FORM 10-Q

Integration of Our German Bottling and Distribution Operations
The Company's integration initiatives include costs related to the integration of 18 German bottling and distribution operations acquired in 2007. We incurred
expenses of $20 million during the three months ended March 29, 2013, related to this initiative. The expenses recorded in connection with these integration
activities have been primarily due to involuntary terminations. The Company began these integration initiatives in 2008 and has incurred total pretax expenses
of $460 million since they commenced. The Company is currently reviewing other integration and restructuring opportunities within the German bottling and
distribution operations, which, if implemented, will result in additional charges in future periods. However, as of March 29, 2013, the Company had not
finalized any additional plans. Refer to Note 11 of Notes to Condensed Consolidated Financial Statements for additional information.
Operating Income and Operating Margin
Information about our operating income by operating segment on a percentage basis is as follows:
Three Months Ended
March 29,
2013
March 30,
2012
Eurasia & Africa 11.7% 10.6%
Europe 28.4 27.7
Latin America 31.7 29.6
North America 14.2 18.0
Pacific 25.0 24.0
Bottling Investments 1.6 1.4
Corporate (12.6) (11.3)
Total 100.0% 100.0%
Information about our operating margin on a consolidated basis and by operating segment is as follows:
Three Months Ended
March 29,
2013
March 30,
2012
Consolidated 21.8% 22.5%
Eurasia & Africa 42.2% 43.3%
Europe 67.0 65.9
Latin America 65.9 66.0
North America 7.0 9.2
Pacific 48.4 46.0
Bottling Investments 1.9 1.7
Corporate * *
*Calculation is not meaningful.
As demonstrated by the tables above, the operating margin and percentage contribution to operating income for each operating segment fluctuated between the
periods. Operating income and operating margin by operating segment were influenced by a variety of factors and events, including the following:
• During the three months ended March 29, 2013, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by
3 percent, primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Japanese yen, Brazilian real, U.K. pound
sterling, South African rand and Australian dollar, which had an unfavorable impact on our Eurasia and Africa, Europe, Latin America, 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 Mexican peso, which had a favorable impact
on our Europe, Latin America and Bottling Investments operating segments. Refer to the heading "Liquidity, Capital Resources and Financial Position —
Foreign Exchange" below.
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