We could not find any results for:
Make sure your spelling is correct or try broadening your search.
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 | |
---|---|---|---|---|---|---|---|---|
-0.09 | -0.15% | 61.84 | 62.3991 | 61.72 | 62.18 | 11,020,479 | 01:00:00 |
Flagship North America Market Maintains Positive Momentum
The Coca-Cola Company today reported third quarter 2016 operating results. “I am pleased to report that we delivered results in line with our expectations,” said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. “We continued to see solid revenue results in our developed markets with 2% unit case volume growth and a continued focus on price realization. The United States, Japan and Western Europe delivered standout performance underpinned by innovation and world-class marketing. Globally, we gained nonalcoholic ready-to-drink value share for the 37th consecutive quarter and are on track to deliver our financial commitments for the full year.”
“While our year-to-date reported net revenues declined 5%, our core business organic revenues* have grown 4% despite continued global economic and political volatility. We believe this core business reflects the ultimate destination of our transformed company – an enterprise positioned to capture sustainable growth through a laser focus on innovating across our portfolio, building strong brands, and leveraging unparalleled customer service through aligned bottlers. As we continue on our path to transform the global system, we remain committed to our strategic actions for growth that will create long-term shareowner and stakeholder value.”
HighlightsQuarterly Performance
Company Updates
The Company continued to make substantial progress in transforming its business to one that is strategically focused on building great brands and leading a strong global franchise system. Key developments this quarter include:
Operating Review – Three Months Ended September 30, 2016
Revenue and Volume
Percent ChangeConcentrate
Sales 1
Price/Mix Currency ImpactAcquisitions,
Divestitures and
Structural Items, Net
Reported Net RevenuesOrganic
Revenues 2
Unit Case Volume Consolidated 1 1 (2) (8) (7) 3 1 Europe, Middle East & Africa 3 (1) 3 (2) (3) (4) 2 2 Latin America 0 11 (16) 0 (4) 11 (2) North America 1 2 0 0 3 3 1 Asia Pacific 9 (8) 4 (1) 4 0 2 Bottling Investments (2) 3 (1) (19) (19) 2 (22)Income Before Taxes and EPS
Percent ChangeReported
Income Before Taxes
Items
Impacting
Comparability
Currency Impact Comparable Currency Neutral 2 Structural ImpactComparable
Currency Neutral
(Structurally
Adjusted) 2
Consolidated (17) (13) (3) (1) (2) 2 Europe, Middle East & Africa 3 (2) 0 (2) 1 Latin America (16) (13) (24) 21 North America 12 5 0 8 Asia Pacific 2 0 3 (1) Bottling Investments (34) (35) 0 1 Percent Change Reported EPSItems
Impacting
Comparability
Currency Impact Comparable Currency Neutral 2 Consolidated EPS (27) (24) (3) 0Note: 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 preceding data, quarterly (unless otherwise noted) results were impacted by the following:
Consolidated
Europe, Middle East & Africa
Latin America
North America
Asia Pacific
Bottling Investments
Operating Results – Nine Months Ended September 30, 2016
Revenue and Volume
Percent Change Concentrate Sales 1 Price/Mix Currency ImpactAcquisitions,
Divestitures and
Structural Items, Net
Reported Net Revenues Organic Revenues 2 Unit Case Volume Consolidated 1 2 (3) (5) (5) 2 1 Europe, Middle East & Africa 3 (1) 3 (3) (3) (4) 2 0 Latin America 0 12 (20) 0 (7) 13 0 North America 0 3 0 0 3 3 1 Asia Pacific 4 (4) 1 (2) (1) 0 2 Bottling Investments (1) 1 (2) (10) (12) 0 (13)Income Before Taxes and EPS
Percent ChangeReported
Income Before
Taxes
Items Impacting Comparability Currency Impact Comparable Currency Neutral 2 Structural ImpactComparable
Currency
Neutral (Structurally Adjusted) 2
Consolidated (6) (1) (9) 4 (3) 7 Europe, Middle East & Africa 3 (4) 0 (3) (1) Latin America (10) (2) (27) 20 North America 6 2 0 4 Asia Pacific 1 0 (1) 1 Bottling Investments (274) (284) (3) 13 Percent Change Reported EPSItems Impacting Comparability
Currency Impact Comparable Currency Neutral 2 Consolidated EPS (1) 3 (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.
Outlook
Our 2016 outlook for organic revenues, comparable currency neutral income before taxes (structurally adjusted) and comparable EPS are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability, the impact of changes in foreign currency exchange rates, acquisitions and divestitures, and the impact of structural items, as applicable. We are not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of changes in foreign currency exchange rates and the exact timing of acquisitions, divestitures and/or structural changes throughout 2016. The unavailable information could have a significant impact on our full year 2016 GAAP financial results.
Full Year Net Revenues:
Full Year Income Before Taxes:
Full Year EPS: Comparable EPS (non-GAAP) 4% to 7% decline versus $2.00 in 2015 – No Change
The Company also expects the following:
Fourth Quarter Considerations - New:
Notes
Conference Call
We are hosting a conference call with investors and analysts to discuss third quarter 2016 results today, Oct. 26, 2016 at 9 a.m. EDT. We invite investors to listen to a live audiocast of the conference call on the Company’s website, http://www.coca-colacompany.com in the "Investors" section. A replay in downloadable MP3 format and a transcript of the call will also be available within 24 hours after the audiocast on the Company’s website. Further, the "Investors" section of the website includes a reconciliation of non-GAAP financial measures, which may be used periodically by management when discussing financial results with investors and analysts, to the Company’s results as reported under GAAP.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED) (In millions except per share data) Three Months Ended September 30, 2016 October 2, 2015 % Change1 Net Operating Revenues $ 10,633 $ 11,427 (7 ) Cost of goods sold 4,131 4,577 (10 ) Gross Profit 6,502 6,850 (5 ) Selling, general and administrative expenses 4,009 4,207 (5 ) Other operating charges 222 264 (16 ) Operating Income 2,271 2,379 (5 ) Interest income 164 155 6 Interest expense 182 138 32 Equity income (loss) — net 281 200 40 Other income (loss) — net (1,106 ) (871 ) (27 ) Income Before Income Taxes 1,428 1,725 (17 ) Income taxes 378 272 39 Consolidated Net Income 1,050 1,453 (28 ) Less: Net income (loss) attributable to noncontrolling interests 4 4 (9 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 1,046 $ 1,449 (28 ) Diluted Net Income Per Share2 $ 0.24 $ 0.33 (27 ) Average Shares Outstanding — Diluted2 4,364 4,3991 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the three months ended September 30, 2016 and October 2, 2015, basic net income per share was $0.24 for 2016 and $0.33 for 2015 based on average shares outstanding — basic of 4,315 million for 2016 and 4,349 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) Nine Months Ended September 30, 2016 October 2, 2015 % Change1 Net Operating Revenues $ 32,454 $ 34,294 (5 ) Cost of goods sold 12,671 13,428 (6 ) Gross Profit 19,783 20,866 (5 ) Selling, general and administrative expenses 11,682 12,490 (6 ) Other operating charges 830 1,166 (29 ) Operating Income 7,271 7,210 1 Interest income 472 459 3 Interest expense 485 713 (32 ) Equity income (loss) — net 678 402 68 Other income (loss) — net (315 ) 709 — Income Before Income Taxes 7,621 8,067 (6 ) Income taxes 1,618 1,937 (16 ) Consolidated Net Income 6,003 6,130 (2 ) Less: Net income (loss) attributable to noncontrolling interests 26 16 57 Net Income Attributable to Shareowners of The Coca-Cola Company $ 5,977 $ 6,114 (2 ) Diluted Net Income Per Share2 $ 1.37 $ 1.39 (1 ) Average Shares Outstanding — Diluted2 4,374 4,4101 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the nine months ended September 30, 2016 and October 2, 2015, basic net income per share was $1.38 for 2016 and $1.40 for 2015 based on average shares outstanding — basic of 4,322 million for 2016 and 4,357 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) September 30, 2016 December 31,2015ASSETS
Current Assets Cash and cash equivalents $ 11,147 $ 7,309 Short-term investments 11,265 8,322 Total Cash, Cash Equivalents and Short-Term Investments 22,412 15,631 Marketable securities 3,157 4,269 Trade accounts receivable, less allowances of $472 and $352, respectively 4,082 3,941 Inventories 2,751 2,902 Prepaid expenses and other assets 3,091 2,752 Assets held for sale 2,463 3,900 Total Current Assets 37,956 33,395 Equity Method Investments 16,917 12,318 Other Investments 1,110 3,470 Other Assets 4,526 4,110 Property, Plant and Equipment — net 11,172 12,571 Trademarks With Indefinite Lives 6,183 5,989 Bottlers' Franchise Rights With Indefinite Lives 4,438 6,000 Goodwill 10,865 11,289 Other Intangible Assets 760 854 Total Assets $ 93,927 $ 89,996LIABILITIES AND EQUITY
Current Liabilities Accounts payable and accrued expenses $ 11,153 $ 9,660 Loans and notes payable 12,088 13,129 Current maturities of long-term debt 3,473 2,676 Accrued income taxes 396 331 Liabilities held for sale 682 1,133 Total Current Liabilities 27,792 26,929 Long-Term Debt 31,663 28,311 Other Liabilities 3,984 4,301 Deferred Income Taxes 4,243 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 14,882 14,016 Reinvested earnings 66,457 65,018 Accumulated other comprehensive income (loss) (10,209 ) (10,174 ) Treasury stock, at cost — 2,727 and 2,716 shares, respectively (46,814 ) (45,066 ) Equity Attributable to Shareowners of The Coca-Cola Company 26,076 25,554 Equity Attributable to Noncontrolling Interests 169 210 Total Equity 26,245 25,764 Total Liabilities and Equity $ 93,927 $ 89,996THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED) (In millions) Nine Months Ended September 30, 2016 October 2,2015 Operating Activities Consolidated net income $ 6,003 $ 6,130 Depreciation and amortization 1,323 1,443 Stock-based compensation expense 191 171 Deferred income taxes (98 ) 212 Equity (income) loss — net of dividends (417 ) (150 ) Foreign currency adjustments 193 (76 ) Significant (gains) losses on sales of assets — net 364 (550 ) Other operating charges 277 697 Other items (205 ) 859 Net change in operating assets and liabilities (908 ) (346 ) Net cash provided by operating activities 6,723 8,390 Investing Activities Purchases of investments (12,733 ) (12,006 ) Proceeds from disposals of investments 13,210 10,403 Acquisitions of businesses, equity method investments and nonmarketable securities (767 ) (2,489 )Proceeds from disposals of businesses, equity method investments and nonmarketable securities
745 416 Purchases of property, plant and equipment (1,561 ) (1,670 ) Proceeds from disposals of property, plant and equipment 92 50 Other investing activities (319 ) (117 ) Net cash provided by (used in) investing activities (1,333 ) (5,413 ) Financing Activities Issuances of debt 22,667 34,298 Payments of debt (20,406 ) (30,159 ) Issuances of stock 1,295 732 Purchases of stock for treasury (2,509 ) (1,966 ) Dividends (3,028 ) (4,313 ) Other financing activities 198 230 Net cash provided by (used in) financing activities (1,783 ) (1,178 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents 231 (774 ) Cash and Cash Equivalents Net increase (decrease) during the period 3,838 1,025 Balance at beginning of period 7,309 8,958 Balance at end of period $ 11,147 $ 9,983THE 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 September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
Europe, Middle East & Africa $ 1,852 $ 1,933 (4 ) $ 914 $ 930 (2 ) $ 922 $ 945 (2 ) Latin America 965 1,012 (4 ) 435 538 (19 ) 447 535 (16 ) North America 2,664 2,580 3 666 585 14 653 581 12 Asia Pacific 1,460 1,406 4 583 571 2 589 576 2 Bottling Investments 4,840 5,948 (19 ) 124 85 46 (734 ) (547 ) (34 ) Corporate 47 55 (16 ) (451 ) (330 ) (37 ) (449 ) (365 ) (23 ) Eliminations (1,195 ) (1,507 ) 21 — — — — — — Consolidated $ 10,633 $ 11,427 (7 ) $ 2,271 $ 2,379 (5 ) $ 1,428 $ 1,725 (17 )Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 During the three months ended September 30, 2016, intersegment revenues were $16 million for Latin America, $1,003 million for North America, $145 million for Asia Pacific and $31 million for Bottling Investments. During the three months ended October 2, 2015, intersegment revenues were $169 million for Europe, Middle East & Africa, $19 million for Latin America, $1,112 million for North America, $159 million for Asia Pacific and $48 million for Bottling Investments.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED) (In millions)Nine Months Ended
Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income Taxes September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
September 30, 2016 October 2, 2015% Fav. /
(Unfav.)
Europe, Middle East & Africa $ 5,633 $ 5,876 (4 ) $ 2,897 $ 3,036 (5 ) $ 2,950 $ 3,085 (4 ) Latin America 2,837 3,051 (7 ) 1,470 1,641 (10 ) 1,485 1,649 (10 ) North America 7,737 7,548 3 1,982 1,874 6 1,978 1,865 6 Asia Pacific 4,255 4,292 (1 ) 1,892 1,876 1 1,903 1,890 1 Bottling Investments 15,747 17,864 (12 ) 222 239 (7 ) (897 ) (240 ) (274 ) Corporate 95 120 (21 ) (1,192 ) (1,456 ) 18 202 (182 ) — Eliminations (3,850 ) (4,457 ) 14 — — — — — — Consolidated $ 32,454 $ 34,294 (5 ) $ 7,271 $ 7,210 1 $ 7,621 $ 8,067 (6 )Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 During the nine months ended September 30, 2016, intersegment revenues were $264 million for Europe, Middle East & Africa, $50 million for Latin America, $2,978 million for North America, $437 million for Asia Pacific, $116 million for Bottling Investments and $5 million for Corporate. During the nine months ended October 2, 2015, intersegment revenues were $471 million for Europe, Middle East & Africa, $56 million for Latin America, $3,311 million for North America, $476 million for Asia Pacific and $143 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"). 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") defined above.
Asset Impairments and Restructuring
Restructuring
During the nine months ended September 30, 2016, the Company recorded charges of $240 million. The Company also recorded charges of $75 million and $204 million during the three and nine months ended October 2, 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 and nine months ended September 30, 2016, the Company recorded charges of $59 million and $187 million, respectively, related to our productivity and reinvestment initiatives. The Company also recorded charges of $141 million and $323 million during the three and nine months ended October 2, 2015, respectively. These productivity and reinvestment initiatives are focused on four key areas: restructuring the Company's global supply chain; implementing zero-based work, an evolution of zero-based budget principles across the organization; streamlining and simplifying the Company's operating model; and further driving increased discipline and efficiency in direct marketing investments. The savings realized from the program will enable the Company to fund marketing initiatives and innovation required to deliver sustainable net revenue growth. The savings will also support margin expansion and increased returns on invested capital over time.
Equity Investees
During the three and nine months ended September 30, 2016, the Company recorded net charges of $14 million and $35 million, respectively. During the three and nine months ended October 2, 2015, the Company recorded a net gain of $3 million and a net charge of $79 million, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by our equity method investees.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)Transaction Gains/Losses
During the three and nine months ended September 30, 2016, the Company recorded charges of $73 million and $170 million, respectively, related to costs incurred to refranchise certain of our North America bottling territories. These costs include, among other items, internal and external costs for individuals directly working on the refranchising efforts, severance, and costs associated with the implementation of information technology systems to facilitate consistent data standards and availability throughout the North America bottling system.
During the three and nine months ended September 30, 2016, the Company recorded charges of $4 million and $37 million, respectively, for noncapitalizable transaction costs associated with pending and closed transactions, primarily related to the deconsolidation of our German bottling operations discussed below.
During the three and nine months ended September 30, 2016, the Company incurred losses of $1,089 million and $1,657 million, respectively. The Company also incurred losses of $815 million and $848 million during the three and nine months ended October 2, 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 and nine months ended September 30, 2016, the Company incurred charges of $17 million 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 and nine months ended September 30, 2016, the Company recognized an $80 million 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.
During the three and nine months ended September 30, 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 nine months ended September 30, 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 nine months ended September 30, 2016, the Company recorded a net gain of $18 million as a result of the disposal of our shares in Keurig Green Mountain, Inc.
During the three and nine months ended October 2, 2015, the Company recorded an impairment charge of $38 million on a trademark in the glacéau portfolio. This charge was primarily a result of foreign currency exchange rate fluctuations that impacted the fair value of the asset.
During the nine months ended October 2, 2015, the Company recorded a net gain of $1,402 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. This net gain was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. Additionally, under the terms of this transaction, the Company was required to discontinue selling energy products under certain trademarks, including one trademark in the glacéau portfolio. As a result, the Company recognized an impairment charge of $380 million upon the closing of the transaction with Monster, primarily related to the discontinuation of the energy products in the glacéau portfolio.
In the fourth quarter of 2014, the owners of the majority interest of a Brazilian bottler exercised their option to acquire from us a 10 percent interest in the entity's outstanding shares resulting in our recognizing an estimated loss of $32 million due to the exercise price being lower than our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of $6 million during the nine months ended October 2, 2015, calculated based on the final option price. Also during the nine months ended October 2, 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.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)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 September 30, 2016 and October 2, 2015, the impact of the Company's adjustment related to our economic hedging activities resulted in a decrease of $11 million and an increase of $87 million, respectively, to our non-GAAP income before income taxes. During the nine months ended September 30, 2016 and October 2, 2015, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in a decrease of $82 million and an increase of $76 million, respectively, to our non-GAAP income before income taxes.
Donation to The Coca-Cola Foundation
During both the nine months ended September 30, 2016 and October 2, 2015, the Company recorded charges of $100 million due to contributions the Company made to The Coca-Cola Foundation.
Early Extinguishment of Long-Term Debt
During the nine months ended October 2, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt.
Hyperinflationary Economies
During the three and nine months ended September 30, 2016, the Company recorded a charge of $76 million due to the write-down we recorded related to our 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 three and nine months ended October 2, 2015, the Company recorded net charges of $3 million and $138 million, respectively, related to our Venezuelan operations. These charges were primarily a result of the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate, an impairment of a Venezuelan trademark due to higher exchange rates, and a write-down of receivables from our bottling partner in Venezuela. The write-down was recorded primarily as a result of the continued lack of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of the Venezuelan bolivar into U.S. dollars by our bottling partner to pay our receivables.
Other
During the three and nine months ended September 30, 2016, the Company recorded other charges of $10 million and $20 million, respectively. During both the three and nine months ended October 2, 2015, the Company recorded other charges of $1 million and $2 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.
Certain Tax Matters
During the three and nine months ended September 30, 2016, the Company recorded net tax charges of $7 million and $84 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. During the three and nine months ended October 2, 2015, the Company recorded a net tax benefit of $6 million related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)2016 OUTLOOK
Our 2016 outlook for organic revenues, comparable currency neutral income before taxes (structurally adjusted) and comparable EPS are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability, the impact of changes in foreign currency exchange rates, acquisitions and divestitures, and the impact of structural items, as applicable. We are not able to reconcile our full year 2016 projected organic revenues to our full year 2016 projected reported net revenues, our full year 2016 projected comparable currency neutral income before taxes (structurally adjusted) to our full year 2016 projected reported income before taxes, or our full year 2016 projected comparable EPS to our full year 2016 projected reported EPS without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of changes in foreign currency exchange rates and the exact timing of acquisitions, divestitures and/or structural changes throughout 2016. The unavailable information could have a significant impact on our full year 2016 GAAP financial results.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data) Three Months Ended September 30, 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) $ 10,633 $ 4,131 $ 6,502 61.1 % $ 4,009 $ 222 $ 2,271 21.4 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — Productivity & Reinvestment — — — — (59 ) 59 Equity Investees — — — — — — Transaction Gains/Losses — — — — (77 ) 77 Other Items (7 ) 2 (9 ) 2 (86 ) 75 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 10,626 $ 4,133 $ 6,493 61.1 % $ 4,011 $ — $ 2,482 23.4 % Three Months Ended October 2, 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) $ 11,427 $ 4,577 $ 6,850 59.9 % $ 4,207 $ 264 $ 2,379 20.8 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (75 ) 75 Productivity & Reinvestment — — — — (141 ) 141 Equity Investees — — — — — — Transaction Gains/Losses — — — — (44 ) 44 Other Items (27 ) (93 ) 66 4 (4 ) 66 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 11,400 $ 4,484 $ 6,916 60.7 % $ 4,211 $ — $ 2,705 23.7 % Net operating revenuesCost of
goods
sold
Gross profitSelling,
general and
administrative
expenses
Other operating charges Operating income % Change — Reported (GAAP) (7) (10) (5) (5) (16) (5) % Currency Impact (2) 0 (3) (1) — (7) % Change — Currency Neutral (Non-GAAP) (5) (10) (2) (3) — 2 % Change — Comparable (Non-GAAP) (7) (8) (6) (5) — (8) % Comparable Currency Impact (Non-GAAP) (2) 0 (3) (1) — (5) % Change — Comparable Currency Neutral (Non-GAAP) (5) (8) (3) (3) — (3)Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data) Three Months Ended September 30, 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) $ 182 $ 281 $ (1,106 ) $ 1,428 $ 378 26.5 % $ 4 $ 1,046 $ 0.24 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — 59 20 — 39 0.01 Equity Investees — 14 — 14 4 — 10 — Transaction Gains/Losses — — 1,127 1,204 246 — 958 0.22 Other Items — — — 75 (15 ) — 90 0.02 Certain Tax Matters — — — — (7 ) — 7 — Comparable (Non-GAAP) $ 182 $ 295 $ 21 $ 2,780 $ 626 22.5 % $ 4 $ 2,150 $ 0.49 Three Months Ended October 2, 2015
Interest
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) $ 138 $ 200 $ (871 ) $ 1,725 $ 272 15.8 % $ 4 $ 1,449 $ 0.33 Items Impacting Comparability: Asset Impairments/Restructuring — — — 75 — — 75 0.02 Productivity & Reinvestment — — — 141 49 — 92 0.02 Equity Investees — (3 ) — (3 ) (1 ) — (2 ) — Transaction Gains/Losses — — 815 859 291 — 568 0.13 Other Items — — 25 91 33 — 58 0.01 Certain Tax Matters — — — — 6 — (6 ) — Comparable (Non-GAAP) $ 138 $ 197 $ (31 ) $ 2,888 $ 650 22.5 % $ 4 $ 2,234 $ 0.51Interest
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) 32 40 (27) (17) 39 (9) (28) (27) % Change — Comparable (Non-GAAP) 32 49 — (4) (4) (7) (4) (3)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 4,364 million average shares outstanding — diluted
3 4,399 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) Nine Months Ended September 30, 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) $ 32,454 $ 12,671 $ 19,783 61.0 % $ 11,682 $ 830 $ 7,271 22.4 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (240 ) 240 Productivity & Reinvestment — — — — (187 ) 187 Equity Investees — — — — — — Transaction Gains/Losses — — — — (207 ) 207 Other Items 25 132 (107 ) 15 (196 ) 74 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 32,479 $ 12,803 $ 19,676 60.6 % $ 11,697 $ — $ 7,979 24.6 % Nine Months Ended October 2, 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) $ 34,294 $ 13,428 $ 20,866 60.8 % $ 12,490 $ 1,166 $ 7,210 21.0 % Items Impacting Comparability: Asset Impairments/Restructuring — — — — (204 ) 204 Productivity & Reinvestment — — — — (323 ) 323 Equity Investees — — — — — — Transaction Gains/Losses — — — — (427 ) 427 Other Items (42 ) (66 ) 24 33 (212 ) 203 Certain Tax Matters — — — — — — Comparable (Non-GAAP) $ 34,252 $ 13,362 $ 20,890 61.0 % $ 12,523 $ — $ 8,367 24.4 %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) (6) (29) 1 % Currency Impact (3) (1) (4) (2) — (9) % Change — Currency Neutral (Non-GAAP) (2) (5) (1) (4) — 9 % Change — Comparable (Non-GAAP) (5) (4) (6) (7) — (5) % Comparable Currency Impact (Non-GAAP) (3) (1) (4) (2) — (7) % Change — Comparable Currency Neutral (Non-GAAP) (2) (3) (2) (4) — 2Note: 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) Nine Months Ended September 30, 2016Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Incometaxes1
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) $ 485 $ 678 $ (315 ) $ 7,621 $ 1,618 21.2 % $ 26 $ 5,977 $ 1.37 Items Impacting Comparability: Asset Impairments/Restructuring — — — 240 — — 240 0.05 Productivity & Reinvestment — — — 187 65 — 122 0.03 Equity Investees — 35 — 35 8 — 27 0.01 Transaction Gains/Losses — — 354 561 363 — 198 0.05 Other Items — — 40 114 1 — 113 0.03 Certain Tax Matters — — — — (84 ) — 84 0.02 Comparable (Non-GAAP) $ 485 $ 713 $ 79 $ 8,758 $ 1,971 22.5 % $ 26 $ 6,761 $ 1.55 Nine Months Ended October 2, 2015Interest
expense
Equity
income
(loss) —
net
Other
income
(loss) —
net
Income
before
income
taxes
Incometaxes1
Effectivetax 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) $ 713 $ 402 $ 709 $ 8,067 $ 1,937 24.0 % $ 16 $ 6,114 $ 1.39 Items Impacting Comparability: Asset Impairments/Restructuring — — — 204 — — 204 0.05 Productivity & Reinvestment — — — 323 124 — 199 0.05 Equity Investees — 79 — 79 5 — 74 0.02 Transaction Gains/Losses — — (529 ) (102 ) (173 ) — 71 0.02 Other Items (320 ) — 113 636 173 — 463 0.10 Certain Tax Matters — — — — 6 — (6 ) — Comparable (Non-GAAP) $ 393 $ 481 $ 293 $ 9,207 $ 2,072 22.5 % $ 16 $ 7,119 $ 1.61Interest
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) (32) 68 — (6) (16) 57 (2) (1) % Change — Comparable (Non-GAAP) 24 48 (73) (5) (5) 57 (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 4,374 million average shares outstanding — diluted
3 4,410 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 September 30, 2016Income before
income taxes
Diluted net income
per share
% Change — Reported (GAAP) (17) (27) % Currency Impact (7) (6) % Change — Currency Neutral (Non-GAAP) (11) (21) % Structural Impact 0 — % Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) (10) — % Impact of Items Impacting Comparability (Non-GAAP) (13) (24) % Change — Comparable (Non-GAAP) (4) (3) % Comparable Currency Impact (Non-GAAP) (3) (3) % Change — Comparable Currency Neutral (Non-GAAP) (1) 0 % Comparable Structural Impact (Non-GAAP) (2) — % Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) 2 — Nine Months Ended September 30, 2016Income before
income taxes
Diluted net income
per share
% Change — Reported (GAAP) (6) (1) % Currency Impact (11) (11) % Change — Currency Neutral (Non-GAAP) 5 10 % Structural Impact (2) — % Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) 8 — % Impact of Items Impacting Comparability (Non-GAAP) (1) 3 % 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) 7 —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 September 30, 2016Europe,
Middle East
& Africa
Latin America
North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 1,852 $ 965 $ 2,664 $ 1,460 $ 4,840 $ 47 $ (1,195 ) $ 10,633 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (3 ) — — (4 ) — (7 ) Comparable (Non-GAAP) $ 1,852 $ 965 $ 2,661 $ 1,460 $ 4,840 $ 43 $ (1,195 ) $ 10,626 Three Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 1,933 $ 1,012 $ 2,580 $ 1,406 $ 5,948 $ 55 $ (1,507 ) $ 11,427 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (2 ) — — (25 ) — (27 ) Comparable (Non-GAAP) $ 1,933 $ 1,012 $ 2,578 $ 1,406 $ 5,948 $ 30 $ (1,507 ) $ 11,400Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated % Change — Reported (GAAP) (4) (4) 3 4 (19) (16) 21 (7) % Currency Impact (2) (16) 0 4 (1) (37) — (2) % Change — Currency Neutral (Non-GAAP) (2) 11 3 (1) (18) 20 — (5) % Acquisitions, Divestitures and Structural Items (3) 0 0 (1) (19) 5 — (8) % Change — Organic Revenues (Non-GAAP) 2 11 3 0 2 13 — 3 % Change — Comparable (Non-GAAP) (4) (4) 3 4 (19) 36 — (7) % Comparable Currency Impact (Non-GAAP) (2) (16) 0 4 (1) (1) — (2) % Change — Comparable Currency Neutral (Non-GAAP) (2) 11 3 (1) (18) 37 — (5)Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Net Operating Revenues by Segment:
Nine Months Ended September 30, 2016Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 5,633 $ 2,837 $ 7,737 $ 4,255 $ 15,747 $ 95 $ (3,850 ) $ 32,454 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (11 ) — — 36 — 25 Comparable (Non-GAAP) $ 5,633 $ 2,837 $ 7,726 $ 4,255 $ 15,747 $ 131 $ (3,850 ) $ 32,479 Nine Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated Reported (GAAP) $ 5,876 $ 3,051 $ 7,548 $ 4,292 $ 17,864 $ 120 $ (4,457 ) $ 34,294 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — — Productivity & Reinvestment — — — — — — — — Equity Investees — — — — — — — — Transaction Gains/Losses — — — — — — — — Other Items — — (19 ) — — (23 ) — (42 ) Comparable (Non-GAAP) $ 5,876 $ 3,051 $ 7,529 $ 4,292 $ 17,864 $ 97 $ (4,457 ) $ 34,252Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Eliminations Consolidated % Change — Reported (GAAP) (4) (7) 3 (1) (12) (21) 14 (5) % Currency Impact (3) (20) 0 1 (2) (46) — (3) % Change — Currency Neutral (Non-GAAP) (1) 13 3 (2) (10) 25 — (2) % Acquisitions, Divestitures and Structural Items (3) 0 0 (2) (10) 14 — (5) % Change — Organic Revenues (Non-GAAP) 2 13 3 0 0 10 — 2 % Change — Comparable (Non-GAAP) (4) (7) 3 (1) (12) 34 — (5) % Comparable Currency Impact (Non-GAAP) (3) (20) 0 1 (2) 3 — (3) % Change — Comparable Currency Neutral (Non-GAAP) (1) 13 3 (2) (10) 31 — (2)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: 1
Three Months Ended
September 30, 2016
Reported (GAAP) Net Operating Revenues $ 10,633 Bottling Investments Net Operating Revenues (4,840 ) Consolidated Eliminations 1,195 Intersegment Core Net Operating Revenue Eliminations — Core Business Revenues (Non-GAAP) 6,988 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (7 ) Comparable Core Business Revenues (Non-GAAP) $ 6,981Three Months Ended
October 2, 2015
Reported (GAAP) Net Operating Revenues $ 11,427 Bottling Investments Net Operating Revenues (5,948 ) Consolidated Eliminations 1,507 Intersegment Core Net Operating Revenue Eliminations (1 ) Core Business Revenues (Non-GAAP) 6,985 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (27 ) Comparable Core Business Revenues (Non-GAAP) $ 6,958 % Change — Reported (GAAP) Net Operating Revenues (7) % Change — Core Business Revenues (Non-GAAP) 0 % Core Business Currency Impact (Non-GAAP) (2) % Change — Currency Neutral Core Business Revenues (Non-GAAP) 2 % Acquisitions, Divestitures and Structural Items (1) % Change — Core Business Organic Revenues (Non-GAAP)2 3 % Change — Comparable Core Business Revenues (Non-GAAP) 0 % Comparable Core Business Currency Impact (Non-GAAP) (2) % Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) 2Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 Core business revenues 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 during the three months ended October 2, 2015.
