Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v2.4.0.8
Operating Segments
 6 Months Ended
Jun. 27, 2014
Operating Segments [Abstract]  
Operating Segments
OPERATING SEGMENTS
Effective January 1, 2014, the Company changed the name of the Pacific segment to Asia Pacific. This change did not impact the results of the segments, but the name of the segment has been updated in all information presented herein.
Information about our Company's operations as of and for the three months ended June 27, 2014 and June 28, 2013, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2014
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
732

$
1,385

$
1,105

$
5,710

$
1,550

$
2,042

$
50

$
—

$
12,574

Intersegment
—

184

13

7

173

18

—

(395
)
—

Total net revenues
732

1,569

1,118

5,717

1,723

2,060

50

(395
)
12,574

Operating income (loss)
290

892

633

827

846

38

(356
)
—

3,170

Income (loss) before income taxes
313

904

636

682

851

254

(256
)
—

3,384

Identifiable operating assets
1,411

4,014

2,871

34,426

2,117

7,119

29,073

—

81,031

Noncurrent investments
1,189

115

807

51

149

9,557

2,590

—

14,458

2013
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
765

$
1,293

$
1,139

$
5,708

$
1,573

$
2,218

$
53

$
—

$
12,749

Intersegment
—

175

76

5

157

20

—

(433
)
—

Total net revenues
765

1,468

1,215

5,713

1,730

2,238

53

(433
)
12,749

Operating income (loss)
332

836

726

731

847

125

(354
)
—

3,243

Income (loss) before income taxes
351

869

730

732

853

354

(364
)
—

3,525

Identifiable operating assets
1,352

3,735

2,683

34,732

2,145

8,178

25,857

—

78,682

Noncurrent investments
1,179

95

562

38

131

8,754

70

—

10,829

As of December 31, 2013
 
 
 
 
 
 
 
 
 
Identifiable operating assets
$
1,273

$
3,713

$
2,918

$
33,964

$
1,922

$
7,011

$
27,742

$
—

$
78,543

Noncurrent investments
1,157

106

545

49

143

9,424

88

—

11,512


During the three months ended June 27, 2014, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $58 million for North America, $1 million for Asia Pacific, $66 million for Bottling Investments and $30 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 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 $25 million for Bottling Investments as a result of the restructuring and transition of the Company's Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $21 million for Corporate as a result of a write-down of receivables related to sales of concentrate to our bottling partner in Venezuela due to limited government-approved exchange rate conversion mechanisms. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $140 million for North America primarily due to the derecognition of intangible assets as a result of refranchising certain territories in North America to three of its unconsolidated bottling partners. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $6 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 June 28, 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 $6 million for Europe, $55 million for North America, $6 million for Asia Pacific, $20 million for Bottling Investments and $46 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.
•
Income (loss) before income taxes was reduced by $144 million for Corporate due to a loss related to the then pending merger of four of the Company's Japanese bottling partners. 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 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 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.
Information about our Company's operations for the six months ended June 27, 2014 and June 28, 2013, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Asia Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2014
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,390

$
2,519

$
2,199

$
10,500

$
2,760

$
3,699

$
83

$
—

$
23,150

Intersegment
—

343

30

10

278

34

—

(695
)
—

Total net revenues
1,390

2,862

2,229

10,510

3,038

3,733

83

(695
)
23,150

Operating income (loss)
593

1,611

1,301

1,255

1,403

12

(629
)
—

5,546

Income (loss) before income taxes
621

1,635

1,303

1,107

1,411

276

(764
)
—

5,589

2013
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,434

$
2,313

$
2,296

$
10,591

$
2,817

$
4,236

$
97

$
—

$
23,784

Intersegment
—

332

147

9

303

40

—

(831
)
—

Total net revenues
1,434

2,645

2,443

10,600

3,120

4,276

97

(831
)
23,784

Operating income (loss)
614

1,519

1,489

1,072

1,449

164

(656
)
—

5,651

Income (loss) before income taxes
640

1,563

1,494

1,074

1,457

463

(822
)
—

5,869


During the six months ended June 27, 2014, the results of our operating segments were impacted by the following items:
•
Operating income (loss) and income (loss) before income taxes were reduced by $133 million for North America, $8 million for Asia Pacific, $108 million for Bottling Investments and $34 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 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 $25 million for Bottling Investments as a result of the restructuring and transition of the Company's Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Refer to Note 10.
•
Income (loss) before income taxes was reduced by $140 million for North America primarily due to the derecognition of intangible assets as a result of refranchising certain territories in North America to three of its unconsolidated bottling partners. Refer to Note 2 and Note 10.
•
Income (loss) before income taxes was reduced by $21 million for Bottling Investments and $247 million for Corporate due to the expansion of the Venezuelan government's currency conversion markets, including a write-down of receivables related to concentrate sales to our bottling partner in Venezuela as well as our proportionate share of the charge incurred by this bottler, an equity method investee. Refer to Note 1 and Note 10.
•
Income (loss) before income taxes was reduced by $12 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 six months ended June 28, 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, $6 million for Europe, $137 million for North America, $14 million for Asia Pacific, $41 million for Bottling Investments and $56 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.
•
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 that has operations in Venezuela. Refer to Note 1 and Note 10.
•
Income (loss) before income taxes was reduced by $144 million for Corporate due to a loss related to the then pending merger of four of the Company's Japanese bottling partners. 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 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 reduced by $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.
•
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.