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Highlights |
Quarterly Performance |
• | Revenue: Net revenues declined 16% to $9.7 billion. Net revenues were impacted by a 17% headwind from the ongoing refranchising of bottling territories and a foreign currency exchange headwind of 2%. Organic revenues (non-GAAP) grew 3% on price/mix growth of 3% and even concentrate sales. Core business organic revenues (non-GAAP) grew 4%, and core business price/mix grew 3%. Our organic revenue (non-GAAP) growth was driven by sparkling soft drinks with balanced performance across the other category clusters. |
• | Volume: Total unit case volume was even, with positive performance in four of the five category clusters. Unit case volume performance continued to be impacted by macroeconomic challenges in certain Latin American markets, with Brazil and Venezuela accounting for more than a 1 point drag on |
• | Margin: Our operating margin declined more than 335 basis points while our comparable operating margin (non-GAAP) expanded more than 375 basis points. The reported operating margin included items impacting comparability. The improvement in comparable operating margin (non-GAAP) was driven by divestitures of lower-margin bottling businesses through our ongoing refranchising initiative, effective operating expense management through our productivity program, and the timing of expenses, partially offset by the impact of changes in foreign currency exchange rates. |
• | Market Share: Our value share growth outpaced volume share in the total nonalcoholic ready-to-drink ("NARTD") beverage industry, reflecting our shift in focus from driving volume growth to driving holistic revenue growth. We gained value share in sparkling soft drinks; juice, dairy, and plant-based beverages; and tea and coffee. |
• | Cash Flow: Year-to-date cash from operations was $3.4 billion, down 11%. Year-to-date free cash flow (non-GAAP) was $2.6 billion, down 6%. This decrease was driven by our ongoing refranchising of North America bottling territories partially offset by the cycling of a pension plan contribution and lower capital expenditures. |
• | Share Repurchase: Year-to-date purchases of stock for treasury were $2.2 billion. Year-to-date net share repurchases (non-GAAP) totaled $1.3 billion. |
Company Updates |
• | Growing sparkling soft drinks without growing sugar: Low- and no-calorie sparkling soft drinks grew unit case volume mid single digits during the quarter as we accelerated the introduction and expansion of reduced-sugar offerings around the world. Coca-Cola Zero Sugar continued to grow double digits in Europe, Middle East & Africa and Latin America, the two operating segments with the broadest availability of the new recipe. Building on the success we have seen for the new recipe in over 25 markets around the world, including Great Britain and Mexico, we plan to introduce Coca-Cola Zero Sugar to the U.S. market in August. This new zero-calorie cola recipe is a result of our strong in-house innovation capabilities, and also serves as an example of our ongoing efforts to deliver great-tasting drinks that also help consumers moderate their consumption of added sugar. |
• | Driving holistic revenue growth: Our balanced pursuit of total revenue growth continued, with a keen focus on value-accretive pricing and mix initiatives. Unit case volume of immediate consumption packs, which are typically sold at a higher retail price per ounce, grew 3% in the quarter. Transaction packs in North America, which are relatively smaller packs that help drive revenue through positive mix, grew mid single digits in the quarter with double-digit growth in mini cans. We also maintained our focus on |
• | Expanding our consumer-centric portfolio: We remain on track with our plan of broadening our portfolio to meet evolving consumer preferences by introducing more than 500 new products this year and also "lifting and shifting" existing brands into new markets. We made progress toward that plan during the quarter with a number of product launches around the world. For example, in Great Britain we launched new flavors of sparkling smartwater and new low-sugar sour fruit flavors of Oasis juice drinks. Elsewhere in Western Europe, Honest Tea expanded into France, the Netherlands, and Belgium. In Asia, we completed the nationwide rollout of Sprite Zero in China and launched a new line of functional Sokenbicha tea in Japan. In Latin America, we saw strong performance in Mexico from Ciel Exprim Fresa, a new flavored water launched during the quarter. |
• | Implementing a 21st century beverage partnership model in North America: During the quarter, letters of intent were signed with Reyes Holdings LLC for the Coca-Cola Refreshments ("CCR") West Operating Unit territories in California and Nevada and with Liberty Coca-Cola Beverages LLC for the territories of the CCR Tri-State Metro Operating Unit, which includes New York City and Philadelphia. With these signings, there are now agreements or letters of intent for 100% of the U.S. territories of CCR, and we remain on track to complete the refranchising of our CCR bottling operations in the U.S. by the end of the year. |
• | Giving back: During the quarter, The Coca-Cola Foundation (the "Foundation") awarded a $1.35 million grant to support the installation of water systems and water treatment equipment, where needed, in 51 Little Red Schoolhouses across the Philippines. As a result, more than 6,000 students will benefit from improved water access. The Little Red Schoolhouse project was launched in 1997 to help improve basic education in impoverished areas. Today, there are more than 100 Little Red Schoolhouses across the Philippines. In addition, the Foundation recently awarded a $1 million grant to fund a pilot program at Atlanta's Hollis Innovation Academy to increase student success by decreasing the student-to-teacher ratio. The program will provide an additional teacher in each of the 21 classrooms at the Academy, which serves Atlanta's Westside neighborhood. |
Operating Review – Three Months Ended June 30, 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 | 0 | 3 | (2) | (17) | (16) | 3 | 0 | ||
Europe, Middle East & Africa | 3 | 3 | (5) | (1) | 0 | 6 | 3 | ||
Latin America | (3) | 5 | 0 | (1) | 2 | 2 | (2) | ||
North America | 1 | 4 | 0 | 2 | 6 | 5 | 0 | ||
Asia Pacific | 0 | (1) | (3) | 0 | (3) | (1) | 1 | ||
Bottling Investments | (2) | 2 | 0 | (46) | (46) | 0 | (46) |
Percent Change | Reported Income Before Income Taxes | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | Structural Items | Comparable Currency Neutral (Structurally Adjusted) 2 |
Consolidated | (39) | (38) | (2) | 1 | (5) | 6 |
Europe, Middle East & Africa | 3 | 1 | (5) | 7 | ||
Latin America | 8 | 0 | (1) | 9 | ||
North America | (12) | (20) | (1) | 9 | ||
Asia Pacific | (6) | 0 | (4) | (2) | ||
Bottling Investments | —3 | (266) | (1) | (24) | ||
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | ||
Consolidated EPS | (60) | (58) | (2) | 1 |
Consolidated |
• | Price/mix growth of 3% was driven by positive operational pricing and mix, particularly in North America and Latin America. 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: 0% |
◦ | Juice, dairy, and plant-based beverages: 3% |
◦ | Water, enhanced water, and sports drinks: 1% |
◦ | Tea and coffee: 2% |
• | The decline in income before income taxes included items impacting comparability, which were predominantly comprised of charges associated with the refranchising of bottling territories in North America and a gain in the prior year. 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. Growth in comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) was driven by the continued impact of our productivity initiatives as well as the timing of expenses, partially offset by the impact of rising interest rates. |
Europe, Middle East & Africa |
• | Price/mix growth of 3% was driven by positive operational pricing and mix in our Western Europe business unit, and also included 1 point of positive geographic mix. Acquisitions, divestitures, and structural items reflect the impact of bottling transactions in Europe and Africa. |
• | Unit case volume growth of 3% included 1 point of growth from acquired brands, which were primarily water brands in Africa. Unit case volume growth was led by positive performance in our Western Europe and South & East Africa business units, partially offset by a decline in our Middle East & North Africa business unit, primarily driven by Egypt. Low single-digit unit case volume growth in sparkling soft drinks was led by Coca-Cola Zero Sugar, which accounted for over one-third of incremental volume growth for the operating segment. |
• | The growth in 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) included the favorable impact of bottling transactions in Europe and Africa. |
• | We maintained value share in total NARTD beverages. We gained value share in sparkling soft drinks and juice, dairy, and plant-based beverages. |
Latin America |
• | Price/mix growth of 5% was driven by positive operational pricing and mix in Mexico and inflation-led pricing in our Latin Center business unit, partially offset by 1 point of negative geographic mix. |
• | The unit case volume decline of 2% was driven by a high single-digit decline in our Brazil business unit and a double-digit decline in our Latin Center business unit. These declines were partially offset by low single-digit growth in Mexico. Unit case volume for sparkling soft drinks declined low single digits, primarily due to the macroeconomic conditions in Brazil and Venezuela. Juice, dairy, and plant-based beverages unit case volume grew low single digits, primarily driven by incremental volume from the recently acquired AdeS brand of plant-based beverages. |
• | We gained value share in water, enhanced water, and sports drinks as well as tea and coffee. |
North America |
• | Price/mix growth of 4% reflects our continued execution of disciplined occasion, brand, price, and package strategy along with positive business and category mix. Sparkling soft drinks price/mix grew 4%, which included a 1 point favorable impact from 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. |
• | Unit case volume was even, which included slightly positive performance in sparkling soft drinks led by Sprite and low single-digit growth in juice, dairy, and plant-based beverages, offset by a mid single-digit decline in water, enhanced water, and sports drinks. |
• | 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 29th consecutive quarter. We also gained value share in sparkling soft drinks; juice, dairy, and plant-based beverages; and tea and coffee. |
Asia Pacific |
• | The price/mix decline of 1% included 1 point of negative impact from geographic mix. |
• | Unit case volume growth of 1% was driven by mid single-digit growth in our Greater China & Korea business unit partially offset by a mid single-digit decline in our ASEAN business unit. Trademark Coca-Cola accounted for over half of the incremental unit case volume growth for the operating segment, driven by strong performance of brand Coca-Cola in China and volume from the recently launched Coca-Cola Plus in Japan. Juice, dairy, and plant-based beverages grew unit case volume mid single digits, and tea and coffee declined low single digits. |
• | We maintained value share in total NARTD beverages. We gained value share in sparkling soft drinks. |
Bottling Investments |
• | Price/mix growth of 2% was driven by positive operational pricing and mix in the North America bottling operations partially offset by negative performance in the India bottling operations. |
• | Loss before income taxes was driven by items impacting comparability and 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 America bottling territories and the deconsolidation of our previously held bottling operations in Germany, China, and South Africa. |
Operating Review – Six Months Ended June 30, 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 | (1) | 3 | (1) | (14) | (14) | 1 | 0 | ||
Europe, Middle East & Africa | 1 | 3 | (5) | (2) | (3) | 4 | 3 | ||
Latin America | (4) | 6 | 0 | (1) | 0 | 1 | (3) | ||
North America | (1) | 3 | 0 | 2 | 4 | 3 | 0 | ||
Asia Pacific | 0 | (1) | (3) | 0 | (3) | (1) | 1 | ||
Bottling Investments | (3) | 2 | 0 | (35) | (37) | (1) | (37) |
Percent Change | Reported Income Before Income Taxes | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | Structural Items | Comparable Currency Neutral (Structurally Adjusted) 2 |
Consolidated | (33) | (31) | (3) | 0 | (4) | 4 |
Europe, Middle East & Africa | (2) | 0 | (5) | 3 | ||
Latin America | 3 | 0 | (2) | 5 | ||
North America | (15) | (20) | (1) | 7 | ||
Asia Pacific | (4) | 0 | (4) | 1 | ||
Bottling Investments | (548) | (528) | 0 | (20) | ||
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | ||
Consolidated EPS | (48) | (45) | (3) | 0 |
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 |
• | Comparable net revenues (non-GAAP): 1% to 2% headwind based on the current rates and including the impact of hedged positions – No Change |
• | Comparable income before income taxes (non-GAAP): 2% headwind based on the current rates and including the impact of hedged positions – Updated |
• | Comparable net revenues (non-GAAP): 18% to 19% headwind from acquisitions, divestitures, and structural items – No Change |
• | Comparable income before income taxes (non-GAAP): 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): Even to 2% decline versus $1.91 in 2016 – Updated |
• | Comparable net revenues (non-GAAP): 19% to 20% headwind from acquisitions, divestitures, and structural items; 1% to 2% currency headwind based on the current rates and including the impact of hedged positions – New |
• | Comparable income before income taxes (non-GAAP): 9% to 10% structural headwind; 2% to 3% currency headwind based on the current rates and including the impact of hedged positions – New |
• | Comparable net revenues (non-GAAP): 16% to 17% headwind from acquisitions, divestitures, and structural items – No Change |
• | Comparable income before income taxes (non-GAAP): 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, source waters, and powders/minerals (in all instances expressed in equivalent unit cases) 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 | ||||||||||
June 30, 2017 | July 1, 2016 | % Change1 | ||||||||
Net Operating Revenues | $ | 9,702 | $ | 11,539 | (16 | ) | ||||
Cost of goods sold | 3,659 | 4,471 | (18 | ) | ||||||
Gross Profit | 6,043 | 7,068 | (15 | ) | ||||||
Selling, general and administrative expenses | 3,142 | 3,912 | (20 | ) | ||||||
Other operating charges | 823 | 297 | 177 | |||||||
Operating Income | 2,078 | 2,859 | (27 | ) | ||||||
Interest income | 165 | 164 | 0 | |||||||
Interest expense | 231 | 162 | 42 | |||||||
Equity income (loss) — net | 409 | 305 | 34 | |||||||
Other income (loss) — net | 203 | 1,133 | (82 | ) | ||||||
Income Before Income Taxes | 2,624 | 4,299 | (39 | ) | ||||||
Income taxes | 1,252 | 839 | 49 | |||||||
Consolidated Net Income | 1,372 | 3,460 | (60 | ) | ||||||
Less: Net income (loss) attributable to noncontrolling interests | 1 | 12 | (91 | ) | ||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 1,371 | $ | 3,448 | (60 | ) | ||||
Diluted Net Income Per Share2 | $ | 0.32 | $ | 0.79 | (60 | ) | ||||
Average Shares Outstanding — Diluted2 | 4,327 | 4,377 |
1 | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
2 | For the three months ended June 30, 2017 and July 1, 2016, basic net income per share was $0.32 for 2017 and $0.80 for 2016 based on average shares outstanding — basic of 4,273 million for 2017 and 4,323 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 Statements of Income | ||||||||||
(UNAUDITED) | ||||||||||
(In millions except per share data) | ||||||||||
Six Months Ended | ||||||||||
June 30, 2017 | July 1, 2016 | % Change1 | ||||||||
Net Operating Revenues | $ | 18,820 | $ | 21,821 | (14 | ) | ||||
Cost of goods sold | 7,172 | 8,540 | (16 | ) | ||||||
Gross Profit | 11,648 | 13,281 | (12 | ) | ||||||
Selling, general and administrative expenses | 6,457 | 7,673 | (16 | ) | ||||||
Other operating charges | 1,131 | 608 | 86 | |||||||
Operating Income | 4,060 | 5,000 | (19 | ) | ||||||
Interest income | 320 | 308 | 4 | |||||||
Interest expense | 423 | 303 | 39 | |||||||
Equity income (loss) — net | 525 | 397 | 32 | |||||||
Other income (loss) — net | (351 | ) | 791 | — | ||||||
Income Before Income Taxes | 4,131 | 6,193 | (33 | ) | ||||||
Income taxes | 1,575 | 1,240 | 27 | |||||||
Consolidated Net Income | 2,556 | 4,953 | (48 | ) | ||||||
Less: Net income (loss) attributable to noncontrolling interests | 3 | 22 | (86 | ) | ||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 2,553 | $ | 4,931 | (48 | ) | ||||
Diluted Net Income Per Share2 | $ | 0.59 | $ | 1.13 | (48 | ) | ||||
Average Shares Outstanding — Diluted2 | 4,330 | 4,379 |
1 | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
2 | For the six months ended June 30, 2017 and July 1, 2016, basic net income per share was $0.60 for 2017 and $1.14 for 2016 based on average shares outstanding — basic of 4,280 million for 2017 and 4,325 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) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 11,718 | $ | 8,555 | |||
Short-term investments | 11,016 | 9,595 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 22,734 | 18,150 | |||||
Marketable securities | 4,490 | 4,051 | |||||
Trade accounts receivable, less allowances of $473 and $466, respectively | 4,024 | 3,856 | |||||
Inventories | 2,790 | 2,675 | |||||
Prepaid expenses and other assets | 2,866 | 2,481 | |||||
Assets held for sale | 2,057 | 2,797 | |||||
Total Current Assets | 38,961 | 34,010 | |||||
Equity Method Investments | 20,845 | 16,260 | |||||
Other Investments | 1,158 | 989 | |||||
Other Assets | 4,318 | 4,248 | |||||
Property, Plant and Equipment — net | 8,672 | 10,635 | |||||
Trademarks With Indefinite Lives | 6,527 | 6,097 | |||||
Bottlers' Franchise Rights With Indefinite Lives | 772 | 3,676 | |||||
Goodwill | 9,449 | 10,629 | |||||
Other Intangible Assets | 444 | 726 | |||||
Total Assets | $ | 91,146 | $ | 87,270 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 10,363 | $ | 9,490 | |||
Loans and notes payable | 14,355 | 12,498 | |||||
Current maturities of long-term debt | 3,478 | 3,527 | |||||
Accrued income taxes | 351 | 307 | |||||
Liabilities held for sale | 283 | 710 | |||||
Total Current Liabilities | 28,830 | 26,532 | |||||
Long-Term Debt | 31,805 | 29,684 | |||||
Other Liabilities | 4,092 | 4,081 | |||||
Deferred Income Taxes | 4,330 | 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 | 15,473 | 14,993 | |||||
Reinvested earnings | 64,890 | 65,502 | |||||
Accumulated other comprehensive income (loss) | (10,489 | ) | (11,205 | ) | |||
Treasury stock, at cost — 2,772 and 2,752 shares, respectively | (49,633 | ) | (47,988 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 22,001 | 23,062 | |||||
Equity Attributable to Noncontrolling Interests | 88 | 158 | |||||
Total Equity | 22,089 | 23,220 | |||||
Total Liabilities and Equity | $ | 91,146 | $ | 87,270 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Six Months Ended | |||||||
June 30, 2017 | July 1, 2016 | ||||||
Operating Activities | |||||||
Consolidated net income | $ | 2,556 | $ | 4,953 | |||
Depreciation and amortization | 629 | 903 | |||||
Stock-based compensation expense | 114 | 119 | |||||
Deferred income taxes | 620 | (178 | ) | ||||
Equity (income) loss — net of dividends | (303 | ) | (224 | ) | |||
Foreign currency adjustments | 33 | 118 | |||||
Significant (gains) losses on sales of assets — net | 259 | (762 | ) | ||||
Other operating charges | 970 | 210 | |||||
Other items | (68 | ) | (125 | ) | |||
Net change in operating assets and liabilities | (1,419 | ) | (1,194 | ) | |||
Net cash provided by operating activities | 3,391 | 3,820 | |||||
Investing Activities | |||||||
Purchases of investments | (10,047 | ) | (9,045 | ) | |||
Proceeds from disposals of investments | 8,337 | 9,518 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (520 | ) | (723 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 2,055 | 420 | |||||
Purchases of property, plant and equipment | (832 | ) | (1,085 | ) | |||
Proceeds from disposals of property, plant and equipment | 42 | 41 | |||||
Other investing activities | (259 | ) | (63 | ) | |||
Net cash provided by (used in) investing activities | (1,224 | ) | (937 | ) | |||
Financing Activities | |||||||
Issuances of debt | 18,586 | 15,947 | |||||
Payments of debt | (14,910 | ) | (12,750 | ) | |||
Issuances of stock | 917 | 1,108 | |||||
Purchases of stock for treasury | (2,197 | ) | (2,156 | ) | |||
Dividends | (1,584 | ) | (3,017 | ) | |||
Other financing activities | (15 | ) | 85 | ||||
Net cash provided by (used in) financing activities | 797 | (783 | ) | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 199 | 238 | |||||
Cash and Cash Equivalents | |||||||
Net increase (decrease) during the period | 3,163 | 2,338 | |||||
Balance at beginning of period | 8,555 | 7,309 | |||||
Balance at end of period | $ | 11,718 | $ | 9,647 |
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 | |||||||||||||||||||||||||||||||
June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 2,037 | $ | 2,031 | 0 | $ | 1,081 | $ | 1,056 | 2 | $ | 1,111 | $ | 1,078 | 3 | ||||||||||||||||||
Latin America | 950 | 937 | 2 | 557 | 512 | 9 | 559 | 520 | 8 | ||||||||||||||||||||||||
North America | 2,871 | 2,709 | 6 | 752 | 735 | 2 | 655 | 745 | (12 | ) | |||||||||||||||||||||||
Asia Pacific | 1,507 | 1,560 | (3 | ) | 713 | 758 | (6 | ) | 716 | 760 | (6 | ) | |||||||||||||||||||||
Bottling Investments | 3,038 | 5,615 | (46 | ) | (652 | ) | 216 | — | (515 | ) | 269 | — | |||||||||||||||||||||
Corporate | 45 | 63 | (28 | ) | (373 | ) | (418 | ) | 11 | 98 | 927 | (90 | ) | ||||||||||||||||||||
Eliminations | (746 | ) | (1,376 | ) | 46 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 9,702 | $ | 11,539 | (16 | ) | $ | 2,078 | $ | 2,859 | (27 | ) | $ | 2,624 | $ | 4,299 | (39 | ) |
Note: | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
1 | During the three months ended June 30, 2017, intersegment revenues were $15 million for Latin America, $585 million for North America, $123 million for Asia Pacific and $23 million for Bottling Investments. During the three months ended July 1, 2016, intersegment revenues were $123 million for Europe, Middle East & Africa, $16 million for Latin America, $1,032 million for North America, $159 million for Asia Pacific, $44 million for Bottling Investments and $2 million for Corporate. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues 1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | |||||||||||||||||||||||||||||||
June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | June 30, 2017 | July 1, 2016 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 3,669 | $ | 3,781 | (3 | ) | $ | 1,948 | $ | 1,983 | (2 | ) | $ | 1,996 | $ | 2,028 | (2 | ) | |||||||||||||||
Latin America | 1,876 | 1,872 | 0 | 1,062 | 1,035 | 3 | 1,066 | 1,038 | 3 | ||||||||||||||||||||||||
North America | 5,265 | 5,073 | 4 | 1,321 | 1,316 | 0 | 1,128 | 1,325 | (15 | ) | |||||||||||||||||||||||
Asia Pacific | 2,715 | 2,795 | (3 | ) | 1,258 | 1,309 | (4 | ) | 1,265 | 1,314 | (4 | ) | |||||||||||||||||||||
Bottling Investments | 6,905 | 10,907 | (37 | ) | (762 | ) | 98 | — | (1,057 | ) | (163 | ) | (548 | ) | |||||||||||||||||||
Corporate | 74 | 48 | 54 | (767 | ) | (741 | ) | (4 | ) | (267 | ) | 651 | — | ||||||||||||||||||||
Eliminations | (1,684 | ) | (2,655 | ) | 37 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 18,820 | $ | 21,821 | (14 | ) | $ | 4,060 | $ | 5,000 | (19 | ) | $ | 4,131 | $ | 6,193 | (33 | ) |
Note: | Certain growth rates may not recalculate using the rounded dollar amounts provided. |
1 | During the six months ended June 30, 2017, intersegment revenues were $28 million for Latin America, $1,357 million for North America, $253 million for Asia Pacific and $46 million for Bottling Investments. During the six months ended July 1, 2016, intersegment revenues were $264 million for Europe, Middle East & Africa, $34 million for Latin America, $1,975 million for North America, $292 million for Asia Pacific, $85 million for Bottling Investments and $5 million for Corporate. |
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. On April 1, 2017, the Company sold a substantial portion of its bottling operations in China to the two local franchise bottlers, which impacted our Asia Pacific and Bottling Investments operating segments. In 2017 and 2016, the Company refranchised bottling territories in North America to certain of its unconsolidated bottling partners. Additionally, in conjunction with the refranchising of Coca-Cola Refreshments' ("CCR") Southwest operating unit ("Southwest Transaction") on April 1, 2017, we obtained an equity interest in AC Bebidas, S. de R.L. de C.V. ("AC Bebidas"), a subsidiary of Arca Continental, S.A.B. de C.V. ("Arca"), which impacted our North America and Bottling Investments operating segments. These transactions were included as structural items in our analysis of net operating revenues on a consolidated basis and for the applicable operating segments. These transactions were also included as structural items in our analysis of comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) on a consolidated basis. 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. |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "Comparable net revenues" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below). Management believes the comparable net revenues (non-GAAP) growth measure provides investors with useful supplemental information to enhance their understanding of the Company's revenue performance and trends by improving their ability to compare our period-to-period results. "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" is a non-GAAP financial measure that represents the combined organic revenue performance from the Europe, Middle East and Africa; Latin America; North America; and Asia Pacific operating segments and Corporate 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 operating 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 and six months ended June 30, 2017 and July 1, 2016 consisted of the structural changes discussed above. Additionally, during the six months ended June 30, 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 operating margin" and "comparable income before income taxes" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability (discussed further below). "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 operating margin (non-GAAP) expansion, comparable income before income taxes (non-GAAP) growth, 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 |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "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). |
• | "Free cash flow" is a non-GAAP financial measure that represents net cash provided by operating activities less purchases of property, plant and equipment. Management uses this non-GAAP financial measure to evaluate the Company's performance and make resource allocation decisions. |
• | "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 June 30, 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) | $ | 9,702 | $ | 3,659 | $ | 6,043 | 62.3 | % | $ | 3,142 | $ | 823 | $ | 2,078 | 21.4 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (653 | ) | 653 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (87 | ) | 87 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (48 | ) | 48 | |||||||||||||||||||||||||
Other Items | 7 | (28 | ) | 35 | (1 | ) | (35 | ) | 71 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 9,709 | $ | 3,631 | $ | 6,078 | 62.6 | % | $ | 3,141 | $ | — | $ | 2,937 | 30.2 | % | ||||||||||||||||
Three Months Ended July 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) | $ | 11,539 | $ | 4,471 | $ | 7,068 | 61.3 | % | $ | 3,912 | $ | 297 | $ | 2,859 | 24.8 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (41 | ) | 41 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (65 | ) | 65 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (84 | ) | 84 | |||||||||||||||||||||||||
Other Items | (15 | ) | 82 | (97 | ) | 9 | (107 | ) | 1 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 11,524 | $ | 4,553 | $ | 6,971 | 60.5 | % | $ | 3,921 | $ | — | $ | 3,050 | 26.5 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (16) | (18) | (15) | (20) | 177 | (27) | ||||||||||||||||||||||||||
% Currency Impact | (2) | (1) | (2) | (1) | — | (4) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (14) | (18) | (12) | (18) | — | (24) | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (16) | (20) | (13) | (20) | — | (4) | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (1) | (1) | (2) | (1) | — | (3) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (14) | (20) | (11) | (19) | — | (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 except per share data) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 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) | $ | 231 | $ | 409 | $ | 203 | $ | 2,624 | $ | 1,252 | 47.7 | % | $ | 1 | $ | 1,371 | $ | 0.32 | |||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 653 | 156 | — | 497 | 0.11 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 87 | 31 | — | 56 | 0.01 | |||||||||||||||||||||||||||||
Equity Investees | — | (37 | ) | — | (37 | ) | (10 | ) | — | (27 | ) | (0.01 | ) | ||||||||||||||||||||||||
Transaction Gains/Losses | — | — | (130 | ) | (82 | ) | (707 | ) | — | 625 | 0.14 | ||||||||||||||||||||||||||
Other Items | (38 | ) | — | (2 | ) | 107 | 43 | — | 64 | 0.01 | |||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | 40 | — | (40 | ) | (0.01 | ) | |||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 193 | $ | 372 | $ | 71 | $ | 3,352 | $ | 805 | 24.0 | % | $ | 1 | $ | 2,546 | $ | 0.59 | |||||||||||||||||||
Three Months Ended July 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) | $ | 162 | $ | 305 | $ | 1,133 | $ | 4,299 | $ | 839 | 19.5 | % | $ | 12 | $ | 3,448 | $ | 0.79 | |||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 41 | — | — | 41 | 0.01 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 65 | 24 | — | 41 | 0.01 | |||||||||||||||||||||||||||||
Equity Investees | — | 18 | — | 18 | 4 | — | 14 | — | |||||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | (1,124 | ) | (1,040 | ) | (26 | ) | — | (1,014 | ) | (0.23 | ) | ||||||||||||||||||||||||
Other Items | — | — | 11 | 12 | 6 | — | 6 | — | |||||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (83 | ) | — | 83 | 0.02 | ||||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 162 | $ | 323 | $ | 20 | $ | 3,395 | $ | 764 | 22.5 | % | $ | 12 | $ | 2,619 | $ | 0.60 | |||||||||||||||||||
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) | 42 | 34 | (82) | (39) | 49 | (91) | (60) | (60) | |||||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 19 | 16 | 252 | (1) | 5 | (91) | (3) | (2) |
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 | $4,327 million average shares outstanding — diluted |
3 | $4,377 million average shares outstanding — diluted |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 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) | $ | 18,820 | $ | 7,172 | $ | 11,648 | 61.9 | % | $ | 6,457 | $ | 1,131 | $ | 4,060 | 21.6 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (737 | ) | 737 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (226 | ) | 226 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | (3 | ) | 3 | — | (107 | ) | 110 | ||||||||||||||||||||||||
Other Items | 21 | (7 | ) | 28 | (4 | ) | (61 | ) | 93 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 18,841 | $ | 7,162 | $ | 11,679 | 62.0 | % | $ | 6,453 | $ | — | $ | 5,226 | 27.7 | % | ||||||||||||||||
