Coca Cola 2011 Annual Report Download - page 136

Fair Value of Other Financial Instruments
The carrying amounts of cash and cash equivalents; short-term investments; receivables; accounts payable and accrued expenses;
and loans and notes payable approximate their fair values because of the relatively short-term maturities of these financial
instruments.
NOTE 17: SIGNIFICANT OPERATING AND NONOPERATING ITEMS
Other Operating Items
On March 11, 2011, a major earthquake struck off the coast of Japan, resulting in a tsunami that devastated the northern and
eastern regions of the country. As a result of these events, the Company made a donation to a charitable organization to establish
the Coca-Cola Japan Reconstruction Fund, which will help rebuild schools and community facilities across the impacted areas of
the country.
The Company recorded total charges of $84 million related to these events during the year ended December 31, 2011. These
charges were recorded in various line items in our consolidated statement of income, including charges of $23 million in
deductions from revenue, $11 million in cost of goods sold and $50 million in other operating charges. Refer to Note 19 for the
impact these charges had on our operating segments.
The charges of $23 million recorded in deductions from revenue were primarily related to funds we provided our local bottling
partners to enable them to continue producing and distributing our beverage products in the affected regions. This support not
only helped restore our business operations in the impacted areas, but it also assisted our bottling partners in meeting the evolving
customer and consumer needs as the recovery and rebuilding efforts advanced. The charges of $11 million in cost of goods sold
were primarily related to Company-owned inventory that was destroyed or lost. The $50 million of other operating charges were
primarily related to the donation discussed above and a $1 million impairment charge related to certain Company-owned fixed
assets. These fixed assets primarily consisted of Company-owned vending equipment and coolers that were damaged or lost as a
result of these events. Refer to Note 16 for the fair value disclosures related to the inventory and fixed asset charges described
above.
Other Operating Charges
In 2011, the Company incurred other operating charges of $732 million, which primarily consisted of $633 million associated with
the Company’s ongoing productivity, integration and restructuring initiatives; $50 million related to the events in Japan described
above; $35 million of costs associated with the merger of Arca and Contal; and $10 million associated with the floods in Thailand
that impacted the Company’s supply chain operations in the region. Refer to Note 18 for additional information on our
productivity, integration and restructuring initiatives. Refer to the discussion of the merger of Arca and Contal below for
additional information on the transaction. Refer to Note 19 for the impact these charges had on our operating segments.
In 2010, the Company incurred other operating charges of $819 million, which consisted of $478 million associated with the
Company’s ongoing productivity, integration and restructuring initiatives; $250 million related to charitable contributions;
$81 million due to transaction costs incurred in connection with our acquisition of CCE’s North American business and the sale of
our Norwegian and Swedish bottling operations to New CCE; and $10 million of charges related to bottling activities in Eurasia.
Refer to Note 18 for additional information on our productivity, integration and restructuring initiatives. The charitable
contributions were primarily attributable to a cash donation to The Coca-Cola Foundation. Refer to Note 2 for additional
information related to the transaction costs. Refer to Note 19 for the impact these charges had on our operating segments.
In 2009, the Company incurred other operating charges of $313 million, which consisted of $273 million related to the Company’s
ongoing productivity, integration and restructuring initiatives and $40 million due to asset impairments. Refer to Note 18 for
additional information on our productivity, integration and restructuring initiatives. The impairment charges were related to a
$23 million impairment of an intangible asset and a $17 million impairment of a building. The impairment of the intangible asset
was due to a change in the expected useful life of the asset, which was previously determined to have an indefinite life. The
$17 million impairment was due to a change in disposal strategy related to a building that is no longer occupied. The Company
had originally intended to sell the building along with the related land. However, we determined that the maximum potential sales
proceeds would likely be realized through the sale of vacant land. As a result, the building was removed. The land was not
considered held-for-sale, primarily due to the fact that it was not probable a sale would be completed within one year. Refer to
Note 16 for the related fair value disclosures of the impairments. Refer to Note 19 for the impact these charges had on our
operating segments.
Other Nonoperating Items
Equity Income (Loss) — Net
In 2011, the Company recorded charges of $53 million in equity income (loss) — net. These charges primarily represent the
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