Annual report pursuant to Section 13 and 15(d)

EQUITY METHOD INVESTMENTS

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EQUITY METHOD INVESTMENTS
 12 Months Ended
Dec. 31, 2023
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 18 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. As of December 31, 2023, we owned 19%, 20%, 20%, 28%, 21% and 18%, respectively, of these companies’ outstanding shares. As of December 31, 2023, our investments in our equity method investees in the aggregate exceeded our proportionate share of the net assets of these equity method investees by $8,634 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
2023 2022 2021
Net operating revenues $ 93,862  $ 85,116  $ 79,934 
Cost of goods sold 55,780  52,051  47,847 
Gross profit $ 38,082  $ 33,065  $ 32,087 
Operating income $ 11,868  $ 9,719  $ 9,089 
Consolidated net income $ 7,657  $ 6,373  $ 6,050 
Less: Net income attributable to noncontrolling interests 75  102  91 
Net income attributable to common shareowners $ 7,582  $ 6,271  $ 5,959 
Company equity income (loss) — net $ 1,691  $ 1,472  $ 1,438 
1 The financial information represents the results of the equity method investees during the Company’s period of ownership.
December 31, 2023 2022
Current assets $ 35,087  $ 32,722 
Noncurrent assets 74,464  70,523 
Total assets $ 109,551  $ 103,245 
Current liabilities $ 26,929  $ 23,580 
Noncurrent liabilities 33,989  34,740 
Total liabilities $ 60,918  $ 58,320 
Equity attributable to shareowners of investees $ 47,473  $ 43,917 
Equity attributable to noncontrolling interests 1,160  1,008 
Total equity $ 48,633  $ 44,925 
Company equity method investments $ 19,671  $ 18,264 
Net sales to equity method investees, the majority of which are located outside the United States, were $17,736 million, $16,084 million and $14,471 million in 2023, 2022 and 2021, respectively. Total payments, primarily related to marketing, made to equity method investees were $294 million, $396 million and $516 million in 2023, 2022 and 2021, respectively. The increase in net sales to equity method investees in 2023 was primarily due to volume growth and favorable pricing initiatives. In addition, purchases of beverage products from equity method investees were $579 million, $505 million and $496 million in 2023, 2022 and 2021, 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, 2023 Fair Value Carrying Value Difference
Monster Beverage Corporation $ 11,766  $ 4,837  $ 6,929 
Coca-Cola Europacific Partners plc 5,870  3,858  2,012 
Coca-Cola FEMSA, S.A.B. de C.V. 5,549  2,092  3,457 
Coca-Cola HBC AG 2,296  1,252  1,044 
Coca-Cola Consolidated, Inc. 2,304  473  1,831 
Coca-Cola Bottlers Japan Holdings Inc. 484  367  117 
Coca-Cola İçecek A.Ş. 911  228  683 
Embotelladora Andina S.A. 137  90  47 
Total $ 29,317  $ 13,197  $ 16,120 
Net Receivables and Dividends from Equity Method Investees
Total net receivables due from equity method investees were $1,527 million and $1,191 million as of December 31, 2023 and 2022, respectively. The total amount of dividends received from equity method investees was $672 million, $634 million and $823 million for the years ended December 31, 2023, 2022 and 2021, respectively. The amount of consolidated reinvested earnings that represents undistributed earnings of investments accounted for under the equity method as of December 31, 2023 was $8,005 million.