Coca Cola 2013 Annual Report Download - page 54

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Other Operating Charges
Other operating charges incurred by operating segment were as follows (in millions):
Year Ended December 31, 2013 2012 2011
Eurasia & Africa $2$— $12
Europe 57 (3) 25
Latin America ——4
North America 277 255 374
Pacific 47 154
Bottling Investments 194 164 89
Corporate 318 30 174
Total $ 895 $ 447 $ 732
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;
$188 million due to the Company’s other productivity, integration and restructuring initiatives; and $22 million due to charges
associated with certain of the Company’s fixed assets. Refer to Note 17 of Notes to Consolidated Financial Statements for further
information on the impairment charges. Refer to Note 18 of Notes to Consolidated Financial Statements and see below for
further information on the Company’s productivity and reinvestment program, as well as the Company’s other productivity,
integration and restructuring initiatives. Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these
charges had on our operating segments.
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 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. 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 19 of Notes to Consolidated Financial Statements for the
impact these charges had on our operating segments. Refer to Note 18 of Notes to Consolidated Financial Statements and see
below for additional information on the Company’s productivity, integration and restructuring initiatives.
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 the weather-related events in Japan;
$35 million of costs associated with the merger of Embotelladoras Arca, S.A.B. de C.V. (‘‘Arca’’) and Grupo Continental S.A.B.
(‘‘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 of Notes to Consolidated Financial Statements for additional information on our productivity, integration
and restructuring initiatives. Refer Note 17 of Notes to Consolidated Financial Statements for the discussion of the Japan events
and merger of Arca and Contal. Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these charges had
on our operating segments.
Productivity and Reinvestment Program
In February 2012, the Company announced a four-year productivity and reinvestment program. This program will further enable
our efforts to strengthen our brands and reinvest our resources to drive long-term profitable growth. The first component of this
program is a global productivity initiative that will target annualized savings of $350 million to $400 million. This initiative will be
focused on four primary areas: global supply chain optimization; global marketing and innovation effectiveness; operating expense
leverage and operational excellence; and data and information technology systems standardization. The second component of our
productivity and reinvestment program involves beginning a new integration initiative in North America related to our acquisition
of CCE’s former North America business. The Company has identified incremental synergies, primarily in the area of our North
American product supply operations, which will better enable us to service our customers and consumers. We believe these efforts
will create annualized savings of $200 million to $250 million.
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