SEC Comment Letter for COCA COLA FEMSA SAB DE CV (KOF) — Aug 7, 2015
COCA COLA FEMSA SAB DE CV
Date: Aug. 7, 2015 · CIK: 0000910631 · Accession: 0000000000-15-040607
AI Filing Summary & Sentiment
File numbers found in text: 001-12260
Letter
August 7 , 2015 Via E -Mail Héctor Treviño Gutiérrez Chief Financial Officer Coca -Cola FEMSA, S.A.B. de C.V. Calle Mario Pani No. 100, Santa Fe Cuajimalpa, Cuajimalpa de Morelos, 05348, México, D.F., México
Re: Coca -Cola FEMSA, S.A.B. de C.V. Form 20-F for the Year Ended December 31, 2014 Filed April 15 , 2015 File No. 001-12260
Dear Mr. Gutiérrez :
We have reviewed your filing and have the following comment . In our comment, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to the comment within ten business days by providing the requested information or advise us when you will provide the requested response. If you do no t believe our comment applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to the comment , we may have additional comments.
Form 20 -F for the Year Ended December 31, 2014 Item 18. Financial Stat ements, page 94 Notes to the Consolidated Statements , page F-8 Note 9. Investments in Associates and Joint Ventures, page F -35
1. We note your January 25, 2013 acquisition of 51% of Coca -Cola FEMSA Philippines, Inc. ( CCFPI ) and, as part of the agreement, you obtained a call option to acquire the remaining 49% of CCFPI at any time during the seven years following the closing. We further note that you have accounted for the results of CCFPI using the equity method from the date of acquisition through Decemb er 31, 2014 based on the following factors: (i) during the initial four -year period some relevant activities require joint approval between you and The Coca -Cola Company ; and (ii) potential voting rights to acquire the remaining 49% of CCFPI are not probable to be executed in the foreseeable future due to the fact the call option is “out of the money” as of December 31, 2014 and 2013. Please provide us with your detailed analysis to support your conclusion to account for CCFPI using the equity method. In your response, please include the following information
Héctor Treviño Gutiérrez Coca -Cola FEMSA, S.A.B. de C.V. August 7, 2015 Page 2
along with any other relevant information to support your conclusion that CCFPI should not be consolidated under International Financial Reporting Standard s 10:
Identify the relevant activities and discuss how decisions about the relevant activities are made, including the identification of which activities require joint approval and which do not require joint approval.
Provide your consideration of whether the potential voting rights are substantive, including whether the call option was deeply out of the money as of December 31, 2014 and 2013 and expected to remain so over the option life; and whether you would benefit for other reasons from the exercise of the option (e.g. realize synergies, protection of interests, etc.).
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adeq uacy of the disclosures they have made.
In responding to our comment , please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person u nder the federal securities laws of the United States.
You may contact Julie Marlowe at (202) 551 -5395 or John Archfield at (202) 551 -3315 if you h ave questions regarding the comment on the financial statements and related matters.
Sincerely,
/s/Tia L. Jenkins
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August 7 , 2015 Via E -Mail Héctor Treviño Gutiérrez Chief Financial Officer Coca -Cola FEMSA, S.A.B. de C.V. Calle Mario Pani No. 100, Santa Fe Cuajimalpa, Cuajimalpa de Morelos, 05348, México, D.F., México Re: Coca -Cola FEMSA, S.A.B. de C.V. Form 20-F for the Year Ended December 31, 2014 Filed April 15 , 2015 File No. 001-12260 Dear Mr. Gutiérrez : We have reviewed your filing and have the following comment . In our comment, we may ask you to provide us with information so we may better understand your disclosure. Please respond to the comment within ten business days by providing the requested information or advise us when you will provide the requested response. If you do no t believe our comment applies to your facts and circumstances, please tell us why in your response. After reviewing your response to the comment , we may have additional comments. Form 20 -F for the Year Ended December 31, 2014 Item 18. Financial Stat ements, page 94 Notes to the Consolidated Statements , page F-8 Note 9. Investments in Associates and Joint Ventures, page F -35 1. We note your January 25, 2013 acquisition of 51% of Coca -Cola FEMSA Philippines, Inc. ( CCFPI ) and, as part of the agreement, you obtained a call option to acquire the remaining 49% of CCFPI at any time during the seven years following the closing. We further note that you have accounted for the results of CCFPI using the equity method from the date of acquisition through Decemb er 31, 2014 based on the following factors: (i) during the initial four -year period some relevant activities require joint approval between you and The Coca -Cola Company ; and (ii) potential voting rights to acquire the remaining 49% of CCFPI are not probable to be executed in the foreseeable future due to the fact the call option is “out of the money” as of December 31, 2014 and 2013. Please provide us with your detailed analysis to support your conclusion to account for CCFPI using the equity method. In your response, please include the following information Héctor Treviño Gutiérrez Coca -Cola FEMSA, S.A.B. de C.V. August 7, 2015 Page 2 along with any other relevant information to support your conclusion that CCFPI should not be consolidated under International Financial Reporting Standard s 10: Identify the relevant activities and discuss how decisions about the relevant activities are made, including the identification of which activities require joint approval and which do not require joint approval. Provide your consideration of whether the potential voting rights are substantive, including whether the call option was deeply out of the money as of December 31, 2014 and 2013 and expected to remain so over the option life; and whether you would benefit for other reasons from the exercise of the option (e.g. realize synergies, protection of interests, etc.). We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adeq uacy of the disclosures they have made. In responding to our comment , please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person u nder the federal securities laws of the United States. You may contact Julie Marlowe at (202) 551 -5395 or John Archfield at (202) 551 -3315 if you h ave questions regarding the comment on the financial statements and related matters. Sincerely, /s/Tia L. Jenkins Tia L. Jenkins Senior Assistant Chief Accountant Office of Beverages, Apparel, and Mining