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, 2021

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, which sit under the four existing geographic operating segments, are highly interconnected, with more consistency in their structure and a focus on 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 19 for additional information on our organizational structure.

The Company has incurred total pretax expenses of $690 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 19 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. These 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
2020
Costs incurred	$	386		$	37	$	4	$	427
Payments	(170)			(36)		(1)		(207)
Noncash and exchange	(35)		1	—		—		(35)
Accrued balance at end of year	$	181		$	1	$	3	$	185
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

1Includes stock-based compensation modifications, pension settlement charges, and other postretirement benefit plan curtailment charges. Refer to Note 12 and Note 13.

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. While we expect most of the remaining initiatives included in this program, which are primarily designed to further simplify and standardize our organization, to be completed by the end of 2023, certain initiatives may extend into 2024.

The Company has incurred total pretax expenses of $4,044 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 19 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
2019
Accrued balance at beginning of year	$	76	$	10	$	4	$	90
Costs incurred	36		87		141		264
Payments	(57)		(98)		(119)		(274)
Noncash and exchange	3		2		(19)		(14)
Accrued balance at end of year	$	58	$	1	$	7	$	66
2020
Accrued balance at beginning of year	$	58	$	1	$	7	$	66
Costs incurred	(12)		69		42		99
Payments	(29)		(70)		(36)		(135)
Noncash and exchange	(2)		—		(11)		(13)
Accrued balance at end of year	$	15	$	—	$	2	$	17
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