Highlights |
Quarterly / Full Year Performance |
• | Revenues: Net revenues grew 16% to $9.1 billion for the quarter and 9% to $37.3 billion for the year. Organic revenues (non-GAAP) grew 7% for the quarter and 6% for the year. Revenue growth for the quarter was driven by concentrate sales growth of 2% and price/mix growth of 5%. The quarter included one additional day, which resulted in an approximate 1-point benefit to revenue growth. Revenue growth for the year was driven by concentrate sales growth of 1% and price/mix growth of 5%. |
• | Margin: For the quarter, operating margin, which included items impacting comparability, was 23.9% versus 23.4% in the prior year, while comparable operating margin (non-GAAP) was 24.8% in both the current and prior year. For the year, operating margin, which included items impacting comparability, was 27.1% versus 26.7% in the prior year. Comparable operating margin (non-GAAP) was 27.9% versus 28.8% in the prior year. For both the quarter and full year, strong underlying margin expansion was more than offset by headwinds from currency and net acquisitions. |
• | Earnings per share: For the quarter, EPS grew 134% to $0.47, and comparable EPS (non-GAAP) grew 1% to $0.44. For the year, EPS grew 38% to $2.07, and comparable EPS (non-GAAP) grew 1% to $2.11. Both fourth |
• | Market share: The company continued to gain value share in total nonalcoholic ready-to-drink (NARTD) beverages. |
• | Cash flow: Cash from operations was $10.5 billion for the year, up 37% largely due to strong underlying growth, accelerated timing of working capital initiatives and the reduction of productivity and restructuring costs. Full year free cash flow (non-GAAP) was $8.4 billion, up 38%. |
Company Updates |
• | Gaining share across the total portfolio: In 2019, the company continued to grow its total portfolio, which led to the largest value share gains in almost a decade, with contribution from both sparkling and non-sparkling offerings. In sparkling, trademark Coca-Cola grew 6% retail value globally as it continued to scale innovative offerings such as Coca-Cola Plus Coffee, now available in more than 40 markets. Coca-Cola Zero Sugar continued to expand its footprint, achieving another year of double-digit volume growth. In the non-sparkling portfolio, innocent, one of the company's juice and smoothie brands, continued to perform well led by innovative products such as innocent plus, a premium juice offering with added vitamins. The innocent brand scaled beyond its flagship market of Europe, launching in Japan during 2019 with more expansion planned in 2020. |
• | Enabling growth through M&A: The company continues to expand its portfolio and capabilities through strategic acquisitions of brands in on-trend categories. Most recently, the company acquired full ownership of the value-added dairy business, fairlife, LLC. Value-added dairy products have been one of the fastest-growing categories in the United States, with fairlife being a large contributor to sales growth. fairlife’s continued success has been supported by new product innovations, ranging from lactose-free, ultra-filtered milk with less sugar and more protein than competing brands, to high-protein recovery and nutrition shakes and drinkable snacks. The brand has been supported by the reach of the U.S. Coca-Cola system, with products distributed through the Minute Maid distribution system and Coca-Cola bottlers across the country. The acquisition closed at the start of 2020. |
• | Continued progress toward a World Without Waste: Packaging remains an ongoing focus, and there were many examples of advances during the year. Bottles made from 100% recycled PET (rPET) were available in 12 markets. Coca-Cola Sweden announced it would be the first market in the world to transition to 100% rPET for all plastic bottles made in-country. The company’s investments included $19 million for a new bottle-to-bottle recycling facility in the Philippines. In the United States, the company teamed with partners and major competitors to launch the “Every Bottle Back” program during the fourth quarter. This includes a new $100 million industry fund that will be used to improve sorting, processing and collection in areas with the biggest infrastructure gaps to help increase the amount of recycled plastic available to be remade into beverage bottles. |
• | Growing revenue while reducing calories: Coca-Cola has teamed with industry counterparts to reduce the amount of calories Americans consume. The Balance Calories Initiative, launched in 2014, is the single-largest voluntary effort by an industry to help fight obesity. Coca-Cola is using its marketing resources and distribution network to boost awareness of, and interest in, the company’s ever-expanding portfolio of low- and no-calorie beverages and smaller packaging options, such as 7.5-oz. mini cans. These efforts are yielding results, as consumption of beverage calories has declined, driven by a reduction in calories consumed from full-sugar beverages, even as sales of sparkling soft drinks continue to grow. |
Operating Review – Three Months Ended Dec. 31, 2019 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Changes, Net | Reported Net Revenues | Organic Revenues2 | Unit Case Volume | ||
Consolidated | 2 | 5 | (2) | 12 | 16 | 7 | 3 | ||
Europe, Middle East & Africa | (5) | 3 | (5) | 4 | (3) | (2) | 4 | ||
Latin America | 10 | 17 | (7) | 0 | 20 | 26 | 3 | ||
North America | 3 | 2 | 0 | 0 | 4 | 4 | 0 | ||
Asia Pacific | 3 | 5 | 2 | 0 | 10 | 8 | 2 | ||
Global Ventures3 | 11 | (1) | (8) | 289 | 292 | 11 | 9 | ||
Bottling Investments | (1) | 5 | (1) | 26 | 29 | 4 | 26 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 19 | 2 | (7) | 23 |
Europe, Middle East & Africa | (14) | 0 | (9) | (5) |
Latin America | 34 | 0 | (13) | 47 |
North America | 30 | 22 | 0 | 9 |
Asia Pacific | 6 | (1) | 2 | 5 |
Global Ventures | 183 | 0 | (4) | 186 |
Bottling Investments | 8 | (187) | (17) | 213 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated EPS | 134 | 133 | (8) | 9 |
Operating Review – Year Ended Dec. 31, 2019 |
Percent Change | Concentrate Sales1 | Price/Mix | Currency Impact | Acquisitions, Divestitures and Structural Changes, Net | Reported Net Revenues | Organic Revenues2 | Unit Case Volume | ||
Consolidated | 1 | 5 | (4) | 7 | 9 | 6 | 2 | ||
Europe, Middle East & Africa | 1 | 4 | (9) | 3 | (1) | 5 | 2 | ||
Latin America | 1 | 13 | (10) | 0 | 3 | 13 | 1 | ||
North America | 0 | 3 | 0 | 0 | 2 | 3 | 0 | ||
Asia Pacific | 5 | 0 | (1) | (1) | 3 | 5 | 5 | ||
Global Ventures3 | 8 | (1) | (16) | 242 | 233 | 7 | 7 | ||
Bottling Investments | 6 | 3 | (5) | 5 | 10 | 9 | 24 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 10 | 5 | (8) | 13 |
Europe, Middle East & Africa | (4) | 0 | (12) | 9 |
Latin America | 2 | 0 | (14) | 17 |
North America | 12 | 7 | 0 | 5 |
Asia Pacific | 0 | (2) | (1) | 3 |
Global Ventures | 120 | 0 | (4) | 125 |
Bottling Investments | —4 | —4 | (12) | 411 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 38 | 37 | (8) | 9 |
Consolidated |
• | Price/mix growth of 5% for the quarter was attributed to positive contribution across all geographic segments and Bottling Investments. Concentrate sales for the quarter were a point behind unit case volume growth, largely due to a reduction in bottler inventory levels related to Brexit. Concentrate sales benefited from one extra day in the quarter, which resulted in an approximate 1-point tailwind. Price/mix growth of 5% for the year was driven by strong price realization and package initiatives across the majority of key markets, in addition to strong growth in Bottling Investments. For the full year, concentrate sales were a point behind unit case volume growth, primarily due to cycling concentrate sales outpacing unit case volume growth in the prior year by a point. |
• | Unit case volume grew 3% for the quarter and 2% for the full year, led by broad-based growth in developing and emerging markets, along with positive performance in developed markets. Category cluster performance was as follows: |
◦ | Sparkling soft drinks grew 3% in the quarter, driven by strong growth in China, Brazil and Southeast Asia. For the year, sparkling soft drinks grew 2%, led by strong growth across Asia and Europe. For both the quarter and full year, growth was led by trademark Coca-Cola, with volume growth across all geographic segments. |
◦ | Juice, dairy and plant-based beverages were even in the quarter and for the year, as strong performance by Chi in West Africa and innocent juices in Europe was offset by a decline in Rani in the Middle East. For the quarter, volume performance was under pressure as a result of strategic downsizing of key packages in the China juice portfolio. |
◦ | Water, enhanced water and sports drinks grew 2% in the quarter and 3% for the year, led by Ciel and Cristal in Latin America and strong global growth in the sports drinks portfolio, partially offset by the impact of deprioritization of low-margin water brands in key markets, such as China and Japan. |
◦ | Tea and coffee volume grew 4% in the quarter and 1% for the year, led by strong performance across the company's portfolio in Japan, Fuze Tea across Western Europe and Leão Fuze Tea in Brazil. |
• | Operating income grew 19% in the quarter and 10% for the year, which included items impacting comparability and a benefit from acquisitions, partially offset by currency headwinds. Comparable currency neutral operating income (non-GAAP) grew 23% in the quarter and 13% for the year, driven by solid organic revenue (non-GAAP) growth, a benefit from productivity initiatives and a benefit from acquisitions. |
Europe, Middle East & Africa |
• | Price/mix grew 3% for the quarter through positive performance across the majority of key markets. |
• | Unit case volume grew 4% for the quarter, led by strong growth across Nigeria, North Africa, Turkey and Central & Eastern Europe. |
• | Operating income declined 14% in the quarter, primarily due to a 9-point currency headwind. Comparable currency neutral operating income (non-GAAP) declined 5%, primarily due to a reduction in bottler inventory levels related to Brexit. |
• | For the full year, the company gained value share in total NARTD beverages in addition to all category clusters. |
Latin America |
• | Price/mix grew 17% for the quarter, led by price realization and package initiatives in Mexico. All business units achieved positive price/mix in the quarter. |
• | Unit case volume grew 3% in the quarter, as growth across the majority of markets, led by Brazil and Mexico, was partially offset by a decline in Argentina. Volume growth benefited from acquired brands in Central America. |
• | Operating income grew 34% in the quarter, which included a 13-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 47%, primarily due to cycling the timing of concentrate shipments in Brazil in the prior year and operating leverage across all business units. |
• | For the full year, the company gained value share in total NARTD beverages, in addition to all category clusters with the exception of juice, dairy and plant-based beverages, where the company maintained share. |
North America |
• | Price/mix grew 2% for the quarter, driven by solid performance across the majority of category clusters. |
• | Unit case volume was even for the quarter across all category clusters, with the exception of water, enhanced water and sports drinks, which grew 3%, driven by strong growth in the sports drinks portfolio, in addition to premium water brands, Topo Chico and smartwater. The company grew volume for trademark Coca-Cola through continued double-digit growth in Coca-Cola Zero Sugar. |
• | Operating income grew 30% in the quarter, which included a benefit from items impacting comparability. Comparable currency neutral operating income (non-GAAP) grew 9%, led by positive pricing in the marketplace and cycling the timing of expenses in the prior year. |
• | For the full year, the company gained value share in total NARTD beverages, in addition to all category clusters, with the exception of tea and coffee, where the company maintained share. |
Asia Pacific |
• | Price/mix grew 5% in the quarter, as positive performance across the majority of markets was further benefited by geographic mix, due to growth in developed markets outpacing certain emerging and developing markets. |
• | Unit case volume grew 2% in the quarter due to broad-based growth across the majority of key markets, partially offset by soft performance in China. In China, strong growth in sparkling soft drinks was offset by the impact of strategic deprioritization of low-margin water and downsizing of key packages in the juice portfolio. |
• | Operating income grew 6% in the quarter, which included items impacting comparability. Comparable currency neutral operating income (non-GAAP) grew 5%. Operating income was negatively impacted by geographic mix. |
• | For the full year, the company gained value share in total NARTD beverages in addition to sparkling soft drinks. |
Global Ventures |
• | Reported net revenues in the quarter benefited from the Costa acquisition. |
• | Price/mix declined 1% in the quarter, largely driven by unfavorable product mix. |
• | Unit case volume grew 9% in the quarter, led by strong growth in Monster and innocent. |
• | Operating income growth in the quarter benefited from the Costa acquisition. |
Bottling Investments |
• | Price/mix grew 5% for the quarter, largely driven by solid performance from the company's bottling operations in South Africa. |
• | Operating income growth in the quarter was driven by strong underlying operating leverage, primarily in the company's bottling operations in India, and the acquisition of bottling operations in the Philippines, partially offset by items impacting comparability and currency headwinds. |
Outlook |
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 were 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 | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Net Operating Revenues | $ | 9,068 | $ | 7,806 | 16 | |||||
Cost of goods sold | 3,566 | 3,102 | 15 | |||||||
Gross Profit | 5,502 | 4,704 | 17 | |||||||
Selling, general and administrative expenses | 3,224 | 2,716 | 19 | |||||||
Other operating charges | 114 | 163 | (30 | ) | ||||||
Operating Income | 2,164 | 1,825 | 19 | |||||||
Interest income | 135 | 179 | (25 | ) | ||||||
Interest expense | 235 | 253 | (7 | ) | ||||||
Equity income (loss) — net | 241 | 195 | 24 | |||||||
Other income (loss) — net | 115 | (981 | ) | — | ||||||
Income Before Income Taxes | 2,420 | 965 | 151 | |||||||
Income taxes | 355 | 38 | 815 | |||||||
Consolidated Net Income | 2,065 | 927 | 123 | |||||||
Less: Net income (loss) attributable to noncontrolling interests | 23 | 57 | (59 | ) | ||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 2,042 | $ | 870 | 135 | |||||
Basic Net Income Per Share1 | $ | 0.48 | $ | 0.20 | 134 | |||||
Diluted Net Income Per Share1 | $ | 0.47 | $ | 0.20 | 134 | |||||
Average Shares Outstanding | 4,282 | 4,262 | 0 | |||||||
Effect of dilutive securities | 40 | 42 | (3 | ) | ||||||
Average Shares Outstanding Assuming Dilution | 4,322 | 4,304 | 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) | ||||||||||
Year Ended | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Net Operating Revenues | $ | 37,266 | $ | 34,300 | 9 | |||||
Cost of goods sold | 14,619 | 13,067 | 12 | |||||||
Gross Profit | 22,647 | 21,233 | 7 | |||||||
Selling, general and administrative expenses | 12,103 | 11,002 | 10 | |||||||
Other operating charges | 458 | 1,079 | (58 | ) | ||||||
Operating Income | 10,086 | 9,152 | 10 | |||||||
Interest income | 563 | 689 | (18 | ) | ||||||
Interest expense | 946 | 950 | 0 | |||||||
Equity income (loss) — net | 1,049 | 1,008 | 4 | |||||||
Other income (loss) — net | 34 | (1,674 | ) | — | ||||||
Income Before Income Taxes | 10,786 | 8,225 | 31 | |||||||
Income taxes | 1,801 | 1,749 | 3 | |||||||
Consolidated Net Income | 8,985 | 6,476 | 39 | |||||||
Less: Net income (loss) attributable to noncontrolling interests | 65 | 42 | 54 | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 8,920 | $ | 6,434 | 39 | |||||
Basic Net Income Per Share1 | $ | 2.09 | $ | 1.51 | 38 | |||||
Diluted Net Income Per Share1 | $ | 2.07 | $ | 1.50 | 38 | |||||
Average Shares Outstanding | 4,276 | 4,259 | 0 | |||||||
Effect of dilutive securities | 38 | 40 | (4 | ) | ||||||
Average Shares Outstanding Assuming Dilution | 4,314 | 4,299 | 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) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 6,480 | $ | 9,077 | |||
Short-term investments | 1,467 | 2,025 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 7,947 | 11,102 | |||||
Marketable securities | 3,228 | 5,013 | |||||
Trade accounts receivable, less allowances of $524 and $501, respectively | 3,971 | 3,685 | |||||
Inventories | 3,379 | 3,071 | |||||
Prepaid expenses and other assets | 1,886 | 2,059 | |||||
Total Current Assets | 20,411 | 24,930 | |||||
Equity method investments | 19,025 | 19,412 | |||||
Other investments | 854 | 867 | |||||
Other assets | 6,075 | 4,148 | |||||
Deferred income tax assets | 2,412 | 2,674 | |||||
Property, plant and equipment — net | 10,838 | 9,598 | |||||
Trademarks with indefinite lives | 9,266 | 6,682 | |||||
Bottlers' franchise rights with indefinite lives | 109 | 51 | |||||
Goodwill | 16,764 | 14,109 | |||||
Other intangible assets | 627 | 745 | |||||
Total Assets | $ | 86,381 | $ | 83,216 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 11,312 | $ | 9,533 | |||
Loans and notes payable | 10,994 | 13,835 | |||||
Current maturities of long-term debt | 4,253 | 5,003 | |||||
Accrued income taxes | 414 | 411 | |||||
Total Current Liabilities | 26,973 | 28,782 | |||||
Long-term debt | 27,516 | 25,376 | |||||
Other liabilities | 8,510 | 7,646 | |||||
Deferred income tax liabilities | 2,284 | 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 | 17,154 | 16,520 | |||||
Reinvested earnings | 65,810 | 63,234 | |||||
Accumulated other comprehensive income (loss) | (13,499 | ) | (12,814 | ) | |||
Treasury stock, at cost — 2,760 and 2,772 shares, respectively | (52,244 | ) | (51,719 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 18,981 | 16,981 | |||||
Equity attributable to noncontrolling interests | 2,117 | 2,077 | |||||
Total Equity | 21,098 | 19,058 | |||||
Total Liabilities and Equity | $ | 86,381 | $ | 83,216 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Year Ended | |||||||
Operating Activities | December 31, 2019 | December 31, 2018 | |||||
Consolidated net income | $ | 8,985 | $ | 6,476 | |||
Depreciation and amortization | 1,365 | 1,086 | |||||
Stock-based compensation expense | 201 | 225 | |||||
Deferred income taxes | (280 | ) | (413 | ) | |||
Equity (income) loss — net of dividends | (421 | ) | (457 | ) | |||
Foreign currency adjustments | 91 | (50 | ) | ||||
Significant (gains) losses — net | (467 | ) | 743 | ||||
Other operating charges | 127 | 558 | |||||
Other items | 504 | 699 | |||||
Net change in operating assets and liabilities | 366 | (1,240 | ) | ||||
Net Cash Provided by Operating Activities | 10,471 | 7,627 | |||||
Investing Activities | |||||||
Purchases of investments | (4,704 | ) | (7,789 | ) | |||
Proceeds from disposals of investments | 6,973 | 14,977 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (5,542 | ) | (1,263 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 429 | 1,362 | |||||
Purchases of property, plant and equipment | (2,054 | ) | (1,548 | ) | |||
Proceeds from disposals of property, plant and equipment | 978 | 248 | |||||
Other investing activities | (56 | ) | (60 | ) | |||
Net Cash Provided by (Used in) Investing Activities | (3,976 | ) | 5,927 | ||||
Financing Activities | |||||||
Issuances of debt | 23,009 | 27,605 | |||||
Payments of debt | (24,850 | ) | (30,600 | ) | |||
Issuances of stock | 1,012 | 1,476 | |||||
Purchases of stock for treasury | (1,103 | ) | (1,912 | ) | |||
Dividends | (6,845 | ) | (6,644 | ) | |||
Other financing activities | (227 | ) | (272 | ) | |||
Net Cash Provided by (Used in) Financing Activities | (9,004 | ) | (10,347 | ) | |||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (72 | ) | (262 | ) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | |||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the year | (2,581 | ) | 2,945 | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year | 9,318 | 6,373 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Year | 6,737 | 9,318 | |||||
Less: Restricted cash and restricted cash equivalents at end of year | 257 | 241 | |||||
Cash and Cash Equivalents at End of Year | $ | 6,480 | $ | 9,077 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Operating Segments and Corporate | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | ||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | % Fav. / (Unfav.) | December 31, 2019 | December 31, 2018 | % Fav. / (Unfav.) | December 31, 2019 | December 31, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 1,528 | $ | 1,579 | (3 | ) | $ | 649 | $ | 753 | (14 | ) | $ | 660 | $ | 402 | 65 | |||||||
Latin America | 1,174 | 981 | 20 | 688 | 514 | 34 | 652 | 501 | 30 | |||||||||||||||
North America | 2,932 | 2,807 | 4 | 656 | 504 | 30 | 668 | 523 | 28 | |||||||||||||||
Asia Pacific | 1,138 | 1,036 | 10 | 415 | 392 | 6 | 419 | 389 | 7 | |||||||||||||||
Global Ventures | 713 | 182 | 292 | 118 | 42 | 183 | 120 | 46 | 163 | |||||||||||||||
Bottling Investments | 1,920 | 1,493 | 29 | 132 | 121 | 8 | 368 | 115 | 220 | |||||||||||||||
Corporate | 15 | 7 | 133 | (494 | ) | (501 | ) | 1 | (467 | ) | (1,011 | ) | 54 | |||||||||||
Eliminations | (352 | ) | (279 | ) | (26 | ) | — | — | — | — | — | — | ||||||||||||
Consolidated | $ | 9,068 | $ | 7,806 | 16 | $ | 2,164 | $ | 1,825 | 19 | $ | 2,420 | $ | 965 | 151 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Operating Segments and Corporate | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | ||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | % Fav./(Unfav.) | December 31, 2019 | December 31, 2018 | % Fav. / (Unfav.) | December 31, 2019 | December 31, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 7,058 | $ | 7,099 | (1 | ) | $ | 3,551 | $ | 3,693 | (4 | ) | $ | 3,361 | $ | 3,386 | (1 | ) | ||||||
Latin America | 4,118 | 4,010 | 3 | 2,375 | 2,318 | 2 | 2,288 | 2,243 | 2 | |||||||||||||||
North America | 11,915 | 11,630 | 2 | 2,594 | 2,318 | 12 | 2,592 | 2,345 | 11 | |||||||||||||||
Asia Pacific | 5,327 | 5,185 | 3 | 2,282 | 2,271 | 0 | 2,310 | 2,298 | 1 | |||||||||||||||
Global Ventures | 2,562 | 770 | 233 | 334 | 152 | 120 | 343 | 165 | 108 | |||||||||||||||
Bottling Investments | 7,440 | 6,787 | 10 | 358 | (197 | ) | — | 716 | (159 | ) | — | |||||||||||||
Corporate | 94 | 92 | 3 | (1,408 | ) | (1,403 | ) | 0 | (824 | ) | (2,053 | ) | 60 | |||||||||||
Eliminations | (1,248 | ) | (1,273 | ) | 2 | — | — | — | — | — | — | |||||||||||||
Consolidated | $ | 37,266 | $ | 34,300 | 9 | $ | 10,086 | $ | 9,152 | 10 | $ | 10,786 | $ | 8,225 | 31 |
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 controlling interests in bottling operations in Zambia, Eswatini and Kenya. 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 controlling interests in bottling operations in Zambia and Botswana. 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 2019, the company refranchised certain of its bottling operations in India. 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 Asia Pacific, 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 changes, 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 changes. The adjustments related to acquisitions, divestitures and structural changes for the years ended December 31, 2019 and December 31, 2018 consisted of the structural changes discussed above. Additionally, in |
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 changes, 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 issuances (repurchases)" is a non-GAAP financial measure that reflects the net amount of issuances of stock or purchases of stock for treasury after considering 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) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||
Three Months Ended December 31, 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) | $ | 9,068 | $ | 3,566 | $ | 5,502 | 60.7 | % | $ | 3,224 | $ | 114 | $ | 2,164 | 23.9 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (80 | ) | 80 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (34 | ) | 34 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | ||||||||||||||||
Other Items | 17 | 39 | (22 | ) | — | — | (22 | ) | ||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 9,085 | $ | 3,605 | $ | 5,480 | 60.3 | % | $ | 3,224 | $ | — | $ | 2,256 | 24.8 | % | ||||||
Three Months Ended December 31, 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) | $ | 7,806 | $ | 3,102 | $ | 4,704 | 60.3 | % | $ | 2,716 | $ | 163 | $ | 1,825 | 23.4 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (127 | ) | 127 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (32 | ) | 32 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 21 | (21 | ) | 68 | — | (89 | ) | ||||||||||||||
Other Items | (1 | ) | (40 | ) | 39 | — | (4 | ) | 43 | |||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 7,805 | $ | 3,083 | $ | 4,722 | 60.5 | % | $ | 2,784 | $ | — | $ | 1,938 | 24.8 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 16 | 15 | 17 | 19 | (30) | 19 | ||||||||||||||||
% Currency Impact | (2) | 1 | (4) | (1) | — | (8) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 18 | 14 | 21 | 20 | — | 27 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 16 | 17 | 16 | 16 | — | 16 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (2) | 1 | (4) | (1) | — | (7) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 18 | 16 | 20 | 17 | — | 23 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||
Three Months Ended December 31, 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) | $ | 235 | $ | 241 | $ | 115 | $ | 2,420 | $ | 355 | 14.7 | % | $ | 2,042 | $ | 0.47 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 80 | 18 | 62 | 0.01 | ||||||||||||||||
Equity Investees | — | (7 | ) | — | (7 | ) | — | (7 | ) | — | |||||||||||||
Transaction Gains/Losses | — | — | (80 | ) | (46 | ) | 7 | (53 | ) | (0.01 | ) | ||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | — | ||||||||||||||||
Other Items | — | — | (42 | ) | (64 | ) | (12 | ) | (52 | ) | (0.01 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 86 | (86 | ) | (0.02 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 235 | $ | 234 | $ | (7 | ) | $ | 2,383 | $ | 454 | 19.0 | % | $ | 1,906 | $ | 0.44 | ||||||
Three Months Ended December 31, 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) | $ | 253 | $ | 195 | $ | (981 | ) | $ | 965 | $ | 38 | 4.0 | % | $ | 870 | $ | 0.20 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 334 | 334 | — | 334 | 0.08 | ||||||||||||||||
Productivity and Reinvestment | — | — | 4 | 131 | 32 | 99 | 0.02 | ||||||||||||||||
Equity Investees | — | 46 | — | 46 | 2 | 44 | 0.01 | ||||||||||||||||
Transaction Gains/Losses | — | — | 306 | 338 | 78 | 260 | 0.06 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (89 | ) | (24 | ) | (41 | ) | (0.01 | ) | ||||||||||||
Other Items | — | — | 411 | 454 | 109 | 345 | 0.08 | ||||||||||||||||
Certain Tax Matters | — | — | — | — | 32 | (32 | ) | (0.01 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 253 | $ | 241 | $ | 74 | $ | 2,179 | $ | 267 | 12.2 | % | $ | 1,879 | $ | 0.44 | |||||||
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) | (7) | 24 | — | 151 | 815 | 135 | 134 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (7) | (2) | — | 9 | 70 | 1 | 1 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||
Year Ended December 31, 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) | $ | 37,266 | $ | 14,619 | $ | 22,647 | 60.8 | % | $ | 12,103 | $ | 458 | $ | 10,086 | 27.1 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (42 | ) | 42 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (264 | ) | 264 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (149 | ) | 149 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 39 | (39 | ) | 109 | — | (148 | ) | ||||||||||||||
Other Items | 14 | 1 | 13 | — | (3 | ) | 16 | |||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 37,280 | $ | 14,659 | $ | 22,621 | 60.7 | % | $ | 12,212 | $ | — | $ | 10,409 | 27.9 | % | ||||||
Year Ended December 31, 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) | $ | 34,300 | $ | 13,067 | $ | 21,233 | 61.9 | % | $ | 11,002 | $ | 1,079 | $ | 9,152 | 26.7 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (450 | ) | 450 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (440 | ) | 440 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (158 | ) | 158 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 92 | (92 | ) | 280 | — | (372 | ) | ||||||||||||||
Other Items | (9 | ) | (34 | ) | 25 | (2 | ) | (31 | ) | 58 | ||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 34,291 | $ | 13,125 | $ | 21,166 | 61.7 | % | $ | 11,280 | $ | — | $ | 9,886 | 28.8 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 9 | 12 | 7 | 10 | (58) | 10 | ||||||||||||||||
% Currency Impact | (4) | (2) | (6) | (4) | — | (9) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 13 | 14 | 12 | 14 | — | 19 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 9 | 12 | 7 | 8 | — | 5 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (4) | (2) | (6) | (4) | — | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 13 | 14 | 13 | 12 | — | 13 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||
Year Ended December 31, 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) | $ | 946 | $ | 1,049 | $ | 34 | $ | 10,786 | $ | 1,801 | 16.7 | % | $ | 8,920 | $ | 2.07 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 767 | 809 | 36 | 773 | 0.18 | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 264 | 61 | 203 | 0.05 | ||||||||||||||||
Equity Investees | — | 100 | — | 100 | 4 | 96 | 0.02 | ||||||||||||||||
Transaction Gains/Losses | — | — | (466 | ) | (317 | ) | 41 | (343 | ) | (0.08 | ) | ||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (148 | ) | (42 | ) | (67 | ) | (0.02 | ) | ||||||||||||
Other Items | — | — | (200 | ) | (184 | ) | (37 | ) | (147 | ) | (0.03 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 331 | (331 | ) | (0.08 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 946 | $ | 1,149 | $ | 135 | $ | 11,310 | $ | 2,195 | 19.4 | % | $ | 9,104 | $ | 2.11 | |||||||
Year Ended December 31, 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) | $ | 950 | $ | 1,008 | $ | (1,674 | ) | $ | 8,225 | $ | 1,749 | 21.3 | % | $ | 6,434 | $ | 1.50 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 591 | 1,041 | 116 | 925 | 0.22 | ||||||||||||||||
Productivity and Reinvestment | — | — | 68 | 508 | 120 | 388 | 0.09 | ||||||||||||||||
Equity Investees | — | 111 | — | 111 | (9 | ) | 120 | 0.03 | |||||||||||||||
Transaction Gains/Losses | — | — | 935 | 1,093 | 4 | 1,011 | 0.24 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (372 | ) | (105 | ) | (170 | ) | (0.04 | ) | ||||||||||||
Other Items | 27 | — | 418 | 449 | 110 | 339 | 0.08 | ||||||||||||||||
Certain Tax Matters | — | — | — | — | 92 | (92 | ) | (0.02 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 977 | $ | 1,119 | $ | 338 | $ | 11,055 | $ | 2,077 | 18.8 | % | $ | 8,955 | $ | 2.08 | |||||||
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 | 4 | — | 31 | 3 | 39 | 38 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (3) | 3 | (60) | 2 | 6 | 2 | 1 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |
Reconciliation of GAAP and Non-GAAP Financial Measures | |
(UNAUDITED) | |
Diluted Net Income Per Share: | |
Three Months Ended December 31, 2019 | |
% Change — Reported (GAAP) | 134 |
% Currency Impact | (9) |
% Change — Currency Neutral (Non-GAAP) | 143 |
% Impact of Items Impacting Comparability (Non-GAAP) | 133 |
% Change — Comparable (Non-GAAP) | 1 |
% Comparable Currency Impact (Non-GAAP) | (8) |
% Change — Comparable Currency Neutral (Non-GAAP) | 9 |
Year Ended December 31, 2019 | |
% Change — Reported (GAAP) | 38 |
% Currency Impact | (11) |
% Change — Currency Neutral (Non-GAAP) | 49 |
% Impact of Items Impacting Comparability (Non-GAAP) | 37 |
% Change — Comparable (Non-GAAP) | 1 |
% Comparable Currency Impact (Non-GAAP) | (8) |
% Change — Comparable Currency Neutral (Non-GAAP) | 9 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||
Net Operating Revenues by Operating Segment and Corporate: | |||||||||||||||||||||||||||
Three Months Ended December 31, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,528 | $ | 1,174 | $ | 2,932 | $ | 1,138 | $ | 713 | $ | 1,920 | $ | 15 | $ | (352 | ) | $ | 9,068 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | 17 | — | 17 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,528 | $ | 1,174 | $ | 2,932 | $ | 1,138 | $ | 713 | $ | 1,920 | $ | 32 | $ | (352 | ) | $ | 9,085 | ||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,579 | $ | 981 | $ | 2,807 | $ | 1,036 | $ | 182 | $ | 1,493 | $ | 7 | $ | (279 | ) | $ | 7,806 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 1,579 | $ | 981 | $ | 2,807 | $ | 1,036 | $ | 182 | $ | 1,493 | $ | 6 | $ | (279 | ) | $ | 7,805 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | (3) | 20 | 4 | 10 | 292 | 29 | 133 | (26) | 16 | ||||||||||||||||||
% Currency Impact | (5) | (7) | 0 | 2 | (8) | (1) | (251) | — | (2) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 2 | 26 | 4 | 8 | 300 | 30 | 384 | — | 18 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Changes | 4 | 0 | 0 | 0 | 289 | 26 | 0 | — | 12 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | (2) | 26 | 4 | 8 | 11 | 4 | 384 | — | 7 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | (3) | 20 | 4 | 10 | 292 | 29 | 559 | — | 16 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (7) | 0 | 2 | (8) | (1) | 34 | — | (2) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 2 | 26 | 4 | 8 | 300 | 30 | 525 | — | 18 |
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: | |||||||||||||||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 7,058 | $ | 4,118 | $ | 11,915 | $ | 5,327 | $ | 2,562 | $ | 7,440 | $ | 94 | $ | (1,248 | ) | $ | 37,266 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | 14 | — | 14 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 7,058 | $ | 4,118 | $ | 11,915 | $ | 5,327 | $ | 2,562 | $ | 7,440 | $ | 108 | $ | (1,248 | ) | $ | 37,280 | ||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 7,099 | $ | 4,010 | $ | 11,630 | $ | 5,185 | $ | 770 | $ | 6,787 | $ | 92 | $ | (1,273 | ) | $ | 34,300 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (9 | ) | — | (9 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 7,099 | $ | 4,010 | $ | 11,630 | $ | 5,185 | $ | 770 | $ | 6,787 | $ | 83 | $ | (1,273 | ) | $ | 34,291 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | (1) | 3 | 2 | 3 | 233 | 10 | 3 | 2 | 9 | ||||||||||||||||||
% Currency Impact | (9) | (10) | 0 | (1) | (16) | (5) | (11) | — | (4) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 8 | 13 | 3 | 4 | 248 | 15 | 14 | — | 13 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Changes | 3 | 0 | 0 | (1) | 242 | 5 | 0 | — | 7 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 5 | 13 | 3 | 5 | 7 | 9 | 14 | — | 6 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | (1) | 3 | 2 | 3 | 233 | 10 | 31 | — | 9 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (9) | (10) | 0 | (1) | (16) | (5) | 16 | — | (4) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 8 | 13 | 3 | 4 | 248 | 15 | 15 | — | 13 |
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 December 31, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 649 | $ | 688 | $ | 656 | $ | 415 | $ | 118 | $ | 132 | $ | (494 | ) | $ | 2,164 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | 1 | 20 | — | — | 2 | 57 | 80 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 34 | — | 34 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | — | — | ||||||||||||||||
Other Items | — | — | (42 | ) | — | — | (5 | ) | 25 | (22 | ) | |||||||||||||
Comparable (Non-GAAP) | $ | 649 | $ | 689 | $ | 634 | $ | 415 | $ | 118 | $ | 163 | $ | (412 | ) | $ | 2,256 | |||||||
Three Months Ended December 31, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 753 | $ | 514 | $ | 504 | $ | 392 | $ | 42 | $ | 121 | $ | (501 | ) | $ | 1,825 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | (1 | ) | 2 | 37 | (3 | ) | — | (1 | ) | 93 | 127 | |||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 22 | 10 | 32 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (89 | ) | — | (89 | ) | ||||||||||||||
Other Items | — | — | 43 | — | — | 1 | (1 | ) | 43 | |||||||||||||||
Comparable (Non-GAAP) | $ | 752 | $ | 516 | $ | 584 | $ | 389 | $ | 42 | $ | 54 | $ | (399 | ) | $ | 1,938 | |||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (14) | 34 | 30 | 6 | 183 | 8 | 1 | 19 | ||||||||||||||||
% Currency Impact | (9) | (13) | 0 | 2 | (4) | (8) | (3) | (8) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | (5) | 47 | 30 | 4 | 186 | 16 | 4 | 27 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | 22 | (1) | 0 | (187) | 4 | 2 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (14) | 34 | 9 | 6 | 183 | 196 | (3) | 16 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (9) | (13) | 0 | 2 | (4) | (17) | 1 | (7) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | (5) | 47 | 9 | 5 | 186 | 213 | (4) | 23 |
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: | ||||||||||||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 3,551 | $ | 2,375 | $ | 2,594 | $ | 2,282 | $ | 334 | $ | 358 | $ | (1,408 | ) | $ | 10,086 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | 42 | — | — | — | 42 | ||||||||||||||||
Productivity and Reinvestment | 2 | 1 | 62 | — | — | 5 | 194 | 264 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 95 | 54 | 149 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (148 | ) | — | (148 | ) | ||||||||||||||
Other Items | — | — | (4 | ) | — | — | (6 | ) | 26 | 16 | ||||||||||||||
Comparable (Non-GAAP) | $ | 3,553 | $ | 2,376 | $ | 2,652 | $ | 2,324 | $ | 334 | $ | 304 | $ | (1,134 | ) | $ | 10,409 | |||||||
Year Ended December 31, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 3,693 | $ | 2,318 | $ | 2,318 | $ | 2,271 | $ | 152 | $ | (197 | ) | $ | (1,403 | ) | $ | 9,152 | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | 450 | — | 450 | ||||||||||||||||
Productivity and Reinvestment | (3 | ) | 4 | 175 | (4 | ) | — | 31 | 237 | 440 | ||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 138 | 20 | 158 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (372 | ) | — | (372 | ) | ||||||||||||||
Other Items | — | — | 37 | — | — | 11 | 10 | 58 | ||||||||||||||||
Comparable (Non-GAAP) | $ | 3,690 | $ | 2,322 | $ | 2,530 | $ | 2,267 | $ | 152 | $ | 61 | $ | (1,136 | ) | $ | 9,886 | |||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (4) | 2 | 12 | 0 | 120 | — | 0 | 10 | ||||||||||||||||
% Currency Impact | (12) | (14) | 0 | (1) | (4) | — | 0 | (9) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 9 | 17 | 12 | 1 | 125 | — | 0 | 19 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | 7 | (2) | 0 | — | (1) | 5 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (4) | 2 | 5 | 3 | 120 | 399 | 0 | 5 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (12) | (14) | 0 | (1) | (4) | (12) | 2 | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 9 | 17 | 5 | 3 | 125 | 411 | (2) | 13 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||
(UNAUDITED) | ||||||
(In millions) | ||||||
Operating Margin: | ||||||
Three Months Ended December 31, 2019 | Three Months Ended December 31, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 23.87 | % | 23.38 | % | 49 | |
Items Impacting Comparability (Non-GAAP) | (0.96 | )% | (1.45 | )% | ||
Comparable Operating Margin (Non-GAAP) | 24.83 | % | 24.83 | % | 0 | |
Comparable Currency Impact (Non-GAAP) | (1.08 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 25.91 | % | 24.83 | % | 108 | |
Impact of Acquisitions and Structural Changes on Comparable Currency Neutral Operating Margin (Non-GAAP) | (1.53 | )% | 0.01 | % | ||
Underlying Operating Margin (Non-GAAP) | 27.44 | % | 24.82 | % | 262 |
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 27.07 | % | 26.68 | % | 39 | |
Items Impacting Comparability (Non-GAAP) | (0.85 | )% | (2.15 | )% | ||
Comparable Operating Margin (Non-GAAP) | 27.92 | % | 28.83 | % | (91 | ) |
Comparable Currency Impact (Non-GAAP) | (1.00 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 28.92 | % | 28.83 | % | 9 | |
Impact of Acquisitions and Structural Changes on Comparable Currency Neutral Operating Margin (Non-GAAP) | (2.18 | )% | (0.76 | )% | ||
Underlying Operating Margin (Non-GAAP) | 31.10 | % | 29.59 | % | 151 |
Purchases and Issuances of Stock: | ||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||
Reported (GAAP): | ||||||
Issuances of Stock | $ | 1,012 | $ | 1,476 | ||
Purchases of Stock for Treasury | (1,103 | ) | (1,912 | ) | ||
Net Change in Stock Issuance Receivables1 | (1 | ) | (6 | ) | ||
Net Share Issuances (Repurchases) (Non-GAAP) | $ | (92 | ) | $ | (442 | ) |
Free Cash Flow: | |||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | % Change | |||||
Net Cash Provided by Operating Activities (GAAP) | $ | 10,471 | $ | 7,627 | 37 | ||
Purchases of Property, Plant and Equipment (GAAP) | (2,054 | ) | (1,548 | ) | 33 | ||
Free Cash Flow (Non-GAAP) | $ | 8,417 | $ | 6,079 | 38 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||
(UNAUDITED) |
Projected 2020 Free Cash Flow (Non-GAAP) (In Billions): | |||
Year Ending December 31, 2020 | |||
Net Cash Provided by Operating Activities (GAAP) | $ | 10.0 | |
Purchases of Property, Plant and Equipment (GAAP) | (2.0 | ) | |
Free Cash Flow (Non-GAAP) | $ | 8.0 |