Coca Cola 2011 Annual Report Download - page 61

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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, 2011 2010 2009
Eurasia & Africa 10.8% 11.6% 9.8%
Europe 30.4 35.2 35.8
Latin America 27.7 28.5 24.8
North America 22.8 18.0 20.7
Pacific 21.2 24.2 22.9
Bottling Investments 2.2 2.7 2.2
Corporate (15.1) (20.2) (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, 2011 2010 2009
Consolidated 21.8% 24.1% 26.6%
Eurasia & Africa 40.6% 40.4% 41.0%
Europe 64.7 67.3 68.4
Latin America 63.9 62.0 55.2
North America 11.3 13.6 20.7
Pacific 39.4 41.4 41.6
Bottling Investments 2.6 2.8 2.2
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 2011, foreign currency exchange rates favorably impacted consolidated operating income by 4 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 euro, Japanese yen, Mexican peso, Brazilian real, British pound, South African rand and
Australian dollar, which had a favorable impact on the Eurasia and Africa, Europe, Latin America, Pacific and Bottling
Investments operating segments. Refer to the heading ‘‘Liquidity, Capital Resources and Financial Position — Foreign
Exchange.’’
• In 2011, operating income was favorably impacted by fluctuations in foreign currency exchange rates by 2 percent for
Europe, 4 percent for Latin America, 1 percent for North America, 7 percent for Pacific, 7 percent for Bottling
Investments and 1 percent for Corporate. Operating income was unfavorably impacted by fluctuations in foreign currency
exchange rates by 1 percent for Eurasia and Africa.
• In 2011, 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. Consequently, the shift in our geographic mix is driving favorable product mix from a global perspective.
• In 2011, operating income and operating margin for Europe were unfavorably impacted by a change in our concentrate
pricing strategy in Germany with our consolidated bottler.
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