Coca Cola 2003 Annual Report Download - page 96

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 16: SIGNIFICANT OPERATING AND NONOPERATING ITEMS (Continued)
In the third quarter of 2002, our Company recorded a noncash pretax charge of approximately $33 million
related to our share of impairment and restructuring charges taken by certain investees in Latin America. This
charge was recorded in the line item equity income—net.
Our Company had direct and indirect ownership interests totaling approximately 18 percent in Cervejarias
Kaiser S.A. (‘‘Kaiser S.A.’’). In March 2002, Kaiser S.A. sold its investment in Cervejarias Kaiser Brazil, Ltda to
Molson Inc. (‘‘Molson’’) for cash of approximately $485 million and shares of Molson valued at approximately
$150 million. Our Company’s pretax share of the gain related to this sale was approximately $43 million, of
which approximately $21 million was recorded in the line item equity income—net, and approximately
$22 million was recorded in the line item other income (loss)—net.
In the first quarter of 2002, our Company recorded a noncash pretax charge of approximately $157 million
(recorded in the line item other income (loss)—net), primarily related to the write-down of certain investments
in Latin America. This write-down reduced the carrying value of the investments in Latin America to fair value.
The charge was primarily the result of the economic developments in Argentina during the first quarter of 2002,
including the devaluation of the Argentine peso and the severity of the unfavorable economic outlook.
NOTE 17: STREAMLINING COSTS
During 2003, the Company took steps to streamline and simplify its operations, primarily in North America
and Germany. In North America, the Company integrated the operations of three formerly 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. As disclosed in Note 1, under SFAS No. 146, a liability is accrued
only when certain criteria are met. All of the Company’s streamlining initiatives met these criteria as of
December 31, 2003, and all related costs have been incurred as of December 31, 2003.
Employees separated from the Company as a result of these streamlining initiatives were offered severance
or early retirement packages, as appropriate, which included both financial and nonfinancial components. The
expenses recorded during the year ended December 31, 2003 included costs associated with involuntary
terminations and other direct costs associated with implementing these initiatives. As of December 31, 2003,
approximately 3,700 associates had been separated pursuant to these streamlining initiatives. Other direct costs
included the relocation of employees; contract termination costs; costs associated with the development,
communication and administration of these initiatives; and asset write-offs. During 2003, the Company incurred
total pretax expenses related to these streamlining initiatives of approximately $561 million, or $0.15 per share
after tax. These expenses were recorded in the line item other operating charges.
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