ANALYSIS CASE 2COCA-COLA OPERATING SEGMENT INFORMATION

The Coca-Cola Company is organized geographically and defines reportable operating segments as regions of the world. The following information was extracted from Note 19 Operating Segments in the Coca-Cola Company 2014 Annual Report:

Information about our Company's operations by operating segment for the years ended December 31, 2014, 2013, and 2012, is as follows (in millions):

Eurasia

& Africa

Europe

Latin

America

North

America

AsiaPacific

Bottling

Investments

Corporate

Eliminations

Consolidated

2014

Net operating revenues:

Third party

$2,730

$4,844

$4,597

$21,462

$5,257

$6,972

$ 136

$

$45,998

Intersegment

692

60

17

489

67

(1,325)

Total net revenues

2,730

5,536

4,657

21,479

5,746

7,039

136

(1,325)

45,998

Operating income (loss)

1,084

2,852

2,316

2,447

2,448

9

(1,448)

9,708

Interest income

594

594

Interest expense

483

483

Depreciation and amortization

47

75

56

1,195

96

315

192

1,976

Equity income (loss)net

35

31

10

(16)

12

691

6

769

Income (loss) before income taxes

1,125

2,892

2,319

1,633

2,464

715

(1,823)

9,325

Identifiable operating assets

1,298

3,358

2,426

33,066

1,793

6,975

29,482

78,398

Investments

1,081

90

757

48

157

8,781

2,711

13,625

Capital expenditures

30

54

55

1,293

76

628

270

2,406

2013

Net operating revenues:

Third party

$2,763

$4,645

$4,748

$21,574

$5,372

$7,598

$154

$

$46,854

Intersegment

689

191

16

497

78

(1,471)

Total net revenues

2,763

5,334

4,939

21,590

5,869

7,676

154

(1,471)

46,854

Operating income (loss)

1,087

2,859

2,908

2,432

2,478

115

(1,651)

10,228

Interest income

534

534

Interest expense

463

463

Depreciation and amortization

42

86

58

1,192

130

335

134

1,977

Equity income (loss)net

22

24

13

2

19

524

(2)

602

Income (loss) before income taxes

1,109

2,923

2,920

2,434

2,494

679

(1,082)

11,477

Identifiable operating assets

1,273

3,713

2,918

33,964

1,922

7,011

27,742

78,543

Investments

1,157

106

545

49

143

9,424

88

11,512

Capital expenditures

40

34

63

1,374

117

643

279

2,550

2012

Net operating revenues:

Third party

$2,697

$4,481

$4,560

$21,665

$5,680

$8,807

$127

$

$48,017

Intersegment

642

271

15

628

88

(1,644)

Total net revenues

2,697

5,123

4,831

21,680

6,308

8,895

127

(1,644)

48,017

Operating income (loss)

1,078

2,960

2,879

2,597

2,516

140

(1,391)

10,779

Interest income

471

471

Interest expense

397

397

Depreciation and amortization

33

100

70

1,083

119

406

171

1,982

Equity income (loss)net

20

45

4

13

2

732

3

819

Income (loss) before income taxes

1,101

3,015

2,882

2,624

2,523

904

(1,240)

11,809

Identifiable operating assets

1,299

2,976

2,759

34,114

2,163

9,648

22,767

75,726

Investments

1,155

271

539

39

127

8,253

64

10,448

Capital expenditures

51

30

88

1,447

107

867

190

2,780

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Required

1. Calculate the following measures for each of Coca-Cola's operating segments (excluding Bottling Investments and Corporate):

• Percentage of total net revenues, 2013 and 2014.
• Percentage change in total net revenues, 2012 to 2013 and 2013 to 2014.
• Operating income as a percentage of total net revenues (profit margin), 2013 and 2014.

1. Determine whether you believe Coca-Cola should attempt to expand its operations in a particular region of the world to increase operating revenues and operating income.
2. List any additional information you would like to have to conduct your analysis.