- Reported net revenues declined 5%
and organic revenues grew 3% in the quarter.
- Reported EPS was $0.79 and
comparable EPS was $0.60 in the quarter.
- Global volume grew 1% year to date
and was even in the quarter.
- Global price/mix grew 3% in the
quarter, reflecting continued effective pricing and packaging
initiatives across key markets.
- Reported operating margin expanded
more than 390 basis points and comparable currency neutral
operating margin expanded more than 140 basis points.
- Gained global value share in
nonalcoholic ready-to-drink beverages.
- Full-year 2016 organic revenues now
expected to grow 3%. Full-year comparable currency neutral income
before taxes (structurally adjusted) outlook remains
6% to 8%.
The Coca-Cola Company today reported second quarter 2016
operating results. Muhtar Kent, Chairman and Chief Executive
Officer of The Coca-Cola Company said, “Despite challenging
macroeconomic conditions, structural changes and foreign exchange
headwinds which contributed to a 5% decline in reported revenues,
we delivered 3% organic revenue growth, gained value share in total
nonalcoholic ready-to-drink beverages, expanded our operating
margins and grew profits in line with our expectations. Strong
performance in some of our largest and most developed markets,
including the United States, Mexico and Japan, was offset by
difficult external conditions in many of our emerging and
developing markets, including China and Argentina. These factors
combined to put pressure on our volume and top-line performance in
the quarter, especially where we own bottling businesses. In these
international operations where external headwinds have proven to be
more severe than originally forecast, we are taking action by
reassessing local market initiatives where needed and continuing
our efforts in driving productivity.
“As we continue the transformation of our business, I am
encouraged by our core business performance which grew ahead of our
consolidated organic revenues in the quarter. We expect this to
continue for the balance of the year as we remain confident in our
segmented revenue growth strategy, our innovation pipeline, and
efforts to increase and improve our advertising.”
SECOND QUARTER 2016 OPERATING
REVIEW
TOTAL COMPANY
Percent Change Second
Quarter YTD Unit Case Volume 0 1
Concentrate Sales/Reported Volume 0 0
Price/Mix
3
2 Currency (3 ) (4 ) Acquisitions, Divestitures and Structural
Items, Net (5 ) (3 ) Reported Net Revenues (5
) (5 ) Organic Revenues * 3 2
Reported Income Before Taxes (1 ) (2 ) Comparable CN Income Before
Taxes (Structurally Adjusted) * 10 10
* Organic revenues 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.
- Concentrate sales growth was in line
with unit case volume growth in the quarter and was slightly behind
unit case volume growth for the year-to-date period. After
adjusting for one less day in the first quarter, concentrate sales
and unit case volume growth were in line for the year-to-date
period. The positive price/mix in the quarter was driven by solid
underlying pricing partially offset by 1 point of geographic mix.
Acquisitions, divestitures and structural items in the quarter
primarily include the impact of refranchised territories in North
America, the deconsolidation of our German bottling operations as a
result of their being merged to create Coca-Cola European Partners
as well as the impact of the brand transfer agreement associated
with the closing of the transaction with Monster Beverage
Corporation (“Monster”) in 2015.
- We gained global volume and value share
in sparkling beverages in the quarter. Value share grew ahead of
volume share, emphasizing our focus on accelerating our revenue
growth management strategies. Sparkling beverage volume was even
year to date and declined 1% in the quarter primarily due to
weakness in certain emerging markets.
- We gained global volume and value share
in still beverages in the quarter. Still beverage volume grew 4%
year to date and 2% in the quarter. Volume growth in the quarter
was driven by strong performance in most categories partially
offset by a decline in juice and juice drinks primarily due to
industry weakness in China.
- The decline in reported income before
taxes in the quarter was primarily driven by an unfavorable
currency impact of 9% and structural impacts, partially offset by a
5% favorable impact due to comparability items. Also, income before
taxes benefited from the impact of our productivity initiatives, a
slightly favorable commodity pricing environment, the timing of
expenses and an increase in equity income. The structural headwind
on comparable currency neutral income before taxes was 4%.
- The reported effective tax rate for the
quarter was 19.5%. The underlying effective tax rate was 22.5%. 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 $0.79 and comparable
EPS was $0.60 in the quarter. Items impacting comparability
increased reported EPS by a net $0.19 and were primarily related to
a noncash gain recognized in connection with the deconsolidation of
our German bottling operations as a result of their being merged to
create Coca-Cola European Partners, partially offset by noncash
charges related to refranchising territories in North America and
costs associated with our previously announced productivity and
restructuring initiatives.
- Fluctuations in foreign currency
exchange rates resulted in a headwind of 7 points, 9 points and 10
points on reported operating income, reported income before taxes
and reported EPS, respectively, in the quarter. Fluctuations in
foreign currency exchange rates resulted in a 6 point headwind on
comparable operating income and an 11 point headwind on both
comparable income before taxes and comparable EPS in the
quarter.
- Year-to-date cash from operations was
$3.8 billion, down $1.3 billion primarily due to the impact of
contributions to our pension plans, fluctuations in foreign
currency exchange rates, one less day in the first quarter and the
deconsolidation of our German bottling operations.
- Year-to-date purchases of stock for
treasury were $2.2 billion. Net share repurchases totaled $1.1
billion.
EURASIA AND AFRICA
Percent Change
Second Quarter YTD Unit Case Volume
(1 ) (1 ) Concentrate Sales
0 (1 ) Price/Mix 7 5 Currency (10 ) (11
) Acquisitions, Divestitures and Structural Items, Net
(3 ) (3 ) Reported Net Revenues (6 )
(10 ) Organic Revenues * 7
5 Reported Income Before Taxes (11 ) (12 ) Comparable
CN Income Before Taxes * 0
(1 )
* Organic revenues 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.
- Concentrate sales growth was slightly
ahead of unit case volume growth in the quarter due to timing of
concentrate shipments. For the year-to-date period, concentrate
sales and unit case volume growth were in line. The positive
price/mix in the quarter was primarily attributable to favorable
pricing and product mix across several key markets, partially
offset by unfavorable geographic mix. Acquisitions, divestitures
and structural items in the quarter primarily reflect the
unfavorable impact of the brand transfer agreement associated with
the closing of the transaction with Monster in 2015.
- The decline in reported income before
taxes in the quarter was primarily driven by an unfavorable
currency impact of 11% and the unfavorable structural impact of the
brand transfer agreement with Monster. Also, income before taxes
benefited in the quarter from the impact of our productivity
initiatives and timing of expenses.
- We gained value share in sparkling
beverages in the quarter. Sparkling beverage volume was even and
still beverage volume declined 4% in the quarter. Unit case volume
performance in the quarter included low single-digit growth in both
our Central, East & West Africa and Middle East & North
Africa business units, offset by a high single-digit decline in our
Russia, Ukraine & Belarus business unit and a mid single-digit
decline in our Turkey, Caucasus & Central Asia business
unit.
EUROPE
Percent Change
Second Quarter YTD Unit Case Volume
0 0 Concentrate Sales
(1 ) (1 ) Price/Mix 3 2 Currency
0 1 Acquisitions, Divestitures and Structural Items, Net
(4 ) (3 ) Reported Net Revenues (2 ) (1
) Organic Revenues * 2 1
Reported Income Before Taxes (3 ) (3 ) Comparable CN Income
Before Taxes * (3 ) (2 )
* Organic revenues 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.
