Coca Cola 2010 Annual Report Download - page 68

Operating Income and Operating Margin
Information about our operating income contribution by operating segment on a percentage basis is as follows:
Year Ended December 31, 2010 2009 2008
Eurasia & Africa 11.6% 9.8% 9.9%
Europe 35.2 35.8 37.6
Latin America 28.5 24.8 24.8
North America 18.0 20.7 18.8
Pacific 24.2 22.9 22.0
Bottling Investments 2.7 2.2 3.1
Corporate (20.2) (16.2) (16.2)
Total 100.0% 100.0% 100.0%
Information about our operating margin on a consolidated basis and by operating segment is as follows:
Year Ended December 31, 2010 2009 2008
Consolidated 24.1% 26.6% 26.4%
Eurasia & Africa 40.4% 41.0% 39.1%
Europe 67.3 68.4 66.4
Latin America 62.0 55.2 57.9
North America 13.6 20.7 19.3
Pacific 41.4 41.6 42.6
Bottling Investments 2.8 2.2 3.0
Corporate ***
* Calculation is not meaningful.
As demonstrated by the tables above, the percentage contribution to operating income and operating margin by
operating segment fluctuated from year to year. Operating income and operating margin by operating segment were
influenced by a variety of factors and events including the following:
• In 2010, foreign currency exchange rates favorably impacted consolidated operating income by approximately
3 percent. The favorable impact of changes in foreign currency exchange rates was primarily due to a weaker
U.S. dollar compared to most foreign currencies, including the Japanese yen, Mexican peso, Brazilian real,
South African rand and Australian dollar, which had a favorable impact on the Eurasia and Africa,
Latin America, Pacific and Bottling Investments operating segments. The favorable impact of a weaker
U.S. dollar compared to the aforementioned currencies was partially offset by the impact of a stronger
U.S. dollar compared to certain other foreign currencies, including the euro and British pound, which had an
unfavorable impact on the Europe and Bottling Investments operating segments. Refer to the heading ‘‘Liquidity,
Capital Resources and Financial Position — Foreign Exchange.’’
• In 2010, operating income was favorably impacted by fluctuations in foreign currency exchange rates by
approximately 7 percent for Eurasia and Africa, 3 percent for Latin America, 8 percent for Pacific and 9 percent
for Bottling Investments. Operating income was unfavorably impacted by fluctuations in foreign currency
exchange rates by approximately 1 percent for Europe. Fluctuations in foreign currency exchange rates had a
nominal impact on operating income for North America and Corporate.
• In 2010, our consolidated operating margin was favorably impacted by geographic mix. The favorable geographic
mix was primarily due to many of our emerging markets recovering from the global recession at a quicker pace
than our developed markets. Although this shift in geographic mix has a negative impact on net operating
revenues, it generally has a favorable impact on our gross profit margin and operating margin due to the
correlated impact it has on our product mix. The product mix in the majority of our emerging and developing
markets is more heavily skewed toward products in our sparkling beverage portfolio, which generally yield a
higher gross profit margin compared to our still beverages and finished products.
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