Annual report pursuant to Section 13 and 15(d)

EQUITY METHOD INVESTMENTS

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EQUITY METHOD INVESTMENTS
12 Months Ended
Dec. 31, 2019
EQUITY METHOD INVESTMENTS [Abstract]  
EQUITY METHOD INVESTMENTS EQUITY METHOD INVESTMENTS
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 statement 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 statement of income and our carrying value in those investments. Refer to Note 19 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 to the extent of our ownership interest, including the intercompany portion of transactions with equity method investees.
The Company's equity method investments include, but are not limited to, our ownership interests in Coca-Cola European Partners plc ("CCEP"), Monster, AC Bebidas, Coca-Cola FEMSA, Coca-Cola HBC AG ("Coca-Cola Hellenic") and Coca-Cola Bottlers Japan Holdings Inc. ("CCBJHI"). As of December 31, 2019, we owned approximately 19 percent, 19 percent, 20 percent, 28 percent, 23 percent and 19 percent, respectively, of these companies' outstanding shares. As of December 31, 2019, our investments in our equity method investees in the aggregate exceeded our proportionate share of the net assets of these equity method investees by $8,679 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 31,1
2019

 
2018

 
2017

Net operating revenues
$
75,980

 
$
75,482

 
$
73,343

Cost of goods sold
44,881

 
44,933

 
42,871

Gross profit
$
31,099

 
$
30,549

 
$
30,472

Operating income
$
7,748

 
$
7,511

 
$
7,577

Consolidated net income
$
4,597

 
$
4,646

 
$
4,545

Less: Net income attributable to noncontrolling interests
63

 
101

 
120

Net income attributable to common shareowners
$
4,534

 
$
4,545

 
$
4,425

Company equity income (loss) — net
$
1,049

 
$
1,008

 
$
1,072

1 The financial information represents the results of the equity method investees during the Company's period of ownership.
December 31,
2019

2018

Current assets
$
25,654

$
23,249

Noncurrent assets
68,269

66,733

Total assets
$
93,923

$
89,982

Current liabilities
$
20,271

$
18,100

Noncurrent liabilities
31,321

29,144

Total liabilities
$
51,592

$
47,244

Equity attributable to shareowners of investees
$
41,203

$
41,558

Equity attributable to noncontrolling interests
1,128

1,180

Total equity
$
42,331

$
42,738

Company equity method investments
$
19,025

$
19,412

Net sales to equity method investees, the majority of which are located outside the United States, were $14,832 million, $14,799 million and $14,144 million in 2019, 2018 and 2017, respectively. Total payments, primarily marketing, made to equity method investees were $897 million, $1,131 million and $930 million in 2019, 2018 and 2017, respectively. The decrease in payments made to equity method investees in 2019 was primarily due to changes in bottler funding arrangements. In addition, purchases of beverage products from equity method investees were $426 million, $536 million and $1,299 million in 2019, 2018 and 2017, respectively. The decrease in purchases of beverage products in 2019 and 2018 was primarily due to reduced purchases of Monster products as a result of the North America refranchising activities. Refer to Note 2.
The following table presents the difference between calculated fair values, based on quoted closing prices of publicly traded shares, and our Company's carrying value in investments in publicly traded companies accounted for under the equity method (in millions):
December 31, 2019
Fair
Value

 
Carrying
Value

 
Difference

Monster Beverage Corporation
$
6,490

 
$
3,781

 
$
2,709

Coca-Cola European Partners plc
4,475

 
3,604

 
871

Coca-Cola FEMSA, S.A.B. de C.V.
3,461

 
1,758

 
1,703

Coca-Cola HBC AG
2,801

 
1,109

 
1,692

Coca-Cola Amatil Limited
1,674

 
611

 
1,063

Coca-Cola Bottlers Japan Holdings Inc.
866

 
765

 
101

Coca-Cola Consolidated, Inc.
705

 
142

 
563

Coca-Cola İçecek A.Ş.
347

 
210

 
137

Embotelladora Andina S.A.
163

 
109

 
54

Total
$
20,982

 
$
12,089

 
$
8,893

Net Receivables and Dividends from Equity Method Investees
Total net receivables due from equity method investees were $1,707 million and $1,564 million as of December 31, 2019 and 2018, respectively. The total amount of dividends received from equity method investees was $628 million, $551 million and $443 million for the years ended December 31, 2019, 2018 and 2017, respectively. The amount of consolidated reinvested earnings that represents undistributed earnings of investments accounted for under the equity method as of December 31, 2019 was $4,983 million.