- Concentrate sales growth in the quarter
was slightly behind unit case volume growth due to timing of
concentrate shipments. For the year-to-date period, concentrate
sales and unit case volume growth were in line after adjusting for
one less day in the first quarter. The positive price/mix in the
quarter reflects an increase in pricing and favorable product mix
in key markets. Acquisitions, divestitures and structural items in
the quarter reflect the unfavorable impact of the brand transfer
agreement associated with the closing of the transaction with
Monster in 2015 as well as the impact of the deconsolidation of our
German bottling operations as a result of their being merged to
create Coca-Cola European Partners.
- The decline in reported income before
taxes in the quarter was primarily driven by the unfavorable
structural impact related to the brand transfer agreement with
Monster and the impact of the deconsolidation of our German
bottling operations. Also, income before taxes benefited in the
quarter from the impact of our productivity initiatives.
- We gained value share in total
nonalcoholic ready-to-drink ("NARTD") beverages in the quarter.
Sparkling beverage volume was even and still beverage volume grew
2% in the quarter. Unit case volume growth in key markets including
Germany, Poland and Romania was offset by volume declines in France
and Spain primarily driven by poor weather.
LATIN AMERICA
Percent Change
Second Quarter YTD Unit Case Volume
0 1 Concentrate Sales
1 1 Price/Mix 15 13 Currency (20
) (22 ) Acquisitions, Divestitures and Structural Items, Net
0 0 Reported Net Revenues
(4 ) (8 ) Organic Revenues * 16
14 Reported Income Before Taxes (1 ) (7 ) Comparable
CN Income Before Taxes * 27
19
* Organic revenues 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.
- Concentrate sales growth was slightly
ahead of unit case volume growth in the quarter due to timing of
concentrate shipments. For the year-to-date period, concentrate
sales and unit case volume growth were in line. Positive price/mix
was realized in each of our four business units in the quarter,
particularly in Brazil and other higher inflationary markets within
our South Latin and Latin Center business units.
- The decline in reported income before
taxes in the quarter was primarily driven by an unfavorable
currency impact of 29%. Also, income before taxes benefited in the
quarter from the impact of our productivity initiatives and timing
of expenses.
- We gained value share in still
beverages in the quarter. Sparkling beverage volume declined 2% in
the quarter and still beverage volume grew 6%. Unit case volume
performance in the quarter was driven by high single-digit growth
in Mexico, offset by a high single-digit decline in both our Latin
Center and South Latin business units and a low single-digit
decline in Brazil.
NORTH AMERICA
Percent Change
Second Quarter YTD Unit Case Volume
1 1 Concentrate Sales
1 0 Price/Mix 2 3 Currency 0 0
Acquisitions, Divestitures and Structural Items, Net
(1 ) (1 ) Reported Net Revenues 2 2 Organic
Revenues * 4 3
Reported Income Before Taxes (1 ) 3 Comparable CN Income Before
Taxes * 0 2
* Organic revenues 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.
- Concentrate sales growth was in line
with unit case volume growth in the quarter and was slightly behind
unit case volume growth for the year-to-date period. After
adjusting for one less day in the first quarter, concentrate sales
and unit case volume growth were in line for the year-to-date
period. The positive price/mix in the quarter reflects the
successful continued implementation of our rational pricing
strategy and our effective revenue management efforts.
Acquisitions, divestitures and structural items in the quarter
primarily reflect the unfavorable impact of the brand transfer
agreement associated with the closing of the transaction with
Monster in 2015.
- Reported income before taxes in the
quarter includes an unfavorable structural impact of 4% primarily
related to the brand transfer agreement associated with the closing
of the transaction with Monster in 2015.
- We gained value share in total NARTD
beverages for the 25th consecutive quarter driven by the continued
increase in the quantity and quality of our marketing investments
along with our disciplined approach to pricing and packaging
strategies. Sparkling beverage volume declined 1% in the quarter.
Growth in Sprite, Fanta and energy drinks was offset by a decline
in Trademark Coca-Cola. Still beverage volume growth of 3% in the
quarter was driven by all key categories.
ASIA PACIFIC
Percent Change
Second Quarter YTD Unit Case Volume
1 3 Concentrate Sales
(2 ) 2 Price/Mix 0 (2 ) Currency
1 (1 ) Acquisitions, Divestitures and Structural Items, Net
(1 ) (2 ) Reported Net Revenues (2 ) (3
) Organic Revenues * (2 ) 0
Reported Income Before Taxes (1 ) 0 Comparable CN Income
Before Taxes * 0 2
* Organic revenues 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.
- Concentrate sales growth trailed unit
case volume growth in the quarter due to timing of concentrate
shipments and was slightly behind unit case volume growth for the
year-to-date period. After adjusting for one less day in the first
quarter, concentrate sales and unit case volume growth were in line
for the year-to-date period. The even price/mix in the quarter was
primarily driven by favorable pricing and geographic mix, offset by
negative product mix. Acquisitions, divestitures and structural
items in the quarter reflect the unfavorable impact of the brand
transfer agreement associated with the closing of the transaction
with Monster in 2015 and a change in the funding arrangement with
our bottlers in China.
- The decline in reported income before
taxes in the quarter was primarily driven by an unfavorable
currency impact of 1 point. Also, income before taxes benefited in
the quarter from the impact of our productivity initiatives and
timing of expenses.
- We gained value share in total NARTD
beverages in the quarter. Sparkling beverage volume was even and
still beverage volume grew 2% in the quarter. Unit case volume
growth in the quarter included high single-digit growth in our
ASEAN business unit, 4% growth in Japan and 3% growth in India,
partially offset by a high single-digit decline in China.
BOTTLING INVESTMENTS
Percent Change
Second Quarter YTD Unit Case Volume
(13 ) (9 ) Reported Volume
(2 ) (1 ) Price/Mix 2 1 Currency (1 )
(2 ) Acquisitions, Divestitures and Structural Items, Net
(11 ) (6 ) Reported Net Revenues (12 )
(8 ) Organic Revenues * 0
0 Reported Income Before Taxes (24 ) — Comparable CN Income
Before Taxes * 11 21
* Organic revenues 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.
- The positive price/mix in the quarter
reflects favorable pricing across several of our bottling
operations and positive geographic mix given our China bottling
operations' weaker volume performance. Acquisitions, divestitures
and structural items in the quarter reflect the impact of the
refranchised North America bottling territories and the
deconsolidation of our German bottling operations as a result of
their being merged to create Coca-Cola European Partners.
- The decline in reported income before
taxes in the quarter was primarily driven by an unfavorable
currency impact of 6%, an unfavorable impact due to comparability
items and an unfavorable structural impact related to refranchised
North America bottling territories and the deconsolidation of our
German bottling operations. Also, income before taxes benefited
from the impact of our productivity initiatives, a slightly
favorable commodity pricing environment and increased equity
income.
2016 OUTLOOK
Our 2016 outlook for organic revenues, comparable currency
neutral income before taxes (structurally adjusted) and comparable
EPS are non-GAAP financial measures that exclude or have otherwise
been adjusted for items impacting comparability, the impact of
changes in foreign currency exchange rates, acquisitions and
divestitures, and the impact of structural items, as applicable. We
are not able to reconcile these forward-looking non-GAAP financial
measures to their most directly comparable forward-looking GAAP
financial measures without unreasonable efforts because we are
unable to predict with a reasonable degree of certainty the actual
impact of changes in foreign currency exchange rates and the exact
timing of acquisitions and divestitures and/or structural changes
throughout 2016. The unavailable information could have a
significant impact on our full-year 2016 GAAP financial
results.
- The Company now expects organic
revenues to be up 3% in 2016. The net impact of acquisitions,
divestitures and structural items on net revenues is expected to be
a 6 to 7 point headwind, and based on the current spot rates,
currency is expected to be a 2 to 3 point headwind, including the
impact of hedged positions for the full year.
- The Company continues to expect
comparable currency neutral income before taxes (structurally
adjusted) to grow 6% to 8% in 2016, in line with our long-term
target. The net impact of structural items is expected to be a 4
point headwind, and based on the current spot rates, currency is
expected to be an 8 to 9 point headwind, including the impact of
hedged positions for the full year.
- Based on the above, the Company expects
full-year comparable EPS to be down 4% to 7% versus prior year’s
comparable EPS of $2.00.
- In addition to the above, the Company
expects the following:
- The underlying effective annual tax
rate in 2016 is expected to be 22.5%.
- We are targeting full-year 2016 net
share repurchases of $2.0 to $2.5 billion.
- For the third quarter of 2016, we
estimate that based on the current spot rates, currency will be a 2
point headwind on comparable net revenues and a 2 to 3 point
headwind on comparable income before taxes, including the impact of
hedged positions. The net impact of structural items is expected to
be a 3 point headwind on comparable income before taxes.
ITEMS IMPACTING
COMPARABILITY
- For details on items impacting
comparability in the quarter, refer to 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.
- The Company reports its financial
results in accordance with accounting principles generally accepted
in the United States (GAAP). However, management uses non-GAAP
financial measures, including, but not limited to, organic
revenues, comparable currency neutral income before taxes and
comparable currency neutral earnings per share, in making
financial, operating, compensation and planning decisions and in
evaluating the Company's performance. Management believes that
these non-GAAP financial measures provide users with additional
meaningful financial information that should be considered when
assessing our ongoing 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. Refer to the Reconciliation of
GAAP and Non-GAAP Financial Measures schedule.
- "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 reflects unit case volume
growth for consolidated bottlers only, which is computed on a
reported basis.
- "Organic revenues" is a non-GAAP
financial measure that excludes or has otherwise been adjusted for
the impact of changes in foreign currency exchange rates and
acquisitions, divestitures and structural items, as applicable. For
details on these adjustments, refer to the Reconciliation of GAAP
and Non-GAAP Financial Measures schedule.
- “Core business” represents the combined
performance from the Eurasia and Africa, Europe, Latin America,
North America, Asia Pacific and Corporate operating segments offset
by intersegment eliminations.
- "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, dairy 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 2016 financial results
were impacted by one less day, while fourth quarter financial
results will be impacted by two additional days. Unit case volume
results for the quarters are not impacted by the variance in days
due to the average daily sales computation referenced above.
CONFERENCE CALL
We are hosting a conference call with investors and analysts to
discuss second quarter 2016 results today, July 27, 2016 at 9 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 1,
2016 July 3, 2015 % Change1
Net Operating Revenues
$ 11,539 $ 12,156 (5 ) Cost of goods sold
4,471 4,748 (6 )
Gross
Profit 7,068 7,408 (5 ) Selling, general and
administrative expenses
3,912 4,204 (7 ) Other operating
charges
297 669
(56 )
Operating Income 2,859 2,535 13 Interest income
164 149 10 Interest expense
162 128 27 Equity income
(loss) — net
305 200 52 Other income (loss) — net
1,133 1,605 (29 )
Income Before Income Taxes 4,299 4,361 (1 ) Income
taxes
839 1,250
(33 )
Consolidated Net Income 3,460 3,111 11 Less:
Net income (loss) attributable to noncontrolling interests
12 3 445
Net
Income Attributable to Shareowners of The Coca-Cola Company
$ 3,448 $ 3,108
11
Diluted Net Income Per Share2
$ 0.79 $ 0.71 12
Average Shares Outstanding — Diluted2
4,377 4,408
1 Certain growth rates may not recalculate using the rounded
dollar amounts provided.
2 For the three months ended July 1, 2016 and July 3, 2015,
basic net income per share was $0.80 for 2016 and $0.71 for 2015
based on average shares outstanding — basic of 4,323 million for
2016 and 4,355 million for 2015. 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 1, 2016 July 3, 2015 % Change1
Net Operating
Revenues $ 21,821 $ 22,867 (5 ) Cost of goods
sold
8,540 8,851
(4 )
Gross Profit 13,281 14,016 (5 )
Selling, general and administrative expenses
7,673 8,283 (7
) Other operating charges
608
902 (33 )
Operating Income
5,000 4,831 4 Interest income
308 304 1 Interest
expense
303 575 (47 ) Equity income (loss) — net
397
202 97 Other income (loss) — net
791
1,580 (50 )
Income Before
Income Taxes 6,193 6,342 (2 ) Income taxes
1,240 1,665 (25 )
Consolidated Net Income 4,953 4,677 6 Less: Net
income (loss) attributable to noncontrolling interests
22 12 82
Net Income Attributable to Shareowners of The Coca-Cola
Company $ 4,931
$ 4,665 6
Diluted Net Income
Per Share2 $ 1.13
$ 1.06 7
Average
Shares Outstanding — Diluted2 4,379
4,415
1 Certain growth rates may not recalculate using the rounded
dollar amounts provided.
2 For the six months ended July 1, 2016 and July 3, 2015, basic
net income per share was $1.14 for 2016 and $1.07 for 2015 based on
average shares outstanding — basic of 4,325 million for 2016 and
4,360 million for 2015. 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 1, 2016 December
31,2015
ASSETS
Current Assets Cash and cash equivalents
$
9,647 $ 7,309 Short-term investments
11,755 8,322
Total Cash, Cash
Equivalents and Short-Term Investments
21,402 15,631 Marketable
securities
2,673 4,269 Trade accounts receivable, less
allowances of $354 and $352, respectively
4,768 3,941
Inventories
3,005 2,902 Prepaid expenses and other assets
3,332 2,752 Assets held for sale
693
3,900
Total Current Assets
35,873 33,395
Equity Method Investments 16,215 12,318
Other
Investments 1,284 3,470
Other Assets 4,370
4,110
Property, Plant and Equipment — net 12,663
12,571
Trademarks With Indefinite Lives 6,038 5,989
Bottlers' Franchise Rights With Indefinite Lives
5,616 6,000
Goodwill 11,204 11,289
Other
Intangible Assets 831
854
Total Assets $ 94,094
$ 89,996
LIABILITIES AND
EQUITY
Current Liabilities Accounts payable and accrued expenses
$ 10,235 $ 9,660 Loans and notes payable
13,901 13,129 Current maturities of long-term debt
4,895 2,676 Accrued income taxes
375 331 Liabilities
held for sale
138 1,133
Total Current Liabilities 29,544
26,929
Long-Term Debt
29,252 28,311
Other Liabilities 3,963 4,301
Deferred Income Taxes 4,497 4,691
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
14,710
14,016 Reinvested earnings
66,921 65,018 Accumulated other
comprehensive income (loss)
(10,153 ) (10,174 )
Treasury stock, at cost — 2,725 and 2,716 shares, respectively
(46,601 ) (45,066 )
Equity Attributable to Shareowners of The Coca-Cola Company
26,637 25,554
Equity Attributable to Noncontrolling
Interests 201 210
Total Equity 26,838
25,764
Total Liabilities and Equity
$ 94,094 $ 89,996
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(UNAUDITED) (In millions)
Six Months Ended July 1, 2016 July
3,2015
Operating Activities Consolidated net income
$
4,953 $ 4,677 Depreciation and amortization
903 961
Stock-based compensation expense
119 117 Deferred income
taxes
(178 ) 643 Equity (income) loss — net of
dividends
(224 ) (44 ) Foreign currency adjustments
118 (144 ) Significant (gains) losses on sales of assets —
net
(762 ) (1,346 ) Other operating charges
210 609 Other items
(125 ) 609 Net change in
operating assets and liabilities
(1,194
) (964 ) Net cash provided by operating
activities
3,820 5,118
Investing Activities Purchases of investments
(9,045 ) (6,981 ) Proceeds from disposals of
investments
9,518 6,316 Acquisitions of businesses, equity
method investments and nonmarketable securities
(723
) (2,284 ) Proceeds from disposals of businesses, equity
method investments and nonmarketable securities
420 413
Purchases of property, plant and equipment
(1,085 )
(1,114 ) Proceeds from disposals of property, plant and equipment
41 33 Other investing activities
(63
) (139 ) Net cash provided by (used in)
investing activities
(937 )
(3,756 )
Financing Activities Issuances of debt
15,947 24,878 Payments of debt
(12,750 )
(22,358 ) Issuances of stock
1,108 410 Purchases of stock
for treasury
(2,156 ) (1,298 ) Dividends
(3,017 ) (2,877 ) Other financing activities
85 115 Net cash provided
by (used in) financing activities
(783
) (1,130 )
Effect of Exchange Rate Changes
on Cash and Cash Equivalents 238
(385 )
Cash and Cash Equivalents Net increase
(decrease) during the period
2,338 (153 ) Balance at
beginning of period
7,309
8,958 Balance at end of period
$
9,647 $ 8,805
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 1, 2016 July 3, 2015
% Fav. /(Unfav.)
