Coca Cola 2014 Annual Report Download - page 56

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Information about our operating margin on a consolidated basis and by operating segment is as follows:
Year Ended December 31, 2014 2013 2012
Consolidated
21.1%
21.8% 22.4%
Eurasia & Africa 39.7% 39.3% 40.0%
Europe 58.9 61.5 66.1
Latin America 50.4 61.3 63.1
North America 11.4 11.3 12.0
Asia Pacific 46.6 46.1 44.3
Bottling Investments 0.1 1.5 1.6
Corporate ** *
* Calculation is not meaningful.
Year Ended December 31, 2014 versus Year Ended December 31, 2013
In 2014, foreign currency exchange rates unfavorably impacted consolidated operating income by 6 percent. The unfavorable impact
of changes in foreign currency exchange rates was primarily due to a stronger U.S. dollar compared to certain other foreign currencies,
including the South African rand, Mexican peso, Brazilian real, Australian dollar and Japanese yen, which had an unfavorable impact
on our Eurasia and Africa, Latin America, Asia Pacific and Bottling Investments operating segments. The unfavorable impact of a
stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to
certain other foreign currencies, including the euro and British pound, which had a favorable impact on our Europe and Bottling
Investments operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange”
below.
Operating income for Eurasia and Africa for the years ended December 31, 2014 and 2013 was $1,084 million and $1,087 million,
respectively. The segment was unfavorably impacted by fluctuations in foreign currency exchange rates of 12 percent. The unfavorable
impact of the foreign currency exchange rates was offset by favorable pricing across many of the segment’s markets.
Operating income for Europe for the years ended December 31, 2014 and 2013 was $2,852 million and $2,859 million, respectively.
The Europe group was favorably impacted by foreign currency exchange rate fluctuations of 2 percent. The favorable impact of
the foreign currency exchange rate fluctuations was offset by lower concentrate sales volume and increased charges related to the
Company’s productivity and reinvestment program.
Operating income for the Latin America segment for the years ended December 31, 2014 and 2013 was $2,316 million and
$2,908 million, respectively. Foreign currency exchange rate fluctuations and the Venezuelan Fair Price Law unfavorably impacted
operating income by 12 percent and 9 percent, respectively. Operating income was also unfavorably impacted by the write-down
of concentrate sales receivables from our local bottling partner in Venezuela. Refer to Note 1 of Notes to Consolidated Financial
Statements for additional information on the write-down of receivables. The impact of these items was partially offset by favorable
price mix in all of the segment’s business units.
North America’s operating income for the years ended December 31, 2014 and 2013 was $2,447 million and $2,432 million,
respectively. The segment was favorably impacted by positive price mix and lower commodity costs, partially offset by increased
marketing investments.
Operating income in Asia Pacific for the years ended December 31, 2014 and 2013 was $2,448 million and $2,478 million, respectively.
Operating income was favorably impacted by a 5 percent increase in concentrate sales and a reduction in operating expenses, offset by
the unfavorable impact of foreign currency exchange rate fluctuations of 8 percent.
Our Bottling Investments segment’s operating income for the years ended December 31, 2014 and 2013 was $9 million and
$115 million, respectively. The primary reason for the decrease in operating income was the deconsolidation of the Company’s
Brazilian bottling operations in July 2013 and increased restructuring expenses incurred by our German bottling operations. In
addition, fluctuations in foreign currency unfavorably impacted the segment’s 2014 operating income by 4 percent.