2 Core business organic revenue growth included 2 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: 1
Nine Months Ended
September 30, 2016
Reported (GAAP) Net Operating Revenues $ 32,454 Bottling Investments Net Operating Revenues (15,747 ) Consolidated Eliminations 3,850 Intersegment Core Net Operating Revenue Eliminations (13 ) Core Business Revenues (Non-GAAP) 20,544 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items 25 Comparable Core Business Revenues (Non-GAAP) $ 20,569Nine Months Ended
October 2, 2015
Reported (GAAP) Net Operating Revenues $ 34,294 Bottling Investments Net Operating Revenues (17,864 ) Consolidated Eliminations 4,457 Intersegment Core Net Operating Revenue Eliminations (8 ) Core Business Revenues (Non-GAAP) 20,879 Items Impacting Comparability: Asset Impairments/Restructuring — Productivity & Reinvestment — Equity Investees — Transaction Gains/Losses — Other Items (42 ) Comparable Core Business Revenues (Non-GAAP) $ 20,837 % Change — Reported (GAAP) Net Operating Revenues (5) % Change — Core Business Revenues (Non-GAAP) (2) % Core Business Currency Impact (Non-GAAP) (4) % Change — Currency Neutral Core Business Revenues (Non-GAAP) 2 % 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) (4) % Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) 2Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 Core business revenues 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 $13 million and $8 million during the nine months ended September 30, 2016 and October 2, 2015, respectively.
2 Core business organic revenue growth included 3 points of positive price/mix.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Operating Income (Loss) by Segment:
Three Months Ended September 30, 2016Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 914 $ 435 $ 666 $ 583 $ 124 $ (451 ) $ 2,271 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — Productivity & Reinvestment 2 (1 ) 22 — 22 14 59 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 73 4 77 Other Items — 76 11 — (15 ) 3 75 Comparable (Non-GAAP) $ 916 $ 510 $ 699 $ 583 $ 204 $ (430 ) $ 2,482 Three Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 930 $ 538 $ 585 $ 571 $ 85 $ (330 ) $ 2,379 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 75 — 75 Productivity & Reinvestment (1 ) 4 31 2 76 29 141 Equity Investees — — — — — — — Transaction Gains/Losses — — — — — 44 44 Other Items — — 40 — 47 (21 ) 66 Comparable (Non-GAAP) $ 929 $ 542 $ 656 $ 573 $ 283 $ (278 ) $ 2,705
Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (2) (19) 14 2 46 (37) (5) % Currency Impact (3) (24) 0 4 (3) (6) (7) % Change — Currency Neutral (Non-GAAP) 1 5 14 (1) 48 (31) 2 % Change — Comparable (Non-GAAP) (1) (6) 7 2 (28) (55) (8) % Comparable Currency Impact (Non-GAAP) (3) (24) 0 4 (1) 1 (5) % Change — Comparable Currency Neutral (Non-GAAP) 1 18 7 (2) (27) (56) (3)Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Operating Income (Loss) by Segment:
Nine Months Ended September 30, 2016Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 2,897 $ 1,470 $ 1,982 $ 1,892 $ 222 $ (1,192 ) $ 7,271 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 240 — 240 Productivity & Reinvestment 6 (2 ) 80 1 60 42 187 Equity Investees — — — — — — — Transaction Gains/Losses — — — — 178 29 207 Other Items — 76 (31 ) — (120 ) 149 74 Comparable (Non-GAAP) $ 2,903 $ 1,544 $ 2,031 $ 1,893 $ 580 $ (972 ) $ 7,979 Nine Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,036 $ 1,641 $ 1,874 $ 1,876 $ 239 $ (1,456 ) $ 7,210 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 204 — 204 Productivity & Reinvestment 3 7 104 (1 ) 157 53 323 Equity Investees — — — — — — — Transaction Gains/Losses — — — — — 427 427 Other Items — 33 (10 ) 2 24 154 203 Comparable (Non-GAAP) $ 3,039 $ 1,681 $ 1,968 $ 1,877 $ 624 $ (822 ) $ 8,367Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (5) (10) 6 1 (7) 18 1 % Currency Impact (3) (28) 0 (1) (1) (4) (9) % Change — Currency Neutral (Non-GAAP) (1) 18 5 1 (6) 22 9 % Change — Comparable (Non-GAAP) (4) (8) 3 1 (7) (18) (5) % Comparable Currency Impact (Non-GAAP) (3) (27) 0 (1) (2) 1 (7) % Change — Comparable Currency Neutral (Non-GAAP) (1) 19 3 1 (6) (19) 2Note: 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 September 30, 2016Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 922 $ 447 $ 653 $ 589 $ (734 ) $ (449 ) $ 1,428 Items Impacting Comparability: Asset Impairments/Restructuring — — — — — — — Productivity & Reinvestment 2 (1 ) 22 — 22 14 59 Equity Investees — — — — 14 — 14 Transaction Gains/Losses — — 17 — 1,162 25 1,204 Other Items — 76 11 — (15 ) 3 75 Comparable (Non-GAAP) $ 924 $ 522 $ 703 $ 589 $ 449 $ (407 ) $ 2,780 Three Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 945 $ 535 $ 581 $ 576 $ (547 ) $ (365 ) $ 1,725 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 75 — 75 Productivity & Reinvestment (1 ) 4 31 2 76 29 141 Equity Investees (3 ) — — — — — (3 ) Transaction Gains/Losses — — — — 794 65 859 Other Items — — 40 — 47 4 91 Comparable (Non-GAAP) $ 941 $ 539 $ 652 $ 578 $ 445 $ (267 ) $ 2,888Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (2) (16) 12 2 (34) (23) (17) % Currency Impact (2) (24) 0 3 0 6 (7) % Change — Currency Neutral (Non-GAAP) 0 8 13 (1) (34) (29) (11) % Impact of Items Impacting Comparability (Non-GAAP) 0 (13) 5 0 (35) 29 (13) % Change — Comparable (Non-GAAP) (2) (3) 8 2 1 (52) (4) % Comparable Currency Impact (Non-GAAP) (2) (24) 0 3 0 16 (3) % Change — Comparable Currency Neutral (Non-GAAP) 1 21 8 (1) 1 (67) (1)Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Income (Loss) Before Income Taxes by Segment:
