Coca Cola 2004 Annual Report Download - page 111
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 17: STREAMLINING COSTS (Continued)
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 the criteria
of SFAS No. 146 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.
The table below summarizes the costs incurred to date, the balances of accrued streamlining expenses and
the movement in those balances as of and for the years ended December 31, 2003 and 2004 (in millions):
Accrued Accrued
Costs Noncash Balance Noncash Balance
Incurred in and December 31, and December 31,
Cost Summary 2003 Payments Exchange 2003 Payments Exchange 2004
Severance pay and
benefits $ 248 $ (113) $ 3 $ 138 $ (118) $ (2) $ 18
Retirement related
benefits 43 — (14) 29 — (29) —
Outside services—
legal,
outplacement,
consulting 36 (25) — 11 (10) (1) —
Other direct costs 133 (81) (1) 51 (29) 1 23
Total1$ 460 $ (219) $ (12) $ 229 $ (157) $ (31) $ 41
Asset impairments $ 101
Total costs incurred $ 561
1As of December 31, 2003 and 2004, $206 million and $41 million, respectively, was included in our
consolidated balance sheet line item accounts payable and accrued expenses. As of December 31, 2003,
approximately $23 million was included in our consolidated balance sheet line item other liabilities. As of
December 31, 2004, this amount was reclassified to the pension and postretirement benefit accounts as such
amounts will be paid out in accordance with the Company’s defined benefit and postretirement benefit
plans over a number of years.
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