Coca Cola 2013 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2013 Coca Cola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

As a combined productivity and reinvestment program, the Company anticipates generating annualized savings of $550 million to
$650 million. The savings generated by this program will be reinvested in brand-building initiatives. Refer to Note 18 of Notes to
Consolidated Financial Statements.
In February 2014, the Company announced that we are expanding our productivity and reinvestment program to drive an
incremental $1 billion in productivity by 2016 that will primarily be redirected into increased media investments. Our
incremental productivity goal consists of two relatively equal components. First, expanded savings through global supply chain
optimization, data and information technology system standardization, and resource and cost reallocation. These savings will be
reinvested in global brand building initiatives, with an emphasis on increased media spending. Second, we will be increasing the
effectiveness of our marketing investments by transforming our marketing and commercial model to redeploy resources into more
consumer-facing marketing investments to accelerate growth.
Productivity Initiatives
During 2011, the Company successfully completed our four-year global productivity program and exceeded our target of providing
$500 million in annualized savings from these initiatives. These savings have provided the Company additional flexibility to invest
for growth. The Company generated these savings in a number of areas, including 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. In realizing these savings,
the Company incurred total costs of $496 million related to these productivity initiatives since they commenced during the first
quarter of 2008. Refer to Note 18 of Notes to Consolidated Financial Statements.
Integration of CCE’s Former North America Business
In 2010, we acquired CCE’s former North America business and began an integration initiative to develop, design and implement
our revised operating framework. In 2011, we completed this program. The Company incurred total pretax expenses of
$486 million related to this initiative since the plan commenced, and we realized nearly all of the $350 million in annualized
savings by the end of 2011. Refer to Note 18 of Notes to Consolidated Financial Statements.
Integration of Our German Bottling and Distribution Operations
The Company’s integration initiatives include costs related to the integration of 18 German bottling and distribution operations
acquired in 2007. The expenses recorded in connection with these integration activities have been primarily due to involuntary
terminations. The Company began these integration initiatives in 2008 and has incurred total pretax expenses of $627 million since
they commenced. The Company is currently reviewing other restructuring opportunities within the German bottling and
distribution operations, which if implemented will result in additional charges in future periods. However, as of December 31,
2013, the Company had not finalized any additional restructuring plans. The Company does anticipate incurring additional
integration costs related to information technology and other initiatives. Refer to Note 18 of Notes to Consolidated Financial
Statements.
53