Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND DIVESTITURES (Tables)

v2.4.0.6
ACQUISITIONS AND DIVESTITURES (Tables)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Acquisitions and Divestitures Disclosure [Abstract] [    
Schedule of Replaced shared-based payments awards related to CCE's North America employees
The following table provides a list of all replacement awards and the estimated fair value of those awards issued in conjunction with our acquisition of CCE's North American business (in millions):
 
Number of
Shares, Options
and Units Issued

 
Fair Value

Performance share units
1.6

 
$
192

Stock options
4.8

 
109

Restricted share units
0.8

 
50

Restricted stock
0.2

 
12

Total
7.4

 
$
363

 
Schedule of the total purchase price of CCE's North American business
The following table reconciles the total purchase price of the Company's acquisition of CCE's North American business, including adjustments recorded as part of the Company's purchase accounting (in millions):
 
October 2,
2010

Fair value of our equity investment in CCE1
$
5,373

Cash consideration2
1,368

Fair value of share-based payment awards3
154

Total purchase price
$
6,895

1 
Represents the fair value of our 33 percent ownership interest in the outstanding common stock of CCE based on the closing price of CCE's common stock on the last day the New York Stock Exchange was open prior to the acquisition date. The fair value reflects our indirect ownership interest in both CCE's North American business and European operations.
2 
Primarily related to the debt shortfall and working capital adjustments.
3 
Represents the portion of the total fair value of the replacement awards associated with services rendered prior to the business combination, net of tax.
 
Schedule of the allocation of the purchase price by major class of assets and liabilities  
The following table presents the final allocation of the purchase price by major class of assets and liabilities (in millions) as of the acquisition date, as well as adjustments made during 2011 (referred to as "measurement period adjustments"):
 
Amounts
Recognized as of
Acquisition Date1

 
Measurement
Period
Adjustments2

 
Amounts
Recognized as of
Acquisition Date
(as Adjusted)

Cash and cash equivalents
$
49

 
$

 
$
49

Marketable securities
7

 

 
7

Trade accounts receivable3
1,194

 

 
1,194

Inventories
696

 

 
696

Other current assets4
744

 
(5
)
 
739

Property, plant and equipment4
5,385

 
(682
)
 
4,703

Bottlers' franchise rights with indefinite lives4,5
5,100

 
100

 
5,200

Other intangible assets4,6
1,032

 
45

 
1,077

Other noncurrent assets
261

 

 
261

Total identifiable assets acquired
$
14,468

 
$
(542
)
 
$
13,926

Accounts payable and accrued expenses4
1,826

 
8

 
1,834

Loans and notes payable7
266

 

 
266

Long-term debt7
9,345

 

 
9,345

Pension and other postretirement liabilities8
1,313

 

 
1,313

Other noncurrent liabilities4,9
2,603

 
(293
)
 
2,310

Total liabilities assumed
$
15,353

 
$
(285
)
 
$
15,068

Net liabilities assumed
(885
)
 
(257
)
 
(1,142
)
Goodwill4,10
7,746

 
304

 
8,050

 
$
6,861

 
$
47

 
$
6,908

Less: Noncontrolling interests
13

 

 
13

Net assets acquired
$
6,848

 
$
47

 
$
6,895

1 
As previously reported in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.
2 
The measurement period adjustments did not have a significant impact on our consolidated statements of income for the years ended December 31, 2011, and December 31, 2010. In addition, these adjustments did not have a significant impact on our consolidated balance sheet as of December 31, 2010. Therefore, we have not retrospectively adjusted the comparative 2010 financial information.
3 
The gross amount due under receivables we acquired was $1,226 million, of which $32 million was expected to be uncollectible.
4 
The measurement period adjustments were due to the finalization of appraisals related to intangible assets and certain fixed assets and resulted in the following: a decrease to property, plant and equipment; an increase to franchise rights; and a decrease to noncurrent deferred tax liabilities. The net impact of the measurement period adjustments and the payments made to New CCE that related to the finalization of working capital adjustments resulted in a net increase to goodwill.
5 
Represents reacquired franchise rights that had previously provided CCE with exclusive and perpetual rights to manufacture and/or distribute certain beverages in specified territories. These rights have been determined to have indefinite lives and are not amortized.
6 
Other intangible assets primarily relate to franchise rights that had previously provided CCE with exclusive rights to manufacture and/or distribute certain beverages in specified territories for a finite period of time, and therefore have been classified as definite-lived intangible assets. The estimated fair value of franchise rights with definite lives was $650 million as of the acquisition date. These franchise rights will be amortized over a weighted-average life of approximately eight years, which is equal to the weighted-average remaining contractual term of the franchise rights. Other intangible assets also include $380 million of customer relationships, which will be amortized over approximately 20 years.
7 
Refer to Note 10 for additional information.
8 
The assumed pension and other postretirement liabilities consisted of benefit obligations of $3,544 million and plan assets of $2,231 million. Refer to Note 13 for additional information related to pension and other postretirement plans assumed from CCE.
9 
Primarily relates to deferred tax liabilities recorded on franchise rights. Refer to Note 14.
10 
The goodwill recognized as part of this acquisition has been assigned to the North America operating segment. $170 million of this goodwill is tax deductible. The goodwill recognized in conjunction with our acquisition of CCE's North American business is primarily related to synergistic value created from having a unified operating system that will strategically position us to better market and distribute our nonalcoholic beverage brands in North America. It also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce.
Schedule of pro forma information of CCE's North American business acquisition and Norwegian and Swedish bottling operation divestitures  
The following table presents unaudited consolidated pro forma information as if our acquisition of CCE's North American business and the divestiture of our Norwegian and Swedish bottling operations had occurred on January 1, 2009 (in millions):
 
Unaudited  
 
Year Ended December 31,
2010

 
2009

 
Net operating revenues1
$
43,106

 
$
41,635

 
Net income attributable to shareowners of The Coca-Cola Company2
6,839

 
11,767

3 
1 
The deconsolidation of our Norwegian and Swedish bottling operations resulted in a decrease to net operating revenues of approximately $433 million and $542 million in 2010 and 2009, respectively.
2 
The deconsolidation of our Norwegian and Swedish bottling operations resulted in a decrease to net income attributable to shareowners of The Coca-Cola Company of approximately $387 million in 2010 and an increase of $294 million in 2009.
3 
Includes the gain related to the remeasurement of our equity interest in CCE to fair value upon the close of the transaction, the gain on the sale of our Norwegian and Swedish bottling operations, transaction costs and charges related to preexisting relationships. The 2010 pro forma information has been adjusted to exclude the impact of these items in order to present the pro forma information as if the transactions had occurred on January 1, 2009.
Information related to the major classes of assets and lianilities held for sale  
The following table presents information related to the major classes of assets and liabilities of the disposal group as of October 1, 2010 (in millions):
Trade receivables, less allowances for doubtful accounts
$
67

Inventories
42

Prepaid expenses and other current assets
17

Property, plant and equipment — net
315

Intangible assets
172

Total assets1
$
613

Accounts payable and accrued expenses
$
159

Accrued income taxes
10

Deferred income taxes
45

Total liabilities1
$
214

1 
Prior to the divestiture of our Norwegian and Swedish bottling operations, the assets and liabilities of these entities were included in our Bottling Investments operating segment. Refer to Note 19