Highlights |
Quarterly Performance |
• | Revenues: Net revenues grew 6% to $10.0 billion. Organic revenues (non-GAAP) grew 6%. Revenue growth was driven by concentrate sales growth of 4% and price/mix growth of 2%. |
• | Margin: Operating margin, which included items impacting comparability, was 29.9% versus 29.4% in the prior year. Comparable operating margin (non-GAAP) was 30.3% versus 30.6% in the prior year. Strong underlying operating margin (non-GAAP) expansion was offset by an approximate 185 basis point negative impact from currency headwinds and net acquisitions. |
• | Earnings per share: EPS grew 12% to $0.61. Comparable EPS (non-GAAP) grew 4% to $0.63. Comparable EPS growth included the impact from a 9-point currency headwind. |
• | 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 $4.5 billion, up 68% largely due to strong underlying growth, working capital initiatives and the timing of tax payments. Year-to-date free cash flow (non-GAAP) was $3.7 billion, up 87%. |
Company Updates |
• | Driving sparkling: Strong performance for the quarter was driven by sparkling soft drinks, led by 4% volume and transaction growth in trademark Coca-Cola. Coca-Cola Zero Sugar continues to perform well, with a seventh consecutive quarter of double-digit volume growth globally. Quarterly performance was further driven by innovation, such as Coca-Cola Plus Coffee, and a modernized marketing strategy for today's consumers. The company reached a first-of-its-kind partnership with Netflix to temporarily bring back 1985’s New Coke for the July 4 debut of season 3 of the hit series "Stranger Things." |
• | Growing coffee: During the quarter, the company launched the first-ever Costa Coffee ready-to-drink (RTD) chilled product in Great Britain, marking the first major introduction since Coca-Cola acquired Costa earlier this year. The company plans to roll out the product in additional markets in the second half of the year. The brand delivers an authentic coffee taste experience with 30% less sugar than most RTD coffees in Costa’s core market of Great Britain. The Costa Coffee brand is also expanding through a new agreement with Coca-Cola HBC AG. The agreement will address a broad range of consumer and customer needs across multiple channels and occasions, including roast and ground coffee, RTD offerings and vending. The bottler plans to introduce Costa Coffee in at least 10 markets in 2020. |
• | Expanding energy: The first energy drink under the Coca-Cola brand launched in select European countries during the quarter. Coca-Cola Energy features caffeine from naturally derived sources, guarana extracts, B vitamins and no taurine, all with the great Coca-Cola taste and feeling that people know and love. The product has shown early signs of success. Coca-Cola Energy is now available in 14 countries, including recent launches in Japan, Australia and South Africa. The company expects to offer Coca-Cola Energy in 20 markets by the end of 2019, including Mexico and Brazil. |
• | Lifting, shifting and scaling: Since the company's initial investment in the innocent business in 2009, the innocent team has taken the business from the #1 smoothie brand in the U.K. to the #1 chilled juice brand across Europe. The brand is now expanding into Asia for the first time through a targeted rollout, starting in Tokyo. Innocent is loved by consumers who want more functional and nutritional benefits in their daily diet, in addition to those who enjoy natural, delicious and healthy juices and smoothies. |
• | Making progress in packaging: The company continues to make progress on its World Without Waste goals for recycling, recyclable packaging and the use of recycled materials, including these recent milestones: |
• | Bottlers worldwide continue to introduce more brands in 100% recycled PET (rPET) packaging. Recent launches include the green tea brand Hajime Ichinichi Ippon in Japan; the Romerquelle and Valser water brands in Austria and Switzerland, respectively; Viva water in the Philippines; and San Luis water in Peru. In Western Europe, 100% rPET bottles will be launched for smartwater, Chaudfontaine and Honest by the end of 2019. |
• | Coca-Cola Amatil and Coca-Cola Australia announced that 70% of all PET bottles in the market will be made from 100% rPET by the end of 2019. |
• | Coca-Cola European Partners and Coca-Cola Great Britain announced a switch from green to clear bottles for Sprite in their markets as a way to improve recycling. Other markets are making this change as well. |
• | Coca-Cola Beverages Philippines, the bottling arm of Coca-Cola in the Philippines, announced that it will lead the investment in a $19 million state-of-the-art, food-grade recycling facility that will collect, sort, clean and wash post-consumer recyclable plastic bottles and turn them into new bottles using advanced technology. It is Coca-Cola’s first major investment in a recycling facility in Southeast Asia. |
• | Coca-Cola Vietnam led the launch of an industry-backed packaging recovery organization alongside other companies. The organization will initially focus on increasing recovery and recycling rates for three materials: PET, aluminum and Tetra Pak®. |
Operating Review – Three Months Ended June 28, 2019 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Items, Net | Reported Net Revenues | Organic Revenues2 | Unit Case Volume | ||
Consolidated | 4 | 2 | (6) | 6 | 6 | 6 | 3 | ||
Europe, Middle East & Africa | 3 | 1 | (10) | 3 | (4) | 4 | 2 | ||
Latin America | 4 | 5 | (11) | (1) | (3) | 9 | 1 | ||
North America | (1) | 4 | 0 | 0 | 3 | 3 | (1) | ||
Asia Pacific | 8 | (3) | (3) | 0 | 2 | 5 | 7 | ||
Global Ventures3 | 5 | (3) | (19) | 218 | 201 | 2 | 5 | ||
Bottling Investments | 14 | 3 | (7) | (1) | 9 | 18 | 30 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 8 | 3 | (8) | 14 |
