Coca Cola 2013 Annual Report Download - page 129

Company-owned vending equipment and coolers that were damaged or lost as a result of these events. Refer to Note 19 for the
impact these charges had on our operating segments.
Other Operating Charges
In 2013, the Company incurred other operating charges of $895 million, which primarily consisted of $494 million associated with
the Company’s productivity and reinvestment program; $195 million due to the impairment of certain intangible assets described
below; $188 million due to the Company’s other restructuring and integration initiatives; and $22 million due to charges associated
with certain of the Company’s fixed assets. Refer to Note 18 for additional information on our productivity and reinvestment
program as well as the Company’s other productivity, integration and restructuring initiatives. Refer to Note 19 for the impact
these charges had on our operating segments.
During the year ended December 31, 2013, the Company recorded charges of $195 million related to certain intangible assets.
These charges included $113 million related to the impairment of trademarks recorded in our Bottling Investments and Pacific
operating segments. These impairments were primarily due to a strategic decision to phase out certain local-market value brands
which resulted in a change in the expected useful life of the intangible assets. The charges were determined by comparing the fair
value of the trademarks, derived using discounted cash flow analyses, to the current carrying value. Additionally, the remaining
charge of $82 million was related to goodwill recorded in our Bottling Investments operating segment. This charge was primarily
the result of management’s revised outlook on market conditions and volume performance.
In 2012, the Company incurred other operating charges of $447 million, which primarily consisted of $270 million associated with
the Company’s productivity and reinvestment program; $163 million related to the Company’s other restructuring and integration
initiatives; $20 million due to changes in the Company’s ready-to-drink tea strategy as a result of our U.S. license agreement with
Nestl´ e S.A. (‘‘Nestl´ e’’) terminating at the end of 2012; and $8 million due to costs associated with the Company detecting
carbendazim in orange juice imported from Brazil for distribution in the United States as described above. These charges were
partially offset by reversals of $10 million associated with the refinement of previously established accruals related to the
Company’s 2008-2011 productivity initiatives as well as reversals of $6 million associated with the refinement of previously
established accruals related to the Company’s integration of CCE’s former North America business. Refer to Note 18 for
additional information on our productivity and reinvestment program as well as the Company’s other productivity, integration and
restructuring initiatives. Refer to Note 19 for the impact these charges had on our operating segments.
In 2011, the Company incurred other operating charges of $732 million, which primarily consisted of $633 million associated with
the Company’s productivity, integration and restructuring initiatives; $50 million related to weather-related 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.
Other Nonoperating Items
Equity Income (Loss) — Net
The Company recorded a net charge of $159 million, a net gain of $8 million, and a net charge of $53 million in equity income
(loss) — net during the years ended December 31, 2013, 2012 and 2011, respectively. These amounts primarily represent the
Company’s proportionate share of unusual or infrequent items recorded by certain of our equity method investees.
In 2012, the Company also recorded a charge of $11 million related to changes in the structure of Beverage Partners Worldwide
(‘‘BPW’’), our 50/50 joint venture with Nestl´ e in the ready-to-drink tea category. These changes resulted in the joint venture
focusing its geographic scope primarily on Europe and Canada. The Company accounts for our investment in BPW under the
equity method of accounting.
Refer to Note 19 for the impact these items had on our operating segments.
Other Income (Loss) — Net
In 2013, the Company recorded a gain of $615 million due to the deconsolidation of our Brazilian bottling operations as a result
of their combination with an independent bottling partner. Refer to Note 2 for additional information on this transaction. Refer to
Note 19 for the impact this gain had on our operating segments.
Effective July 1, 2013, four of the Company’s Japanese bottling partners merged as CCEJ, a publicly traded entity, through a
share exchange. The terms of the agreement included the issuance of new shares of one of the publicly traded bottlers in
exchange for 100 percent of the outstanding shares of the remaining three bottlers according to an agreed-upon share exchange
ratio. As a result, the Company recorded a net charge of $114 million for those investments in which the Company’s carrying
value was less than the fair value of the shares received. Refer to Note 19 for the impact this loss had on our operating segments.
127