Highlights |
Quarterly Performance |
• | Revenues: Net revenues grew 8% to $9.5 billion. Organic revenues (non-GAAP) grew 5%. Revenue growth was driven by price/mix growth of 6%, partially offset by a 2% decline in concentrate sales. |
• | Margin: Operating margin, which included items impacting comparability, was 26.3% versus 29.8% in the prior year. Comparable operating margin (non-GAAP) was 28.1% versus 30.7% in the prior year. Margins were unfavorably impacted by a 260 basis point headwind from currency and net acquisitions. |
• | Earnings per share: EPS grew 37% to $0.60. Comparable EPS (non-GAAP) declined 2% to $0.56. Comparable EPS performance included the impact from a 6-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 $7.8 billion, up 37% largely due to strong underlying growth, working capital initiatives and the timing of tax payments. Year-to-date free cash flow (non-GAAP) was $6.6 billion, up 41%. |
Company Updates |
• | Executing the revenue growth algorithm: The company continues to capitalize on opportunities for growth through expanded revenue growth management capabilities and improved execution. Key initiatives include increasing availability and distribution of priority SKUs. In Brazil, for example, expansion of priority package offerings at key price points, along with placing more than 100,000 incremental coolers in the marketplace, has led to double-digit transaction growth of immediate consumption priority packages year-to-date. Globally, growth in immediate consumption packages outpaced future consumption by 6 points during the quarter. |
• | Expanding headroom for growth in sparkling beverages: Globally, trademark Coca-Cola has grown retail value 6% year-to-date through an accelerated pace of innovation and optimizing price/pack architecture in the marketplace. The largest contributor to retail value growth was the flagship U.S. market, driven by continued double-digit volume growth in Coca-Cola Zero Sugar, in addition to strong growth in smaller packages, led by double-digit growth in 7.5-oz. mini cans. Internationally, a scaled launch of Coca-Cola Plus Coffee in more than 20 markets with a diligent consumer focus, consistent messaging and an integrated execution plan has driven strong performance year-to-date. Accelerated revenue growth for core sparkling soft drink brands continues to fuel and enable new innovations and investments across the expanding total beverage portfolio. |
• | Disciplined portfolio growth of premium brands: During the year, the company leveraged the leader, challenger, explorer framework to successfully grow smartwater in India, where it has become the second-largest premium water brand in the market since its initial launch in 2018. In the explorer and challenger phase, the company leveraged local celebrity endorsements and digital marketing to drive brand edge while expanding distribution in select channels as a premium offering. India is now the fourth-largest market globally for the smartwater brand, with a target to be in 90,000 outlets by the end of 2019. |
• | Expanding innovation through Coca-Cola Energy: The company recently announced plans to bring new fans into the energy drink category next year with the U.S. launch of Coca-Cola Energy. Coca-Cola Energy and Coca-Cola Energy Cherry – a flavor available exclusively in the United States – and their zero-calorie counterparts will be available nationwide in 12-oz. sleek cans starting in January 2020. The rollout supports ongoing efforts to deliver more beverage options that meet changing preferences, lifestyles and tastes. It’s also an example of the company’s commitment to move quickly, bring more drinks to the shelf, and "lift and shift" innovations around the world. Coca-Cola Energy debuted earlier this year in Spain and Hungary and is currently available in more than 25 countries. |
• | Growing sustainably through package innovation: During the quarter, the company made solid progress on its World Without Waste goals. In the United States, the company announced the goal of removing the equivalent of at least 1 billion virgin PET plastic bottles from its supply chain over the next five years. Dasani, America’s leading mainstream bottled water brand, will roll out a next-generation lineup of recyclable, reusable and package-free options – anchored by the first-ever HybridBottle™, which is made with a mix of up to 50% plant-based, renewable material and recycled PET. The company also announced the expansion of up to 100 Dasani PureFill™ water dispensers leveraging Coca-Cola Freestyle™ technology in late 2019. Globally, the company now has seven markets where its local water brand is packaged in 100% recycled PET. The company also continues to lightweight its packaging to reduce the amount of virgin PET plastic sourced by the Coca-Cola system. |
Operating Review – Three Months Ended September 27, 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) | 6 | (3) | 6 | 8 | 5 | 2 | ||
Europe, Middle East & Africa | 1 | 3 | (7) | 3 | 0 | 4 | 1 | ||
Latin America | (8) | 20 | (8) | 0 | 4 | 12 | 1 | ||
North America | (1) | 3 | 0 | (1) | 2 | 3 | 1 | ||
Asia Pacific | 3 | 0 | 1 | 0 | 3 | 3 | 4 | ||
Global Ventures3 | 17 | (3) | (14) | 243 | 243 | 14 | 15 | ||
Bottling Investments | 7 | 2 | (3) | 2 | 8 | 9 | 24 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | (4) | (3) | (7) | 5 |
Europe, Middle East & Africa | (5) | 0 | (11) | 7 |
Latin America | (6) | 0 | (11) | 5 |
North America | (3) | (3) | 0 | 0 |
Asia Pacific | (3) | (7) | 1 | 3 |
Global Ventures | 75 | 0 | (4) | 79 |
Bottling Investments | (70) | —4 | —4 | —4 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated EPS | 37 | 39 | (6) | 4 |
Consolidated |
• | Price/mix grew 6% for the quarter through revenue growth management initiatives and a benefit from geographic mix. Concentrate sales were 4 points behind unit case volume growth due to the timing of shipments during the quarter, in addition to cycling the timing of shipments in Brazil in the prior year. |
• | Unit case volume grew 2%, primarily driven by strong growth in developing and emerging markets in addition to solid growth in North America. Category cluster performance was as follows: |
◦ | Sparkling soft drinks grew 2%, driven by strong 3% global growth in trademark Coca-Cola, including continued double-digit growth in Coca-Cola Zero Sugar. |
◦ | Juice, dairy and plant-based beverages grew 1%, led by strong performance within the Minute Maid and Simply portfolio in North America in addition to strong growth in Minute Maid Pulpy in China, partially 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 Latin America and strong growth in Dasani internationally as well as Kinley in India, partially offset by the deprioritization of low-margin commodity water in China. |
◦ | Tea and coffee volume grew 4%, led by strong performance across the company's portfolio in Japan, in addition to the doğadan tea business in Turkey and Gold Peak tea in North America. |
• | Operating income declined 4%, including a negative impact from currency. Comparable currency neutral operating income (non-GAAP) grew 5%. Operating income was negatively impacted by cycling the timing of concentrate shipments and expenses in the prior year, in addition to the timing of certain items in the current year, including marketing investments. |
Europe, Middle East & Africa |
• | Price/mix grew 3% for the quarter through positive performance across the majority of key markets. |
• | Unit case volume grew 1%, as strong growth across West and South Africa was partially offset by a decline in Europe, which was impacted by cycling strong performance in the prior year. |
• | Operating income declined 5%, primarily due to an 11-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 7%, primarily driven by favorable product mix. |
• | The company gained value share in total NARTD beverages, led by solid share performance across Europe, partially offset by a value share decline in Nigeria, primarily due to local value brands. |
Latin America |
• | Price/mix grew 20% for the quarter, through strong pricing and package initiatives in the marketplace, in addition to a benefit from cycling the timing of deductions in the prior year. |
• | Unit case volume grew 1%, 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 declined 6%, which included an 11-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 5%. Operating income was impacted by cycling the timing of concentrate shipments in Brazil in the prior year. |
• | The company gained value share in total NARTD beverages, led by solid share performance in Brazil. |
North America |
• | Price/mix grew 3% for the quarter, driven by solid performance across the majority of category clusters. |
• | Unit case volume grew 1%, led by strong performance in sparkling soft drinks under trademark Coca-Cola and Sprite. All category clusters grew volume during the quarter, with the exception of tea and coffee, which was even. |
• | Operating income declined 3%, which included the impact of comparability items. Comparable currency neutral operating income (non-GAAP) was even. Operating income was negatively impacted by cycling the benefit of |
• | 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 was even for the quarter, negatively impacted by 4 points of geographic mix due to growth in emerging and developing markets outpacing developed markets. |
• | Unit case volume grew 4%, due to broad-based growth across the majority of key markets, partially offset by a decline in Japan. Volume growth was led by Southeast Asia, China and India. |
• | Operating income declined 3%, which included the impact of comparability items. Comparable currency neutral operating income (non-GAAP) grew 3%. Operating income was negatively impacted by geographic mix. |
• | 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 unfavorable product mix as a result of strong growth in the doğadan tea business. |
• | Unit case volume grew 15%, led by the doğadan tea business in Turkey, in addition to strong growth in Monster and innocent. |
• | Operating income growth benefited from the Costa acquisition. |
Bottling Investments |
• | Price/mix grew 2% for the quarter, largely driven by solid performance from the company's bottling operations in India. |
