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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 | |
---|---|---|---|---|---|---|---|---|
0.265 | 0.43% | 62.195 | 62.31 | 61.72 | 62.18 | 2,991,851 | 16:48:11 |
The Coca-Cola Company today reported second quarter 2015 operating results. "Our second quarter results were in line with our expectations and mark continued progress toward restoring momentum in our global business," said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. "We are executing against our strategic initiatives and remain focused on driving efficiencies through productivity and making disciplined investment decisions to accelerate growth. While there is more work to do, we remain confident that we have the right plans in place and are committed to leveraging our superior brand portfolio together with our unparalleled global distribution system to continue creating long-term shareowner value."
SECOND QUARTER 2015 OPERATING REVIEW
TOTAL COMPANY
Percent Change Second Quarter YTD Unit Case Volume 2 1 Sparkling Beverages 1 1 Still Beverages 5 3 Concentrate Sales/Reported Volume 3 4 Price/Mix 1 2 Currency (7) (7) Acquisitions & Divestitures 0 0 Reported Net Revenues (3) (1) Organic Revenues * 4 6 Reported Income Before Taxes 29 13 Comparable CN Income Before Taxes (Structurally Adjusted) * 3 7 * Organic revenue and comparable currency neutral (CN) income before taxes (structurally adjusted) are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.EURASIA AND AFRICA
Percent Change Second Quarter YTD Unit Case Volume 4 3 Sparkling Beverages 3 3 Still Beverages 7 5 Concentrate Sales 4 4 Price/Mix (1) 1 Currency (13) (12) Acquisitions & Divestitures 0 0 Reported Net Revenues (10) (7) Organic Revenues * 4 5 Reported Income Before Taxes (8) (8) Comparable CN Income Before Taxes * 9 6 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.EUROPE
Percent Change Second Quarter YTD Unit Case Volume 1 0 Sparkling Beverages 0 (1) Still Beverages 7 5 Concentrate Sales 2 3 Price/Mix 1 1 Currency (11) (12) Acquisitions & Divestitures (1) 0 Reported Net Revenues (9) (8) Organic Revenues * 3 4 Reported Income Before Taxes (7) (4) Comparable CN Income Before Taxes * (1) 1 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.LATIN AMERICA
Percent Change Second Quarter YTD Unit Case Volume 2 1 Sparkling Beverages 0 0 Still Beverages 5 3 Concentrate Sales 1 4 Price/Mix 10 7 Currency (24) (19) Acquisitions & Divestitures 0 0 Reported Net Revenues (13) (8) Organic Revenues * 11 11 Reported Income Before Taxes (17) (15) Comparable CN Income Before Taxes * 13 10 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.NORTH AMERICA
Percent Change Second Quarter YTD Unit Case Volume 2 1 Sparkling Beverages 1 0 Still Beverages 4 3 Concentrate Sales 1 4 Price/Mix 4 3 Currency (1) (1) Acquisitions & Divestitures (1) (1) Reported Net Revenues 3 5 Organic Revenues * 5 7 Reported Income Before Taxes 28 23 Comparable CN Income Before Taxes * 8 15 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.ASIA PACIFIC
Percent Change Second Quarter YTD Unit Case Volume 3 3 Sparkling Beverages 1 3 Still Beverages 5 2 Concentrate Sales 7 5 Price/Mix (6) (2) Currency (8) (8) Acquisitions & Divestitures 0 0 Reported Net Revenues (7) (5) Organic Revenues * 1 3 Reported Income Before Taxes (10) (7) Comparable CN Income Before Taxes * (2) 1 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.BOTTLING INVESTMENTS
Percent Change Second Quarter YTD Unit Case Volume 7 5 Reported Volume 5 7 Price/Mix (3) (3) Currency (10) (9) Acquisitions & Divestitures 2 2 Reported Net Revenues (6) (3) Organic Revenues * 1 4 Reported Income Before Taxes (9) (17) Comparable CN Income Before Taxes * 11 14 * Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.2015 OUTLOOK
ITEMS IMPACTING COMPARABILITY
NOTES
CONFERENCE CALL
We are hosting a conference call with investors and analysts to discuss second quarter 2015 results today, July 22, 2015 at 9:30 a.m. EDT. We invite investors to listen to a live audiocast of the conference call on the Company’s website, http://www.coca-colacompany.com in the "Investors" section. A replay in downloadable MP3 format and a transcript of the call will also be available within 24 hours after the audiocast on the Company’s website. Further, the "Investors" section of the website includes a reconciliation of non-GAAP financial measures, which may be used periodically by management when discussing financial results with investors and analysts, to the Company’s results as reported under GAAP.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED) (In millions except per share data) Three Months Ended July 3, June 27, % 2015 2014Change1
Net Operating Revenues $ 12,156 $ 12,574 (3 ) Cost of goods sold 4,748 4,819 (1 ) Gross Profit 7,408 7,755 (4 ) Selling, general and administrative expenses 4,204 4,384 (4 ) Other operating charges 669 201 233 Operating Income 2,535 3,170 (20 ) Interest income 149 144 4 Interest expense 128 107 19 Equity income (loss) — net 200 254 (21 ) Other income (loss) — net 1,605 (77 ) — Income Before Income Taxes 4,361 3,384 29 Income taxes 1,250 779 60 Consolidated Net Income 3,111 2,605 19 Less: Net income (loss) attributable to noncontrolling interests 3 10 (76 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 3,108 $ 2,595 20 Diluted Net Income Per Share2 $ 0.71 $ 0.58 21 Average Shares Outstanding — Diluted2 4,408 4,454 1 Certain growth rates may not recalculate using the rounded dollar amounts provided. 2 For the three months ended July 3, 2015 and June 27, 2014, basic net income per share was $0.71 for 2015 and $0.59 for 2014 based on average shares outstanding — basic of 4,355 million for 2015 and 4,391 million for 2014. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED) (In millions except per share data) Six Months Ended July 3, June 27, % 2015 2014Change1
Net Operating Revenues $ 22,867 $ 23,150 (1 ) Cost of goods sold 8,851 8,902 (1 ) Gross Profit 14,016 14,248 (2 ) Selling, general and administrative expenses 8,283 8,373 (1 ) Other operating charges 902 329 174 Operating Income 4,831 5,546 (13 ) Interest income 304 267 14 Interest expense 575 231 149 Equity income (loss) — net 202 325 (38 ) Other income (loss) — net 1,580 (318 ) — Income Before Income Taxes 6,342 5,589 13 Income taxes 1,665 1,358 23 Consolidated Net Income 4,677 4,231 11 Less: Net income (loss) attributable to noncontrolling interests 12 17 (28 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 4,665 $ 4,214 11 Diluted Net Income Per Share2 $ 1.06 $ 0.95 12 Average Shares Outstanding — Diluted2 4,415 4,459 1 Certain growth rates may not recalculate using the rounded dollar amounts provided. 2 For the six months ended July 3, 2015 and June 27, 2014, basic net income per share was $1.07 for 2015 and $0.96 for 2014 based on average shares outstanding — basic of 4,360 million for 2015 and 4,396 million for 2014. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED) (In millions except par value) July 3, December 31, 2015 2014ASSETS
Current Assets Cash and cash equivalents $ 8,805 $ 8,958 Short-term investments 8,709 9,052 Total Cash, Cash Equivalents and Short-Term Investments 17,514 18,010 Marketable securities 3,433 3,665Trade accounts receivable, less allowances of $363 and $331, respectively
4,976 4,466 Inventories 3,224 3,100 Prepaid expenses and other assets 3,159 3,066 Assets held for sale 497 679 Total Current Assets 32,803 32,986 Equity Method Investments 12,771 9,947 Other Investments 3,002 3,678 Other Assets 4,517 4,407 Property, Plant and Equipment — net 14,365 14,633 Trademarks With Indefinite Lives 6,085 6,533 Bottlers' Franchise Rights With Indefinite Lives 7,313 6,689 Goodwill 11,706 12,100 Other Intangible Assets 976 1,050 Total Assets $ 93,538 $ 92,023LIABILITIES AND EQUITY
Current Liabilities Accounts payable and accrued expenses $ 9,997 $ 9,234 Loans and notes payable 16,306 19,130 Current maturities of long-term debt 2,031 3,552 Accrued income taxes 437 400 Liabilities held for sale 81 58 Total Current Liabilities 28,852 32,374 Long-Term Debt 25,977 19,063 Other Liabilities 4,283 4,389 Deferred Income Taxes 5,785 5,636 The Coca-Cola Company Shareowners' Equity Common stock, $0.25 par value; Authorized — 11,200 shares;Issued — 7,040 and 7,040 shares, respectively 1,760 1,760 Capital surplus 13,486 13,154 Reinvested earnings 65,196 63,408 Accumulated other comprehensive income (loss) (8,736 ) (5,777 )Treasury stock, at cost — 2,691 and 2,674 shares, respectively
(43,288 ) (42,225 ) Equity Attributable to Shareowners of The Coca-Cola Company 28,418 30,320 Equity Attributable to Noncontrolling Interests 223 241 Total Equity 28,641 30,561 Total Liabilities and Equity $ 93,538 $ 92,023THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED) (In millions) Six Months Ended July 3, June 27, 2015 2014 Operating Activities Consolidated net income $ 4,677 $ 4,231 Depreciation and amortization 961 967 Stock-based compensation expense 117 112 Deferred income taxes 643 (67 ) Equity (income) loss — net of dividends (44 ) (124 ) Foreign currency adjustments (144 ) 260 Significant (gains) losses on sales of assets — net (1,346 ) 140 Other operating charges 609 120 Other items 609 6 Net change in operating assets and liabilities (964 ) (1,175 ) Net cash provided by operating activities 5,118 4,470 Investing Activities Purchases of investments (6,981 ) (7,895 ) Proceeds from disposals of investments 6,316 6,192 Acquisitions of businesses, equity method investments and nonmarketable securities (2,284 ) (332 )Proceeds from disposals of businesses, equity method investments and nonmarketable securities
413 45 Purchases of property, plant and equipment (1,114 ) (1,030 ) Proceeds from disposals of property, plant and equipment 33 134 Other investing activities (139 ) (242 ) Net cash provided by (used in) investing activities (3,756 ) (3,128 ) Financing Activities Issuances of debt 24,878 21,267 Payments of debt (22,358 ) (18,122 ) Issuances of stock 410 650 Purchases of stock for treasury (1,298 ) (1,953 ) Dividends (2,877 ) (1,342 ) Other financing activities 115 (438 ) Net cash provided by (used in) financing activities (1,130 ) 62 Effect of Exchange Rate Changes on Cash and Cash Equivalents (385 ) (200 ) Cash and Cash Equivalents Net increase (decrease) during the period (153 ) 1,204 Balance at beginning of period 8,958 10,414 Balance at end of period $ 8,805 $ 11,618THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED) (In millions)Three Months Ended
Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income Taxes July 3, 2015 June 27, 2014% Fav. /(Unfav.)
July 3, 2015 June 27, 2014% Fav. /(Unfav.)
July 3, 2015 June 27, 2014% Fav. /(Unfav.)
Eurasia & Africa $ 658 $ 732 (10 ) $ 275 $ 290 (6 ) $ 287 $ 313 (8 ) Europe 1,435 1,569 (9 ) 836 892 (6 ) 843 904 (7 ) Latin America 973 1,118 (13 ) 525 633 (17 ) 526 636 (17 ) North America 5,917 5,717 3 887 827 7 874 682 28 Asia Pacific 1,601 1,723 (7 ) 761 846 (10 ) 766 851 (10 ) Bottling Investments 1,930 2,060 (6 ) 31 38 (16 ) 231 254 (9 ) Corporate 25 50 (50 ) (780 ) (356 ) (120 ) 834 (256 ) — Eliminations (383 ) (395 ) 3 — — — — — — Consolidated $ 12,156 $ 12,574 (3 ) $ 2,535 $ 3,170 (20 ) $ 4,361 $ 3,384 29 Note: Certain growth rates may not recalculate using the rounded dollar amounts provided. 1 During the three months ended July 3, 2015, intersegment revenues were $7 million for Eurasia and Africa, $151 million for Europe, $18 million for Latin America, $6 million for North America, $188 million for Asia Pacific and $13 million for Bottling Investments. During the three months ended June 27, 2014, intersegment revenues were $184 million for Europe, $13 million for Latin America, $7 million for North America, $173 million for Asia Pacific and $18 million for Bottling Investments.THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED) (In millions)Six Months Ended
Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income Taxes July 3, 2015 June 27, 2014% Fav. /(Unfav.)
July 3, 2015 June 27, 2014% Fav. /(Unfav.)
July 3, 2015 June 27, 2014% Fav. /(Unfav.)
Eurasia & Africa $ 1,296 $ 1,390 (7 ) $ 554 $ 593 (7 ) $ 573 $ 621 (8 ) Europe 2,647 2,862 (8 ) 1,552 1,611 (4 ) 1,567 1,635 (4 ) Latin America 2,039 2,229 (8 ) 1,103 1,301 (15 ) 1,114 1,303 (15 ) North America 11,018 10,510 5 1,398 1,255 11 1,361 1,107 23 Asia Pacific 2,886 3,038 (5 ) 1,305 1,403 (7 ) 1,314 1,411 (7 ) Bottling Investments 3,608 3,733 (3 ) 45 12 283 230 276 (17 ) Corporate 65 83 (23 ) (1,126 ) (629 ) (79 ) 183 (764 ) — Eliminations (692 ) (695 ) 1 — — — — — — Consolidated $ 22,867 $ 23,150 (1 ) $ 4,831 $ 5,546 (13 ) $ 6,342 $ 5,589 13 Note: Certain growth rates may not recalculate using the rounded dollar amounts provided. 1 During the six months ended July 3, 2015, intersegment revenues were $7 million for Eurasia and Africa, $295 million for Europe, $37 million for Latin America, $10 million for North America, $317 million for Asia Pacific and $26 million for Bottling Investments. During the six months ended June 27, 2014, intersegment revenues were $343 million for Europe, $30 million for Latin America, $10 million for North America, $278 million for Asia Pacific and $34 million for Bottling Investments.THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP" or referred to herein as "reported"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.
ITEMS IMPACTING COMPARABILITY
The following information is provided to give qualitative and quantitative information related to items impacting comparability. Items impacting comparability are not defined terms within GAAP. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies. We determine which items to consider as "items impacting comparability" based on how management views our business; makes financial, operating and planning decisions; and evaluates the Company's ongoing performance. Items such as charges, gains and accounting changes which are viewed by management as impacting only the current period or the comparable period, but not both, or as relating to different and unrelated underlying activities or events across comparable periods, are generally considered "items impacting comparability". In addition, we provide the impact that changes in foreign currency exchange rates had on our financial results ("currency neutral").
Asset Impairments and Restructuring
Restructuring
During the three and six months ended July 3, 2015, the Company recorded charges of $94 million and $129 million, respectively. The Company also recorded charges of $66 million and $108 million during the three and six months ended June 27, 2014, respectively. These charges were related to the integration of our German bottling and distribution operations.
Productivity and Reinvestment
During the three and six months ended July 3, 2015, the Company recorded charges of $92 million and $182 million, respectively, related to our productivity and reinvestment program. The Company also recorded charges of $89 million and $175 million during the three and six months ended June 27, 2014, respectively. These productivity and reinvestment initiatives are focused on four key areas: restructuring the Company's global supply chain, including manufacturing in North America; implementing zero-based budgeting across the organization; streamlining and simplifying the Company's operating model; and further driving increased discipline and efficiency in direct marketing investments. The savings realized from the program will enable the Company to fund marketing initiatives and innovation required to deliver sustainable net revenue growth. The savings will also support margin expansion and increased returns on invested capital over time.
Equity Investees
During the three and six months ended July 3, 2015, the Company recorded net charges of $9 million and $82 million, respectively. During the three and six months ended June 27, 2014, the Company recorded net charges of $6 million and $12 million, respectively. These amounts represent the Company’s proportionate share of unusual or infrequent items recorded by certain of our equity method investees.
Transaction Gains/Losses
During the three and six months ended July 3, 2015, the Company recorded a net gain of $1,402 million as a result of our transaction with Monster Beverage Corporation ("Monster"), primarily due to the difference in the recorded carrying value of the assets transferred, including an allocated portion of goodwill, compared to the value of the total assets and business acquired. This net gain was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. Additionally, under the terms of this transaction, the Company is required to discontinue selling energy products under certain trademarks, including one trademark in the glacéau portfolio. As a result, the Company recognized an impairment charge of $380 million in the line item other operating charges in our condensed consolidated statement of income upon the closing of the transaction with Monster, primarily related to the discontinuation of the energy products in the glacéau portfolio.
During the three and six months ended July 3, 2015, the Company recorded charges of $12 million and $33 million, respectively. The Company also recorded charges of $140 million during the three and six months ended June 27, 2014. These charges were primarily due to the derecognition of intangible assets relating to the refranchising of territories in North America to certain of its unconsolidated bottling partners.
In the fourth quarter of 2014, the owners of the majority interest of a Brazilian bottler exercised their option to acquire from us a 10 percent interest in the entity's outstanding shares resulting in our recognizing an estimated loss of $32 million due to the exercise price being lower than our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of $6 million during the six months ended July 3, 2015, calculated based on the final option price. Also during the six months ended July 3, 2015, the Company recorded a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015.
