The Coca-Cola Company Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENTS

12 Months Ended

Dec. 31, 2014

EQUITY METHOD INVESTMENTS [Abstract]

Our consolidated net income includes our Company's proportionate share of the net income or loss of our equity method investees. When we record our proportionate share of net income, it increases equity income (loss) — net in our consolidated statements of income and our carrying value in that investment. Conversely, when we record our proportionate share of a net loss, it decreases equity income (loss) — net in our consolidated statements of income and our carrying value in that investment. The Company's proportionate share of the net income or loss of our equity method investees includes significant operating and nonoperating items recorded by our equity method investees. These items can have a significant impact on the amount of equity income (loss) — net in our consolidated statements of income and our carrying value in those investments. Refer to Note 17 for additional information related to significant operating and nonoperating items recorded by our equity method investees. The carrying values of our equity method investments are also impacted by our proportionate share of items impacting the equity investee's AOCI.

We eliminate from our financial results all significant intercompany transactions, including the intercompany portion of transactions with equity method investees.

The Company's equity method investments include our ownership interests in Coca-Cola FEMSA, Coca-Cola Hellenic and Coca-Cola Amatil. As of December 31, 2014, we owned 28 percent, 23 percent and 29 percent, respectively, of these companies' outstanding shares. As of December 31, 2014, our investment in our equity method investees in the aggregate exceeded our proportionate share of the net assets of these equity method investees by $1,671 million. This difference is not amortized.

A summary of financial information for our equity method investees in the aggregate is as follows (in millions):



Year Ended December 31,	2014		2013		2012
Net operating revenues	$	52,627	$	53,038	$	47,087
Cost of goods sold	31,810		32,377		28,821
Gross profit	$	20,817	$	20,661	$	18,266
Operating income	$	4,489	$	4,380	$	4,605
Consolidated net income	$	2,440	$	2,364	$	2,993
Less: Net income attributable to noncontrolling interests	74		62		89
Net income attributable to common shareowners	$	2,366	$	2,302	$	2,904
Equity income (loss) — net	$	769	$	602	$	819



December 31,	2014		2013
Current assets	$	16,184	$	19,229
Noncurrent assets	40,080		40,427
Total assets	$	56,264	$	59,656
Current liabilities	$	12,477	$	14,386
Noncurrent liabilities	16,657		17,779
Total liabilities	$	29,134	$	32,165
Equity attributable to shareowners of investees	$	26,363	$	26,668
Equity attributable to noncontrolling interests	767		823
Total equity	$	27,130	$	27,491
Company equity investment	$	9,947	$	10,393

Net sales to equity method investees, the majority of which are located outside the United States, were $10,063 million, $9,178 million and $7,082 million in 2014, 2013 and 2012, respectively. Total payments, primarily marketing, made to equity method investees were $1,605 million, $1,807 million and $1,587 million in 2014, 2013 and 2012, respectively. In addition, purchases of finished products from equity method investees were $381 million, $415 million and $392 million in 2014, 2013 and 2012, respectively.

If valued at the December 31, 2014 quoted closing prices of shares actively traded on stock markets, the value of our equity method investments in publicly traded bottlers would have exceeded our carrying value by $5,443 million.

Net Receivables and Dividends from Equity Method Investees

Total net receivables due from equity method investees were $1,448 million and $1,308 million as of December 31, 2014 and 2013, respectively. The total amount of dividends received from equity method investees was $398 million, $401 million and $393 million for the years ended December 31, 2014, 2013 and 2012, respectively. Dividends received included a $35 million special dividend from Coca-Cola Hellenic during 2012. We classified the receipt of the special dividend in cash flows from operating activities because our cumulative equity in earnings from Coca-Cola Hellenic exceeded the cumulative distributions received; therefore, the dividends were deemed to be a return on our investment and not a return of our investment.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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