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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Coca Cola Company | NYSE:KO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.22 | -0.35% | 61.82 | 6,043 | 11:13:34 |
Strong Price/Mix and Solid Performance in Developed Markets
Flagship North America Market Continues to Outperform the Industry
The Coca-Cola Company today reported fourth quarter and full year 2016 operating results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company, said, "We are pleased to report that we ended 2016 with fourth quarter top- and bottom-line growth within our expectations. Strong price/mix stemming from our continued focus on driving revenue and solid performance in our developed markets helped offset persistent macroeconomic pressures in our emerging and developing markets. Our flagship market of North America grew net revenues 8% for the quarter and 4% for the year, outperforming total retail value growth for both the North America nonalcoholic ready-to-drink beverage industry and U.S. consumer packaged goods companies."
"In addition to delivering our profit target for the full year, I am encouraged by the strategic actions taken during 2016 to strengthen our global bottling system. In the fourth quarter, we reached a definitive agreement to refranchise all Company-owned bottling operations in China, and we took important steps to further the evolution of Coca-Cola Beverages Africa. During the year, we successfully completed the creation of Coca-Cola European Partners, and we supported the ongoing transformation of the franchise bottling system in Japan. And last, we remain on track to complete the refranchising of Company-owned bottling operations in the United States by the end of 2017. In total, half of our global system revenue has been in motion through our recent actions to strengthen the system. The progress demonstrated by these actions is foundational in positioning our system for prosperity long into the future."
"We also recently made an important decision about the future leadership of The Coca-Cola Company with the announcement that James Quincey will become our next CEO, effective May 1. Having worked closely with James for many years, I know that his knowledge and experience make him the ideal candidate to lead our Company and bottling system into the future. I am partnering with James to ensure a smooth CEO transition and look forward to providing continued support as Chairman of the Board of Directors."
Highlights Quarterly / Full Year PerformanceStrong momentum in transforming our business continued through the last quarter of the year, with key actions driving positive results in many markets around the world. Notable developments included:
Revenue and Volume
Percent ChangeConcentrate
Sales 1
Price/MixCurrency
Impact
Acquisitions,
Divestitures,
and Structural
Items, Net
Reported
Net Revenues
Organic
Revenues 2
Unit Case
Volume
Consolidated 0 6 (2) (10) (6) 6 (1) Europe, Middle East & Africa 3 5 0 (2) (6) (4) 5 1 Latin America (5) 15 (14) 0 (4) 10 (4) North America 4 5 0 0 8 8 1 Asia Pacific (2) 9 4 (3) 8 7 0 Bottling Investments 3 0 0 (23) (20) 3 (25)Income Before Taxes and EPS
Percent ChangeReported
Income Before
Taxes
Items
Impacting
Comparability
Currency
Impact
Comparable
Currency
Neutral 2
Structural
Impact
Comparable
Currency Neutral
(Structurally
Adjusted) 2
Consolidated (67) (61) (11) 6 (7) 14 Europe, Middle East & Africa 3 (5) (4) (2) 2 Latin America (7) 0 (24) 17 North America 18 3 (1) 16 Asia Pacific 6 1 1 3 Bottling Investments (447) (449) 1 0 Percent Change Reported EPSItems
Impacting
Comparability
Currency
Impact
Comparable
Currency
Neutral 2
Consolidated EPS (55) (51) (11) 7Note: Certain rows may not add due to rounding.
1 For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes.2 Organic revenues, comparable currency neutral income before taxes, comparable currency neutral income before taxes (structurally adjusted), and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section.3 Effective August 1, 2016, the Company formed a new Europe, Middle East & Africa operating group consisting of business units that were previously included in the Europe and the Eurasia & Africa operating groups.
Operating Results – Year Ended December 31, 2016Revenue and Volume
Percent ChangeConcentrate
Sales 1
Price/Mix
Currency
Impact
Acquisitions,
Divestitures,
and Structural
Items, Net
Reported
Net Revenues
Organic
Revenues 2
Unit Case
Volume
Consolidated 1 3 (3) (6) (5) 3 1 Europe, Middle East & Africa 3 0 2 (3) (4) (4) 3 1 Latin America (1) 13 (18) 0 (6) 12 (1) North America 1 3 0 0 4 4 1 Asia Pacific 3 (2) 1 (2) 1 1 2 Bottling Investments 0 1 (1) (13) (14) 1 (16)Income Before Taxes and EPS
Percent ChangeReported
Income Before
Taxes
Items
Impacting
Comparability
Currency
Impact
Comparable
Currency
Neutral 2
Structural
Impact
Comparable
Currency Neutral
(Structurally
Adjusted) 2
Consolidated (15) (10) (9) 4 (3) 8 Europe, Middle East & Africa 3 (4) (1) (3) (1) Latin America (9) (2) (26) 19 North America 9 2 0 7 Asia Pacific 1 0 0 2 Bottling Investments (350) (358) (2) 11 Percent ChangeReported EPS
Items
Impacting
Comparability
Currency
Impact
Comparable
Currency
Neutral 2
Consolidated EPS (10) (6) (9) 5Note: Certain rows may not add due to rounding.
1 For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes.2 Organic revenues, comparable currency neutral income before taxes, comparable currency neutral income before taxes (structurally adjusted), and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section.3 Effective August 1, 2016, the Company formed a new Europe, Middle East & Africa operating group consisting of business units that were previously included in the Europe and the Eurasia & Africa operating groups.
In addition to the data in the preceding tables, operating results were impacted by the following:
ConsolidatedOur 2017 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, divestitures, and/or structural changes throughout 2017. The unavailable information could have a significant impact on our full year 2017 GAAP financial results.