Nine Months Ended September 30, 2016Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 2,950 $ 1,485 $ 1,978 $ 1,903 $ (897 ) $ 202 $ 7,621 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 240 — 240 Productivity & Reinvestment 6 (2 ) 80 1 60 42 187 Equity Investees — — — — 32 3 35 Transaction Gains/Losses — — 17 — 1,835 (1,291 ) 561 Other Items — 76 (31 ) — (120 ) 189 114 Comparable (Non-GAAP) $ 2,956 $ 1,559 $ 2,044 $ 1,904 $ 1,150 $ (855 ) $ 8,758 Nine Months Ended October 2, 2015Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated Reported (GAAP) $ 3,085 $ 1,649 $ 1,865 $ 1,890 $ (240 ) $ (182 ) $ 8,067 Items Impacting Comparability: Asset Impairments/Restructuring — — — — 204 — 204 Productivity & Reinvestment 3 7 104 (1 ) 157 53 323 Equity Investees 3 — — — 76 — 79 Transaction Gains/Losses — — — — 827 (929 ) (102 ) Other Items — 33 (10 ) 2 24 587 636 Comparable (Non-GAAP) $ 3,091 $ 1,689 $ 1,959 $ 1,891 $ 1,048 $ (471 ) $ 9,207Europe,
Middle East
& Africa
Latin America North America Asia PacificBottling
Investments
Corporate Consolidated % Change — Reported (GAAP) (4) (10) 6 1 (274) — (6) % Currency Impact (3) (28) 0 (1) (11) — (11) % Change — Currency Neutral (Non-GAAP) (1) 18 6 1 (263) — 5 % Impact of Items Impacting Comparability (Non-GAAP) 0 (2) 2 0 (284) 292 (1) % Change — Comparable (Non-GAAP) (4) (8) 4 1 10 (81) (5) % Comparable Currency Impact (Non-GAAP) (3) (27) 0 (1) (3) (50) (9) % Change — Comparable Currency Neutral (Non-GAAP) (1) 20 4 1 13 (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 September 30, 2016Operating
income
Gross profitOperating expense
leverage1
% Change — Reported (GAAP) (5) (5) 1 % Change — Currency Neutral (Non-GAAP) 2 (2) 4 % Change — Comparable (Non-GAAP) (8) (6) (2) % Change — Comparable Currency Neutral (Non-GAAP) (3) (3) 0 Nine Months Ended September 30, 2016Operating
income
Gross profitOperating expense
leverage1
% Change — Reported (GAAP) 1 (5) 6 % Change — Currency Neutral (Non-GAAP) 9 (1) 10 % Change — Comparable (Non-GAAP) (5) (6) 1 % Change — Comparable Currency Neutral (Non-GAAP) 2 (2) 4Note: 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
September 30, 2016
Three Months
Ended
October 2, 2015
Basis Point
Growth (Decline)
Reported (GAAP) 21.36 % 20.81 % 55 Items Impacting Comparability (Non-GAAP) (2.00 )% (2.92 )% Comparable Operating Margin (Non-GAAP) 23.36 % 23.73 % (37 ) Comparable Currency Impact (Non-GAAP) (0.88 )% 0.00 % Comparable Currency Neutral Operating Margin (Non-GAAP) 24.24 % 23.73 % 51Nine Months
Ended
September 30, 2016
Nine Months
Ended
October 2, 2015
Basis Point
Growth (Decline)
Reported (GAAP) 22.40 % 21.02 % 138 Items Impacting Comparability (Non-GAAP) (2.17 )% (3.41 )% Comparable Operating Margin (Non-GAAP) 24.57 % 24.43 % 14 Comparable Currency Impact (Non-GAAP) (0.97 )% 0.00 % Comparable Currency Neutral Operating Margin (Non-GAAP) 25.54 % 24.43 % 111THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)Purchases and Issuances of Stock:
Nine Months Ended
September 30, 2016
Nine Months Ended
October 2, 2015
Reported (GAAP) Issuances of Stock $ 1,295 $ 732 Purchases of Stock for Treasury (2,509 ) (1,966 ) Net Change in Stock Issuance Receivables1 (2 ) 16 Net Change in Treasury Stock Payables2 12 (37 )Net Share Repurchases (Non-GAAP)
$ (1,204 ) $ (1,255 )1 Represents the net change in receivables related to employee stock options exercised but not settled prior to the end of the period.
2Represents the net change in payables for treasury shares repurchased but not settled prior to the end of the period.
Consolidated Cash from Operations:
Nine Months Ended
September 30, 2016
Nine Months Ended
October 2, 2015
Net Cash Provided byOperating Activities
Net Cash Provided byOperating Activities
Reported (GAAP) $ 6,723 $ 8,390 Items Impacting Comparability: Cash Payments for Pension Plan Contributions 471 — Comparable (Non-GAAP) $ 7,194 $ 8,390 Net Cash Provided byOperating Activities
% Change — Reported (GAAP) (20) % Change — Comparable (Non-GAAP) (14)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/20161026005768/en/
The Coca-Cola CompanyInvestors and Analysts:Tim Leveridge, +01-404-676-7563orMedia:Petro Kacur, +01-404-676-2683
1 Year Coca Cola Chart |
1 Month Coca Cola Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions