in emerging and developing markets, may impact the determination of fair value.
In the event the fair value of an investment declines below our cost basis, management is required to determine if the decline in fair value is other than
temporary. If management determines the decline is other than temporary, an impairment charge is recorded. Management's assessment as to the nature of a
decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis, the
financial condition and near-term prospects of the issuer, and our intent and ability to retain the investment for a period of time sufficient to allow for any
anticipated recovery in market value.
In 2013, four of the Company's Japanese bottling partners merged as Coca-Cola East Japan Bottling Company, Ltd., now known as Coca-Cola East Japan
Co., Ltd. ("CCEJ"), a publicly traded entity, through a share exchange. The terms of the agreement included the issuance of new shares of one of the publicly
traded bottlers in exchange for 100 percent of the outstanding shares of the remaining three bottlers according to an agreed-upon share exchange ratio. As a
result, the Company recorded a net charge of $114 million for those investments in which the Company's carrying value was greater than the fair value of the
shares received. These charges were recorded in the line item other income (loss) — net in our consolidated statement of income and impacted the Corporate
operating segment. Refer to the heading "Operations Review — Other Income (Loss) — Net" below as well as Note 17 of Notes to Consolidated Financial
Statements.
The following table presents the difference between calculated fair values, based on quoted closing prices of publicly traded shares, and our Company's cost
basis in investments in publicly traded companies accounted for under the equity method (in millions):
December 31, 2015
Fair
Value
Carrying
Value

Monster Beverage Corporation $ 5,071
$ 3,118
 
Coca-Cola FEMSA, S.A.B. de C.V. 4,360
1,853

Coca-Cola HBC AG 1,851
1,105

Coca-Cola Amatil Limited 1,496
685

Coca-Cola İçecek A.Ş. 653
202

Coca-Cola East Japan Co., Ltd. 627
448

Coca-Cola Bottling Co. Consolidated 453
104

Embotelladora Andina S.A. 396
275

Corporación Lindley S.A. 191
83

Total $ 15,098
$ 7,873
 
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