- Reported net revenue declined 3% and
organic revenue grew 4%
- Reported EPS was $0.71 and
comparable EPS was $0.63
- Global volume growth of 2%
- Gained global value and volume share
in nonalcoholic ready-to-drink beverages
- Year-to-date cash from operations
increased 14% to a record $5.1 billion
- Full-year comparable currency
neutral growth expectations remain unchanged
The Coca-Cola Company today reported second quarter 2015
operating results. "Our second quarter results were in line with
our expectations and mark continued progress toward restoring
momentum in our global business," said Muhtar Kent, Chairman and
Chief Executive Officer of The Coca-Cola Company. "We are executing
against our strategic initiatives and remain focused on driving
efficiencies through productivity and making disciplined investment
decisions to accelerate growth. While there is more work to do, we
remain confident that we have the right plans in place and are
committed to leveraging our superior brand portfolio together with
our unparalleled global distribution system to continue creating
long-term shareowner value."
SECOND QUARTER 2015 OPERATING
REVIEW
TOTAL COMPANY
Percent Change Second
Quarter YTD Unit Case Volume 2
1 Sparkling Beverages 1 1 Still Beverages 5
3 Concentrate Sales/Reported Volume 3 4 Price/Mix 1 2
Currency (7) (7) Acquisitions & Divestitures 0
0 Reported Net Revenues (3) (1) Organic Revenues *
4 6 Reported Income Before Taxes 29 13
Comparable CN Income Before Taxes (Structurally Adjusted) *
3 7 * Organic revenue and comparable
currency neutral (CN) income before taxes (structurally adjusted)
are non-GAAP financial measures. Refer to the Notes and
Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
- We had positive organic revenue growth
in each of our operating groups and gained global value and volume
share in nonalcoholic ready-to-drink (NARTD) beverages in the
quarter. After adjusting for the six additional days in the first
quarter, concentrate sales growth and unit case volume growth were
generally in line year to date.
- Global sparkling beverage volume growth
in the quarter was led by 1% growth in brand Coca-Cola, 6% growth
in Coca-Cola Zero, 3% growth in Sprite and 2% growth in Fanta.
Growth in these brands was partially offset by a 7% decline in Diet
Coke. We gained global value and volume share in sparkling
beverages in the quarter.
- Global still beverage volume growth in
the quarter reflects 7% growth in ready-to-drink tea, 8% growth in
packaged water and double-digit growth in value-added dairy. Volume
growth in these categories was partially offset by a 1% decline in
juice and juice drinks attributable to price increases taken to
cover higher input costs and continued industry softness in certain
markets. We gained global value and volume share in still
beverages, juice and juice drinks, ready-to-drink tea and sports
drinks in the quarter.
- Comparable currency neutral operating
income growth outpaced organic revenue growth in the quarter
primarily due to gross margin expansion and the impact of our
ongoing productivity initiatives, partially offset by increased
marketing investments.
- Comparable currency neutral income
before taxes lagged comparable currency neutral operating income
growth in the quarter primarily due to lower equity income and a
decrease in net interest income.
- The reported effective tax rate and the
underlying annual effective tax rate in the quarter were 28.7% and
22.5%, respectively. The variance between the reported rate and the
underlying rate was due to the tax effect of various items
impacting comparability, separately disclosed in the Reconciliation
of GAAP and Non-GAAP Financial Measures schedule.
- Reported EPS was $0.71 and comparable
EPS was $0.63. Items impacting comparability increased reported EPS
by a net $0.08 and were primarily related to a net gain recognized
in connection with the closing of the transaction with Monster
Beverage Corporation, partially offset by costs associated with our
previously announced productivity program. For additional details
on items impacting comparability, refer to the Reconciliation of
GAAP and Non-GAAP Financial Measures schedule.
- Fluctuations in foreign currency
exchange rates resulted in an 11 point headwind on comparable
operating income and a 6 point headwind on both comparable income
before taxes and EPS in the quarter. The currency impact on income
before taxes was consistent with the outlook we provided earlier
this year.
- Year-to-date cash from operations was
$5.1 billion, up 14%, primarily due to efficient management of
working capital and the impact of six additional days in the first
quarter, partially offset by fluctuations in foreign currency
exchange rates.
- Year-to-date net share repurchases
totaled $876 million.
EURASIA AND AFRICA
Percent Change Second
Quarter YTD Unit Case Volume 4 3
Sparkling Beverages 3 3 Still Beverages 7 5
Concentrate Sales 4 4 Price/Mix (1) 1 Currency (13) (12)
Acquisitions & Divestitures 0 0 Reported
Net Revenues (10) (7) Organic Revenues * 4 5
Reported Income Before Taxes (8) (8) Comparable CN Income Before
Taxes * 9 6 * Organic revenue and
comparable currency neutral (CN) income before taxes are non-GAAP
financial measures. Refer to the Notes and Reconciliation of GAAP
and Non-GAAP Financial Measures schedule.
- Organic revenue growth in the quarter
was driven by concentrate sales growth, positive pricing and
favorable product mix across most key markets, partially offset by
unfavorable geographic mix. After adjusting for the additional days
in the first quarter and unit case volume related to joint ventures
that do not have equivalent concentrate sales, concentrate sales
growth trailed unit case volume growth year to date. We expect
concentrate sales and unit case sales to be generally in line for
the full year.
- Comparable currency neutral income
before taxes outpaced organic revenue growth in the quarter due to
favorable timing of operating expenses, partially offset by lower
equity income associated with our joint ventures in the juice and
juice drinks category in our Eurasia and Africa group.
- We gained value and volume share in
total NARTD beverages, sparkling beverages and still beverages.
Sparkling beverage volume growth was driven by 5% growth in
Trademark Coca-Cola. Still beverage volume growth was primarily
driven by 9% growth in juice and juice drinks and 6% growth in
packaged water. Unit case volume growth included 7% growth in our
Central, East & West Africa business unit and 3% growth in our
Middle East & North Africa business unit. Volume growth in
these markets was partially offset by a low single-digit decline in
Russia.
EUROPE
Percent Change Second
Quarter YTD Unit Case Volume 1
0 Sparkling Beverages 0 (1) Still Beverages 7
5 Concentrate Sales 2 3 Price/Mix 1 1 Currency (11)
(12) Acquisitions & Divestitures (1)
0 Reported Net Revenues (9) (8) Organic Revenues *
3 4 Reported Income Before Taxes (7) (4)
Comparable CN Income Before Taxes * (1)
1 * Organic revenue and comparable currency neutral (CN)
income before taxes are non-GAAP financial measures. Refer to the
Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.
- Organic revenue growth in the quarter
was driven by strong growth in our expanding still beverage
portfolio and 1 point of positive price/mix despite the
deflationary environment. After adjusting for the additional days
in the first quarter, concentrate sales growth and unit case volume
growth were generally in line year to date.
- Comparable currency neutral income
before taxes trailed organic revenue growth in the quarter
primarily due to increased marketing investments and higher input
costs partially offset by the impact of ongoing productivity
initiatives.
- We gained value and volume share in
core sparkling and value share in still beverages driven by strong
marketing investments and new product launches in both categories.
Still beverage volume growth was driven by juice and juice drinks,
including double-digit growth of the innocent brand, and packaged
water, including the introduction of smartwater at the end of
2014.
LATIN AMERICA
Percent Change Second
Quarter YTD Unit Case Volume 2
1 Sparkling Beverages 0 0 Still Beverages 5
3 Concentrate Sales 1 4 Price/Mix 10 7 Currency (24)
(19) Acquisitions & Divestitures 0
0 Reported Net Revenues (13) (8) Organic Revenues *
11 11 Reported Income Before Taxes (17) (15)
Comparable CN Income Before Taxes * 13
10 * Organic revenue and comparable currency neutral (CN)
income before taxes are non-GAAP financial measures. Refer to the
Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.
- Organic revenue growth in the quarter
was driven by positive price/mix in each of our four business
units, particularly in the higher inflationary markets within our
South Latin business unit. After adjusting for the additional days
in the first quarter, concentrate sales growth and unit case volume
growth were generally in line year to date.
- Comparable currency neutral income
before taxes outpaced organic revenue growth in the quarter
primarily due to timing of operating expenses, partially offset by
higher input costs and increased marketing investments.
