Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.5.0.2
Operating Segments
 6 Months Ended
Jul. 01, 2016
Operating Segments [Abstract]  
Operating Segments
OPERATING SEGMENTS
Effective January 1, 2016, we transferred CCR's bottling and associated supply chain operations in the United States and Canada from our North America segment to our Bottling Investments segment. Accordingly, all prior period segment information presented herein has been adjusted to reflect this change in our organizational structure.
Information about our Company's operations as of and for the three months ended July 1, 2016 and July 3, 2015 by operating segment is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2016
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
610

$
1,298

$
921

$
1,677

$
1,401

$
5,571

$
61

$
—

$
11,539

Intersegment
11

112

16

1,032

159

44

2

(1,376
)
—

Total net revenues
621

1,410

937

2,709

1,560

5,615

63

(1,376
)
11,539

Operating income (loss)
248

808

512

735

758

216

(418
)
—

2,859

Income (loss) before income taxes
256

822

520

745

760

269

927

—

4,299

Identifiable operating assets
1,200

3,565

1,990

16,706

2,381

19,023

31,730

—

76,595

Noncurrent investments
1,303

96

743

112

161

11,716

3,368

—

17,499

2015
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
651

$
1,284

$
955

$
1,493

$
1,413

$
6,335

$
25

$
—

$
12,156

Intersegment
7

151

18

1,158

188

50

—

(1,572
)
—

Total net revenues
658

1,435

973

2,651

1,601

6,385

25

(1,572
)
12,156

Operating income (loss)
275

836

525

754

761

164

(780
)
—

2,535

Income (loss) before income taxes
287

843

526

752

766

353

834

—

4,361

Identifiable operating assets
1,332

3,282

2,169

17,293

1,880

23,273

28,454

—

77,683

Noncurrent investments
1,110

88

711

45

163

8,507

5,149

—

15,773

As of December 31, 2015
 
 
 
 
 
 
 
 
 
Identifiable operating assets
$
1,148

$
3,008

$
1,627

$
16,396

$
1,639

$
22,688

$
27,702

$
—

$
74,208

Noncurrent investments
1,061

77

657

107

158

8,084

5,644

—

15,788


During the three months ended July 1, 2016, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $1 million for Eurasia and Africa, $27 million for North America, $58 million for Bottling Investments and $21 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss) before income taxes were increased by $1 million for Latin America due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11 for additional information on each of the Company's productivity, restructuring and integration initiatives.
•
Operating income (loss) and income (loss) before income taxes were reduced by $52 million for Bottling Investments due to costs incurred to refranchise our North America bottling territories. Refer to Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $8 million for Bottling Investments and $24 million for Corporate related to noncapitalizable transaction costs associated with pending and closed transactions. Refer to Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $15 million for Bottling Investments and $3 million for Corporate due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $199 million for Bottling Investments primarily due to the refranchising of territories in North America. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was increased by $1,323 million for Corporate as a result of the deconsolidation of our German bottling operations. Refer to Note 2.
During the three months ended July 3, 2015, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $3 million for Eurasia and Africa, $3 million for Latin America, $31 million for North America, $2 million for Asia Pacific, $143 million for Bottling Investments and $4 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $380 million for Corporate due to an impairment charge primarily related to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction. Refer to Note 2 and Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 10.
•
Income (loss) before income taxes was increased by $1,402 million for Corporate as a result of the Monster Transaction. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $12 million for Bottling Investments due to the refranchising of territories in North America. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $5 million for Europe and $4 million for Bottling Investments due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.
Information about our Company's operations for the six months ended July 1, 2016 and July 3, 2015 by operating segment is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2016
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,150

$
2,367

$
1,838

$
3,098

$
2,503

$
10,822

$
43

$
—

$
21,821

Intersegment
17

247

34

1,975

292

85

5

(2,655
)
—

Total net revenues
1,167

2,614

1,872

5,073

2,795

10,907

48

(2,655
)
21,821

Operating income (loss)
484

1,499

1,035

1,316

1,309

98

(741
)
—

5,000

Income (loss) before income taxes
502

1,526

1,038

1,325

1,314

(163
)
651

—

6,193

2015
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,289

$
2,352

$
2,002

$
2,769

$
2,569

$
11,821

$
65

$
—

$
22,867

Intersegment
7

295

37

2,199

317

95

—

(2,950
)
—

Total net revenues
1,296

2,647

2,039

4,968

2,886

11,916

65

(2,950
)
22,867

Operating income (loss)
554

1,552

1,103

1,289

1,305

154

(1,126
)
—

4,831

Income (loss) before income taxes
573

1,567

1,114

1,284

1,314

307

183

—

6,342


During the six months ended July 1, 2016, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $4 million for Europe, $58 million for North America, $1 million for Asia Pacific, $278 million for Bottling Investments and $28 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss) before income taxes were increased by $1 million for Latin America due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11 for additional information on each of the Company's productivity, restructuring and integration initiatives.
•
Operating income (loss) and income (loss) before income taxes were reduced by $97 million for Bottling Investments due to costs incurred to refranchise our North America bottling territories. Refer to Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $8 million for Bottling Investments and $25 million for Corporate related to noncapitalizable transaction costs associated with pending and closed transactions. Refer to Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $18 million for Bottling Investments and $3 million for Corporate due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $568 million for Bottling Investments primarily due to the refranchising of territories in North America. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was increased by $1,323 million for Corporate as a result of the deconsolidation of our German bottling operations. Refer to Note 2.
•
Income (loss) before income taxes was increased by $18 million for Corporate as a result of the disposal of our investment in Keurig. Refer to Note 2.
During the six months ended July 3, 2015, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $15 million for Eurasia and Africa, $3 million for Latin America, $73 million for North America, $210 million for Bottling Investments and $24 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss) before income taxes were increased by $11 million for Europe and $3 million for Asia Pacific due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $380 million for Corporate due to an impairment charge primarily related to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction. Refer to Note 2 and Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 10.
•
Income (loss) before income taxes was increased by $1,402 million for Corporate as a result of the Monster Transaction. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $33 million for Bottling Investments due to the refranchising of territories in North America. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $320 million for Corporate due to charges the Company recognized on the early extinguishment of debt. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $33 million for Latin America and $102 million for Corporate due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S. dollars using the SIMADI exchange rate, an impairment of a Venezuelan trademark and a write-down the Company recorded on receivables from our bottling partner in Venezuela. Refer to Note 1 and Note 10.
•
Income (loss) before income taxes was reduced by $19 million for Corporate 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. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $6 million for Corporate 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. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $6 million for Europe and $76 million for Bottling Investments due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.