• | Operating income was driven by strong revenue growth, partially offset by the impact of comparability items and currency headwinds. |
Operating Review – Nine Months Ended September 27, 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 | 4 | (5) | 6 | 6 | 6 | 2 | ||
Europe, Middle East & Africa | 3 | 4 | (10) | 3 | 0 | 7 | 2 | ||
Latin America | (2) | 11 | (11) | 0 | (3) | 9 | 0 | ||
North America | (2) | 4 | 0 | 0 | 2 | 2 | 0 | ||
Asia Pacific | 5 | (2) | (2) | (1) | 1 | 4 | 6 | ||
Global Ventures3 | 7 | (1) | (18) | 227 | 214 | 5 | 7 | ||
Bottling Investments | 9 | 3 | (6) | (1) | 4 | 11 | 23 |
Percent Change | Reported Operating Income | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 8 | 6 | (8) | 11 |
Europe, Middle East & Africa | (1) | 0 | (13) | 12 |
Latin America | (7) | 0 | (15) | 8 |
North America | 7 | 3 | 0 | 4 |
Asia Pacific | (1) | (2) | (1) | 3 |
Global Ventures | 96 | 0 | (5) | 101 |
Bottling Investments | —4 | —4 | 35 | 2,225 |
Percent Change | Reported EPS | Items Impacting Comparability | Currency Impact | Comparable Currency Neutral2 |
Consolidated | 23 | 22 | (8) | 10 |
Outlook |
• | At least 5% growth in organic revenues (non-GAAP) – Updated |
• | At least 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% to 5% currency headwind based on the current rates and including the impact of hedged positions – Updated |
• | 12% to 13% 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): 8% to 9% 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 $8.8 billion – Updated |
• | Capital expenditures: Approximately $2.2 billion – Updated |
• | Net share repurchases (non-GAAP): Expect share repurchases to offset dilution from employee stock-based compensation plans – No Change |
• | Comparable net revenues (non-GAAP): 12% 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): 7% currency headwind based on the current rates and including the impact of hedged positions |
• | Comparable net revenues (non-GAAP): 1% to 2% currency headwind based on the current rates and including the impact of hedged positions |
• | Comparable operating income (non-GAAP): 2% to 3% 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 | ||||||||||
September 27, 2019 | September 28, 2018 | % Change | ||||||||
Net Operating Revenues | $ | 9,507 | $ | 8,775 | 8 | |||||
Cost of goods sold | 3,767 | 3,346 | 13 | |||||||
Gross Profit | 5,740 | 5,429 | 6 | |||||||
Selling, general and administrative expenses | 3,116 | 2,660 | 17 | |||||||
Other operating charges | 125 | 155 | (20 | ) | ||||||
Operating Income | 2,499 | 2,614 | (4 | ) | ||||||
Interest income | 153 | 171 | (10 | ) | ||||||
Interest expense | 230 | 214 | 8 | |||||||
Equity income (loss) — net | 346 | 348 | 0 | |||||||
Other income (loss) — net | 324 | (546 | ) | — | ||||||
Income Before Income Taxes | 3,092 | 2,373 | 30 | |||||||
Income taxes | 503 | 555 | (9 | ) | ||||||
Consolidated Net Income | 2,589 | 1,818 | 42 | |||||||
Less: Net income (loss) attributable to noncontrolling interests | (4 | ) | (62 | ) | 94 | |||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 2,593 | $ | 1,880 | 38 | |||||
Basic Net Income Per Share1 | $ | 0.61 | $ | 0.44 | 37 | |||||
Diluted Net Income Per Share1 | $ | 0.60 | $ | 0.44 | 37 | |||||
Average Shares Outstanding | 4,280 | 4,255 | 1 | |||||||
Effect of dilutive securities | 41 | 40 | 2 | |||||||
Average Shares Outstanding Assuming Dilution | 4,321 | 4,295 | 1 |
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) | |||||||||||
Nine Months Ended | |||||||||||
September 27, 2019 | September 28, 2018 | % Change | |||||||||
Net Operating Revenues | $ | 28,198 | $ | 26,494 | 6 | ||||||
Cost of goods sold | 11,053 | 9,965 | 11 | ||||||||
Gross Profit | 17,145 | 16,529 | 4 | ||||||||
Selling, general and administrative expenses | 8,879 | 8,286 | 7 | ||||||||
Other operating charges | 344 | 916 | (62 | ) | |||||||
Operating Income | 7,922 | 7,327 | 8 | ||||||||
Interest income | 428 | 510 | (16 | ) | |||||||
Interest expense | 711 | 697 | 2 | ||||||||
Equity income (loss) — net | 808 | 813 | (1 | ) | |||||||
Other income (loss) — net | (81 | ) | (693 | ) | 88 | ||||||
Income Before Income Taxes | 8,366 | 7,260 | 15 | ||||||||
Income taxes | 1,446 | 1,711 | (15 | ) | |||||||
Consolidated Net Income | 6,920 | 5,549 | 25 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 42 | (15 | ) | — | |||||||
Net Income Attributable to Shareowners of The Coca-Cola Company | $ | 6,878 | $ | 5,564 | 24 | ||||||
Basic Net Income Per Share1 | $ | 1.61 | 1.31 | $ | 1.31 | 23 | |||||
Diluted Net Income Per Share1 | $ | 1.60 | $ | 1.29 | 23 | ||||||
Average Shares Outstanding | 4,273 | 4,258 | 0 | ||||||||
Effect of dilutive securities | 38 | 39 | (5 | ) | |||||||
Average Shares Outstanding Assuming Dilution | 4,311 | 4,297 | 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) | |||||||
September 27, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 7,531 | $ | 9,077 | |||
Short-term investments | 2,001 | 2,025 | |||||
Total Cash, Cash Equivalents and Short-Term Investments | 9,532 | 11,102 | |||||
Marketable securities | 3,456 | 5,013 | |||||
Trade accounts receivable, less allowances of $525 and $501, respectively | 4,353 | 3,685 | |||||
