Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v2.4.0.6
Operating Segments
 9 Months Ended
Sep. 28, 2012
Operating Segments  
Operating Segments
Operating Segments
Information about our Company's operations as of and for the three months ended September 28, 2012, and September 30, 2011, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
720

$
1,124

$
1,171

$
5,669

$
1,448

$
2,182

$
26

$
—

$
12,340

Intersegment
29

165

55

1

147

26

—

(423
)
—

Total net revenues
749

1,289

1,226

5,670

1,595

2,208

26

(423
)
12,340

Operating income (loss)
254

698

734

832

603

44

(372
)
—

2,793

Income (loss) before income taxes
258

716

734

838

606

269

(337
)
—

3,084

Identifiable operating assets
1,488

3,012

2,576

33,906

2,188

9,374

23,960

—

76,504

Noncurrent investments
1,143

275

556

21

126

7,953

76

—

10,150

2011 — As Adjusted
 
 
 
 
 
 
 
 
 
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

618

608

76

(396
)
—

2,754

Income (loss) before income taxes
258

821

772

621

609

266

(420
)
—

2,927

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

As of December 31, 2011
 
 
 
 
 
 
 
 
 
Identifiable operating assets
$
1,245

$
3,204

$
2,446

$
33,422

$
2,085

$
8,905

$
20,293

$
—

$
71,600

Noncurrent investments
284

243

475

26

133

7,140

73

—

8,374


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 charges related 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 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 $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. As a result, the Company began purchasing additional supplies of Florida orange juice at a higher cost than Brazilian orange juice. 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.
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 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 were 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 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 $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 former North America business.
•
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.
Information about our Company's operations for the nine months ended September 28, 2012, and September 30, 2011, by operating segment, is as follows (in millions):
 
Eurasia
& Africa

Europe

Latin
America

North
America

Pacific

Bottling
Investments

Corporate

Eliminations

Consolidated

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
2,147

$
3,492

$
3,381

$
16,375

$
4,317

$
6,742

$
108

$
—

$
36,562

Intersegment
126

488

176

13

372

66

—

(1,241
)
—

Total net revenues
2,273

3,980

3,557

16,388

4,689

6,808

108

(1,241
)
36,562

Operating income (loss)
896

2,290

2,164

2,039

1,999

169

(961
)
—

8,596

Income (loss) before income taxes
911

2,340

2,164

2,066

1,998

750

(797
)
—

9,432

2011 — As Adjusted
 
 
 
 
 
 
 
 
 
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

1,821

1,769

189

(1,082
)
—

8,217

Income (loss) before income taxes
856

2,536

2,174

1,827

1,771

700

(622
)
—

9,242


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 charges related 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 $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.
•
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. As a result, the Company began purchasing additional supplies of Florida orange juice at a higher cost than Brazilian orange juice. 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, an equity method investee, issuing additional shares of its own stock during the period at a per share amount greater than the carrying amount 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.
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 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 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. Refer to Note 10.
•
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 reduced 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 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 $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 former North America business.
•
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.