Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v2.3.0.15
Operating Segments
 9 Months Ended
Sep. 30, 2011
Operating Segments  
Operating Segments
Operating Segments
Information about our Company's operations as of and for the three months ended September 30, 2011, and October 1, 2010, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2011
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
684

$
1,207

$
1,162

$
5,387

$
1,534

$
2,240

$
34

$
—

$
12,248

Intersegment
34

192

64

—

121

24

—

(435
)
—

    Total net revenues
718

1,399

1,226

5,387

1,655

2,264

34

(435
)
12,248

Operating income (loss)
265

810

773

619

608

76

(401
)
—

2,750

Income (loss) before income taxes
258

821

772

621

609

266

(424
)
—

2,923

Identifiable operating assets
1,379

3,499

2,552

33,444

2,207

9,204

21,131

—

73,416

Noncurrent investments
309

266

494

26

127

7,041

74

—

8,337

2010
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
599

$
1,107

$
988

$
2,159

$
1,429

$
2,132

$
12

$
—

$
8,426

Intersegment
25

231

60

12

109

27

—

(464
)
—

Total net revenues
624

1,338

1,048

2,171

1,538

2,159

12

(464
)
8,426

Operating income (loss)
221

742

616

503

586

78

(402
)
—

2,344

Income (loss) before income taxes
217

748

617

501

588

432

(403
)
—

2,700

Identifiable operating assets
1,279

3,104

2,104

10,897

1,915

8,701

18,609

—

46,609

Noncurrent investments
300

236

340

45

123

6,369

67

—

7,480

As of December 31, 2010
 
 
 
 
 
 
 
 
 
Identifiable operating assets
$
1,278

$
2,724

$
2,298

$
32,793

$
1,827

$
8,398

$
16,018

$
—

$
65,336

Noncurrent investments
291

243

379

57

123

6,426

66

—

7,585


During the three months ended September 30, 2011, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $2 million for Europe, $2 million for Latin America, $52 million for North America, $2 million for Pacific, $14 million for Bottling Investments and $26 million for Corporate due to the Company's ongoing productivity, integration and restructuring initiatives as well as costs associated with the merger of Arca and Contal. Refer to Note 11 for additional information on our productivity, integration and restructuring initiatives. Refer to Note 10 for additional information related to the merger of Arca and Contal.
•
Operating income (loss) and income (loss) before income taxes were reduced by $2 million for North America and increased by $1 million for Pacific due to charges associated with the earthquake and tsunami that devastated northern and eastern Japan on March 11, 2011. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $36 million for Bottling Investments, primarily attributable to the Company's proportionate share of asset impairments and restructuring charges recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $5 million for Corporate due to the net charge we recognized on the repurchase and/or exchange of certain long-term debt assumed in connection with our acquisition of CCE's North American business. Refer to Note 6.
•
Income (loss) before income taxes was reduced by $5 million for Corporate due to the finalization of working capital adjustments related to the sale of all our ownership interests in our Norwegian and Swedish bottling operations to New CCE. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $3 million for Corporate due to the impairment of an investment in an entity accounted for under the equity method of accounting. Refer to Note 10 and Note 14.
During the three months ended October 1, 2010, 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, $13 million for Europe, $8 million for Pacific, $12 million for Bottling Investments and $68 million for Corporate, primarily due to the Company's ongoing productivity, integration and restructuring initiatives as well as transaction costs. Operating income (loss) and income (loss) before income taxes were increased by $2 million for North America due to the refinement of previously established restructuring accruals. Refer to Note 11 for additional information on our productivity, integration and restructuring initiatives.
•
Income (loss) before income taxes was reduced by $10 million for Bottling Investments. This net charge was primarily attributable to the Company's proportionate share of transaction costs recorded by CCE, which was partially offset by our proportionate share of a foreign currency remeasurement gain recorded by an equity method investee. The components of the net charge were individually insignificant. Refer to Note 10.
•
Income (loss) before income taxes was increased by $23 million for Corporate due to the gain on the sale of 50 percent of our investment in Leão Junior. Refer to Note 10.
Information about our Company's operations for the nine months ended September 30, 2011, and October 1, 2010, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2011
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
2,054

$
3,725

$
3,308

$
15,567

$
4,175

$
6,548

$
125

$
—

$
35,502

Intersegment
124

537

205

11

306

66

—

(1,249
)
—

Total net revenues
2,178

4,262

3,513

15,578

4,481

6,614

125

(1,249
)
35,502

Operating income (loss)
860

2,497

2,163

1,820

1,769

189

(1,095
)
—

8,203

Income (loss) before income taxes
856

2,536

2,174

1,826

1,771

700

(635
)
—

9,228

2010
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,827

$
3,400

$
2,865

$
6,336

$
3,758

$
6,376

$
63

$
—

$
24,625

Intersegment
110

686

171

47

297

77

—

(1,388
)
—

Total net revenues
1,937

4,086

3,036

6,383

4,055

6,453

63

(1,388
)
24,625

Operating income (loss)
781

2,391

1,795

1,435

1,658

221

(991
)
—

7,290

Income (loss) before income taxes
794

2,423

1,810

1,433

1,659

1,018

(1,135
)
—

8,002


During the nine months ended September 30, 2011, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $9 million for Eurasia and Africa, $5 million for Europe, $3 million for Latin America, $229 million for North America, $3 million for Pacific, $58 million for Bottling Investments and $100 million for Corporate, primarily due to the Company's ongoing productivity, integration and restructuring initiatives as well as costs associated with the merger of Arca and Contal. Refer to Note 11 for additional information on our productivity, integration and restructuring initiatives. Refer to Note 10 for additional information related to the merger of Arca and Contal.
•
Operating income (loss) and income (loss) before income taxes were reduced by $2 million for North America and $82 million for Pacific due to charges associated with the earthquake and tsunami that devastated northern and eastern Japan on March 11, 2011.
•
Income (loss) before income taxes was increased by a net $417 million for Corporate, primarily due to the gain the Company recognized as a result of the merger of Arca and Contal. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by $102 million for Corporate due to the gain on the sale of our investment in Embonor, a bottling partner with operations primarily in Chile. Prior to this transaction, the Company accounted for our investment in Embonor under the equity method of accounting. Refer to Note 10.
•
Income (loss) before income taxes was decreased by $41 million for Corporate due to the impairment of an investment in an entity accounted for under the equity method of accounting. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was reduced by $40 million for Bottling Investments, primarily attributable to the Company's proportionate share of asset impairments and restructuring charges recorded by certain of our equity method investees. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $8 million for Corporate due to the net charge we recognized on the repurchase and/or exchange of certain long-term debt assumed in connection with our acquisition of CCE's North American business. Refer to Note 6.
•
Income (loss) before income taxes was reduced by $5 million for Corporate due to the finalization of working capital adjustments related to the sale of our Norwegian and Swedish bottling operations to New CCE. Refer to Note 10.
During the nine months ended October 1, 2010, 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 Eurasia and Africa, $43 million for Europe, $8 million for North America, $13 million for Pacific, $56 million for Bottling Investments and $150 million for Corporate, primarily due to the Company's ongoing productivity, integration and restructuring initiatives as well as transaction costs incurred in connection with our acquisition of CCE's North American business and the sale of our Norwegian and Swedish bottling operations to New CCE. Refer to Note 11 for additional information on our productivity, integration and restructuring initiatives.
•
Income (loss) before income taxes was reduced by $103 million for Corporate due to the remeasurement of our Venezuelan subsidiary's net assets. Subsequent to December 31, 2009, the Venezuelan government announced a currency devaluation, and Venezuela was determined to be a hyperinflationary economy. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $55 million for Bottling Investments. This net charge was primarily attributable to the Company's proportionate share of unusual tax charges, asset impairments, restructuring charges and transaction costs recorded by equity method investees, which were partially offset by our proportionate share of a foreign currency remeasurement gain recorded by an equity method investee. The components of the net charge were individually insignificant. Refer to Note 10.
•
Income (loss) before income taxes was increased by $23 million for Corporate due to the gain on the sale of 50 percent of our investment in Leão Junior. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $23 million for Bottling Investments and $3 million for Corporate, primarily due to other-than-temporary impairments of available-for-sale securities. Refer to Note 10 and Note 14.