FORM 10-Q

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.
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