Other Items
Economic (Nondesignated) Hedges
The Company uses derivatives as economic hedges primarily to mitigate the price risk associated with the purchase of materials used in the manufacturing process as well as the purchase of vehicle fuel. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in fair values of these economic hedges are immediately recognized into earnings.
The Company excludes the net impact of mark-to-market adjustments for outstanding hedges and realized gains/losses for settled hedges from our non-GAAP financial information until the period in which the underlying exposure being hedged impacts our condensed consolidated statement of income. We believe this adjustment provides meaningful information related to the impact of our economic hedging activities. During the three months ended July 3, 2015 and June 27, 2014, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in decreases of $56 million and $54 million, respectively, to our non-GAAP income before income taxes. During the six months ended July 3, 2015 and June 27, 2014, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in decreases of $11 million and $99 million, respectively, to our non-GAAP income before income taxes.
Donation to The Coca-Cola Foundation
During the three and six months ended July 3, 2015, the Company recorded a charge of $100 million due to a contribution that was made to The Coca-Cola Foundation, which was recorded in the line item other operating charges in our condensed consolidated statement of income.
Early Extinguishment of Long-Term Debt
During the six months ended July 3, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt, which were recorded in the line item interest expense in our condensed consolidated statement of income.
Hyperinflationary Economies
During the six months ended July 3, 2015, the Company recorded net charges of $135 million related to our Venezuelan operations. These charges were a result of the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate, an impairment of a Venezuelan trademark due to higher exchange rates, and a write-down of receivables from our bottling partner in Venezuela. The write-down was recorded as a result of the continued lack of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of the Venezuelan bolivar into U.S. dollars by our bottling partner to pay our receivables.
During the three and six months ended June 27, 2014, the Company recorded charges of $21 million and $268 million, respectively, related to the devaluation of the Venezuelan bolivar, including a write-down of receivables from our bottling partner in Venezuela as well as our proportionate share of the charge incurred by our bottling partner in Venezuela, an equity method investee.
Restructuring and Transitioning Russian Juice Operations
During the three and six months ended June 27, 2014, the Company recorded a loss of $25 million related to restructuring and transitioning its Russian juice operations to an existing joint venture with an unconsolidated bottling partner.
Certain Tax Matters
During the three months ended July 3, 2015, the Company recorded a net tax charge of $16 million related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. During the three and six months ended June 27, 2014, the Company recorded net tax charges of $26 million and $31 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties.
CURRENCY NEUTRAL
Management evaluates the operating performance of our Company and our international subsidiaries on a currency neutral basis. We determine our currency neutral operating results by dividing or multiplying, as appropriate, our current period actual U.S. dollar operating results, normalizing for certain structural items in hyperinflationary economies, by the current period actual exchange rates (that include the impact of current period currency hedging activities), to derive our current period local currency operating results. We then multiply or divide, as appropriate, the derived current period local currency operating results by the foreign currency exchange rates (that also include the impact of the comparable prior period currency hedging activities) used to translate the Company's financial statements in the comparable prior year period to determine what the current period U.S. dollar operating results would have been if the foreign currency exchange rates had not changed from the comparable prior year period.
ORGANIC REVENUE
Organic revenue is a non-GAAP financial measure that excludes or otherwise adjusts for the impact of changes in foreign currency exchange rates and acquisitions and divestitures (including structural changes), as applicable. The adjustments related to acquisitions and divestitures for the three and six months ended July 3, 2015 and June 27, 2014 consisted entirely of the structural changes discussed below.
STRUCTURAL CHANGES
Structural changes generally refer to acquisitions or dispositions of bottling, distribution or canning operations and consolidation or deconsolidation of bottling and distribution entities for accounting purposes. In 2015, the Company sold its global energy drink business to Monster; acquired Monster's non-energy drink business; acquired an equity interest in Monster; amended its current distribution coordination agreements with Monster to expand into additional territories; refranchised additional territories in North America to certain of its unconsolidated bottling partners; acquired a South African bottler; and sold a 10 percent interest in a Brazilian bottler. In 2014, the Company refranchised territories in North America to certain of its unconsolidated bottling partners; changed its process of buying and selling recyclable materials in North America; was impacted by a new provision enacted by the Venezuelan government which imposes a maximum threshold for profit margins; acquired bottling operations in Sri Lanka and Nepal; and restructured and transitioned its Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Accordingly, these activities have been included as structural items in our analysis of the impact of these changes on certain line items in our condensed consolidated statements of income.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data) Three Months Ended July 3, 2015 Selling, Net Cost of general and Other operating goods Gross Gross administrative operating Operating Operating revenues sold profit margin expenses charges income margin Reported (GAAP) $ 12,156 $ 4,748 $ 7,408 60.9 % $ 4,204 $ 669 $ 2,535 20.9 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (94 ) 94 Productivity & Reinvestment — — — — (92 ) 92 Equity Investees — — — — — — Transaction Gains/Losses — — — — (383 ) 383 Other Items (7 ) 24 (31 ) 19 (100 ) 50 Certain Tax Matters — — — — — — After Considering Items (Non-GAAP) $ 12,149 $ 4,772 $ 7,377 60.7 % $ 4,223 $ — $ 3,154 26.0 % Three Months Ended June 27, 2014 Selling, Net Cost of general and Other operating goods Gross Gross administrative operating Operating Operating revenues sold profit margin expenses charges income margin Reported (GAAP) $ 12,574 $ 4,819 $ 7,755 61.7 % $ 4,384 $ 201 $ 3,170 25.2 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (66 ) 66 Productivity & Reinvestment — — — — (89 ) 89 Equity Investees — — — — — — Transaction Gains/Losses — — — — — — Other Items (28 ) 13 (41 ) 4 (46 ) 1 Certain Tax Matters — — — — — — After Considering Items (Non-GAAP) $ 12,546 $ 4,832 $ 7,714 61.5 % $ 4,388 $ — $ 3,326 26.5 % Selling, Net Cost of general and Other operating goods Gross administrative operating Operating revenues sold profit expenses charges income % Change — Reported (GAAP) (3) (1) (4) (4) 233 (20) % Currency Impact (7) (4) (9) (7) — (11) % Change — Currency Neutral Reported 4 3 4 3 — (9)% Change — After Considering Items (Non-GAAP)
(3) (1) (4) (4) — (5)% Currency Impact After Considering Items (Non-GAAP)
(7) (4) (9) (7) — (11) % Change — Currency Neutral After Considering Items (Non-GAAP) 4 3 4 3 — 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 except per share data) Three Months Ended July 3, 2015Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare1
Reported (GAAP) $ 128 $ 200 $ 1,605 $ 4,361 $ 1,250 28.7 % $ 3 $ 3,108 $ 0.71 Items Impacting Comparability: Asset Impairments/Restructuring — — — 94 — — 94 0.02 Productivity & Reinvestment — — — 92 33 — 59 0.01 Equity Investees — 9 — 9 — — 9 — Transaction Gains/Losses — — (1,390 ) (1,007 ) (474 ) — (533 ) (0.12 ) Other Items — — (6 ) 44 16 — 28 0.01 Certain Tax Matters — — — — (16 ) — 16 — After Considering Items (Non-GAAP) $ 128 $ 209 $ 209 $ 3,593 $ 809 22.5 % $ 3 $ 2,781 $ 0.63 Three Months Ended June 27, 2014Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 107 $ 254 $ (77 ) $ 3,384 $ 779 23.0 % $ 10 $ 2,595 $ 0.58 Items Impacting Comparability: Asset Impairments/Restructuring — — — 66 — — 66 0.01 Productivity & Reinvestment — — — 89 34 — 55 0.01 Equity Investees — 6 — 6 1 — 5 — Transaction Gains/Losses — — 140 140 51 — 89 0.02 Other Items — — (9 ) (8 ) (25 ) — 17 — Certain Tax Matters — — — — (26 ) — 26 0.01 After Considering Items (Non-GAAP) $ 107 $ 260 $ 54 $ 3,677 $ 814 22.2 % $ 10 $ 2,853 $ 0.64Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) 19 (21) — 29 60 (76) 20 21 % Change — After Considering Items (Non-GAAP) 19 (20) 284 (2) (1) (75) (3) (2) Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided. 1 4,408 million average shares outstanding — diluted 2 4,454 million average shares outstanding — dilutedTHE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data) Six Months Ended July 3, 2015Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 22,867 $ 8,851 $ 14,016 61.3 % $ 8,283 $ 902 $ 4,831 21.1 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (129 ) 129 Productivity & Reinvestment — — — — (182 ) 182 Equity Investees — — — — — — Transaction Gains/Losses — — — — (383 ) 383 Other Items (15 ) 27 (42 ) 29 (208 ) 137 Certain Tax Matters — — — — — — After Considering Items (Non-GAAP) $ 22,852 $ 8,878 $ 13,974 61.1 % $ 8,312 $ — $ 5,662 24.8 % Six Months Ended June 27, 2014Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 23,150 $ 8,902 $ 14,248 61.5 % $ 8,373 $ 329 $ 5,546 24.0 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (108 ) 108 Productivity & Reinvestment — — — — (175 ) 175 Equity Investees — — — — — — Transaction Gains/Losses — — — — — — Other Items (20 ) 69 (89 ) 1 (46 ) (44 ) Certain Tax Matters — — — — — — After Considering Items (Non-GAAP) $ 23,130 $ 8,971 $ 14,159 61.2 % $ 8,374 $ — $ 5,785 25.0 %Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Selling,general andadministrativeexpenses
Otheroperatingcharges
Operatingincome
% Change — Reported (GAAP) (1 ) (1 ) (2 ) (1 ) 174 (13 ) % Currency Impact (7 ) (5 ) (8 ) (6 ) — (10 ) % Change — Currency Neutral Reported 5 4 6 5 — (3 ) % Change — After Considering Items(Non-GAAP)
(1 ) (1 ) (1 ) (1 ) — (2 ) % Currency Impact After Considering Items (Non-GAAP) (7 ) (4 ) (8 ) (6 ) — (10 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 5 3 6 6 — 8Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data) Six Months Ended July 3, 2015Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare1
Reported (GAAP) $ 575 $ 202 $ 1,580 $ 6,342 $ 1,665 26.3 % $ 12 $ 4,665 $ 1.06 Items Impacting Comparability: Asset Impairments/Restructuring — — — 129 — — 129 0.03 Productivity & Reinvestment — — — 182 75 — 107 0.02 Equity Investees — 82 — 82 6 — 76 0.02 Transaction Gains/Losses — — (1,344 ) (961 ) (464 ) — (497 ) (0.11 ) Other Items (320 ) — 88 545 140 — 405 0.09 Certain Tax Matters — — — — — — — — After Considering Items (Non-GAAP) $ 255 $ 284 $ 324 $ 6,319 $ 1,422 22.5 % $ 12 $ 4,885 $ 1.11 Six Months Ended June 27, 2014Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare2