July 1, 2016 July 3, 2015
% Fav. /(Unfav.)
July 1, 2016 July 3, 2015
% Fav. /(Unfav.)
Eurasia & Africa
$ 621 $ 658 (6 )
$
248 $ 275 (10 )
$ 256 $ 287 (11 ) Europe
1,410 1,435 (2 )
808 836 (3 )
822 843 (3 )
Latin America
937 973 (4 )
512 525 (2 )
520
526 (1 ) North America
2,709 2,651 2
735 754 (3 )
745 752 (1 ) Asia Pacific
1,560 1,601 (2 )
758
761 0
760 766 (1 ) Bottling Investments
5,615 6,385
(12 )
216 164 31
269 353 (24 ) Corporate
63 25
149
(418 ) (780 ) 47
927 834 11 Eliminations
(1,376 ) (1,572 ) 13
— — —
—
— — Consolidated
$
11,539 $ 12,156 (5 )
$ 2,859 $ 2,535 13
$ 4,299 $ 4,361 (1
)
Note: Certain growth rates may not recalculate using the rounded
dollar amounts provided.
1 During the three months ended July 1, 2016, intersegment
revenues were $11 million for Eurasia and Africa, $112 million for
Europe, $16 million for Latin America, $1,032 million for
North America, $159 million for Asia Pacific, $44 million for
Bottling Investments and $2 million for Corporate. 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, $1,158 million for North America,
$188 million for Asia Pacific and $50 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 1, 2016 July 3,
2015
% Fav. /(Unfav.)
July 1, 2016 July 3, 2015
% Fav. /(Unfav.)
July 1, 2016 July 3, 2015
% Fav. /(Unfav.)
Eurasia & Africa
$ 1,167 $ 1,296 (10 )
$
484 $ 554 (13 )
$ 502 $ 573 (12 ) Europe
2,614 2,647 (1 )
1,499 1,552 (3 )
1,526 1,567
(3 ) Latin America
1,872 2,039 (8 )
1,035 1,103 (6 )
1,038 1,114 (7 ) North America
5,073 4,968 2
1,316 1,289 2
1,325 1,284 3 Asia Pacific
2,795
2,886 (3 )
1,309 1,305 0
1,314 1,314 0 Bottling
Investments
10,907 11,916 (8 )
98 154 (36 )
(163
)
307 — Corporate
48 65
(25
)
(741 ) (1,126 ) 34
651 183 256 Eliminations
(2,655 ) (2,950 ) 10
— — —
— — —
Consolidated
$ 21,821 $ 22,867
(5 )
$ 5,000
$ 4,831 4
$
6,193 $ 6,342 (2 )
Note: Certain growth rates may not recalculate using the rounded
dollar amounts provided.
1 During the six months ended July 1, 2016, intersegment
revenues were $17 million for Eurasia and Africa, $247 million for
Europe, $34 million for Latin America, $1,975 million for
North America, $292 million for Asia Pacific, $85 million for
Bottling Investments and $5 million for Corporate. 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, $2,199 million for North America,
$317 million for Asia Pacific and $95 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
uses non-GAAP financial measures in making financial, operating,
compensation and planning decisions and in evaluating the Company's
performance. Management believes that certain non-GAAP financial
measures provide users with additional meaningful financial
information that should be considered when assessing our ongoing
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, compensation 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 pertaining 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") defined below.
Asset Impairments and Restructuring
Restructuring
During the three and six months ended July 1, 2016, the
Company recorded charges of $41 million and $240 million,
respectively. The Company also recorded charges of $94 million and
$129 million during the three and six months ended
July 3, 2015, respectively. These charges were related to the
integration of our German bottling operations.
Productivity and Reinvestment
During the three and six months ended July 1, 2016, the
Company recorded charges of $65 million and $128 million,
respectively, related to our productivity and reinvestment
initiatives. The Company also recorded charges of $92 million and
$182 million during the three and six months ended
July 3, 2015, respectively. These productivity and
reinvestment initiatives are focused on four key areas:
restructuring the Company's global supply chain; implementing
zero-based work, an evolution of zero-based budget principles
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 1, 2016, the
Company recorded net charges of $18 million and $21 million,
respectively. During the three and six months ended July 3,
2015, the Company recorded net charges of $9 million and
$82 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 1, 2016, the
Company recorded charges of $52 million and $97 million,
respectively, related to costs incurred to refranchise our North
America bottling territories. These costs include, among other
items, internal and external costs for individuals directly working
on the refranchising efforts, severance, and costs associated with
the implementation of information technology systems to facilitate
consistent data standards and availability throughout the North
America bottling system.
During the three and six months ended July 1, 2016, the
Company recorded charges of $32 million and $33 million,
respectively, for noncapitalizable transaction costs associated
with pending and closed transactions, primarily related to the
deconsolidation of our German bottling operations discussed
below.
During the three and six months ended July 1, 2016, the
Company recognized a noncash gain of $1,292 million, net of
transaction costs described above, as a result of the
deconsolidation of our German bottling operations. On May 29, 2016,
the Company merged its German bottling operations with
Coca-Cola Enterprises, Inc. and Coca-Cola Iberian Partners,
S.A.U., to create Coca-Cola European Partners ("CCEP") in exchange
for an equity investment in CCEP.
During the three and six months ended July 1, 2016, the
Company incurred noncash losses of $199 million and
$568 million, respectively. The Company also incurred noncash
losses of $12 million and $33 million during the three and six
months ended July 3, 2015, respectively. These losses were
primarily due to the derecognition of intangible assets relating to
the refranchising of territories in North America to certain of our
unconsolidated bottling partners.
During the six months ended July 1, 2016, the Company
recorded a net gain of $18 million as a result of the disposal of
our shares in Keurig Green Mountain, Inc.
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 was
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.
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 1, 2016 and July 3, 2015, the impact of the
Company's adjustment related to our economic hedging activities
resulted in decreases of $95 million and $56 million, respectively,
to our non-GAAP income before income taxes. During the six months
ended July 1, 2016 and July 3, 2015, the net impact of
the Company's adjustment related to our economic hedging activities
described above resulted in decreases of $71 million and $11
million, respectively, to our non-GAAP income before income
taxes.
