Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.20.2
Operating Segments
 6 Months Ended
Jun. 26, 2020
Operating Segments [Abstract]  
Operating Segments OPERATING SEGMENTS
Information about our Company's operations by operating segment and Corporate is as follows (in millions):
Europe, Middle East & Africa Latin
America		 North
America		 Asia Pacific Global Ventures Bottling
Investments		 Corporate Eliminations Consolidated
As of and for the Three Months Ended June 26, 2020                
Net operating revenues:                
Third party $ 1,135    $ 755    $ 2,647    $ 1,068    $ 295    $ 1,262    $ (12)   $ —    $ 7,150   
Intersegment 75    —    1    115    —    1    —    (192)   —   
Total net operating revenues 1,210    755    2,648    1,183    295    1,263    (12)   (192)   7,150   
Operating income (loss) 715    504    489    652    (102)   12    (289)   —    1,981   
Income (loss) before income taxes 736    444    483    661    (103)   166    (190)   —    2,197   
Identifiable operating assets 8,065   
1
 1,643    20,320    2,131   
2
 6,983    9,817   
1,2
 26,795    —    75,754   
Investments3
534    573    356    226    5    13,199    4,042    —    18,935   
As of and for the Three Months Ended June 28, 2019                
Net operating revenues:                
Third party $ 1,804    $ 1,003    $ 3,158    $ 1,350    $ 635    $ 2,024    $ 23    $ —    $ 9,997   
Intersegment 126    —    4    190    —    2    —    (322)   —   
Total net operating revenues 1,930    1,003    3,162    1,540    635    2,026    23    (322)   9,997   
Operating income (loss) 1,038    588    711    731    73    119    (272)   —    2,988   
Income (loss) before income taxes 1,062    540    729    738    75    393    (488)   —    3,049   
Identifiable operating assets 8,511   
1
 2,008    18,512    2,266    7,236    10,727   
1
 20,424    —    69,684   
Investments3
731    728    364    223    16    14,420    3,830    —    20,312   
As of December 31, 2019                
Identifiable operating assets $ 8,143   
1
 $ 1,801    $ 17,687    $ 2,060    $ 7,265    $ 11,170   
1
 $ 18,376    $ —    $ 66,502   
Investments3
543    716    358    224    14    14,093    3,931    —    19,879   
1 Property, plant and equipment — net in South Africa represented 14 percent, 14 percent and 16 percent of consolidated property, plant and equipment — net as of June 26, 2020, June 28, 2019 and December 31, 2019, respectively.
2 Property, plant and equipment — net in the Philippines represented 10 percent of consolidated property, plant and equipment — net as of June 26, 2020.
3 Principally equity method investments and other investments in bottling companies.
During the three months ended June 26, 2020, the results of our operating segments and Corporate were impacted by the following items:
•Operating income (loss) and income (loss) before income taxes were reduced by $55 million for North America related to the impairment of a trademark, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company's portfolio.
•Operating income (loss) and income (loss) before income taxes were reduced by $39 million for North America for charges related to the cost of discontinuing the Odwalla juice business and $8 million related to the impairment of the Odwalla trademark.
•Operating income (loss) and income (loss) before income taxes were reduced by $25 million and $44 million, respectively, for North America related to the restructuring of our water manufacturing operations in the United States.
•Operating income (loss) and income (loss) before income taxes were reduced by $22 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note 12.
•Operating income (loss) and income (loss) before income taxes were reduced by $18 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 2.
•Income (loss) before income taxes was increased by $247 million for Corporate 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 4.
•Income (loss) before income taxes was reduced by $28 million for Latin America, $1 million for North America and $34 million for Bottling Investments due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.
•Income (loss) before income taxes was reduced by $38 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees.
During the three months ended June 28, 2019, the results of our operating segments and Corporate were impacted by the following items:
•Operating income (loss) and income (loss) before income taxes were reduced by $29 million for Bottling Investments related to costs incurred to refranchise certain of our North America bottling operations. Refer to Note 11.
•Operating income (loss) and income (loss) before income taxes were reduced by $13 million for North America, $1 million for Bottling Investments and $41 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note 12.
•Income (loss) before income taxes was reduced by $160 million for Corporate as a result of CCBA asset adjustments. Refer to Note 2.
