Coca Cola 2015 Annual Report Download - page 91

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard will be effective
for the Company beginning January 1, 2016 and will be applied retrospectively. The Company expects that the only impact of the adoption of ASU 2015-03
on our consolidated financial statements will be the change in balance sheet presentation of our debt issuance costs.
In April 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset
Value per Share (or Its Equivalent). This amendment removes the requirement to categorize within the fair value hierarchy all investments for which fair
value is measured using the net asset value per share. This guidance will be effective for the Company beginning January 1, 2016. The Company expects that
the implementation of this amendment will impact the Company's notes to the consolidated financial statements but will not have an effect on the Company's
financial position or results of operations.
In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this
update simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a consolidated
statement of financial position. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all
periods presented. The amendments will be effective for the Company beginning January 1, 2017. Earlier application is permitted for all entities as of the
beginning of an interim or annual reporting period.
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Acquisitions
During 2015, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $2,491 million, which primarily
related to our strategic partnership with Monster Beverage Corporation ("Monster") and an investment in a bottling partner in Indonesia that is accounted for
under the equity method of accounting. The bottling partner in Indonesia is a subsidiary of Coca-Cola Amatil Limited, an equity method investee. We also
acquired the remaining outstanding shares of a bottling partner in South Africa ("South African bottler"), which was previously accounted for as an equity
method investment. We remeasured our previously held equity interest in the South African bottler to fair value upon the close of the transaction and
recorded a loss on the remeasurement of $19 million during the year ended December 31, 2015. This bottler will be included in the Coca-Cola Beverages
Africa Limited transaction discussed further below.
During 2014, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $389 million and primarily
included a joint investment with one of our bottling partners in a dairy company in Ecuador, which is accounted for under the equity method of accounting.
During 2013, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $353 million, which primarily
included our acquisition of the majority of the remaining outstanding shares of Fresh Trading Ltd. ("innocent") and a majority interest in bottling operations
in Myanmar. The Company previously accounted for our investment in innocent under the equity method of accounting. We remeasured our equity interest
in innocent to fair value upon the close of the transaction. The resulting gain on the remeasurement was not significant to our consolidated financial
statements.
Monster Beverage Corporation
On August 14, 2014, the Company and Monster entered into definitive agreements for a long-term strategic relationship in the global energy drink category.
The transaction contemplated under these agreements ("Monster Transaction") closed on June 12, 2015. As a result of the Monster Transaction, (1) the
Company purchased newly issued shares of Monster common stock representing approximately 17 percent of the outstanding shares of Monster common
stock (after giving effect to the new issuance); (2) the Company sold its global energy drink business (including NOS, Full Throttle, Burn, Mother, Play and
Power Play, and Relentless) to Monster, and the Company acquired Monster's non-energy drink business (including Hansen's Natural Sodas, Peace Tea,
Hubert's Lemonade and Hansen's Juice Products); and (3) the parties amended their distribution coordination agreements to expand distribution of Monster
products into additional territories pursuant to long-term agreements with the Company's existing network of Company-owned or -controlled bottling
operations and distribution partners. The Coca-Cola system also became Monster's preferred global distribution partner. The Company made a net cash
payment of $2,150 million to Monster, of which $125 million is being held in escrow, subject to release upon achievement of milestones relating to the
transfer of Monster's domestic distribution rights to our distribution network.
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