Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v2.4.0.8
Operating Segments
 9 Months Ended
Sep. 27, 2013
Operating Segments  
Operating Segments
OPERATING SEGMENTS
Effective January 1, 2013, the Company transferred our India and South West Asia business unit from the Eurasia and Africa operating segment to the Pacific operating 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 September 27, 2013, and September 28, 2012, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2013
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
669

$
1,232

$
1,208

$
5,715

$
1,368

$
1,811

$
27

$
—

$
12,030

Intersegment
—

188

22

4

128

21

—

(363
)
—

Total net revenues
669

1,420

1,230

5,719

1,496

1,832

27

(363
)
12,030

Operating income (loss)
231

742

720

803

575

22

(621
)
—

2,472

Income (loss) before income taxes
228

755

719

805

585

214

74

—

3,380

Identifiable operating assets
1,340

3,567

2,672

34,278

1,848

6,836

27,356

—

77,897

Noncurrent investments
1,160

104

525

44

140

9,486

76

—

11,535

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
698

$
1,124

$
1,171

$
5,669

$
1,470

$
2,182

$
26

$
—

$
12,340

Intersegment
—

165

55

1

176

26

—

(423
)
—

Total net revenues
698

1,289

1,226

5,670

1,646

2,208

26

(423
)
12,340

Operating income (loss)
244

698

734

832

613

44

(372
)
—

2,793

Income (loss) before income taxes
248

716

734

838

616

269

(337
)
—

3,084

Identifiable operating assets
1,373

3,012

2,576

33,906

2,303

9,374

23,960

—

76,504

Noncurrent investments
1,143

275

556

21

126

7,953

76

—

10,150

As of December 31, 2012
 
 
 
 
 
 
 
 
 
Identifiable operating assets
$
1,299

$
2,976

$
2,759

$
34,114

$
2,163

$
9,648

$
22,767

$
—

$
75,726

Noncurrent investments
1,155

271

539

39

127

8,253

64

—

10,448


During the three months ended September 27, 2013, 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, $53 million for North America, $2 million for Pacific, $45 million for Bottling Investments and $41 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 $2 million for North America due to the refinement of previously established accruals related to the Company's integration of CCE's former North America business. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $190 million for Corporate due to impairment charges recorded on certain of the Company's intangible assets. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by $615 million for Corporate due to a gain the Company recognized on the deconsolidation of our Brazilian bottling operations as a result of their combination with an independent bottling partner. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was increased by $30 million for Corporate due to a gain recognized on the merger of four of the Company's Japanese bottling partners in which we held equity method investments prior to their merger. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by a net $8 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.
During the three months ended September 28, 2012, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $48 million for North America, $1 million for Pacific, $14 million for Bottling Investments and $10 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 Pacific and $5 million for Corporate due to the refinement of previously established accruals related to the Company's 2008–2011 productivity initiatives. Operating income (loss) and income (loss) before income taxes were increased by $5 million for North America due to the refinement of previously established accruals related to the Company's integration of CCE's former North America business. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $9 million for North America due to costs associated with the Company detecting residues of carbendazim, a fungicide that is not registered in the United States for use on citrus products, in orange juice imported from Brazil for distribution in the United States. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $1 million for Latin America, $1 million for North America, $2 million for Pacific and was increased by $1 million for Eurasia and Africa and $3 million for Europe due to changes in the structure of BPW, our 50/50 joint venture with Nestlé in the ready-to-drink tea category. Refer to Note 10.
•
Income (loss) before income taxes was reduced by a net $10 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 as of and for the nine months ended September 27, 2013, and September 28, 2012, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2013
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
2,103

$
3,545

$
3,504

$
16,306

$
4,185

$
6,047

$
124

$
—

$
35,814

Intersegment
—

520

169

13

431

61

—

(1,194
)
—

Total net revenues
2,103

4,065

3,673

16,319

4,616

6,108

124

(1,194
)
35,814

Operating income (loss)
845

2,261

2,209

1,875

2,024

186

(1,277
)
—

8,123

Income (loss) before income taxes
868

2,318

2,213

1,879

2,042

677

(748
)
—

9,249

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
2,041

$
3,492

$
3,381

$
16,375

$
4,423

$
6,742

$
108

$
—

$
36,562

Intersegment
—

488

176

13

498

66

—

(1,241
)
—

Total net revenues
2,041

3,980

3,557

16,388

4,921

6,808

108

(1,241
)
36,562

Operating income (loss)
806

2,290

2,164

2,039

2,089

169

(961
)
—

8,596

Income (loss) before income taxes
821

2,340

2,164

2,066

2,088

750

(797
)
—

9,432


During the nine months ended September 27, 2013, 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 Eurasia and Africa, $7 million for Europe, $190 million for North America, $16 million for Pacific, $86 million for Bottling Investments and $97 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 $2 million for North America due to the refinement of previously established accruals related to the Company's integration of CCE's former North America business. Operating income (loss) and income (loss) before income taxes were increased by $1 million for Pacific and $1 million for Corporate due to the refinement of previously established accruals related to the Company's 2008–2011 productivity initiatives. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $190 million for Corporate due to impairment charges recorded on certain of the Company's intangible assets. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by $615 million for Corporate due to a gain the Company recognized on the deconsolidation of our Brazilian bottling operations as a result of their combination with an independent bottling partner. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $9 million for Bottling Investments and $140 million for Corporate due to the devaluation of the Venezuelan bolivar, including our proportionate share of the charge incurred by an equity method investee which has operations in Venezuela. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $114 million for Corporate due to a loss related to the merger of four of the Company's Japanese bottling partners in which we held equity method investments prior to their merger. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by $139 million for Corporate due to a gain the Company recognized as a result of Coca-Cola FEMSA issuing additional shares of its own stock at a per share amount greater than the carrying value of the Company's per share investment. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was reduced by a net $25 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.
•
Income (loss) before income taxes was reduced by $23 million for Corporate due to a charge the Company recognized as a result of the early extinguishment of certain long-term debt. Refer to Note 6.
During the nine months ended September 28, 2012, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $157 million for North America, $1 million for Pacific, $45 million for Bottling Investments and $18 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 $3 million for Europe, $1 million for Pacific and $5 million for Corporate due to the refinement of previously established accruals related to the Company's 2008–2011 productivity initiatives. Operating income (loss) and income (loss) before income taxes were increased by $5 million for North America due to the refinement of previously established accruals related to the Company's integration of CCE's former North America business. Refer to Note 10 and Note 11.
•
Operating income (loss) and income (loss) before income taxes were reduced by $21 million for North America due to costs associated with the Company detecting residues of carbendazim, a fungicide that is not registered in the United States for use on citrus products, in orange juice imported from Brazil for distribution in the United States. Refer to Note 10.
•
Operating income (loss) and income (loss) before income taxes were reduced by $20 million for North America due to changes in the Company's ready-to-drink tea strategy as a result of our current U.S. license agreement with Nestlé terminating at the end of 2012. Refer to Note 10.
•
Income (loss) before income taxes was increased by $92 million for Corporate due to a gain the Company recognized as a result of Coca-Cola FEMSA issuing additional shares of its own stock during the period at a per share amount greater than the carrying value of the Company's per share investment. Refer to Note 10 and Note 14.
•
Income (loss) before income taxes was increased by a net $33 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.
•
Income (loss) before income taxes was reduced by $2 million for Eurasia and Africa, $3 million for Europe, $3 million for Latin America, $1 million for North America and $5 million for Pacific due to changes in the structure of BPW, our 50/50 joint venture with Nestlé in the ready-to-drink tea category. Refer to Note 10.