Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v2.4.0.8
Operating Segments
 6 Months Ended
Jun. 28, 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 June 28, 2013, and June 29, 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
$
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

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
728

$
1,314

$
1,083

$
5,789

$
1,643

$
2,476

$
52

$
—

$
13,085

Intersegment
—

173

62

8

184

21

—

(448
)
—

Total net revenues
728

1,487

1,145

5,797

1,827

2,497

52

(448
)
13,085

Operating income (loss)
296

897

686

756

874

90

(305
)
—

3,294

Income (loss) before income taxes
307

916

687

761

871

312

(231
)
—

3,623

Identifiable operating assets
1,327

3,159

2,459

34,316

2,366

9,218

23,068

—

75,913

Noncurrent investments
820

265

495

22

123

7,437

74

—

9,236

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 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 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. 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.
•
Income (loss) before income taxes was reduced by $144 million for Corporate due to a loss related to the 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. Refer to Note 6.
During the three months ended June 29, 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, $16 million for Bottling Investments and $5 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 Europe 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 $6 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 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 reduced by $3 million for Eurasia and Africa, $6 million for Europe, $2 million for Latin America, $3 million for Pacific and was increased by $3 million for Corporate 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 $1 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 six months ended June 28, 2013, and June 29, 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
$
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

2012
 
 
 
 
 
 
 
 
 
Net operating revenues:
 
 
 
 
 
 
 
 
 
Third party
$
1,343

$
2,368

$
2,210

$
10,706

$
2,953

$
4,560

$
82

$
—

$
24,222

Intersegment
—

323

121

12

322

40

—

(818
)
—

Total net revenues
1,343

2,691

2,331

10,718

3,275

4,600

82

(818
)
24,222

Operating income (loss)
562

1,592

1,430

1,207

1,476

125

(589
)
—

5,803

Income (loss) before income taxes
573

1,624

1,430

1,228

1,472

481

(460
)
—

6,348


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 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. 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.
•
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 $144 million for Corporate due to a loss related to the 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 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 $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. Refer to Note 6.
During the six months ended June 29, 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 $109 million for North America, $31 million for Bottling Investments and $8 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 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 $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 $12 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 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 $43 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 $3 million for Eurasia and Africa, $6 million for Europe, $2 million for Latin America and $3 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.