Coca Cola 2003 Annual Report Download - page 40

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applied from its original effective date. Of the $422 million recorded in 2003, $407 million was recorded in
selling, general and administrative expenses and $15 million was recorded in other operating charges.
A stronger U.S. dollar relative to most major currencies partially offset the increases in selling, general and
administrative expenses in 2002 compared to 2001.
Pension Benefits. Net periodic cost for our defined benefit pension plans was $120 million, $72 million and
$62 million, respectively, for the years ended December 31, 2003, 2002 and 2001. These expenses are included in
general and administrative expenses.
The decrease in our expected weighted-average, long-term rate of return assumption, the decrease in our
discount rate assumption and increased amortization of actuarial losses increased our net periodic pension cost
by $48 million in 2003 compared to 2002. Net periodic pension cost in 2004 is expected to be in the range of
$20 million to $25 million higher than 2003 due to a decrease in our discount rate assumptions and increased
amortization of actuarial losses.
Refer to Note 14.
Other Operating Charges
Operating income in 2003 reflected the impact of $561 million of expenses related to the 2003 streamlining
initiatives. A majority of the charges related to initiatives in North America and Germany. In North America,
the Company integrated the operations of three separate North American business units—Coca-Cola North
America, Minute Maid and Fountain. In Germany, CCEAG took steps to improve its efficiency in sales,
distribution and manufacturing, and our German Division office also implemented streamlining initiatives.
Selected other operations also took steps to streamline their operations to improve overall efficiency
and effectiveness.
The total streamlining initiative costs incurred for the year ended December 31, 2003 by operating segment
were as follows (in millions):
North America $ 273
Africa 12
Asia 18
Europe, Eurasia & Middle East 183
Latin America 8
Corporate 67
Total $ 561
These initiatives resulted in the separation of a total of approximately 3,700 associates in 2003, primarily in
North America, Germany and Asia. As a result of these streamlining initiatives, apart from the charge to 2003
earnings of $561 million, we estimate that the Company’s financial results benefited by approximately
$50 million (pretax) in 2003 and will benefit by at least $100 million (pretax) on an annualized basis beginning
in 2004.
Refer to Note 17.
37