SEC Comment Letter 0000000000-23-008590 to COCA COLA FEMSA SAB DE CV (KOF)
COCA COLA FEMSA SAB DE CV
Date: Aug. 8, 2023 · CIK: 0000910631 · Accession: 0000000000-23-008590
AI Filing Summary & Sentiment
File numbers found in text: 001-12260
Letter
United States securities and exchange commission logo August 8, 2023 Gerardo Cruz Celaya Chief Financial Officer Coca-Cola FEMSA, S.A.B. de C.V. Calle Mario Pani No. 100 Santa Fe Cuajimalpa Cuajimalpa de Morelos 05348, Ciudad de México, México Re:Coca-Cola FEMSA, S.A.B. de C.V. Form 20-F for the Year Ended December 31, 2022 Filed April 17, 2023 Form 6-K Filed July 26, 2023 File No. 001-12260 Dear Gerardo Cruz Celaya: We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 20-F for the Year Ended December 31, 2022 Consolidated Financial Statements Note 3. Significant Accounting Policies 3.14 Intangible assets, page F-26 1.We note your accounting policy and disclosures regarding your treatment of TCCC bottling agreement intangible assets as indefinite lived intangible assets even though they appear to have stated terms of 10 years and contain a 10 year renewal right. Please refer to paragraph 94 of IAS 38 and more fully explain to us why you believe your accounting policy is appropriate and consistent with IFRS, given the stated terms stipulated in the agreements. In addition, please more fully explain to us the process and expected costs of renewing the agreements at the end of the 10 year term and address if the agreements
FirstName LastNameGerardo Cruz Celaya Comapany NameCoca-Cola FEMSA, S.A.B. de C.V. August 8, 2023 Page 2 FirstName LastName Gerardo Cruz Celaya Coca-Cola FEMSA, S.A.B. de C.V. August 8, 2023 Page 2 provide for successive renewal periods after the initial 10 year renewal term. Form 6-K filed on July 26, 2023 General 2.We note that you define EBITDA on a consolidated basis as operating income plus depreciation, amortization and other operating non-cash charges. Please be advised that Question 103.01 of the Division of Corporation Finance’s Compliance and Disclosure Interpretations on Non-GAAP Financial Measures indicates that EBITDA is defined as “earnings before interest, taxes, depreciation and amortization”. Please revise the non- IFRS measure you present as EBITDA to only include adjustments for items contemplated by its acronym or revise the title of the non-IFRS measure you present to convey the additional adjustments. In addition, if you continue to present either EBITDA or Adjusted EBITDA on a consolidated basis, please be advised that Question 103.02 of the Division of Corporation Finance’s Compliance and Disclosure Interpretations on Non- GAAP Financial Measures requires these measure to be reconciled to the most directly comparable IFRS measure which is net income rather than operating income. 3.We note that you present percentage changes related to numerous IFRS measures, on both a consolidated and segment basis, that you identify as "comparable". We also note that you broadly define the nature of the items excluded from comparable percentage changes but do not quantify the impact of each excluded item for each comparable percentage change. It appears to us this results in presenting non-IFRS measures but not providing reconciliations to the most directly comparable IFRS measures. In regard to the comparable percentage changes you present, please tell us your consideration of the the requirements of Item 100(a)(2) of Regulation G. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Jeffrey Gordon at 202-551-3866 or Anne McConnell at 202-551- 3709 with any questions. Sincerely, Division of Corporation Finance Office of Manufacturing
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United States securities and exchange commission logo
August 8, 2023
Gerardo Cruz Celaya
Chief Financial Officer
Coca-Cola FEMSA, S.A.B. de C.V.
Calle Mario Pani No. 100
Santa Fe Cuajimalpa
Cuajimalpa de Morelos
05348, Ciudad de México, México
Re:Coca-Cola FEMSA, S.A.B. de C.V.
Form 20-F for the Year Ended December 31, 2022
Filed April 17, 2023
Form 6-K Filed July 26, 2023
File No. 001-12260
Dear Gerardo Cruz Celaya:
We have limited our review of your filing to the financial statements and related
disclosures and have the following comments. In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 20-F for the Year Ended December 31, 2022
Consolidated Financial Statements
Note 3. Significant Accounting Policies
3.14 Intangible assets, page F-26
1.We note your accounting policy and disclosures regarding your treatment of TCCC
bottling agreement intangible assets as indefinite lived intangible assets even though they
appear to have stated terms of 10 years and contain a 10 year renewal right. Please refer
to paragraph 94 of IAS 38 and more fully explain to us why you believe your accounting
policy is appropriate and consistent with IFRS, given the stated terms stipulated in the
agreements. In addition, please more fully explain to us the process and expected costs of
renewing the agreements at the end of the 10 year term and address if the agreements
FirstName LastNameGerardo Cruz Celaya
Comapany NameCoca-Cola FEMSA, S.A.B. de C.V.
August 8, 2023 Page 2
FirstName LastName
Gerardo Cruz Celaya
Coca-Cola FEMSA, S.A.B. de C.V.
August 8, 2023
Page 2
provide for successive renewal periods after the initial 10 year renewal term.
Form 6-K filed on July 26, 2023
General
2.We note that you define EBITDA on a consolidated basis as operating income plus
depreciation, amortization and other operating non-cash charges. Please be advised that
Question 103.01 of the Division of Corporation Finance’s Compliance and Disclosure
Interpretations on Non-GAAP Financial Measures indicates that EBITDA is defined as
“earnings before interest, taxes, depreciation and amortization”. Please revise the non-
IFRS measure you present as EBITDA to only include adjustments for items
contemplated by its acronym or revise the title of the non-IFRS measure you present to
convey the additional adjustments. In addition, if you continue to present either EBITDA
or Adjusted EBITDA on a consolidated basis, please be advised that Question 103.02 of
the Division of Corporation Finance’s Compliance and Disclosure Interpretations on Non-
GAAP Financial Measures requires these measure to be reconciled to the most directly
comparable IFRS measure which is net income rather than operating income.
3.We note that you present percentage changes related to numerous IFRS measures, on both
a consolidated and segment basis, that you identify as "comparable". We also note that
you broadly define the nature of the items excluded from comparable percentage changes
but do not quantify the impact of each excluded item for each comparable percentage
change. It appears to us this results in presenting non-IFRS measures but not providing
reconciliations to the most directly comparable IFRS measures. In regard to the
comparable percentage changes you present, please tell us your consideration of the the
requirements of Item 100(a)(2) of Regulation G.
In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
You may contact Jeffrey Gordon at 202-551-3866 or Anne McConnell at 202-551-
3709 with any questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing