Significant Operating and Nonoperating Items |
6 Months Ended |
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Jul. 02, 2021 | |
| Significant Operating and Nonoperating Items | |
| Significant Operating and Nonoperating Items | SIGNIFICANT OPERATING AND NONOPERATING ITEMS Other Operating Charges
During the three months ended July 2, 2021, the Company recorded other operating charges of $309 million. These charges primarily consisted of $247 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $29 million due to the Company’s strategic realignment initiatives and $22 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $7 million related to the restructuring of our manufacturing operations in the United States and $4 million related to tax litigation expense.
During the six months ended July 2, 2021, the Company recorded other operating charges of $433 million. These charges primarily consisted of $251 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $122 million due to the Company’s strategic realignment initiatives and $40 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $13 million related to tax litigation expense and $7 million related to the restructuring of our manufacturing operations in the United States.
During the three months ended June 26, 2020, the Company recorded other operating charges of $173 million. These charges included an impairment charge of $55 million related to a trademark in North America, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company’s portfolio. Also included were charges of $35 million related to discontinuing the Odwalla juice business and an impairment charge of $8 million related to the Odwalla trademark. Other operating charges also included $22 million related to the Company’s productivity and reinvestment program, $18 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition and $12 million related to the restructuring of our manufacturing operations in the United States.
During the six months ended June 26, 2020, the Company recorded other operating charges of $375 million. These charges primarily consisted of an impairment charge of $160 million related to the Odwalla trademark and charges of $35 million related to discontinuing the Odwalla juice business. These charges also included an impairment charge of $55 million related to a trademark in North America, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company’s portfolio. Other operating charges also included $61 million related to the Company’s productivity and reinvestment program, $29 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition and $12 million related to the restructuring of our manufacturing operations in the United States.
Refer to Note 2 for additional information on the fairlife acquisition. Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company’s strategic realignment initiatives and productivity and reinvestment program. Refer to Note 15 for additional information on the impairment charges. Refer to Note 16 for the impact these charges had on our operating segments and Corporate.
Other Nonoperating Items
Interest Expense
During the three and six months ended July 2, 2021, the Company recorded charges of $592 million and $650 million, respectively, related to the extinguishment of long-term debt. Refer to Note 7.
Equity Income (Loss) — Net
During the three and six months ended July 2, 2021, the Company recorded net charges of $60 million and $23 million, respectively. During the three and six months ended June 26, 2020, the Company recorded net charges of $63 million and $101 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 and Corporate.
Other Income (Loss) — Net
During the three months ended July 2, 2021, the Company recognized a net gain of $695 million related to the sale of our ownership interest in CCA, an equity method investee. Additionally, the Company recognized a net gain of $203 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 recorded pension benefit plan settlement charges of $29 million related to its strategic realignment initiatives.
During the six months ended July 2, 2021, the Company recognized a net gain of $695 million related to the sale of our ownership interest in CCA, an equity method investee. Additionally, the Company recognized a net gain of $336 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 recorded pension benefit plan settlement charges of $83 million related to its strategic realignment initiatives.
During the three months ended June 26, 2020, the Company recognized a net gain of $247 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 recorded an other-than-temporary impairment charge of $38 million related to one of our equity method investees in Latin America and a charge of $19 million related to asset write-offs associated with the restructuring of our manufacturing operations in the United States.
During the six months ended June 26, 2020, the Company recognized a gain of $902 million in conjunction with the fairlife acquisition, which resulted from the remeasurement of our previously held equity interest in fairlife to fair value, and a gain of $18 million related to the sale of a portion of our ownership interest in one of our equity method investments. These gains were partially offset by an other-than-temporary impairment charge of $38 million related to one of our equity method investees in Latin America, a charge of $19 million related to asset write-offs associated with the restructuring of our manufacturing operations in the United States, a net loss of $144 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, and a net loss of $55 million related to economic hedging activities.
Refer to Note 2 for additional information on the sale of our ownership interest in CCA and the fairlife acquisition. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 6 for additional information on our economic hedging activities. Refer to Note 12 for additional information on the Company’s strategic realignment initiatives. Refer to Note 15 for additional information on the impairment charge. Refer to Note 16 for the impact that certain of these items had on our operating segments and Corporate.
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