Six Months Ended July 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) | $ | 21,821 | $ | 8,540 | $ | 13,281 | 60.9 | % | $ | 7,673 | $ | 608 | $ | 5,000 | 22.9 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (240 | ) | 240 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (128 | ) | 128 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (130 | ) | 130 | |||||||||||||||||||||||||
Other Items | 32 | 130 | (98 | ) | 13 | (110 | ) | (1 | ) | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 21,853 | $ | 8,670 | $ | 13,183 | 60.3 | % | $ | 7,686 | $ | — | $ | 5,497 | 25.2 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (14) | (16) | (12) | (16) | 86 | (19) | ||||||||||||||||||||||||||
% Currency Impact | (1) | 0 | (2) | (1) | — | (4) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (12) | (16) | (10) | (15) | — | (15) | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (14) | (17) | (11) | (16) | — | (5) | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (1) | 0 | (2) | (1) | — | (4) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (12) | (17) | (9) | (15) | — | (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 except per share data) | |||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 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) | $ | 423 | $ | 525 | $ | (351 | ) | $ | 4,131 | $ | 1,575 | 38.1 | % | $ | 3 | $ | 2,553 | $ | 0.59 | ||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 737 | 156 | — | 581 | 0.13 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 226 | 83 | — | 143 | 0.03 | |||||||||||||||||||||||||||||
Equity Investees | — | 21 | — | 21 | 5 | — | 16 | — | |||||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 473 | 583 | (533 | ) | — | 1,116 | 0.26 | ||||||||||||||||||||||||||||
Other Items | (38 | ) | — | (2 | ) | 129 | 43 | — | 86 | 0.02 | |||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | 70 | — | (70 | ) | (0.02 | ) | |||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 385 | $ | 546 | $ | 120 | $ | 5,827 | $ | 1,399 | 24.0 | % | $ | 3 | $ | 4,425 | $ | 1.02 | |||||||||||||||||||
Six Months Ended July 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) | $ | 303 | $ | 397 | $ | 791 | $ | 6,193 | $ | 1,240 | 20.0 | % | $ | 22 | $ | 4,931 | $ | 1.13 | |||||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 240 | — | — | 240 | 0.05 | |||||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 128 | 45 | — | 83 | 0.02 | |||||||||||||||||||||||||||||
Equity Investees | — | 21 | — | 21 | 4 | — | 17 | — | |||||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | (773 | ) | (643 | ) | 117 | — | (760 | ) | (0.17 | ) | |||||||||||||||||||||||||
Other Items | — | — | 40 | 39 | 16 | — | 23 | 0.01 | |||||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (77 | ) | — | 77 | 0.02 | ||||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 303 | $ | 418 | $ | 58 | $ | 5,978 | $ | 1,345 | 22.5 | % | $ | 22 | $ | 4,611 | $ | 1.05 | |||||||||||||||||||
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) | 39 | 32 | — | (33) | 27 | (86) | (48) | (48) | |||||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 27 | 31 | 107 | (3) | 4 | (86) | (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 | $4,330 million average shares outstanding — diluted |
3 | $4,379 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 June 30, 2017 | |||||
Income before income taxes | Diluted net income per share | ||||
% Change — Reported (GAAP) | (39) | (60) | |||
% Currency Impact | (2) | (1) | |||
% Change — Currency Neutral (Non-GAAP) | (37) | (59) | |||
% Structural Impact | (1) | — | |||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | (36) | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | (38) | (58) | |||
% Change — Comparable (Non-GAAP) | (1) | (2) | |||
% Comparable Currency Impact (Non-GAAP) | (2) | (2) | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 1 | 1 | |||
% Comparable Structural Impact (Non-GAAP) | (5) | — | |||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 6 | — | |||
Six Months Ended June 30, 2017 | |||||
Income before income taxes | Diluted net income per share | ||||
% Change — Reported (GAAP) | (33) | (48) | |||
% Currency Impact | (2) | (1) | |||
% Change — Currency Neutral (Non-GAAP) | (32) | (46) | |||
% Structural Impact | 1 | — | |||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | (32) | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | (31) | (45) | |||
% Change — Comparable (Non-GAAP) | (3) | (3) | |||
% Comparable Currency Impact (Non-GAAP) | (3) | (3) | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 0 | 0 | |||
% Comparable Structural Impact (Non-GAAP) | (4) | — | |||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 4 | — | |||
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 Operating Segment: | ||||||||||||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 2,037 | $ | 950 | $ | 2,871 | $ | 1,507 | $ | 3,038 | $ | 45 | $ | (746 | ) | $ | 9,702 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | 3 | — | — | 4 | — | 7 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 2,037 | $ | 950 | $ | 2,874 | $ | 1,507 | $ | 3,038 | $ | 49 | $ | (746 | ) | $ | 9,709 | |||||||||
Three Months Ended July 1, 2016 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 2,031 | $ | 937 | $ | 2,709 | $ | 1,560 | $ | 5,615 | $ | 63 | $ | (1,376 | ) | $ | 11,539 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | (6 | ) | — | — | (9 | ) | — | (15 | ) | |||||||||||||||
Comparable (Non-GAAP) | $ | 2,031 | $ | 937 | $ | 2,703 | $ | 1,560 | $ | 5,615 | $ | 54 | $ | (1,376 | ) | $ | 11,524 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 0 | 2 | 6 | (3) | (46) | (28) | 46 | (16) | ||||||||||||||||||
% Currency Impact | (5) | 0 | 0 | (3) | 0 | (30) | — | (2) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 5 | 1 | 6 | (1) | (46) | 2 | — | (14) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | (1) | (1) | 2 | 0 | (46) | 0 | — | (17) | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 6 | 2 | 5 | (1) | 0 | 2 | — | 3 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | 2 | 6 | (3) | (46) | (6) | — | (16) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | 0 | 0 | (3) | 0 | (9) | — | (1) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 5 | 1 | 7 | (1) | (46) | 2 | — | (14) |
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 Operating Segment: | ||||||||||||||||||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 3,669 | $ | 1,876 | $ | 5,265 | $ | 2,715 | $ | 6,905 | $ | 74 | $ | (1,684 | ) | $ | 18,820 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | 8 | — | — | 13 | — | 21 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 3,669 | $ | 1,876 | $ | 5,273 | $ | 2,715 | $ | 6,905 | $ | 87 | $ | (1,684 | ) | $ | 18,841 | |||||||||
Six Months Ended July 1, 2016 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 3,781 | $ | 1,872 | $ | 5,073 | $ | 2,795 | $ | 10,907 | $ | 48 | $ | (2,655 | ) | $ | 21,821 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | — | ||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | — | — | — | — | ||||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | — | ||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | — | — | — | ||||||||||||||||||
Other Items | — | — | (8 | ) | — | — | 40 | — | 32 | |||||||||||||||||
Comparable (Non-GAAP) | $ | 3,781 | $ | 1,872 | $ | 5,065 | $ | 2,795 | $ | 10,907 | $ | 88 | $ | (2,655 | ) | $ | 21,853 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | (3) | 0 | 4 | (3) | (37) | 54 | 37 | (14) | ||||||||||||||||||
% Currency Impact | (5) | 0 | 0 | (3) | 0 | 46 | — | (1) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 2 | 1 | 4 | 0 | (37) | 7 | — | (12) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | (2) | (1) | 2 | 0 | (35) | 0 | — | (14) | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 4 | 1 | 3 | (1) | (1) | 7 | — | 1 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | (3) | 0 | 4 | (3) | (37) | (2) | — | (14) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | 0 | 0 | (3) | 0 | (6) | — | (1) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 2 | 1 | 4 | 0 | (37) | 4 | — | (12) |
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 June 30, 2017 | |||||
Reported (GAAP) Net Operating Revenues | $ | 9,702 | |||
Bottling Investments Net Operating Revenues | (3,038 | ) | |||
Consolidated Eliminations | 746 | ||||
Intersegment Core Net Operating Revenue Eliminations | (3 | ) | |||
Core Business Revenues (Non-GAAP) | 7,407 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | 7 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 7,414 | |||
Three Months Ended July 1, 2016 | |||||
Reported (GAAP) Net Operating Revenues | $ | 11,539 | |||
Bottling Investments Net Operating Revenues | (5,615 | ) | |||
Consolidated Eliminations | 1,376 | ||||
Intersegment Core Net Operating Revenue Eliminations | (7 | ) | |||
Core Business Revenues (Non-GAAP) | 7,293 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | (15 | ) | |||
Comparable Core Business Revenues (Non-GAAP) | $ | 7,278 | |||
% Change — Reported (GAAP) Net Operating Revenues | (16) | ||||
% Change — Core Business Revenues (Non-GAAP) | 2 | ||||
% Core Business Currency Impact (Non-GAAP) | (2) | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 4 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)2 | 4 | ||||
% 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) | 4 |
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 $3 million and $7 million during the three months ended June 30, 2017 and July 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) | |||||
Core Business Revenues (Non-GAAP): 1 | |||||
Six Months Ended June 30, 2017 | |||||
Reported (GAAP) Net Operating Revenues | $ | 18,820 | |||
Bottling Investments Net Operating Revenues | (6,905 | ) | |||
Consolidated Eliminations | 1,684 | ||||
Intersegment Core Net Operating Revenue Eliminations | (7 | ) | |||
Core Business Revenues (Non-GAAP) | 13,592 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | 21 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 13,613 | |||
Six Months Ended July 1, 2016 | |||||
Reported (GAAP) Net Operating Revenues | $ | 21,821 | |||
Bottling Investments Net Operating Revenues | (10,907 | ) | |||
Consolidated Eliminations | 2,655 | ||||
Intersegment Core Net Operating Revenue Eliminations | (13 | ) | |||
Core Business Revenues (Non-GAAP) | 13,556 | ||||
Items Impacting Comparability: | |||||
Asset Impairments/Restructuring | — | ||||
Productivity & Reinvestment | — | ||||
Equity Investees | — | ||||
Transaction Gains/Losses | — | ||||
Other Items | 32 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 13,588 | |||
% Change — Reported (GAAP) Net Operating Revenues | (14) | ||||
% 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 | 0 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)2 | 2 | ||||
% 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) | 2 |
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 $7 million and $13 million during the six months ended June 30, 2017 and July 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) | |||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes by Operating Segment: | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2017 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 1,111 | $ | 559 | $ | 655 | $ | 716 | $ | (515 | ) | $ | 98 | $ | 2,624 | ||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 653 | — | 653 | ||||||||||||||||||||||
Productivity & Reinvestment | (6 | ) | 1 | 49 | 2 | 10 | 31 | 87 | |||||||||||||||||||||
Equity Investees | — | — | — | — | (38 | ) | 1 | (37 | ) | ||||||||||||||||||||
Transaction Gains/Losses | — | — | 108 | — | 258 | (448 | ) | (82 | ) | ||||||||||||||||||||
Other Items | — | — | (5 | ) | — | 30 | 82 | 107 | |||||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,105 | $ | 560 | $ | 807 | $ | 718 | $ | 398 | $ | (236 | ) | $ | 3,352 | ||||||||||||||
Three Months Ended July 1, 2016 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 1,078 | $ | 520 | $ | 745 | $ | 760 | $ | 269 | $ | 927 | $ | 4,299 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 41 | — | 41 | ||||||||||||||||||||||
Productivity & Reinvestment | 1 | (1 | ) | 27 | — | 17 | 21 | 65 | |||||||||||||||||||||
Equity Investees | — | — | — | — | 15 | 3 | 18 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 259 | (1,299 | ) | (1,040 | ) | ||||||||||||||||||||
Other Items | — | — | (26 | ) | — | (63 | ) | 101 | 12 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,079 | $ | 519 | $ | 746 | $ | 760 | $ | 538 | $ | (247 | ) | $ | 3,395 | ||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
% Change — Reported (GAAP) | 3 | 8 | (12) | (6) | — | (90) | (39) | ||||||||||||||||||||||
% Currency Impact | (5) | (1) | (1) | (4) | — | 1 | (2) | ||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 8 | 8 | (12) | (2) | — | (91) | (37) | ||||||||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 1 | 0 | (20) | 0 | (266) | (94) | (38) | ||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 2 | 8 | 8 | (5) | (26) | 4 | (1) | ||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (1) | (1) | (4) | (1) | 7 | (2) | ||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 7 | 9 | 9 | (2) | (24) | (2) | 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 Operating Segment: | |||||||||||||||||||||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 1,996 | $ | 1,066 | $ | 1,128 | $ | 1,265 | $ | (1,057 | ) | $ | (267 | ) | $ | 4,131 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 737 | — | 737 | ||||||||||||||||||||||
Productivity & Reinvestment | (4 | ) | 1 | 84 | 3 | 24 | 118 | 226 | |||||||||||||||||||||
Equity Investees | 4 | — | — | — | 15 | 2 | 21 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 215 | — | 814 | (446 | ) | 583 | |||||||||||||||||||||
Other Items | — | — | (15 | ) | — | 27 | 117 | 129 | |||||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,996 | $ | 1,067 | $ | 1,412 | $ | 1,268 | $ | 560 | $ | (476 | ) | $ | 5,827 | ||||||||||||||
Six Months Ended July 1, 2016 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 2,028 | $ | 1,038 | $ | 1,325 | $ | 1,314 | $ | (163 | ) | $ | 651 | $ | 6,193 | ||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 240 | — | 240 | ||||||||||||||||||||||
Productivity & Reinvestment | 4 | (1 | ) | 58 | 1 | 38 | 28 | 128 | |||||||||||||||||||||
Equity Investees | — | — | — | — | 18 | 3 | 21 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 673 | (1,316 | ) | (643 | ) | ||||||||||||||||||||
Other Items | — | — | (42 | ) | — | (105 | ) | 186 | 39 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 2,032 | $ | 1,037 | $ | 1,341 | $ | 1,315 | $ | 701 | $ | (448 | ) | $ | 5,978 | ||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
% Change — Reported (GAAP) | (2) | 3 | (15) | (4) | (548) | — | (33) | ||||||||||||||||||||||
% Currency Impact | (5) | (2) | (1) | (4) | (1) | — | (2) | ||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 4 | 5 | (14) | 1 | (548) | — | (32) | ||||||||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | (20) | 0 | (528) | (135) | (31) | ||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (2) | 3 | 5 | (4) | (20) | (6) | (3) | ||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (2) | (1) | (4) | 0 | 9 | (3) | ||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 5 | 7 | 1 | (20) | (16) | 0 |
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) | ||||||
Gross Margin: | ||||||
Three Months Ended June 30, 2017 | Three Months Ended July 1, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 62.28 | % | 61.25 | % | 103 | |
Items Impacting Comparability (Non-GAAP) | (0.31 | )% | 0.76 | % | ||
Comparable Gross Margin (Non-GAAP) | 62.59 | % | 60.49 | % | 210 | |
Comparable Currency Impact (Non-GAAP) | (0.38 | )% | 0.00 | % | ||
Comparable Currency Neutral Gross Margin (Non-GAAP) | 62.97 | % | 60.49 | % | 248 | |
Six Months Ended June 30, 2017 | Six Months Ended July 1, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 61.89 | % | 60.86 | % | 103 | |
Items Impacting Comparability (Non-GAAP) | (0.09 | )% | 0.54 | % | ||
Comparable Gross Margin (Non-GAAP) | 61.98 | % | 60.32 | % | 166 | |
Comparable Currency Impact (Non-GAAP) | (0.50 | )% | 0.00 | % | ||
Comparable Currency Neutral Gross Margin (Non-GAAP) | 62.48 | % | 60.32 | % | 216 |
Operating Margin: | ||||||
Three Months Ended June 30, 2017 | Three Months Ended July 1, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 21.42 | % | 24.78 | % | (336 | ) |
Items Impacting Comparability (Non-GAAP) | (8.83 | )% | (1.68 | )% | ||
Comparable Operating Margin (Non-GAAP) | 30.25 | % | 26.46 | % | 379 | |
Comparable Currency Impact (Non-GAAP) | (0.41 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 30.66 | % | 26.46 | % | 420 | |
Structural Impact on Comparable Currency Neutral Operating Margin (Non-GAAP) | (0.24 | )% | (3.18 | )% | ||
Underlying Operating Margin (Non-GAAP) | 30.90 | % | 29.64 | % | 126 | |
Six Months Ended June 30, 2017 | Six Months Ended July 1, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 21.57 | % | 22.91 | % | (134 | ) |
Items Impacting Comparability (Non-GAAP) | (6.17 | )% | (2.24 | )% | ||
Comparable Operating Margin (Non-GAAP) | 27.74 | % | 25.15 | % | 259 | |
Comparable Currency Impact (Non-GAAP) | (0.64 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 28.38 | % | 25.15 | % | 323 | |
Structural Impact on Comparable Currency Neutral Operating Margin (Non-GAAP) | (0.16 | )% | (2.39 | )% | ||
Underlying Operating Margin (Non-GAAP) | 28.54 | % | 27.54 | % | 100 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||
(UNAUDITED) | ||||||||||
(In millions) | ||||||||||
Purchases and Issuances of Stock: | ||||||||||
Six Months Ended June 30, 2017 | Six Months Ended July 1, 2016 | |||||||||
Reported (GAAP): | ||||||||||
Issuances of Stock | $ | 917 | $ | 1,108 | ||||||
Purchases of Stock for Treasury | (2,197 | ) | (2,156 | ) | ||||||
Net Change in Stock Issuance Receivables1 | 1 | 3 | ||||||||
Net Change in Treasury Stock Payables2 | 4 | (34 | ) | |||||||
Net Share Repurchases (Non-GAAP) | $ | (1,275 | ) | $ | (1,079 | ) |
1 | Represents the net change in receivables related to employee stock options exercised but not settled prior to the end of the period. |
2 | Represents the net change in payables for treasury shares repurchased but not settled prior to the end of the period. |
Consolidated Cash from Operations: | ||||||||||
Six Months Ended June 30, 2017 | Six Months Ended July 1, 2016 | |||||||||
Net Cash Provided by Operating Activities | Net Cash Provided by Operating Activities | |||||||||
Reported (GAAP): | $ | 3,391 | $ | 3,820 | ||||||
Items Impacting Comparability: | ||||||||||
Cash Payments for Pension Plan Contributions | 29 | 471 | ||||||||
Comparable (Non-GAAP) | $ | 3,420 | $ | 4,291 | ||||||
Net Cash Provided by Operating Activities | ||||||||||
% Change — Reported (GAAP) | (11) | |||||||||
% Change — Comparable (Non-GAAP) | (20) |
Free Cash Flow: | ||||||||||||||||
Six Months Ended June 30, 2017 | Six Months Ended July 1, 2016 | % Change | ||||||||||||||
Net Cash Provided by Operating Activities | $ | 3,391 | $ | 3,820 | (11 | ) | ||||||||||
Purchases of Property, Plant and Equipment | (832 | ) | (1,085 | ) | (23 | ) | ||||||||||
Free Cash Flow (Non-GAAP) | $ | 2,559 | $ | 2,735 | (6 | ) |