Full Year 2017 Underlying Performance:
Full Year 2017 Currency Impact:
Full Year 2017 Acquisitions, Divestitures, and Structural Items Impact:
Full Year 2017 Other Items:
Full Year 2017 EPS: Comparable EPS (non-GAAP) 1% to 4% decline versus $1.91 in 2016
First Quarter 2017 Considerations:
Full Year 2018 Considerations:
*Does not include any impact from potential tax reform
NotesWe are hosting a conference call with investors and analysts to discuss fourth quarter and full year 2016 results today, Feb. 9, 2017 at 9 a.m. EST. Also today, the Company's Investor Relations team will hold a separate investor and analyst conference call to address financial modeling-related questions at 11:30 a.m. EST. We invite investors to listen to a live audiocast of both conference calls 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 calls will also be available within 24 hours after the audiocasts on the Company’s website. Further, the "Investors" section of the website includes a reconciliation of non-GAAP financial measures, which may be used 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 EndedDecember 31,
2016
December 31,
2015
% Change1 Net Operating Revenues $ 9,409 $ 10,000 (6 ) Cost of goods sold 3,794 4,054 (6 ) Gross Profit 5,615 5,946 (6 ) Selling, general and administrative expenses 3,580 3,937 (9 ) Other operating charges 680 491 39 Operating Income 1,355 1,518 (11 ) Interest income 170 154 10 Interest expense 248 143 73 Equity income (loss) — net 157 87 82 Other income (loss) — net (919 ) (78 ) — Income Before Income Taxes 515 1,538 (67 ) Income taxes (32 ) 302 — Consolidated Net Income 547 1,236 (56 ) Less: Net income (loss) attributable to noncontrolling interests (3 ) (1 ) (358 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 550 $ 1,237 (56 ) Diluted Net Income Per Share2 $ 0.13 $ 0.28 (55 ) Average Shares Outstanding — Diluted2 4,345 4,390
1 Certain growth rates may not recalculate using the rounded dollar amounts provided.2 For the three months ended December 31, 2016 and December 31, 2015, basic net income per share was $0.13 for 2016 and $0.29 for 2015 based on average shares outstanding — basic of 4,303 million for 2016 and 4,336 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) Year EndedDecember 31,
2016
December 31,
2015
% Change1 Net Operating Revenues $ 41,863 $ 44,294 (5 ) Cost of goods sold 16,465 17,482 (6 ) Gross Profit 25,398 26,812 (5 ) Selling, general and administrative expenses 15,262 16,427 (7 ) Other operating charges 1,510 1,657 (9 ) Operating Income 8,626 8,728 (1 ) Interest income 642 613 5 Interest expense 733 856 (14 ) Equity income (loss) — net 835 489 71 Other income (loss) — net (1,234 ) 631 — Income Before Income Taxes 8,136 9,605 (15 ) Income taxes 1,586 2,239 (29 ) Consolidated Net Income 6,550 7,366 (11 ) Less: Net income (loss) attributable to noncontrolling interests 23 15 45 Net Income Attributable to Shareowners of The Coca-Cola Company $ 6,527 $ 7,351 (11 ) Diluted Net Income Per Share2 $ 1.49 $ 1.67 (10 ) Average Shares Outstanding — Diluted2 4,367 4,4051 Certain growth rates may not recalculate using the rounded dollar amounts provided.2 For the years ended December 31, 2016 and December 31, 2015, basic net income per share was $1.51 for 2016 and $1.69 for 2015 based on average shares outstanding — basic of 4,317 million for 2016 and 4,352 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) December 31, 2016 December 31,2015ASSETS
Current Assets Cash and cash equivalents $ 8,555 $ 7,309 Short-term investments 9,595 8,322 Total Cash, Cash Equivalents and Short-Term Investments 18,150 15,631 Marketable securities 4,051 4,269 Trade accounts receivable, less allowances of $466 and $352, respectively 3,856 3,941 Inventories 2,675 2,902 Prepaid expenses and other assets 2,481 2,752 Assets held for sale 2,797 3,900 Total Current Assets 34,010 33,395 Equity Method Investments 16,260 12,318 Other Investments 989 3,470 Other Assets 4,248 4,110 Property, Plant and Equipment — net 10,635 12,571 Trademarks With Indefinite Lives 6,097 5,989 Bottlers' Franchise Rights With Indefinite Lives 3,676 6,000 Goodwill 10,629 11,289 Other Intangible Assets 726 854 Total Assets $ 87,270 $ 89,996LIABILITIES AND EQUITY
Current Liabilities Accounts payable and accrued expenses $ 9,490 $ 9,660 Loans and notes payable 12,498 13,129 Current maturities of long-term debt 3,527 2,676 Accrued income taxes 307 331 Liabilities held for sale 710 1,133 Total Current Liabilities 26,532 26,929 Long-Term Debt 29,684 28,311 Other Liabilities 4,081 4,301 Deferred Income Taxes 3,753 4,691 The Coca-Cola Company Shareowners' EquityCommon stock, $0.25 par value; Authorized — 11,200 shares; Issued — 7,040 and 7,040 shares, respectively
1,760 1,760 Capital surplus 14,993 14,016 Reinvested earnings 65,502 65,018 Accumulated other comprehensive income (loss) (11,205 ) (10,174 ) Treasury stock, at cost — 2,752 and 2,716 shares, respectively (47,988 ) (45,066 ) Equity Attributable to Shareowners of The Coca-Cola Company 23,062 25,554 Equity Attributable to Noncontrolling Interests 158 210 Total Equity 23,220 25,764 Total Liabilities and Equity $ 87,270 $ 89,996THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED) (In millions) Year Ended December 31, 2016 December 31,2015 Operating Activities Consolidated net income $ 6,550 $ 7,366 Depreciation and amortization 1,787 1,970 Stock-based compensation expense 258 236 Deferred income taxes (856 ) 73 Equity (income) loss — net of dividends (449 ) (122 ) Foreign currency adjustments 158 (137 ) Significant (gains) losses on sales of assets — net 1,146 (374 ) Other operating charges 647 929 Other items (224 ) 744 Net change in operating assets and liabilities (221 ) (157 ) Net cash provided by operating activities 8,796 10,528 Investing Activities Purchases of investments (15,499 ) (15,831 ) Proceeds from disposals of investments 16,624 14,079 Acquisitions of businesses, equity method investments and nonmarketable securities (838 ) (2,491 )Proceeds from disposals of businesses, equity method investments and nonmarketable securities
1,035 565 Purchases of property, plant and equipment (2,262 ) (2,553 ) Proceeds from disposals of property, plant and equipment 150 85 Other investing activities (209 ) (40 ) Net cash provided by (used in) investing activities (999 ) (6,186 ) Financing Activities Issuances of debt 27,281 40,434 Payments of debt (25,615 ) (37,738 ) Issuances of stock 1,434 1,245 Purchases of stock for treasury (3,681 ) (3,564 ) Dividends (6,043 ) (5,741 ) Other financing activities 79 251 Net cash provided by (used in) financing activities (6,545 ) (5,113 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents (6 ) (878 ) Cash and Cash Equivalents Net increase (decrease) during the year 1,246 (1,649 ) Balance at beginning of year 7,309 8,958 Balance at end of year $ 8,555 $ 7,309THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED) (In millions)Three Months Ended
Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income TaxesDecember 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
December 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
December 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
Europe, Middle East & Africa $ 1,645 $ 1,711 (4 ) $ 779 $ 839 (7 ) $ 799 $ 838 (5 ) Latin America 982 1,023 (4 ) 481 528 (9 ) 481 515 (7 ) North America 2,473 2,292 8 600 492 22 582 491 18 Asia Pacific 1,039 960 8 332 313 6 335 317 6 Bottling Investments 4,138 5,199 (20 ) (359 ) (115 ) (212 ) (1,026 ) (187 ) (447 ) Corporate 37 46 (20 ) (478 ) (539 ) 11 (656 ) (436 ) (50 ) Eliminations (905 ) (1,231 ) 27 — — — — — — Consolidated $ 9,409 $ 10,000 (6 ) $ 1,355 $ 1,518 (11 ) $ 515 $ 1,538 (67 )Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 During the three months ended December 31, 2016, intersegment revenues were $23 million for Latin America, $795 million for North America, $69 million for Asia Pacific and $18 million for Bottling Investments. During the three months ended December 31, 2015, intersegment revenues were $150 million for Europe, Middle East & Africa, $19 million for Latin America, $948 million for North America, $69 million for Asia Pacific, $35 million for Bottling Investments and $10 million for Corporate.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED) (In millions)Year Ended
Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income TaxesDecember 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
December 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
December 31,
2016
December 31,
2015
% Fav. /
(Unfav.)
Europe, Middle East & Africa $ 7,278 $ 7,587 (4 ) $ 3,676 $ 3,875 (5 ) $ 3,749 $ 3,923 (4 ) Latin America 3,819 4,074 (6 ) 1,951 2,169 (10 ) 1,966 2,164 (9 ) North America 10,210 9,840 4 2,582 2,366 9 2,560 2,356 9 Asia Pacific 5,294 5,252 1 2,224 2,189 2 2,238 2,207 1 Bottling Investments 19,885 23,063 (14 ) (137 ) 124 — (1,923 ) (427 ) (350 ) Corporate 132 166 (21 ) (1,670 ) (1,995 ) 16 (454 ) (618 ) 27 Eliminations (4,755 ) (5,688 ) 16 — — — — — — Consolidated $ 41,863 $ 44,294 (5 ) $ 8,626 $ 8,728 (1 ) $ 8,136 $ 9,605 (15 )Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 During the year ended December 31, 2016, intersegment revenues were $264 million for Europe, Middle East & Africa, $73 million for Latin America, $3,773 million for North America, $506 million for Asia Pacific, $134 million for Bottling Investments and $5 million for Corporate. During the year ended December 31, 2015, intersegment revenues were $621 million for Europe, Middle East & Africa, $75 million for Latin America, $4,259 million for North America, $545 million for Asia Pacific, $178 million for Bottling Investments and $10 million for Corporate.
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"). To supplement our consolidated financial statements reported on a GAAP basis, we provide the following non-GAAP financial measures: "Organic revenues," "core business organic revenues," "comparable currency neutral operating margin," "comparable currency neutral income before taxes," "comparable currency neutral income before taxes (structurally adjusted)," "comparable EPS," "comparable currency neutral EPS," "underlying effective tax rate" and "net share repurchases," each of which are defined below. Management believes these non-GAAP financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. We believe these non-GAAP financial measures also enhance investors' ability to compare period-to-period financial results. 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 measures do not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of each of these non-GAAP financial measures to GAAP information are also included. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions and in evaluating the Company's performance. Disclosing these non-GAAP financial measures allows investors and Company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance.
DEFINITIONS
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)DEFINITIONS (continued)
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.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)DEFINITIONS (continued)
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." Items impacting comparability include asset impairments and restructuring charges, charges related to our productivity and reinvestment initiatives, and transaction gains/losses, in each case when exceeding a U.S. dollar threshold. Also included are timing differences related to our economic (nondesignated) hedging activities and our proportionate share of similar items incurred by our equity method investees, regardless of size. In addition, we provide the impact that changes in foreign currency exchange rates had on our financial results ("currency neutral operating results" defined above).
Asset Impairments and Restructuring
Asset Impairments
During the three months and year ended December 31, 2016, the Company recorded charges of $153 million related to certain intangible assets. These charges included $143 million related to the impairment of certain U.S. bottlers' franchise rights recorded in our Bottling Investments operating segment. This charge was related to a number of factors, primarily as a result of lower operating performance compared to previously modeled results as well as a revision in management's view of the proceeds that may be ultimately received upon refranchising the territory. The remaining charge of $10 million was related to an impairment of goodwill recorded in our Bottling Investments operating segment. This charge was primarily the result of management's revised outlook on market conditions. These charges of $153 million were recorded in our Bottling Investments operating segment.
Restructuring
During the year ended December 31, 2016, the Company recorded charges of $240 million. The Company also recorded charges of $88 million and $292 million during the three months and year ended December 31, 2015, respectively. These charges were related to the integration of our German bottling operations, which were deconsolidated in May 2016.