Donation to The Coca-Cola Foundation
During the three and six months ended July 1, 2016, the
Company recorded a charge of $100 million. During the three and six
months ended July 3, 2015, the Company recorded a charge of
$100 million. These charges were due to contributions the Company
made to The Coca-Cola Foundation.
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 primarily 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 primarily 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.
Other
During the three and six months ended July 1, 2016, the
Company recorded other charges of $7 million and $10 million,
respectively. During the six months ended July 3, 2015, the Company
recorded other charges of $1 million. These charges were primarily
related to tax litigation expense as well as charges associated
with certain fixed assets and costs associated with restructuring
and transitioning the Company's Russian juice operations to an
existing joint venture with an unconsolidated bottling partner.
Certain Tax Matters
During the three and six months ended July 1, 2016, the
Company recorded net tax charges of $83 million and
$77 million, respectively, related to amounts required to be
recorded for changes to our uncertain tax positions, including
interest and penalties. 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.
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 REVENUES
Organic revenues is a non-GAAP financial measure that excludes
or has otherwise been adjusted for the impact of changes in foreign
currency exchange rates and acquisitions, divestitures and
structural items, as applicable. The adjustments related to
acquisitions, divestitures and structural items for the three and
six months ended July 1, 2016 and July 3, 2015 consisted
of the structural changes discussed below. Additionally, during the
three and six months ended July 1, 2016, organic revenues were
adjusted, both on a consolidated basis and for our Asia Pacific
operating segment, for the sales of the Company's newly acquired
plant-based protein beverages in China.
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 2016, the Company
deconsolidated our German bottling operations as a result of their
being merged to create CCEP. As a result of the merger transaction,
the Company now owns an equity method investment in CCEP.
Accordingly, the impact of the deconsolidation and new equity
method investment has been included as a structural change (a
component of acquisitions and divestitures) in our analysis of net
operating revenues and income (loss) before income taxes on a
consolidated basis as well as for our Europe and Bottling
Investments operating segments. During 2016, the Company also
changed our funding arrangement with our bottling partners in
China, which resulted in a reduction in net revenues with an
offsetting reduction in direct marketing expense. In 2016 and 2015,
the Company refranchised territories in North America to certain of
its unconsolidated bottling partners. Additionally, 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; and acquired a
South African bottler. 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. In addition, for non-Company-owned and
licensed beverage products sold in the refranchised territories in
North America for which the Company no longer reports unit case
volume, we have eliminated the unit case volume from the base year
when calculating 2016 versus 2015 volume growth rates on a
consolidated basis as well as for the North America and Bottling
Investments operating segments.
2016 OUTLOOK
Our 2016 outlook for organic revenue, comparable currency
neutral income before taxes (structurally adjusted) and comparable
EPS are non-GAAP financial measures that exclude or have otherwise
been adjusted for items impacting comparability, the impact of
changes in foreign currency exchange rates, acquisitions and
divestitures, and the impact of structural items, as applicable. We
are not able to reconcile our full-year 2016 projected organic
revenue to our full-year 2016 projected reported net revenue, our
full-year 2016 projected comparable currency neutral income before
taxes (structurally adjusted) to our full-year 2016 projected
reported income before taxes, or our full-year 2016 projected
comparable EPS to our full-year 2016 projected reported EPS without
unreasonable efforts because we are unable to predict with a
reasonable degree of certainty the actual impact of changes in
foreign currency exchange rates and the exact timing of
acquisitions and divestitures and/or structural changes throughout
2016. The unavailable information could have a significant impact
on our full-year 2016 GAAP financial results.
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 1, 2016
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 11,539 $ 4,471
$ 7,068 61.3 % $ 3,912
$ 297 $ 2,859 24.8 %
Items Impacting Comparability: Asset Impairments/Restructuring — —
— —
(41
)
41
Productivity & Reinvestment — — — — (65
)
65
Equity Investees — — — — — — Transaction Gains/Losses — — — — (84
)
84 Other Items (15
)
82 (97
)
9 (107
)
1 Certain Tax Matters — — —
— — — After
Considering Items (Non-GAAP) $ 11,524 $
4,553 $ 6,971 60.5 %
$ 3,921 $ —
$ 3,050 26.5 %
Three Months Ended
July 3, 2015
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
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 %
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
% Change — Reported (GAAP) (5 )
(6 ) (5 ) (7 ) (56
) 13 % Currency Impact (3 ) (1 ) (3 ) (2 ) — (7 ) %
Change — Currency Neutral Reported (3 ) (5 )
(1 ) (5 ) —
20
% Change — After
Considering Items
(Non-GAAP)
(5 ) (5 ) (6 ) (7 ) — (3 ) % Currency Impact After Considering
Items (Non-GAAP) (3 ) (1 ) (4 ) (2 ) — (6 )
% Change — Currency Neutral After Considering Items (Non-GAAP)
(3 ) (4 ) (2 )
(5 ) — 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 except per share data)
Three Months Ended July 1, 2016
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes1
Effective
tax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 162 $ 305
$ 1,133 $ 4,299 $ 839
19.5 % $ 12 $ 3,448
$ 0.79 Items Impacting Comparability: Asset
Impairments/Restructuring — — — 41 — — 41 0.01 Productivity &
Reinvestment — — — 65 24 — 41 0.01 Equity Investees — 18 — 18 4 —
14 — Transaction Gains/Losses — — (1,124 ) (1,040 ) (26 ) — (1,014
) (0.23 ) Other Items — — 11 12 6 — 6 — Certain Tax Matters —
— — — (83 ) — 83 0.02
After Considering Items (Non-GAAP) $ 162
$ 323 $ 20 $ 3,395
$ 764 22.5 % $ 12 $ 2,619
$ 0.60
Three Months Ended July 3,
2015
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes1
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare3
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
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) 27 52 (29)
(1) (33) 445 11 12 % Change —
After Considering Items (Non-GAAP) 27 54
(90) (6) (6)
436 (6) (5)
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 The income tax adjustments are the calculated income tax
benefits (charges) at the applicable tax rate for each of the items
impacting comparability with the exception of certain tax matters
previously discussed.
2 4,377 million average shares outstanding — diluted
3 4,408 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
1, 2016
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 21,821 $ 8,540
$ 13,281 60.9 % $ 7,673
$ 608 $ 5,000 22.9 %
Items Impacting Comparability: Asset Impairments/Restructuring — —
— —
(240
)
240 Productivity & Reinvestment — — — — (128
)
128 Equity Investees — — — — — — Transaction Gains/Losses — — — —
(130
)
130 Other Items 32 130
(98
)
13 (110
)
(1
)
Certain Tax Matters — — —
— — — After Considering
Items (Non-GAAP) $ 21,853 $ 8,670
$ 13,183 60.3 %
$ 7,686 $ — $
5,497 25.2 %
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 %
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
% Change — Reported (GAAP) (5 )
(4 ) (5 ) (7 ) (33
) 4 % Currency Impact (4 ) (2 ) (5 ) (3 ) — (10 ) %
Change — Currency Neutral Reported (1 ) (2 )
0 (5 ) —
13
% Change —
After Considering Items
(Non-GAAP)
(4 ) (2 ) (6 ) (8 ) — (3 ) % Currency Impact After Considering
Items (Non-GAAP) (3 ) (2 ) (5 ) (3 ) — (8 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) (1 )
(1 ) (1 ) (5 )
— 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 except per
share data)
Six Months Ended July 1, 2016
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes1
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 303 $ 397
$ 791 $ 6,193 $ 1,240
20.0 % $ 22 $ 4,931
$ 1.13 Items Impacting Comparability: Asset
Impairments/Restructuring — — — 240 — — 240 0.05 Productivity &
Reinvestment — — — 128 45 — 83 0.02 Equity Investees — 21 — 21 4 —
17 — Transaction Gains/Losses — — (773 ) (643 ) 117 — (760 ) (0.17
) Other Items — — 40 39 16 — 23 0.01 Certain Tax Matters — —
— — (77 ) — 77 0.02 After
Considering Items (Non-GAAP) $ 303 $ 418
$ 58 $ 5,978 $ 1,345
22.5 % $ 22 $ 4,611
$ 1.05
Six Months Ended July 3,
2015
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes1
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare3
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
Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) (47) 97 (50)
(2) (25) 82 6 7 % Change — After
Considering Items (Non-GAAP) 19 47
(82) (5) (5)
81 (6) (5)
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 The income tax adjustments are the calculated income tax
benefits (charges) at the applicable tax rate for each of the items
impacting comparability with the exception of certain tax matters
previously discussed.
