The Coca-Cola Company Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Acquisitions and Divestitures

Acquisitions and Divestitures

3 Months Ended

Mar. 29, 2013

Acquisitions and divestitures

Acquisitions and Divestitures

ACQUISITIONS AND DIVESTITURES

Acquisitions

During the three months ended March 29, 2013, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $28 million, none of which were individually significant.

During the three months ended March 30, 2012, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $120 million, which included our acquisition of bottling operations in Vietnam and Cambodia. None of the Company's acquisitions were individually significant.

Divestitures

During the three months ended March 29, 2013, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $690 million, which primarily included the sale of a majority ownership interest in our previously consolidated bottling operations in the Philippines ("Philippine bottling operations") to Coca-Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), an equity method investee. The Company now accounts for our ownership interest in the Philippine bottling operations as an equity method investment, which we remeasured to fair value taking into consideration the sale price of the majority ownership interest. Coca-Cola FEMSA has an option to purchase our remaining ownership interest in the Philippine bottling operations at any time during the seven years following closing at the initial purchase price plus a defined return. Coca-Cola FEMSA also has an option exercisable during the sixth year after closing to sell its ownership interest back to the Company at a price not to exceed the initial purchase price.

During the three months ended March 30, 2012, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $11 million, none of which were individually significant.

Assets and Liabilities Held for Sale

On December 13, 2012, the Company and Coca-Cola FEMSA executed a share purchase agreement for the sale of a majority ownership interest in our consolidated Philippine bottling operations. This transaction was completed on January 25, 2013. As of December 31, 2012, our Philippine bottling operations met the criteria to be classified as held for sale, and we were required to record their assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the agreed-upon purchase price. The Company recorded a total loss of $107 million, primarily during the fourth quarter of 2012, on the sale of our Philippine bottling operations. Refer to the table below for a detail of our Philippine bottling assets and liabilities that were classified as held for sale as of December 31, 2012.

On December 17, 2012, the Company entered into an agreement with several parties which will result in the merger of our consolidated bottling operations in Brazil ("Brazilian bottling operations") with an independent bottler in Brazil. Upon completion of the transaction, we will deconsolidate our Brazilian bottling operations in exchange for cash and a minority ownership interest in the newly combined entity. As a result, our Brazilian bottling operations met the criteria to be classified as held for sale. We were not required to record their assets and liabilities at fair value less any costs to sell because their fair value exceeded our carrying value as of March 29, 2013, and December 31, 2012.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our condensed consolidated balance sheets as of March 29, 2013, and December 31, 2012 (in millions):



	March 29, 2013		December 31, 2012
	Brazilian Bottling Operations		Brazilian Bottling Operations		Philippine Bottling Operations			Total Bottling Operations Held for Sale as of December 31, 2012
Cash, cash equivalents and short-term investments	$	85	$	45	$	133		$	178
Trade accounts receivable, less allowances	62		88		108			196
Inventories	92		85		187			272
Prepaid expenses and other assets	134		174		223			397
Other assets	182		128		7			135
Property, plant and equipment — net	464		419		841			1,260
Bottlers' franchise rights with indefinite lives	141		130		341			471
Goodwill	23		22		148			170
Other intangible assets	—		1		—			1
Allowance for reduction of assets held for sale	—		—		(107		)	(107		)
Total assets	$	1,183	$	1,092	$	1,881		$	2,973
Accounts payable and accrued expenses	$	140	$	157	$	241		$	398
Loans and notes payable	15		6		—			6
Current maturities of long-term debt	32		28		—			28
Accrued income taxes	1		4		(4		)	—
Long-term debt	152		147		—			147
Other liabilities	85		75		20			95
Deferred income taxes	21		20		102			122
Total liabilities	$	446	$	437	$	359		$	796

We determined that our Philippine and Brazilian bottling operations did not meet the criteria to be classified as discontinued operations, primarily due to the continued significant involvement we anticipate having in these operations following each transaction.