•Income (loss) before income taxes was reduced by $49 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees.
•Income (loss) before income taxes was reduced by $24 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.
Europe, Middle East & Africa Latin
America		 North
America		 Asia Pacific Global Ventures Bottling
Investments		 Corporate Eliminations Consolidated
Six Months Ended June 26, 2020                
Net operating revenues:                
Third party $ 2,708    $ 1,685    $ 5,496    $ 2,057    $ 868    $ 2,918    $ 19    $ —    $ 15,751   
Intersegment 227    —    2    254    —    3    —    (486)   —   
Total net operating revenues 2,935    1,685    5,498    2,311    868    2,921    19    (486)   15,751   
Operating income (loss) 1,675    1,043    876    1,163    (83)   75    (388)   —    4,361   
Income (loss) before income taxes 1,707    979    885    1,174    (85)   364    183    —    5,207   
Six Months Ended June 28, 2019                
Net operating revenues:                
Third party $ 3,438    $ 1,899    $ 5,839    $ 2,410    $ 1,218    $ 3,832    $ 55    $ —    $ 18,691   
Intersegment 264    —    6    317    2    4    —    (593)   —   
Total net operating revenues 3,702    1,899    5,845    2,727    1,220    3,836    55    (593)   18,691   
Operating income (loss) 2,016    1,084    1,297    1,273    139    219    (605)   —    5,423   
Income (loss) before income taxes 2,050    1,031    1,266    1,288    143    293    (797)   —    5,274   
During the six months ended June 26, 2020, the results of our operating segments and Corporate were impacted by the following items:
•Operating income (loss) and income (loss) before income taxes were reduced by $160 million for North America related to the impairment of the Odwalla trademark and $39 million related to the cost of discontinuing the Odwalla juice business.
•Operating income (loss) and income (loss) before income taxes were reduced by $61 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note 12.
•Operating income (loss) and income (loss) before income taxes were reduced by $55 million for North America related to the impairment of a trademark, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company's portfolio.
•Operating income (loss) and income (loss) before income taxes were reduced by $25 million and $44 million,
respectively, for North America related to the restructuring of our water manufacturing operations in the United States.
•Operating income (loss) and income (loss) before income taxes were reduced by $29 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 2.
•Income (loss) before income taxes was increased by $902 million for Corporate in conjunction with our fairlife acquisition, which resulted from the remeasurement of our previously held equity interest in fairlife to fair value. Refer to Note 2.
•Income (loss) before income taxes was increased by $18 million for Corporate related to the sale of a portion of our ownership interest in one of our equity method investments.
•Income (loss) before income taxes was reduced by $144 million for Corporate 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 4.
•Income (loss) before income taxes was reduced by $28 million for Latin America, $1 million for North America and $72 million for Bottling Investments due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.
•Income (loss) before income taxes was reduced by $38 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees.
During the six months ended June 28, 2019, the results of our operating segments and Corporate 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, $30 million for North America, $3 million for Bottling Investments and $89 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note 12.
•Operating income (loss) and income (loss) before income taxes were reduced by $46 million for Corporate related to transaction costs associated with the purchase of Costa, which we acquired in January 2019. Refer to Note 2.
•Operating income (loss) and income (loss) before income taxes were reduced by $40 million for Bottling Investments related to costs incurred to refranchise certain of our North America bottling operations. Refer to Note 11.
•Income (loss) before income taxes was increased by $39 million for Corporate related to the sale of a portion of our equity ownership interest in Andina.
•Income (loss) before income taxes was reduced by $286 million for Bottling Investments due to an other-than-temporary impairment charge related to CCBJHI, an equity method investee. Refer to Note 15.
•Income (loss) before income taxes was reduced by $160 million for Corporate as result of CCBA asset adjustments. Refer to Note 2.
•Income (loss) before income taxes was reduced by $121 million for Corporate resulting from a loss in conjunction with our acquisition of the remaining equity ownership interest in CHI. Refer to Note 2.
•Income (loss) before income taxes was reduced by $66 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.
•Income (loss) before income taxes was reduced by $57 million for North America due to an other-than-temporary impairment charge related to one of our equity method investees.
•Income (loss) before income taxes was reduced by $49 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees.