Highlights |
Quarterly / Full Year Performance |
• | Revenues: Net revenues declined 20% to $7.5 billion for the quarter and declined 15% to $35.4 billion for the year, impacted by headwinds of 26% and 17%, respectively, from the ongoing refranchising of bottling territories. Organic revenues (non-GAAP) grew 6% for the quarter, driven by price/mix growth of 4% and concentrate sales growth of 1%. The quarter included one additional day, which equated to an approximate one point benefit to organic revenue (non-GAAP) growth. For the year, organic revenues (non-GAAP) grew 3%, driven by price/mix growth of 3%. |
• | Volume: Total unit case volume was even for the quarter and full year. Developing and emerging markets generated positive volume growth for the second consecutive quarter, including volume growth in Brazil. While volume growth in developed markets overall was even during the quarter, North America volume grew 1%. |
• | Margin: Operating margin, which included items impacting comparability, grew over 315 and 55 basis points for the quarter and full year, respectively. Comparable operating margin (non-GAAP) expanded more than 530 and 350 basis points for the quarter and full year, respectively. Margin expansion was driven by divestitures of lower-margin bottling businesses and the Company's ongoing productivity efforts. |
• | Market Share: The Company continued to gain value share in total nonalcoholic ready-to-drink ("NARTD") beverages for the quarter and full year. Value share growth outpaced volume share performance, reflecting the Company's continued shift in focus to value growth from volume growth. |
• | Cash Flow: Cash from operations for the full year was $7.0 billion, down 20%. Full year free cash flow (non-GAAP) was $5.3 billion, down 19%. The declines were primarily driven by comparability items related to the refranchising of North America bottling territories, including the establishment of third-party receivables and cash restructuring charges. |
• | Share Repurchases: Full year purchases of stock for treasury were $3.7 billion. Net share repurchases (non-GAAP) totaled $2.0 billion. |
Company Updates |
• | Impact of U.S. Tax Cuts and Jobs Act: The Tax Cuts and Jobs Act ("Tax Reform Act") was signed into law on Dec. 22, 2017. The Company supports the Tax Reform Act as it enhances the ability of U.S.-headquartered companies to compete globally on more equal footing including facilitating the free flow of capital. As a result of the Tax Reform Act, the Company’s effective tax rate for 2018 is now estimated to be 21%, reduced from the previously provided estimate of 26%. However, under the Tax Reform Act, the |
• | Expanding the appeal of diets and lights: In January 2018, the Company announced plans to rejuvenate Diet Coke in North America with an updated look, new packaging, and the debut of four new flavors. The Company is re-energizing and modernizing Diet Coke for a new generation of drinkers, while also offering millions of current fans a new experience with a brand they love, without changing its formula and great taste. The changes to Diet Coke reflect the Company’s continued focus on innovation within sparkling soft drinks. |
• | Accelerating a consumer-centric portfolio: In September 2017, the Company expanded its Venturing & Emerging Brands ("VEB") model to Central & Eastern Europe in partnership with Coca-Cola HBC AG. To date, the joint effort has shown early signs of success of the "lift and shift" approach through the launch of smartwater, ZICO coconut water, and Appletiser. This strategy, coupled with world-class innovation and bolt-on M&A, is expected to accelerate growth of the Company's expanding consumer-centric portfolio. |
• | Stronger focus on revenue growth: During the quarter, the Company continued to pursue Revenue Growth Management ("RGM") initiatives across key markets, including the South Latin and Central & Eastern Europe business units, which led to revenues and transactions growing ahead of volume. Throughout the year, the Company also continued to make disciplined decisions around profitable growth by deprioritizing low-margin water in major markets, including China, Japan, and Mexico. |
• | Re-energized system: The U.S. Coca-Cola system is now fully refranchised after the closing of two important territories during the quarter. Liberty Coca-Cola Beverages, a newly formed bottler, began operations in the former Tri-State Metro Operating Unit, and Reyes Coca-Cola Bottling took on new bottling territories in the former West Operating Unit. The refranchised system is working to reinvent the future of the business, especially in key areas such as portfolio diversification, packaging innovation, production, procurement, and technology. |
• | World Without Waste: In January 2018, the Company announced new sustainable packaging goals to lead the industry in addressing the issue of packaging waste. One of these goals is to help collect and recycle a bottle or can for every one it sells by 2030 – effectively bringing back the equivalent of 100% of its packaging. With the help of partners, the Company is focusing on collection and recycling. The Company is also continuing to focus on the design of its packages to ensure they are 100% recyclable. |
Operating Review – Three Months Ended December 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 | 1 | 4 | 0 | (26) | (20) | 6 | 0 | ||
Europe, Middle East & Africa | 2 | 6 | 3 | (4) | 6 | 8 | 0 | ||
Latin America | 2 | 11 | 1 | 0 | 14 | 13 | 0 | ||
North America | 2 | 2 | 0 | 3 | 6 | 3 | 1 | ||
Asia Pacific | 4 | (2) | (4) | 2 | (1) | 1 | 2 | ||
Bottling Investments | (2) | 15 | 1 | (83) | (69) | 12 | (32) |
Percent Change | Reported Income from Continuing Operations Before Income Taxes | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | Structural Items | Comparable Currency Neutral (Structurally Adjusted) 2 |
Consolidated | 82 | 75 | 2 | 6 | (12) | 18 |
Europe, Middle East & Africa | (6) | 0 | 0 | (7) | ||
Latin America | 21 | (1) | 0 | 22 | ||
North America | 2 | (13) | 0 | 15 | ||
Asia Pacific | (2) | (2) | (10) | 9 | ||
Bottling Investments | 40 | 35 | 9 | (4) | ||
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | ||
EPS from Continuing Operations | —3 | (630) | 2 | 5 |
Operating Review – Year Ended December 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 | 0 | 3 | (1) | (17) | (15) | 3 | 0 | ||
Europe, Middle East & Africa | 2 | 3 | (2) | (2) | 1 | 5 | 1 | ||
Latin America | (3) | 8 | 0 | 0 | 5 | 6 | (2) | ||
North America | 0 | 3 | 0 | 2 | 4 | 3 | 0 | ||
Asia Pacific | 1 | (1) | (4) | 0 | (2) | 1 | 1 | ||
Bottling Investments | (3) | 4 | 0 | (48) | (47) | 1 | (41) |
Percent Change | Reported Income from Continuing Operations Before Income Taxes | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | Structural Items | Comparable Currency Neutral (Structurally Adjusted) 2 |
Consolidated | (17) | (18) | (1) | 2 | (7) | 9 |
Europe, Middle East & Africa | (1) | 0 | (2) | 1 | ||
Latin America | 12 | 4 | 0 | 9 | ||
North America | (10) | (16) | (1) | 7 | ||
Asia Pacific | (3) | 0 | (6) | 4 | ||
Bottling Investments | (22) | (3) | 2 | (20) | ||
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral 2 | ||
EPS from Continuing Operations | (82) | (82) | (1) | 1 |
Consolidated |
• | Price/mix growth of 4% for the quarter was due to price/mix of 3% in the core business and a one point benefit of segment mix from Bottling Investments. Price/mix growth of 3% for the year was driven by balanced contributions from all operating segments, with the exception of Asia Pacific. |
• | Unit case volume was even for the quarter and full year. Category cluster performance for the quarter and full year, respectively, was as follows: |
◦ | Sparkling soft drinks: 0%, -1% |
◦ | Juice, dairy, and plant-based beverages: -2%, 0% |
◦ | Water, enhanced water, and sports drinks: 2%, 1% |
◦ | Tea and coffee: 2%, 2% |
• | Growth in income from continuing operations before income taxes for the quarter and the decline for the full year were impacted by comparability items, which were predominantly charges associated with the refranchising of bottling territories in North America. Results were also impacted by structural items, primarily related to the refranchising of bottling territories. Growth for the quarter and full year in comparable currency neutral income from continuing operations before income taxes (structurally adjusted) (non-GAAP) was driven by organic revenue (non-GAAP) growth, the continued impact of productivity initiatives, and an increase in equity income. Growth for the full year was unfavorably impacted by higher interest expense. |
Europe, Middle East & Africa |
• | Price/mix growth of 6% for the quarter was driven by strong price/pack initiatives across Europe and Southern Africa. Nearly all business units had positive price/mix for the quarter. |
• | Unit case volume for the quarter was even as solid volume growth across the Central & Eastern Europe business unit and Turkey was offset by declines across Africa and the Middle East, largely due to macroeconomic challenges and strategic pack downsizing initiatives. |
• | Income from continuing operations before income taxes for the quarter was unfavorably impacted by intercompany profit eliminations related to the transition of the majority ownership of Coca-Cola Beverages Africa to the Company. |
• | The Company gained value share in total NARTD beverages for the full year, including sparkling soft drinks and the juice, dairy, and plant-based beverages cluster. |
Latin America |
• | Price/mix growth of 11% for the quarter was primarily driven by strong price/mix in Mexico and the South Latin business unit. |
• | Unit case volume was even for the quarter as volume growth in Brazil and the South Latin business unit was offset by a 1% decline in both Mexico and the Latin Center business unit. Brazil returned to growth in the quarter as the Company continued to execute its strategy around returnables and an adjusted price/pack architecture. The decline in Mexico was primarily attributable to a softening consumer environment and deprioritization of low-margin water. |
• | The Company gained value share in total NARTD beverages for the full year, including sparkling soft drinks and the juice, dairy, and plant-based beverages cluster. |
North America |
• | Price/mix growth of 2% for the quarter, including sparkling price/mix growth of 3%, reflected the continued execution of the Company's disciplined occasion, brand, price, package, and channel strategy, as well as strong performance in the foodservice business. Acquisitions, divestitures, and structural items reflected the impact of the ongoing refranchising of bottling territories in North America. |
• | Unit case volume grew 1% for the quarter. Sparkling soft drinks volume growth was even. Juice, dairy, and plant-based beverages declined 1% as mid single-digit growth in Minute Maid and Simply was offset by a decline in Hi-C. Tea and coffee grew 8%, while water, enhanced water, and sports drinks accelerated to 3% growth. |
• | Income from continuing operations before income taxes for the quarter included items impacting comparability. Comparable currency neutral income from continuing operations before income taxes (non-GAAP) was favorably impacted by the ongoing refranchising of bottling territories in North America. |
• | The Company gained value share in total NARTD beverages for the full year, including sparkling soft drinks and the tea and coffee cluster. |
Asia Pacific |
• | Price/mix declined 2% during the quarter, largely due to pressure from product mix within China and the ASEAN business unit. |
• | Unit case volume growth of 2% for the quarter was driven by high single-digit growth in the ASEAN business unit, partially offset by a 1% decline in both the Greater China & Korea business unit and Japan. The decline in China was largely due to timing of the Chinese New Year. |
• | Income from continuing operations before income taxes for the quarter included the impact of changes in foreign currency exchange rates. Comparable currency neutral income from continuing operations before income taxes (non-GAAP) was favorably impacted by the deconsolidation of previously held bottling operations in China. |
• | The Company gained or maintained value share in sparkling soft drinks and juice, dairy, and plant-based beverages for the full year. |
Bottling Investments |
• | Price/mix growth of 15% for the quarter was largely driven by the timing of various bottler funding settlements and positive price/mix within the India bottling operations. |
• | Income from continuing operations before income taxes for the quarter was driven by items impacting comparability and the impact of changes in foreign currency exchange rates. Comparable currency |
Outlook |
• | Approximately 4% growth in organic revenues (non-GAAP) |
• | 8% to 9% growth in comparable currency neutral operating income (structurally adjusted) (non-GAAP) |
• | Comparable net revenues (non-GAAP): 1% tailwind based on the current rates and including the impact of hedged positions |
• | Comparable operating income (non-GAAP): 0% to 1% headwind based on the current rates and including the impact of hedged positions |
• | Comparable net revenues (non-GAAP): 17% headwind from acquisitions, divestitures, and structural items |
• | Comparable net revenues (non-GAAP): 1% to 2% tailwind from Accounting Standards Update 2014-09 |
• | Comparable operating income (non-GAAP): 2% structural headwind |
• | Comparable operating income (non-GAAP): 0% impact from Accounting Standards Update 2014-09 |
• | Underlying effective tax rate (non-GAAP): Approximately 21% |
• | Cash from operations of at least $8.5 billion |
• | Capital expenditures (excluding discontinued operations): Approximately $1.9 billion |
• | Net share repurchases (non-GAAP): Approximately $1.0 billion |
• | Comparable EPS from continuing operations (non-GAAP): 8% to 10% growth versus $1.91 in 2017 |
• | Comparable net revenues (non-GAAP): 26% headwind from acquisitions, divestitures, and structural items; 2% currency tailwind based on the current rates and including the impact of hedged positions; 1% tailwind from Accounting Standards Update 2014-09 |
• | Comparable operating income (non-GAAP): 6% structural headwind; 1% currency tailwind based on the current rates and including the impact of hedged positions |
• | One less day compared to first quarter 2017 |
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 for the fourth quarter, unless otherwise noted, and are computed on a reported basis for the full year. "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 the geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For the 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. The 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 were impacted by one additional day as compared to the same periods in 2016. Unit case volume results for the quarters were not impacted by the 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 | ||||||||||
December 31, 2017 | December 31, 2016 | % Change | ||||||||
Net Operating Revenues | $ | 7,512 | $ | 9,409 | (20 | ) | ||||
Cost of goods sold | 2,689 | 3,794 | (29 | ) | ||||||
Gross Profit | 4,823 | 5,615 | (14 | ) | ||||||
Selling, general and administrative expenses | 2,836 | 3,580 | (21 | ) | ||||||
Other operating charges | 666 | 680 | (2 | ) | ||||||
Operating Income | 1,321 | 1,355 | (3 | ) | ||||||
Interest income | 182 | 170 | 8 | |||||||
Interest expense | 210 | 248 | (15 | ) | ||||||
Equity income (loss) — net | 188 | 157 | 20 | |||||||
Other income (loss) — net | (544 | ) | (919 | ) | 41 | |||||
Income from Continuing Operations Before Income Taxes | 937 | 515 | 82 | |||||||
Income taxes from continuing operations | 3,755 | (32 | ) | — | ||||||
Net Income (Loss) from Continuing Operations | (2,818 | ) | 547 | — | ||||||
Income from discontinued operations (net of income taxes of $47 and $0, respectively) | 101 | — | — | |||||||
Consolidated Net Income (Loss) | (2,717 | ) | 547 | — | ||||||
Less: Net income (loss) attributable to noncontrolling interests | 35 | (3 | ) | — | ||||||
Net Income (Loss) Attributable to Shareowners of The Coca-Cola Company | $ | (2,752 | ) | $ | 550 | — | ||||
Basic net income (loss) per share from continuing operations1 | $ | (0.66 | ) | $ | 0.13 | — | ||||
Basic net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Basic Net Income (Loss) Per Share | $ | (0.65 | ) | $ | 0.13 | — | ||||
Average Shares Outstanding — Basic | 4,261 | 4,303 | ||||||||
Diluted net income (loss) per share from continuing operations1 | $ | (0.66 | ) | $ | 0.13 | — | ||||
Diluted net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Diluted Net Income (Loss) Per Share | $ | (0.65 | ) | $ | 0.13 | — | ||||
Average Shares Outstanding — Diluted | 4,261 | 4,345 | ||||||||
1 | Calculated based on net income (loss) from continuing operations less net income (loss) from continuing operations attributable to noncontrolling interests. |
2 | Calculated based on net income from discontinued operations less net income from discontinued operations attributable to noncontrolling interests. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Income | ||||||||||
(UNAUDITED) | ||||||||||
(In millions except per share data) | ||||||||||
Year Ended | ||||||||||
December 31, 2017 | December 31, 2016 | % Change | ||||||||
Net Operating Revenues | $ | 35,410 | $ | 41,863 | (15 | ) | ||||
Cost of goods sold | 13,256 | 16,465 | (19 | ) | ||||||
Gross Profit | 22,154 | 25,398 | (13 | ) | ||||||
Selling, general and administrative expenses | 12,496 | 15,262 | (18 | ) | ||||||
Other operating charges | 2,157 | 1,510 | 43 | |||||||
Operating Income | 7,501 | 8,626 | (13 | ) | ||||||
Interest income | 677 | 642 | 6 | |||||||
Interest expense | 841 | 733 | 15 | |||||||
Equity income (loss) — net | 1,071 | 835 | 28 | |||||||
Other income (loss) — net | (1,666 | ) | (1,234 | ) | (35 | ) | ||||
Income from Continuing Operations Before Income Taxes | 6,742 | 8,136 | (17 | ) | ||||||
Income taxes from continuing operations | 5,560 | 1,586 | 251 | |||||||
Net Income from Continuing Operations | 1,182 | 6,550 | (82 | ) | ||||||
Income from discontinued operations (net of income taxes of $47 and $0, respectively) | 101 | — | — | |||||||
Consolidated Net Income | 1,283 | 6,550 | (80 | ) | ||||||
Less: Net income attributable to noncontrolling interests | 35 | 23 | 55 | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 1,248 | $ | 6,527 | (81 | ) | ||||
Basic net income per share from continuing operations1 | $ | 0.28 | $ | 1.51 | (82 | ) | ||||
Basic net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Basic Net Income Per Share | $ | 0.29 | $ | 1.51 | (81 | ) | ||||
Average Shares Outstanding — Basic | 4,272 | 4,317 | ||||||||
Diluted net income per share from continuing operations1 | $ | 0.27 | $ | 1.49 | (82 | ) | ||||
Diluted net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Diluted Net Income Per Share | $ | 0.29 | $ | 1.49 | (81 | ) | ||||
Average Shares Outstanding — Diluted | 4,324 | 4,367 | ||||||||
1 | Calculated based on net income from continuing operations less net income from continuing operations attributable to noncontrolling interests. |
2 | Calculated based on net income from discontinued operations less net income from discontinued operations attributable to noncontrolling interests. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(UNAUDITED) | |||||||
(In millions except par value) | |||||||
December 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 6,006 | $ | 8,555 | |||
Short-term investments | 9,352 | 9,595 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 15,358 | 18,150 | |||||
Marketable securities | 5,317 | 4,051 | |||||
Trade accounts receivable, less allowances of $477 and $466, respectively | 3,667 | 3,856 | |||||
Inventories | 2,655 | 2,675 | |||||
Prepaid expenses and other assets | 2,000 | 2,481 | |||||
Assets held for sale | 219 | 2,797 | |||||
Assets held for sale — discontinued operations | 7,329 | — | |||||
Total Current Assets | 36,545 | 34,010 | |||||
Equity Method Investments | 20,856 | 16,260 | |||||
Other Investments | 1,096 | 989 | |||||
Other Assets | 4,560 | 4,248 | |||||
Property, Plant and Equipment — net | 8,203 | 10,635 | |||||
Trademarks With Indefinite Lives | 6,729 | 6,097 | |||||
Bottlers' Franchise Rights With Indefinite Lives | 138 | 3,676 | |||||
Goodwill | 9,401 | 10,629 | |||||
Other Intangible Assets | 368 | 726 | |||||
Total Assets | $ | 87,896 | $ | 87,270 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 8,748 | $ | 9,490 | |||
Loans and notes payable | 13,205 | 12,498 | |||||
Current maturities of long-term debt | 3,298 | 3,527 | |||||
Accrued income taxes | 410 | 307 | |||||
Liabilities held for sale | 37 | 710 | |||||
Liabilities held for sale — discontinued operations | 1,496 | — | |||||
Total Current Liabilities | 27,194 | 26,532 | |||||
Long-Term Debt | 31,182 | 29,684 | |||||
Other Liabilities | 8,021 | 4,081 | |||||
Deferred Income Taxes | 2,522 | 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 | 15,864 | 14,993 | |||||
Reinvested earnings | 60,430 | 65,502 | |||||
Accumulated other comprehensive income (loss) | (10,305 | ) | (11,205 | ) | |||
Treasury stock, at cost — 2,781 and 2,752 shares, respectively | (50,677 | ) | (47,988 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 17,072 | 23,062 | |||||
Equity Attributable to Noncontrolling Interests | 1,905 | 158 | |||||
Total Equity | 18,977 | 23,220 | |||||
Total Liabilities and Equity | $ | 87,896 | $ | 87,270 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Year Ended | |||||||
December 31, 2017 | December 31, 2016 | ||||||
Operating Activities | |||||||
Consolidated net income | $ | 1,283 | $ | 6,550 | |||
(Income) loss from discontinued operations | (101 | ) | — | ||||
Net income from continuing operations | 1,182 | 6,550 | |||||
Depreciation and amortization | 1,260 | 1,787 | |||||
Stock-based compensation expense | 219 | 258 | |||||
Deferred income taxes | (1,256 | ) | (856 | ) | |||
Equity (income) loss — net of dividends | (628 | ) | (449 | ) | |||
Foreign currency adjustments | 281 | 158 | |||||
Significant (gains) losses on sales of assets — net | 1,459 | 1,146 | |||||
Other operating charges | 1,218 | 647 | |||||
Other items | (269 | ) | (224 | ) | |||
Net change in operating assets and liabilities | 3,529 | (221 | ) | ||||
Net cash provided by operating activities | 6,995 | 8,796 | |||||
Investing Activities | |||||||
Purchases of investments | (16,520 | ) | (15,499 | ) | |||
Proceeds from disposals of investments | 15,911 | 16,624 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (3,900 | ) | (838 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 3,821 | 1,035 | |||||
Purchases of property, plant and equipment | (1,675 | ) | (2,262 | ) | |||
Proceeds from disposals of property, plant and equipment | 104 | 150 | |||||
Other investing activities | (126 | ) | (209 | ) | |||
Net cash provided by (used in) investing activities | (2,385 | ) | (999 | ) | |||
Financing Activities | |||||||
Issuances of debt | 29,857 | 27,281 | |||||
Payments of debt | (28,768 | ) | (25,615 | ) | |||
Issuances of stock | 1,595 | 1,434 | |||||
Purchases of stock for treasury | (3,682 | ) | (3,681 | ) | |||
Dividends | (6,320 | ) | (6,043 | ) | |||
Other financing activities | (91 | ) | 79 | ||||
Net cash provided by (used in) financing activities | (7,409 | ) | (6,545 | ) | |||
Cash Flows from Discontinued Operations | |||||||
Net cash provided by (used in) operating activities | 111 | — | |||||
Net cash provided by (used in) investing activities | (65 | ) | — | ||||
Net cash provided by (used in) financing activities | (38 | ) | — | ||||
Net cash provided by (used in) discontinued operations | 8 | — | |||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 242 | (6 | ) | ||||
Cash and Cash Equivalents | |||||||
Net increase (decrease) during the year | (2,549 | ) | 1,246 | ||||
Balance at beginning of year | 8,555 | 7,309 | |||||
Balance at end of year | $ | 6,006 | $ | 8,555 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues 1 | Operating Income (Loss) | Income (Loss) from Continuing Operations Before Income Taxes | |||||||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 1,746 | $ | 1,645 | 6 | $ | 762 | $ | 779 | (2 | ) | $ | 748 | $ | 799 | (6 | ) | ||||||||||||||||
Latin America | 1,118 | 982 | 14 | 589 | 481 | 23 | 584 | 481 | 21 | ||||||||||||||||||||||||
North America | 2,622 | 2,473 | 6 | 611 | 600 | 2 | 596 | 582 | 2 | ||||||||||||||||||||||||
Asia Pacific | 1,029 | 1,039 | (1 | ) | 328 | 332 | (2 | ) | 326 | 335 | (2 | ) | |||||||||||||||||||||
Bottling Investments | 1,268 | 4,138 | (69 | ) | (138 | ) | (359 | ) | 62 | (615 | ) | (1,026 | ) | 40 | |||||||||||||||||||
Corporate | 16 | 37 | (56 | ) | (831 | ) | (478 | ) | (74 | ) | (702 | ) | (656 | ) | (7 | ) | |||||||||||||||||
Eliminations | (287 | ) | (905 | ) | 68 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 7,512 | $ | 9,409 | (20 | ) | $ | 1,321 | $ | 1,355 | (3 | ) | $ | 937 | $ | 515 | 82 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues 1 | Operating Income (Loss) | Income (Loss) from Continuing Operations Before Income Taxes | |||||||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | December 31, 2017 | December 31, 2016 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 7,374 | $ | 7,278 | 1 | $ | 3,646 | $ | 3,676 | (1 | ) | $ | 3,706 | $ | 3,749 | (1 | ) | ||||||||||||||||
Latin America | 4,029 | 3,819 | 5 | 2,214 | 1,951 | 14 | 2,211 | 1,966 | 12 | ||||||||||||||||||||||||
North America | 10,637 | 10,210 | 4 | 2,578 | 2,582 | 0 | 2,307 | 2,560 | (10 | ) | |||||||||||||||||||||||
Asia Pacific | 5,176 | 5,294 | (2 | ) | 2,163 | 2,224 | (3 | ) | 2,179 | 2,238 | (3 | ) | |||||||||||||||||||||
Bottling Investments | 10,605 | 19,885 | (47 | ) | (1,117 | ) | (137 | ) | (713 | ) | (2,345 | ) | (1,923 | ) | (22 | ) | |||||||||||||||||
Corporate | 138 | 132 | 5 | (1,983 | ) | (1,670 | ) | (19 | ) | (1,316 | ) | (454 | ) | (190 | ) | ||||||||||||||||||
Eliminations | (2,549 | ) | (4,755 | ) | 46 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 35,410 | $ | 41,863 | (15 | ) | $ | 7,501 | $ | 8,626 | (13 | ) | $ | 6,742 | $ | 8,136 | (17 | ) |
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, 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, the Company refranchised its bottling operations in China to the two local franchise bottlers. The impact of these refranchising activities has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Asia Pacific and Bottling Investments operating segments. Also in 2017, the Company remeasured our previously held equity method interest in Coca-Cola Beverages Africa Proprietary Limited ("CCBA") as a result of obtaining a controlling interest. The impact of this transaction has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Europe, Middle East and Africa operating segment. 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 from continuing operations 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 years ended December 31, 2017 and December 31, 2016 consisted of the structural changes discussed above. Additionally, during the year ended December 31, 2017, organic revenues (non-GAAP) were adjusted, both on a consolidated basis and for our Asia Pacific operating segment, for the revenues generated by the Company's plant-based protein beverages in China that were acquired in 2016. Organic revenues (non-GAAP) were also adjusted, both on a consolidated basis and for our North America operating segment, for the revenues generated by the Topo Chico premium sparkling water brand whose U.S. rights were acquired in 2017. |
• | "Comparable operating margin" and "comparable income from continuing operations 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 from continuing operations before income taxes" and "comparable currency neutral income from continuing operations 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 from continuing operations 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 from continuing operations before income taxes (non-GAAP) growth, comparable currency neutral income from continuing operations before income taxes (non-GAAP) growth and comparable currency neutral income from continuing operations 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 from continuing operations" and "comparable currency neutral EPS from continuing operations" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability |
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 from continuing operations before income taxes, which 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 December 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) | $ | 7,512 | $ | 2,689 | $ | 4,823 | 64.2 | % | $ | 2,836 | $ | 666 | $ | 1,321 | 17.6 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | ||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (295 | ) | 295 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (118 | ) | 118 | |||||||||||||||||||||||||
Other Items | — | 1 | (1 | ) | (1 | ) | (253 | ) | 253 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 7,512 | $ | 2,690 | $ | 4,822 | 64.2 | % | $ | 2,835 | $ | — | $ | 1,987 | 26.5 | % | ||||||||||||||||
Three Months Ended December 31, 2016 | ||||||||||||||||||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Gross margin | Selling, general and administrative expenses | Other operating charges | Operating income | Operating margin | |||||||||||||||||||||||||
Reported (GAAP) | $ | 9,409 | $ | 3,794 | $ | 5,615 | 59.7 | % | $ | 3,580 | $ | 680 | $ | 1,355 | 14.4 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (153 | ) | 153 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (165 | ) | 165 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (249 | ) | 249 | |||||||||||||||||||||||||
Other Items | (34 | ) | 16 | (50 | ) | 6 | (113 | ) | 57 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 9,375 | $ | 3,810 | $ | 5,565 | 59.4 | % | $ | 3,586 | $ | — | $ | 1,979 | 21.1 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (20) | (29) | (14) | (21) | (2) | (3) | ||||||||||||||||||||||||||
% Currency Impact | 0 | 1 | 0 | 1 | — | (3) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (20) | (30) | (14) | (22) | — | 1 | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (20) | (29) | (13) | (21) | — | 0 | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 1 | 1 | 0 | 1 | — | (1) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (20) | (30) | (14) | (22) | — | 1 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations1 | Effective tax rate | Net income (loss) from continuing operations | Diluted net income (loss) per share from continuing operations | 2 | |||||||||||||||||||||||||
Reported (GAAP) | $ | 210 | $ | 188 | $ | (544 | ) | $ | 937 | $ | 3,755 | 400.6 | % | $ | (2,818 | ) | $ | (0.66 | ) | 4 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 295 | 103 | 192 | 0.05 | ||||||||||||||||||||||||||
Equity Investees | — | 55 | — | 55 | 13 | 42 | 0.01 | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 543 | 661 | 255 | 406 | 0.10 | ||||||||||||||||||||||||||
Other Items | — | — | 2 | 255 | 96 | 159 | 0.04 | ||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (3,693 | ) | 3,693 | 0.87 | |||||||||||||||||||||||||
Impact of Dilutive Securities | — | — | — | — | — | — | (0.01 | ) | |||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 210 | $ | 243 | $ | 1 | $ | 2,203 | $ | 529 | 24.0 | % | $ | 1,674 | $ | 0.39 | 4,5 | ||||||||||||||||
Three Months Ended December 31, 2016 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations1 | Effective tax rate | Net income (loss) from continuing operations | Diluted net income (loss) per share from continuing operations | 3 | |||||||||||||||||||||||||
Reported (GAAP) | $ | 248 | $ | 157 | $ | (919 | ) | $ | 515 | $ | (32 | ) | (6.3 | )% | $ | 547 | $ | 0.13 | 4 | ||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 153 | 56 | 97 | 0.02 | ||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 165 | 57 | 108 | 0.02 | ||||||||||||||||||||||||||
Equity Investees | — | 26 | — | 26 | 3 | 23 | 0.01 | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 813 | 1,062 | 361 | 701 | 0.16 | ||||||||||||||||||||||||||
Other Items | — | — | 73 | 130 | 21 | 109 | 0.03 | ||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (5 | ) | 5 | — | |||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 248 | $ | 183 | $ | (33 | ) | $ | 2,051 | $ | 461 | 22.5 | % | $ | 1,590 | $ | 0.37 | 4 | |||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | Net income (loss) from continuing operations | Diluted net income (loss) per share from continuing operations | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (15) | 20 | 41 | 82 | — | — | — | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (15) | 32 | — | 7 | 15 | 5 | 7 |
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 investments in foreign subsidiaries that are now expected to reverse in the foreseeable future. |
2 | 4,261 million average shares outstanding — diluted |
3 | 4,345 million average shares outstanding — diluted |
4 | Calculated based on net income (loss) from continuing operations less net income (loss) attributable to noncontrolling interests from continuing operations of $1 million and $(3) million for the three months ended December 31, 2017 and December 31, 2016, respectively. |
5 | Calculated using average shares outstanding of 4,315 million (average shares outstanding — basic of 4,261 million plus the dilutive effect of securities of 54 million). |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||||||||
Year Ended December 31, 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) | $ | 35,410 | $ | 13,256 | $ | 22,154 | 62.6 | % | $ | 12,496 | $ | 2,157 | $ | 7,501 | 21.2 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (737 | ) | 737 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (650 | ) | 650 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | (3 | ) | 3 | — | (438 | ) | 441 | ||||||||||||||||||||||||
Other Items | 6 | (28 | ) | 34 | (2 | ) | (332 | ) | 368 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 35,416 | $ | 13,225 | $ | 22,191 | 62.7 | % | $ | 12,494 | $ | — | $ | 9,697 | 27.4 | % | ||||||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Gross margin | Selling, general and administrative expenses | Other operating charges | Operating income | Operating margin | |||||||||||||||||||||||||
Reported (GAAP) | $ | 41,863 | $ | 16,465 | $ | 25,398 | 60.7 | % | $ | 15,262 | $ | 1,510 | $ | 8,626 | 20.6 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (393 | ) | 393 | |||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | — | (352 | ) | 352 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (456 | ) | 456 | |||||||||||||||||||||||||
Other Items | (9 | ) | 148 | (157 | ) | 21 | (309 | ) | 131 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 41,854 | $ | 16,613 | $ | 25,241 | 60.3 | % | $ | 15,283 | $ | — | $ | 9,958 | 23.8 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (15) | (19) | (13) | (18) | 43 | (13) | ||||||||||||||||||||||||||
% Currency Impact | (1) | 0 | (1) | 0 | — | (3) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (15) | (19) | (12) | (18) | — | (10) | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (15) | (20) | (12) | (18) | — | (3) | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (1) | 0 | (1) | 0 | — | (2) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (15) | (20) | (11) | (18) | — | 0 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 2 | |||||||||||||||||||||||||
Reported (GAAP) | $ | 841 | $ | 1,071 | $ | (1,666 | ) | $ | 6,742 | $ | 5,560 | 82.5 | % | $ | 1,182 | $ | 0.27 | 4 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | 50 | 787 | 156 | 631 | 0.15 | ||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 650 | 230 | 420 | 0.10 | ||||||||||||||||||||||||||
Equity Investees | — | 92 | — | 92 | 22 | 70 | 0.02 | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 1,771 | 2,212 | 83 | 2,129 | 0.49 | ||||||||||||||||||||||||||
Other Items | (38 | ) | — | — | 406 | 146 | 260 | 0.06 | |||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (3,583 | ) | 3,583 | 0.83 | |||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 803 | $ | 1,163 | $ | 155 | $ | 10,889 | $ | 2,614 | 24.0 | % | $ | 8,275 | $ | 1.91 | 4 | ||||||||||||||||
Year Ended December 31, 2016 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 3 | |||||||||||||||||||||||||
Reported (GAAP) | $ | 733 | $ | 835 | $ | (1,234 | ) | $ | 8,136 | $ | 1,586 | 19.5 | % | $ | 6,550 | $ | 1.49 | 4 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 393 | 56 | 337 | 0.08 | ||||||||||||||||||||||||||
Productivity & Reinvestment | — | — | — | 352 | 122 | 230 | 0.05 | ||||||||||||||||||||||||||
Equity Investees | — | 61 | — | 61 | 11 | 50 | 0.01 | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 1,167 | 1,623 | 724 | 899 | 0.21 | ||||||||||||||||||||||||||
Other Items | — | — | 113 | 244 | 22 | 222 | 0.05 | ||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (89 | ) | 89 | 0.02 | |||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 733 | $ | 896 | $ | 46 | $ | 10,809 | $ | 2,432 | 22.5 | % | $ | 8,377 | $ | 1.91 | 4 | ||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | Net income (loss) from continuing operations | Diluted net income per share from continuing operations | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | 15 | 28 | (35) | (17) | 251 | (82) | (82) | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 10 | 30 | 240 | 1 | 7 | (1) | 0 |
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 investments in foreign subsidiaries that are now expected to reverse in the foreseeable future. |
2 | 4,324 million average shares outstanding — diluted |
3 | 4,367 million average shares outstanding — diluted |
4 | Calculated based on net income from continuing operations less net income (loss) attributable to noncontrolling interests from continuing operations of $1 million and $23 million for the years ended December 31, 2017 and December 31, 2016, respectively. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||
(UNAUDITED) | |||||
Income from Continuing Operations Before Income Taxes and Diluted Net Income Per Share from Continuing Operations: | |||||
Three Months Ended December 31, 2017 | |||||
Income from continuing operations before income taxes | Diluted net income per share from continuing operations | ||||
% Change — Reported (GAAP) | 82 | — | |||
% Currency Impact | 14 | — | |||
% Change — Currency Neutral (Non-GAAP) | 68 | — | |||
% Structural Impact | (102) | — | |||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | 161 | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | 75 | (630) | |||
% Change — Comparable (Non-GAAP) | 7 | 7 | |||
% Comparable Currency Impact (Non-GAAP) | 2 | 2 | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 6 | 5 | |||
% Comparable Structural Impact (Non-GAAP) | (12) | — | |||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 18 | — | |||
Year Ended December 31, 2017 | |||||
Income from continuing operations before income taxes | Diluted net income per share from continuing operations | ||||
% Change — Reported (GAAP) | (17) | (82) | |||
% Currency Impact | 0 | 0 | |||
% Change — Currency Neutral (Non-GAAP) | (17) | (82) | |||
% Structural Impact | (4) | — | |||
% Change — Currency Neutral (Structurally Adjusted) (Non-GAAP) | (13) | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | (18) | (82) | |||
% Change — Comparable (Non-GAAP) | 1 | 0 | |||
% Comparable Currency Impact (Non-GAAP) | (1) | (1) | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 2 | 1 | |||
% Comparable Structural Impact (Non-GAAP) | (7) | — | |||
% Change — Comparable Currency Neutral (Structurally Adjusted) (Non-GAAP) | 9 | — | |||
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 December 31, 2017 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,746 | $ | 1,118 | $ | 2,622 | $ | 1,029 | $ | 1,268 | $ | 16 | $ | (287 | ) | $ | 7,512 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | (6 | ) | — | — | 6 | — | — | |||||||||||||||||
Comparable (Non-GAAP) | $ | 1,746 | $ | 1,118 | $ | 2,616 | $ | 1,029 | $ | 1,268 | $ | 22 | $ | (287 | ) | $ | 7,512 | |||||||||
Three Months Ended December 31, 2016 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,645 | $ | 982 | $ | 2,473 | $ | 1,039 | $ | 4,138 | $ | 37 | $ | (905 | ) | $ | 9,409 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | (7 | ) | — | — | (27 | ) | — | (34 | ) | |||||||||||||||
Comparable (Non-GAAP) | $ | 1,645 | $ | 982 | $ | 2,466 | $ | 1,039 | $ | 4,138 | $ | 10 | $ | (905 | ) | $ | 9,375 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 6 | 14 | 6 | (1) | (69) | (56) | 68 | (20) | ||||||||||||||||||
% Currency Impact | 3 | 1 | 0 | (4) | 1 | (25) | — | 0 | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 4 | 13 | 6 | 3 | (70) | (31) | — | (20) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | (4) | 0 | 3 | 2 | (83) | 0 | — | (26) | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 8 | 13 | 3 | 1 | 12 | (31) | — | 6 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 6 | 14 | 6 | (1) | (69) | 122 | — | (20) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 3 | 1 | 0 | (4) | 1 | 236 | — | 1 | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 4 | 13 | 6 | 3 | (70) | (114) | — | (20) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Net Operating Revenues by Operating Segment: | ||||||||||||||||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 7,374 | $ | 4,029 | $ | 10,637 | $ | 5,176 | $ | 10,605 | $ | 138 | $ | (2,549 | ) | $ | 35,410 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | (10 | ) | — | — | 16 | — | 6 | |||||||||||||||||
Comparable (Non-GAAP) | $ | 7,374 | $ | 4,029 | $ | 10,627 | $ | 5,176 | $ | 10,605 | $ | 154 | $ | (2,549 | ) | $ | 35,416 | |||||||||
Year Ended December 31, 2016 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 7,278 | $ | 3,819 | $ | 10,210 | $ | 5,294 | $ | 19,885 | $ | 132 | $ | (4,755 | ) | $ | 41,863 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | (18 | ) | — | — | 9 | — | (9 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 7,278 | $ | 3,819 | $ | 10,192 | $ | 5,294 | $ | 19,885 | $ | 141 | $ | (4,755 | ) | $ | 41,854 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 1 | 5 | 4 | (2) | (47) | 5 | 46 | (15) | ||||||||||||||||||
% Currency Impact | (2) | 0 | 0 | (4) | 0 | 10 | — | (1) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 3 | 5 | 4 | 1 | (47) | (5) | — | (15) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | (2) | 0 | 2 | 0 | (48) | 0 | — | (17) | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 5 | 6 | 3 | 1 | 1 | (5) | — | 3 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 1 | 5 | 4 | (2) | (47) | 10 | — | (15) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (2) | 0 | 0 | (4) | 0 | 14 | — | (1) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 5 | 4 | 1 | (47) | (5) | — | (15) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||
(UNAUDITED) | |||||
(In millions) | |||||
Core Business Revenues (Non-GAAP): 1 | |||||
Three Months Ended December 31, 2017 | |||||
Reported (GAAP) Net Operating Revenues | $ | 7,512 | |||
Bottling Investments Net Operating Revenues | (1,268 | ) | |||
Consolidated Eliminations | 287 | ||||
Intersegment Core Net Operating Revenue Eliminations | (4 | ) | |||
Core Business Revenues (Non-GAAP) | 6,527 | ||||
Items Impacting Comparability: | |||||
Other Items | — | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 6,527 | |||
Three Months Ended December 31, 2016 | |||||
Reported (GAAP) Net Operating Revenues | $ | 9,409 | |||
Bottling Investments Net Operating Revenues | (4,138 | ) | |||
Consolidated Eliminations | 905 | ||||
Intersegment Core Net Operating Revenue Eliminations | (1 | ) | |||
Core Business Revenues (Non-GAAP) | 6,175 | ||||
Items Impacting Comparability: | |||||
Other Items | (34 | ) | |||
Comparable Core Business Revenues (Non-GAAP) | $ | 6,141 | |||
% Change — Reported (GAAP) Net Operating Revenues | (20) | ||||
% Change — Core Business Revenues (Non-GAAP) | 6 | ||||
% Core Business Currency Impact (Non-GAAP) | 0 | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 6 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)2 | 5 | ||||
% Change — Comparable Core Business Revenues (Non-GAAP) | 6 | ||||
% Comparable Core Business Currency Impact (Non-GAAP) | 1 | ||||
% Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) | 6 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||
(UNAUDITED) | |||||
(In millions) | |||||
Core Business Revenues (Non-GAAP): 1 | |||||
Year Ended December 31, 2017 | |||||
Reported (GAAP) Net Operating Revenues | $ | 35,410 | |||
Bottling Investments Net Operating Revenues | (10,605 | ) | |||
Consolidated Eliminations | 2,549 | ||||
Intersegment Core Net Operating Revenue Eliminations | (18 | ) | |||
Core Business Revenues (Non-GAAP) | 27,336 | ||||
Items Impacting Comparability: | |||||
Other Items | 6 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 27,342 | |||
Year Ended December 31, 2016 | |||||
Reported (GAAP) Net Operating Revenues | $ | 41,863 | |||
Bottling Investments Net Operating Revenues | (19,885 | ) | |||
Consolidated Eliminations | 4,755 | ||||
Intersegment Core Net Operating Revenue Eliminations | (15 | ) | |||
Core Business Revenues (Non-GAAP) | 26,718 | ||||
Items Impacting Comparability: | |||||
Other Items | (9 | ) | |||
Comparable Core Business Revenues (Non-GAAP) | $ | 26,709 | |||
% Change — Reported (GAAP) Net Operating Revenues | (15) | ||||
% Change — Core Business Revenues (Non-GAAP) | 2 | ||||
% Core Business Currency Impact (Non-GAAP) | (1) | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 3 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)2 | 3 | ||||
% Change — Comparable Core Business Revenues (Non-GAAP) | 2 | ||||
% Comparable Core Business Currency Impact (Non-GAAP) | (1) | ||||
% Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) | 3 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Operating Income (Loss) by Operating Segment: | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 762 | $ | 589 | $ | 611 | $ | 328 | $ | (138 | ) | $ | (831 | ) | $ | 1,321 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | ||||||||||||||||
Productivity & Reinvestment | 24 | 4 | 110 | 6 | 18 | 133 | 295 | ||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 104 | 14 | 118 | ||||||||||||||||
Other Items | — | — | (5 | ) | — | 1 | 257 | 253 | |||||||||||||||
Comparable (Non-GAAP) | $ | 786 | $ | 593 | $ | 716 | $ | 334 | $ | (15 | ) | $ | (427 | ) | $ | 1,987 | |||||||
Three Months Ended December 31, 2016 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 779 | $ | 481 | $ | 600 | $ | 332 | $ | (359 | ) | $ | (478 | ) | $ | 1,355 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 153 | — | 153 | ||||||||||||||||
Productivity & Reinvestment | 26 | — | 54 | — | 22 | 63 | 165 | ||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 246 | 3 | 249 | ||||||||||||||||
Other Items | — | — | (16 | ) | — | (10 | ) | 83 | 57 | ||||||||||||||
Comparable (Non-GAAP) | $ | 805 | $ | 481 | $ | 638 | $ | 332 | $ | 52 | $ | (329 | ) | $ | 1,979 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (2) | 23 | 2 | (2) | 62 | (74) | (3) | ||||||||||||||||
% Currency Impact | 0 | 0 | 0 | (10) | 0 | (2) | (3) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (3) | 23 | 2 | 8 | 62 | (72) | 1 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (3) | 24 | 12 | 0 | — | (30) | 0 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 0 | 0 | 0 | (10) | — | 7 | (1) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (3) | 24 | 13 | 10 | — | (36) | 1 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Operating Income (Loss) by Operating Segment: | |||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 3,646 | $ | 2,214 | $ | 2,578 | $ | 2,163 | $ | (1,117 | ) | $ | (1,983 | ) | $ | 7,501 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 737 | — | 737 | ||||||||||||||||
Productivity & Reinvestment | 26 | 7 | 241 | 10 | 57 | 309 | 650 | ||||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 420 | 21 | 441 | ||||||||||||||||
Other Items | — | — | (14 | ) | — | 24 | 358 | 368 | |||||||||||||||
Comparable (Non-GAAP) | $ | 3,672 | $ | 2,221 | $ | 2,805 | $ | 2,173 | $ | 121 | $ | (1,295 | ) | $ | 9,697 | ||||||||
Year Ended December 31, 2016 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 3,676 | $ | 1,951 | $ | 2,582 | $ | 2,224 | $ | (137 | ) | $ | (1,670 | ) | $ | 8,626 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 393 | — | 393 | ||||||||||||||||
Productivity & Reinvestment | 32 | (2 | ) | 134 | 1 | 82 | 105 | 352 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 424 | 32 | 456 | ||||||||||||||||
Other Items | — | 76 | (47 | ) | — | (130 | ) | 232 | 131 | ||||||||||||||
Comparable (Non-GAAP) | $ | 3,708 | $ | 2,025 | $ | 2,669 | $ | 2,225 | $ | 632 | $ | (1,301 | ) | $ | 9,958 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (1) | 14 | 0 | (3) | (713) | (19) | (13) | ||||||||||||||||
% Currency Impact | (3) | 0 | (1) | (6) | 0 | 1 | (3) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 2 | 14 | 1 | 3 | (713) | (20) | (10) | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (1) | 10 | 5 | (2) | (81) | 0 | (3) | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (3) | 0 | (1) | (6) | 0 | 2 | (2) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 2 | 10 | 6 | 4 | (81) | (1) | 0 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations Before Income Taxes by Operating Segment: | |||||||||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 748 | $ | 584 | $ | 596 | $ | 326 | $ | (615 | ) | $ | (702 | ) | $ | 937 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | — | — | — | ||||||||||||||||||||||
Productivity & Reinvestment | 24 | 4 | 110 | 6 | 18 | 133 | 295 | ||||||||||||||||||||||
Equity Investees | — | — | 2 | — | 41 | 12 | 55 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 26 | — | 771 | (136 | ) | 661 | |||||||||||||||||||||
Other Items | — | — | (5 | ) | — | 1 | 259 | 255 | |||||||||||||||||||||
Comparable (Non-GAAP) | $ | 772 | $ | 588 | $ | 729 | $ | 332 | $ | 216 | $ | (434 | ) | $ | 2,203 | ||||||||||||||
Three Months Ended December 31, 2016 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 799 | $ | 481 | $ | 582 | $ | 335 | $ | (1,026 | ) | $ | (656 | ) | $ | 515 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 153 | — | 153 | ||||||||||||||||||||||
Productivity & Reinvestment | 26 | — | 54 | — | 22 | 63 | 165 | ||||||||||||||||||||||
Equity Investees | — | — | — | — | 20 | 6 | 26 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 15 | — | 1,044 | 3 | 1,062 | ||||||||||||||||||||||
Other Items | — | — | (16 | ) | — | (9 | ) | 155 | 130 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 825 | $ | 481 | $ | 635 | $ | 335 | $ | 204 | $ | (429 | ) | $ | 2,051 | ||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
% Change — Reported (GAAP) | (6) | 21 | 2 | (2) | 40 | (7) | 82 | ||||||||||||||||||||||
% Currency Impact | 0 | 0 | 0 | (10) | 2 | 14 | 14 | ||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (7) | 22 | 3 | 8 | 38 | (21) | 68 | ||||||||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | (1) | (13) | (2) | 35 | (5) | 75 | ||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (6) | 22 | 15 | (1) | 5 | (2) | 7 | ||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 0 | 0 | 0 | (10) | 9 | 12 | 2 | ||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (7) | 22 | 15 | 9 | (4) | (13) | 6 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations Before Income Taxes by Operating Segment: | |||||||||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 3,706 | $ | 2,211 | $ | 2,307 | $ | 2,179 | $ | (2,345 | ) | $ | (1,316 | ) | $ | 6,742 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 737 | 50 | 787 | ||||||||||||||||||||||
Productivity & Reinvestment | 26 | 7 | 241 | 10 | 57 | 309 | 650 | ||||||||||||||||||||||
Equity Investees | 4 | — | 2 | — | 70 | 16 | 92 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 313 | — | 2,560 | (661 | ) | 2,212 | |||||||||||||||||||||
Other Items | — | — | (14 | ) | — | 24 | 396 | 406 | |||||||||||||||||||||
Comparable (Non-GAAP) | $ | 3,736 | $ | 2,218 | $ | 2,849 | $ | 2,189 | $ | 1,103 | $ | (1,206 | ) | $ | 10,889 | ||||||||||||||
Year Ended December 31, 2016 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 3,749 | $ | 1,966 | $ | 2,560 | $ | 2,238 | $ | (1,923 | ) | $ | (454 | ) | $ | 8,136 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 393 | — | 393 | ||||||||||||||||||||||
Productivity & Reinvestment | 32 | (2 | ) | 134 | 1 | 82 | 105 | 352 | |||||||||||||||||||||
Equity Investees | — | — | — | — | 52 | 9 | 61 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 32 | — | 2,879 | (1,288 | ) | 1,623 | |||||||||||||||||||||
Other Items | — | 76 | (47 | ) | — | (129 | ) | 344 | 244 | ||||||||||||||||||||
Comparable (Non-GAAP) | $ | 3,781 | $ | 2,040 | $ | 2,679 | $ | 2,239 | $ | 1,354 | $ | (1,284 | ) | $ | 10,809 | ||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
% Change — Reported (GAAP) | (1) | 12 | (10) | (3) | (22) | (190) | (17) | ||||||||||||||||||||||
% Currency Impact | (2) | 0 | (1) | (6) | 1 | 45 | 0 | ||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 1 | 13 | (9) | 3 | (23) | (235) | (17) | ||||||||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 4 | (16) | 0 | (3) | (196) | (18) | ||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (1) | 9 | 6 | (2) | (19) | 6 | 1 | ||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (2) | 0 | (1) | (6) | 2 | 9 | (1) | ||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 1 | 9 | 7 | 4 | (20) | (3) | 2 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||
(UNAUDITED) | ||||||
(In millions) | ||||||
Operating Margin: | ||||||
Three Months Ended December 31, 2017 | Three Months Ended December 31, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 17.59 | % | 14.40 | % | 319 | |
Items Impacting Comparability (Non-GAAP) | (8.86 | )% | (6.71 | )% | ||
Comparable Operating Margin (Non-GAAP) | 26.45 | % | 21.11 | % | 534 | |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Basis Point Growth (Decline) | ||||
Reported (GAAP) | 21.18 | % | 20.61 | % | 57 | |
Items Impacting Comparability (Non-GAAP) | (6.20 | )% | (3.18 | )% | ||
Comparable Operating Margin (Non-GAAP) | 27.38 | % | 23.79 | % | 359 |
Purchases and Issuances of Stock: | ||||||||||
Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||
Reported (GAAP): | ||||||||||
Issuances of Stock | $ | 1,595 | $ | 1,434 | ||||||
Purchases of Stock for Treasury | (3,682 | ) | (3,681 | ) | ||||||
Net Change in Stock Issuance Receivables1 | 1 | 1 | ||||||||
Net Change in Treasury Stock Payables2 | 74 | (63 | ) | |||||||
Net Share Repurchases (Non-GAAP) | $ | (2,012 | ) | $ | (2,309 | ) |
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. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||
(UNAUDITED) | ||||||||||
(In millions) | ||||||||||
Consolidated Cash from Operations: | ||||||||||
Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||
Net Cash Provided by Operating Activities | Net Cash Provided by Operating Activities | |||||||||
Reported (GAAP): | $ | 6,995 | $ | 8,796 | ||||||
Items Impacting Comparability: | ||||||||||
Cash Payments for Pension Plan Contributions | 111 | 471 | ||||||||
Comparable (Non-GAAP) | $ | 7,106 | $ | 9,267 | ||||||
Net Cash Provided by Operating Activities | ||||||||||
% Change — Reported (GAAP) | (20) | |||||||||
% Change — Comparable (Non-GAAP) | (23) |
Free Cash Flow: | ||||||||||||||||
Year Ended December 31, 2017 | Year Ended December 31, 2016 | % Change | ||||||||||||||
Net Cash Provided by Operating Activities | $ | 6,995 | $ | 8,796 | (20 | ) | ||||||||||
Purchases of Property, Plant and Equipment | 1,675 | 2,262 | (26 | ) | ||||||||||||
Free Cash Flow (Non-GAAP) | $ | 5,320 | $ | 6,534 | (19 | ) |