Productivity and Reinvestment
During the three months and year ended December 31, 2016, the Company recorded charges of $165 million and $352 million, respectively, related to our productivity and reinvestment initiatives. The Company also recorded charges of $368 million and $691 million during the three months and year ended December 31, 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.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)Equity Investees
During the three months and year ended December 31, 2016, the Company recorded net charges of $26 million and $61 million, respectively. During the three months and year ended December 31, 2015, the Company recorded net charges of $8 million and $87 million, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.
Transaction Gains/Losses
During the three months and year ended December 31, 2016, the Company recorded charges of $127 million and $297 million, respectively, related to costs incurred to refranchise certain of our bottling operations. 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 our bottling systems. Additionally, during the three months and year ended December 31, 2016, the Company recorded $118 million of pension settlement charges primarily as a result of our refranchising activities.
During the three months and year ended December 31, 2016, the Company recorded charges of $4 million and $41 million, respectively. During the three months and year ended December 31, 2015, the Company recorded charges of $21 million and $30 million, respectively. These charges were for noncapitalizable transaction costs associated with pending and closed transactions, primarily related to the deconsolidation of our German bottling operations and the Monster transaction both discussed below.
During the three months and year ended December 31, 2016, the Company incurred losses of $799 million and $2,456 million, respectively. The Company also incurred losses of $179 million and $1,027 million during the three months and year ended December 31, 2015, respectively. These losses were primarily due to the derecognition of intangible assets relating to the refranchising of bottling territories in North America to certain of our unconsolidated bottling partners.
During the three months and year ended December 31, 2016, the Company incurred charges of $14 million and $31 million, respectively, related to payments made to certain of our unconsolidated North America bottling partners in order to convert their bottling agreements to a comprehensive beverage agreement with additional requirements.
During the three months and year ended December 31, 2016, the Company recognized a tax benefit of $23 million and a net tax charge of $57 million, respectively, resulting from the accrual of tax on temporary differences related to the investment in foreign subsidiaries that are now expected to reverse in the foreseeable future.
During the year ended December 31, 2016, the Company recorded a net loss of $21 million primarily due to the deconsolidation of our South African bottling operations in exchange for investments in CCBA and CCBA's South African subsidiary.
During the year ended December 31, 2016, the Company recognized a gain of $1,288 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 CCEP in exchange for an equity investment in CCEP.
During the year ended December 31, 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 year ended December 31, 2015, the Company recorded a net gain of $1,403 million as a result of our transaction with 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. 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. During the year ended December 31, 2015, the Company recognized impairment charges of $418 million primarily related to the discontinuation of the energy products in the glacéau portfolio as a result of the transaction with Monster.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)Transaction Gains/Losses (continued)
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 year ended December 31, 2015, calculated based on the final option price. Also during the year ended December 31, 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 and year ended December 31, 2016, the net impact of the Company's adjustment related to our economic hedging activities resulted in decreases of $56 million and $138 million, respectively, to our non-GAAP income before income taxes. During the three months and year ended December 31, 2015, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in a decrease of $52 million and an increase of $24 million, respectively, to our non-GAAP income before income taxes.
Donations to The Coca-Cola Foundation
During the three months and year ended December 31, 2016, the Company recorded charges of $100 million and $200 million, respectively. During the year ended December 31, 2015, the Company recorded charges of $100 million. These charges were due to contributions the Company made to The Coca-Cola Foundation.
Devaluation of the Egyptian Pound
During the three months and year ended December 31, 2016, the Company recorded a charge of $72 million as a result of remeasuring its net monetary assets denominated in Egyptian pounds. The Egyptian pound devalued as a result of the central bank allowing its currency, which was previously pegged to the U.S. dollar, to float freely.
Other
During the three months and year ended December 31, 2016, the Company recorded other charges of $14 million and $34 million, respectively. During the three months and year ended December 31, 2015, the Company recorded other charges of $14 million and $15 million, respectively. 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.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)Other Items (continued)
Hyperinflationary Economies
During the year ended December 31, 2016, the Company recorded a charge of $76 million due to the write-down related to receivables from our bottling partner in Venezuela 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 year ended December 31, 2015, the Company recorded net charges of $138 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.
Early Extinguishment of Long-Term Debt
During the year ended December 31, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt.
Certain Tax Matters
During the three months and year ended December 31, 2016, the Company recorded net tax charges of $5 million and $89 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. During the three months and year ended December 31, 2015, the Company recorded a net tax charge of $1 million and a net tax benefit of $5 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties.
