Significant Operating and Nonoperating Items |
3 Months Ended |
|---|---|
Apr. 01, 2016 | |
| Significant Operating and Nonoperating Items | |
| Significant Operating and Nonoperating Items |
SIGNIFICANT OPERATING AND NONOPERATING ITEMS
Other Operating Charges
During the three months ended April 1, 2016, the Company recorded other operating charges of $311 million. These charges primarily consisted of $63 million due to the Company's productivity and reinvestment program and $199 million due to the integration of our German bottling operations. In addition, the Company recorded charges of $45 million related to costs incurred to refranchise our North America bottling territories. These costs include, among other items, internal and external costs for individuals directly working on the refranchising efforts, severance and costs associated with the implementation of information technology systems to facilitate consistent data standards and availability throughout the North America bottling system. Refer to Note 10 for additional information on the Company's productivity, integration and restructuring initiatives. Refer to Note 14 for the impact these charges had on our operating segments.
During the three months ended April 3, 2015, the Company incurred other operating charges of $233 million. These charges consisted of $90 million due to the Company's productivity and reinvestment program and $35 million due to the integration of our German bottling operations. In addition, the Company incurred a charge of $108 million due to the write-down of receivables from our bottling partner in Venezuela and an impairment of a Venezuelan trademark primarily due to changes in exchange rates as a result of the establishment of the new open market exchange system. Refer to Note 10 for additional information on the Company's productivity, integration and restructuring initiatives. Refer to Note 1 for additional information on the Venezuelan currency conversion mechanisms. Refer to Note 14 for the impact these charges had on our operating segments.
Other Nonoperating Items
Interest Expense
During the three months ended April 3, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt. These charges included the difference between the reacquisition price and the net carrying amount of the debt extinguished, including the impact of the related fair value hedging relationship. Refer to Note 14 for the impact this charge had on our operating segments.
Equity Income (Loss) — Net
During the three months ended April 1, 2016 and April 3, 2015, the Company recorded net charges of $3 million and $73 million, respectively. These amounts represent the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees, including charges incurred by an equity method investee due to changes in the Venezuelan bolivar exchange rates. Refer to Note 14 for the impact these items had on our operating segments.
Other Income (Loss) — Net
During the three months ended April 1, 2016, the Company recognized noncash losses of $369 million due to the refranchising of certain territories in North America, partially offset by a gain of $18 million, net of transaction costs, resulting from the Company's disposal of its investment in Keurig. Refer to Note 2 for additional information on the North America refranchising and Keurig investment disposal. Refer to Note 14 for the impact these items had on our operating segments.
During the three months ended April 3, 2015, the Company recognized noncash losses of $21 million due to the refranchising of certain territories in North America, $19 million as a result of the remeasurement of our previously held equity interest in a South African bottler to fair value upon our acquisition of the bottling operations, and $6 million as a result of a Brazilian bottling entity's majority interest owners exercising their option to acquire from us an additional equity interest at an exercise price less than that of our carrying value. The Company recognized a foreign currency exchange gain of $80 million associated with our euro-denominated debt partially offset by a charge of $27 million due to the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate. Refer to Note 2 for more information related to the North America refranchising and the acquisition of the South African bottler. Refer to Note 1 for more information related to the charge due to the remeasurement in Venezuela. Refer to Note 14 for the impact these charges had on our operating segments.
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