Significant Operating and Nonoperating Items |
9 Months Ended |
|---|---|
Sep. 28, 2018 | |
| Significant Operating and Nonoperating Items | |
| Significant Operating and Nonoperating Items |
SIGNIFICANT OPERATING AND NONOPERATING ITEMS
Other Operating Charges
During the three months ended September 28, 2018, the Company recorded other operating charges of $155 million. These charges primarily consisted of $107 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $38 million related to costs incurred to refranchise certain of our North America bottling operations. Costs related to refranchising 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 our North America bottling system. Other operating charges also included $4 million related to tax litigation expense. Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company's productivity and reinvestment program. Refer to Note 16 for the impact these charges had on our operating segments.
During the nine months ended September 28, 2018, the Company recorded other operating charges of $916 million. These charges primarily consisted of $450 million of CCR asset impairments and $313 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $117 million related to costs incurred to refranchise certain of our North America bottling operations. Other operating charges also included $31 million related to tax litigation expense. Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company's productivity and reinvestment program. Refer to Note 15 for information on how the Company determined the asset impairment charges. Refer to Note 16 for the impact these charges had on our operating segments.
During the three months ended September 29, 2017, the Company recorded other operating charges of $194 million. These charges primarily consisted of $129 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $47 million related to costs incurred to refranchise certain of our North America bottling operations. Other operating charges also included $18 million related to tax litigation expense. Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company's productivity and reinvestment program. Refer to Note 16 for the impact these charges had on our operating segments.
During the nine months ended September 29, 2017, the Company recorded other operating charges of $1,310 million. These charges primarily consisted of $737 million of CCR asset impairments and $355 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $133 million related to costs incurred to refranchise certain of our bottling operations, $43 million related to tax litigation expense and $34 million related to impairments of Venezuelan intangible assets. Refer to Note 1 for additional information about the Venezuelan intangible assets and Note 15 for information on how the Company determined the asset impairment charges. Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company's productivity and reinvestment program. Refer to Note 16 for the impact these charges had on our operating segments.
Other Nonoperating Items
Interest Expense
During the three and nine months ended September 28, 2018, the Company recorded a net gain of $27 million related to the extinguishment of long-term debt. Refer to Note 7.
During the nine months ended September 29, 2017, the Company recorded a net charge of $38 million related to the extinguishment of long-term debt.
Equity Income (Loss) — Net
During the three and nine months ended September 28, 2018, the Company recorded a net gain of $19 million and a net charge of $65 million, respectively. During the three and nine months ended September 29, 2017, the Company recorded net charges of $16 million and $37 million, respectively. These amounts represent the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 16 for the impact these items had on our operating segments.
Other Income (Loss) — Net
During the three months ended September 28, 2018, the Company recognized a net gain of $370 million related to the sale of our equity ownership in Lindley and a net gain of $64 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. The Company also recognized a net gain of $33 million related to economic hedging activity associated with certain acquisition and divestiture activities, and a gain of $11 million related to the refranchising of our Latin American bottling operations. These gains were partially offset by net charges of $275 million due to the refranchising of certain bottling territories in North America and an other-than-temporary impairment charge of $205 million related to our equity method investee in Indonesia. The Company also recorded charges of $35 million related to pension settlements and charges of $12 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Refer to Note 1 and Note 4 for additional information on equity and debt securities. Refer to Note 2 for additional information on refranchising activities, North America conversion payments and the sale of our equity ownership in Lindley. Refer to Note 6 for additional information on our hedging activities. Refer to Note 15 for information on how the Company determined the impairment charge. Refer to Note 16 for the impact these items had on our operating segments.
During the nine months ended September 28, 2018, the Company recorded charges of $379 million due to the refranchising of certain bottling territories in North America and other-than-temporary impairment charges of $257 million related to two of our equity method investees. The Company also recorded charges of $121 million related to pension settlements, charges of $33 million primarily related to the reversal of the cumulative translation adjustments resulting from the substantial liquidation of the Company's former Russian juice operations and charges of $33 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. These charges were partially offset by a net gain of $370 million related to the sale of our equity ownership in Lindley and a net gain of $47 million related to the refranchising of our Latin American bottling operations. The Company also recognized a net gain of $33 million related to economic hedging activity associated with certain acquisition and divestiture activities, and a net gain of $15 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. Refer to Note 1 and Note 4 for additional information on equity and debt securities. Refer to Note 2 for additional information on refranchising activities, North America conversion payments and the sale of our equity ownership in Lindley. Refer to Note 6 for additional information on our hedging activities. Refer to Note 15 for information on how the Company determined the impairment charges. Refer to Note 16 for the impact these items had on our operating segments.
During the three months ended September 29, 2017, the Company recorded charges of $762 million due to the refranchising of certain bottling territories in North America and net charges of $166 million resulting from special termination benefits and curtailment credits primarily related to North America refranchising and the Company's productivity and reinvestment program. The Company also recorded charges of $72 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Additionally, the Company also recorded an other-than-temporary impairment charge of $50 million related to one of our international equity method investees, primarily driven by foreign currency exchange rate fluctuations. These charges were partially offset by a gain of $79 million related to the refranchising of our remaining China bottling operations and related cost method investment. Refer to Note 2 for additional information on the refranchising of our China bottling operations, North America refranchising and the conversion payments. Refer to Note 16 for the impact these items had on our operating segments.
During the nine months ended September 29, 2017, the Company recognized net charges of $1,473 million due to the refranchising of certain bottling territories in North America and charges of $181 million resulting from special termination benefits and curtailment credits primarily related to North America refranchising and the Company's productivity and reinvestment program. The Company also recorded charges of $287 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. The Company also recorded an other-than-temporary impairment charge of $50 million related to one of our international equity method investees, primarily driven by foreign currency exchange rate fluctuations and a charge of $26 million related to our former German bottling operations. These charges were partially offset by a gain of $445 million related to the integration of Coca-Cola West Co., Ltd. ("CCW") and Coca-Cola East Japan Co., Ltd. ("CCEJ") to establish Coca-Cola Bottlers Japan Inc., now known as Coca-Cola Bottlers Japan Holdings Inc. ("CCBJHI"). In exchange for our previously existing equity interests in CCW and CCEJ, we received an approximate 17 percent equity interest in CCBJHI. The Company also recognized a gain of $88 million related to the refranchising of our China bottling operations and related cost method investment and a gain of $25 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its stock during the period at a per share amount greater than the carrying value of the Company's per share investment. Refer to Note 2 for additional information on the North America refranchising, the conversion payments and the refranchising of our China bottling operations. Refer to Note 16 for the impact these items had on our operating segments.
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