Exhibit 99.2
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP performance measures, ratios, and trends used in managing the business, may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2003, and December 31, 2002. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures
Fourth Quarter
(UNAUDITED)
(In Millions, except per share data and margins)
| |
Three Months Ended December 31, 2003 |
Three Months Ended December 31, 2002 |
|
|
|||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
|
Items Impacting Results |
|
|
|
|
|
|
|||||||||||||||||
| |
|
After Considering Items (Non-GAAP) |
|
|
After Considering Items (Non-GAAP) |
|
% Change — After Considering Items (Non-GAAP) |
||||||||||||||||||
| |
Reported (GAAP) |
Charges Related to Streamlining Initiatives |
Charges Primarily Related to the Write Down of Assets in Latin America |
Reported (GAAP) |
Items Impacting Results |
% Change — Reported (GAAP) |
|||||||||||||||||||
| Net Operating Revenues | $ | 5,176 | $ | 5,176 | $ | 4,795 | $ | 4,795 | 8 | % | 8 | % | |||||||||||||
| Cost of goods sold | 1,850 | 1,850 | 1,701 | 1,701 | 9 | % | 9 | % | |||||||||||||||||
| Gross Profit | 3,326 | 3,326 | 3,094 | 3,094 | 7 | % | 7 | % | |||||||||||||||||
| Selling, general and administrative expenses | 1,945 | 1,945 | 1,804 | 1,804 | 8 | % | 8 | % | |||||||||||||||||
| Other operating charges | 289 | $ | (289 | ) | — | — | — | — | — | ||||||||||||||||
| Operating Income | 1,092 | 289 | 1,381 | 1,290 | 1,290 | (15 | )% | 7 | % | ||||||||||||||||
| Interest income | 38 | 38 | 53 | 53 | (28 | )% | (28 | )% | |||||||||||||||||
| Interest expense | 48 | 48 | 43 | 43 | 12 | % | 12 | % | |||||||||||||||||
| Equity income | 81 | $ | 7 | 88 | 34 | 34 | 138 | % | 159 | % | |||||||||||||||
| Other income (loss) — net | (39 | ) | (39 | ) | (61 | ) | (61 | ) | — | — | |||||||||||||||
| Income Before Income Taxes | 1,124 | 289 | 7 | 1,420 | 1,273 | 1,273 | (12 | )% | 12 | % | |||||||||||||||
| Income taxes | 197 | 92 | — | 289 | 343 | 343 | (43 | )% | (16 | )% | |||||||||||||||
| Net Income | $ | 927 | $ | 197 | $ | 7 | $ | 1,131 | $ | 930 | $ | 930 | 0 | % | 22 | % | |||||||||
| Diluted Net Income Per Share | $ | 0.38 | $ | 0.08 | $ | — | $ | 0.46 | $ | 0.38 | $ | 0.38 | 0 | % | 21 | % | |||||||||
| Average Shares Outstanding — Diluted | 2,452 | 2,452 | 2,452 | 2,452 | 2,478 | 2,478 | (1 | )% | (1 | )% | |||||||||||||||
| Gross Margin | 64.3 | % | 64.3 | % | 64.5 | % | 64.5 | % | |||||||||||||||||
| Operating Margin | 21.1 | % | 26.7 | % | 26.9 | % | 26.9 | % | |||||||||||||||||
| Effective Tax Rate | 17.5 | % | 20.4 | % | 26.9 | % | 26.9 | % | |||||||||||||||||
Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains positively impacting net income are reflected as deductions to reported net income.
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP performance measures, ratios, and trends used in managing the business, may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the twelve months ended December 31, 2003, and December 31, 2002. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures
Full Year
(UNAUDITED)
(In Millions, except per share data and margins)
| |
Twelve Months Ended December 31, 2003 |
Twelve Months Ended December 31, 2002 |
|
|
||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
|
Items Impacting Results |
|
|
Items Impacting Results |
|
|
|
||||||||||||||||||||||||||||||
| |
Reported (GAAP) |
Charges Related to Streamlining Initiatives |
Gain on Vitamin Settlement |
Gains on Issuances of Stock by Equity Investees |
Charges Primarily Related to the Write Down of Assets in Latin America |
After Considering Items (Non-GAAP) |
Reported (GAAP) |
SFAS 142 Accounting Change |
Gain on Sale of Kaiser |
Charges Primarily Related to Investments in Latin America |
After Considering Items (Non-GAAP) |
% Change — Reported (GAAP) |
% Change — After Considering Items (Non-GAAP) |
|||||||||||||||||||||||||
| Net Operating Revenues | $ | 21,044 | $ | 21,044 | $ | 19,564 | $ | 19,564 | 8 | % | 8 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 7,762 | $ | 52 | 7,814 | 7,105 | 7,105 | 9 | % | 10 | % | ||||||||||||||||||||||||||||
| Gross Profit | 13,282 | (52 | ) | 13,230 | 12,459 | 12,459 | 7 | % | 6 | % | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 7,488 | 7,488 | 7,001 | 7,001 | 7 | % | 7 | % | ||||||||||||||||||||||||||||||
| Other operating charges | 573 | $ | (561 | ) | $ | (12 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
| Operating Income | 5,221 | 561 | (52 | ) | 12 | 5,742 | 5,458 | 5,458 | (4 | )% | 5 | % | ||||||||||||||||||||||||||
| Interest income | 176 | 176 | 209 | 209 | (16 | )% | (16 | )% | ||||||||||||||||||||||||||||||
| Interest expense | 178 | 178 | 199 | 199 | (11 | )% | (11 | )% | ||||||||||||||||||||||||||||||
| Equity income | 406 | 102 | 508 | 384 | $ | (21 | ) | $ | 33 | 396 | 6 | % | 28 | % | ||||||||||||||||||||||||
| Other income (loss) — net | (138 | ) | (138 | ) | (353 | ) | (22 | ) | 157 | (218 | ) | — | — | |||||||||||||||||||||||||
| Gains on issuances of stock by equity investees | 8 | $ | (8 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
| Income Before Income Taxes and Cumulative Effect of Accounting Change | 5,495 | 561 | (52 | ) | (8 | ) | 114 | 6,110 | 5,499 | (43 | ) | 190 | 5,646 | — | 8 | % | ||||||||||||||||||||||
| Income taxes | 1,148 | 187 | (18 | ) | (3 | ) | 3 | 1,317 | 1,523 | (14 | ) | 14 | 1,523 | (25 | )% | (14 | )% | |||||||||||||||||||||
| Net Income Before Cumualtive Effect of Accounting Change | 4,347 | 374 | (34 | ) | (5 | ) | 111 | 4,793 | 3,976 | (29 | ) | 176 | 4,123 | 9 | % | 16 | % | |||||||||||||||||||||
| Cumulative effect of accounting change, net of income taxes | ||||||||||||||||||||||||||||||||||||||
| SFAS No. 142: Company Operations |
(367 | ) | $ | 367 | — | — | — | |||||||||||||||||||||||||||||||
| Equity Investees |
(559 | ) | 559 | — | — | — | ||||||||||||||||||||||||||||||||
| Net Income | $ | 4,347 | $ | 374 | $ | (34 | ) | $ | (5 | ) | $ | 111 | $ | 4,793 | $ | 3,050 | $ | 926 | $ | (29 | ) | $ | 176 | $ | 4,123 | 43 | % | 16 | % | |||||||||
| Diluted Net Income Per Share Before Cumulative Effect | $ | 1.77 | $ | 0.15 | $ | (0.01 | ) | $ | — | $ | 0.05 | $ | 1.95 | * | $ | 1.60 | $ | — | $ | (0.01 | ) | $ | 0.07 | $ | 1.66 | 11 | % | 17 | % | |||||||||
| Diluted Net Income Per Share | $ | 1.77 | $ | 0.15 | $ | (0.01 | ) | $ | — | $ | 0.05 | $ | 1.95 | * | $ | 1.23 | $ | 0.37 | $ | (0.01 | ) | $ | 0.07 | $ | 1.66 | 44 | % | 17 | % | |||||||||
| Average Shares Outstanding — Diluted | 2,462 | 2,462 | 2,462 | 2,462 | 2,462 | 2,462 | 2,483 | 2,483 | 2,483 | 2,483 | 2,483 | (1 | )% | (1 | )% | |||||||||||||||||||||||
| Gross Margin | 63.1 | % | 62.9 | % | 63.7 | % | 63.7 | % | ||||||||||||||||||||||||||||||
| Operating Margin | 24.8 | % | 27.3 | % | 27.9 | % | 27.9 | % | ||||||||||||||||||||||||||||||
| Effective Tax Rate | 20.9 | % | 21.6 | % | 27.7 | % | 27.0 | % | ||||||||||||||||||||||||||||||
Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains positively impacting net income are reflected as deductions to reported net income.
* Per share amounts do not add across due to rounding.