Coca Cola 2010 Annual Report Download - page 149

the remeasurement gains and losses were recorded in other income (loss) — net. This charge impacted the Corporate
operating segment.
Also during 2010, the Company recorded charges of $48 million in other income (loss) — net related to
other-than-temporary impairments of available-for-sale securities and an equity method investment and a donation of
preferred shares in one of our equity method investees. Refer to Note 16 for fair value disclosures related to these
impairments. Refer to Note 19 for the impact these charges had on our operating segments.
During 2009, the Company realized a gain of $44 million in other income (loss) — net on the sale of equity securities
that were classified as available-for-sale. In 2008, the Company recognized an other-than-temporary impairment on
these same securities, primarily due to the length of time the market value had been less than our cost basis, and the
lack of intent to retain the investment for a period of time sufficient to allow for recovery in market value. The gain on
the sale of these securities represents the appreciation in market value since the impairment was recognized and
impacted the Corporate operating segment.
Also during 2009, the Company recorded a charge of $27 million in other income (loss) — net due to an
other-than-temporary decline in the fair value of a cost method investment. As of December 31, 2008, the estimated
fair value of this investment approximated the Company’s carrying value in the investment. However, during the first
quarter of 2009, the Company was informed by the investee of its intent to reorganize its capital structure in 2009,
which would result in the Company’s shares in the investee being canceled. As a result, the Company determined that
the decline in fair value of this cost method investment was other than temporary. This impairment charge impacted the
Corporate operating segment. Refer to Note 16 for fair value disclosures related to this impairment.
During 2008, the Company recognized gains of $119 million in other income (loss) — net due to divestitures, primarily
related to the sale of Remil to Coca-Cola FEMSA, and the sale of 49 percent of our interest in Coca-Cola Beverages
Pakistan Ltd. (‘‘Coca-Cola Pakistan’’) to Coca-Cola Icecek A.S. (‘‘Coca-Cola Icecek’’). Prior to the sale of Remil, our
Company owned 100 percent of the outstanding common stock of Remil. Cash proceeds from the sale were
$275 million, net of the cash balance, as of the disposal date. Subsequent to the sale of a portion of our interest in
Coca-Cola Pakistan, the Company owns a noncontrolling interest and accounts for our remaining investment under the
equity method. These gains impacted the Bottling Investments and Corporate operating segments.
Also during 2008, the Company recorded charges of $84 million in other income (loss) — net, which primarily consisted
of $81 million of other-than-temporary impairment charges. As of December 31, 2008, the Company had several
investments classified as available-for-sale securities in which our cost basis exceeded the fair value of the investment,
each of which initially occurred between the end of the second quarter and the beginning of the third quarter of 2008.
Management assessed each individual investment to determine if the decline in fair value was other than temporary.
Based on these assessments, management determined that the decline in fair value of each investment was other than
temporary. These impairment charges impacted the North America, Bottling Investments and Corporate operating
segments.
NOTE 18: PRODUCTIVITY, INTEGRATION AND RESTRUCTURING INITIATIVES
Productivity Initiatives
During 2008, the Company announced a transformation effort centered on productivity initiatives that will provide
additional flexibility to invest for growth. The initiatives are expected to impact a number of areas and include
aggressively managing operating expenses supported by lean techniques; redesigning key processes to drive
standardization and effectiveness; better leveraging our size and scale; and driving savings in indirect costs through the
implementation of a ‘‘procure-to-pay’’ program.
The Company has incurred total pretax expenses of $352 million related to these productivity initiatives since they
commenced in the first quarter of 2008. These expenses were recorded in the line item other operating charges. Refer
to Note 19 for the impact these charges had on our operating segments.
Other direct costs included both internal and external costs associated with the development, communication,
administration and implementation of these initiatives and accelerated depreciation on certain fixed assets. The
Company currently expects the total cost of these initiatives to be approximately $500 million and anticipates
recognizing the remainder of the costs by the end of 2011.
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