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• | Net Revenues Declined 11%, Reflecting Unfavorable Impacts from Structural Changes of 10% and |
• | Organic Revenues (Non-GAAP) Were Even, Which Included the Impact of Two Fewer Days in the |
• | Price/Mix Grew 3% with Balanced Contribution Across the Operating Segments |
• | Operating Margin and Comparable Currency Neutral Operating Margin (Non-GAAP) |
• | EPS of $0.27 and Comparable EPS (Non-GAAP) of $0.43 |
• | On Track to Deliver Full Year Organic Revenue (Non-GAAP) and |
• | Expanding Our Existing $3 Billion Productivity and Reinvestment Program to Capture an |
Highlights |
Quarterly Performance |
• | Net revenues declined 11% to $9.1 billion, impacted by a headwind from acquisitions, divestitures, and structural items of 10% related to the ongoing refranchising of bottling territories and a foreign currency exchange headwind of 1%. Organic revenues (non-GAAP) were even – the result of 3% price/mix growth and a 3% decline in concentrate sales. The two fewer days in the quarter accounted for an approximate 2 point drag on organic revenue (non-GAAP) growth. The timing of concentrate shipments and the shift of the Easter holiday into the second quarter also put negative pressure on the results. Core business organic revenues (non-GAAP) were even, and core business price/mix growth was 3%. |
• | Our value share growth outpaced our volume share in total nonalcoholic ready-to-drink ("NARTD") beverages, reflecting our shifted focus from driving volume growth to driving revenue growth. We also gained value share in sparkling soft drinks and juice, dairy, and plant-based beverages. |
• | Total unit case volume was even, which included less than a half point of growth from acquired brands. Unit case volume performance was significantly impacted by the macroeconomic conditions in select Latin American markets along with the shift of the Easter holiday into the second quarter. Brazil and Venezuela accounted for over a 1 point drag on consolidated unit case volume growth. From a market segmentation perspective, our developed markets continued to outperform the consolidated results with 1% unit case volume growth. |
• | Our operating margin expanded by more than 90 basis points and our comparable currency neutral operating margin (non-GAAP) expanded over 220 basis points. The reported operating margin includes items impacting comparability and the impact of changes in foreign currency exchange rates. Improvements in operating margin were driven by structural impacts, our ongoing pricing initiatives, savings generated through our productivity program, and geographic mix. |
• | Cash from operations was $788 million, up 30% from the prior year. This increase was driven by the cycling of a pension plan contribution in the prior year, partially offset by the impact of two fewer days in the quarter and our ongoing refranchising of North American bottling territories. |
Company Updates |
• | Expanding our productivity and reinvestment program: We are expanding our current productivity and reinvestment program, with planned initiatives that are expected to generate an incremental $800 million in annualized savings by 2019. This brings the total annualized savings target of our six-year program to $3.8 billion. We expect to generate these additional savings through opportunities across our entire spend base – supply chain, marketing expenditures, and from the new operating model that was announced at the CAGNY Conference earlier this year. The majority of these additional savings are expected to be achieved in 2018 and 2019. The expected productivity savings associated with 2017 were included in our previously provided guidance. |
• | Accelerating growth of our consumer-centric brand portfolio: As part of our ongoing strategic priority to expand the beverages we sell across key consumer-centric category clusters, we completed the acquisition of the AdeS plant-based beverage business from Unilever. While the transaction began as an acquisition by The Coca-Cola Company and Coca-Cola FEMSA, other bottlers in Latin America later elected to participate in the investment. By closing, the transaction included all bottling partners within the AdeS geographic footprint, demonstrating excitement across the system for the fast-growing, plant-based beverage category. Building on the recent success of Honest Tea in the U.S., our organic sports drink Honest Sport was reintroduced with a new recipe and visual identity. In addition, Honest Tea continued its expansion in Europe, with additional markets planned for the remainder of the year. In order to meet changing consumer needs in Japan, we launched Coca-Cola Plus, the first-ever Trademark Coca-Cola product approved by the Japanese government as Food for Specified Health Use (FOSHU). This no-sugar product with added dietary fiber is positioned to address Japan's large aging population. The product is also helping us drive revenue growth in sparkling soft drinks, with a premium retail price over similar size, pack, and channel offerings of brand Coca-Cola. |
• | Strengthening our system: Bottler refranchising transactions completed in North America since our last update on Feb. 9, 2017 represent the largest block of territory transitions to date in this process. In China, we closed the majority of previously announced bottler refranchising transactions on April 1, 2017. Following these transactions, all bottling territories in China are now majority owned by local franchise partners. Meanwhile in Japan, Coca-Cola West and Coca-Cola East Japan completed their previously announced merger on April 1, 2017 to form Coca-Cola Bottlers Japan Inc. |
• | Unlocking the power of our people: We recently announced senior leadership appointments to further advance our ongoing transformation into a growth-oriented, consumer-centered, total beverage company. We announced the creation of a Chief Growth Officer role with a clear mandate for driving global growth and a Chief Innovation Officer role to accelerate the expansion of our consumer-centric portfolio, both reporting directly to the CEO. As part of our continued work to digitize the enterprise, the Information Technology function will now also report directly to the CEO. The entire enterprise will be supported by a focused, more agile corporate center as well as a broader Enabling Services organization, combining key transactional and expertise services. |
Operating Review – Three Months Ended March 31, 2017 |
Percent Change | Concentrate Sales 1 | Price/Mix | Currency Impact | Acquisitions, Divestitures, and Structural Items, Net | Reported Net Revenues | Organic Revenues 2 | Unit Case Volume | ||
Consolidated | (3) | 3 | (1) | (10) | (11) | 0 | 0 | ||
Europe, Middle East & Africa | (2) | 2 | (5) | (3) | (7) | 1 | 2 | ||
Latin America | (6) | 6 | (1) | 0 | (1) | 0 | (3) | ||
North America | (3) | 3 | 0 | 2 | 1 | 0 | 0 | ||
Asia Pacific | 0 | 0 | (3) | 0 | (2) | 0 | 1 | ||
Bottling Investments | (4) | 2 | 0 | (25) | (27) | (2) | (27) |
Percent Change | Reported Income Before Income Taxes | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | Structural Impact | Comparable Currency Neutral (Structurally Adjusted) 2 |
Consolidated | (20) | (16) | (3) | (1) | (3) | 2 |
Europe, Middle East & Africa | (7) | 0 | (5) | (1) | ||
Latin America | (2) | 0 | (4) | 2 | ||
North America | (18) | (20) | (2) | 4 | ||
Asia Pacific | (1) | 0 | (5) | 4 | ||
Bottling Investments | (26) | (24) | 3 | (5) | ||
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | ||
Consolidated EPS | (19) | (15) | (3) | (2) |
Consolidated |
• | Price/mix growth of 3% was primarily driven by positive operational pricing and mix in all operating segments. Geographic or segment mix did not have a significant impact on price/mix. |
• | Unit case volume was even and included the following performance by category cluster: |
◦ | Sparkling soft drinks: -1% |
◦ | Juice, dairy, and plant-based beverages: 0% |
◦ | Water, enhanced water, and sports drinks: 3% |
◦ | Tea and coffee: 2% |
• | The decline in income before income taxes included items impacting comparability, primarily due to charges associated with the refranchising of bottling territories in North America. The decline was also impacted by changes in foreign currency exchange rates and structural items, which were primarily related to the refranchising of bottling territories. Comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) benefited from the impact of our productivity initiatives and an increase in equity income, partially offset by a swing from net interest income to net interest expense. |
• | Purchases of stock for treasury were $1.3 billion in the quarter, and net share repurchases (non-GAAP) totaled $836 million. |
Europe, Middle East & Africa |
• | Price/mix growth of 2% was driven by positive operational pricing and mix in our Western Europe business unit. Geographic mix did not have a significant impact on price/mix. Acquisitions, divestitures, and structural items reflect the impact of bottling transactions in Europe and Africa. |
• | The decline in income before income taxes included items impacting comparability and the impact of changes in foreign currency exchange rates. On a net basis, comparable currency neutral income before income taxes (non-GAAP) was not significantly impacted by structural items. |
• | We maintained value share in total NARTD beverages. We gained value share in sparkling soft drinks; juice, dairy, and plant-based beverages; and tea and coffee. |
• | Unit case volume growth of 2% included 1 point of growth from acquired brands, which were primarily water brands in Africa. Unit case volume growth was driven by growth in our West Africa and Western Europe business units and was partially offset by a decline in our South & East Africa business unit, primarily driven by South Africa. Low single-digit sparkling soft drinks unit case volume growth was led by growth across the region in Coca-Cola Zero Sugar, and a mid single-digit decline in juice, dairy, and plant-based beverages was driven by market disruptions in Iraq. |
Latin America |
• | Price/mix growth of 6% included solid performance in Mexico and inflation-led pricing in Argentina. |
• | We gained value share in total NARTD beverages; water, enhanced water, and sports drinks; and tea and coffee. |
• | The unit case volume decline of 3% was driven by double-digit declines in both our Brazil and Latin Center business units amidst persistent macroeconomic challenges in those markets. These declines were partially offset by mid single-digit unit case volume growth in Mexico. Unit case volume for sparkling soft drinks declined mid single digits, primarily due to Brazil and Venezuela, while water, enhanced water, and sports drinks grew low single digits. |
North America |
• | Price/mix growth of 3% reflects our continued execution of disciplined occasion, brand, price, and package strategy. Sparkling soft drinks price/mix growth of 1% was unfavorably impacted by two points due to the timing of shipments in the foodservice & on-premise channel. Acquisitions, divestitures, and structural items reflect the impact of the ongoing refranchising of bottling territories in North America. |
• | Income before income taxes included items impacting comparability and the impact of changes in foreign currency exchange rates. Comparable currency neutral income before income taxes (non-GAAP) was favorably impacted by the ongoing refranchising in North America. |
• | We gained value share in total NARTD beverages for the 28th consecutive quarter. We also gained value share in sparkling soft drinks; juice, dairy, and plant-based beverages; and tea and coffee. |
• | In sparkling soft drinks, mid single-digit unit case volume growth in both Fanta and Sprite as well as low single-digit growth in Coca-Cola Zero was offset primarily by a mid single-digit decline in Diet Coke. In juice, dairy, and plant-based beverages, fairlife ultra-filtered milk grew unit case volume over 50%. |
Asia Pacific |
• | Price/mix was even, driven by positive operational pricing and mix in our Greater China & Korea business unit offset by negative performance in our India & South West Asia business unit. Geographic mix did not have a significant impact on price/mix. |
• | We gained value share in sparkling soft drinks. |
• | Unit case volume growth of 1% included low single-digit growth in our Greater China & Korea and ASEAN business units, partially offset by a low single-digit decline in our India & South West Asia business unit. Brand Coca-Cola led low single-digit unit case volume growth in sparkling soft drinks. Mid single-digit unit case volume growth in juice, dairy, and plant-based beverages was driven by solid growth in Minute Maid. |
Bottling Investments |
• | Price/mix growth of 2% included solid performance in the North American bottling operations partially offset by negative operational pricing and mix in the Indian bottling operations. |
• | The decline in income before income taxes was driven by items impacting comparability partially offset by the impact of changes in foreign currency exchange rates. Comparable currency neutral income before income taxes (non-GAAP) was unfavorably impacted by the ongoing refranchising of North American bottling territories and the deconsolidation of our German and South African bottling operations in 2016. |
Outlook |
• | Approximately 3% growth in organic revenues (non-GAAP) – No Change |
• | 7% to 8% growth in comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP), driven by strong operating performance partially offset by the impact of an increasing interest rate environment – No Change |
• | Net revenues: 1% to 2% headwind based on the current rates and including the impact of hedged positions – No Change |
• | Income before income taxes: 3% headwind based on the current rates and including the impact of hedged positions – Updated |
• | Net revenues: 18% to 19% headwind from acquisitions, divestitures, and structural items – No Change |
• | Income before income taxes: 5% to 6% structural headwind – No Change |
• | Underlying effective tax rate (non-GAAP): 24.0%* – No Change |
• | Net share repurchases (non-GAAP): Approximately $2.0 billion – No Change |
• | Net capital expenditures: $2.0 billion to $2.5 billion – No Change |
• | Comparable EPS (non-GAAP): 1% to 3% decline versus $1.91 in 2016 – Updated |
• | Net revenues: 17% to 18% headwind from acquisitions, divestitures, and structural items; 1% to 2% currency headwind based on the current rates and including the impact of hedged positions |
• | Income before income taxes: 3% to 4% structural headwind; 3% currency headwind based on the current rates and including the impact of hedged positions |
• | Net revenues: 16% to 17% headwind from acquisitions, divestitures, and structural items – No Change |
• | Income before income taxes: 1% to 2% structural headwind; low single-digit currency headwind based on the current rates and including the impact of hedged positions – No Change |
• | Underlying effective tax rate (non-GAAP): 26.0%* – No Change |
Notes |
• | All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period. |
• | All references to volume and volume percentage changes indicate unit case volume, unless otherwise noted. All volume percentage changes are computed based on average daily sales, unless otherwise noted. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage. "Unit case volume" means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers. |
• | "Core business" represents the combined performance from the Europe, Middle East & Africa; Latin America; North America; Asia Pacific; and Corporate operating segments offset by intersegment eliminations. |
• | "Concentrate sales" represents the amount of concentrates, syrups, beverage bases, and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. In the reconciliation of reported net revenues, "concentrate sales" represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For our Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating segment reflects unit case volume growth for consolidated bottlers only. |
• | "Price/mix" represents the change in revenues caused by factors such as price changes, the mix of products and packages sold, and the mix of channels and geographic territories where the sales occurred. |
• | First quarter 2017 financial results were impacted by two fewer days and fourth quarter 2017 financial results will be impacted by one additional day as compared to the same periods in 2016. Unit case volume results are not impacted by variances in days due to the average daily sales computation referenced above. |
Conference Call |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Income | ||||||||||
(UNAUDITED) | ||||||||||
(In millions except per share data) | ||||||||||
Three Months Ended | ||||||||||
March 31, 2017 | April 1, 2016 | % Change1 | ||||||||
Net Operating Revenues | $ | 9,118 | $ | 10,282 | (11 | ) | ||||
Cost of goods sold | 3,513 | 4,069 | (14 | ) | ||||||
Gross Profit | 5,605 | 6,213 | (10 | ) | ||||||
Selling, general and administrative expenses | 3,315 | 3,761 | (12 | ) | ||||||
Other operating charges | 308 | 311 | (1 | ) | ||||||
Operating Income | 1,982 | 2,141 | (7 | ) | ||||||
Interest income | 155 | 144 | 8 | |||||||
Interest expense | 192 | 141 | 36 | |||||||
Equity income (loss) — net | 116 | 92 | 25 | |||||||
Other income (loss) — net | (554 | ) | (342 | ) | (62 | ) | ||||
Income Before Income Taxes | 1,507 | 1,894 | (20 | ) | ||||||
Income taxes | 323 | 401 | (19 | ) | ||||||
Consolidated Net Income | 1,184 | 1,493 | (21 | ) | ||||||
Less: Net income (loss) attributable to noncontrolling interests | 2 | 10 | (79 | ) | ||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 1,182 | $ | 1,483 | (20 | ) | ||||
Diluted Net Income Per Share2 | $ | 0.27 | $ | 0.34 | (19 | ) | ||||
Average Shares Outstanding — Diluted2 | 4,334 | 4,382 |
1 | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
2 | For the three months ended March 31, 2017 and April 1, 2016, basic net income per share was $0.28 for 2017 and $0.34 for 2016 based on average shares outstanding — basic of 4,287 million for 2017 and 4,328 million for 2016. 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) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 12,120 | $ | 8,555 | |||
Short-term investments | 9,791 | 9,595 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 21,911 | 18,150 | |||||
Marketable securities | 3,294 | 4,051 | |||||
Trade accounts receivable, less allowances of $446 and $466, respectively | 3,702 | 3,856 | |||||
Inventories | 2,885 | 2,675 | |||||
Prepaid expenses and other assets | 2,670 | 2,481 | |||||
Assets held for sale | 5,789 | 2,797 | |||||
Total Current Assets | 40,251 | 34,010 | |||||
Equity Method Investments | 16,753 | 16,260 | |||||
Other Investments | 1,230 | 989 | |||||
Other Assets | 4,454 | 4,248 | |||||
Property, Plant and Equipment — net | 9,746 | 10,635 | |||||
Trademarks With Indefinite Lives | 6,478 | 6,097 | |||||
Bottlers' Franchise Rights With Indefinite Lives | 1,769 | 3,676 | |||||
Goodwill | 10,008 | 10,629 | |||||
Other Intangible Assets | 512 | 726 | |||||
Total Assets | $ | 91,201 | $ | 87,270 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 10,251 | $ | 9,490 | |||
Loans and notes payable | 13,726 | 12,498 | |||||
Current maturities of long-term debt | 2,185 | 3,527 | |||||
Accrued income taxes | 268 | 307 | |||||
Liabilities held for sale | 2,226 | 710 | |||||
Total Current Liabilities | 28,656 | 26,532 | |||||
Long-Term Debt | 31,538 | 29,684 | |||||
Other Liabilities | 4,041 | 4,081 | |||||
Deferred Income Taxes | 3,899 | 3,753 | |||||
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 | 15,197 | 14,993 | |||||
Reinvested earnings | 65,099 | 65,502 | |||||
Accumulated other comprehensive income (loss) | (10,206 | ) | (11,205 | ) | |||
Treasury stock, at cost — 2,767 and 2,752 shares, respectively | (48,974 | ) | (47,988 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 22,876 | 23,062 | |||||
Equity Attributable to Noncontrolling Interests | 191 | 158 | |||||
Total Equity | 23,067 | 23,220 | |||||
Total Liabilities and Equity | $ | 91,201 | $ | 87,270 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Three Months Ended | |||||||
March 31, 2017 | April 1, 2016 | ||||||
Operating Activities | |||||||
Consolidated net income | $ | 1,184 | $ | 1,493 | |||
Depreciation and amortization | 328 | 458 | |||||
Stock-based compensation expense | 55 | 69 | |||||
Deferred income taxes | (34 | ) | (81 | ) | |||
Equity (income) loss — net of dividends | (89 | ) | (79 | ) | |||
Foreign currency adjustments | 72 | 93 | |||||
Significant (gains) losses on sales of assets — net | 497 | 362 | |||||
Other operating charges | 269 | 142 | |||||
Other items | 16 | (173 | ) | ||||
Net change in operating assets and liabilities | (1,510 | ) | (1,680 | ) | |||
Net cash provided by operating activities | 788 | 604 | |||||
Investing Activities | |||||||
Purchases of investments | (3,551 | ) | (4,763 | ) | |||
Proceeds from disposals of investments | 4,176 | 6,010 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (337 | ) | (688 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 1,430 | 291 | |||||
Purchases of property, plant and equipment | (442 | ) | (536 | ) | |||
Proceeds from disposals of property, plant and equipment | 18 | 29 | |||||
Other investing activities | (255 | ) | 5 | ||||
Net cash provided by (used in) investing activities | 1,039 | 348 | |||||
Financing Activities | |||||||
Issuances of debt | 11,704 | 8,530 | |||||
Payments of debt | (9,223 | ) | (6,783 | ) | |||
Issuances of stock | 394 | 763 | |||||
Purchases of stock for treasury | (1,304 | ) | (739 | ) | |||
Dividends | — | (1,505 | ) | ||||
Other financing activities | (36 | ) | 133 | ||||
Net cash provided by (used in) financing activities | 1,535 | 399 | |||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 203 | 88 | |||||
Cash and Cash Equivalents | |||||||
Net increase (decrease) during the period | 3,565 | 1,439 | |||||
Balance at beginning of period | 8,555 | 7,309 | |||||
Balance at end of period | $ | 12,120 | $ | 8,748 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues 1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | |||||||||||||||||||||||||||||||
March 31, 2017 | April 1, 2016 | % Fav. / (Unfav.) | March 31, 2017 | April 1, 2016 | % Fav. / (Unfav.) | March 31, 2017 | April 1, 2016 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 1,632 | $ | 1,750 | (7 | ) | $ | 867 | $ | 927 | (7 | ) | $ | 885 | $ | 950 | (7 | ) | |||||||||||||||
Latin America | 926 | 935 | (1 | ) | 505 | 523 | (3 | ) | 507 | 518 | (2 | ) | |||||||||||||||||||||
North America | 2,394 | 2,364 | 1 | 569 | 581 | (2 | ) | 473 | 580 | (18 | ) | ||||||||||||||||||||||
Asia Pacific | 1,208 | 1,235 | (2 | ) | 545 | 551 | (1 | ) | 549 | 554 | (1 | ) | |||||||||||||||||||||
Bottling Investments | 3,867 | 5,292 | (27 | ) | (110 | ) | (118 | ) | 6 | (542 | ) | (432 | ) | (26 | ) | ||||||||||||||||||
Corporate | 29 | (15 | ) | — | (394 | ) | (323 | ) | (22 | ) | (365 | ) | (276 | ) | (32 | ) | |||||||||||||||||
Eliminations | (938 | ) | (1,279 | ) | 27 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 9,118 | $ | 10,282 | (11 | ) | $ | 1,982 | $ | 2,141 | (7 | ) | $ | 1,507 | $ | 1,894 | (20 | ) |
Note: | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
1 | During the three months ended March 31, 2017, intersegment revenues were $13 million for Latin America, $772 million for North America, $130 million for Asia Pacific and $23 million for Bottling Investments. During the three months ended April 1, 2016, intersegment revenues were $141 million for Europe, Middle East & Africa, $18 million for Latin America, $943 million for North America, $133 million for Asia Pacific, $41 million for Bottling Investments and $3 million for Corporate. |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "Currency neutral operating results" are determined 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. |
• | "Structural changes" generally refer to acquisitions or dispositions of bottling, distribution or canning operations and the consolidation or deconsolidation of bottling and distribution entities for accounting purposes. In 2017 and 2016, the Company refranchised bottling territories in North America to certain of its unconsolidated bottling partners. 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 2017 versus 2016 volume growth rates on a consolidated basis as well as for the North America and Bottling Investments operating segments. During 2016, the Company deconsolidated our South African bottling operations and disposed of its related equity method investment in exchange for equity method investments in Coca-Cola Beverages Africa Limited ("CCBA") and CCBA's South African subsidiary. As part of the transaction, the Company also acquired and licensed several brands. The impacts of the deconsolidation and new equity method investments have been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Europe, Middle East and Africa and Bottling Investments operating segments and equity income on a consolidated basis as well as for our Bottling Investments operating segment. The brands and licenses that the Company acquired impacted the Company’s unit case volume and concentrate sales volume and therefore, in addition to being included as a structural change, they are also considered acquired brands. Also in 2016, the Company deconsolidated our German bottling operations as a result of their being combined to create Coca-Cola European Partners plc ("CCEP"). As a result of the transaction, the Company now owns an equity method investment in CCEP. Accordingly, the impact of the deconsolidation and new equity method investment has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Europe, Middle East and Africa and Bottling Investments operating segments and equity income on a consolidated basis as well as for our Bottling Investments operating segment. |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "Organic revenues" is a non-GAAP financial measure that excludes or has otherwise been adjusted for the impact of acquisitions, divestitures and structural items, as applicable, as well as the impact of changes in foreign currency exchange rates. Management believes the organic revenue (non-GAAP) growth measure provides users with useful supplemental information regarding the Company's ongoing revenue performance and trends by presenting revenue growth excluding the impact of foreign exchange, as well as the impact of acquisitions, divestitures and structural changes. "Core business organic revenues" (non-GAAP) represents the combined organic revenue performance from the Europe, Middle East and Africa; Latin America; North America; Asia Pacific; and Corporate operating segments offset by intersegment eliminations. Management believes the core business organic revenues (non-GAAP) measure enhances the understanding of the change in the net operating revenues of the segments of our business that are not significantly impacted by the acquisition and divestiture activity taking place in our Bottling Investments operating segment. The adjustments related to acquisitions, divestitures and structural items for the three months ended March 31, 2017 and April 1, 2016 consisted of the structural changes discussed above. Additionally, during the three months ended March 31, 2017, organic revenues (non-GAAP) were adjusted, both on a consolidated basis and for our Asia Pacific operating segment, for the sales of the Company's plant-based protein beverages in China that were acquired in 2016. |
• | "Comparable currency neutral operating margin", "comparable currency neutral income before income taxes" and "comparable currency neutral income before income taxes (structurally adjusted)" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability (discussed further below) and the impact of changes in foreign currency exchange rates. Comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) has also been adjusted for structural changes. Management uses these non-GAAP financial measures to evaluate the Company's performance and make resource allocation decisions. Further, management believes the comparable currency neutral operating margin (non-GAAP) expansion, comparable currency neutral income before income taxes (non-GAAP) growth and comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) growth measures enhance its ability to communicate the underlying operating results and provide investors with useful supplemental information to enhance their understanding of the Company's underlying business performance and trends by improving their ability to compare our period-to-period financial results. |
• | "Comparable EPS" and "comparable currency neutral EPS" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability (discussed further below). Comparable currency neutral EPS (non-GAAP) has also been adjusted for the impact of changes in foreign currency exchange rates. Management uses these non-GAAP financial measures to evaluate the Company's performance and make resource allocation decisions. Further, management believes the comparable EPS (non-GAAP) and comparable currency neutral EPS (non-GAAP) growth measures enhance its ability to communicate the underlying operating results and provide investors with useful supplemental information to enhance their understanding of the Company's underlying business performance and trends by improving their ability to compare our period-to-period financial results. |
• | "Underlying effective tax rate" is a non-GAAP financial measure that represents the estimated annual effective income tax rate on income before income taxes that excludes or has otherwise been adjusted for items impacting comparability (discussed further below). |
• | "Net share repurchases" is a non-GAAP financial measure that reflects the net amount of purchases of stock for treasury after considering proceeds from the issuances of stock, the net change in stock issuance receivables (related to employee stock options exercised but not settled prior to the end of the period) and the net change in treasury stock payables (for treasury shares repurchased but not settled prior to the end of the period). |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Gross margin | Selling, general and administrative expenses | Other operating charges | Operating income | Operating margin | |||||||||||||||||||||||||
Reported (GAAP) | $ | 9,118 | $ | 3,513 | $ | 5,605 | 61.5 | % | $ | 3,315 | $ | 308 | $ | 1,982 | 21.7 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (84 | ) | 84 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (139 | ) | 139 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | (3 | ) | 3 | — | (59 | ) | 62 | ||||||||||||||||||||||||
Other Items | 14 | 21 | (7 | ) | (3 | ) | (26 | ) | 22 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 9,132 | $ | 3,531 | $ | 5,601 | 61.3 | % | $ | 3,312 | $ | — | $ | 2,289 | 25.1 | % | ||||||||||||||||
Three Months Ended April 1, 2016 | ||||||||||||||||||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Gross margin | Selling, general and administrative expenses | Other operating charges | Operating income | Operating margin | |||||||||||||||||||||||||
Reported (GAAP) | $ | 10,282 | $ | 4,069 | $ | 6,213 | 60.4 | % | $ | 3,761 | $ | 311 | $ | 2,141 | 20.8 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (199 | ) | 199 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (63 | ) | 63 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (46 | ) | 46 | |||||||||||||||||||||||||
Other Items | 47 | 48 | (1 | ) | 4 | (3 | ) | (2 | ) | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 10,329 | $ | 4,117 | $ | 6,212 | 60.1 | % | $ | 3,765 | $ | — | $ | 2,447 | 23.7 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (11) | (14) | (10) | (12) | (1) | (7) | ||||||||||||||||||||||||||
% Currency Impact | (1) | 0 | (2) | (1) | — | (4) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (10) | (14) | (8) | (11) | — | (4) | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (12) | (14) | (10) | (12) | — | (6) | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (1) | 0 | (2) | (1) | — | (5) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (10) | (14) | (8) | (11) | — | (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 except per share data) | |||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||||||||||||||||||||||||
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 share2 | |||||||||||||||||||||||||||||
Reported (GAAP) | $ | 192 | $ | 116 | $ | (554 | ) | $ | 1,507 | $ | 323 | 21.4 | % | $ | 2 | $ | 1,182 | $ | 0.27 | ||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 84 | — | — | 84 | 0.02 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 139 | 52 | — | 87 | 0.02 | |||||||||||||||||||||||||||||
Equity Investees | — | 58 | — | 58 | 15 | — | 43 | 0.01 | |||||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 603 | 665 | 174 | — | 491 | 0.11 | |||||||||||||||||||||||||||||
Other Items | — | — | — | 22 | — | — | 22 | 0.01 | |||||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | 30 | — | (30 | ) | (0.01 | ) | |||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 192 | $ | 174 | $ | 49 | $ | 2,475 | $ | 594 | 24.0 | % | $ | 2 | $ | 1,879 | $ | 0.43 | |||||||||||||||||||
Three Months Ended April 1, 2016 | |||||||||||||||||||||||||||||||||||||
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) | $ | 141 | $ | 92 | $ | (342 | ) | $ | 1,894 | $ | 401 | 21.2 | % | $ | 10 | $ | 1,483 | $ | 0.34 | ||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 199 | — | — | 199 | 0.05 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 63 | 21 | — | 42 | 0.01 | |||||||||||||||||||||||||||||
Equity Investees | — | 3 | — | 3 | — | — | 3 | — | |||||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 351 | 397 | 143 | — | 254 | 0.06 | |||||||||||||||||||||||||||||
Other Items | — | — | 29 | 27 | 10 | — | 17 | — | |||||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | 6 | — | (6 | ) | — | ||||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 141 | $ | 95 | $ | 38 | $ | 2,583 | $ | 581 | 22.5 | % | $ | 10 | $ | 1,992 | $ | 0.45 | |||||||||||||||||||
Interest 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) | 36 | 25 | (62) | (20) | (19) | (79) | (20) | (19) | |||||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 36 | 81 | 31 | (4) | 2 | (79) | (6) | (5) |
Note: | Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided. |
1 | The income tax adjustments are the calculated income tax benefits (charges) at the applicable tax rate for each of the items impacting comparability with the exception of certain tax matters previously discussed 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 | 4,334 million average shares outstanding — diluted |
3 | 4,382 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 March 31, 2017 | |||||
Income before income taxes | Diluted net income per share | ||||
% Change — Reported (GAAP) | (20) | (19) | |||
% Currency Impact | (1) | (1) | |||
% Change — Currency Neutral (Non-GAAP) | (19) | (18) | |||
% Structural Impact | 4 | — | |||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | (23) | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | (16) | (15) | |||
% Change — Comparable (Non-GAAP) | (4) | (5) | |||
% Comparable Currency Impact (Non-GAAP) | (3) | (3) | |||
% Change — Comparable Currency Neutral (Non-GAAP) | (1) | (2) | |||
% Comparable Structural Impact (Non-GAAP) | (3) | — | |||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 2 | — | |||
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 March 31, 2017 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,632 | $ | 926 | $ | 2,394 | $ | 1,208 | $ | 3,867 | $ | 29 | $ | (938 | ) | $ | 9,118 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | 5 | — | — | 9 | — | 14 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,632 | $ | 926 | $ | 2,399 | $ | 1,208 | $ | 3,867 | $ | 38 | $ | (938 | ) | $ | 9,132 | |||||||||
Three Months Ended April 1, 2016 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,750 | $ | 935 | $ | 2,364 | $ | 1,235 | $ | 5,292 | $ | (15 | ) | $ | (1,279 | ) | $ | 10,282 | ||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | (2 | ) | — | — | 49 | — | 47 | |||||||||||||||||
Comparable (Non-GAAP) | $ | 1,750 | $ | 935 | $ | 2,362 | $ | 1,235 | $ | 5,292 | $ | 34 | $ | (1,279 | ) | $ | 10,329 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | (7) | (1) | 1 | (2) | (27) | — | 27 | (11) | ||||||||||||||||||
% Currency Impact | (5) | (1) | 0 | (3) | 0 | — | — | (1) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (2) | 0 | 2 | 0 | (27) | — | — | (10) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | (3) | 0 | 2 | 0 | (25) | — | — | (10) | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 1 | 0 | 0 | 0 | (2) | — | — | 0 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | (7) | (1) | 2 | (2) | (27) | 5 | — | (12) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (1) | 0 | (3) | 0 | (1) | — | (1) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (2) | 0 | 2 | 0 | (27) | 7 | — | (10) |
Note: | Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||
(UNAUDITED) | |||||
(In millions) | |||||
Core Business Revenues (Non-GAAP): 1 | |||||
Three Months Ended March 31, 2017 | |||||
Reported (GAAP) Net Operating Revenues | $ | 9,118 | |||
Bottling Investments Net Operating Revenues | (3,867 | ) | |||
Consolidated Eliminations | 938 | ||||
Intersegment Core Net Operating Revenue Eliminations | (4 | ) | |||
Core Business Revenues (Non-GAAP) | 6,185 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | 14 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 6,199 | |||
Three Months Ended April 1, 2016 | |||||
Reported (GAAP) Net Operating Revenues | $ | 10,282 | |||
Bottling Investments Net Operating Revenues | (5,292 | ) | |||
Consolidated Eliminations | 1,279 | ||||
Intersegment Core Net Operating Revenue Eliminations | (6 | ) | |||
Core Business Revenues (Non-GAAP) | 6,263 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | 47 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 6,310 | |||
% Change — Reported (GAAP) Net Operating Revenues | (11) | ||||
% Change — Core Business Revenues (Non-GAAP) | (1) | ||||
% Core Business Currency Impact (Non-GAAP) | (1) | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 0 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)2 | 0 | ||||
% Change — Comparable Core Business Revenues (Non-GAAP) | (2) | ||||
% Comparable Core Business Currency Impact (Non-GAAP) | (2) | ||||
% Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) | 0 |
Note: | Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided. |
1 | Core business revenues (non-GAAP) included the net operating revenues from the Europe, Middle East & Africa, Latin America, North America, Asia Pacific and Corporate operating segments offset by intersegment revenue eliminations of $4 million and $6 million during the three months ended March 31, 2017 and April 1, 2016, respectively. |
2 | Core business organic revenue (non-GAAP) 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 March 31, 2017 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 867 | $ | 505 | $ | 569 | $ | 545 | $ | (110 | ) | $ | (394 | ) | $ | 1,982 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 84 | — | 84 | ||||||||||||||||
Productivity & Reinvestment | 2 | — | 35 | 1 | 14 | 87 | 139 | ||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 60 | 2 | 62 | ||||||||||||||||
Other Items | — | — | (10 | ) | — | (3 | ) | 35 | 22 | ||||||||||||||
Comparable (Non-GAAP) | $ | 869 | $ | 505 | $ | 594 | $ | 546 | $ | 45 | $ | (270 | ) | $ | 2,289 | ||||||||
Three Months Ended April 1, 2016 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 927 | $ | 523 | $ | 581 | $ | 551 | $ | (118 | ) | $ | (323 | ) | $ | 2,141 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 199 | — | 199 | ||||||||||||||||
Productivity & Reinvestment | 3 | — | 31 | 1 | 21 | 7 | 63 | ||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 45 | 1 | 46 | ||||||||||||||||
Other Items | — | — | (16 | ) | — | (42 | ) | 56 | (2 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 930 | $ | 523 | $ | 596 | $ | 552 | $ | 105 | $ | (259 | ) | $ | 2,447 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (7) | (3) | (2) | (1) | 6 | (22) | (7) | ||||||||||||||||
% Currency Impact | (5) | (4) | (2) | (5) | (1) | 13 | (4) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (1) | 1 | 0 | 4 | 8 | (34) | (4) | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (7) | (3) | 0 | (1) | (59) | (4) | (6) | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (4) | (2) | (5) | (2) | 0 | (5) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (1) | 1 | 2 | 4 | (57) | (4) | (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) | |||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes by Segment: | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 885 | $ | 507 | $ | 473 | $ | 549 | $ | (542 | ) | $ | (365 | ) | $ | 1,507 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 84 | — | 84 | ||||||||||||||||||||||
Productivity & Reinvestment | 2 | — | 35 | 1 | 14 | 87 | 139 | ||||||||||||||||||||||
Equity Investees | 4 | — | — | — | 53 | 1 | 58 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 107 | — | 556 | 2 | 665 | ||||||||||||||||||||||
Other Items | — | — | (10 | ) | — | (3 | ) | 35 | 22 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 891 | $ | 507 | $ | 605 | $ | 550 | $ | 162 | $ | (240 | ) | $ | 2,475 | ||||||||||||||
Three Months Ended April 1, 2016 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 950 | $ | 518 | $ | 580 | $ | 554 | $ | (432 | ) | $ | (276 | ) | $ | 1,894 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 199 | — | 199 | ||||||||||||||||||||||
Productivity & Reinvestment | 3 | — | 31 | 1 | 21 | 7 | 63 | ||||||||||||||||||||||
Equity Investees | — | — | — | — | 3 | — | 3 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 414 | (17 | ) | 397 | |||||||||||||||||||||
Other Items | — | — | (16 | ) | — | (42 | ) | 85 | 27 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 953 | $ | 518 | $ | 595 | $ | 555 | $ | 163 | $ | (201 | ) | $ | 2,583 | ||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
% Change — Reported (GAAP) | (7) | (2) | (18) | (1) | (26) | (32) | (20) | ||||||||||||||||||||||
% Currency Impact | (5) | (4) | (2) | (5) | 0 | 31 | (1) | ||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (2) | 2 | (16) | 4 | (26) | (63) | (19) | ||||||||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | (20) | 0 | (24) | (13) | (16) | ||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (6) | (2) | 2 | (1) | (2) | (19) | (4) | ||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (4) | (2) | (5) | 3 | 13 | (3) | ||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (1) | 2 | 4 | 4 | (5) | (32) | (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) | |||||||
Operating Expense Leverage: | |||||||
Three Months Ended March 31, 2017 | |||||||
Operating income | Gross profit | Operating expense leverage1 | |||||
% Change — Reported (GAAP) | (7) | (10) | 2 | ||||
% Change — Currency Neutral (Non-GAAP) | (4) | (8) | 4 | ||||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | (8) | 0 | (8) | ||||
% Change — Comparable (Non-GAAP) | (6) | (10) | 3 | ||||
% Change — Comparable Currency Neutral (Non-GAAP) | (2) | (8) | 6 | ||||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 3 | 1 | 2 |
Note: | Certain rows may not add due to rounding. |
Operating Margin: | ||||||
Three Months Ended March 31, 2017 | Three Months Ended April 1, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 21.74 | % | 20.82 | % | 92 | |
Items Impacting Comparability (Non-GAAP) | (3.32 | )% | (2.87 | )% | ||
Comparable Operating Margin (Non-GAAP) | 25.06 | % | 23.69 | % | 137 | |
Comparable Currency Impact (Non-GAAP) | (0.89 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 25.95 | % | 23.69 | % | 226 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||
(UNAUDITED) | ||||||||||
(In millions) | ||||||||||
Purchases and Issuances of Stock: | ||||||||||
Three Months Ended March 31, 2017 | Three Months Ended April 1, 2016 | |||||||||
Reported (GAAP) | ||||||||||
Issuances of Stock | $ | 394 | $ | 763 | ||||||
Purchases of Stock for Treasury | (1,304 | ) | (739 | ) | ||||||
Net Change in Stock Issuance Receivables1 | (1 | ) | 40 | |||||||
Net Change in Treasury Stock Payables2 | 75 | (219 | ) | |||||||
Net Share Repurchases (Non-GAAP) | $ | (836 | ) | $ | (155 | ) |
1 | Represents the net change in receivables related to employee stock options exercised but not settled prior to the end of the period. |
2 | Represents the net change in payables for treasury shares repurchased but not settled prior to the end of the period. |
Consolidated Cash from Operations: | ||||||||||
Three Months Ended March 31, 2017 | Three Months Ended April 1, 2016 | |||||||||
Net Cash Provided by Operating Activities | Net Cash Provided by Operating Activities | |||||||||
Reported (GAAP) | $ | 788 | $ | 604 | ||||||
Items Impacting Comparability: | ||||||||||
Cash Payments for Pension Plan Contributions | 29 | 471 | ||||||||
Comparable (Non-GAAP) | $ | 817 | $ | 1,075 | ||||||
Net Cash Provided by Operating Activities | ||||||||||
% Change — Reported (GAAP) | 30 | |||||||||
% Change — Comparable (Non-GAAP) | (24) |
Note: | Certain growth rates may not recalculate using the rounded dollar amounts provided. |