- We gained value and volume share in
total NARTD beverages, sparkling beverages and still beverages in
the quarter. Unit case volume reflected 7% growth in our South
Latin business unit, 4% growth in our Latin Center business unit
and 1% growth in Mexico, partially offset by a low single-digit
decline in Brazil.
NORTH AMERICA
Percent Change Second
Quarter YTD Unit Case Volume 2
1 Sparkling Beverages 1 0 Still Beverages 4
3 Concentrate Sales 1 4 Price/Mix 4 3 Currency (1)
(1) Acquisitions & Divestitures (1)
(1) Reported Net Revenues 3 5 Organic Revenues * 5
7 Reported Income Before Taxes 28 23 Comparable CN
Income Before Taxes * 8 15 *
Organic revenue and comparable currency neutral (CN) income before
taxes are non-GAAP financial measures. Refer to the Notes and
Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
- Organic revenue growth in the quarter
was driven primarily by 4 points of positive price/mix.
Acquisitions and divestitures reflect the impact of refranchised
territories, which was mostly offset by the benefit of our expanded
distribution of Monster beverage products in North America. The
expanded distribution contributed 1 point of unit case volume
growth in both the quarter and year to date. After adjusting for
the additional days in the first quarter and the impact of acquired
volume, concentrate sales growth and unit case volume growth were
generally in line year to date.
- Comparable currency neutral income
before taxes outpaced organic revenue growth in the quarter
primarily due to lower input costs and the impact of our ongoing
productivity initiatives, partially offset by increased marketing
investments. Structural changes had a nominal net impact on income
before taxes as the impact of refranchised territories was offset
by the benefit of expanded distribution of Monster beverage
products in North America.
- We gained value share in total NARTD
beverages for the 21st consecutive quarter driven by an increase in
both the quality and quantity of our marketing investments and our
continued rational approach to pricing and disciplined price/pack
strategies. We also gained value and volume share in sparkling
beverages, still beverages, juice and juice drinks and
ready-to-drink tea. Still beverage volume growth was driven by
double-digit growth in smartwater, Gold Peak and Honest tea.
ASIA PACIFIC
Percent Change Second
Quarter YTD Unit Case Volume 3
3 Sparkling Beverages 1 3 Still Beverages 5
2 Concentrate Sales 7 5 Price/Mix (6) (2) Currency
(8) (8) Acquisitions & Divestitures 0
0 Reported Net Revenues (7) (5) Organic Revenues *
1 3 Reported Income Before Taxes (10) (7)
Comparable CN Income Before Taxes * (2)
1 * Organic revenue and comparable currency neutral (CN)
income before taxes are non-GAAP financial measures. Refer to the
Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.
- Organic revenue growth in the quarter
reflects strong concentrate sales growth, mostly offset by
unfavorable price/mix. After adjusting for the additional days in
the first quarter, concentrate sales growth lagged unit case volume
growth year to date primarily due to timing of shipments. We expect
concentrate sales and unit case sales to be generally in line for
the full year.
- Comparable currency neutral income
before taxes trailed organic revenue growth due to increased
marketing investments partially offset by the efficient management
of operating expenses.
- Unit case volume growth in the quarter
reflected 6% growth in China and 1% growth in Japan, partially
offset by a mid single-digit decline in India. China's performance
includes strong growth across our sparkling brand portfolio. In
Japan, volume growth was driven by solid performance in the tea
category. We gained value and volume share in total NARTD beverages
in both China and Japan in the quarter. In India, unseasonable
weather during the quarter drove an overall decline in the
industry.
BOTTLING INVESTMENTS
Percent Change Second
Quarter YTD Unit Case Volume 7
5 Reported Volume 5 7 Price/Mix
(3) (3) Currency (10) (9) Acquisitions & Divestitures
2 2 Reported Net Revenues (6) (3) Organic
Revenues * 1 4 Reported Income Before
Taxes (9) (17) Comparable CN Income Before Taxes * 11
14 * Organic revenue and comparable currency
neutral (CN) income before taxes are non-GAAP financial measures.
Refer to the Notes and Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Organic revenue growth in the quarter
was driven by reported volume growth, partially offset by
unfavorable price/mix attributable to channel, product and package
mix.
- Comparable currency neutral income
before taxes outpaced organic revenue growth primarily due to the
continued strong performance of our Company-owned bottling
operations in several markets including Germany, China and
Vietnam.
2015 OUTLOOK
- We estimate that the net impact of
structural items on full-year 2015 results will be a 1 point
headwind on both net revenues and income before taxes.
- We expect fluctuations in foreign
currency exchange rates to have an unfavorable impact on our
reported results in 2015. Based on current spot rates, our existing
hedge positions, and the cycling of our prior year rates, we
estimate that currency will be an approximate 6 point headwind on
net revenues, an 11 point headwind on operating income, and a 7 to
8 point headwind on income before taxes for the full year. For the
third quarter, we estimate that currency will be an approximate 7
point headwind on net revenues, a 13 point headwind on operating
income and a 10 point headwind on income before taxes.
- The underlying effective annual tax
rate on operations for 2015 is expected to be 22.5%.
- We are now targeting full-year 2015 net
share repurchases of $2.0 to $2.5 billion.
- Given the above, our full-year
comparable currency neutral growth expectations remain
unchanged.
ITEMS IMPACTING
COMPARABILITY
- For details on items impacting
comparability in the quarter, see the Reconciliation of GAAP and
Non-GAAP Financial Measures schedule.
NOTES
- All references to growth rate
percentages and share compare the results of the period to those of
the prior year comparable period.
- "Comparable currency neutral income
before taxes" is a non-GAAP financial measure that excludes or
otherwise adjusts for items impacting comparability and the impact
of changes in foreign currency exchange rates. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- "Comparable currency neutral income
before taxes (structurally adjusted)" is a non-GAAP financial
measure that excludes or otherwise adjusts for items impacting
comparability, the impact of changes in foreign currency exchange
rates and the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- "Concentrate sales" represents the
amount of concentrates, syrups, beverage bases and powders sold by,
or used in finished beverages sold by, the Company to its bottling
partners or other customers.
- "Concentrate sales/reported volume"
represents the percent change in net revenues attributable to the
increase (decrease) in concentrate sales volume for our geographic
operating segments (expressed in equivalent unit cases) after
considering the impact of structural changes. For our Bottling
Investments operating segment, this represents the percent change
in net revenues attributable to the increase (decrease) in unit
case volume after considering the impact of structural changes. Our
Bottling Investments operating segment data reflects unit case
volume growth for consolidated bottlers only and is computed on a
reported basis.
- "Organic revenue" is a non-GAAP
financial measure that excludes or otherwise adjusts for the impact
of changes in foreign currency exchange rates and acquisitions and
divestitures, as applicable. For details on these adjustments,
refer to the Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.
- "Sparkling beverages" means NARTD
beverages with carbonation, including carbonated energy drinks and
waters.
- "Still beverages" means nonalcoholic
beverages without carbonation, including noncarbonated waters,
flavored waters and enhanced waters, juices and juice drinks, teas,
coffees, sports drinks and noncarbonated energy drinks.
- All references to volume and volume
percentage changes indicate unit case volume, unless otherwise
noted. All volume percentage changes are computed based on average
daily sales, unless otherwise noted. "Unit case" means a unit of
measurement equal to 24 eight-ounce servings of finished beverage.
"Unit case volume" means the number of unit cases (or unit case
equivalents) of Company beverages directly or indirectly sold by
the Company and its bottling partners to customers.
- First quarter 2015 financial results
were impacted by six additional days, and fourth quarter 2015
financial results will be impacted by six fewer days. Unit case
volume results for the quarters are not impacted by the variance in
selling days due to the average daily sales computation referenced
above.
- The Company reports its financial
results in accordance with accounting principles generally accepted
in the United States (GAAP). However, management believes that
certain non-GAAP financial measures provide users with additional
meaningful financial information that should be considered when
assessing the Company’s ongoing performance. Management also uses
these non-GAAP financial measures in making financial, operating
and planning decisions and in evaluating the Company's performance.
Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the Company's reported results prepared
in accordance with GAAP. The Company’s non-GAAP financial
information does not represent a comprehensive basis of
accounting.
CONFERENCE CALL
We are hosting a conference call with investors and analysts to
discuss second quarter 2015 results today, July 22, 2015 at 9:30
a.m. EDT. We invite investors to listen to a live audiocast of the
conference call on the Company’s website, http://www.coca-colacompany.com in the "Investors"
section. A replay in downloadable MP3 format and a transcript of
the call will also be available within 24 hours after the audiocast
on the Company’s website. Further, the "Investors" section of the
website includes a reconciliation of non-GAAP financial measures,
which may be used periodically by management when discussing
financial results with investors and analysts, to the Company’s
results as reported under GAAP.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Income
(UNAUDITED) (In millions except per share data)
Three Months Ended
July 3, June 27, %
2015 2014
Change1
Net Operating Revenues $ 12,156 $ 12,574 (3 )
Cost of goods sold
4,748
4,819 (1 )
Gross Profit 7,408
7,755 (4 ) Selling, general and administrative expenses
4,204 4,384 (4 ) Other operating charges
669 201 233
Operating Income 2,535 3,170 (20 ) Interest income
149 144 4 Interest expense
128 107 19 Equity income
(loss) — net
200 254 (21 ) Other income (loss) — net
1,605 (77 ) —
Income Before Income Taxes 4,361 3,384 29
Income taxes
1,250 779
60
Consolidated Net Income
3,111 2,605 19 Less: Net income (loss) attributable to
noncontrolling interests
3
10 (76 )
Net Income Attributable to
Shareowners of The Coca-Cola Company $
3,108 $ 2,595 20
Diluted Net Income Per Share2
$ 0.71 $ 0.58
21
Average Shares Outstanding —
Diluted2 4,408
4,454 1 Certain growth rates may
not recalculate using the rounded dollar amounts provided. 2 For
the three months ended July 3, 2015 and June 27, 2014, basic net
income per share was $0.71 for 2015 and $0.59 for 2014 based on
average shares outstanding — basic of 4,355 million for 2015 and
4,391 million for 2014. Basic net income per share and diluted net
income per share are calculated based on net income attributable to
shareowners of The Coca-Cola Company.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Income
(UNAUDITED) (In millions except per share data)
Six Months Ended
July 3, June 27, %
2015 2014
Change1
Net Operating Revenues $ 22,867 $ 23,150 (1 )
Cost of goods sold
8,851
8,902 (1 )
Gross Profit 14,016
14,248 (2 ) Selling, general and administrative expenses
8,283 8,373 (1 ) Other operating charges
902 329 174
Operating Income 4,831 5,546 (13 ) Interest income
304 267 14 Interest expense
575 231 149 Equity income
(loss) — net
202 325 (38 ) Other income (loss) — net
1,580 (318 ) —
Income Before Income Taxes 6,342 5,589 13
Income taxes
1,665 1,358
23
Consolidated Net Income
4,677 4,231 11 Less: Net income (loss) attributable to
noncontrolling interests
12
17 (28 )
Net Income Attributable to
Shareowners of The Coca-Cola Company $
4,665 $ 4,214 11
Diluted Net Income Per Share2
$ 1.06 $ 0.95
12
Average Shares Outstanding —
Diluted2 4,415
4,459 1 Certain growth rates may
not recalculate using the rounded dollar amounts provided. 2 For
the six months ended July 3, 2015 and June 27, 2014, basic net
income per share was $1.07 for 2015 and $0.96 for 2014 based on
average shares outstanding — basic of 4,360 million for 2015 and
4,396 million for 2014. Basic net income per share and diluted net
income per share are calculated based on net income attributable to
shareowners of The Coca-Cola Company.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(UNAUDITED) (In millions except par value)
July 3, December 31,
2015 2014
ASSETS
Current Assets Cash and cash equivalents
$
8,805 $ 8,958 Short-term investments
8,709 9,052
Total Cash, Cash
Equivalents and Short-Term Investments
17,514 18,010 Marketable
securities
3,433 3,665
Trade accounts receivable, less allowances
of $363 and $331, respectively
4,976 4,466 Inventories
3,224 3,100 Prepaid expenses
and other assets
3,159 3,066 Assets held for sale
497 679
Total Current
Assets 32,803 32,986
Equity Method Investments 12,771 9,947
Other Investments 3,002 3,678
Other Assets
4,517 4,407
Property, Plant and Equipment — net
14,365 14,633
Trademarks With Indefinite Lives
6,085 6,533
Bottlers' Franchise Rights With Indefinite
Lives 7,313 6,689
Goodwill 11,706 12,100
Other Intangible Assets 976
1,050
Total Assets
$ 93,538 $ 92,023
LIABILITIES AND
EQUITY
Current Liabilities Accounts payable and accrued expenses
$ 9,997 $ 9,234 Loans and notes payable
16,306
19,130 Current maturities of long-term debt
2,031 3,552
Accrued income taxes
437 400 Liabilities held for sale
81 58
Total
Current Liabilities 28,852
32,374
Long-Term Debt 25,977 19,063
Other Liabilities 4,283 4,389
Deferred Income
Taxes 5,785 5,636
The Coca-Cola Company Shareowners'
Equity Common stock, $0.25 par value; Authorized — 11,200
shares;Issued — 7,040 and 7,040 shares, respectively
1,760
1,760 Capital surplus
13,486 13,154 Reinvested earnings
65,196 63,408 Accumulated other comprehensive income (loss)
(8,736 ) (5,777 )
Treasury stock, at cost — 2,691 and 2,674
shares, respectively
(43,288 ) (42,225 )
Equity Attributable to Shareowners of The Coca-Cola Company
28,418 30,320
Equity Attributable to Noncontrolling
Interests 223 241
Total Equity 28,641
30,561
Total Liabilities and Equity
$ 93,538 $ 92,023
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(UNAUDITED) (In millions) Six
Months Ended July 3, June 27,
2015 2014
Operating Activities Consolidated net income
$
4,677 $ 4,231 Depreciation and amortization
961 967
Stock-based compensation expense
117 112 Deferred income
taxes
643 (67 ) Equity (income) loss — net of dividends
(44 ) (124 ) Foreign currency adjustments
(144
) 260 Significant (gains) losses on sales of assets — net
(1,346 ) 140 Other operating charges
609 120
Other items
609 6 Net change in operating assets and
liabilities
(964 ) (1,175 ) Net
cash provided by operating activities
5,118
4,470
Investing Activities Purchases of
investments
(6,981 ) (7,895 ) Proceeds from disposals
of investments
6,316 6,192 Acquisitions of businesses,
equity method investments and nonmarketable securities
(2,284 ) (332 )
Proceeds from disposals of businesses,
equity method investments and nonmarketable securities
413 45 Purchases of property, plant and equipment
(1,114 ) (1,030 ) Proceeds from disposals of
property, plant and equipment
33 134 Other investing
activities
(139 ) (242 ) Net
cash provided by (used in) investing activities
(3,756 ) (3,128 )
Financing
Activities Issuances of debt
24,878 21,267 Payments of
debt
(22,358 ) (18,122 ) Issuances of stock
410 650 Purchases of stock for treasury
(1,298
) (1,953 ) Dividends
(2,877 ) (1,342 ) Other
financing activities
115 (438 )
Net cash provided by (used in) financing activities
(1,130 ) 62
Effect of
Exchange Rate Changes on Cash and Cash Equivalents
(385 ) (200 )
Cash and Cash
Equivalents Net increase (decrease) during the period
(153 ) 1,204 Balance at beginning of period
8,958 10,414 Balance at end of
period
$ 8,805 $ 11,618
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Three Months
Ended
Net Operating Revenues 1
Operating Income (Loss) Income (Loss)
Before Income Taxes July 3, 2015
June 27, 2014
% Fav. /(Unfav.)
July 3, 2015 June 27, 2014
% Fav. /(Unfav.)
July 3, 2015 June 27, 2014
% Fav. /(Unfav.)
Eurasia & Africa
$ 658 $ 732 (10 )
$ 275 $ 290 (6 )
$ 287
$ 313 (8 ) Europe
1,435 1,569 (9 )
836 892 (6 )
843 904 (7 ) Latin America
973
1,118 (13 )
525 633 (17 )
526 636 (17 ) North America
5,917 5,717 3
887 827 7
874 682 28 Asia
Pacific
1,601 1,723 (7 )
761 846 (10 )
766 851
(10 ) Bottling Investments
1,930 2,060 (6 )
31 38 (16
)
231 254 (9 ) Corporate
25 50 (50 )
(780
) (356 ) (120 )
834 (256 ) — Eliminations
(383 ) (395 ) 3
— —
—
— —
— Consolidated
$
12,156 $ 12,574 (3
)
$ 2,535 $ 3,170
(20 )
$ 4,361
$ 3,384 29 Note:
Certain growth rates may not recalculate using the rounded dollar
amounts provided. 1 During the three months ended
July 3, 2015, intersegment revenues were $7 million for Eurasia and
Africa, $151 million for Europe, $18 million for Latin America, $6
million for North America, $188 million for Asia Pacific and $13
million for Bottling Investments. During the three months ended
June 27, 2014, intersegment revenues were $184 million for Europe,
$13 million for Latin America, $7 million for North America, $173
million for Asia Pacific and $18 million for Bottling Investments.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Six Months
Ended
Net Operating Revenues 1
Operating Income (Loss) Income (Loss) Before
Income Taxes July 3, 2015 June 27,
2014
% Fav. /(Unfav.)
July 3, 2015 June 27, 2014
% Fav. /(Unfav.)
July 3, 2015 June 27, 2014
% Fav. /(Unfav.)
Eurasia & Africa
$ 1,296 $ 1,390 (7
)
$ 554 $ 593 (7 )
$ 573
$ 621 (8 ) Europe
2,647 2,862 (8 )
1,552 1,611 (4 )
1,567 1,635 (4 ) Latin America
2,039 2,229 (8 )
1,103 1,301 (15 )
1,114 1,303
(15 ) North America
11,018 10,510 5
1,398 1,255 11
1,361 1,107 23 Asia Pacific
2,886 3,038 (5 )
1,305 1,403 (7 )
1,314 1,411 (7 ) Bottling
Investments
3,608 3,733 (3 )
45 12 283
230 276
(17 ) Corporate
65 83 (23 )
(1,126 ) (629 )
(79 )
183 (764 ) — Eliminations
(692
) (695 ) 1
— — —
— — —
Consolidated
$ 22,867
$ 23,150 (1 )
$ 4,831 $ 5,546
(13 )
$ 6,342 $
5,589 13 Note: Certain growth rates may
not recalculate using the rounded dollar amounts provided. 1
During the six months ended July 3, 2015, intersegment
revenues were $7 million for Eurasia and Africa, $295 million for
Europe, $37 million for Latin America, $10 million for North
America, $317 million for Asia Pacific and $26 million for Bottling
Investments. During the six months ended June 27, 2014,
intersegment revenues were $343 million for Europe, $30 million for
Latin America, $10 million for North America, $278 million for Asia
Pacific and $34 million for Bottling Investments.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States
("GAAP" or referred to herein as "reported"). However, management
believes that certain non-GAAP financial measures provide users
with additional meaningful financial information that should be
considered when assessing our ongoing performance. Management also
uses these non-GAAP financial measures in making financial,
operating and planning decisions and in evaluating the Company's
performance. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company’s reported
results prepared in accordance with GAAP. Our non-GAAP financial
information does not represent a comprehensive basis of
accounting.
ITEMS IMPACTING COMPARABILITY
The following information is provided to give qualitative and
quantitative information related to items impacting comparability.
Items impacting comparability are not defined terms within GAAP.
Therefore, our non-GAAP financial information may not be comparable
to similarly titled measures reported by other companies. We
determine which items to consider as "items impacting
comparability" based on how management views our business; makes
financial, operating and planning decisions; and evaluates the
Company's ongoing performance. Items such as charges, gains and
accounting changes which are viewed by management as impacting only
the current period or the comparable period, but not both, or as
relating to different and unrelated underlying activities or events
across comparable periods, are generally considered "items
impacting comparability". In addition, we provide the impact that
changes in foreign currency exchange rates had on our financial
results ("currency neutral").
Asset Impairments and Restructuring
Restructuring
During the three and six months ended July 3, 2015, the
Company recorded charges of $94 million and $129 million,
respectively. The Company also recorded charges of $66 million
and $108 million during the three and six months ended
June 27, 2014, respectively. These charges were related to the
integration of our German bottling and distribution operations.
Productivity and Reinvestment
During the three and six months ended July 3, 2015, the
Company recorded charges of $92 million and $182 million,
respectively, related to our productivity and reinvestment program.
The Company also recorded charges of $89 million and
$175 million during the three and six months ended
June 27, 2014, respectively. These productivity and
reinvestment initiatives are focused on four key areas:
restructuring the Company's global supply chain, including
manufacturing in North America; implementing zero-based budgeting
across the organization; streamlining and simplifying the Company's
operating model; and further driving increased discipline and
efficiency in direct marketing investments. The savings realized
from the program will enable the Company to fund marketing
initiatives and innovation required to deliver sustainable net
revenue growth. The savings will also support margin expansion and
increased returns on invested capital over time.
Equity Investees
During the three and six months ended July 3, 2015, the
Company recorded net charges of $9 million and $82 million,
respectively. During the three and six months ended June 27,
2014, the Company recorded net charges of $6 million and
$12 million, respectively. These amounts represent the
Company’s proportionate share of unusual or infrequent items
recorded by certain of our equity method investees.
Transaction Gains/Losses
During the three and six months ended July 3, 2015, the
Company recorded a net gain of $1,402 million as a result of our
transaction with Monster Beverage Corporation ("Monster"),
primarily due to the difference in the recorded carrying value of
the assets transferred, including an allocated portion of goodwill,
compared to the value of the total assets and business acquired.
This net gain was recorded in the line item other income (loss) —
net in our condensed consolidated statement of income.
Additionally, under the terms of this transaction, the Company is
required to discontinue selling energy products under certain
trademarks, including one trademark in the glacéau portfolio. As a
result, the Company recognized an impairment charge of
$380 million in the line item other operating charges in our
condensed consolidated statement of income upon the closing of the
transaction with Monster, primarily related to the discontinuation
of the energy products in the glacéau portfolio.
During the three and six months ended July 3, 2015, the
Company recorded charges of $12 million and $33 million,
respectively. The Company also recorded charges of $140 million
during the three and six months ended June 27, 2014. These
charges were primarily due to the derecognition of intangible
assets relating to the refranchising of territories in North
America to certain of its unconsolidated bottling partners.
In the fourth quarter of 2014, the owners of the majority
interest of a Brazilian bottler exercised their option to acquire
from us a 10 percent interest in the entity's outstanding shares
resulting in our recognizing an estimated loss of $32 million due
to the exercise price being lower than our carrying value. The
transaction closed in January 2015, and the Company recorded an
additional loss of $6 million during the six months ended July 3,
2015, calculated based on the final option price. Also during the
six months ended July 3, 2015, the Company recorded a loss of $19
million on our previously held investment in a South African
bottler, which had been accounted for under the equity method of
accounting prior to our acquisition of the bottler in February
2015.
Other Items
Economic (Nondesignated) Hedges
The Company uses derivatives as economic hedges primarily to
mitigate the price risk associated with the purchase of materials
used in the manufacturing process as well as the purchase of
vehicle fuel. Although these derivatives were not designated and/or
did not qualify for hedge accounting, they are effective economic
hedges. The changes in fair values of these economic hedges are
immediately recognized into earnings.
The Company excludes the net impact of mark-to-market
adjustments for outstanding hedges and realized gains/losses for
settled hedges from our non-GAAP financial information until the
period in which the underlying exposure being hedged impacts our
condensed consolidated statement of income. We believe this
adjustment provides meaningful information related to the impact of
our economic hedging activities. During the three months ended July
3, 2015 and June 27, 2014, the net impact of the Company's
adjustment related to our economic hedging activities described
above resulted in decreases of $56 million and $54 million,
respectively, to our non-GAAP income before income taxes. During
the six months ended July 3, 2015 and June 27, 2014, the net impact
of the Company's adjustment related to our economic hedging
activities described above resulted in decreases of $11 million and
$99 million, respectively, to our non-GAAP income before
income taxes.
Donation to The Coca-Cola Foundation
During the three and six months ended July 3, 2015, the
Company recorded a charge of $100 million due to a contribution
that was made to The Coca-Cola Foundation, which was recorded in
the line item other operating charges in our condensed consolidated
statement of income.
Early Extinguishment of Long-Term Debt
During the six months ended July 3, 2015, the Company recorded
charges of $320 million due to the early extinguishment of certain
long-term debt, which were recorded in the line item interest
expense in our condensed consolidated statement of income.
Hyperinflationary Economies
During the six months ended July 3, 2015, the Company recorded
net charges of $135 million related to our Venezuelan operations.
These charges were a result of the remeasurement of the net
monetary assets of our Venezuelan subsidiary using the SIMADI
exchange rate, an impairment of a Venezuelan trademark due to
higher exchange rates, and a write-down of receivables from our
bottling partner in Venezuela. The write-down was recorded as a
result of the continued lack of liquidity and our revised
assessment of the U.S. dollar value we expect to realize upon the
conversion of the Venezuelan bolivar into U.S. dollars by our
bottling partner to pay our receivables.
During the three and six months ended June 27, 2014, the
Company recorded charges of $21 million and $268 million,
respectively, related to the devaluation of the Venezuelan bolivar,
including a write-down of receivables from our bottling partner in
Venezuela as well as our proportionate share of the charge incurred
by our bottling partner in Venezuela, an equity method
investee.
Restructuring and Transitioning Russian Juice Operations
During the three and six months ended June 27, 2014, the
Company recorded a loss of $25 million related to
restructuring and transitioning its Russian juice operations to an
existing joint venture with an unconsolidated bottling partner.
Certain Tax Matters
During the three months ended July 3, 2015, the Company
recorded a net tax charge of $16 million related to amounts
required to be recorded for changes to our uncertain tax positions,
including interest and penalties. During the three and six months
ended June 27, 2014, the Company recorded net tax charges of
$26 million and $31 million, respectively, related to
amounts required to be recorded for changes to our uncertain tax
positions, including interest and penalties.
CURRENCY NEUTRAL
Management evaluates the operating performance of our Company
and our international subsidiaries on a currency neutral basis. We
determine our currency neutral operating results by dividing or
multiplying, as appropriate, our current period actual U.S. dollar
operating results, normalizing for certain structural items in
hyperinflationary economies, by the current period actual exchange
rates (that include the impact of current period currency hedging
activities), to derive our current period local currency operating
results. We then multiply or divide, as appropriate, the derived
current period local currency operating results by the foreign
currency exchange rates (that also include the impact of the
comparable prior period currency hedging activities) used to
translate the Company's financial statements in the comparable
prior year period to determine what the current period U.S. dollar
operating results would have been if the foreign currency exchange
rates had not changed from the comparable prior year period.
ORGANIC REVENUE
Organic revenue is a non-GAAP financial measure that excludes or
otherwise adjusts for the impact of changes in foreign currency
exchange rates and acquisitions and divestitures (including
structural changes), as applicable. The adjustments related to
acquisitions and divestitures for the three and six months ended
July 3, 2015 and June 27, 2014 consisted entirely of the structural
changes discussed below.
STRUCTURAL CHANGES
Structural changes generally refer to acquisitions or
dispositions of bottling, distribution or canning operations and
consolidation or deconsolidation of bottling and distribution
entities for accounting purposes. In 2015, the Company sold its
global energy drink business to Monster; acquired Monster's
non-energy drink business; acquired an equity interest in Monster;
amended its current distribution coordination agreements with
Monster to expand into additional territories; refranchised
additional territories in North America to certain of its
unconsolidated bottling partners; acquired a South African bottler;
and sold a 10 percent interest in a Brazilian bottler. In 2014, the
Company refranchised territories in North America to certain of its
unconsolidated bottling partners; changed its process of buying and
selling recyclable materials in North America; was impacted by a
new provision enacted by the Venezuelan government which imposes a
maximum threshold for profit margins; acquired bottling operations
in Sri Lanka and Nepal; and restructured and transitioned its
Russian juice operations to an existing joint venture with an
unconsolidated bottling partner. Accordingly, these activities have
been included as structural items in our analysis of the impact of
these changes on certain line items in our condensed consolidated
statements of income.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Three Months
Ended July 3, 2015 Selling, Net Cost of general and Other
operating goods Gross Gross administrative operating Operating
Operating revenues sold profit
margin expenses charges
income margin
Reported (GAAP) $
12,156 $ 4,748 $ 7,408
60.9 % $ 4,204 $ 669
$ 2,535 20.9 % Items Impacting
Comparability: Asset Impairments/Restructuring — — — — (94 ) 94
Productivity & Reinvestment — — — — (92 ) 92 Equity Investees —
— — — — — Transaction Gains/Losses — — — — (383 ) 383 Other Items
(7 ) 24 (31 ) 19 (100 ) 50 Certain Tax Matters — — —
— — — After Considering Items
(Non-GAAP) $ 12,149 $ 4,772
$ 7,377 60.7 % $
4,223 $ — $ 3,154
26.0 %
Three Months Ended June 27, 2014
Selling, Net Cost of general and Other operating goods Gross Gross
administrative operating Operating Operating revenues
sold profit margin expenses charges
income margin
Reported (GAAP) $
12,574 $ 4,819 $ 7,755
61.7 % $ 4,384 $ 201
$ 3,170 25.2 % Items Impacting
Comparability: Asset Impairments/Restructuring — — — — (66 ) 66
Productivity & Reinvestment — — — — (89 ) 89 Equity Investees —
— — — — — Transaction Gains/Losses — — — — — — Other Items (28 ) 13
(41 ) 4 (46 ) 1 Certain Tax Matters — — — —
— — After Considering Items (Non-GAAP)
$ 12,546 $ 4,832 $ 7,714
61.5 % $ 4,388
$ — $ 3,326 26.5 %
Selling, Net Cost of general and Other operating goods Gross
administrative operating Operating revenues sold
profit expenses charges income
% Change — Reported (GAAP) (3) (1)
(4) (4) 233 (20) % Currency Impact (7)
(4) (9) (7) — (11) % Change — Currency Neutral Reported 4
3 4 3 — (9)
% Change — After Considering Items
(Non-GAAP)
(3) (1) (4) (4) — (5)
% Currency Impact After Considering Items
(Non-GAAP)
(7) (4) (9) (7) — (11) % Change — Currency Neutral After
Considering Items (Non-GAAP) 4 3 4
3 — 6
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Three Months Ended July 3, 2015
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare1
Reported (GAAP) $ 128 $ 200
$ 1,605 $ 4,361 $ 1,250
28.7 % $ 3 $ 3,108
$ 0.71 Items Impacting Comparability: Asset
Impairments/Restructuring — — — 94 — — 94 0.02 Productivity &
Reinvestment — — — 92 33 — 59 0.01 Equity Investees — 9 — 9 — — 9 —
Transaction Gains/Losses — — (1,390 ) (1,007 ) (474 ) — (533 )
(0.12 ) Other Items — — (6 ) 44 16 — 28 0.01 Certain Tax Matters —
— — — (16 ) — 16 —
After Considering Items (Non-GAAP) $ 128
$ 209 $ 209 $ 3,593
$ 809 22.5 %
$ 3 $ 2,781
$ 0.63
Three Months Ended June 27, 2014
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 107 $ 254
$ (77 ) $ 3,384 $
779 23.0 % $ 10 $
2,595 $ 0.58 Items Impacting Comparability:
Asset Impairments/Restructuring — — — 66 — — 66 0.01 Productivity
& Reinvestment — — — 89 34 — 55 0.01 Equity Investees — 6 — 6 1
— 5 — Transaction Gains/Losses — — 140 140 51 — 89 0.02 Other Items
— — (9 ) (8 ) (25 ) — 17 — Certain Tax Matters — — —
— (26 ) — 26 0.01 After
Considering Items (Non-GAAP) $ 107 $
260 $ 54 $ 3,677
$ 814 22.2 % $ 10
$ 2,853 $ 0.64
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) 19 (21) —
29 60 (76) 20 21 % Change —
After Considering Items (Non-GAAP) 19 (20)
284 (2) (1)
(75) (3) (2) Note:
Certain columns may not add due to rounding. Certain growth rates
may not recalculate using the rounded dollar amounts provided. 1
4,408 million average shares outstanding — diluted 2 4,454
million average shares outstanding — diluted
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Six
Months Ended July 3, 2015
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 22,867 $ 8,851
$ 14,016 61.3 % $ 8,283
$ 902 $ 4,831 21.1 %
Items Impacting Comparability: Asset Impairments/Restructuring — —
— — (129 ) 129 Productivity & Reinvestment — — — — (182 ) 182
Equity Investees — — — — — — Transaction Gains/Losses — — — — (383
) 383 Other Items (15 ) 27 (42 ) 29 (208 ) 137 Certain Tax Matters
— — — — — — After
Considering Items (Non-GAAP) $ 22,852 $
8,878 $ 13,974 61.1 %
$ 8,312 $ —
$ 5,662 24.8 %
Six
Months Ended June 27, 2014
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 23,150 $ 8,902
$ 14,248 61.5 % $ 8,373
$ 329 $ 5,546 24.0 %
Items Impacting Comparability: Asset Impairments/Restructuring — —
— — (108 ) 108 Productivity & Reinvestment — — — — (175 ) 175
Equity Investees — — — — — — Transaction Gains/Losses — — — — — —
Other Items (20 ) 69 (89 ) 1 (46 ) (44 ) Certain Tax Matters —
— — — — — After
Considering Items (Non-GAAP) $ 23,130 $
8,971 $ 14,159 61.2 %
$ 8,374 $ —
$ 5,785 25.0 %
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
% Change — Reported (GAAP) (1 )
(1 ) (2 ) (1 ) 174
(13 ) % Currency Impact (7 ) (5 ) (8 ) (6 ) — (10 ) %
Change — Currency Neutral Reported 5 4
6 5 —
(3 ) % Change — After
Considering Items
(Non-GAAP)
(1 ) (1 ) (1 ) (1 ) — (2 ) % Currency Impact After Considering
Items (Non-GAAP) (7 ) (4 ) (8 ) (6 ) — (10 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) 5
3 6 6
— 8
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Six Months Ended July 3, 2015
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare1
Reported (GAAP) $ 575 $ 202
$ 1,580 $ 6,342 $ 1,665
26.3 % $ 12 $ 4,665
$ 1.06 Items Impacting Comparability: Asset
Impairments/Restructuring — — — 129 — — 129 0.03 Productivity &
Reinvestment — — — 182 75 — 107 0.02 Equity Investees — 82 — 82 6 —
76 0.02 Transaction Gains/Losses — — (1,344 ) (961 ) (464 ) — (497
) (0.11 ) Other Items (320 ) — 88 545 140 — 405 0.09 Certain Tax
Matters — — — — — —
— — After Considering Items (Non-GAAP)
$ 255 $ 284 $ 324
$ 6,319 $ 1,422
22.5 % $ 12 $
4,885 $ 1.11
Six Months Ended
June 27, 2014
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 231 $ 325
$ (318 ) $ 5,589 $
1,358 24.3 % $ 17 $
4,214 $ 0.95 Items Impacting Comparability:
Asset Impairments/Restructuring — — — 108 — — 108 0.02 Productivity
& Reinvestment — — — 175 66 — 109 0.02 Equity Investees — 12 —
12 2 — 10 — Transaction Gains/Losses — — 140 140 51 — 89 0.02 Other
Items — 21 217 194 (47 ) — 241 0.05 Certain Tax Matters —
— — — (31 ) — 31 0.01
After Considering Items (Non-GAAP) $ 231
$ 358 $ 39
$ 6,218 $ 1,399 22.5 %
$ 17 $ 4,802
$ 1.08
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) 149 (38) —
13 23 (28) 11 12 % Change —
After Considering Items (Non-GAAP) 10 (21)
736 2 2
(27) 2 3
Note: Certain columns may not add due to rounding. Certain growth
rates may not recalculate using the rounded dollar amounts
provided. 1 4,415 million average shares outstanding —
diluted 2 4,459 million average shares outstanding — diluted
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Income Before
Income Taxes and Diluted Net Income Per Share:
Three Months Ended July 3, 2015 Income before Diluted net
income income taxes per share
% Change — Reported
(GAAP) 29 21 % Currency Impact (6 ) (5 ) % Change
— Currency Neutral Reported 34 26 % Structural Impact 1 N/A %
Change — Currency Neutral Reported and Adjusted for Structural
Impact 33 N/A % Change — After
Considering Items (Non-GAAP) (2 ) (2 ) % Currency Impact After
Considering Items (Non-GAAP) (6 ) (6 ) % Change — Currency Neutral
After Considering Items (Non-GAAP) 3 4 % Structural Impact After
Considering Items (Non-GAAP) 0 N/A % Change — Currency Neutral
After Considering Items and Adjusted for Structural Impact
(Non-GAAP) 3 N/A
Six
Months Ended July 3, 2015 Income before Diluted net income
income taxes per share
% Change — Reported
(GAAP) 13 12 % Currency Impact (2 ) (2 ) % Change
— Currency Neutral Reported 15 14 % Structural Impact 1 N/A %
Change — Currency Neutral Reported and Adjusted for Structural
Impact 15 N/A % Change — After
Considering Items (Non-GAAP) 2 3 % Currency Impact After
Considering Items (Non-GAAP) (6 ) (6 ) % Change — Currency Neutral
After Considering Items (Non-GAAP) 7 8 % Structural Impact After
Considering Items (Non-GAAP) 0 N/A % Change — Currency Neutral
After Considering Items and Adjusted for Structural Impact
(Non-GAAP) 7 N/A
Note: Certain columns may not add due to rounding.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Net Operating
Revenues by Segment:
Three Months Ended July 3, 2015 Eurasia & Latin
North Asia Bottling Africa Europe America
America Pacific Investments Corporate
Eliminations Consolidated
Reported
(GAAP) $ 658 $ 1,435 $
973 $ 5,917 $ 1,601 $
1,930 $ 25 $ (383 )
$ 12,156 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — — — — — Productivity &
Reinvestment — — — — — — — — — Equity Investees — — — — — — — — —
Transaction Gains/Losses — — — — — — — — — Other Items —
— — (11 ) —
— 4 — (7 ) After
Considering Items (Non-GAAP) $ 658 $ 1,435
$ 973 $ 5,906 $ 1,601
$ 1,930 $ 29 $ (383 )
$ 12,149
Three Months Ended June 27,
2014 Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific
Investments Corporate Eliminations
Consolidated
Reported (GAAP) $ 732
$ 1,569 $ 1,118 $ 5,717
$ 1,723 $ 2,060 $ 50
$ (395 ) $ 12,574 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
— — — — Productivity & Reinvestment — — — — — — — — — Equity
Investees — — — — — — — — — Transaction Gains/Losses — — — — — — —
— — Other Items — — — (2
) — (24 ) (2 ) —
(28 ) After Considering Items (Non-GAAP) $ 732
$ 1,569 $ 1,118 $ 5,715 $
1,723 $ 2,036 $ 48 $ (395
) $ 12,546 Eurasia & Latin North Asia
Bottling Africa Europe America America
Pacific Investments Corporate
Eliminations Consolidated
% Change — Reported
(GAAP) (10) (9) (13) 3 (7)
(6) (50) — (3) % Currency Impact (13)
(11) (24) (1) (8) (10) (21) — (7) % Change — Currency Neutral
Reported 3 2 11 4 1 4 (29) — 4 % Acquisition & Divestiture
Adjustments 0 (1) 0 (1) 0 2 3 — 0 % Change — Organic Revenues
(Non-GAAP) 4 3 11 5 1 1
(32) — 4 % Change — After
Considering Items (Non-GAAP) (10) (9) (13) 3 (7) (5) (39) — (3) %
Currency Impact After Considering Items (Non-GAAP) (13) (11) (24)
(1) (8) (10) (9) — (7) % Change — Currency Neutral After
Considering Items (Non-GAAP) 3 2 11 4
1 5 (30) — 4
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Net Operating
Revenues by Segment:
Six Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 1,296 $ 2,647
$ 2,039 $ 11,018 $ 2,886
$ 3,608 $ 65 $ (692
) $ 22,867 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Equity Investees — — — — — — —
— — Transaction Gains/Losses — — — — — — — — — Other Items —
— — (17 ) —
— 2 — (15
)
After Considering Items (Non-GAAP) $ 1,296 $
2,647 $ 2,039 $ 11,001
$ 2,886 $ 3,608 $ 67
$ (692 ) $ 22,852
Six Months
Ended June 27, 2014
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 1,390 $ 2,862
$ 2,229 $ 10,510 $ 3,038
$ 3,733 $ 83 $ (695
) $ 23,150 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Equity Investees — — — — — — —
— — Transaction Gains/Losses — — — — — — — — — Other Items —
— — — —
(24 ) 4 —
(20
)
After Considering Items (Non-GAAP) $ 1,390 $
2,862 $ 2,229 $ 10,510
$ 3,038 $ 3,709 $ 87
$ (695 ) $ 23,130
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
% Change — Reported (GAAP) (7 ) (8
) (8 ) 5 (5 ) (3
) (23 ) — (1 ) % Currency
Impact (12 ) (12 ) (19 ) (1 ) (8 ) (9 ) (5 ) — (7 ) % Change —
Currency Neutral Reported 5 4 11 6 3 6 (17 ) — 5 % Acquisition
& Divestiture Adjustments 0 0 0 (1 ) 0 2 2 — 0 % Change —
Organic Revenues (Non-GAAP) 5 4
11 7 3 4
(19 ) — 6 % Change —
After Considering Items (Non-GAAP) (7 ) (8 ) (8 ) 5 (5 ) (3 ) (24 )
— (1 ) % Currency Impact After Considering Items (Non-GAAP) (12 )
(12 ) (19 ) (1 ) (8 ) (9 ) (7 ) — (7 ) % Change — Currency Neutral
After Considering Items (Non-GAAP) 5 4
11 6 3 6
(17 ) — 5
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Operating Income
(Loss) by Segment:
Three Months Ended July 3, 2015 Eurasia & Latin North
Asia Bottling Africa Europe America
America Pacific Investments Corporate
Consolidated
Reported (GAAP) $ 275 $
836 $ 525 $ 887 $
761 $ 31 $ (780 )
$ 2,535 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 94 — 94 Productivity &
Reinvestment 3 — 3 79 2 1 4 92 Equity Investees — — — — — — — —
Transaction Gains/Losses — — — — — — 383 383 Other Items —
— — (57 ) —
5 102 50 After
Considering Items (Non-GAAP) $ 278 $ 836
$ 528 $ 909 $ 763
$ 131 $ (291 ) $ 3,154
Three Months Ended June 27, 2014 Eurasia & Latin
North Asia Bottling Africa Europe America
America Pacific Investments Corporate
Consolidated
Reported (GAAP) $ 290
$ 892 $ 633 $ 827
$ 846 $ 38 $ (356
) $ 3,170 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 66 — 66 Productivity &
Reinvestment — — — 58 1 — 30 89 Equity Investees — — — — — — — —
Transaction Gains/Losses — — — — — — — — Other Items —
— — (39 ) —
21 19 1 After Considering
Items (Non-GAAP) $ 290 $ 892 $
633 $ 846 $ 847 $ 125
$ (307 ) $ 3,326 Eurasia
& Latin North Asia Bottling Africa Europe
America America Pacific Investments
Corporate Consolidated
% Change — Reported (GAAP)
(6 ) (6 ) (17 ) 7
(10 ) (16 ) (120 )
(20 ) % Currency Impact (17 ) (5 ) (30 ) (1 ) (8 ) 16
(1 ) (11 ) % Change — Currency Neutral Reported 12
(2 ) 13 8 (2 ) (32
) (119 ) (9 ) % Change — After Considering
Items (Non-GAAP) (5 ) (6 ) (17 ) 7 (10 ) 5 5 (5 ) % Currency Impact
After Considering Items (Non-GAAP) (17 ) (5 ) (30 ) (1 ) (8 ) (14 )
1 (11 ) % Change — Currency Neutral After Considering Items
(Non-GAAP) 13 (2 ) 13 8
(2 ) 19 4 6
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In
millions)
Operating Income (Loss) by Segment:
Six
Months Ended July 3, 2015 Eurasia & Latin North Asia
Bottling Africa Europe America America
Pacific Investments Corporate
Consolidated
Reported (GAAP) $ 554 $
1,552 $ 1,103 $ 1,398 $
1,305 $ 45 $ (1,126 )
$ 4,831 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 129 — 129 Productivity &
Reinvestment 15 (11 ) 3 154 (3 ) — 24 182 Equity Investees — — — —
— — — — Transaction Gains/Losses — — — — — — 383 383 Other Items —
— 33 (75 ) 2
2 175 137 After
Considering Items (Non-GAAP) $ 569 $ 1,541
$ 1,139 $ 1,477 $ 1,304
$ 176 $ (544 ) $ 5,662
Six Months Ended June 27, 2014 Eurasia &
Latin North Asia Bottling Africa Europe
America America Pacific Investments
Corporate Consolidated
Reported (GAAP) $
593 $ 1,611 $ 1,301 $
1,255 $ 1,403 $ 12 $
(629 ) $ 5,546 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 108 — 108
Productivity & Reinvestment — — — 133 8 — 34 175 Equity
Investees — — — — — — — — Transaction Gains/Losses — — — — — — — —
Other Items — — — (92 )
— 20 28 (44 )
After Considering Items (Non-GAAP) $ 593
$ 1,611 $ 1,301 $ 1,296
$ 1,411 $ 140 $ (567 )
$ 5,785 Eurasia & Latin North Asia
Bottling Africa Europe America America
Pacific Investments Corporate
Consolidated
% Change — Reported (GAAP) (7 )
(4 ) (15 ) 11 (7 )
283 (79 ) (13 ) % Currency
Impact (12 ) (5 ) (21 ) 0 (8 ) 59 1 (10 ) % Change — Currency
Neutral Reported 5 1 6
12 1 224 (80 ) (3
) % Change — After Considering Items (Non-GAAP) (4 ) (4 )
(12 ) 14 (8 ) 26 4 (2 ) % Currency Impact After Considering Items
(Non-GAAP) (12 ) (5 ) (21 ) 0 (8 ) (17 ) 0 (10 ) % Change —
Currency Neutral After Considering Items (Non-GAAP) 8
1 9 14 1 43
4 8
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Income (Loss)
Before Income Taxes by Segment:
Three Months Ended July 3, 2015 Eurasia
& Latin North Asia Bottling Africa Europe
America America Pacific
Investments Corporate
Consolidated
Reported (GAAP) $ 287 $
843 $ 526 $ 874 $
766 $ 231 $ 834 $
4,361 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 94 — 94 Productivity &
Reinvestment 3 — 3 79 2 1 4 92 Equity Investees — 5 — — — 4 — 9
Transaction Gains/Losses — — — 12 — — (1,019 ) (1,007 ) Other Items
— — —
(57 ) — 5
96 44 After Considering
Items (Non-GAAP) $ 290 $ 848
$ 529 $ 908
$ 768 $ 335 $ (85 )
$ 3,593
Three Months Ended
June 27, 2014 Eurasia & Latin North Asia Bottling
Africa Europe America
America Pacific Investments
Corporate Consolidated
Reported (GAAP)
$ 313 $ 904 $ 636
$ 682 $ 851 $ 254
$ (256 ) $ 3,384 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 66 — 66
Productivity & Reinvestment — — — 58 1 — 30 89 Equity Investees
— — — — — 6 — 6 Transaction Gains/Losses — — — 140 — — — 140 Other
Items — — —
(39 ) — 21
10 (8 ) After Considering
Items (Non-GAAP) $ 313 $ 904
$ 636 $ 841
$ 852 $ 347 $ (216 )
$ 3,677 Eurasia &
Africa Europe Latin America
North America Asia Pacific
Bottling Investments Corporate
Consolidated
% Change — Reported (GAAP) (8 )
(7 ) (17 ) 28 (10
) (9 ) 425 29 % Currency Impact
(16 ) (5 ) (30 ) (1 ) (8 ) (10 ) 73 (6 ) % Change — Currency
Neutral Reported 8 (2 )
12 29 (2 )
1 352 34
% Change — After Considering Items
(Non-GAAP)
(7 ) (6 ) (17 ) 8 (10 ) (3 ) 60 (2 )
% Currency Impact After Considering Items
(Non-GAAP)
(16 ) (5 ) (30 ) (1 ) (8 ) (14 ) 90 (6 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) 9
(1 ) 13 8
(2 ) 11 (30 )
3
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Income (Loss)
Before Income Taxes by Segment:
Six Months Ended July 3, 2015
Eurasia & Latin North Asia Bottling Africa
Europe America America
Pacific Investments Corporate
Consolidated
Reported (GAAP) $ 573
$ 1,567 $ 1,114 $ 1,361
$ 1,314 $ 230 $ 183
$ 6,342 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 129 — 129 Productivity &
Reinvestment 15 (11 ) 3 154 (3 ) — 24 182 Equity Investees — 6 — —
— 76 — 82 Transaction Gains/Losses — — — 33 — — (994 ) (961 ) Other
Items — — 33
(75 ) 2 2
583 545 After
Considering Items (Non-GAAP) $ 588 $
1,562 $ 1,150 $ 1,473
$ 1,313 $ 437
$ (204 ) $ 6,319
Six
Months Ended June 27, 2014 Eurasia & Latin North Asia
Bottling Africa Europe America
America Pacific
Investments Corporate Consolidated
Reported (GAAP) $ 621 $ 1,635
$ 1,303 $ 1,107 $ 1,411
$ 276 $ (764 ) $
5,589 Items Impacting Comparability: Asset
Impairments/Restructuring — — — — — 108 — 108 Productivity &
Reinvestment — — — 133 8 — 34 175 Equity Investees — — — — — 12 —
12 Transaction Gains/Losses — — — 140 — — — 140 Other Items —
— —
(92 ) — 41
245 194 After Considering Items
(Non-GAAP) $ 621 $ 1,635
$ 1,303 $ 1,288 $
1,419 $ 437 $ (485 )
$ 6,218 Eurasia & Latin North Asia
Bottling Africa Europe America
America Pacific
Investments Corporate Consolidated
%
Change — Reported (GAAP) (8 ) (4 )
(15 ) 23 (7 ) (17
) 124 13 % Currency Impact (12 ) (5 ) (21 ) (1
) (8 ) (8 ) 61 (2 ) % Change — Currency Neutral Reported 4
1 7
23 1 (9 )
63 15
% Change — After Considering Items
(Non-GAAP)
(5 ) (5 ) (12 ) 14 (7 ) 0 58 2 % Currency Impact After Considering
Items (Non-GAAP) (12 ) (5 ) (21 ) 0 (8 ) (14 ) 55 (6 ) % Change —
Currency Neutral After Considering Items (Non-GAAP) 6
1 10 15
1 14
3 7
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Operating Expense
Leverage:
Three Months Ended July 3, 2015 Operating expense
Operating income Gross profit
leverage1
% Change — Reported (GAAP) (20 ) (4
) (16 ) % Change — Currency Neutral Reported
(9 ) 4 (13 ) % Change — After
Considering Items (Non-GAAP) (5 ) (4 ) (1 )
% Change — Currency Neutral After
Considering Items (Non-GAAP)
6 4 2
Six Months Ended July 3, 2015 Operating expense
Operating income Gross profit
leverage1
% Change — Reported (GAAP) (13 ) (2
) (11 ) % Change — Currency Neutral Reported
(3 ) 6 (9 ) % Change — After
Considering Items (Non-GAAP) (2 ) (1 ) (1 )
% Change — Currency Neutral After
Considering Items (Non-GAAP)
8 6 1
Note: Certain rows may not add due to rounding.
1 Operating expense leverage is calculated by subtracting gross
profit growth from operating income growth.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Purchases and
Issuances of Stock:
Six Months Ended Six Months Ended
July 3, 2015 June 27, 2014 Reported
(GAAP) Issuances of Stock $ 410 $ 650 Purchases of Stock for
Treasury (1,298 ) (1,953 ) Net Change in Stock Issuance
Receivables1 (3 ) 29 Net Change in Treasury Stock Payables2 15
(20 ) Net Treasury Share Repurchases (Non-GAAP) $
(876 ) $ (1,294 ) 1 Represents the net change
in receivables related to employee stock options exercised but not
settled prior to the end of the quarter. 2 Represents the net
change in payables for treasury shares repurchased but not settled
prior to the end of the quarter.
About The Coca-Cola
Company
The Coca-Cola Company (NYSE: KO) is the world's largest beverage
company, refreshing consumers with more than 500 sparkling and
still brands. Led by Coca-Cola, one of the world's most valuable
and recognizable brands, our Company's portfolio features 20
billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola
Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del
Valle. Globally, we are the No. 1 provider of sparkling
beverages, ready-to-drink coffees, and juices and juice
drinks. Through the world's largest beverage distribution system,
consumers in more than 200 countries enjoy our beverages at a rate
of 1.9 billion servings a day. With an enduring commitment to
building sustainable communities, our Company is focused on
initiatives that reduce our environmental footprint, support
active, healthy living, create a safe, inclusive work environment
for our associates, and enhance the economic development of the
communities where we operate. Together with our bottling
partners, we rank among the world's top 10 private employers with
more than 700,000 system associates. For
more information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at
twitter.com/CocaColaCo, visit our
blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at
www.linkedin.com/company/the-coca-cola-company.
Forward-Looking
Statements
This press release may contain statements, estimates or
projections that constitute “forward-looking statements” as defined
under U.S. federal securities laws. Generally, the words “believe,”
“expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and
similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from The Coca-Cola Company’s
historical experience and our present expectations or projections.
These risks include, but are not limited to, obesity concerns;
water scarcity and poor quality; evolving consumer preferences;
increased competition and capabilities in the marketplace; product
safety and quality concerns; perceived negative health consequences
of certain ingredients, such as non-nutritive sweeteners and
biotechnology-derived substances, and of other substances present
in our beverage products or packaging materials; increased demand
for food products and decreased agricultural productivity; changes
in the retail landscape or the loss of key retail or foodservice
customers; an inability to expand operations in emerging and
developing markets; fluctuations in foreign currency exchange
rates; interest rate increases; an inability to maintain good
relationships with our bottling partners; a deterioration in our
bottling partners' financial condition; increases in income tax
rates, changes in income tax laws or unfavorable resolution of tax
matters; increased or new indirect taxes in the United States or in
other major markets; increased cost, disruption of supply or
shortage of energy or fuels; increased cost, disruption of supply
or shortage of ingredients, other raw materials or packaging
materials; changes in laws and regulations relating to beverage
containers and packaging; significant additional labeling or
warning requirements or limitations on the availability of our
products; an inability to protect our information systems against
service interruption, misappropriation of data or breaches of
security; unfavorable general economic conditions in the United
States; unfavorable economic and political conditions in
international markets; litigation or legal proceedings; adverse
weather conditions; climate change; damage to our brand image and
corporate reputation from negative publicity, even if unwarranted,
related to product safety or quality, human and workplace rights,
obesity or other issues; changes in, or failure to comply with, the
laws and regulations applicable to our products or our business
operations; changes in accounting standards; an inability to
achieve our overall long-term growth objectives; deterioration of
global credit market conditions; default by or failure of one or
more of our counterparty financial institutions; an inability to
timely implement our previously announced actions to reinvigorate
growth, or to realize the economic benefits we anticipate from
these actions; failure to realize a significant portion of the
anticipated benefits of our strategic relationships with Keurig
Green Mountain, Inc. and Monster Beverage Corporation; an inability
to renew collective bargaining agreements on satisfactory terms, or
we or our bottling partners experience strikes, work stoppages or
labor unrest; future impairment charges; multi-employer plan
withdrawal liabilities in the future; an inability to successfully
integrate and manage our Company-owned or -controlled bottling
operations; an inability to successfully manage the possible
negative consequences of our productivity initiatives; global or
regional catastrophic events; and other risks discussed in our
Company’s filings with the Securities and Exchange Commission
(SEC), including our Annual Report on Form 10-K for the year ended
December 31, 2014 and our subsequently filed Quarterly Report on
Form 10-Q, which filings are available from the SEC. You should not
place undue reliance on forward-looking statements, which speak
only as of the date they are made. The Coca-Cola Company undertakes
no obligation to publicly update or revise any forward-looking
statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20150722005662/en/
The Coca-Cola CompanyInvestors and Analysts:Tim Leveridge, +01
404-676-7563orMedia:Petro Kacur, +01 404-676-2683
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