Coca Cola 2015 Annual Report Download - page 48

In 2015, the Company closed a transaction with Monster ("Monster Transaction"), which has been included as a structural change (a component of
acquisitions and divestitures) in our analysis of net operating revenues on a consolidated basis as well as for the Eurasia and Africa, Europe, Latin America,
North America, Asia Pacific and Corporate operating segments. This transaction consisted of multiple elements including, but not limited to, the acquisition
of Monster's non-energy brands and the expansion of our distribution of Monster products into additional U.S. territories. These elements of the transaction
impacted the Company's unit case volume and concentrate sales volume and therefore, in addition to being included as a structural change (a component of
acquisitions and divestitures), they are also considered acquired brands. See further discussion of this transaction in Note 2 of Notes to Consolidated
Financial Statements. Also during 2015, the Company acquired a South African bottler, which has been included as a structural change (a component of
acquisitions and divestitures) in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment.
Refer to "Net Operating Revenues" below.
In 2014, the Company began refranchising territories in North America that were previously managed by CCR to certain of our unconsolidated bottling
partners. The impact of these refranchising activities has been included as a structural change (a component of acquisitions and divestitures) in our analysis
of net operating revenues on a consolidated basis as well as for our North America operating segment. In addition, for non-Company-owned and licensed
beverage products sold in the refranchised territories, we have eliminated the unit case volume and associated concentrate sales from the base year when
calculating volume growth rates on a consolidated basis as well as for the North America operating segment. Refer to the headings "Beverage Volume" and
"Net Operating Revenues" below.
In 2014, the Company made a decision to change our process of buying and selling recyclable materials in North America. Also during 2014, the Company
transitioned our Russian juice operations to an existing joint venture with an unconsolidated bottling partner and acquired a majority interest in bottling
operations in Sri Lanka and Nepal. The impact of these changes is included as a structural change (a component of acquisitions and divestitures) in our
analysis of net operating revenues on a consolidated basis as well as for our North America and Bottling Investments operating segments. Refer to the
heading "Net Operating Revenues" below.
In January 2014, the Venezuelan government enacted a new law ("Fair Price Law") that imposes limits on profit margins earned in the country, which limited
the amount of revenue the Company was able to recognize in 2014 as compared to 2013. The impact of the Fair Price Law has been included as a structural
change in our analysis of operating results for our Latin America segment for the year ended December 31, 2014. Refer to the heading "Net Operating
Revenues" below.
In 2013, the Company acquired a majority interest in bottling operations in Myanmar, sold a majority interest in our previously consolidated bottling
operations in the Philippines and deconsolidated our bottling operations in Brazil as a result of their combination with an independent bottling partner.
Accordingly, the impact to net operating revenues related to these transactions is included as a structural change (a component of acquisitions and
divestitures) in our analysis of net operating revenues for our Bottling Investments segment. Refer to the heading "Net Operating Revenues" below.
The Company sells concentrates and syrups to both consolidated and unconsolidated bottling partners. The ownership structure of our bottling partners
impacts the timing of recognizing concentrate revenue and concentrate sales volume. When we sell concentrates or syrups to our consolidated bottling
partners, we are not able to recognize the concentrate revenue or concentrate sales volume until the bottling partner has sold finished products manufactured
from the concentrates or syrups to a third party or independent customer. When we sell concentrates or syrups to our unconsolidated bottling partners, we
recognize the concentrate revenue and concentrate sales volume when the concentrates or syrups are sold to the bottling partner. The subsequent sale of the
finished products manufactured from the concentrates or syrups to a customer does not impact the timing of recognizing the concentrate revenue or
concentrate sales volume. When we account for an unconsolidated bottling partner as an equity method investment, we eliminate the intercompany profit
related to these transactions until the equity method investee has sold finished products manufactured from the concentrates or syrups to a third party or
independent customer.
The Company is currently pursuing certain transactions that, if completed, will be included as structural changes for the applicable periods. In November
2014, the Company and two of our existing bottling partners entered into an agreement to combine each of the parties' bottling operations in Southern and
East Africa. In August 2015, the Company entered into an agreement to merge our German bottling operations with the bottling operations of two of our
existing bottling partners. Subject to receiving any required regulatory and shareholder approvals, we expect each of these transactions to close during the
second quarter of 2016. Additionally, in 2016 we announced our intent to refranchise 100 percent of Company-owned North America bottling territories by
the end of 2017. The Company also announced that we have entered into a non-binding letter of intent to refranchise Company-owned bottling operations in
China to two of our existing bottling partners.
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