2017 OUTLOOK
Our 2017 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 our full year 2017 projected organic revenues to our full year 2017 projected reported net revenues, our full year 2017 projected comparable currency neutral income before taxes (structurally adjusted) to our full year 2017 projected reported income before taxes, or our full year 2017 projected comparable EPS to our full year 2017 projected 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, divestitures and/or structural changes throughout 2017. The unavailable information could have a significant impact on our full year 2017 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 December 31, 2016Net
operating
revenues
Cost of
goods
sold
Gross
profit
Gross
margin
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
Operating
margin
Reported (GAAP) $ 9,409 $ 3,794 $ 5,615 59.7 % $ 3,580 $ 680 $ 1,355 14.4% Items Impacting Comparability: Asset Impairments/Restructuring — — — — (153 ) 153 Productivity & Reinvestment — — — — (165 ) 165 Equity Investees — — — — — — Transaction Gains/Losses — — — — (249 ) 249 Other Items (34 ) 16 (50 ) 6 (113 ) 57 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 9,375 $ 3,810 $ 5,565 59.4 % $ 3,586 $ — $ 1,979 21.1% Three Months Ended December 31, 2015Net
operating
revenues
Cost of
goods
sold
Gross
profit
Gross
margin
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
Operating
margin
Reported (GAAP) $ 10,000 $ 4,054 $ 5,946 59.5 % $ 3,937 $ 491 $ 1,518 15.2% Items Impacting Comparability: Asset Impairments/Restructuring — — — — (88 ) 88 Productivity & Reinvestment — — — — (368 ) 368 Equity Investees — — — — — — Transaction Gains/Losses — — — — (21 ) 21 Other Items 5 — 5 8 (14 ) 11 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 10,005 $ 4,054 $ 5,951 59.5 % $ 3,945 $ — $ 2,006 20.0%Net
operating
revenues
Cost of
goods
sold
Gross
profit
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
% Change — Reported (GAAP) (6) (6) (6) (9) 39 (11) % Currency Impact (2) 0 (3) (1) — (8) % Change — Currency Neutral (Non-GAAP) (4) (7) (3) (8) — (3) % Change — Comparable (Non-GAAP) (6) (6) (7) (9) — (1) % Comparable Currency Impact (Non-GAAP) (2) 0 (3) (1) — (8) % Change — Comparable Currency Neutral (Non-GAAP) (4) (6) (3) (8) — 7Note: 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 December 31, 2016Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes1
Effective
tax rate
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share2
Reported (GAAP) $ 248 $ 157 $ (919 ) $ 515 $ (32 ) (6.3 )% $ (3 ) $ 550 $ 0.13 Items Impacting Comparability: Asset Impairments/Restructuring — — — 153 56 — 97 0.02 Productivity & Reinvestment — — — 165 57 — 108 0.02 Equity Investees — 26 — 26 3 — 23 0.01 Transaction Gains/Losses — — 813 1,062 361 — 701 0.16 Other Items — — 73 130 21 — 109 0.03 Certain Tax Matters — — — — (5 ) — 5 — Comparable (Non-GAAP) $ 248 $ 183 $ (33 ) $ 2,051 $ 461 22.5 % $ (3 ) $ 1,593 $ 0.37 Three Months Ended December 31, 2015Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes1
Effective
tax rate
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share3
Reported (GAAP) $ 143 $ 87 $ (78 ) $ 1,538 $ 302 19.6 % $ (1 ) $ 1,237 $ 0.28 Items Impacting Comparability: Asset Impairments/Restructuring — — — 88 — — 88 0.02 Productivity & Reinvestment — — — 368 135 — 233 0.05 Equity Investees — 8 — 8 — — 8 — Transaction Gains/Losses — — 178 199 65 — 134 0.03 Other Items — — (49 ) (38 ) (15 ) — (23 ) (0.01 ) Certain Tax Matters — — — — (1 ) — 1 — Comparable (Non-GAAP) $ 143 $ 95 $ 51 $ 2,163 $ 486 22.5 % $ (1 ) $ 1,678 $ 0.38Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share
% Change — Reported (GAAP) 73 82 — (67) — (358) (56) (55) % Change — Comparable (Non-GAAP) 73 94 — (5) (5) (336) (5) (4)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 as well as the tax impact resulting from the accrual of tax on temporary differences related to the investment in foreign subsidiaries that are now expected to reverse in the foreseeable future.2 4,345 million average shares outstanding — diluted3 4,390 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)Year Ended December 31, 2016
Net
operating
revenues
Cost of
goods
sold
Gross
profit
Gross
margin
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
Operating
margin
Reported (GAAP) $ 41,863 $ 16,465 $ 25,398 60.7% $ 15,262 $ 1,510 $ 8,626 20.6% Items Impacting Comparability: Asset Impairments/Restructuring — — — — (393 ) 393 Productivity & Reinvestment — — — — (352 ) 352 Equity Investees — — — — — — Transaction Gains/Losses — — — — (456 ) 456 Other Items (9 ) 148 (157 ) 21 (309 ) 131 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 41,854 $ 16,613 $ 25,241 60.3% $ 15,283 $ — $ 9,958 23.8% Year Ended December 31, 2015Net
operating
revenues
Cost of
goods
sold
Gross
profit
Gross
margin
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
Operating
margin
Reported (GAAP) $ 44,294 $ 17,482 $ 26,812 60.5% $ 16,427 $ 1,657 $ 8,728 19.7% Items Impacting Comparability: Asset Impairments/Restructuring — — — — (292 ) 292 Productivity & Reinvestment — — — — (691 ) 691 Equity Investees — — — — — — Transaction Gains/Losses — — — — (448 ) 448 Other Items (37 ) (66 ) 29 41 (226 ) 214 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 44,257 $ 17,416 $ 26,841 60.6% $ 16,468 $ — $ 10,373 23.4%Net
operating
revenues
Cost of
goods
sold
Gross
profit
Selling,
general and
administrative
expenses
Other
operating
charges
Operating
income
% Change — Reported (GAAP) (5) (6) (5) (7) (9) (1) % Currency Impact (3) (1) (4) (2) — (8) % Change — Currency Neutral (Non-GAAP) (3) (5) (1) (5) — 7 % Change — Comparable (Non-GAAP) (5) (5) (6) (7) — (4) % Comparable Currency Impact (Non-GAAP) (3) (1) (4) (2) — (7) % Change — Comparable Currency Neutral (Non-GAAP) (3) (4) (2) (5) — 3Note: 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) Year Ended December 31, 2016Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes1
Effective
tax rate
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share2
Reported (GAAP) $ 733 $ 835 $ (1,234 ) $ 8,136 $ 1,586 19.5 % $ 23 $ 6,527 $ 1.49 Items Impacting Comparability: Asset Impairments/Restructuring — — — 393 56 — 337 0.08 Productivity & Reinvestment — — — 352 122 — 230 0.05 Equity Investees — 61 — 61 11 — 50 0.01 Transaction Gains/Losses — — 1,167 1,623 724 — 899 0.21 Other Items — — 113 244 22 — 222 0.05 Certain Tax Matters — — — — (89 ) — 89 0.02 Comparable (Non-GAAP) $ 733 $ 896 $ 46 $ 10,809 $ 2,432 22.5 % $ 23 $ 8,354 $ 1.91 Year Ended December 31, 2015Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes1
Effective
tax rate
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share3
Reported (GAAP) $ 856 $ 489 $ 631 $ 9,605 $ 2,239 23.3 % $ 15 $ 7,351 $ 1.67 Items Impacting Comparability: Asset Impairments/Restructuring — — — 292 — — 292 0.07 Productivity & Reinvestment — — — 691 259 — 432 0.10 Equity Investees — 87 — 87 5 — 82 0.02 Transaction Gains/Losses — — (351 ) 97 (108 ) — 205 0.05 Other Items (320 ) — 64 598 158 — 440 0.10 Certain Tax Matters — — — — 5 — (5 ) — Comparable (Non-GAAP) $ 536 $ 576 $ 344 $ 11,370 $ 2,558 22.5 % $ 15 $ 8,797 $ 2.00Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Income
taxes
Net income
(loss)
attributable to
noncontrolling
interests
Net income
attributable to
shareowners of
The Coca-Cola
Company
Diluted
net
income
per
share
% Change — Reported (GAAP) (14) 71 — (15) (29) 45 (11) (10) % Change — Comparable (Non-GAAP) 37 55 (87) (5) (5) 45 (5) (4)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 as well as the tax impact resulting from the accrual of tax on temporary differences related to the investment in foreign subsidiaries that are now expected to reverse in the foreseeable future.2 4,367 million average shares outstanding — diluted3 4,405 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 December 31, 2016Income before
income taxes
Diluted net income
per share
% Change — Reported (GAAP) (67) (55) % Currency Impact (17) (23) % Change — Currency Neutral (Non-GAAP) (49) (32) % Structural Impact 2 — % Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) (50) — % Impact of Items Impacting Comparability (Non-GAAP) (61) (51) % Change — Comparable (Non-GAAP) (5) (4) % Comparable Currency Impact (Non-GAAP) (11) (11) % Change — Comparable Currency Neutral (Non-GAAP) 6 7 % Comparable Structural Impact (Non-GAAP) (7) — % Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) 14 — Year Ended December 31, 2016Income before
income taxes
Diluted net income
per share
% Change — Reported (GAAP) (15) (10) % Currency Impact (12) (13) % Change — Currency Neutral (Non-GAAP) (3) 2 % Structural Impact (2) — % Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) (1) — % Impact of Items Impacting Comparability (Non-GAAP) (10) (6) % Change — Comparable (Non-GAAP) (5) (4) % Comparable Currency Impact (Non-GAAP) (9) (9) % Change — Comparable Currency Neutral (Non-GAAP) 4 5 % Comparable Structural Impact (Non-GAAP) (3) — % Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) 8 —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 December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate
Eliminations Consolidated Reported (GAAP) $ 1,645 $ 982 $ 2,473 $ 1,039 $ 4,138 $ 37 $ (905 ) $ 9,409 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (7 ) — — (27 ) — (34 ) Comparable (Non-GAAP) $ 1,645 $ 982 $ 2,466 $ 1,039 $ 4,138 $ 10 $ (905 ) $ 9,375 Three Months Ended December 31, 2015Europe,
Middle East & Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 1,711 $ 1,023 $ 2,292 $ 960 $ 5,199 $ 46 $ (1,231 ) $ 10,000 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (5 ) — — 10 — 5 Comparable (Non-GAAP) $ 1,711 $ 1,023 $ 2,287 $ 960 $ 5,199 $ 56 $ (1,231 ) $ 10,005Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Eliminations Consolidated % Change — Reported (GAAP) (4) (4) 8 8 (20) (20) 27 (6) % Currency Impact (2) (14) 0 4 0 26 — (2) % Change — Currency Neutral (Non-GAAP) (2) 10 8 4 (20) (46) — (4) % Acquisitions, Divestitures and Structural Items (6) 0 0 (3) (23) (6) — (10) % Change — Organic Revenues (Non-GAAP) 5 10 8 7 3 (42) — 6 % Change — Comparable (Non-GAAP) (4) (4) 8 8 (20) (82) — (6) % Comparable Currency Impact (Non-GAAP) (2) (14) 0 4 0 (43) — (2) % Change — Comparable Currency Neutral (Non-GAAP) (2) 10 8 4 (20) (38) — (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:
Year Ended December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 7,278 $ 3,819 $ 10,210 $ 5,294 $ 19,885 $ 132 $ (4,755 ) $ 41,863 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (18 ) — — 9 — (9 ) Comparable (Non-GAAP) $ 7,278 $ 3,819 $ 10,192 $ 5,294 $ 19,885 $ 141 $ (4,755 ) $ 41,854 Year Ended December 31, 2015Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 7,587 $ 4,074 $ 9,840 $ 5,252 $ 23,063 $ 166 $ (5,688 ) $ 44,294 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (24 ) — — (13 ) — (37 ) Comparable (Non-GAAP) $ 7,587 $ 4,074 $ 9,816 $ 5,252 $ 23,063 $ 153 $ (5,688 ) $ 44,257Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Eliminations Consolidated % Change — Reported (GAAP) (4) (6) 4 1 (14) (21) 16 (5) % Currency Impact (3) (18) 0 1 (1) (26) — (3) % Change — Currency Neutral (Non-GAAP) (1) 12 4 (1) (13) 6 — (3) % Acquisitions, Divestitures and Structural Items (4) 0 0 (2) (13) 9 — (6) % Change — Organic Revenues (Non-GAAP) 3 12 4 1 1 (4) — 3 % Change — Comparable (Non-GAAP) (4) (6) 4 1 (14) (8) — (5) % Comparable Currency Impact (Non-GAAP) (3) (18) 0 1 (1) (14) — (3) % Change — Comparable Currency Neutral (Non-GAAP) (1) 12 4 (1) (13) 6 — (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)Core Business Revenues (Non-GAAP): 1
Three Months Ended
December 31, 2016
Reported (GAAP) Net Operating Revenues $ 9,409 Bottling Investments Net Operating Revenues (4,138 ) Consolidated Eliminations 905 Intersegment Core Net Operating Revenue Eliminations (1 ) Core Business Revenues (Non-GAAP) 6,175 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (34 ) Comparable Core Business Revenues (Non-GAAP) $ 6,141Three Months Ended
December 31, 2015
Reported (GAAP) Net Operating Revenues $ 10,000 Bottling Investments Net Operating Revenues (5,199 ) Consolidated Eliminations 1,231 Intersegment Core Net Operating Revenue Eliminations (11 ) Core Business Revenues (Non-GAAP) 6,021 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items 5 Comparable Core Business Revenues (Non-GAAP) $ 6,026 % Change — Reported (GAAP) Net Operating Revenues (6) % Change — Core Business Revenues (Non-GAAP) 3 % Core Business Currency Impact (Non-GAAP) (2) % Change — Currency Neutral Core Business Revenues (Non-GAAP) 5 % Acquisitions, Divestitures and Structural Items (2) % Change — Core Business Organic Revenues (Non-GAAP)2 7 % Change — Comparable Core Business Revenues (Non-GAAP) 2 % Comparable Core Business Currency Impact (Non-GAAP) (3) % Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) 5Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 Core business revenues (Non-GAAP) included the net operating revenues from the Europe, Middle East & Africa, Latin America, North America, Asia Pacific and Corporate operating segments offset by intersegment revenue eliminations of $1 million and $11 million during the three months ended December 31, 2016 and December 31, 2015, respectively.2 Core business organic revenue (Non-GAAP) growth included 7 points of positive price/mix.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Core Business Revenues (Non-GAAP): 1
Year Ended
December 31, 2016
Reported (GAAP) Net Operating Revenues $ 41,863 Bottling Investments Net Operating Revenues (19,885 ) Consolidated Eliminations 4,755 Intersegment Core Net Operating Revenue Eliminations (15 ) Core Business Revenues (Non-GAAP) 26,718 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (9 ) Comparable Core Business Revenues (Non-GAAP) $ 26,709Year Ended
December 31, 2015
Reported (GAAP) Net Operating Revenues $ 44,294 Bottling Investments Net Operating Revenues (23,063 ) Consolidated Eliminations 5,688 Intersegment Core Net Operating Revenue Eliminations (19 ) Core Business Revenues (Non-GAAP) 26,900 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (37 ) Comparable Core Business Revenues (Non-GAAP) $ 26,863 % Change — Reported (GAAP) Net Operating Revenues (5) % Change — Core Business Revenues (Non-GAAP) (1) % Core Business Currency Impact (Non-GAAP) (3) % Change — Currency Neutral Core Business Revenues (Non-GAAP) 3 % Acquisitions, Divestitures and Structural Items (1) % Change — Core Business Organic Revenues (Non-GAAP)2 4 % Change — Comparable Core Business Revenues (Non-GAAP) (1) % Comparable Core Business Currency Impact (Non-GAAP) (3) % Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) 3Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 Core business revenues (Non-GAAP) included the net operating revenues from the Europe, Middle East & Africa, Latin America, North America, Asia Pacific and Corporate operating segments offset by intersegment revenue eliminations of $15 million and $19 million during the years ended December 31, 2016 and December 31, 2015, respectively.2 Core business organic revenue (Non-GAAP) 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)Operating Income (Loss) by Segment:
Three Months Ended December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 779 $ 481 $ 600 $ 332 $ (359 ) $ (478 ) $ 1,355 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 153 — 153 Productivity & Reinvestment 26 — 54 — 22 63 165 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 246 3 249 Other Items — — (16 ) — (10 ) 83 57 Comparable (Non-GAAP) $ 805 $ 481 $ 638 $ 332 $ 52 $ (329 ) $ 1,979 Three Months Ended December 31, 2015Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 839 $ 528 $ 492 $ 313 $ (115 ) $ (539 ) $ 1,518 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 88 — 88 Productivity & Reinvestment (12 ) — 37 3 147 193 368 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 3 18 21 Other Items — — 22 — (34 ) 23 11 Comparable (Non-GAAP) $ 827 $ 528 $ 551 $ 316 $ 89 $ (305 ) $ 2,006Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (7) (9) 22 6 (212) 11 (11) % Currency Impact (2) (23) (1) 1 3 3 (8) % Change — Currency Neutral (Non-GAAP) (5) 14 22 5 (215) 9 (3) % Change — Comparable (Non-GAAP) (3) (9) 16 5 (41) (8) (1) % Comparable Currency Impact (Non-GAAP) (2) (23) (1) 1 1 (7) (8) % Change — Comparable Currency Neutral (Non-GAAP) (1) 14 16 4 (42) (1) 7Note: 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:
Year Ended December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,676 $ 1,951 $ 2,582 $ 2,224 $ (137 ) $ (1,670 ) $ 8,626 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 393 — 393 Productivity & Reinvestment 32 (2 ) 134 1 82 105 352 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 424 32 456 Other Items — 76 (47 ) — (130 ) 232 131 Comparable (Non-GAAP) $ 3,708 $ 2,025 $ 2,669 $ 2,225 $ 632 $ (1,301 ) $ 9,958 Year Ended December 31, 2015Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,875 $ 2,169 $ 2,366 $ 2,189 $ 124 $ (1,995 ) $ 8,728 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 292 — 292 Productivity & Reinvestment (9 ) 7 141 2 304 246 691 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 3 445 448 Other Items — 33 12 2 (10 ) 177 214 Comparable (Non-GAAP) $ 3,866 $ 2,209 $ 2,519 $ 2,193 $ 713 $ (1,127 ) $ 10,373Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (5) (10) 9 2 — 16 (1) % Currency