in 2008, and losses of approximately $10 million and $15 million in 2007 and 2006, respectively. These amounts were recorded in other income (loss)—net in our consolidated statements of income. Exchange gain (loss)—net includes the remeasurement of monetary assets and liabilities from certain currencies into functional currencies and the costs of hedging certain exposures of our consolidated balance sheets. Refer to Note 11 of Notes to Consolidated Financial Statements. 

The Company will continue to manage its foreign currency exposure to mitigate, over time, a portion of the impact of exchange rate changes on net income and earnings per share. 

Overview of Financial Position 

Our consolidated balance sheet as of December 31, 2008, compared to our consolidated balance sheet as of December 31, 2007, was impacted by the following: 

a decrease in net assets of $2,285 million resulting from translation adjustments in various balance sheet accounts; 

an increase in cash and cash equivalents of $608 million, primarily related to the timing of borrowings; 

a decrease of $1,637 million in our investment in CCE, primarily due to our proportionate share of impairment charges recorded by CCE; 

a decrease of $942 million in other assets, primarily due to the decline in fair value of pension and other postretirement benefit plan assets. Prior to this decline in fair value, the plan assets for certain pension and other postretirement benefit plans exceeded the benefit obligation, which resulted in the recognition of a prepaid asset. The Company has now recognized a liability for these pension and other postretirement benefit plans; 

an increase in our trademarks with indefinite lives of $906 million, primarily related to the finalization of purchase accounting for glacéau and Fuze and the acquisition of brands and licenses from Carlsberg. The increase in trademarks with indefinite lives related to the finalization of purchase accounting for glacéau resulted in a reclassification from goodwill; and 

a decrease in deferred income taxes of $1,013 million, primarily related to the change in deferred taxes on pension and other postretirement benefit obligations and the reversal of deferred tax liabilities on our investment in CCE as a result of our proportionate share of impairment charges recorded by CCE during 2008. 

Impact of Inflation and Changing Prices 

Inflation affects the way we operate in many markets around the world. In general, we believe that, over time, we are able to increase prices to counteract the majority of the inflationary effects of increasing costs and to generate sufficient cash flows to maintain our productive capability. 

Additional Information 

On September 3, 2008, we announced our intention to make cash offers to purchase Huiyuan. The making of the offers is subject to preconditions relating to Chinese regulatory approvals. We are offering HK$12.20 per share, and making a comparable offer for outstanding convertible bonds and options. We have accepted irrevocable undertakings from three shareholders for acceptance of the offers, in aggregate representing approximately 66 percent of the Huiyuan shares, and upon