Inventories | 3,266 | 3,071 | |||||
Prepaid expenses and other assets | 2,510 | 2,059 | |||||
Total Current Assets | 23,117 | 24,930 | |||||
Equity method investments | 18,689 | 19,412 | |||||
Other investments | 878 | 867 | |||||
Other assets | 5,750 | 4,148 | |||||
Deferred income tax assets | 2,452 | 2,674 | |||||
Property, plant and equipment — net | 10,217 | 9,598 | |||||
Trademarks with indefinite lives | 9,167 | 6,682 | |||||
Bottlers' franchise rights with indefinite lives | 109 | 51 | |||||
Goodwill | 16,465 | 14,109 | |||||
Other intangible assets | 589 | 745 | |||||
Total Assets | $ | 87,433 | $ | 83,216 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 12,727 | $ | 9,533 | |||
Loans and notes payable | 10,972 | 13,835 | |||||
Current maturities of long-term debt | 492 | 5,003 | |||||
Accrued income taxes | 909 | 411 | |||||
Total Current Liabilities | 25,100 | 28,782 | |||||
Long-term debt | 31,012 | 25,376 | |||||
Other liabilities | 8,057 | 7,646 | |||||
Deferred income tax liabilities | 2,581 | 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 | 17,039 | 16,520 | |||||
Reinvested earnings | 65,481 | 63,234 | |||||
Accumulated other comprehensive income (loss) | (13,706 | ) | (12,814 | ) | |||
Treasury stock, at cost — 2,756 and 2,772 shares, respectively | (51,861 | ) | (51,719 | ) | |||
Equity Attributable to Shareowners of The Coca-Cola Company | 18,713 | 16,981 | |||||
Equity attributable to noncontrolling interests | 1,970 | 2,077 | |||||
Total Equity | 20,683 | 19,058 | |||||
Total Liabilities and Equity | $ | 87,433 | $ | 83,216 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(UNAUDITED) | |||||||
(In millions) | |||||||
Nine Months Ended | |||||||
Operating Activities | September 27, 2019 | September 28, 2018 | |||||
Consolidated net income | $ | 6,920 | $ | 5,549 | |||
Depreciation and amortization | 965 | 807 | |||||
Stock-based compensation expense | 146 | 167 | |||||
Deferred income taxes | (326 | ) | 26 | ||||
Equity (income) loss — net of dividends | (336 | ) | (385 | ) | |||
Foreign currency adjustments | 79 | (169 | ) | ||||
Significant (gains) losses — net | (389 | ) | 541 | ||||
Other operating charges | 147 | 662 | |||||
Other items | 444 | 130 | |||||
Net change in operating assets and liabilities | 121 | (1,638 | ) | ||||
Net Cash Provided by Operating Activities | 7,771 | 5,690 | |||||
Investing Activities | |||||||
Purchases of investments | (4,113 | ) | (6,809 | ) | |||
Proceeds from disposals of investments | 5,674 | 11,079 | |||||
Acquisitions of businesses, equity method investments and nonmarketable securities | (5,376 | ) | (598 | ) | |||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 266 | 1,354 | |||||
Purchases of property, plant and equipment | (1,206 | ) | (1,048 | ) | |||
Proceeds from disposals of property, plant and equipment | 944 | 97 | |||||
Other investing activities | (90 | ) | 33 | ||||
Net Cash Provided by (Used in) Investing Activities | (3,901 | ) | 4,108 | ||||
Financing Activities | |||||||
Issuances of debt | 19,598 | 21,422 | |||||
Payments of debt | (21,716 | ) | (23,595 | ) | |||
Issuances of stock | 923 | 891 | |||||
Purchases of stock for treasury | (690 | ) | (1,596 | ) | |||
Dividends | (3,419 | ) | (3,321 | ) | |||
Other financing activities | (33 | ) | (184 | ) | |||
Net Cash Provided by (Used in) Financing Activities | (5,337 | ) | (6,383 | ) | |||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (75 | ) | (249 | ) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | |||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period | (1,542 | ) | 3,166 | ||||
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 | 7,776 | 9,539 | |||||
Less: Restricted cash and restricted cash equivalents at end of period | 245 | 318 | |||||
Cash and Cash Equivalents at End of Period | $ | 7,531 | $ | 9,221 |
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 | ||||||||||||||||||||||
September 27, 2019 | September 28, 2018 | % Fav. / (Unfav.) | September 27, 2019 | September 28, 2018 | % Fav. / (Unfav.) | September 27, 2019 | September 28, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 1,828 | $ | 1,826 | 0 | $ | 886 | $ | 933 | (5 | ) | $ | 651 | $ | 943 | (31 | ) | |||||||
Latin America | 1,045 | 1,002 | 4 | 603 | 640 | (6 | ) | 605 | 636 | (5 | ) | |||||||||||||
North America | 3,138 | 3,091 | 2 | 641 | 663 | (3 | ) | 658 | 662 | (1 | ) | |||||||||||||
Asia Pacific | 1,462 | 1,420 | 3 | 594 | 614 | (3 | ) | 603 | 628 | (4 | ) | |||||||||||||
Global Ventures | 629 | 183 | 243 | 77 | 44 | 75 | 80 | 47 | 69 | |||||||||||||||
Bottling Investments | 1,684 | 1,565 | 8 | 7 | 24 | (70 | ) | 55 | (152 | ) | — | |||||||||||||
Corporate | 24 | 17 | 44 | (309 | ) | (304 | ) | (1 | ) | 440 | (391 | ) | — | |||||||||||
Eliminations | (303 | ) | (329 | ) | 8 | — | — | — | — | — | — | |||||||||||||
Consolidated | $ | 9,507 | $ | 8,775 | 8 | $ | 2,499 | $ | 2,614 | (4 | ) | $ | 3,092 | $ | 2,373 | 30 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||
Net Operating Revenues1 | Operating Income (Loss) | Income (Loss) Before Income Taxes | ||||||||||||||||||||||
September 27, 2019 | September 28, 2018 | % Fav./(Unfav.) | September 27, 2019 | September 28, 2018 | % Fav. / (Unfav.) | September 27, 2019 | September 28, 2018 | % Fav. / (Unfav.) | ||||||||||||||||
Europe, Middle East & Africa | $ | 5,530 | $ | 5,520 | 0 | $ | 2,902 | $ | 2,940 | (1 | ) | $ | 2,701 | $ | 2,984 | (10 | ) | |||||||
Latin America | 2,944 | 3,029 | (3 | ) | 1,687 | 1,804 | (7 | ) | 1,636 | 1,742 | (6 | ) | ||||||||||||
North America | 8,983 | 8,823 | 2 | 1,938 | 1,814 | 7 | 1,924 | 1,822 | 6 | |||||||||||||||
Asia Pacific | 4,189 | 4,149 | 1 | 1,867 | 1,879 | (1 | ) | 1,891 | 1,909 | (1 | ) | |||||||||||||
Global Ventures | 1,849 | 588 | 214 | 216 | 110 | 96 | 223 | 119 | 88 | |||||||||||||||
Bottling Investments | 5,520 | 5,294 | 4 | 226 | (318 | ) | — | 348 | (274 | ) | — | |||||||||||||
Corporate | 79 | 85 | (7 | ) | (914 | ) | (902 | ) | (1 | ) | (357 | ) | (1,042 | ) | 66 | |||||||||
Eliminations | (896 | ) | (994 | ) | 10 | — | — | — | — | — | — | |||||||||||||
Consolidated | $ | 28,198 | $ | 26,494 | 6 | $ | 7,922 | $ | 7,327 | 8 | $ | 8,366 | $ | 7,260 | 15 |
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 and Eswatini. 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 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 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 three and nine months ended September 27, 2019 and September 28, 2018 consisted of the structural changes discussed above. Additionall |
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 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) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||
Three Months Ended September 27, 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) | $ | 9,507 | $ | 3,767 | $ | 5,740 | 60.4 | % | $ | 3,116 | $ | 125 | $ | 2,499 | 26.3 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (42 | ) | 42 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (61 | ) | 61 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (21 | ) | 21 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | ||||||||||||||||
Other Items | (7 | ) | (50 | ) | 43 | — | (1 | ) | 44 | |||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 9,500 | $ | 3,717 | $ | 5,783 | 60.9 | % | $ | 3,116 | $ | — | $ | 2,667 | 28.1 | % | ||||||
Three Months Ended September 28, 2018 | ||||||||||||||||||||||
Net operating revenues | Cost of goods sold | Gross profit | Gross margin | Selling, general and administrative expenses | Other operating charges | Operating income | Operating margin | |||||||||||||||
Reported (GAAP) | $ | 8,775 | $ | 3,346 | $ | 5,429 | 61.9 | % | $ | 2,660 | $ | 155 | $ | 2,614 | 29.8 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | — | — | — | — | (107 | ) | 107 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (44 | ) | 44 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 22 | (22 | ) | 68 | — | (90 | ) | ||||||||||||||
Other Items | 18 | (2 | ) | 20 | — | (4 | ) | 24 | ||||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 8,793 | $ | 3,366 | $ | 5,427 | 61.7 | % | $ | 2,728 | $ | — | $ | 2,699 | 30.7 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 8 | 13 | 6 | 17 | (20) | (4) | ||||||||||||||||
% Currency Impact | (3) | (1) | (4) | (2) | — | (6) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 11 | 13 | 10 | 19 | — | 1 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 8 | 10 | 7 | 14 | — | (1) | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (3) | (1) | (4) | (2) | — | (7) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 11 | 11 | 11 | 16 | — | 5 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||
Three Months Ended September 27, 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) | $ | 230 | $ | 346 | $ | 324 | $ | 3,092 | $ | 503 | 16.3 | % | $ | 2,593 | $ | 0.60 | |||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 375 | 417 | — | 417 | 0.10 | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 61 | 14 | 47 | 0.01 | ||||||||||||||||
Equity Investees | — | 39 | — | 39 | 2 | 37 | 0.01 | ||||||||||||||||
Transaction Gains/Losses | — | — | (636 | ) | (615 | ) | (149 | ) | (466 | ) | (0.11 | ) | |||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | — | ||||||||||||||||
Other Items | — | — | (18 | ) | 26 | 6 | 20 | 0.00 | |||||||||||||||
Certain Tax Matters | — | — | — | — | 213 | (213 | ) | (0.05 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 230 | $ | 385 | $ | 45 | $ | 3,020 | $ | 589 | 19.5 | % | $ | 2,435 | $ | 0.56 | |||||||
Three Months Ended September 28, 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) | $ | 214 | $ | 348 | $ | (546 | ) | $ | 2,373 | $ | 555 | 23.4 | % | $ | 1,880 | $ | 0.44 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 205 | 205 | — | 205 | 0.05 | ||||||||||||||||
Productivity and Reinvestment | — | — | 25 | 132 | 31 | 101 | 0.02 | ||||||||||||||||
Equity Investees | — | (19 | ) | — | (19 | ) | (7 | ) | (12 | ) | 0.00 | ||||||||||||
Transaction Gains/Losses | — | — | 460 | 504 | (107 | ) | 533 | 0.12 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (90 | ) | (26 | ) | (41 | ) | (0.01 | ) | ||||||||||||
Other Items | 27 | — | (65 | ) | (68 | ) | (17 | ) | (51 | ) | (0.01 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 149 | (149 | ) | (0.03 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 241 | $ | 329 | $ | 79 | $ | 3,037 | $ | 578 | 19.0 | % | $ | 2,466 | $ | 0.57 | |||||||
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) | 8 | 0 | — | 30 | (9) | 38 | 37 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (4) | 17 | (42) | (1) | 2 | (1) | (2) |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||
Nine Months Ended September 27, 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) | $ | 28,198 | $ | 11,053 | $ | 17,145 | 60.8 | % | $ | 8,879 | $ | 344 | $ | 7,922 | 28.1 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (42 | ) | 42 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (184 | ) | 184 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (115 | ) | 115 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 39 | (39 | ) | 109 | — | (148 | ) | ||||||||||||||
Other Items | (3 | ) | (38 | ) | 35 | — | (3 | ) | 38 | |||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 28,195 | $ | 11,054 | $ | 17,141 | 60.8 | % | $ | 8,988 | $ | — | $ | 8,153 | 28.9 | % | ||||||
Nine Months Ended September 28, 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) | $ | 26,494 | $ | 9,965 | $ | 16,529 | 62.4 | % | $ | 8,286 | $ | 916 | $ | 7,327 | 27.7 | % | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||
Asset Impairments | — | — | — | — | (450 | ) | 450 | |||||||||||||||
Productivity and Reinvestment | — | — | — | — | (313 | ) | 313 | |||||||||||||||
Equity Investees | — | — | — | — | — | — | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | (126 | ) | 126 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | 71 | (71 | ) | 212 | — | (283 | ) | ||||||||||||||
Other Items | (8 | ) | 6 | (14 | ) | (2 | ) | (27 | ) | 15 | ||||||||||||
Certain Tax Matters | — | — | — | — | — | — | ||||||||||||||||
Comparable (Non-GAAP) | $ | 26,486 | $ | 10,042 | $ | 16,444 | 62.1 | % | $ | 8,496 | $ | — | $ | 7,948 | 30.0 | % | ||||||
Net operating revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Other operating charges | Operating income | |||||||||||||||||
% Change — Reported (GAAP) | 6 | 11 | 4 | 7 | (62) | 8 | ||||||||||||||||
% Currency Impact | (5) | (3) | (6) | (4) | — | (9) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 12 | 14 | 10 | 11 | — | 18 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | 6 | 10 | 4 | 6 | — | 3 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (5) | (3) | (6) | (4) | — | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 12 | 13 | 11 | 10 | — | 11 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||||||
Nine Months Ended September 27, 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) | $ | 711 | $ | 808 | $ | (81 | ) | $ | 8,366 | $ | 1,446 | 17.3 | % | $ | 6,878 | $ | 1.60 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 767 | 809 | 36 | 773 | 0.18 | ||||||||||||||||
Productivity and Reinvestment | — | — | — | 184 | 43 | 141 | 0.03 | ||||||||||||||||
Equity Investees | — | 107 | — | 107 | 4 | 103 | 0.02 | ||||||||||||||||
Transaction Gains/Losses | — | — | (386 | ) | (271 | ) | 34 | (290 | ) | (0.07 | ) | ||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (148 | ) | (42 | ) | (67 | ) | (0.02 | ) | ||||||||||||
Other Items | — | — | (158 | ) | (120 | ) | (25 | ) | (95 | ) | (0.02 | ) | |||||||||||
Certain Tax Matters | — | — | — | — | 245 | (245 | ) | (0.06 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 711 | $ | 915 | $ | 142 | $ | 8,927 | $ | 1,741 | 19.5 | % | $ | 7,198 | $ | 1.67 | |||||||
Nine Months Ended September 28, 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) | $ | 697 | $ | 813 | $ | (693 | ) | $ | 7,260 | $ | 1,711 | 23.6 | % | $ | 5,564 | $ | 1.29 | ||||||
Items Impacting Comparability: | |||||||||||||||||||||||
Asset Impairments | — | — | 257 | 707 | 116 | 591 | 0.14 | ||||||||||||||||
Productivity and Reinvestment | — | — | 64 | 377 | 88 | 289 | 0.07 | ||||||||||||||||
Equity Investees | — | 65 | — | 65 | (11 | ) | 76 | 0.02 | |||||||||||||||
Transaction Gains/Losses | — | — | 629 | 755 | (74 | ) | 751 | 0.17 | |||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | (283 | ) | (81 | ) | (129 | ) | (0.03 | ) | ||||||||||||
Other Items | 27 | — | 7 | (5 | ) | 1 | (6 | ) | 0.00 | ||||||||||||||
Certain Tax Matters | — | — | — | — | 60 | (60 | ) | (0.01 | ) | ||||||||||||||
Comparable (Non-GAAP) | $ | 724 | $ | 878 | $ | 264 | $ | 8,876 | $ | 1,810 | 20.4 | % | $ | 7,076 | $ | 1.65 | |||||||
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) | 2 | (1) | 88 | 15 | (15) | 24 | 23 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (2) | 4 | (46) | 1 | (4) | 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 September 27, 2019 | |
% Change — Reported (GAAP) | 37 |
% Currency Impact | (8) |
% Change — Currency Neutral (Non-GAAP) | 45 |
% Impact of Items Impacting Comparability (Non-GAAP) | 39 |
% Change — Comparable (Non-GAAP) | (2) |
% Comparable Currency Impact (Non-GAAP) | (6) |
% Change — Comparable Currency Neutral (Non-GAAP) | 4 |
Nine Months Ended September 27, 2019 | |
% Change — Reported (GAAP) | 23 |
% Currency Impact | (11) |
% Change — Currency Neutral (Non-GAAP) | 34 |
% Impact of Items Impacting Comparability (Non-GAAP) | 22 |
% Change — Comparable (Non-GAAP) | 1 |
% Comparable Currency Impact (Non-GAAP) | (8) |
% Change — Comparable Currency Neutral (Non-GAAP) | 10 |
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 September 27, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,828 | $ | 1,045 | $ | 3,138 | $ | 1,462 | $ | 629 | $ | 1,684 | $ | 24 | $ | (303 | ) | $ | 9,507 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (7 | ) | — | (7 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 1,828 | $ | 1,045 | $ | 3,138 | $ | 1,462 | $ | 629 | $ | 1,684 | $ | 17 | $ | (303 | ) | $ | 9,500 | ||||||||
Three Months Ended September 28, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 1,826 | $ | 1,002 | $ | 3,091 | $ | 1,420 | $ | 183 | $ | 1,565 | $ | 17 | $ | (329 | ) | $ | 8,775 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | 18 | — | 18 | ||||||||||||||||||
Comparable (Non-GAAP) | $ | 1,826 | $ | 1,002 | $ | 3,091 | $ | 1,420 | $ | 183 | $ | 1,565 | $ | 35 | $ | (329 | ) | $ | 8,793 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 0 | 4 | 2 | 3 | 243 | 8 | 44 | 8 | 8 | ||||||||||||||||||
% Currency Impact | (7) | (8) | 0 | 1 | (14) | (3) | 156 | — | (3) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 7 | 12 | 2 | 2 | 258 | 11 | (112) | — | 11 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Changes | 3 | 0 | (1) | 0 | 243 | 2 | 0 | — | 6 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 4 | 12 | 3 | 3 | 14 | 9 | (112) | — | 5 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | 4 | 2 | 3 | 243 | 8 | (52) | — | 8 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (7) | (8) | 0 | 1 | (14) | (3) | 1 | — | (3) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 7 | 12 | 2 | 2 | 258 | 11 | (53) | — | 11 |
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: | |||||||||||||||||||||||||||
Nine Months Ended September 27, 2019 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 5,530 | $ | 2,944 | $ | 8,983 | $ | 4,189 | $ | 1,849 | $ | 5,520 | $ | 79 | $ | (896 | ) | $ | 28,198 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (3 | ) | — | (3 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 5,530 | $ | 2,944 | $ | 8,983 | $ | 4,189 | $ | 1,849 | $ | 5,520 | $ | 76 | $ | (896 | ) | $ | 28,195 | ||||||||
Nine Months Ended September 28, 2018 | |||||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
Reported (GAAP) | $ | 5,520 | $ | 3,029 | $ | 8,823 | $ | 4,149 | $ | 588 | $ | 5,294 | $ | 85 | $ | (994 | ) | $ | 26,494 | ||||||||
Items Impacting Comparability: | |||||||||||||||||||||||||||
Other Items | — | — | — | — | — | — | (8 | ) | — | (8 | ) | ||||||||||||||||
Comparable (Non-GAAP) | $ | 5,520 | $ | 3,029 | $ | 8,823 | $ | 4,149 | $ | 588 | $ | 5,294 | $ | 77 | $ | (994 | ) | $ | 26,486 | ||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Eliminations | Consolidated | |||||||||||||||||||
% Change — Reported (GAAP) | 0 | (3) | 2 | 1 | 214 | 4 | (7) | 10 | 6 | ||||||||||||||||||
% Currency Impact | (10) | (11) | 0 | (2) | (18) | (6) | 8 | — | (5) | ||||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 10 | 9 | 2 | 3 | 233 | 11 | (15) | — | 12 | ||||||||||||||||||
% Acquisitions, Divestitures and Structural Changes | 3 | 0 | 0 | (1) | 227 | (1) | 0 | — | 6 | ||||||||||||||||||
% Change — Organic Revenues (Non-GAAP) | 7 | 9 | 2 | 4 | 5 | 11 | (15) | — | 6 | ||||||||||||||||||
% Change — Comparable (Non-GAAP) | 0 | (3) | 2 | 1 | 214 | 4 | (1) | — | 6 | ||||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (10) | (11) | 0 | (2) | (18) | (6) | 15 | — | (5) | ||||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 10 | 9 | 2 | 3 | 233 | 11 | (16) | — | 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 September 27, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 886 | $ | 603 | $ | 641 | $ | 594 | $ | 77 | $ | 7 | $ | (309 | ) | $ | 2,499 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | 42 | — | — | — | 42 | ||||||||||||||||
Productivity and Reinvestment | 1 | — | 12 | — | — | — | 48 | 61 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 21 | — | 21 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | — | — | — | ||||||||||||||||
Other Items | — | — | 49 | — | — | 2 | (7 | ) | 44 | |||||||||||||||
Comparable (Non-GAAP) | $ | 887 | $ | 603 | $ | 702 | $ | 636 | $ | 77 | $ | 30 | $ | (268 | ) | $ | 2,667 | |||||||
Three Months Ended September 28, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 933 | $ | 640 | $ | 663 | $ | 614 | $ | 44 | $ | 24 | $ | (304 | ) | $ | 2,614 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | — | — | — | ||||||||||||||||
Productivity and Reinvestment | (4 | ) | (1 | ) | 39 | (2 | ) | — | 10 | 65 | 107 | |||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 37 | 7 | 44 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (90 | ) | — | (90 | ) | ||||||||||||||
Other Items | — | — | (1 | ) | — | — | 5 | 20 | 24 | |||||||||||||||
Comparable (Non-GAAP) | $ | 929 | $ | 639 | $ | 701 | $ | 612 | $ | 44 | $ | (14 | ) | $ | (212 | ) | $ | 2,699 | ||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (5) | (6) | (3) | (3) | 75 | (70) | (1) | (4) | ||||||||||||||||
% Currency Impact | (11) | (11) | 0 | 1 | (4) | (46) | 10 | (6) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 6 | 5 | (3) | (4) | 79 | (24) | (11) | 1 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | (3) | (7) | 0 | — | 25 | (3) | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (5) | (6) | 0 | 4 | 75 | — | (26) | (1) | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (11) | (11) | 0 | 1 | (4) | — | 2 | (7) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 7 | 5 | 0 | 3 | 79 | — | (28) | 5 |
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: | ||||||||||||||||||||||||
Nine Months Ended September 27, 2019 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 2,902 | $ | 1,687 | $ | 1,938 | $ | 1,867 | $ | 216 | $ | 226 | $ | (914 | ) | $ | 7,922 | |||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | 42 | — | — | — | 42 | ||||||||||||||||
Productivity and Reinvestment | 2 | — | 42 | — | — | 3 | 137 | 184 | ||||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 61 | 54 | 115 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (148 | ) | — | (148 | ) | ||||||||||||||
Other Items | — | — | 38 | — | — | (1 | ) | 1 | 38 | |||||||||||||||
Comparable (Non-GAAP) | $ | 2,904 | $ | 1,687 | $ | 2,018 | $ | 1,909 | $ | 216 | $ | 141 | $ | (722 | ) | $ | 8,153 | |||||||
Nine Months Ended September 28, 2018 | ||||||||||||||||||||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
Reported (GAAP) | $ | 2,940 | $ | 1,804 | $ | 1,814 | $ | 1,879 | $ | 110 | $ | (318 | ) | $ | (902 | ) | $ | 7,327 | ||||||
Items Impacting Comparability: | ||||||||||||||||||||||||
Asset Impairments | — | — | — | — | — | 450 | — | 450 | ||||||||||||||||
Productivity and Reinvestment | (2 | ) | 2 | 138 | (1 | ) | — | 32 | 144 | 313 | ||||||||||||||
Transaction Gains/Losses | — | — | — | — | — | 116 | 10 | 126 | ||||||||||||||||
CCBA Unrecognized Depreciation and Amortization | — | — | — | — | — | (283 | ) | — | (283 | ) | ||||||||||||||
Other Items | — | — | (6 | ) | — | — | 10 | 11 | 15 | |||||||||||||||
Comparable (Non-GAAP) | $ | 2,938 | $ | 1,806 | $ | 1,946 | $ | 1,878 | $ | 110 | $ | 7 | $ | (737 | ) | $ | 7,948 | |||||||
Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Global Ventures | Bottling Investments | Corporate | Consolidated | |||||||||||||||||
% Change — Reported (GAAP) | (1) | (7) | 7 | (1) | 96 | — | (1) | 8 | ||||||||||||||||
% Currency Impact | (13) | (15) | 0 | (1) | (5) | — | 2 | (9) | ||||||||||||||||
% Change — Currency Neutral (Non-GAAP) | 12 | 8 | 7 | 1 | 101 | — | (3) | 18 | ||||||||||||||||
% Impact of Items Impacting Comparability (Non-GAAP) | 0 | 0 | 3 | (2) | 0 | — | (3) | 6 | ||||||||||||||||
% Change — Comparable (Non-GAAP) | (1) | (7) | 4 | 2 | 96 | 2,261 | 2 | 3 | ||||||||||||||||
% Comparable Currency Impact (Non-GAAP) | (13) | (15) | 0 | (1) | (5) | 35 | 2 | (8) | ||||||||||||||||
% Change — Comparable Currency Neutral (Non-GAAP) | 12 | 8 | 4 | 3 | 101 | 2,225 | 0 | 11 |
THE COCA-COLA COMPANY AND SUBSIDIARIES | ||||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||||
(UNAUDITED) | ||||||
(In millions) | ||||||
Operating Margin: | ||||||
Three Months Ended September 27, 2019 | Three Months Ended September 28, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 26.28 | % | 29.79 | % | (351 | ) |
Items Impacting Comparability (Non-GAAP) | (1.79 | )% | (0.91 | )% | ||
Comparable Operating Margin (Non-GAAP) | 28.07 | % | 30.70 | % | (263 | ) |
Comparable Currency Impact (Non-GAAP) | (1.08 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 29.15 | % | 30.70 | % | (155 | ) |
Impact of Acquisitions and Structural Changes on Comparable Currency Neutral Operating Margin (Non-GAAP) | (2.13 | )% | (0.61 | )% | ||
Underlying Operating Margin (Non-GAAP) | 31.28 | % | 31.31 | % | (3 | ) |
Nine Months Ended September 27, 2019 | Nine Months Ended September 28, 2018 | Basis Point Growth (Decline) | ||||
Reported Operating Margin (GAAP) | 28.09 | % | 27.65 | % | 44 | |
Items Impacting Comparability (Non-GAAP) | (0.83 | )% | (2.36 | )% | ||
Comparable Operating Margin (Non-GAAP) | 28.92 | % | 30.01 | % | (109 | ) |
Comparable Currency Impact (Non-GAAP) | (0.95 | )% | 0.00 | % | ||
Comparable Currency Neutral Operating Margin (Non-GAAP) | 29.87 | % | 30.01 | % | (14 | ) |
Impact of Acquisitions and Structural Changes on Comparable Currency Neutral Operating Margin (Non-GAAP) | (2.35 | )% | (1.03 | )% | ||
Underlying Operating Margin (Non-GAAP) | 32.22 | % | 31.04 | % | 118 |
Purchases and Issuances of Stock: | ||||||
Nine Months Ended September 27, 2019 | Nine Months Ended September 28, 2018 | |||||
Reported (GAAP): | ||||||
Issuances of Stock | $ | 923 | $ | 891 | ||
Purchases of Stock for Treasury | (690 | ) | (1,596 | ) | ||
Net Change in Stock Issuance Receivables1 | (1 | ) | (2 | ) | ||
Net Share Issuances (Repurchases) (Non-GAAP) | $ | 232 | $ | (707 | ) |
Free Cash Flow: | |||||||
Nine Months Ended September 27, 2019 | Nine Months Ended September 28, 2018 | % Change | |||||
Net Cash Provided by Operating Activities (GAAP) | $ | 7,771 | $ | 5,690 | 37 | ||
Purchases of Property, Plant and Equipment (GAAP) | (1,206 | ) | (1,048 | ) | 15 | ||
Free Cash Flow (Non-GAAP) | $ | 6,565 | $ | 4,642 | 41 |