Reported (GAAP) $ 231 $ 325 $ (318 ) $ 5,589 $ 1,358 24.3 % $ 17 $ 4,214 $ 0.95 Items Impacting Comparability: Asset Impairments/Restructuring — — — 108 — — 108 0.02 Productivity & Reinvestment — — — 175 66 — 109 0.02 Equity Investees — 12 — 12 2 — 10 — Transaction Gains/Losses — — 140 140 51 — 89 0.02 Other Items — 21 217 194 (47 ) — 241 0.05 Certain Tax Matters — — — — (31 ) — 31 0.01 After Considering Items (Non-GAAP) $ 231 $ 358 $ 39 $ 6,218 $ 1,399 22.5 % $ 17 $ 4,802 $ 1.08Interestexpense
Equityincome(loss) —net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Net income(loss)attributable tononcontrollinginterests
Net incomeattributable toshareowners ofThe Coca-ColaCompany
Dilutednetincomepershare
% Change — Reported (GAAP) 149 (38) — 13 23 (28) 11 12 % Change — After Considering Items (Non-GAAP) 10 (21) 736 2 2 (27) 2 3 Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided. 1 4,415 million average shares outstanding — diluted 2 4,459 million average shares outstanding — dilutedTHE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)Income Before Income Taxes and Diluted Net Income Per Share:
Three Months Ended July 3, 2015 Income before Diluted net income income taxes per share % Change — Reported (GAAP) 29 21 % Currency Impact (6 ) (5 ) % Change — Currency Neutral Reported 34 26 % Structural Impact 1 N/A % Change — Currency Neutral Reported and Adjusted for Structural Impact 33 N/A % Change — After Considering Items (Non-GAAP) (2 ) (2 ) % Currency Impact After Considering Items (Non-GAAP) (6 ) (6 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 3 4 % Structural Impact After Considering Items (Non-GAAP) 0 N/A % Change — Currency Neutral After Considering Items and Adjusted for Structural Impact (Non-GAAP) 3 N/A Six Months Ended July 3, 2015 Income before Diluted net income income taxes per share % Change — Reported (GAAP) 13 12 % Currency Impact (2 ) (2 ) % Change — Currency Neutral Reported 15 14 % Structural Impact 1 N/A % Change — Currency Neutral Reported and Adjusted for Structural Impact 15 N/A % Change — After Considering Items (Non-GAAP) 2 3 % Currency Impact After Considering Items (Non-GAAP) (6 ) (6 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 7 8 % Structural Impact After Considering Items (Non-GAAP) 0 N/A % Change — Currency Neutral After Considering Items and Adjusted for Structural Impact (Non-GAAP) 7 N/ANote: Certain columns may not add due to rounding.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Net Operating Revenues by Segment:
Three Months Ended July 3, 2015 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Eliminations Consolidated Reported (GAAP) $ 658 $ 1,435 $ 973 $ 5,917 $ 1,601 $ 1,930 $ 25 $ (383 ) $ 12,156 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — — Productivity & Reinvestment — — — — — — — — — Equity Investees — — — — — — — — — Transaction Gains/Losses — — — — — — — — — Other Items — — — (11 ) — — 4 — (7 ) After Considering Items (Non-GAAP) $ 658 $ 1,435 $ 973 $ 5,906 $ 1,601 $ 1,930 $ 29 $ (383 ) $ 12,149 Three Months Ended June 27, 2014 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Eliminations Consolidated Reported (GAAP) $ 732 $ 1,569 $ 1,118 $ 5,717 $ 1,723 $ 2,060 $ 50 $ (395 ) $ 12,574 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — — Productivity & Reinvestment — — — — — — — — — Equity Investees — — — — — — — — — Transaction Gains/Losses — — — — — — — — — Other Items — — — (2 ) — (24 ) (2 ) — (28 ) After Considering Items (Non-GAAP) $ 732 $ 1,569 $ 1,118 $ 5,715 $ 1,723 $ 2,036 $ 48 $ (395 ) $ 12,546 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Eliminations Consolidated % Change — Reported (GAAP) (10) (9) (13) 3 (7) (6) (50) — (3) % Currency Impact (13) (11) (24) (1) (8) (10) (21) — (7) % Change — Currency Neutral Reported 3 2 11 4 1 4 (29) — 4 % Acquisition & Divestiture Adjustments 0 (1) 0 (1) 0 2 3 — 0 % Change — Organic Revenues (Non-GAAP) 4 3 11 5 1 1 (32) — 4 % Change — After Considering Items (Non-GAAP) (10) (9) (13) 3 (7) (5) (39) — (3) % Currency Impact After Considering Items (Non-GAAP) (13) (11) (24) (1) (8) (10) (9) — (7) % Change — Currency Neutral After Considering Items (Non-GAAP) 3 2 11 4 1 5 (30) — 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) (In millions)Net Operating Revenues by Segment:
Six Months Ended July 3, 2015Eurasia &Africa
Europe
LatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated Reported (GAAP) $ 1,296 $ 2,647 $ 2,039 $ 11,018 $ 2,886 $ 3,608 $ 65 $ (692 ) $ 22,867 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — — Productivity & Reinvestment — — — — — — — — — Equity Investees — — — — — — — — — Transaction Gains/Losses — — — — — — — — — Other Items — — — (17 ) — — 2 — (15)
After Considering Items (Non-GAAP) $ 1,296 $ 2,647 $ 2,039 $ 11,001 $ 2,886 $ 3,608 $ 67 $ (692 ) $ 22,852 Six Months Ended June 27, 2014
Eurasia &Africa
EuropeLatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated Reported (GAAP) $ 1,390 $ 2,862 $ 2,229 $ 10,510 $ 3,038 $ 3,733 $ 83 $ (695 ) $ 23,150 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — — Productivity & Reinvestment — — — — — — — — — Equity Investees — — — — — — — — — Transaction Gains/Losses — — — — — — — — — Other Items — — — — — (24 ) 4 —(20
)
After Considering Items (Non-GAAP) $ 1,390 $ 2,862 $ 2,229 $ 10,510 $ 3,038 $ 3,709 $ 87 $ (695 ) $ 23,130
Eurasia &Africa
EuropeLatinAmerica
NorthAmerica
AsiaPacific
BottlingInvestments
Corporate Eliminations Consolidated % Change — Reported (GAAP) (7 ) (8 ) (8 ) 5 (5 ) (3 ) (23 ) — (1 ) % Currency Impact (12 ) (12 ) (19 ) (1 ) (8 ) (9 ) (5 ) — (7 ) % Change — Currency Neutral Reported 5 4 11 6 3 6 (17 ) — 5 % Acquisition & Divestiture Adjustments 0 0 0 (1 ) 0 2 2 — 0 % Change — Organic Revenues (Non-GAAP) 5 4 11 7 3 4 (19 ) — 6 % Change — After Considering Items (Non-GAAP) (7 ) (8 ) (8 ) 5 (5 ) (3 ) (24 ) — (1 ) % Currency Impact After Considering Items (Non-GAAP) (12 ) (12 ) (19 ) (1 ) (8 ) (9 ) (7 ) — (7 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 5 4 11 6 3 6 (17 ) — 5Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Operating Income (Loss) by Segment:
Three Months Ended July 3, 2015 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 275 $ 836 $ 525 $ 887 $ 761 $ 31 $ (780 ) $ 2,535 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 94 — 94 Productivity & Reinvestment 3 — 3 79 2 1 4 92 Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — 383 383 Other Items — — — (57 ) — 5 102 50 After Considering Items (Non-GAAP) $ 278 $ 836 $ 528 $ 909 $ 763 $ 131 $ (291 ) $ 3,154 Three Months Ended June 27, 2014 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 290 $ 892 $ 633 $ 827 $ 846 $ 38 $ (356 ) $ 3,170 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 66 — 66 Productivity & Reinvestment — — — 58 1 — 30 89 Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — — (39 ) — 21 19 1 After Considering Items (Non-GAAP) $ 290 $ 892 $ 633 $ 846 $ 847 $ 125 $ (307 ) $ 3,326 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated % Change — Reported (GAAP) (6 ) (6 ) (17 ) 7 (10 ) (16 ) (120 ) (20 ) % Currency Impact (17 ) (5 ) (30 ) (1 ) (8 ) 16 (1 ) (11 ) % Change — Currency Neutral Reported 12 (2 ) 13 8 (2 ) (32 ) (119 ) (9 ) % Change — After Considering Items (Non-GAAP) (5 ) (6 ) (17 ) 7 (10 ) 5 5 (5 ) % Currency Impact After Considering Items (Non-GAAP) (17 ) (5 ) (30 ) (1 ) (8 ) (14 ) 1 (11 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 13 (2 ) 13 8 (2 ) 19 4 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)
Operating Income (Loss) by Segment: Six Months Ended July 3, 2015 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 554 $ 1,552 $ 1,103 $ 1,398 $ 1,305 $ 45 $ (1,126 ) $ 4,831 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 129 — 129 Productivity & Reinvestment 15 (11 ) 3 154 (3 ) — 24 182 Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — 383 383 Other Items — — 33 (75 ) 2 2 175 137 After Considering Items (Non-GAAP) $ 569 $ 1,541 $ 1,139 $ 1,477 $ 1,304 $ 176 $ (544 ) $ 5,662 Six Months Ended June 27, 2014 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 593 $ 1,611 $ 1,301 $ 1,255 $ 1,403 $ 12 $ (629 ) $ 5,546 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 108 — 108 Productivity & Reinvestment — — — 133 8 — 34 175 Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — — (92 ) — 20 28 (44 ) After Considering Items (Non-GAAP) $ 593 $ 1,611 $ 1,301 $ 1,296 $ 1,411 $ 140 $ (567 ) $ 5,785 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated % Change — Reported (GAAP) (7 ) (4 ) (15 ) 11 (7 ) 283 (79 ) (13 ) % Currency Impact (12 ) (5 ) (21 ) 0 (8 ) 59 1 (10 ) % Change — Currency Neutral Reported 5 1 6 12 1 224 (80 ) (3 ) % Change — After Considering Items (Non-GAAP) (4 ) (4 ) (12 ) 14 (8 ) 26 4 (2 ) % Currency Impact After Considering Items (Non-GAAP) (12 ) (5 ) (21 ) 0 (8 ) (17 ) 0 (10 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 8 1 9 14 1 43 4 8Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Income (Loss) Before Income Taxes by Segment:
Three Months Ended July 3, 2015 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 287 $ 843 $ 526 $ 874 $ 766 $ 231 $ 834 $ 4,361 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 94 — 94 Productivity & Reinvestment 3 — 3 79 2 1 4 92 Equity Investees — 5 — — — 4 — 9 Transaction Gains/Losses — — — 12 — — (1,019 ) (1,007 ) Other Items — — — (57 ) — 5 96 44 After Considering Items (Non-GAAP) $ 290 $ 848 $ 529 $ 908 $ 768 $ 335 $ (85 ) $ 3,593 Three Months Ended June 27, 2014 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 313 $ 904 $ 636 $ 682 $ 851 $ 254 $ (256 ) $ 3,384 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 66 — 66 Productivity & Reinvestment — — — 58 1 — 30 89 Equity Investees — — — — — 6 — 6 Transaction Gains/Losses — — — 140 — — — 140 Other Items — — — (39 ) — 21 10 (8 ) After Considering Items (Non-GAAP) $ 313 $ 904 $ 636 $ 841 $ 852 $ 347 $ (216 ) $ 3,677 Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments Corporate Consolidated % Change — Reported (GAAP) (8 ) (7 ) (17 ) 28 (10 ) (9 ) 425 29 % Currency Impact (16 ) (5 ) (30 ) (1 ) (8 ) (10 ) 73 (6 ) % Change — Currency Neutral Reported 8 (2 ) 12 29 (2 ) 1 352 34% Change — After Considering Items (Non-GAAP)
(7 ) (6 ) (17 ) 8 (10 ) (3 ) 60 (2 )% Currency Impact After Considering Items (Non-GAAP)
(16 ) (5 ) (30 ) (1 ) (8 ) (14 ) 90 (6 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 9 (1 ) 13 8 (2 ) 11 (30 ) 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:
Six Months Ended July 3, 2015 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 573 $ 1,567 $ 1,114 $ 1,361 $ 1,314 $ 230 $ 183 $ 6,342 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 129 — 129 Productivity & Reinvestment 15 (11 ) 3 154 (3 ) — 24 182 Equity Investees — 6 — — — 76 — 82 Transaction Gains/Losses — — — 33 — — (994 ) (961 ) Other Items — — 33 (75 ) 2 2 583 545 After Considering Items (Non-GAAP) $ 588 $ 1,562 $ 1,150 $ 1,473 $ 1,313 $ 437 $ (204 ) $ 6,319 Six Months Ended June 27, 2014 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated Reported (GAAP) $ 621 $ 1,635 $ 1,303 $ 1,107 $ 1,411 $ 276 $ (764 ) $ 5,589 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — 108 — 108 Productivity & Reinvestment — — — 133 8 — 34 175 Equity Investees — — — — — 12 — 12 Transaction Gains/Losses — — — 140 — — — 140 Other Items — — — (92 ) — 41 245 194 After Considering Items (Non-GAAP) $ 621 $ 1,635 $ 1,303 $ 1,288 $ 1,419 $ 437 $ (485 ) $ 6,218 Eurasia & Latin North Asia Bottling Africa Europe America America Pacific Investments Corporate Consolidated % Change — Reported (GAAP) (8 ) (4 ) (15 ) 23 (7 ) (17 ) 124 13 % Currency Impact (12 ) (5 ) (21 ) (1 ) (8 ) (8 ) 61 (2 ) % Change — Currency Neutral Reported 4 1 7 23 1 (9 ) 63 15% Change — After Considering Items (Non-GAAP)
(5 ) (5 ) (12 ) 14 (7 ) 0 58 2 % Currency Impact After Considering Items (Non-GAAP) (12 ) (5 ) (21 ) 0 (8 ) (14 ) 55 (6 ) % Change — Currency Neutral After Considering Items (Non-GAAP) 6 1 10 15 1 14 3 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)Operating Expense Leverage:
Three Months Ended July 3, 2015 Operating expense Operating income Gross profitleverage1
% Change — Reported (GAAP) (20 ) (4 ) (16 ) % Change — Currency Neutral Reported (9 ) 4 (13 ) % Change — After Considering Items (Non-GAAP) (5 ) (4 ) (1 )% Change — Currency Neutral After Considering Items (Non-GAAP)
6 4 2 Six Months Ended July 3, 2015 Operating expense Operating income Gross profitleverage1
% Change — Reported (GAAP) (13 ) (2 ) (11 ) % Change — Currency Neutral Reported (3 ) 6 (9 ) % Change — After Considering Items (Non-GAAP) (2 ) (1 ) (1 )% Change — Currency Neutral After Considering Items (Non-GAAP)
8 6 1Note: Certain rows may not add due to rounding.
1 Operating expense leverage is calculated by subtracting gross profit growth from operating income growth.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Purchases and Issuances of Stock:
Six Months Ended Six Months Ended July 3, 2015 June 27, 2014 Reported (GAAP) Issuances of Stock $ 410 $ 650 Purchases of Stock for Treasury (1,298 ) (1,953 ) Net Change in Stock Issuance Receivables1 (3 ) 29 Net Change in Treasury Stock Payables2 15 (20 ) Net Treasury Share Repurchases (Non-GAAP) $ (876 ) $ (1,294 ) 1 Represents the net change in receivables related to employee stock options exercised but not settled prior to the end of the quarter. 2 Represents the net change in payables for treasury shares repurchased but not settled prior to the end of the quarter.About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, one of the world's most valuable and recognizable brands, our Company's portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, we are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy our beverages at a rate of 1.9 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that reduce our environmental footprint, support active, healthy living, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world's top 10 private employers with more than 700,000 system associates. For more information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company.
Forward-Looking Statements
This press release may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company’s historical experience and our present expectations or projections. These risks include, but are not limited to, obesity concerns; water scarcity and poor quality; evolving consumer preferences; increased competition and capabilities in the marketplace; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials; increased demand for food products and decreased agricultural productivity; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand operations in emerging and developing markets; fluctuations in foreign currency exchange rates; interest rate increases; an inability to maintain good relationships with our bottling partners; a deterioration in our bottling partners' financial condition; increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters; increased or new indirect taxes in the United States or in other major markets; increased cost, disruption of supply or shortage of energy or fuels; increased cost, disruption of supply or shortage of ingredients, other raw materials or packaging materials; changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the availability of our products; an inability to protect our information systems against service interruption, misappropriation of data or breaches of security; unfavorable general economic conditions in the United States; unfavorable economic and political conditions in international markets; litigation or legal proceedings; adverse weather conditions; climate change; damage to our brand image and corporate reputation from negative publicity, even if unwarranted, related to product safety or quality, human and workplace rights, obesity or other issues; changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations; changes in accounting standards; an inability to achieve our overall long-term growth objectives; deterioration of global credit market conditions; default by or failure of one or more of our counterparty financial institutions; an inability to timely implement our previously announced actions to reinvigorate growth, or to realize the economic benefits we anticipate from these actions; failure to realize a significant portion of the anticipated benefits of our strategic relationships with Keurig Green Mountain, Inc. and Monster Beverage Corporation; an inability to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages or labor unrest; future impairment charges; multi-employer plan withdrawal liabilities in the future; an inability to successfully integrate and manage our Company-owned or -controlled bottling operations; an inability to successfully manage the possible negative consequences of our productivity initiatives; global or regional catastrophic events; and other risks discussed in our Company’s filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2014 and our subsequently filed Quarterly Report on Form 10-Q, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company undertakes no obligation to publicly update or revise any forward-looking statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150722005662/en/
The Coca-Cola CompanyInvestors and Analysts:Tim Leveridge, +01 404-676-7563orMedia:Petro Kacur, +01 404-676-2683
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