Coca Cola 2014 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, 2014 2013 2012
Eurasia & Africa
$ 26
$ 2 $ —
Europe 111 57 (3)
Latin
America
295 — —
North
America
281 277 255
Asia Pacific 38 47 1
Bottling
Investments
247 194 164
Corporate 185 318 30
Total $ 1,183 $ 895 $ 447
In 2014, the Company incurred other operating charges of $1,183 million. These charges primarily consisted of $601 million due to the
Company’s productivity and reinvestment program and $208 million due to the integration of our German bottling and distribution
operations. In addition, the Company incurred a charge of $314 million due to a write-down we recorded related to our concentrate
sales receivables from our bottling partner in Venezuela and an impairment of a Venezuelan trademark primarily due to higher
exchange rates. The write-down was recorded as a result of our revised assessment of the U.S. dollar value we expect to realize upon
the conversion of the Venezuelan bolivar into U.S. dollars by our bottling partner to pay our concentrate sales receivables. The
Company also recorded a loss of $36 million as a result of the restructuring and transition of the Company’s Russian juice operations
to an existing joint venture with an unconsolidated bottling partner. Refer to Note 18 of Notes to Consolidated Financial Statements
and see below for additional information on our productivity and reinvestment program as well as the Company’s other productivity,
integration and restructuring initiatives. Refer to Note 1 of Notes to Consolidated Financial Statements for additional information on
the Venezuelan currency rate change. Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these charges
had on our operating segments.
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
Nestlé 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 18 of Notes to Consolidated Financial Statements and see below for additional information on
the Company’s 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.
Productivity and Reinvestment Program
In February 2012, the Company announced a four-year productivity and reinvestment program. This program is designed to assist us in
strengthening our brands and reinvesting our resources to drive long-term profitable growth. The first component of this program is a
global productivity initiative that will target annualized productivity 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 relates to additional integration initiatives in North America as a result of 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