2 4,379 million average shares outstanding — diluted
3 4,415 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 1, 2016
Income beforeincome taxes
Diluted net incomeper share
% Change — Reported (GAAP) (1) 12 % Currency
Impact (9) (10) % Change — Currency Neutral Reported 8 22 %
Structural Impact (3) — % Change — Currency Neutral Reported and
Adjusted for Structural Impact 12 — % Change —
After Considering Items (Non-GAAP) (6) (5) % Currency Impact After
Considering Items (Non-GAAP) (11) (11) % Change — Currency Neutral
After Considering Items (Non-GAAP) 6 6 % Structural Impact After
Considering Items (Non-GAAP) (4) — % Change — Currency Neutral
After Considering Items and Adjusted for Structural Impact
(Non-GAAP) 10 —
Six Months Ended
July 1, 2016
Income beforeincome taxes
Diluted net incomeper share
% Change — Reported (GAAP) (2) 7 % Currency
Impact (12) (13) % Change — Currency Neutral Reported 10 20 %
Structural Impact (3) — % Change — Currency Neutral Reported and
Adjusted for Structural Impact 13 — % Change —
After Considering Items (Non-GAAP) (5) (5) % Currency Impact After
Considering Items (Non-GAAP) (12) (12) % Change — Currency Neutral
After Considering Items (Non-GAAP) 6 7 % Structural Impact After
Considering Items (Non-GAAP) (3) — % Change — Currency Neutral
After Considering Items and Adjusted for Structural Impact
(Non-GAAP) 10 —
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 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 621 $ 1,410
$ 937 $ 2,709 $ 1,560
$ 5,615 $ 63 $ (1,376
) $ 11,539 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Equity Investees — — — — — — —
— — Transaction Gains/Losses — — — — — — — — — Other Items —
— — (6
)
— — (9 ) — (15
)
After Considering Items (Non-GAAP) $ 621 $
1,410 $ 937 $ 2,703 $
1,560 $ 5,615 $ 54 $ (1,376 ) $
11,524
Three Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 658 $ 1,435
$ 973 $ 2,651 $ 1,601
$ 6,385 $ 25 $ (1,572
) $ 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 $ 2,640 $
1,601 $ 6,385 $ 29 $ (1,572 ) $
12,149
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
%
Change — Reported (GAAP) (6 ) (2 )
(4 ) 2 (2 ) (12 )
149 13 (5 ) % Currency Impact (10 ) 0
(20 ) 0 1 (1 ) 70 — (3 ) % Change — Currency Neutral Reported 4 (2
) 16 2 (3 ) (11 ) 79 — (3 ) % Acquisitions, Divestitures and
Structural Items (3 ) (4 ) 0 (1 ) (1 ) (11 ) 30 — (5 ) % Change —
Organic Revenues (Non-GAAP) 7 2
16 4 (2 ) 0 49
— 3
% Change — After Considering
Items (Non-GAAP) (6 ) (2 ) (4 ) 2 (2 ) (12 ) 79 — (5 ) % Currency
Impact After Considering Items (Non-GAAP) (10 ) 0 (20 ) 0 1 (1 ) 12
— (3 ) % Change — Currency Neutral After Considering Items
(Non-GAAP) 4 (2 ) 16 2
(3 ) (11 ) 66 — (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)
Net Operating
Revenues by Segment:
Six Months Ended July 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 1,167 $ 2,614
$ 1,872 $ 5,073 $ 2,795
$ 10,907 $ 48 $ (2,655
) $ 21,821 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Equity Investees — — — — — — —
— — Transaction Gains/Losses — — — — — — — — — Other Items —
— — (8
)
— — 40 — 32
After Considering Items (Non-GAAP) $ 1,167
$ 2,614 $ 1,872 $ 5,065
$ 2,795 $ 10,907 $ 88
$ (2,655 ) $ 21,853
Six Months Ended July
3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 1,296 $ 2,647
$ 2,039 $ 4,968 $ 2,886
$ 11,916 $ 65 $ (2,950
) $ 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 $ 4,951 $
2,886 $ 11,916 $ 67 $
(2,950 ) $ 22,852
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated
%
Change — Reported (GAAP) (10 ) (1 )
(8 ) 2 (3 ) (8 )
(25 ) 10 (5 ) % Currency Impact
(11 ) 1 (22 ) 0 (1 ) (2 ) (55 ) — (4 ) % Change — Currency Neutral
Reported 2 (2 ) 14 2 (2 ) (7 ) 29 — (1 ) % Acquisitions,
Divestitures and Structural Items (3 ) (3 ) 0 (1 ) (2 ) (6 ) 24 —
(3 ) % Change — Organic Revenues (Non-GAAP) 5
1 14 3 0 0
6 — 2
%
Change — After Considering Items (Non-GAAP) (10 ) (1 ) (8 ) 2 (3 )
(8 ) 33 — (4 ) % Currency Impact After Considering Items (Non-GAAP)
(11 ) 1 (22 ) 0 (1 ) (2 ) 4 — (3 ) % Change — Currency Neutral
After Considering Items (Non-GAAP) 2 (2 )
14 2 (2 ) (7 ) 28
— (1 )
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)
Core Net
Operating Revenues: 1
Three Months EndedJuly 1,
2016
Reported (GAAP) Net Operating Revenues $
11,539 Bottling Investments Net Operating Revenues (5,615 )
Consolidated Eliminations 1,376 Intersegment Core Net Operating
Revenue Eliminations (7 ) Core Net Operating Revenues (Non-GAAP)
7,293 Items Impacting Comparability: Asset
Impairments/Restructuring — Productivity & Reinvestment —
Equity Investees — Transaction Gains/Losses — Other Items (15 )
Core Net Operating Revenues After Considering Items (Non-GAAP)
$ 7,278
Three Months EndedJuly 3,
2015
Reported (GAAP) Net Operating Revenues $
12,156 Bottling Investments Net Operating Revenues (6,385 )
Consolidated Eliminations 1,572 Intersegment Core Net Operating
Revenue Eliminations (4 ) Core Net Operating Revenues (Non-GAAP)
7,339 Items Impacting Comparability: Asset
Impairments/Restructuring — Productivity & Reinvestment —
Equity Investees — Transaction Gains/Losses — Other Items (7 ) Core
Net Operating Revenues After Considering Items (Non-GAAP) $
7,332
% Change — Reported
(GAAP) Net Operating Revenues (5) % Change — Core Net
Operating Revenues (Non-GAAP) (1) % Currency Impact (3) % Change —
Core Currency Neutral Reported (Non-GAAP) 2 % Acquisitions,
Divestitures and Structural Items (2) % Change — Core Organic
Revenues (Non-GAAP)2 4 % Change
— Core After Considering Items (Non-GAAP) (1) % Currency Impact
After Considering Items (Non-GAAP) (3) % Change — Core Currency
Neutral After Considering Items (Non-GAAP) 3
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 Core net operating revenues included the net operating
revenues from the Eurasia and Africa, Europe, Latin America, North
America, Asia Pacific and Corporate operating segments offset by
intersegment revenue eliminations of $7 million and $4 million
during the three months ended July 1, 2016 and July 3, 2015,
respectively.