Impact (3) (27) 0 0 — (2) (8) % Change — Currency Neutral (Non-GAAP) (2) 17 9 2 — 18 7 % Change — Comparable (Non-GAAP) (4) (8) 6 2 (11) (15) (4) % Comparable Currency Impact (Non-GAAP) (3) (26) 0 0 (1) (1) (7) % Change — Comparable Currency Neutral (Non-GAAP) (1) 18 6 2 (10) (14) 3Note: 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 December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 799 $ 481 $ 582 $ 335 $ (1,026 ) $ (656 ) $ 515 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 153 — 153 Productivity & Reinvestment 26 — 54 — 22 63 165 Equity Investees — — — — 20 6 26 Transaction Gains/Losses — — 15 — 1,044 3 1,062 Other Items — — (16 ) — (9 ) 155 130 Comparable (Non-GAAP) $ 825 $ 481 $ 635 $ 335 $ 204 $ (429 ) $ 2,051 Three Months Ended December 31, 2015Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 838 $ 515 $ 491 $ 317 $ (187 ) $ (436 ) $ 1,538 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 88 — 88 Productivity & Reinvestment (12 ) — 37 3 147 193 368 Equity Investees 1 — — — 7 — 8 Transaction Gains/Losses — — — — 183 16 199 Other Items — — 22 — (34 ) (26 ) (38 ) Comparable (Non-GAAP) $ 827 $ 515 $ 550 $ 320 $ 204 $ (253 ) $ 2,163Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (5) (7) 18 6 (447) (50) (67) % Currency Impact (2) (24) (1) 1 6 (32) (17) % Change — Currency Neutral (Non-GAAP) (3) 17 19 4 (453) (18) (49) % Impact of Items Impacting Comparability (Non-GAAP) (4) 0 3 1 (449) 19 (61) % Change — Comparable (Non-GAAP) 0 (7) 15 5 1 (70) (5) % Comparable Currency Impact (Non-GAAP) (2) (24) (1) 1 1 (41) (11) % Change — Comparable Currency Neutral (Non-GAAP) 2 17 16 3 0 (29) 6Note: 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:
Year Ended December 31, 2016Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,749 $ 1,966 $ 2,560 $ 2,238 $ (1,923 ) $ (454 ) $ 8,136 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 393 — 393 Productivity & Reinvestment 32 (2 ) 134 1 82 105 352 Equity Investees — — — — 52 9 61 Transaction Gains/Losses — — 32 — 2,879 (1,288 ) 1,623 Other Items — 76 (47 ) — (129 ) 344 244 Comparable (Non-GAAP) $ 3,781 $ 2,040 $ 2,679 $ 2,239 $ 1,354 $ (1,284 ) $ 10,809 Year Ended December 31, 2015Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,923 $ 2,164 $ 2,356 $ 2,207 $ (427 ) $ (618 ) $ 9,605 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 292 — 292 Productivity & Reinvestment (9 ) 7 141 2 304 246 691 Equity Investees 4 — — — 83 — 87 Transaction Gains/Losses — — — — 1,010 (913 ) 97 Other Items — 33 12 2 (10 ) 561 598 Comparable (Non-GAAP) $ 3,918 $ 2,204 $ 2,509 $ 2,211 $ 1,252 $ (724 ) $ 11,370Europe,
Middle East &
Africa
Latin
America
North
America
Asia
Pacific
Bottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (4) (9) 9 1 (350) 27 (15) % Currency Impact (3) (27) 0 0 (3) (70) (12) % Change — Currency Neutral (Non-GAAP) (2) 18 9 2 (346) 96 (3) % Impact of Items Impacting Comparability (Non-GAAP) (1) (2) 2 0 (358) 104 (10) % Change — Comparable (Non-GAAP) (4) (7) 7 1 8 (77) (5) % Comparable Currency Impact (Non-GAAP) (3) (26) 0 0 (2) (47) (9) % Change — Comparable Currency Neutral (Non-GAAP) (1) 19 7 2 11 (31) 4Note: 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 December 31, 2016Operating income
Gross profitOperating expense
leverage1
% Change — Reported (GAAP) (11) (6) (5) % Change — Currency Neutral (Non-GAAP) (3) (3) 0 % Change — Comparable (Non-GAAP) (1) (7) 5 % Change — Comparable Currency Neutral (Non-GAAP) 7 (3) 10 Year Ended December 31, 2016 Operating income Gross profitOperating expense
leverage1
% Change — Reported (GAAP) (1) (5) 4 % Change — Currency Neutral (Non-GAAP) 7 (1) 9 % Change — Comparable (Non-GAAP) (4) (6) 2 % Change — Comparable Currency Neutral (Non-GAAP) 3 (2) 5Note: Certain rows may not add due to rounding.
1Operating expense leverage is calculated by subtracting gross profit growth from operating income growth.
Operating Margin:
Three Months
Ended
December 31,
2016
Three Months
Ended
December 31,
2015
Basis Point
Growth
(Decline)
Reported (GAAP) 14.40 % 15.19 % (79 ) Items Impacting Comparability (Non-GAAP) (6.71 )% (4.86 )% Comparable Operating Margin (Non-GAAP) 21.11 % 20.05 % 106 Comparable Currency Impact (Non-GAAP) (1.23 )% 0.00 % Comparable Currency Neutral Operating Margin (Non-GAAP) 22.34 % 20.05 % 229Year Ended
December 31,
2016
Year Ended
December 31,
2015
Basis Point
Growth
(Decline)
Reported (GAAP) 20.61 % 19.70 % 91 Items Impacting Comparability (Non-GAAP) (3.18 )% (3.74 )% Comparable Operating Margin (Non-GAAP) 23.79 % 23.44 % 35 Comparable Currency Impact (Non-GAAP) (1.04 )% 0.00 % Comparable Currency Neutral Operating Margin (Non-GAAP) 24.83 % 23.44 % 139THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Purchases and Issuances of Stock:
Year Ended
December 31, 2016
Year Ended
December 31, 2015
Reported (GAAP) Issuances of Stock $ 1,434 $ 1,245 Purchases of Stock for Treasury (3,681 ) (3,564 ) Net Change in Stock Issuance Receivables1 1 1 Net Change in Treasury Stock Payables2 (63 ) 18 Net Share Repurchases (Non-GAAP) $ (2,309 ) $ (2,300 )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:
Year Ended
December 31, 2016
Year Ended
December 31, 2015
Net Cash Provided by
Operating Activities
Net Cash Provided by
Operating Activities
Reported (GAAP) $ 8,796 $ 10,528 Items Impacting Comparability: Cash Payments for Pension Plan Contributions 471 — Comparable (Non-GAAP) $ 9,267 $ 10,528 Net Cash Provided byOperating Activities
% Change — Reported (GAAP) (16) % Change — Comparable (Non-GAAP) (12)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 Reports 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/20170209005618/en/
The Coca-Cola CompanyInvestors and Analysts:Tim Leveridge, 404-676-7563orMedia:Kent Landers, 404-676-2683
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