Annual report pursuant to Section 13 and 15(d)

EQUITY METHOD INVESTMENTS

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EQUITY METHOD INVESTMENTS
 12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [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 of that investment. Conversely, when we record our proportionate share of a net loss, it decreases equity income (loss) — net in our consolidated statement of income and our carrying value of 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 of 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 method investees’ 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 CCEP; Monster; AC Bebidas, S. de R.L. de C.V.; Coca-Cola FEMSA, S.A.B. de C.V.; Coca-Cola HBC AG; and Coca-Cola Bottlers Japan Holdings Inc. (“CCBJHI”). As of December 31, 2022, we owned 19 percent, 20 percent, 20 percent, 28 percent, 21 percent and 19 percent, respectively, of these companies’ outstanding shares. As of December 31, 2022, our investments in our equity method investees in the aggregate exceeded our proportionate share of the net assets of these equity method investees by $7,822 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
2022 2021 2020
Net operating revenues $ 85,116  $ 79,934  $ 69,384 
Cost of goods sold 52,051  47,847  41,139 
Gross profit $ 33,065  $ 32,087  $ 28,245 
Operating income $ 9,719  $ 9,089  $ 7,056 
Consolidated net income $ 6,373  $ 6,050  $ 4,176 
Less: Net income attributable to noncontrolling interests 102  91  54 
Net income attributable to common shareowners $ 6,271  $ 5,959  $ 4,122 
Company equity income (loss) — net $ 1,472  $ 1,438  $ 978 
1 The financial information represents the results of the equity method investees during the Company’s period of ownership.
December 31, 2022 2021
Current assets $ 32,722  $ 30,992 
Noncurrent assets 70,523  72,064 
Total assets $ 103,245  $ 103,056 
Current liabilities $ 23,580  $ 21,362 
Noncurrent liabilities 34,740  37,353 
Total liabilities $ 58,320  $ 58,715 
Equity attributable to shareowners of investees $ 43,917  $ 43,422 
Equity attributable to noncontrolling interests 1,008  919 
Total equity $ 44,925  $ 44,341 
Company equity method investments $ 18,264  $ 17,598 
Net sales to equity method investees, the majority of which are located outside the United States, were $16,084 million, $14,471 million and $13,041 million in 2022, 2021 and 2020, respectively. Total payments, primarily related to marketing, made to equity method investees were $396 million, $516 million and $547 million in 2022, 2021 and 2020, respectively. The increase in net sales to equity method investees in 2022 was primarily due to the continued recovery from the COVID-19 pandemic. In addition, purchases of beverage products from equity method investees were $505 million, $496 million and $452 million in 2022, 2021 and 2020, respectively.
The following table presents the difference between calculated fair value, 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, 2022 Fair Value Carrying Value Difference
Monster Beverage Corporation $ 10,368  $ 4,514  $ 5,854 
Coca-Cola Europacific Partners plc 4,865  3,643  1,222 
Coca-Cola FEMSA, S.A.B. de C.V. 3,952  1,729  2,223 
Coca-Cola HBC AG 1,868  1,119  749 
Coca-Cola Consolidated, Inc. 1,272  339  933 
Coca-Cola Bottlers Japan Holdings Inc.1
369  398  (29)
Coca-Cola İçecek A.Ş. 559  207  352 
Embotelladora Andina S.A. 134  97  37 
Total $ 23,387  $ 12,046  $ 11,341 
1The carrying value of our investment in CCBJHI exceeded its fair value as of December 31, 2022 by $29 million. Based on the length of time and the extent to which the fair value has been less than our carrying value and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value, management determined that the decline in fair value was temporary in nature. Therefore, we did not record an impairment charge related to the investment.
Net Receivables and Dividends from Equity Method Investees
Total net receivables due from equity method investees were $1,191 million and $882 million as of December 31, 2022 and 2021, respectively. The total amount of dividends received from equity method investees was $634 million, $823 million and $467 million for the years ended December 31, 2022, 2021 and 2020, respectively. The amount of consolidated reinvested earnings that represents undistributed earnings of investments accounted for under the equity method as of December 31, 2022 was $7,030 million.