Coca Cola 2015 Annual Report Download - page 47

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Our organizational structure as of December 31, 2015, consisted of the following operating segments, the first six of which are sometimes referred to as
"operating groups" or "groups": Eurasia and Africa; Europe; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate. For further
information regarding our operating segments, refer to Note 19 of Notes to Consolidated Financial Statements.
Structural Changes, Acquired Brands and Newly Licensed Brands
In order to continually improve upon the Company's operating performance, from time to time, we engage in buying and selling ownership interests in
bottling partners and other manufacturing operations. In addition, we also acquire brands or enter into license agreements for certain brands to supplement
our beverage offerings. These items impact our operating results and certain key metrics used by management in assessing the Company's performance.
Unit case volume growth is a metric used by management to evaluate the Company's performance because it measures demand for our products at the
consumer level. The Company's unit case volume represents the number of unit cases (or unit case equivalents) of Company beverage products directly or
indirectly sold by the Company and its bottling partners to customers and, therefore, reflects unit case volume for consolidated and unconsolidated bottlers.
Refer to the heading "Beverage Volume" below.
Concentrate sales volume represents the amount of concentrates and syrups (in all cases expressed in equivalent unit cases) sold by, or used in finished
products sold by, the Company to its bottling partners or other customers. Refer to the heading "Beverage Volume" below.
Our Bottling Investments operating segment and our other finished product operations, including the finished product operations in our North America
operating segment, typically generate net operating revenues by selling sparkling beverages and a variety of still beverages, such as juices and juice drinks,
energy and sports drinks, ready-to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners who
distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers such as restaurants and
convenience stores who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners
who resell the fountain syrups to fountain retailers. For these consolidated finished product operations, we recognize the associated concentrate sales volume
at the time the unit case or unit case equivalent is sold to the customer. Our concentrate operations typically generate net operating revenues by selling
concentrates and syrups to authorized bottling and canning operations. For these concentrate operations, we recognize concentrate revenue and concentrate
sales volume when we sell concentrate to the authorized unconsolidated bottling and canning operations, and we typically report unit case volume when
finished products manufactured from the concentrates and syrups are sold to the customer. When we analyze our net operating revenues we generally
consider the following four factors: (1) volume growth (unit case volume or concentrate sales volume, as appropriate), (2) acquisitions and divestitures
(including structural changes defined below), as applicable, (3) changes in price, product and geographic mix and (4) foreign currency fluctuations. Refer to
the heading "Net Operating Revenues" below.
We generally refer to acquisition and divestitures of bottling, distribution or canning operations and consolidation or deconsolidation of bottling and
distribution entities for accounting purposes as structural changes ("structural changes"). Typically, structural changes do not impact the Company's unit case
volume on a consolidated basis or at the geographic operating segment level. We recognize unit case volume for all sales of Company beverage products
regardless of our ownership interest in the bottling partner, if any. However, the unit case volume reported by our Bottling Investments operating segment is
generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations.
"Acquired brands" refers to brands acquired during the past 12 months. Typically, the Company has not reported unit case volume or recognized concentrate
sales volume related to acquired brands in periods prior to the closing of a transaction. Therefore, the unit case volume and concentrate sales volume from the
sale of these brands is incremental to prior year volume. We do not generally consider acquired brands to be structural changes.
"Licensed brands" refers to brands not owned by the Company, but for which we hold certain rights, generally including, but not limited to, distribution
rights, and from which we derive an economic benefit when these brands are ultimately sold. Typically, the Company has not reported unit case volume or
recognized concentrate sales volume related to these brands in periods prior to the beginning of the term of a license agreement. Therefore, in the year that
the licenses are entered into, the unit case volume and concentrate sales volume from the sale of these brands is incremental to prior year volume. We do not
generally consider newly licensed brands to be structural changes.
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