Europe, Middle East & Africa | (5) | 0 | (14) | 9 |
Latin America | (1) | 0 | (13) | 12 |
North America | 10 | 6 | 0 | 4 |
Asia Pacific | 4 | 0 | (3) | 7 |
Global Ventures | 96 | 0 | (4) | 100 |
Bottling Investments | —4 | —4 | —4 | —4 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated EPS | 12 | 8 | (9) | 13 |
Consolidated |
• | Price/mix grew 2% for the quarter through solid pricing in the marketplace across all operating segments. Concentrate sales growth of 4% was ahead of unit case volume growth primarily due to the timing of shipments in Brazil. |
• | Unit case volume grew 3%, driven by strong growth in developing and emerging markets. Category cluster performance was as follows: |
◦ | Sparkling soft drinks grew 3%, driven by strong 4% global growth in trademark Coca-Cola, including growth in original Coca-Cola and continued double-digit growth in Coca-Cola Zero Sugar. |
◦ | Juice, dairy and plant-based beverages volume was even as strong performance in the Maaza brand in India and the innocent business across Europe was offset by a decline in Rani, the leading juice brand in the Middle East. |
◦ | Water, enhanced water and sports drinks grew 2%, led by the Ciel and Cristal brands in Mexico as well as the Kinley brand in India, partially offset by a decline in the company's water brands in Japan. The decline in Japan was primarily due to deprioritization of low-margin commodity water brands. |
◦ | Tea and coffee volume declined 3% as growth in Fuze Tea across Europe and Mexico was offset by a decline in the doğadan tea business in Turkey, in addition to the company's tea brands in Japan. |
• | Operating income grew 8% including a negative impact from currency. Comparable currency neutral operating income (non-GAAP) grew 14%. Operating income growth was driven by strong organic revenue (non-GAAP) growth, a benefit from acquisitions and ongoing productivity initiatives. |
Europe, Middle East & Africa |
• | Price/mix grew 1% for the quarter, which included a 2-point headwind from geographic mix due to strong growth across key African markets, including South Africa and Nigeria. |
• | Unit case volume grew 2%, as growth across the majority of markets was partially offset by declines in Zimbabwe and the Middle East. Growth was led by sparkling soft drinks and Fuze Tea. |
• | Operating income declined 5%, primarily due to a 14-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 9%, primarily driven by organic revenue (non-GAAP) growth in addition to a benefit from the timing of expenses. |
• | The company gained value share in total NARTD beverages, led by solid share performance across Europe, in addition to gaining share across all category clusters. |
Latin America |
• | Price/mix grew 5% for the quarter, largely driven by strong performance in Mexico and Brazil, in addition to inflationary pricing in Argentina. |
• | Unit case volume grew 1% as growth across the majority of key markets, led by Brazil and Mexico, was partially offset by a decline in Argentina. |
• | Operating income declined 1%, which included a 13-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 12%. Operating income growth was largely driven by the benefit of strong pricing in the marketplace. |
• | The company lost value share in total NARTD beverages as a gain in sparkling soft drinks was offset by a loss in packaged water. |
North America |
• | Price/mix grew 4% for the quarter, driven by sparkling soft drinks. |
• | Unit case volume declined 1% partially due to the impact of pricing and package initiatives executed in the marketplace, which is driving positive price/mix performance. Positive performance in trademark Coca-Cola was driven by double-digit growth in Coca-Cola Zero Sugar and innovation such as Coca-Cola Orange Vanilla. |
• | Operating income grew 10%. Comparable currency neutral operating income (non-GAAP) grew 4%. Growth was largely driven by favorable product mix, with sparkling soft drinks as the main driver. |
• | The company gained value share in total NARTD beverages led by strong performance in sparkling soft drinks; water, enhanced water and sports drinks; and juice, dairy and plant-based beverages. |
Asia Pacific |
• | Price/mix declined 3% for the quarter, largely driven by geographic mix due to growth in emerging and developing markets outpacing developed markets. |
• | Unit case volume grew 7% due to broad-based growth across nearly all key markets. Volume growth was led by India, Southeast Asia and China. |
• | Operating income grew 4%. Comparable currency neutral operating income (non-GAAP) grew 7%. Operating income growth was primarily driven by organic revenue (non-GAAP) growth and a benefit from the timing of expenses. |
• | The company gained value share in total NARTD beverages, driven by strong performance in China and Southeast Asia. |
Global Ventures |
• | Reported net revenues benefited from the Costa acquisition. |
• | Price/mix declined 3%, largely driven by innocent product mix as growth in juices outpaced smoothies, in addition to cycling strong 8% price/mix growth in the prior year. |
• | Unit case volume grew 5% as strong growth in innocent and the energy category was partially offset by a decline in the doğadan tea business in Turkey. |
• | Operating income growth benefited from the Costa acquisition. |
Bottling Investments |
• | During the quarter, the company announced that it will maintain its majority stake in Coca-Cola Beverages Africa (CCBA) for the foreseeable future. As a result, CCBA is now presented within the company’s results from continuing operations and is included in the Bottling Investments operating segment. |
• | Price/mix grew 3% for the quarter, largely driven by solid performance from CCBA and the company's bottling operations in India. |
• | Operating income was favorably impacted by comparability items and the acquisition of bottling operations in the Philippines. |
Operating Review – Six Months Ended June 28, 2019 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Items, Net | Reported Net Revenues | Organic Revenues2 | Unit Case Volume | ||
Consolidated | 3 | 3 | (6) | 6 | 5 | 6 | 2 | ||
Europe, Middle East & Africa | 4 | 5 | (11) | 3 | 0 | 9 | 2 | ||
Latin America | 0 | 7 | (13) | 0 | (6) | 7 | 0 | ||
North America | (2) | 4 | 0 | 0 | 2 | 2 | (1) | ||
Asia Pacific | 7 | (2) | (3) | (1) | 0 | 4 | 7 | ||
Global Ventures3 | 1 | 0 | (20) | 220 | 201 | 1 | 3 | ||
Bottling Investments | 9 | 3 | (8) | (2) | 3 | 13 | 23 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 15 | 11 | (9) | 14 |
Europe, Middle East & Africa | 0 | 0 | (14) | 15 |
Latin America | (7) | 0 | (16) | 9 |
North America | 13 | 7 | 0 | 6 |
Asia Pacific | 1 | 0 | (3) | 3 |
Global Ventures | 110 | 0 | (6) | 116 |
Bottling Investments | —4 | —4 | 64 | 372 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 16 | 13 | (9) | 13 |
Outlook |
• | 5% growth in organic revenues (non-GAAP) – Updated |
• | 12% growth in comparable currency neutral net revenues (non-GAAP), including a 7% tailwind from acquisitions, divestitures and structural items – Updated |
• | Comparable net revenues (non-GAAP): 4% currency headwind based on the current rates and including the impact of hedged positions – Updated |
• | 11% to 12% growth in comparable currency neutral operating income (non-GAAP), including a low single-digit tailwind from acquisitions, divestitures and structural items – Updated |
• | Comparable operating income (non-GAAP): 7% to 8% currency headwind based on the current rates and including the impact of hedged positions – Updated |
• | -1% to 1% growth versus $2.08 in 2018 in comparable EPS (non-GAAP) – No Change |
• | Underlying effective tax rate (non-GAAP): Estimated to be 19.5% – No Change |
• | Cash from operations: At least $8.5 billion – Updated |
• | Capital expenditures: Approximately $2.4 billion – Updated |
• | Net share repurchases (non-GAAP): Share repurchases to offset dilution from employee stock-based compensation plans – No Change |
• | Comparable net revenues (non-GAAP): 6% tailwind from acquisitions, divestitures and structural items; 3% currency headwind based on the current rates and including the impact of hedged positions |
• | Comparable operating income (non-GAAP): 6% currency headwind based on the current rates and including the impact of hedged positions |
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. |
• | "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 and the Global Ventures operating segment (excluding Costa non-RTD sales) (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 computed based on total sales (rather than average daily sales) in each of the corresponding periods 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 2019 financial results were impacted by one less day as compared to the same period in 2018, and fourth quarter 2019 financial results will be impacted by one additional day as compared to the same period in 2018. 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 28, 2019 | June 29, 2018 | % Change | ||||||||
Net Operating Revenues | $ | 9,997 | $ | 9,421 | 6 | |||||
Cost of goods sold | 3,921 | 3,543 | 11 | |||||||
Gross Profit | 6,076 | 5,878 | 3 | |||||||
Selling, general and administrative expenses | 2,996 | 2,887 | 4 | |||||||
Other operating charges | 92 | 225 | (59 | ) | ||||||
Operating Income | 2,988 | 2,766 | 8 | |||||||
Interest income | 142 | 173 | (18 | ) | ||||||
Interest expense | 236 | 247 | (4 | ) | ||||||
Equity income (loss) — net | 329 | 324 | 2 | |||||||
Other income (loss) — net | (174 | ) | (74 | ) | (135 | ) | ||||
Income Before Income Taxes | 3,049 | 2,942 | 4 | |||||||
Income taxes | 421 | 611 | (31 | ) | ||||||
Consolidated Net Income | 2,628 | 2,331 | 13 | |||||||
Less: Net income attributable to noncontrolling interests | 21 | 15 | 30 | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 2,607 | $ | 2,316 | 13 | |||||
Basic Net Income Per Share1 | $ | 0.61 | $ | 0.54 | 12 | |||||
Diluted Net Income Per Share1 | $ | 0.61 | $ | 0.54 | 12 | |||||
Average Shares Outstanding | 4,269 | 4,255 | 0 | |||||||
Effect of dilutive securities | 36 | 35 | 3 | |||||||
Average Shares Outstanding Assuming Dilution | 4,305 | 4,290 | 0 |
1 | Calculated based on net income attributable to shareowners of The Coca-Cola Company. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||
Condensed Consolidated Statements of Income | |||||||||||
(UNAUDITED) | |||||||||||
(In millions except per share data) | |||||||||||
Six Months Ended | |||||||||||
June 28, 2019 | June 29, 2018 | % Change | |||||||||
Net Operating Revenues | $ | 18,691 | $ | 17,719 | 5 | ||||||
Cost of goods sold | 7,286 | 6,619 | 10 | ||||||||
Gross Profit | 11,405 | 11,100 | 3 | ||||||||
Selling, general and administrative expenses | 5,763 | 5,626 | 2 | ||||||||
Other operating charges | 219 | 761 | (71 | ) | |||||||
Operating Income | 5,423 | 4,713 | 15 | ||||||||
Interest income | 275 | 339 | (19 | ) | |||||||
Interest expense | 481 | 483 | 0 | ||||||||
Equity income (loss) — net | 462 | 465 | (1 | ) | |||||||
Other income (loss) — net | (405 | ) | (147 | ) | (175 | ) | |||||
Income Before Income Taxes | 5,274 | 4,887 | 8 | ||||||||
Income taxes | 943 | 1,156 | (18 | ) | |||||||
Consolidated Net Income | 4,331 | 3,731 | 16 | ||||||||
Less: Net income attributable to noncontrolling interests | 46 | 47 | (4 | ) | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | 4,285 | 3,684 | 16 | ||||||||
Basic Net Income Per Share1 | $ | 1.00 | 0.86 | $ | 0.86 | 16 | |||||
Diluted Net Income Per Share1 | $ | 1.00 | $ | 0.86 | 16 | ||||||
Average Shares Outstanding | 4,270 | 4,260 | 0 | ||||||||
Effect of dilutive securities | 35 | 38 | (8 | ) | |||||||
Average Shares Outstanding Assuming Dilution | 4,305 | 4,298 | 0 |
1 | Calculated based on net income attributable to shareowners of The Coca-Cola Company. |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(UNAUDITED) | |||||||
(In millions except par value) | |||||||
June 28, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 6,731 | $ | 9,077 | |||
Short-term investments | 2,572 | 2,025 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 9,303 | 11,102 | |||||
Marketable securities | 4,058 | 5,013 | |||||
Trade accounts receivable, less allowances of $524 and $501, respectively | 4,888 | 3,685 | |||||
Inventories | 3,453 | 3,071 | |||||
Prepaid expenses and other assets | 2,658 | 2,059 | |||||
Total Current Assets | 24,360 | 24,930 | |||||
Equity method investments | 19,418 | 19,412 | |||||
Other investments | 894 | 867 | |||||
Other assets | 5,596 | 4,148 | |||||
Deferred income tax assets | 2,559 | 2,674 | |||||
Property, plant and equipment — net | 10,254 | 9,598 | |||||
Trademarks with indefinite lives | 9,313 | 6,682 | |||||
Bottlers' franchise rights with indefinite lives | 110 | 51 | |||||
Goodwill | 16,840 | 14,109 | |||||
Other intangible assets | 652 | 745 | |||||
Total Assets | $ | 89,996 | $ | 83,216 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 12,819 | $ | 9,533 | |||
Loans and notes payable | 13,030 | 13,835 | |||||
Current maturities of long-term debt | 2,749 | 5,003 | |||||
Accrued income taxes | 784 | 411 | |||||
Total Current Liabilities | 29,382 | 28,782 | |||||
Long-term debt | 29,296 | 25,376 | |||||
Other liabilities | 8,336 | 7,646 | |||||
Deferred income tax liabilities | 2,687 | 2,354 | |||||
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 | 16,833 | 16,520 | |||||
Reinvested earnings | 64,602 | 63,234 | |||||
Accumulated other comprehensive income (loss) | (12,981 | ) | (12,814 | ) | |||
Treasury stock, at cost — 2,765 and 2,772 shares, respectively | (52,033 | ) | (51,719 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 18,181 | 16,981 | |||||
Equity attributable to noncontrolling interests | 2,114 | 2,077 | |||||
Total Equity | 20,295 | 19,058 | |||||
Total Liabilities and Equity | $ | 89,996 | $ | 83,216 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Six Months Ended | |||||||
Operating Activities | June 28, 2019 | June 29, 2018 | |||||
Consolidated net income | $ | 4,331 | $ | 3,731 | |||
Depreciation and amortization | 602 | 553 | |||||
Stock-based compensation expense | 88 | 121 | |||||
Deferred income taxes | (163 | ) | 24 | ||||
Equity (income) loss — net of dividends | (254 | ) | (148 | ) | |||
(Gain) loss on equity securities | (193 | ) | 49 | ||||
Foreign currency adjustments | 37 | (119 | ) | ||||
Significant (gains) losses — net | 247 | 98 | |||||
Other operating charges | 93 | 576 | |||||
Other items | 373 | (6 | ) | ||||
Net change in operating assets and liabilities | (660 | ) | (2,193 | ) | |||
Net Cash Provided by Operating Activities | 4,501 | 2,686 | |||||
Investing Activities | |||||||
Purchases of investments | (2,935 | ) | (4,833 | ) | |||
Proceeds from disposals of investments | 3,395 | 7,621 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (5,353 | ) | (218 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 265 | 304 | |||||
Purchases of property, plant and equipment | (767 | ) | (689 | ) | |||
Proceeds from disposals of property, plant and equipment | 43 | 63 | |||||
Other investing activities | (10 | ) | 6 | ||||
Net Cash Provided by (Used in) Investing Activities | (5,362 | ) | 2,254 | ||||
Financing Activities | |||||||
Issuances of debt | 14,518 | 16,280 | |||||
Payments of debt | (14,278 | ) | (16,666 | ) | |||
Issuances of stock | 602 | 600 | |||||
Purchases of stock for treasury | (689 | ) | (1,317 | ) | |||
Dividends | (1,709 | ) | (1,662 | ) | |||
Other financing activities | 124 | (70 | ) | ||||
Net Cash Provided by (Used in) Financing Activities | (1,432 | ) | (2,835 | ) | |||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 2 | (109 | ) | ||||
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 | (2,291 | ) | 1,996 | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 9,318 | 6,373 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Period | 7,027 | 8,369 | |||||
Less: Restricted cash and restricted cash equivalents at end of period | 296 | 220 | |||||
Cash and Cash Equivalents at End of Period | $ | 6,731 | $ | 8,149 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | ||||||||||||||||||||||
June 28, 2019 | June 29, 2018 | % Fav. / (Unfav.) | June 28, 2019 | June 29, 2018 | % Fav. / (Unfav.) | June 28, 2019 | June 29, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 1,930 | $ | 2,008 | (4 | ) | $ | 1,038 | $ | 1,093 | (5 | ) | $ | 1,062 | $ | 1,114 | (5 | ) | ||||||
Latin America | 1,003 | 1,030 | (3 | ) | 588 | 593 | (1 | ) | 540 | 541 | 0 | |||||||||||||
North America | 3,162 | 3,080 | 3 | 711 | 648 | 10 | 729 | 660 | 10 | |||||||||||||||
Asia Pacific | 1,540 | 1,514 | 2 | 731 | 703 | 4 | 738 | 710 | 4 | |||||||||||||||
Global Ventures | 635 | 211 | 201 | 73 | 37 | 96 | 75 | 40 | 88 | |||||||||||||||
Bottling Investments | 2,026 | 1,855 | 9 | 119 | (17 | ) | — | 393 | 131 | 200 | ||||||||||||||
Corporate | 23 | 57 | (59 | ) | (272 | ) | (291 | ) | 6 | (488 | ) | (254 | ) | (92 | ) | |||||||||
Eliminations | (322 | ) | (334 | ) | 4 | — | — | — | — | — | — | |||||||||||||
Consolidated | $ | 9,997 | $ | 9,421 | 6 | $ | 2,988 | $ | 2,766 | 8 | $ | 3,049 | $ | 2,942 | 4 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | ||||||||||||||||||||||
June 28, 2019 | June 29, 2018 | % Fav./(Unfav.) | June 28, 2019 | June 29, 2018 | % Fav. / (Unfav.) | June 28, 2019 | June 29, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 3,702 | $ | 3,694 | 0 | $ | 2,016 | $ | 2,007 | 0 | $ | 2,050 | $ | 2,041 | 0 | |||||||||
Latin America | 1,899 | 2,027 | (6 | ) | 1,084 | 1,164 | (7 | ) | 1,031 | 1,106 | (7 | ) | ||||||||||||
North America | 5,845 | 5,732 | 2 | 1,297 | 1,151 | 13 | 1,266 | 1,160 | 9 | |||||||||||||||
Asia Pacific | 2,727 | 2,729 | 0 | 1,273 | 1,265 | 1 | 1,288 | 1,281 | 1 | |||||||||||||||
Global Ventures | 1,220 | 405 | 201 | 139 | 66 | 110 | 143 | 72 | 100 | |||||||||||||||
Bottling Investments | 3,836 | 3,729 | 3 | 219 | (342 | ) | — | 293 | (122 | ) | — | |||||||||||||
Corporate | 55 | 68 | (19 | ) | (605 | ) | (598 | ) | (1 | ) | (797 | ) | (651 | ) | (22 | ) | ||||||||
Eliminations | (593 | ) | (665 | ) | 11 | — | — | — | — | — | — | |||||||||||||
Consolidated | $ | 18,691 | $ | 17,719 | 5 | $ | 5,423 | $ | 4,713 | 15 | $ | 5,274 | $ | 4,887 | 8 |
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 and divestitures of bottling and distribution operations including the impact of intercompany transactions among our operating segments. In 2019, the company acquired bottling operations in Zambia. In 2018, the company acquired controlling interests in the Philippine bottling operations and Oman bottling operations, both of which were previously accounted for as equity method investees, as well as bottling operations in Botswana and Zambia. The impact of these acquisitions 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, Asia Pacific and Bottling Investments operating segments. In 2018, the company refranchised our Canadian and Latin American bottling operations. 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 the North America, Latin America and Bottling Investments operating segments. |
• | "Comparable net revenues" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below). "Comparable currency neutral net revenues" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below) as well as the impact of changes in foreign currency exchange rates. Management believes the comparable net revenues (non-GAAP) growth measure and the comparable currency neutral net revenues (non‑GAAP) growth measure provide 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, and 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 items. The adjustments related to acquisitions, divestitures and structural items for the three and six months ended June 28, 2019 and June 29, 2018 consisted of the structural changes discussed above. Additionally, in 2019, the |
THE COCA-COLA COMPANY AND SUBSIDIARIES |
Reconciliation of GAAP and Non-GAAP Financial Measures |
(UNAUDITED) |
• | "Comparable operating income" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below). "Comparable currency neutral operating income" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below) and the impact of changes in foreign currency exchange rates. "Comparable operating margin" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below). "Underlying operating margin" is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability (discussed further below), the impact of changes in foreign currency exchange rates, and the impact of acquisitions, divestitures and structural items, as applicable. Management uses these non-GAAP financial measures to evaluate the company's performance and make resource allocation decisions. Further, management believes the comparable operating income (non-GAAP) growth measure, comparable currency neutral operating income (non-GAAP) growth measure, comparable operating margin (non-GAAP) measure and underlying operating margin (non-GAAP) measure enhance its ability to communicate the underlying operating results and provide investors with useful supplemental information to enhance their understanding of the company's underlying business performance and trends by improving their ability to compare our period-to-period financial results. |
• | "Comparable EPS" and "comparable currency neutral EPS" are non-GAAP financial measures that exclude or have otherwise been adjusted for items impacting comparability (discussed further below). Comparable currency neutral EPS (non-GAAP) has also been adjusted for the impact of changes in foreign currency exchange rates. Management uses these non-GAAP financial measures to evaluate the company's performance and make resource allocation decisions. Further, management believes the comparable EPS (non-GAAP) and comparable currency neutral EPS (non-GAAP) growth measures enhance its ability to communicate the underlying operating results and provide investors with useful supplemental information to enhance their understanding of the company's underlying business performance and trends by improving their ability to compare our period-to-period financial results. |
• | "Underlying effective tax rate" is a non-GAAP financial measure that represents the estimated annual effective income tax rate on income before income taxes, 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 June 28, 2019 | ||||||||||||||||||||||
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) | $ | 9,997 | $ | 3,921 | $ | 6,076 | 60.8 | % | $ | 2,996 | $ | 92 | $ | 2,988 | 29.9 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (55 | ) | 55 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (37 | ) | 37 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 16 | (16 | ) | 44 | — | (60 | ) | ||||||||||||||
Other Items | — | (10 | ) | 10 | — | — | 10 | |||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 9,997 | $ | 3,927 | $ | 6,070 | 60.7 | % | $ | 3,040 | $ | — | $ | 3,030 | 30.3 | % | ||||||
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) | $ | 9,421 | $ | 3,543 | $ | 5,878 | 62.4 | % | $ | 2,887 | $ | 225 | $ | 2,766 | 29.4 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (60 | ) | 60 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (111 | ) | 111 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (37 | ) | 37 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 24 | (24 | ) | 73 | — | (97 | ) | ||||||||||||||
Other Items | (24 | ) | (1 | ) | (23 | ) | (1 | ) | (17 | ) | (5 | ) | ||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 9,397 | $ | 3,566 | $ | 5,831 | 62.0 | % | $ | 2,959 | $ | — | $ | 2,872 | 30.6 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 6 | 11 | 3 | 4 | (59) | 8 | ||||||||||||||||
% Currency Impact | (6) | (4) | (7) | (5) | — | (10) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 12 | 14 | 10 | 9 | — | 18 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 6 | 10 | 4 | 3 | — | 6 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (6) | (4) | (7) | (5) | — | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 12 | 14 | 11 | 8 | — | 14 |
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 28, 2019 | |||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Effective tax rate | Net income2 | Diluted net income per share | ||||||||||||||||
Reported (GAAP) | $ | 236 | $ | 329 | $ | (174 | ) | $ | 3,049 | $ | 421 | 13.8 | % | $ | 2,607 | $ | 0.61 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 49 | 49 | — | 49 | 0.01 | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 55 | 13 | 42 | 0.01 | ||||||||||||||||
Equity Investees | — | 26 | — | 26 | 1 | 25 | 0.01 | ||||||||||||||||
Transaction Gains/Losses | — | — | 160 | 197 | 206 | 6 | — | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (60 | ) | (17 | ) | (27 | ) | (0.01 | ) | ||||||||||||
Other Items | — | — | 22 | 32 | 9 | 23 | 0.01 | ||||||||||||||||
Certain Tax Matters | — | — | — | — | 10 | (10 | ) | — | |||||||||||||||
Comparable (Non-GAAP) | $ | 236 | $ | 355 | $ | 57 | $ | 3,348 | $ | 643 | 19.2 | % | $ | 2,715 | $ | 0.63 | |||||||
Three Months Ended June 29, 2018 | |||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Effective tax rate | Net income2 | Diluted net income per share | ||||||||||||||||
Reported (GAAP) | $ | 247 | $ | 324 | $ | (74 | ) | $ | 2,942 | $ | 611 | 20.7 | % | $ | 2,316 | $ | 0.54 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 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 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (97 | ) | (28 | ) | (44 | ) | (0.01 | ) | ||||||||||||
Other Items | — | — | (25 | ) | (30 | ) | (5 | ) | (25 | ) | (0.01 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 37 | (37 | ) | (0.01 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 247 | $ | 357 | $ | 107 | $ | 3,262 | $ | 682 | 20.9 | % | $ | 2,590 | $ | 0.60 | |||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Net income2 | Diluted net income per share | |||||||||||||||||
% Change — Reported (GAAP) | (4) | 2 | (135) | 4 | (31) | 13 | 12 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (4) | 0 | (47) | 3 | (6) | 5 | 4 |
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 28, 2019 | ||||||||||||||||||||||
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) | $ | 18,691 | $ | 7,286 | $ | 11,405 | 61.0 | % | $ | 5,763 | $ | 219 | $ | 5,423 | 29.0 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (123 | ) | 123 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (94 | ) | 94 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 39 | (39 | ) | 109 | — | (148 | ) | ||||||||||||||
Other Items | 4 | 12 | (8 | ) | — | (2 | ) | (6 | ) | |||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 18,695 | $ | 7,337 | $ | 11,358 | 60.8 | % | $ | 5,872 | $ | — | $ | 5,486 | 29.3 | % | ||||||
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) | $ | 17,719 | $ | 6,619 | $ | 11,100 | 62.6 | % | $ | 5,626 | $ | 761 | $ | 4,713 | 26.6 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (450 | ) | 450 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (206 | ) | 206 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (82 | ) | 82 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 49 | (49 | ) | 144 | — | (193 | ) | ||||||||||||||
Other Items | (26 | ) | 8 | (34 | ) | (2 | ) | (23 | ) | (9 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 17,693 | $ | 6,676 | $ | 11,017 | 62.3 | % | $ | 5,768 | $ | — | $ | 5,249 | 29.7 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 5 | 10 | 3 | 2 | (71) | 15 | ||||||||||||||||
% Currency Impact | (6) | (4) | (8) | (5) | — | (11) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 12 | 14 | 10 | 8 | — | 27 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 6 | 10 | 3 | 2 | — | 5 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (6) | (4) | (7) | (5) | — | (9) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 12 | 14 | 10 | 7 | — | 14 |
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 28, 2019 | |||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Effective tax rate | Net income2 | Diluted net income per share | ||||||||||||||||
Reported (GAAP) | $ | 481 | $ | 462 | $ | (405 | ) | $ | 5,274 | $ | 943 | 17.9 | % | $ | 4,285 | $ | 1.00 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 392 | 392 | 36 | 356 | 0.08 | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 123 | 29 | 94 | 0.02 | ||||||||||||||||
Equity Investees | — | 68 | — | 68 | 2 | 66 | 0.02 | ||||||||||||||||
Transaction Gains/Losses | — | — | 250 | 344 | 183 | 176 | 0.04 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (148 | ) | (42 | ) | (67 | ) | (0.02 | ) | ||||||||||||
Other Items | — | — | (140 | ) | (146 | ) | (31 | ) | (115 | ) | (0.03 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 32 | (32 | ) | (0.01 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 481 | $ | 530 | $ | 97 | $ | 5,907 | $ | 1,152 | 19.5 | % | $ | 4,763 | $ | 1.11 | |||||||
