Note 23. Information by Segment

The information by segment is presented considering the Company’s business units (as defined in Note 1) based on its products and services, which is consistent with the internal reporting presented to the Chief Operating Decision Maker. A segment is a component of the Company that engages in business activities from which it earns revenues, and incurs the related costs and expenses, including revenues, costs and expenses that relate to transactions with any of Company’s other components. All segments’ operating results are reviewed regularly by the Chief Operating Decision Maker, which makes decisions about the resources that would be allocated to the segment and to assess its performance, and for which financial information is available.

In 2018, FEMSA made a change to the disclosure related to the businesses segments formerly named as FEMSA Comercio’s “Retail Division” by removing those operations that are not directly related to Proximity store business, including restaurant and discount retail units, from this segment. The business segment is now named the FEMCO – “Proximity Division” and will only include Proximity and Proximity-related operations, most of which operate today under the OXXO brand across markets. The removed operations are included in “Other.”

Inter-segment transfers or transactions are entered into and presented under accounting policies of each segment, which are the same to those applied by the Company. Intercompany operations are eliminated and presented within the consolidation adjustment column included in the tables below. Selected information of the condensed consolidated statements of operations by geographic operating segment for the six-month period ended as of June 30, 2019 and 2018 is as follows:

a) By Business Unit:


2019	Coca-Cola FEMSA			FEMCO – Proximity Division			FEMCO – Health Division		FEMCO – Fuel Division		Heineken Investment			Other ⁽¹⁾			Consolidation Adjustments			Consolidated
Total revenues	Ps.	94,444		Ps.	88,440		Ps.	28,004	Ps.	23,268	Ps.	—		Ps.	20,149		Ps.	(9,934	)	Ps.	244,371
Intercompany revenue		2,697			157			—		7		—			7,073			(9,934	)		—
Gross profit		43,095			34,636			8,202		2,324		—			4,965			(2,430	)		90,792
Administrative expenses		—			—			—		—		—			—			—			9,519
Selling expenses		—			—			—		—		—			—			—			58,992
Other income		—			—			—		—		—			—			—			935
Other expenses		—			—			—		—		—			—			—			2,454
Interest expense		3,475			2,706			578		593		—			1,188			(1,570	)		6,970
Interest income		551			171			8		64		4			2,253			(1,523	)		1,528
Other net finance income ⁽³⁾		—			—			—		—		—			—			—			(1,897	)
Income before income taxes and share of the profit of equity accounted investees		8,939			4,824			420		94		1			(1,035	)		180			13,423
Income taxes		2,519			40			65		33		(493	)		1,945			—			4,109
Share of the profit of equity accounted investees, net of tax		(64	)		(22	)		—		—		3,138			—			—			3,052

Net income from continuing operations		—			—			—		—		—			—			—			12,366

Net income from discontinued operations		—			—			—		—		—			—			—			—

Non-cash items other than depreciation and amortization ⁽²⁾		360			159			9		72		—			494			—			1,094

Investments in equity accounted investees

10,618

252

—

83,724

261

—

94,855

Total assets

259,728

109,392

53,694

16,092

85,674

158,582

(51,149

)

632,013

Total liabilities

130,538

90,709

40,948

15,154

3,297

70,887

(51,242

)

300,291

Investments in fixed assets ⁽⁴⁾

3,961

4,505

595

244

—

998

(83

)

10,220

(1)	Includes other companies and corporate (see Note 1).

(2)	Includes bottle breakage.

(3)	Includes foreign exchange loss, net; gain on monetary position for subsidiaries in hyperinflationary economies; and market value loss on financial instruments.

(4)	Includes acquisitions and disposals of property, plant and equipment, intangible assets and other long-lived assets.


