Highlights |
Quarterly Performance |
• | Revenues: Net revenues declined 8% to $8.9 billion, impacted by a 15% headwind from the refranchising of company-owned bottling operations. Organic revenues (non-GAAP) grew 5%, driven by concentrate sales growth of more than 2% and price/mix growth of more than 2%. |
• | Volume: Unit case volume grew 2%. Growth was led by Trademark Coca-Cola, including continued double-digit growth for Coca-Cola Zero Sugar, and also reflects the continued strong performance of Fuze Tea. |
• | Margin: Operating margin, which included items impacting comparability, grew more than 950 basis points. Comparable operating margin (non-GAAP) expanded more than 300 basis points, driven by divestitures of lower-margin bottling operations and the company's ongoing productivity efforts, partially offset by an approximate 200 basis point headwind from the adoption of the new revenue recognition accounting standard and the impact of currency. |
• | Market share: The company continued to gain value share in total nonalcoholic ready-to-drink (NARTD) beverages. |
• | Cash flow: Year-to-date cash from operations was $2.6 billion, down 22%. The decline was largely due to the impact of more than $600 million from the year-over-year increase in tax payments in addition to the impact of the refranchising of North American bottling territories, partially offset by strong cash generation in the underlying business. Year-to-date free cash flow (non-GAAP) was $2.0 billion, down 20%. |
• | Share repurchases: Year-to-date purchases of stock for treasury were $1.3 billion. Year-to-date net share repurchases (non-GAAP) totaled $730 million. |
Company Updates |
• | Lifting, shifting and scaling brands around the world: The company expanded its footprint within the fast-growing, plant-based nourishment category with the launch of AdeZ in Europe by leveraging the brand edge of AdeS, a plant-based beverage originating in Latin America. Positioned as a premium offering, AdeZ will expand the company's presence beyond the beverage aisle into on-the-go snacking. AdeZ was launched in more than 10 European markets during the quarter and is on-track to be in 19 markets by the end of 2018. This rollout across a new continent, within a year after the acquisition of AdeS, illustrates the company’s ability to act with speed and agility in a rapidly changing consumer landscape. |
• | Reducing sugar while growing value: The company continued to execute on its strategy of delivering great-tasting sparkling beverages with less sugar. During the quarter, the company debuted Coca-Cola Stevia No Sugar in New Zealand, which is sweetened with 100% stevia. The company also expanded its Diet Coke brand re-stage into Great Britain, including the introduction of new flavors. Within North America, the company's no-sugar sparkling soft drink portfolio accelerated from the first quarter, resulting in 7% retail value growth, driven by Coca-Cola Zero Sugar and Diet Coke. |
• | Digitizing the enterprise: The company continues to embrace the growth of e-commerce and rethink how products are sold and delivered, not only to consumers but to customers as well. In North America, the company expanded coverage of the digital MyCoke platform, which allows retail customers to replenish beverage inventories and schedule future orders online. The MyCoke platform has led to over a 5% increase in sales revenue versus orders placed through traditional call centers, while reducing costs and further driving the Coca-Cola system's competitive edge. |
• | System commitment to drive shared opportunity: The system’s ongoing commitment to investment in capabilities and products was demonstrated by three significant announcements during the quarter. In the United States, Coca-Cola Southwest Beverages (CCSWB) announced plans to build a new production and distribution facility to expand the portfolio and help drive improved execution. The CCSWB plant in Houston will be the first built in the U.S. in over a decade. In China, the company and its bottling partner, Swire Group, celebrated the opening of one of the country's largest plants. The facility received a gold certification of Leadership in Energy and Environmental Design (LEED). In Canada, fairlife LLC – one of the company's joint ventures in value-added dairy – announced plans to build a new production facility in Ontario and introduce fairlife products in the Canadian market. |
• | Doing business the right way: The company has long been engaged in water conservation efforts throughout the world as part of its goal to replenish all of the water used in its beverages. The company accomplished this goal globally five years ahead of schedule and continues to invest in water replenishment programs. Earlier this year, the company announced its World Without Waste initiative, with goals that include collecting and recycling a bottle or can for every one the company sells by 2030. Each of the company’s business units has developed local plans to address the pillars of the World Without Waste program. For example, in Mexico, the company’s bottled water brand, Ciel, is now available in a 100% recycled PET bottle. The company plans to release its annual sustainability report in August. |
Operating Review – Three Months Ended June 29, 2018 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Items, Net | Accounting Changes2 | Reported Net Revenues | Organic Revenues3 | Unit Case Volume | ||
Consolidated | 2 | 2 | 1 | (15) | 2 | (8) | 5 | 2 | ||
Europe, Middle East & Africa | 3 | 4 | 2 | 1 | (3) | 7 | 7 | 1 | ||
Latin America | (1) | 12 | (6) | 2 | 1 | 8 | 11 | 0 | ||
North America | 2 | (3) | 0 | (1) | 10 | 7 | (1) | 1 | ||
Asia Pacific | 6 | 0 | 2 | 0 | (7) | 1 | 6 | 5 | ||
Bottling Investments | 10 | 1 | 0 | (72) | 3 | (59) | 11 | (11) |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral3 | Structural Items | Accounting Changes2 | Comparable Currency Neutral (Adjusted for Structural Items and Accounting Changes)3 |
Consolidated | 34 | 33 | (2) | 3 | (3) | (2) | 8 |
Europe, Middle East & Africa | 2 | (1) | (1) | 3 | |||
Latin America | 6 | 0 | (8) | 14 | |||
North America | (10) | (3) | 0 | (7) | |||
Asia Pacific | (1) | 0 | 1 | (2) | |||
Bottling Investments | 91 | 137 | (3) | (42) | |||
Percent Change | Reported EPS from Continuing Operations | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral3 | |||
Consolidated | 68 | 65 | (2) | 5 |
Consolidated |
• | Price/mix grew more than 2% for the quarter, driven by strong pricing and mix performance in the company's international operations. |
• | Unit case volume grew 2% in the quarter. Category cluster performance was as follows: |
◦ | Sparkling soft drinks: 2% |
◦ | Juice, dairy and plant-based beverages: -2% |
◦ | Water, enhanced water and sports drinks: 4% |
◦ | Tea and coffee: -1% |
• | Operating income was impacted by comparability items, predominantly charges associated with productivity and reinvestment initiatives, as well as structural items related to refranchising. Growth in comparable currency neutral operating income (adjusted for structural items and accounting changes) (non-GAAP) was driven by organic revenue (non-GAAP) growth and the benefit from ongoing productivity initiatives. |
Europe, Middle East & Africa |
• | Price/mix grew 4% for the quarter due to solid price/mix across all business units, partially offset by negative geographic mix as growth in emerging and developing markets outpaced developed markets. |
• | Unit case volume grew 1% in the quarter, as growth across the majority of the group's markets was partially offset by declines in South Africa and Western Europe. |
• | Operating income growth trailed revenue growth, largely due to the impact of currency and increased marketing investments related to key product launches. Product mix also impacted the quarter due to continued strong growth in innocent, a finished goods business. |
• | The company maintained value share in the juice, dairy and plant-based beverages cluster. |
Latin America |
• | Price/mix growth of 12% for the quarter was primarily driven by strong price/mix in Mexico, Brazil and the South Latin business unit. |
• | Unit case volume was even for the quarter, as growth in Mexico and Chile was offset by declines in Argentina and Brazil. |
• | The company gained value share in total NARTD beverages and gained or maintained value share in all category clusters. |
North America |
• | Price/mix declined 3% for the quarter as low single-digit pricing in the marketplace was offset by 1 point from increased freight costs, 1 point from the timing of deductions and approximately 2 points from business mix as performance in the concentrate business, notably sparkling soft drinks, outpaced the finished goods businesses, including juice and tea. |
• | Unit case volume grew 1% in the quarter. Sparkling soft drinks growth of 1% included continued double-digit growth in Coca-Cola Zero Sugar. Juice, dairy and plant-based beverages declined 6%, as growth in dairy was offset by a decline in juice, largely due to package downsizing across the juice portfolio and deprioritizing lower-margin juice drink brands. Tea and coffee declined 1% as solid growth in coffee was offset by a decline in tea, primarily due to package downsizing in Gold Peak tea. Water, enhanced water and sports drinks grew 5%, led by strong growth in Powerade and across the total |
• | Operating income was unfavorably impacted by a 5-point headwind from cycling the benefit of intercompany profit elimination in the prior year related to the refranchising of North American bottling operations, as well as increased input and freight costs. |
• | The company gained value share in total NARTD beverages along with sparkling soft drinks and the water, enhanced water and sports drinks cluster. |
Asia Pacific |
• | Price/mix was even for the quarter, as positive underlying pricing was offset by negative geographic mix due to growth in China and India outpacing developed markets, specifically Japan and Australia. |
• | Unit case volume growth of 5% in the quarter was driven by strong performance in China and India. All business units grew volume in the quarter, with the exception of South Pacific. |
• | The company maintained value share in total NARTD beverages and gained value share in sparkling soft drinks. |
Bottling Investments |
• | Price/mix grew 1% for the quarter, largely due to strong performance in India and benefiting from geographic mix. |
• | The operating loss for the quarter was largely driven by items impacting comparability. Comparable currency neutral operating income (non-GAAP) was unfavorably impacted by the refranchising of North American bottling territories and the deconsolidation of previously held bottling operations in China in the prior year. |
Operating Review – Six Months Ended June 29, 2018 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Items, Net | Accounting Changes2 | Reported Net Revenues | Organic Revenues3 | Unit Case Volume | ||
Consolidated | 3 | 2 | 1 | (21) | 2 | (12) | 5 | 3 | ||
Europe, Middle East & Africa | 5 | 2 | 4 | 1 | (3) | 9 | 7 | 3 | ||
Latin America | 0 | 9 | (3) | 1 | 1 | 8 | 9 | 0 | ||
North America | 2 | (2) | 0 | (1) | 11 | 9 | 0 | 2 | ||
Asia Pacific | 5 | (1) | 3 | (1) | (6) | 1 | 5 | 5 | ||
Bottling Investments | 11 | 1 | 1 | (82) | 3 | (67) | 12 | (23) |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral3 | Structural Items | Accounting Changes2 | Comparable Currency Neutral (Adjusted for Structural Items and Accounting Changes)3 |
Consolidated | 13 | 11 | 0 | 3 | (5) | (1) | 8 |
Europe, Middle East & Africa | 4 | 0 | 1 | 3 | |||
Latin America | 10 | 0 | (4) | 14 | |||
North America | (9) | (2) | 0 | (6) | |||
Asia Pacific | 2 | 0 | 1 | 0 | |||
Bottling Investments | 30 | 102 | (3) | (68) | |||
Percent Change | Reported EPS from Continuing Operations | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral3 | |||
Consolidated | 43 | 37 | 0 | 6 |
Outlook |
• | At least 4% growth in organic revenues (non-GAAP) – Updated |
• | At least 9% growth in comparable currency neutral operating income (adjusted for structural items and accounting changes) (non-GAAP) – Updated |
• | Comparable net revenues (non-GAAP): 1% headwind based on the current rates and including the impact of hedged positions – Updated |
• | Comparable operating income (non-GAAP): 4% headwind based on the current rates and including the impact of hedged positions – Updated |
• | Comparable net revenues (non-GAAP): 17% headwind from acquisitions, divestitures and structural items – No Change |
• | Comparable net revenues (non-GAAP): 1% to 2% tailwind from accounting changes – No Change |
• | Comparable operating income (non-GAAP): 2% structural headwind – No Change |
• | Comparable operating income (non-GAAP): 0% impact from accounting changes – No Change |
• | Underlying effective tax rate (non-GAAP): Estimated to be 21% – No Change |
• | Cash from operations of approximately $8.0 billion – Updated |
• | Capital expenditures (excluding discontinued operations): Approximately $1.7 billion – Updated |
• | Net share repurchases (non-GAAP): Approximately $1.0 billion – No Change |
• | Comparable EPS from continuing operations (non-GAAP): 8% to 10% growth versus $1.91 in 2017 – No Change |
• | Comparable net revenues (non-GAAP): 13% headwind from acquisitions, divestitures and structural items; 3% currency headwind based on the current rates and including the impact of hedged positions; 2% to 3% tailwind from accounting changes. |
• | Comparable operating income (non-GAAP): 2% structural headwind; 7% currency headwind based on the current rates and including the impact of hedged positions; 2% tailwind from accounting changes. |
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 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 net operating 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 2018 financial results were impacted by one less day, and fourth quarter 2018 financial results will be impacted by one additional day as compared to the same periods in 2017. Unit case volume results for the quarters are 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 | ||||||||||
June 29, 2018 | June 30, 2017 | % Change | ||||||||
Net Operating Revenues | $ | 8,927 | $ | 9,702 | (8 | ) | ||||
Cost of goods sold | 3,252 | 3,659 | (11 | ) | ||||||
Gross Profit | 5,675 | 6,043 | (6 | ) | ||||||
Selling, general and administrative expenses | 2,723 | 3,180 | (14 | ) | ||||||
Other operating charges | 225 | 826 | (73 | ) | ||||||
Operating Income | 2,727 | 2,037 | 34 | |||||||
Interest income | 170 | 165 | 3 | |||||||
Interest expense | 241 | 231 | 4 | |||||||
Equity income (loss) — net | 324 | 409 | (21 | ) | ||||||
Other income (loss) — net | (97 | ) | 244 | — | ||||||
Income from Continuing Operations Before Income Taxes | 2,883 | 2,624 | 10 | |||||||
Income taxes from continuing operations | 594 | 1,252 | (53 | ) | ||||||
Net Income from Continuing Operations | 2,289 | 1,372 | 67 | |||||||
Income from discontinued operations (net of income taxes of $16 and $0, respectively) | 42 | — | — | |||||||
Consolidated Net Income | 2,331 | 1,372 | 70 | |||||||
Less: Net income attributable to noncontrolling interests | 15 | 1 | 1,459 | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 2,316 | $ | 1,371 | 69 | |||||
Basic net income per share from continuing operations1 | $ | 0.54 | $ | 0.32 | 68 | |||||
Basic net income per share from discontinued operations2 | 0.01 | — | — | |||||||
Basic Net Income Per Share3 | $ | 0.54 | $ | 0.32 | 70 | |||||
Average Shares Outstanding — Basic | 4,255 | 4,273 | 0 | |||||||
Diluted net income per share from continuing operations1 | $ | 0.53 | $ | 0.32 | 68 | |||||
Diluted net income per share from discontinued operations2 | 0.01 | — | — | |||||||
Diluted Net Income Per Share | $ | 0.54 | $ | 0.32 | 70 | |||||
Average Shares Outstanding — Diluted | 4,290 | 4,327 | (1 | ) | ||||||
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. |
3 | Certain columns may not add due to rounding. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Income | ||||||||||
(UNAUDITED) | ||||||||||
(In millions except per share data) | ||||||||||
Six Months Ended | ||||||||||
June 29, 2018 | June 30, 2017 | % Change | ||||||||
Net Operating Revenues | $ | 16,553 | $ | 18,820 | (12 | ) | ||||
Cost of goods sold | 5,990 | 7,172 | (16 | ) | ||||||
Gross Profit | 10,563 | 11,648 | (9 | ) | ||||||
Selling, general and administrative expenses | 5,264 | 6,532 | (19 | ) | ||||||
Other operating charges | 761 | 1,116 | (32 | ) | ||||||
Operating Income | 4,538 | 4,000 | 13 | |||||||
Interest income | 335 | 320 | 5 | |||||||
Interest expense | 471 | 423 | 11 | |||||||
Equity income (loss) — net | 466 | 525 | (11 | ) | ||||||
Other income (loss) — net | (152 | ) | (291 | ) | 48 | |||||
Income from Continuing Operations Before Income Taxes | 4,716 | 4,131 | 14 | |||||||
Income taxes from continuing operations | 1,100 | 1,575 | (30 | ) | ||||||
Net Income from Continuing Operations | 3,616 | 2,556 | 41 | |||||||
Income from discontinued operations (net of income taxes of $56 and $0, respectively) | 115 | — | — | |||||||
Consolidated Net Income | 3,731 | 2,556 | 46 | |||||||
Less: Net income attributable to noncontrolling interests | 47 | 3 | 1,423 | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 3,684 | $ | 2,553 | 44 | |||||
Basic net income per share from continuing operations1 | $ | 0.85 | $ | 0.60 | 42 | |||||
Basic net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Basic Net Income Per Share3 | $ | 0.86 | $ | 0.60 | 45 | |||||
Average Shares Outstanding — Basic | 4,260 | 4,280 | 0 | |||||||
Diluted net income per share from continuing operations1 | $ | 0.84 | $ | 0.59 | 43 | |||||
Diluted net income per share from discontinued operations2 | 0.02 | — | — | |||||||
Diluted Net Income Per Share | $ | 0.86 | $ | 0.59 | 45 | |||||
Average Shares Outstanding — Diluted | 4,298 | 4,330 | (1 | ) | ||||||
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. |
3 | Certain columns may not add due to rounding. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(UNAUDITED) | |||||||
(In millions except par value) | |||||||
June 29, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 7,975 | $ | 6,006 | |||
Short-term investments | 5,843 | 9,352 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 13,818 | 15,358 | |||||
Marketable securities | 5,536 | 5,317 | |||||
Trade accounts receivable, less allowances of $487 and $477, respectively | 4,565 | 3,667 | |||||
Inventories | 2,881 | 2,655 | |||||
Prepaid expenses and other assets | 2,543 | 2,000 | |||||
Assets held for sale | — | 219 | |||||
Assets held for sale — discontinued operations | 6,681 | 7,329 | |||||
Total Current Assets | 36,024 | 36,545 | |||||
Equity Method Investments | 20,604 | 20,856 | |||||
Other Investments | 1,015 | 1,096 | |||||
Other Assets | 4,401 | 4,230 | |||||
Deferred Income Tax Assets | 2,999 | 330 | |||||
Property, Plant and Equipment — net | 7,688 | 8,203 | |||||
Trademarks With Indefinite Lives | 6,669 | 6,729 | |||||
Bottlers' Franchise Rights With Indefinite Lives | 38 | 138 | |||||
Goodwill | 9,863 | 9,401 | |||||
Other Intangible Assets | 292 | 368 | |||||
Total Assets | $ | 89,593 | $ | 87,896 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 10,842 | $ | 8,748 | |||
Loans and notes payable | 14,715 | 13,205 | |||||
Current maturities of long-term debt | 4,023 | 3,298 | |||||
Accrued income taxes | 362 | 410 | |||||
Liabilities held for sale | — | 37 | |||||
Liabilities held for sale — discontinued operations | 1,456 | 1,496 | |||||
Total Current Liabilities | 31,398 | 27,194 | |||||
Long-Term Debt | 28,063 | 31,182 | |||||
Other Liabilities | 7,367 | 8,021 | |||||
Deferred Income Tax Liabilities | 2,589 | 2,522 | |||||
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 | 16,117 | 15,864 | |||||
Reinvested earnings | 63,808 | 60,430 | |||||
Accumulated other comprehensive income (loss) | (11,774 | ) | (10,305 | ) | |||
Treasury stock, at cost — 2,787 and 2,781 shares, respectively | (51,588 | ) | (50,677 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 18,323 | 17,072 | |||||
Equity Attributable to Noncontrolling Interests | 1,853 | 1,905 | |||||
Total Equity | 20,176 | 18,977 | |||||
Total Liabilities and Equity | $ | 89,593 | $ | 87,896 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Six Months Ended | |||||||
Operating Activities | June 29, 2018 | June 30, 2017 | |||||
Consolidated net income | $ | 3,731 | $ | 2,556 | |||
(Income) loss from discontinued operations | (115 | ) | — | ||||
Net income from continuing operations | 3,616 | 2,556 | |||||
Depreciation and amortization | 553 | 629 | |||||
Stock-based compensation expense | 121 | 114 | |||||
Deferred income taxes | 5 | 620 | |||||
Equity (income) loss — net of dividends | (147 | ) | (303 | ) | |||
Foreign currency adjustments | (109 | ) | 33 | ||||
Significant (gains) losses on sales of assets — net | 98 | 259 | |||||
Other operating charges | 576 | 970 | |||||
Other items | 56 | (68 | ) | ||||
Net change in operating assets and liabilities | (2,161 | ) | (1,468 | ) | |||
Net cash provided by operating activities | 2,608 | 3,342 | |||||
Investing Activities | |||||||
Purchases of investments | (4,833 | ) | (10,435 | ) | |||
Proceeds from disposals of investments | 7,621 | 8,729 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (218 | ) | (520 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 304 | 2,055 | |||||
Purchases of property, plant and equipment | (612 | ) | (832 | ) | |||
Proceeds from disposals of property, plant and equipment | 62 | 42 | |||||
Other investing activities | 17 | (240 | ) | ||||
Net cash provided by (used in) investing activities | 2,341 | (1,201 | ) | ||||
Financing Activities | |||||||
Issuances of debt | 16,190 | 18,586 | |||||
Payments of debt | (16,643 | ) | (14,910 | ) | |||
Issuances of stock | 600 | 917 | |||||
Purchases of stock for treasury | (1,317 | ) | (2,197 | ) | |||
Dividends | (1,662 | ) | (1,584 | ) | |||
Other financing activities | (58 | ) | (15 | ) | |||
Net cash provided by (used in) financing activities | (2,890 | ) | 797 | ||||
Cash Flows from Discontinued Operations | |||||||
Net cash provided by (used in) operating activities | 78 | — | |||||
Net cash provided by (used in) investing activities | (87 | ) | — | ||||
Net cash provided by (used in) financing activities | 55 | — | |||||
Net cash provided by (used in) discontinued operations | 46 | — | |||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (109 | ) | 199 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | |||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period | 1,996 | 3,137 | |||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 6,373 | 8,850 | |||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 8,369 | 11,987 | |||||
Less: Restricted cash and restricted cash equivalents at end of period | 394 | 269 | |||||
Cash and cash equivalents at end of period | $ | 7,975 | $ | 11,718 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) from Continuing Operations Before Income Taxes | |||||||||||||||||||||||||||||||
June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 2,170 | $ | 2,037 | 7 | $ | 1,095 | $ | 1,076 | 2 | $ | 1,117 | $ | 1,111 | 0 | ||||||||||||||||||
Latin America | 1,031 | 950 | 8 | 593 | 559 | 6 | 541 | 559 | (3 | ) | |||||||||||||||||||||||
North America | 3,117 | 2,903 | 7 | 684 | 755 | (10 | ) | 699 | 659 | 6 | |||||||||||||||||||||||
Asia Pacific | 1,517 | 1,507 | 1 | 705 | 709 | (1 | ) | 712 | 716 | (1 | ) | ||||||||||||||||||||||
Bottling Investments | 1,235 | 2,998 | (59 | ) | (56 | ) | (651 | ) | 91 | 91 | (519 | ) | — | ||||||||||||||||||||
Corporate | 65 | 45 | 46 | (294 | ) | (411 | ) | 28 | (277 | ) | 98 | — | |||||||||||||||||||||
Eliminations | (208 | ) | (738 | ) | 72 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 8,927 | $ | 9,702 | (8 | ) | $ | 2,727 | $ | 2,037 | 34 | $ | 2,883 | $ | 2,624 | 10 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) from Continuing Operations Before Income Taxes | |||||||||||||||||||||||||||||||
June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | June 29, 2018 | June 30, 2017 | % Fav. / (Unfav.) | |||||||||||||||||||||||||
Europe, Middle East & Africa | $ | 4,011 | $ | 3,669 | 9 | $ | 2,009 | $ | 1,936 | 4 | $ | 2,044 | $ | 1,996 | 2 | ||||||||||||||||||
Latin America | 2,029 | 1,876 | 8 | 1,165 | 1,064 | 10 | 1,107 | 1,066 | 4 | ||||||||||||||||||||||||
North America | 5,797 | 5,320 | 9 | 1,215 | 1,329 | (9 | ) | 1,230 | 1,136 | 8 | |||||||||||||||||||||||
Asia Pacific | 2,735 | 2,715 | 1 | 1,270 | 1,250 | 2 | 1,286 | 1,265 | 2 | ||||||||||||||||||||||||
Bottling Investments | 2,286 | 6,834 | (67 | ) | (517 | ) | (740 | ) | 30 | (297 | ) | (1,065 | ) | 72 | |||||||||||||||||||
Corporate | 83 | 74 | 12 | (604 | ) | (839 | ) | 28 | (654 | ) | (267 | ) | (145 | ) | |||||||||||||||||||
Eliminations | (388 | ) | (1,668 | ) | 77 | — | — | — | — | — | — | ||||||||||||||||||||||
Consolidated | $ | 16,553 | $ | 18,820 | (12 | ) | $ | 4,538 | $ | 4,000 | 13 | $ | 4,716 | $ | 4,131 | 14 |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "Accounting changes" refer to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"), which was adopted by the Company effective January 1, 2018. |
• | "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 and distribution operations. In 2018, the Company refranchised certain bottling operations in Latin America. The impact of these transactions has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Latin America operating segments. In 2018, the Company acquired a controlling interest in the Oman bottler. The impact of this acquisition has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment. In 2017, 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. The impact of these transactions has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the applicable operating segments. In 2017, the Company also 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. These transactions were also included as structural items in our analysis of comparable currency neutral operating income (adjusted for structural items and accounting changes) (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 2018 versus 2017 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 operating margin" and "comparable operating income" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability (discussed further below). "Comparable currency neutral operating income" and "comparable currency neutral operating income (adjusted for structural items and accounting changes)" 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 operating income (adjusted for structural items and accounting changes) (non-GAAP) has also been adjusted for structural changes and accounting 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 operating income (non-GAAP) growth, comparable currency neutral operating income (non-GAAP) growth and comparable currency neutral operating income (adjusted for structural items and accounting changes) (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 (discussed further below). Comparable currency neutral EPS from continuing operations (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 from continuing operations (non-GAAP) and comparable currency neutral EPS from continuing operations (non-GAAP) growth measures enhance its ability to communicate the underlying operating results and provide investors with useful supplemental information to enhance their understanding of the Company's underlying business performance and trends by improving their ability to compare our period-to-period financial results. |
• | "Underlying effective tax rate" is a non-GAAP financial measure that represents the estimated annual effective income tax rate on income from continuing operations before income taxes, which excludes or has otherwise been adjusted for items impacting comparability (discussed further below). |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "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 29, 2018 | ||||||||||||||||||||||||||||||||
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) | $ | 8,927 | $ | 3,252 | $ | 5,675 | 63.6 | % | $ | 2,723 | $ | 225 | $ | 2,727 | 30.5 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (60 | ) | 60 | |||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (111 | ) | 111 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (37 | ) | 37 | |||||||||||||||||||||||||
Other Items | (24 | ) | (1 | ) | (23 | ) | (1 | ) | (17 | ) | (5 | ) | ||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 8,903 | $ | 3,251 | $ | 5,652 | 63.5 | % | $ | 2,722 | $ | — | $ | 2,930 | 32.9 | % | ||||||||||||||||
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 | % | $ | 3,180 | $ | 826 | $ | 2,037 | 21.0 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (653 | ) | 653 | |||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (87 | ) | 87 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (51 | ) | 51 | |||||||||||||||||||||||||
Other Items | 7 | (28 | ) | 35 | (1 | ) | (35 | ) | 71 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 9,709 | $ | 3,631 | $ | 6,078 | 62.6 | % | $ | 3,179 | $ | — | $ | 2,899 | 29.9 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (8) | (11) | (6) | (14) | (73) | 34 | ||||||||||||||||||||||||||
% Currency Impact | 1 | 1 | 0 | 1 | — | (1) | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (8) | (12) | (6) | (16) | — | 35 | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (8) | (10) | (7) | (14) | — | 1 | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 0 | 1 | 0 | 1 | — | (2) | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (9) | (11) | (7) | (16) | — | 3 |
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 29, 2018 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | 1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 2 | ||||||||||||||||||||||||
Reported (GAAP) | $ | 241 | $ | 324 | $ | (97 | ) | $ | 2,883 | $ | 594 | 20.6 | % | $ | 2,289 | $ | 0.53 | 4 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | 52 | 112 | 16 | 96 | 0.02 | ||||||||||||||||||||||||||
Productivity and Reinvestment | — | — | 39 | 150 | 34 | 116 | 0.03 | ||||||||||||||||||||||||||
Equity Investees | — | 33 | — | 33 | 1 | 32 | 0.01 | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 115 | 152 | 16 | 136 | 0.03 | ||||||||||||||||||||||||||
Other Items | — | — | (25 | ) | (30 | ) | (5 | ) | (25 | ) | (0.01 | ) | |||||||||||||||||||||
Certain Tax Matters | — | — | — | — | 37 | (37 | ) | (0.01 | ) | ||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 241 | $ | 357 | $ | 84 | $ | 3,300 | $ | 693 | 21.0 | % | $ | 2,607 | $ | 0.61 | 4 | ||||||||||||||||
Three Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | 1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 3 | ||||||||||||||||||||||||
Reported (GAAP) | $ | 231 | $ | 409 | $ | 244 | $ | 2,624 | $ | 1,252 | 47.7 | % | $ | 1,372 | $ | 0.32 | 4 | ||||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 653 | 156 | 497 | 0.11 | ||||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | 87 | 31 | 56 | 0.01 | ||||||||||||||||||||||||||
Equity Investees | — | (37 | ) | — | (37 | ) | (10 | ) | (27 | ) | (0.01 | ) | |||||||||||||||||||||
Transaction Gains/Losses | — | — | (133 | ) | (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 | $ | 109 | $ | 3,352 | $ | 805 | 24.0 | % | $ | 2,547 | $ | 0.59 | 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 from continuing operations | Diluted net income per share from continuing operations | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | 4 | (21) | — | 10 | (53) | 67 | 68 | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 25 | (4) | (22) | (2) | (14) | 2 | 3 |
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. |
2 | 4,290 million average shares outstanding — diluted |
3 | 4,327 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 $1 million for the three months ended June 29, 2018 and June 30, 2017, respectively. |
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 29, 2018 | ||||||||||||||||||||||||||||||||
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) | $ | 16,553 | $ | 5,990 | $ | 10,563 | 63.8 | % | $ | 5,264 | $ | 761 | $ | 4,538 | 27.4 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (450 | ) | 450 | |||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (206 | ) | 206 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (82 | ) | 82 | |||||||||||||||||||||||||
Other Items | (26 | ) | 8 | (34 | ) | (2 | ) | (23 | ) | (9 | ) | |||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 16,527 | $ | 5,998 | $ | 10,529 | 63.7 | % | $ | 5,262 | $ | — | $ | 5,267 | 31.9 | % | ||||||||||||||||
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 | % | $ | 6,532 | $ | 1,116 | $ | 4,000 | 21.3 | % | ||||||||||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | (737 | ) | 737 | |||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (226 | ) | 226 | |||||||||||||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | (3 | ) | 3 | — | (92 | ) | 95 | ||||||||||||||||||||||||
Other Items | 21 | (7 | ) | 28 | (4 | ) | (61 | ) | 93 | |||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 18,841 | $ | 7,162 | $ | 11,679 | 62.0 | % | $ | 6,528 | $ | — | $ | 5,151 | 27.3 | % | ||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | (12) | (16) | (9) | (19) | (32) | 13 | ||||||||||||||||||||||||||
% Currency Impact | 1 | 1 | 1 | 2 | — | 0 | ||||||||||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (13) | (18) | (11) | (21) | — | 13 | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | (12) | (16) | (10) | (19) | — | 2 | ||||||||||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 1 | 1 | 1 | 2 | — | 0 | ||||||||||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (13) | (18) | (11) | (21) | — | 3 |
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 29, 2018 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | 1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 2 | ||||||||||||||||||||||||
Reported (GAAP) | $ | 471 | $ | 466 | $ | (152 | ) | $ | 4,716 | $ | 1,100 | 23.3 | % | $ | 3,616 | $ | 0.84 | 4 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | 52 | 502 | 116 | 386 | 0.09 | ||||||||||||||||||||||||||
Productivity and Reinvestment | — | — | 39 | 245 | 57 | 188 | 0.04 | ||||||||||||||||||||||||||
Equity Investees | — | 84 | — | 84 | (4 | ) | 88 | 0.02 | |||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 169 | 251 | 33 | 218 | 0.05 | ||||||||||||||||||||||||||
Other Items | — | — | 72 | 63 | 18 | 45 | 0.01 | ||||||||||||||||||||||||||
Certain Tax Matters | — | — | — | — | (89 | ) | 89 | 0.02 | |||||||||||||||||||||||||
Comparable (Non-GAAP) | $ | 471 | $ | 550 | $ | 180 | $ | 5,861 | $ | 1,231 | 21.0 | % | $ | 4,630 | $ | 1.08 | 4 | ||||||||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income from continuing operations before income taxes | Income taxes from continuing operations | 1 | Effective tax rate | Net income from continuing operations | Diluted net income per share from continuing operations | 3 | ||||||||||||||||||||||||
Reported (GAAP) | $ | 423 | $ | 525 | $ | (291 | ) | $ | 4,131 | $ | 1,575 | 38.1 | % | $ | 2,556 | $ | 0.59 | 4 | |||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | 737 | 156 | 581 | 0.13 | ||||||||||||||||||||||||||
Productivity and Reinvestment | — | — | — | 226 | 83 | 143 | 0.03 | ||||||||||||||||||||||||||
Equity Investees | — | 21 | — | 21 | 5 | 16 | — | ||||||||||||||||||||||||||
Transaction Gains/Losses | — | — | 488 | 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 | $ | 195 | $ | 5,827 | $ | 1,399 | 24.0 | % | $ | 4,428 | $ | 1.02 | 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 from continuing operations | Diluted net income per share from continuing operations | |||||||||||||||||||||||||||
% Change — Reported (GAAP) | 11 | (11) | 48 | 14 | (30) | 41 | 43 | ||||||||||||||||||||||||||
% Change — Comparable (Non-GAAP) | 23 | 1 | (8) | 1 | (12) | 5 | 5 |
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. |
2 | 4,298 million average shares outstanding — diluted |
3 | 4,330 million average shares outstanding — diluted |
4 | Calculated based on net income from continuing operations less net income attributable to noncontrolling interests from continuing operations of $2 million and $3 million for the six months ended June 29, 2018 and June 30, 2017, respectively. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||
(UNAUDITED) | |||||
Operating Income and Diluted Net Income Per Share from Continuing Operations: | |||||
Three Months Ended June 29, 2018 | |||||
Operating income | Diluted net income per share from continuing operations | ||||
% Change — Reported (GAAP) | 34 | 68 | |||
% Currency Impact | (1) | (2) | |||
% Change — Currency Neutral (Non-GAAP) | 35 | 71 | |||
% Structural Impact | (7) | — | |||
% Change — Currency Neutral (Adjusted for Structural Items) (Non-GAAP) | 42 | — | |||
% Impact of Accounting Changes1 | (2) | — | |||
% Change — Currency Neutral (Adjusted for Structural Items and Accounting Changes) (Non-GAAP) | 44 | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | 33 | 65 | |||
% Change — Comparable (Non-GAAP) | 1 | 3 | |||
% Comparable Currency Impact (Non-GAAP) | (2) | (2) | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 5 | |||
% Comparable Structural Impact (Non-GAAP) | (3) | — | |||
% Change — Comparable Currency Neutral (Adjusted for Structural Items) (Non-GAAP) | 6 | — | |||
% Comparable Impact of Accounting Changes (Non-GAAP)1 | (2) | — | |||
% Change — Comparable Currency Neutral (Adjusted for Structural Items and Accounting Changes) (Non-GAAP) | 8 | — | |||
Six Months Ended June 29, 2018 | |||||
Operating income | Diluted net income per share from continuing operations | ||||
% Change — Reported (GAAP) | 13 | 43 | |||
% Currency Impact | 0 | 0 | |||
% Change — Currency Neutral (Non-GAAP) | 13 | 43 | |||
% Structural Impact | (7) | — | |||
% Change — Currency Neutral (Adjusted for Structural Items) (Non-GAAP) | 20 | — | |||
% Impact of Accounting Changes1 | (1) | — | |||
% Change — Currency Neutral (Adjusted for Structural Items and Accounting Changes) (Non-GAAP) | 21 | — | |||
% Impact of Items Impacting Comparability (Non-GAAP) | 11 | 37 | |||
% Change — Comparable (Non-GAAP) | 2 | 5 | |||
% Comparable Currency Impact (Non-GAAP) | 0 | 0 | |||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 6 | |||
% Comparable Structural Impact (Non-GAAP) | (5) | — | |||
% Change — Comparable Currency Neutral (Adjusted for Structural Items) (Non-GAAP) | 7 | — | |||
% Comparable Impact of Accounting Changes (Non-GAAP)1 | (1) | — | |||
% Change — Comparable Currency Neutral (Adjusted for Structural Items and Accounting Changes) (Non-GAAP) | 8 | — |
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 29, 2018 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 2,170 | $ | 1,031 | $ | 3,117 | $ | 1,517 | $ | 1,235 | $ | 65 | $ | (208 | ) | $ | 8,927 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | — | — | — | (24 | ) | — | (24 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 2,170 | $ | 1,031 | $ | 3,117 | $ | 1,517 | $ | 1,235 | $ | 41 | $ | (208 | ) | $ | 8,903 | |||||||||
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 | $ | 2,903 | $ | 1,507 | $ | 2,998 | $ | 45 | $ | (738 | ) | $ | 9,702 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | 3 | — | — | 4 | — | 7 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 2,037 | $ | 950 | $ | 2,906 | $ | 1,507 | $ | 2,998 | $ | 49 | $ | (738 | ) | $ | 9,709 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 7 | 8 | 7 | 1 | (59) | 46 | 72 | (8) | ||||||||||||||||||
% Currency Impact | 2 | (6) | 0 | 2 | 0 | 68 | — | 1 | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 5 | 14 | 7 | (1) | (59) | (22) | — | (8) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | 1 | 2 | (1) | 0 | (72) | 0 | — | (15) | ||||||||||||||||||
% Impact of Accounting Changes1 | (3) | 1 | 10 | (7) | 3 | 13 | — | 2 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 7 | 11 | (1) | 6 | 11 | (35) | — | 5 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 7 | 8 | 7 | 1 | (59) | (17) | — | (8) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 2 | (6) | 0 | 2 | 0 | 3 | — | 0 | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 5 | 14 | 7 | (1) | (59) | (20) | — | (9) |
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 29, 2018 | ||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 4,011 | $ | 2,029 | $ | 5,797 | $ | 2,735 | $ | 2,286 | $ | 83 | $ | (388 | ) | $ | 16,553 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | — | — | — | (26 | ) | — | (26 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 4,011 | $ | 2,029 | $ | 5,797 | $ | 2,735 | $ | 2,286 | $ | 57 | $ | (388 | ) | $ | 16,527 | |||||||||
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 | $ | 5,320 | $ | 2,715 | $ | 6,834 | $ | 74 | $ | (1,668 | ) | $ | 18,820 | |||||||||
Items Impacting Comparability: | ||||||||||||||||||||||||||
Other Items | — | — | 8 | — | — | 13 | — | 21 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 3,669 | $ | 1,876 | $ | 5,328 | $ | 2,715 | $ | 6,834 | $ | 87 | $ | (1,668 | ) | $ | 18,841 | |||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 9 | 8 | 9 | 1 | (67) | 12 | 77 | (12) | ||||||||||||||||||
% Currency Impact | 4 | (3) | 0 | 3 | 1 | 55 | — | 1 | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 5 | 11 | 9 | (2) | (67) | (43) | — | (13) | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | 1 | 1 | (1) | (1) | (82) | 0 | — | (21) | ||||||||||||||||||
% Impact of Accounting Changes1 | (3) | 1 | 11 | (6) | 3 | 4 | — | 2 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 7 | 9 | 0 | 5 | 12 | (47) | — | 5 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 9 | 8 | 9 | 1 | (67) | (35) | — | (12) | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 4 | (3) | 0 | 3 | 1 | 2 | — | 1 | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 5 | 11 | 9 | (2) | (67) | (36) | — | (13) |
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 29, 2018 | |||||
Reported Net Operating Revenues (GAAP) | $ | 8,927 | |||
Bottling Investments Net Operating Revenues | (1,235 | ) | |||
Consolidated Eliminations | 208 | ||||
Intersegment Core Net Operating Revenue Eliminations | (7 | ) | |||
Core Business Revenues (Non-GAAP) | 7,893 | ||||
Items Impacting Comparability: | |||||
Other Items | (24 | ) | |||
Comparable Core Business Revenues (Non-GAAP) | $ | 7,869 | |||
Three Months Ended June 30, 2017 | |||||
Reported Net Operating Revenues (GAAP) | $ | 9,702 | |||
Bottling Investments Net Operating Revenues | (2,998 | ) | |||
Consolidated Eliminations | 738 | ||||
Intersegment Core Net Operating Revenue Eliminations | (4 | ) | |||
Core Business Revenues (Non-GAAP) | 7,438 | ||||
Items Impacting Comparability: | |||||
Other Items | 7 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 7,445 | |||
% Change — Reported Net Operating Revenues (GAAP) | (8) | ||||
% Change — Core Business Revenues (Non-GAAP) | 6 | ||||
% Core Business Currency Impact (Non-GAAP) | 1 | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 5 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Impact of Accounting Changes2 | 2 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)3 | 4 | ||||
% Change — Comparable Core Business Revenues (Non-GAAP) | 6 | ||||
% Comparable Core Business Currency Impact (Non-GAAP) | 0 | ||||
% Change — Comparable Currency Neutral Core Business Revenues (Non-GAAP) | 5 |
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 29, 2018 | |||||
Reported Net Operating Revenues (GAAP) | $ | 16,553 | |||
Bottling Investments Net Operating Revenues | (2,286 | ) | |||
Consolidated Eliminations | 388 | ||||
Intersegment Core Net Operating Revenue Eliminations | (11 | ) | |||
Core Business Revenues (Non-GAAP) | 14,644 | ||||
Items Impacting Comparability: | |||||
Other Items | (26 | ) | |||
Comparable Core Business Revenues (Non-GAAP) | $ | 14,618 | |||
Six Months Ended June 30, 2017 | |||||
Reported Net Operating Revenues (GAAP) | $ | 18,820 | |||
Bottling Investments Net Operating Revenues | (6,834 | ) | |||
Consolidated Eliminations | 1,668 | ||||
Intersegment Core Net Operating Revenue Eliminations | (7 | ) | |||
Core Business Revenues (Non-GAAP) | 13,647 | ||||
Items Impacting Comparability: | |||||
Other Items | 21 | ||||
Comparable Core Business Revenues (Non-GAAP) | $ | 13,668 | |||
% Change — Reported Net Operating Revenues (GAAP) | (12) | ||||
% Change — Core Business Revenues (Non-GAAP) | 7 | ||||
% Core Business Currency Impact (Non-GAAP) | 2 | ||||
% Change — Currency Neutral Core Business Revenues (Non-GAAP) | 6 | ||||
% Acquisitions, Divestitures and Structural Items | 0 | ||||
% Impact of Accounting Changes2 | 2 | ||||
% Change — Core Business Organic Revenues (Non-GAAP)3 | 4 | ||||
% Change — Comparable Core Business Revenues (Non-GAAP) | 7 | ||||
% 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) | |||||||||||||||||||||||
Operating Income (Loss) by Operating Segment: | |||||||||||||||||||||||
Three Months Ended June 29, 2018 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 1,095 | $ | 593 | $ | 684 | $ | 705 | $ | (56 | ) | $ | (294 | ) | $ | 2,727 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 60 | — | 60 | ||||||||||||||||
Productivity and Reinvestment | — | 1 | 47 | 1 | 16 | 46 | 111 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 34 | 3 | 37 | ||||||||||||||||
Other Items | — | — | 14 | — | (5 | ) | (14 | ) | (5 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 1,095 | $ | 594 | $ | 745 | $ | 706 | $ | 49 | $ | (259 | ) | $ | 2,930 | ||||||||
Three Months Ended June 30, 2017 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 1,076 | $ | 559 | $ | 755 | $ | 709 | $ | (651 | ) | $ | (411 | ) | $ | 2,037 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 653 | — | 653 | ||||||||||||||||
Productivity and Reinvestment | (6 | ) | 1 | 49 | 2 | 10 | 31 | 87 | |||||||||||||||
Transaction Gains/Losses | — | — | — | — | 46 | 5 | 51 | ||||||||||||||||
Other Items | — | — | (5 | ) | — | 30 | 46 | 71 | |||||||||||||||
Comparable (Non-GAAP) | $ | 1,070 | $ | 560 | $ | 799 | $ | 711 | $ | 88 | $ | (329 | ) | $ | 2,899 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | 2 | 6 | (10) | (1) | 91 | 28 | 34 | ||||||||||||||||
% Currency Impact | (1) | (8) | 0 | 1 | (1) | 7 | (1) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 3 | 14 | (9) | (1) | 92 | 21 | 35 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | (1) | 0 | (3) | 0 | 137 | 7 | 33 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 2 | 6 | (7) | (1) | (46) | 21 | 1 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (1) | (8) | 0 | 1 | (3) | 0 | (2) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 14 | (7) | (2) | (42) | 21 | 3 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Operating Income (Loss) by Operating Segment: | |||||||||||||||||||||||
Six Months Ended June 29, 2018 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 2,009 | $ | 1,165 | $ | 1,215 | $ | 1,270 | $ | (517 | ) | $ | (604 | ) | $ | 4,538 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 450 | — | 450 | ||||||||||||||||
Productivity and Reinvestment | 2 | 3 | 99 | 1 | 22 | 79 | 206 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | 79 | 3 | 82 | ||||||||||||||||
Other Items | — | — | (5 | ) | — | 5 | (9 | ) | (9 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 2,011 | $ | 1,168 | $ | 1,309 | $ | 1,271 | $ | 39 | $ | (531 | ) | $ | 5,267 | ||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 1,936 | $ | 1,064 | $ | 1,329 | $ | 1,250 | $ | (740 | ) | $ | (839 | ) | $ | 4,000 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments/Restructuring | — | — | — | — | 737 | — | 737 | ||||||||||||||||
Productivity and Reinvestment | (4 | ) | 1 | 84 | 3 | 24 | 118 | 226 | |||||||||||||||
Transaction Gains/Losses | — | — | — | — | 88 | 7 | 95 | ||||||||||||||||
Other Items | — | — | (15 | ) | — | 27 | 81 | 93 | |||||||||||||||
Comparable (Non-GAAP) | $ | 1,932 | $ | 1,065 | $ | 1,398 | $ | 1,253 | $ | 136 | $ | (633 | ) | $ | 5,151 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | 4 | 10 | (9) | 2 | 30 | 28 | 13 | ||||||||||||||||
% Currency Impact | 1 | (4) | 0 | 1 | (2) | 5 | 0 | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 3 | 14 | (8) | 0 | 32 | 23 | 13 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | (2) | 0 | 102 | 12 | 11 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 4 | 10 | (6) | 1 | (72) | 16 | 2 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | 1 | (4) | 0 | 1 | (3) | 0 | 0 | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 3 | 14 | (6) | 0 | (68) | 16 | 3 |
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 June 29, 2018 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 1,117 | $ | 541 | $ | 699 | $ | 712 | $ | 91 | $ | (277 | ) | $ | 2,883 | ||||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | 52 | — | — | 60 | — | 112 | ||||||||||||||||||||||
Productivity and Reinvestment | — | 1 | 47 | 1 | 16 | 85 | 150 | ||||||||||||||||||||||
Equity Investees | — | — | — | — | 31 | 2 | 33 | ||||||||||||||||||||||
Transaction Gains/Losses | — | — | 1 | — | 183 | (32 | ) | 152 | |||||||||||||||||||||
Other Items | — | — | 14 | — | (5 | ) | (39 | ) | (30 | ) | |||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,117 | $ | 594 | $ | 761 | $ | 713 | $ | 376 | $ | (261 | ) | $ | 3,300 |
Six Months Ended June 29, 2018 | |||||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Consolidated | |||||||||||||||||||||||
Reported (GAAP) | $ | 2,044 | $ | 1,107 | $ | 1,230 | $ | 1,286 | $ | (297 | ) | $ | (654 | ) | $ | 4,716 | |||||||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||||
Asset Impairments/Restructuring | — | 52 | — | — | 450 | — | 502 | ||||||||||||||||||||||
Productivity and Reinvestment | 2 | 3 | 99 | 1 | 22 | 118 | 245 | ||||||||||||||||||||||
Equity Investees | — | — | — | — | 99 | (15 | ) | 84 | |||||||||||||||||||||
Transaction Gains/Losses | — | — | 20 | — | 263 | (32 | ) | 251 | |||||||||||||||||||||
Other Items | — | — | (5 | ) | — | 5 | 63 | 63 | |||||||||||||||||||||
Comparable (Non-GAAP) | $ | 2,046 | $ | 1,162 | $ | 1,344 | $ | 1,287 | $ | 542 | $ | (520 | ) | $ | 5,861 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||
(UNAUDITED) | ||||||
(In millions) | ||||||
Operating Margin: | ||||||
Three Months Ended June 29, 2018 | Three Months Ended June 30, 2017 | Basis Point Growth | ||||
Reported Operating Margin (GAAP) | 30.55 | % | 20.99 | % | 956 | |
Items Impacting Comparability (Non-GAAP) | (2.35 | )% | (8.86 | )% | ||
Comparable Operating Margin (Non-GAAP) | 32.90 | % | 29.85 | % | 305 |
Six Months Ended June 29, 2018 | Six Months Ended June 30, 2017 | Basis Point Growth | ||||
Reported Operating Margin (GAAP) | 27.41 | % | 21.25 | % | 616 | |
Items Impacting Comparability (Non-GAAP) | (4.46 | )% | (6.09 | )% | ||
Comparable Operating Margin (Non-GAAP) | 31.87 | % | 27.34 | % | 453 |
Purchases and Issuances of Stock: | ||||||||||
Six Months Ended June 29, 2018 | Six Months Ended June 30, 2017 | |||||||||
Reported (GAAP): | ||||||||||
Issuances of Stock | $ | 600 | $ | 917 | ||||||
Purchases of Stock for Treasury | (1,317 | ) | (2,197 | ) | ||||||
Net Change in Stock Issuance Receivables1 | 2 | 1 | ||||||||
Net Change in Treasury Stock Payables2 | (15 | ) | 4 | |||||||
Net Share Repurchases (Non-GAAP) | $ | (730 | ) | $ | (1,275 | ) |
Free Cash Flow: | |||||||||||||
Six Months Ended June 29, 2018 | Six Months Ended June 30, 2017 | % Change | |||||||||||
Net Cash Provided by Operating Activities (GAAP) | $ | 2,608 | $ | 3,342 | (22 | ) | |||||||
Purchases of Property, Plant and Equipment (GAAP) | (612 | ) | (832 | ) | (26 | ) | |||||||
Free Cash Flow (Non-GAAP) | $ | 1,996 | $ | 2,510 | (20 | ) |