Six Months Ended June 29, 2018 | |||||||||||||||||||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Effective tax rate | Net income2 | Diluted net income per share | ||||||||||||||||
Reported (GAAP) | $ | 483 | $ | 465 | $ | (147 | ) | $ | 4,887 | $ | 1,156 | 23.6 | % | $ | 3,684 | $ | 0.86 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 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 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (193 | ) | (55 | ) | (88 | ) | (0.02 | ) | ||||||||||||
Other Items | — | — | 72 | 63 | 18 | 45 | 0.01 | ||||||||||||||||
Certain Tax Matters | — | — | — | — | (89 | ) | 89 | 0.02 | |||||||||||||||
Comparable (Non-GAAP) | $ | 483 | $ | 549 | $ | 185 | $ | 5,839 | $ | 1,232 | 21.1 | % | $ | 4,610 | $ | 1.07 | |||||||
Interest expense | Equity income (loss) — net | Other income (loss) — net | Income before income taxes | Income taxes1 | Net income2 | Diluted net income per share | |||||||||||||||||
% Change — Reported (GAAP) | 0 | (1) | (175) | 8 | (18) | 16 | 16 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | (4) | (47) | 1 | (7) | 3 | 3 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |
Reconciliation of GAAP and Non-GAAP Financial Measures | |
(UNAUDITED) | |
Diluted Net Income Per Share: | |
Three Months Ended June 28, 2019 | |
% Change — Reported (GAAP) | 12 |
% Currency Impact | (12) |
% Change — Currency Neutral (Non-GAAP) | 24 |
% Impact of Items Impacting Comparability (Non-GAAP) | 8 |
% Change — Comparable (Non-GAAP) | 4 |
% Comparable Currency Impact (Non-GAAP) | (9) |
% Change — Comparable Currency Neutral (Non-GAAP) | 13 |
Six Months Ended June 28, 2019 | |
% Change — Reported (GAAP) | 16 |
% Currency Impact | (13) |
% Change — Currency Neutral (Non-GAAP) | 29 |
% Impact of Items Impacting Comparability (Non-GAAP) | 13 |
% Change — Comparable (Non-GAAP) | 3 |
% Comparable Currency Impact (Non-GAAP) | (9) |
% Change — Comparable Currency Neutral (Non-GAAP) | 13 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||
Net Operating Revenues by Operating Segment and Corporate: | |||||||||||||||||||||||||||
Three Months Ended June 28, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,930 | $ | 1,003 | $ | 3,162 | $ | 1,540 | $ | 635 | $ | 2,026 | $ | 23 | $ | (322 | ) | $ | 9,997 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,930 | $ | 1,003 | $ | 3,162 | $ | 1,540 | $ | 635 | $ | 2,026 | $ | 23 | $ | (322 | ) | $ | 9,997 | ||||||||
Three Months Ended June 29, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 2,008 | $ | 1,030 | $ | 3,080 | $ | 1,514 | $ | 211 | $ | 1,855 | $ | 57 | $ | (334 | ) | $ | 9,421 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (24 | ) | — | (24 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 2,008 | $ | 1,030 | $ | 3,080 | $ | 1,514 | $ | 211 | $ | 1,855 | $ | 33 | $ | (334 | ) | $ | 9,397 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | (4) | (3) | 3 | 2 | 201 | 9 | (59) | 4 | 6 | ||||||||||||||||||
% Currency Impact | (10) | (11) | 0 | (3) | (19) | (7) | (44) | — | (6) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 7 | 8 | 3 | 5 | 220 | 17 | (15) | — | 12 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | 3 | (1) | 0 | 0 | 218 | (1) | 0 | — | 6 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 4 | 9 | 3 | 5 | 2 | 18 | (15) | — | 6 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | (4) | (3) | 3 | 2 | 201 | 9 | (29) | — | 6 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (10) | (11) | 0 | (3) | (19) | (7) | (3) | — | (6) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 7 | 8 | 3 | 5 | 220 | 17 | (26) | — | 12 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||
Net Operating Revenues by Operating Segment and Corporate: | |||||||||||||||||||||||||||
Six Months Ended June 28, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 3,702 | $ | 1,899 | $ | 5,845 | $ | 2,727 | $ | 1,220 | $ | 3,836 | $ | 55 | $ | (593 | ) | $ | 18,691 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | 4 | — | 4 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 3,702 | $ | 1,899 | $ | 5,845 | $ | 2,727 | $ | 1,220 | $ | 3,836 | $ | 59 | $ | (593 | ) | $ | 18,695 | ||||||||
Six Months Ended June 29, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 3,694 | $ | 2,027 | $ | 5,732 | $ | 2,729 | $ | 405 | $ | 3,729 | $ | 68 | $ | (665 | ) | $ | 17,719 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (26 | ) | — | (26 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 3,694 | $ | 2,027 | $ | 5,732 | $ | 2,729 | $ | 405 | $ | 3,729 | $ | 42 | $ | (665 | ) | $ | 17,693 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 0 | (6) | 2 | 0 | 201 | 3 | (19) | 11 | 5 | ||||||||||||||||||
% Currency Impact | (11) | (13) | 0 | (3) | (20) | (8) | (29) | — | (6) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 11 | 7 | 2 | 3 | 221 | 11 | 9 | — | 12 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Items | 3 | 0 | 0 | (1) | 220 | (2) | 0 | — | 6 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 9 | 7 | 2 | 4 | 1 | 13 | 9 | — | 6 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | (6) | 2 | 0 | 201 | 3 | 41 | — | 6 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (11) | (13) | 0 | (3) | (20) | (8) | 26 | — | (6) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 11 | 7 | 2 | 3 | 221 | 11 | 15 | — | 12 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Operating Income (Loss) by Operating Segment and Corporate: | ||||||||||||||||||||||||
Three Months Ended June 28, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 1,038 | $ | 588 | $ | 711 | $ | 731 | $ | 73 | $ | 119 | $ | (272 | ) | $ | 2,988 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | 13 | — | — | 1 | 41 | 55 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 29 | 8 | 37 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (60 | ) | — | (60 | ) | ||||||||||||||
Other Items | — | — | 10 | — | — | 1 | (1 | ) | 10 | |||||||||||||||
Comparable (Non-GAAP) | $ | 1,038 | $ | 588 | $ | 734 | $ | 731 | $ | 73 | $ | 90 | $ | (224 | ) | $ | 3,030 | |||||||
Three Months Ended June 29, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 1,093 | $ | 593 | $ | 648 | $ | 703 | $ | 37 | $ | (17 | ) | $ | (291 | ) | $ | 2,766 | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | 60 | — | 60 | ||||||||||||||||
Productivity and Reinvestment | — | 1 | 47 | 1 | — | 16 | 46 | 111 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 34 | 3 | 37 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (97 | ) | — | (97 | ) | ||||||||||||||
Other Items | — | — | 14 | — | — | (5 | ) | (14 | ) | (5 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 1,093 | $ | 594 | $ | 709 | $ | 704 | $ | 37 | $ | (9 | ) | $ | (256 | ) | $ | 2,872 | ||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (5) | (1) | 10 | 4 | 96 | — | 6 | 8 | ||||||||||||||||
% Currency Impact | (14) | (13) | 0 | (3) | (4) | — | (7) | (10) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 9 | 12 | 10 | 7 | 100 | — | 14 | 18 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | 6 | 0 | 0 | — | (6) | 3 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (5) | (1) | 4 | 4 | 96 | — | 12 | 6 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (14) | (13) | 0 | (3) | (4) | — | 1 | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 9 | 12 | 4 | 7 | 100 | — | 11 | 14 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Operating Income (Loss) by Operating Segment and Corporate: | ||||||||||||||||||||||||
Six Months Ended June 28, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 2,016 | $ | 1,084 | $ | 1,297 | $ | 1,273 | $ | 139 | $ | 219 | $ | (605 | ) | $ | 5,423 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | 1 | — | 30 | — | — | 3 | 89 | 123 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 40 | 54 | 94 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (148 | ) | — | (148 | ) | ||||||||||||||
Other Items | — | — | (11 | ) | — | — | (3 | ) | 8 | (6 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 2,017 | $ | 1,084 | $ | 1,316 | $ | 1,273 | $ | 139 | $ | 111 | $ | (454 | ) | $ | 5,486 | |||||||
Six Months Ended June 29, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 2,007 | $ | 1,164 | $ | 1,151 | $ | 1,265 | $ | 66 | $ | (342 | ) | $ | (598 | ) | $ | 4,713 | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | 450 | — | 450 | ||||||||||||||||
Productivity and Reinvestment | 2 | 3 | 99 | 1 | — | 22 | 79 | 206 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 79 | 3 | 82 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (193 | ) | — | (193 | ) | ||||||||||||||
Other Items | — | — | (5 | ) | — | — | 5 | (9 | ) | (9 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 2,009 | $ | 1,167 | $ | 1,245 | $ | 1,266 | $ | 66 | $ | 21 | $ | (525 | ) | $ | 5,249 | |||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | 0 | (7) | 13 | 1 | 110 | — | (1) | 15 | ||||||||||||||||
% Currency Impact | (14) | (16) | 0 | (3) | (6) | — | (3) | (11) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 15 | 10 | 13 | 3 | 116 | — | 1 | 27 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | 7 | 0 | 0 | — | (15) | 11 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | (7) | 6 | 1 | 110 | 436 | 13 | 5 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (14) | (16) | 0 | (3) | (6) | 64 | 3 | (9) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 15 | 9 | 6 | 3 | 116 | 372 | 10 | 14 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||
(UNAUDITED) | ||||||
(In millions) | ||||||
Operating Margin: | ||||||
Three Months Ended June 28, 2019 | Three Months Ended June 29, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 29.89 | % | 29.36 | % | 53 | |
Items Impacting Comparability (Non-GAAP) | (0.43 | )% | (1.21 | )% | ||
Comparable Operating Margin (Non-GAAP) | 30.32 | % | 30.57 | % | (25 | ) |
Comparable Currency Impact (Non-GAAP) | (0.72 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 31.04 | % | 30.57 | % | 47 | |
Impact of Acquisitions and Structural Items on Comparable Currency Neutral Operating Margin (Non-GAAP) | (2.21 | )% | (1.09 | )% | ||
Underlying Operating Margin (Non-GAAP) | 33.25 | % | 31.66 | % | 159 |
Six Months Ended June 28, 2019 | Six Months Ended June 29, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 29.01 | % | 26.60 | % | 241 | |
Items Impacting Comparability (Non-GAAP) | (0.34 | )% | (3.06 | )% | ||
Comparable Operating Margin (Non-GAAP) | 29.35 | % | 29.66 | % | (31 | ) |
Comparable Currency Impact (Non-GAAP) | (0.87 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 30.22 | % | 29.66 | % | 56 | |
Impact of Acquisitions and Structural Items on Comparable Currency Neutral Operating Margin (Non-GAAP) | (2.49 | )% | (1.25 | )% | ||
Underlying Operating Margin (Non-GAAP) | 32.71 | % | 30.91 | % | 180 |
Purchases and Issuances of Stock: | ||||||
Six Months Ended June 28, 2019 | Six Months Ended June 29, 2018 | |||||
Reported (GAAP): | ||||||
Issuances of Stock | $ | 602 | $ | 600 | ||
Purchases of Stock for Treasury | (689 | ) | (1,317 | ) | ||
Net Change in Stock Issuance Receivables1 | (1 | ) | 2 | |||
Net Change in Treasury Stock Payables2 | — | (15 | ) | |||
Net Share Repurchases (Non-GAAP) | $ | (88 | ) | $ | (730 | ) |
Free Cash Flow: | |||||||
Six Months Ended June 28, 2019 | Six Months Ended June 29, 2018 | % Change | |||||
Net Cash Provided by Operating Activities (GAAP) | $ | 4,501 | $ | 2,686 | 68 | ||
Purchases of Property, Plant and Equipment (GAAP) | (767 | ) | (689 | ) | 11 | ||
Free Cash Flow (Non-GAAP) | $ | 3,734 | $ | 1,997 | 87 |