2018	Coca-Cola FEMSA			FEMCO – Proximity Division			FEMCO – Health Division		FEMCO – Fuel Division		Heineken Investment		Other ⁽¹⁾		Consolidation Adjustments			Consolidated
Total revenues	Ps.	88,692		Ps.	80,134		Ps.	25,834	Ps.	22,104	Ps.		Ps.	20,443	Ps.	(10,268	)	Ps.	226,939
Intercompany revenue		2,456			117			—		—		—		7,695		(10,268	)
Gross profit		41,073			29,569			7,789		1,803		—		5,158		(2,105	)		83,287
Administrative expenses		—			—			—		—		—		—		—			8,513
Selling expenses		—			—			—		—		—		—		—			55,299
Other income		—			—			—		—		—		—		—			605
Other expenses		—			—			—		—		—		—		—			1,867
Interest expense		3,688			833			396		101		—		1,051		(1,191	)		4,878
Interest income		426			176			58		128		4		1,653		(1,191	)		1,254
Other net finance expenses ⁽³⁾		—			—			—		—		—		—		—			375
Income before income taxes and share of the profit of equity accounted investees		8,175			4,987			573		244		—		960		24			14,963
Income taxes		2,499			139			363		73		1		1,746		—			4,821
Share of the profit of equity accounted investees, net of tax		(110	)		(12	)		—		—		3,120		1		—			2,999

Net income from continuing operations		—			—			—		—		—		—		—			13,141

Net income from discontinued operations		—			—			—		—		—		—		—			166

Consolidated net income		—			—			—		—		—		—		—			13,307

Depreciation and a amortization		4,802			2,324			494		71		—		396		—			8,087
Non-cash items other than depreciation and amortization		372			177			9		6				72		—			636

Investments in equity accounted investees ⁽⁵⁾		10,518			84			—		—		83,461		252		—			94,315
Total assets ⁽⁵⁾		263,787			75,146			35,881		7,015		86,340		150,674		(42,462	)		576,381
Total liabilities ⁽⁵⁾		132,037			56,468			23,357		6,142		4,054		61,340		(42,559	)		240,839
Investments in fixed assets ⁽⁴⁾		11,069			9,441			1,162		520		—		2,391		(317	)		24,266

(1)	Includes other companies and corporate (see Note 1).

(2)	Includes bottle breakage.

(3)	Includes foreign exchange gain, net; gain on monetary position for subsidiaries in hyperinflationary economies; and market value loss on financial instruments.

(4)	Includes acquisitions and disposals of property, plant and equipment, intangible assets and other long-lived assets.

(5)	As of December 31, 2018

b)	By Geographic Area:

The Company aggregates geographic areas into the following for the purposes of its consolidated financial statements: (i) Mexico and Central America division (comprising the following countries: Mexico, Guatemala, Nicaragua, Costa Rica and Panama) and (ii) the South America division (comprising the following countries: Brazil, Argentina, Colombia, Chile, Ecuador, Peru and Uruguay). (iii) Europe (comprised of the Company’s equity method investment in Heineken Group). For further information related with aggregates geographic areas see Note 24.2 Disaggregation of revenue.

Geographic disclosure for the Company non-current assets is as follow:


	June 30, 2019		December 31, 2018
Mexico and Central America ⁽¹⁾	Ps.	233,686	Ps.	195,310
South America ⁽²⁾		137,247		120,003
Europe		83,724		83,461

Consolidated	Ps.	454,657	Ps.	398,774

⁽¹⁾	Domestic (Mexico only) non-current assets were Ps. 228,201 and Ps. 185,857, as of June 30, 2019 and December 31, 2018, respectively.

⁽²⁾

South America non-current assets includes Brazil, Argentina, Colombia, Chile and Uruguay. Brazilian non-current assets were Ps. 76.921 and Ps. 76,869, as of June 30, 2019 and December 31, 2018, respectively. Colombia non-current assets were Ps. 17,227 and Ps. 16,664, as of June 30, 2019 and December 31, 2018, respectively. Argentina non-current assets were Ps. 4,808 and Ps. 4,538, as of June 30, 2019 and December 31, 2018, respectively. Chile non-current assets were Ps. 33,248 and Ps. 16,787, as of June 30, 2019 and December 31, 2018, respectively. Uruguay non-current assets were Ps. 5,012 and Ps. 5,145, as of June 30, 2019 and December 31, 2018, respectively.