The Coca-Cola Company Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING

RESTRUCTURING

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Strategic Realignment

In August 2020, the Company announced strategic steps to transform our organizational structure in an effort to better enable us to capture growth in the fast-changing marketplace. The Company has transformed into a networked global organization designed to combine the power of scale with the deep knowledge required to win locally. We created new operating units effective January 1, 2021, which are focused on regional and local execution. The operating units sit under our four geographic operating segments and are highly interconnected, with the goal of eliminating duplication of resources and scaling new products more quickly. The operating units work closely with five global marketing category leadership teams to rapidly scale ideas while staying close to the consumer. The global marketing category leadership teams primarily focus on innovation as well as marketing efficiency and effectiveness. The organizational structure also includes a center and a platform services organization. Refer to Note 20 for additional information on our organizational structure.

The Company has incurred total pretax expenses of $684 million related to these strategic realignment initiatives since they commenced. These expenses were recorded in the line items other operating charges and other income (loss) — net in our consolidated statements of income. Refer to Note 20 for the impact these expenses had on our operating segments and Corporate. Outside services reported in the table below primarily relate to expenses in connection with legal and consulting activities. The strategic realignment initiatives were substantially complete as of December 31, 2021.

The following table summarizes the balance of accrued expenses related to these strategic realignment initiatives (in millions):


	Severance Pay and Benefits			Outside Services		Other Direct Costs		Total
2021
Accrued balance at beginning of year	$	181		$	1	$	3	$	185
Costs incurred	224			37		2		263
Payments	(265)			(35)		(3)		(303)
Noncash and exchange	(120)		1	(2)		—		(122)
Accrued balance at end of year	$	20		$	1	$	2	$	23
2022
Accrued balance at beginning of year	$	20		$	1	$	2	$	23
Costs incurred	(4)			—		(2)		(6)
Payments	(15)			—		—		(15)
Noncash and exchange	1			—		—		1
Accrued balance at end of year	$	2		$	1	$	—	$	3
2023
Accrued balance at beginning of year	$	2		$	1	$	—	$	3

Payments	(2)			—		—		(2)
Noncash and exchange	—			(1)		—		(1)
Accrued balance at end of year	$	—		$	—	$	—	$	—

1Includes pension settlement charges. Refer to Note 14.

North America Operating Unit Restructuring

In November 2022, the Company announced a restructuring program for our North America operating unit designed to better align its operating structure with its customers and bottlers. The evolved operating structure will bring together all bottler-related components (franchise leadership, commercial leadership, digital, governance and technical innovation) and will help streamline how we work. The Company has incurred total pretax expenses of $65 million related to this restructuring program since it commenced. These expenses were recorded in the line item other operating charges in our consolidated statements of income. Refer to Note 20 for the impact these charges had on our operating segments and Corporate. This restructuring program was substantially complete as of December 31, 2023.

The following table summarizes the balance of accrued expenses related to these North America operating unit restructuring initiatives (in millions):


	Severance Pay and Benefits		Outside Services		Other Direct Costs		Total
2022
Costs incurred	$	38	$	—	$	—	$	38
Payments	(1)		—		—		(1)

Accrued balance at end of year	$	37	$	—	$	—	$	37
2023
Accrued balance at beginning of year	$	37	$	—	$	—	$	37
Costs incurred	22		1		4		27
Payments	(58)		(1)		(4)		(63)

Accrued balance at end of year	$	1	$	—	$	—	$	1

Productivity and Reinvestment Program

In February 2012, the Company announced a productivity and reinvestment program designed to strengthen our brands and reinvest our resources to drive long-term profitable growth. This program was expanded multiple times, with the last expansion occurring in April 2017. The remaining initiatives included in this program, which are primarily designed to further simplify and standardize our organization, will be completed in 2024.

The Company has incurred total pretax expenses of $4,293 million related to our productivity and reinvestment program since it commenced. These expenses were recorded in the line items other operating charges and other income (loss) — net in our consolidated statements of income. Refer to Note 20 for the impact these charges had on our operating segments and Corporate. Outside services reported in the table below primarily include costs associated with outplacement and consulting activities. Other direct costs reported in the table below include, among other items, internal and external costs associated with the development, communication, administration and implementation of these initiatives; accelerated depreciation on certain fixed assets; contract termination fees; and relocation costs.

The following table summarizes the balance of accrued expenses related to these productivity and reinvestment initiatives and the changes in the accrued amounts (in millions):


	Severance Pay and Benefits		Outside Services		Other Direct Costs		Total
2021
Accrued balance at beginning of year	$	15	$	—	$	2	$	17
Costs incurred	4		97		14		115
Payments	(6)		(97)		(14)		(117)
Noncash and exchange	(1)		—		3		2
Accrued balance at end of year	$	12	$	—	$	5	$	17
2022
Accrued balance at beginning of year	$	12	$	—	$	5	$	17
Costs incurred	(4)		81		8		85
Payments	(2)		(81)		(11)		(94)
Noncash and exchange	(2)		—		—		(2)
Accrued balance at end of year	$	4	$	—	$	2	$	6
2023
Accrued balance at beginning of year	$	4	$	—	$	2	$	6
Costs incurred	(1)		131		34		164
Payments	—		(124)		(42)		(166)
Noncash and exchange	—		(7)		6		(1)
Accrued balance at end of year	$	3	$	—	$	—	$	3