2 Core organic revenue growth included 4 points of positive
price/mix.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Core Net
Operating Revenues: 1
Six Months EndedJuly 1,
2016
Reported (GAAP) Net Operating Revenues $
21,821 Bottling Investments Net Operating Revenues (10,907
)
Consolidated Eliminations 2,655 Intersegment Core Net Operating
Revenue Eliminations (13
)
Core Net Operating Revenues (Non-GAAP) 13,556 Items Impacting
Comparability: Asset Impairments/Restructuring — Productivity &
Reinvestment — Equity Investees — Transaction Gains/Losses — Other
Items 32 Core Net Operating Revenues After
Considering Items (Non-GAAP) $ 13,588
Six Months EndedJuly 3,
2015
Reported (GAAP) Net Operating Revenues $
22,867 Bottling Investments Net Operating Revenues (11,916
)
Consolidated Eliminations 2,950 Intersegment Core Net Operating
Revenue Eliminations (7
)
Core Net Operating Revenues (Non-GAAP) 13,894 Items Impacting
Comparability: Asset Impairments/Restructuring — Productivity &
Reinvestment — Equity Investees — Transaction Gains/Losses — Other
Items (15
)
Core Net Operating Revenues After Considering Items (Non-GAAP)
$ 13,879
%
Change — Reported (GAAP) Net Operating Revenues (5
) % Change — Core Net Operating Revenues (Non-GAAP) (2 ) %
Currency Impact (4 ) % Change — Core Currency Neutral Reported
(Non-GAAP) 2 % Acquisitions, Divestitures and Structural Items (1 )
% Change — Core Organic Revenues (Non-GAAP)2 4
% Change — Core After Considering Items
(Non-GAAP) (2 ) % Currency Impact After Considering Items
(Non-GAAP) (4 ) % Change — Core Currency Neutral After Considering
Items (Non-GAAP) 2
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 Core net operating revenues included the net operating
revenues from the Eurasia and Africa, Europe, Latin America, North
America, Asia Pacific and Corporate operating segments offset by
intersegment revenue eliminations of $13 million and $7 million
during the six months ended July 1, 2016 and July 3, 2015,
respectively.
2 Core organic revenue growth included 3 points of positive
price/mix.
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 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 248 $ 808 $ 512
$ 735 $ 758 $ 216
$ (418 ) $ 2,859 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 41 — 41
Productivity & Reinvestment 1 —
(1
)
27 — 17 21 65 Equity Investees — — — — — — — — Transaction
Gains/Losses — — — — — 60 24 84 Other Items — —
— (26
)
—
(63
)
90 1 After Considering Items (Non-GAAP) $ 249
$ 808 $ 511 $ 736
$ 758 $ 271 $ (283 ) $ 3,050
Three Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 275 $ 836 $ 525
$ 754 $ 761 $ 164
$ (780 ) $ 2,535 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 94 — 94
Productivity & Reinvestment 3 — 3 31 2 49 4 92 Equity Investees
— — — — — — — — Transaction Gains/Losses — — — — — — 383 383 Other
Items — — —
(40
)
— (12
)
102 50 After Considering Items (Non-GAAP) $
278 $ 836 $ 528 $ 745
$ 763 $ 295 $ (291 ) $
3,154
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
% Change — Reported
(GAAP) (10 ) (3 ) (2
) (3 ) 0 31 47 13
% Currency Impact (12 ) 0 (29 ) 0 (1 ) (4 ) 3 (7 ) % Change —
Currency Neutral Reported 2 (4 ) 27
(3 ) 1 35 44
20
%
Change — After Considering Items (Non-GAAP) (10 ) (3 ) (3 ) (1 ) (1
) (9 ) 3 (3 ) % Currency Impact After Considering Items (Non-GAAP)
(12 ) 0 (29 ) 0 (1 ) (1 ) 2 (6 ) % Change — Currency Neutral After
Considering Items (Non-GAAP) 2 (4 ) 26
(1 ) 1 (7 ) 0 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)
Operating Income
(Loss) by Segment:
Six Months Ended July 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 484 $ 1,499 $ 1,035
$ 1,316 $ 1,309 $ 98
$ (741 ) $ 5,000 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 240 — 240
Productivity & Reinvestment — 4 (1 ) 58 1 38 28 128 Equity
Investees — — — — — — — — Transaction Gains/Losses — — — — — 105 25
130 Other Items — — — (42 ) — (105 )
146 (1 ) After Considering Items (Non-GAAP)
$ 484 $ 1,503 $ 1,034 $ 1,332 $
1,310 $ 376 $ (542 ) $ 5,497
Six Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 554 $ 1,552 $ 1,103
$ 1,289 $ 1,305 $ 154
$ (1,126 ) $ 4,831 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
129 — 129 Productivity & Reinvestment 15 (11 ) 3 73 (3 ) 81 24
182 Equity Investees — — — — — — — — Transaction Gains/Losses — — —
— — — 383 383 Other Items — — 33 (50 ) 2
(23 ) 175 137 After Considering
Items (Non-GAAP) $ 569 $ 1,541 $ 1,139
$ 1,312 $ 1,304 $ 341 $ (544 ) $ 5,662
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
% Change — Reported
(GAAP)
(13
)
(3
)
(6
)
2 0
(36
)
34 4 % Currency Impact
(14
)
0 (30
)
1 (2
)
0 (3
)
(10
)
% Change — Currency Neutral Reported 1 (4
) 24 1 3 (37 ) 37
13
% Change — After Considering Items
(Non-GAAP) (15
)
(2 ) (9
)
2 0 10 0 (3
)
% Currency Impact After Considering Items (Non-GAAP) (13
)
0 (29
)
1 (2
)
(2
)
0 (8
)
% Change — Currency Neutral After Considering Items (Non-GAAP)
(1
)
(3 ) 20 1 3 12
0 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)
Income (Loss)
Before Income Taxes by Segment:
Three Months Ended July 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported
(GAAP) $ 256 $ 822 $
520 $ 745 $ 760 $
269 $ 927 $ 4,299 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
41 — 41 Productivity & Reinvestment 1 —
(1
)
27 — 17 21 65 Equity Investees — — — — — 15 3 18 Transaction
Gains/Losses — — — — — 259 (1,299
)
(1,040
)
Other Items — — —
(26
)
—
(63
)
101
12 After Considering Items
(Non-GAAP) $ 257 $ 822
$ 519 $ 746 $ 760
$ 538 $ (247
)
$ 3,395
Three Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported
(GAAP) $ 287 $ 843 $
526 $ 752 $ 766 $
353 $ 834 $ 4,361 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
94 — 94 Productivity & Reinvestment 3 — 3 31 2 49 4 92 Equity
Investees — 5 — — — 4 — 9 Transaction Gains/Losses — — — — — 12
(1,019
)
(1,007
)
Other Items — — —
(40
)
—
(12
)
96
44 After Considering Items
(Non-GAAP) $ 290 $ 848
$ 529 $ 743 $ 768
$ 500 $ (85
)
$ 3,593
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
% Change —
Reported (GAAP) (11 ) (3 )
(1 ) (1 ) (1 ) (24
) 11 (1 ) % Currency Impact (11 ) 0 (29
) 0 (1 ) (6 ) (22 ) (9 ) % Change — Currency Neutral Reported
0 (3 ) 28
(1 ) 0 (18 )
34 8
% Change — After Considering Items(Non-GAAP)
(11 ) (3 ) (2 ) 0 (1 ) 7 (187 ) (6 ) % Currency Impact After
Considering Items (Non-GAAP) (11 ) 0 (29 ) 0 (1 ) (4 ) (225 ) (11 )
% Change — Currency Neutral After Considering Items (Non-GAAP)
0 (3 ) 27
0 0 11
38 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)
Income (Loss)
Before Income Taxes by Segment:
Six Months Ended July 1, 2016
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported
(GAAP) $ 502 $ 1,526 $
1,038 $ 1,325 $ 1,314 $
(163
)
$ 651 $ 6,193 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 240 — 240
Productivity & Reinvestment — 4 (1
)
58 1 38 28 128 Equity Investees — — — — — 18 3 21 Transaction
Gains/Losses — — — — — 673 (1,316
)
(643
)
Other Items — — —
(42 ) — (105
)
186 39 After Considering
Items (Non-GAAP) $ 502 $ 1,530
$ 1,037 $ 1,341 $
1,315 $ 701 $ (448
)
$ 5,978
Six Months Ended July 3, 2015
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
Reported
(GAAP) $ 573 $ 1,567 $
1,114 $ 1,284 $ 1,314 $
307 $ 183 $ 6,342 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
129 — 129 Productivity & Reinvestment 15
(11
)
3 73 (3
)
81 24 182 Equity Investees — 6 — — — 76 — 82 Transaction
Gains/Losses — — — — — 33 (994
)
(961
)
Other Items — — 33
(50 ) 2 (23
)
583 545 After Considering
Items (Non-GAAP) $ 588 $ 1,562
$ 1,150 $ 1,307 $
1,313 $ 603 $ (204
)
$ 6,319
Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Consolidated
% Change —
Reported (GAAP) (12 ) (3 )
(7 ) 3 0 — 256 (2
) % Currency Impact (13 ) 0 (30 ) 1 (2 ) — (171 ) (12 ) %
Change — Currency Neutral Reported 1 (3
) 23 3 2
— 428 10
% Change —
After Considering Items(Non-GAAP) (15 ) (2 ) (10 ) 3 0 16 (120 ) (5
) % Currency Impact After Considering Items (Non-GAAP) (13 ) 0 (29
) 1 (2 ) (5 ) (136 ) (12 ) % Change — Currency Neutral After
Considering Items (Non-GAAP) (1 ) (2 )
19 2 2
21 16 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)
Operating Expense
Leverage:
Three Months Ended July 1, 2016 Operating income
Gross profit
Operating expenseleverage1
% Change — Reported (GAAP) 13 (5) 17 %
Change — Currency Neutral Reported 20 (1)
21
% Change — After Considering Items (Non-GAAP) (3) (6) 2 %
Change — Currency Neutral After Considering Items (Non-GAAP)
3 (2) 5
Six Months
Ended July 1, 2016 Operating income Gross
profit
Operating expenseleverage1
% Change — Reported (GAAP) 4 (5) 9 %
Change — Currency Neutral Reported 13 0
13 %
Change — After Considering Items (Non-GAAP) (3) (6) 3 % Change —
Currency Neutral After Considering Items (Non-GAAP) 5
(1) 6
Note: Certain rows may not add due to rounding.
1 Operating expense leverage is calculated by subtracting gross
profit growth from operating income growth.
Operating
Margin:
Three MonthsEnded July
1,2016
Three MonthsEnded July
3,2015
Basis PointGrowth
(Decline)
Reported (GAAP) 24.78 % 20.85 %
393
Impact on Operating Margin of Items Impacting Comparability
(Non-GAAP) (1.68 )% (5.10 )% Operating Margin After Considering
Items (Non-GAAP) 26.46 % 25.95 % 51 Impact on Operating Margin of
Currency After Considering Items (Non-GAAP) (0.92 )%
0.00
% Currency Neutral Operating Margin After Considering Items
(Non-GAAP) 27.38 % 25.95 % 143
Six MonthsEnded July
1,2016
Six MonthsEnded July
3,2015
Basis PointGrowth
(Decline)
Reported (GAAP) 22.91 % 21.13 %
178
Impact on Operating Margin of Items Impacting Comparability
(Non-GAAP) (2.24 )% (3.65 )% Operating Margin After Considering
Items (Non-GAAP) 25.15 % 24.78 % 37 Impact on Operating Margin of
Currency After Considering Items (Non-GAAP) (1.02 )%
0.00
% Currency Neutral Operating Margin After Considering Items
(Non-GAAP) 26.17 % 24.78 % 139
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Purchases and
Issuances of Stock:
Six Months EndedJuly 1,
2016
Six Months EndedJuly 3,
2015
Reported (GAAP) Issuances of Stock $ 1,108 $ 410 Purchases
of Stock for Treasury (2,156 ) (1,298 ) Net Change in Stock
Issuance Receivables1 3 (3 ) Net Change in Treasury Stock Payables2
(34 ) 15 Net Treasury Share Repurchases (Non-GAAP) $
(1,079 ) $ (876 )
1 Represents the net change in receivables related to employee
stock options exercised but not settled prior to the end of the
period.
2 Represents the net change in payables for treasury shares
repurchased but not settled prior to the end of the period.
Consolidated Cash
from Operations:
Six Months EndedJuly 1,
2016
Six Months EndedJuly 3,
2015
Net Cash Provided byOperating
Activities
Net Cash Provided byOperating
Activities
Reported (GAAP) $ 3,820 $ 5,118
Items Impacting Comparability: Cash Payments for Pension Plan
Contributions 471 — After Considering Items (Non-GAAP)
$ 4,291 $ 5,118
Net Cash Provided byOperating
Activities
% Change — Reported (GAAP) (25) % Change —
After Considering Items (Non-GAAP) (16)
Note: Certain growth rates may not recalculate using the rounded
dollar amounts provided.
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 and more than 3,800 beverage choices.
Led by Coca-Cola, one of the world's most valuable and recognizable
brands, our Company's portfolio features 20 billion-dollar brands,
18 of which are available in reduced-, low- or no-calorie options.
These brands include Diet Coke, Coca-Cola Zero, Fanta, Sprite,
Dasani, vitaminwater, Powerade, Minute Maid, Simply,
Del Valle, Georgia and Gold Peak. Through the world's largest
beverage distribution system, we are the No. 1 provider of both
sparkling and still beverages. More than 1.9 billion servings
of our beverages are enjoyed by consumers in more than 200
countries each day. With an enduring commitment to building
sustainable communities, our Company is focused on initiatives that
reduce our environmental footprint, 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; an inability to be
successful in our innovation activities; 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
one or more 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 marketing or sale 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; failure to
adequately protect, or disputes relating to, trademarks, formulae
and other intellectual property rights; 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 relationship with 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 our refranchising activities; an inability to
successfully manage the possible negative consequences of our
productivity initiatives; an inability to attract or retain a
highly skilled workforce; 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, 2015 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160727005662/en/
The Coca-Cola CompanyInvestors and Analysts:Tim
Leveridge, +01-404-676-7563orMedia:Petro Kacur,
+01-404-676-2683
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