Significant Operating and Nonoperating Items |
6 Months Ended |
|---|---|
Jun. 29, 2018 | |
| Significant Operating and Nonoperating Items | |
| Significant Operating and Nonoperating Items |
SIGNIFICANT OPERATING AND NONOPERATING ITEMS
Other Operating Charges
During the three months ended June 29, 2018, the Company recorded other operating charges of $225 million. These charges primarily consisted of $111 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $60 million of CCR asset impairments and $34 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 $22 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 six months ended June 29, 2018, the Company recorded other operating charges of $761 million. These charges primarily consisted of $450 million of CCR asset impairments and $206 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $79 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 $27 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 June 30, 2017, the Company recorded other operating charges of $826 million. These charges primarily consisted of $653 million of CCR asset impairments and $87 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 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 $14 million related to the impairment of a Venezuelan intangible asset and $19 million related to tax litigation expense. Refer to Note 1 for additional information about the Venezuelan intangible asset 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.
During the six months ended ended June 30, 2017, the Company recorded other operating charges of $1,116 million. These charges primarily consisted of $737 million of CCR asset impairments and $226 million related to the Company's productivity and reinvestment program. In addition, other operating charges included $86 million related to costs incurred to refranchise certain of our bottling operations, $34 million related to impairments of Venezuelan intangible assets and $25 million related to tax litigation expense. 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 six months ended June 30, 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 six months ended June 29, 2018, the Company recorded net charges of $33 million and $84 million, respectively. During the three and six months ended June 30, 2017, the Company recorded a net gain of $37 million and a net charge of $21 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 June 29, 2018, the Company recorded charges of $86 million related to pension settlements and net charges of $102 million due to the refranchising of certain bottling territories in North America. The Company also recorded an other-than-temporary impairment charge of $52 million related to one of our equity method investees. These charges were partially offset by a net gain of $36 million related to the refranchising of our Latin American bottling operations and a net gain of $36 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. Refer to Note 16 for the impact these items had on our operating segments.
During the six months ended June 29, 2018, the Company recorded charges of $86 million related to pension settlements and net charges of $104 million due to the refranchising of certain bottling territories in North America. The Company also recorded an other-than-temporary impairment charge of $52 million related to one of our equity method investees and a net loss of $49 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. Additionally, the Company recognized a net loss 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 $21 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 $36 million related to the refranchising of our Latin American bottling operations. 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 and North America conversion payments. Refer to Note 16 for the impact these items had on our operating segments.
During the three months ended June 30, 2017, the Company recognized 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 with a fair market value of $1,112 million as of April 1, 2017. The Company accounts for its 17 percent interest in CCBJHI as an equity method investment based on our equity ownership percentage, our representation on CCBJHI's Board of Directors, material intercompany transactions and other governance rights. The Company also recognized a $25 million gain 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 and a gain of $9 million related to refranchising a substantial portion of our China bottling operations. These gains were partially offset by a net charge of $214 million due to the refranchising of certain bottling territories in North America and charges of $109 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 incurred a charge of $26 million related to our former German bottling operations. Refer to Note 2 for additional information on refranchising activities and the conversion payments. Refer to Note 16 for the impact these items had on our operating segments.
During the six months ended June 30, 2017, the Company recognized net charges of $711 million due to the refranchising of certain bottling territories in North America and charges of $215 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 incurred a charge of $26 million related to our former German bottling operations and net charges of $15 million resulting from special termination benefits and curtailment credits related to refranchising certain of our North America bottling operations. These charges were partially offset by a gain of $445 million related to the integration of CCW and CCEJ to establish 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 $25 million gain 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 and a gain of $9 million related to refranchising a substantial portion of our China bottling operations. Refer to Note 2 for additional information on refranchising activities and the conversion payments. Refer to Note 13 for additional information on the special termination benefit charges and curtailment credits. Refer to Note 16 for the impact these items had on our operating segments.
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