Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.7.0.1
Operating Segments
 6 Months Ended
Jun. 30, 2017
Operating Segments [Abstract]  
Operating Segments
OPERATING SEGMENTS
Information about our Company's operations by operating segment is as follows (in millions):
 
Europe, Middle East & Africa

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

As of and for the three months ended June 30, 2017
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
Third party
$
2,037

$
935

$
2,286

$
1,384

$
3,015

$
45

$
—

$
9,702

Intersegment
—

15

585

123

23

—

(746
)
—

Total net revenues
2,037

950

2,871

1,507

3,038

45

(746
)
9,702

Operating income (loss)
1,081

557

752

713

(652
)
(373
)
—

2,078

Income (loss) before income taxes
1,111

559

655

716

(515
)
98

—

2,624

Identifiable operating assets
5,409

1,787

17,423

2,340

8,157

34,027

—

69,143

Noncurrent investments
1,330

880

110

168

16,035

3,480

—

22,003

As of and for the three months ended July 1, 2016
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
Third party
$
1,908

$
921

$
1,677

$
1,401

$
5,571

$
61

$
—

$
11,539

Intersegment
123

16

1,032

159

44

2

(1,376
)
—

Total net revenues
2,031

937

2,709

1,560

5,615

63

(1,376
)
11,539

Operating income (loss)
1,056

512

735

758

216

(418
)
—

2,859

Income (loss) before income taxes
1,078

520

745

760

269

927

—

4,299

Identifiable operating assets
4,765

1,990

16,706

2,381

19,023

31,730

—

76,595

Noncurrent investments
1,399

743

112

161

11,716

3,368

—

17,499

As of December 31, 2016
 
 
 
 
 
 
 
 
Identifiable operating assets
$
4,067

$
1,785

$
16,566

$
2,024

$
15,973

$
29,606

$
—

$
70,021

Noncurrent investments
1,302

804

109

164

11,456

3,414

—

17,249


During the three months ended June 30, 2017, 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 Latin America, $49 million for North America, $2 million for Asia Pacific, $10 million for Bottling Investments and $31 million for Corporate due to the Company's productivity and reinvestment program. Operating income (loss) and income (loss) before income taxes were increased by $6 million for Europe, Middle East and Africa due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $44 million for Bottling Investments due to costs incurred to refranchise certain of our bottling operations. Refer to Note 2 and Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $653 million for Bottling Investments and $14 million for Corporate due to asset impairment charges. Refer to Note 1 and Note 10.
•
Income (loss) before income taxes was increased by $38 million for Bottling Investments and decreased by $1 million for Corporate due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $109 million for North America 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 2.
•
Income (loss) before income taxes was reduced by $214 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2.
•
Income (loss) before income taxes was increased by $445 million for Corporate due to a gain recognized resulting from the merger of CCW and CCEJ. Refer to Note 10.
•
Income (loss) before income taxes was increased by $9 million for Corporate due to a gain recognized upon refranchising a substantial portion of our China bottling operations. Refer to Note 2.
•
Income (loss) before income taxes was increased by $25 million for Corporate due to 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.
•
Income (loss) before income taxes was reduced by $26 million for Corporate due to charges related to our former German bottling operations.
•
Income (loss) before income taxes was reduced by $38 million for Corporate due to the early extinguishment of long-term debt. Refer to Note 6.
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 Europe, Middle East 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.
•
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 2 and 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 $199 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2 and 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 significant operating and nonoperating items recorded by certain of our equity method investees. Refer to 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 June 30, 2017 and July 1, 2016, our operating segments were impacted by acquisition and divestiture activities. Refer to Note 2.
 
Europe, Middle East & Africa

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
Third party
$
3,669

$
1,848

$
3,908

$
2,462

$
6,859

$
74

$
—

$
18,820

Intersegment
—

28

1,357

253

46

—

(1,684
)
—

Total net revenues
3,669

1,876

5,265

2,715

6,905

74

(1,684
)
18,820

Operating income (loss)
1,948

1,062

1,321

1,258

(762
)
(767
)
—

4,060

Income (loss) before income taxes
1,996

1,066

1,128

1,265

(1,057
)
(267
)
—

4,131

Six Months Ended July 1, 2016
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
Third party
$
3,517

$
1,838

$
3,098

$
2,503

$
10,822

$
43

$
—

$
21,821

Intersegment
264

34

1,975

292

85

5

(2,655
)
—

Total net revenues
3,781

1,872

5,073

2,795

10,907

48

(2,655
)
21,821

Operating income (loss)
1,983

1,035

1,316

1,309

98

(741
)
—

5,000

Income (loss) before income taxes
2,028

1,038

1,325

1,314

(163
)
651

—

6,193


During the six months ended June 30, 2017, 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 Latin America, $84 million for North America, $3 million for Asia Pacific, $24 million for Bottling Investments and $118 million for Corporate due to the Company's productivity and reinvestment program. Operating income (loss) and income (loss) before income taxes were increased by $4 million for Europe, Middle East and Africa due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $101 million for Bottling Investments due to costs incurred to refranchise certain of our bottling operations. Refer to Note 2 and Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $737 million for Bottling Investments and $34 million for Corporate due to asset impairment charges. Refer to Note 1 and Note 10.
•
Income (loss) before income taxes was reduced by $4 million for Europe, Middle East and Africa, $15 million for Bottling Investments and $2 million for Corporate due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $215 million for North America 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 2.
•
Income (loss) before income taxes was reduced by $711 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2.
•
Income (loss) before income taxes was increased by $445 million for Corporate due to a gain recognized resulting from the merger of CCW and CCEJ. Refer to Note 10.
•
Income (loss) before income taxes was increased by $9 million for Corporate due to a gain recognized upon refranchising a substantial portion of our China bottling operations. Refer to Note 2.
•
Income (loss) before income taxes was increased by $25 million for Corporate due to 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.
•
Income (loss) before income taxes was reduced by $26 million for Corporate due to charges related to our former German bottling operations.
•
Income (loss) before income taxes was reduced by $38 million for Corporate due to the early extinguishment of long-term debt. Refer to Note 6.
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, Middle East and Africa, $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.
•
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 2 and 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 $568 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2 and 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 significant operating and nonoperating items recorded by certain of our equity method investees. Refer to 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 June 30, 2017 and July 1, 2016, our operating segments were impacted by acquisition and divestiture activities. Refer to Note 2.