The Coca-Cola Company Reports Fourth Quarter and Full Year 2006 Results
-- Worldwide unit case volume up 4 percent for the fourth quarter and the year, at the top end of the Company's long-term growth targets.
-- Balanced growth in the year with sparkling beverage unit case volume up 4 percent, the highest growth since 1998, and still beverage unit case volume up 7 percent.
-- International unit case volume up 6 percent for the quarter and the year, led by 5 percent growth in Trademark Coca-Cola.
-- Full year EPS of $2.16 up 6 percent; and $2.37 up 9 percent after considering items impacting comparability.
ATLANTA--(BUSINESS WIRE)--
The Coca-Cola Company today reported full year earnings per share of $2.16, which included a net charge of $0.21 per share. Full year earnings per share increased 6 percent on a reported basis and 9 percent after considering items impacting comparability. The net charge for the year was primarily related to a non-cash impairment charge at Coca-Cola Enterprises Inc. ("CCE"), an equity investee. Full year 2005 earnings per share were $2.04, which included a net charge of $0.13 per share.
Earnings per share for the fourth quarter were $0.29, which included a net charge of $0.23 per share. Fourth quarter earnings per share decreased 19 percent on a reported basis and increased 13 percent after considering items impacting comparability. The net charge for the quarter was primarily related to the non-cash impairment charge at CCE. Fourth quarter 2005 earnings per share were $0.36, which included a net charge of $0.10 per share. (A reconciliation is provided on pages 21 and 22 of this release.)
Chairman and CEO Neville Isdell said, "I am pleased with our strong performance in the quarter as well as for the year. Our results, once again, demonstrate our ability to deliver balanced growth across our product portfolio and our global markets. In 2006, we further strengthened our business, enabling us to absorb fluctuations in individual markets and beverage categories, as we continue to grow overall. We now have in place a firm foundation for delivering long-term sustainable growth.
"We continue to demonstrate that we can be successful growing sparkling beverages, while expanding our beverage portfolio. With an improving set of capabilities, we delivered results at the top end of our long-term volume and profit growth targets. We achieved strong results in key emerging markets including China, Russia and across Latin America, along with improved performance in Japan and Western Europe during the year.
"As for 2007, I am confident that our strategies are working. We will continue to build our innovation pipeline - Enviga and Coca-Cola Zero were just the start - and focus on important markets like North America. We will lead the Coca-Cola system with strengthened capabilities in consumer marketing, customer and commercial leadership and franchise leadership. Our actions set us apart as the only truly global beverage company as we work to create long-term sustainable growth and value for shareowners."
(Sparkling beverages refers to all ready-to-drink nonalcoholic beverages with carbonation. Still beverages refers to all ready-to-drink nonalcoholic beverages without carbonation.)
(All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.)
Financial Highlights
-- Fourth quarter net operating revenues increased 7 percent.
Revenue growth reflected a 3 percent increase in gallon sales,
a 1 percent currency benefit and a 3 percent favorable impact
from pricing and mix. Structural changes had a negligible
impact. For the year, net operating revenues increased 4
percent, reflecting a 4 percent increase in gallon sales and a
2 percent benefit from pricing and mix, partially offset by a
2 percent decrease from structural changes, primarily from
changing the business model in Spain. Currency had a
negligible impact on full year revenues.
-- Operating income in the quarter decreased 4 percent on a
reported basis and increased 10 percent after considering
items impacting comparability. Fourth quarter operating income
was reduced by $174 million in 2006 and increased by $5
million in 2005 for items impacting comparability. Currency
had a slight negative impact on operating income in the
quarter. Full year operating income increased 4 percent on a
reported basis and 7 percent after considering items impacting
comparability. Currency negatively impacted full year
operating income by 1 percent.
-- The Company repurchased $2.5 billion of its stock in 2006 and
intends to repurchase $2.5 to $3.0 billion of its stock for
the full year 2007. The Company paid $2.9 billion in dividends
to shareowners in 2006.
-- The Company's reported tax rate for 2006 was 22.8 percent,
which included a lower underlying effective tax rate on
operations. The 2006 underlying effective tax rate on
operations was 22.4 percent versus the previous estimate of
23.5 percent, which resulted in a $0.03 per share tax benefit
for the quarter and year.
Operational Highlights
(All references to unit case volume percentage changes in this section are computed based on average daily sales. Group operational highlights are reported in line with the Company's operating structure as described in the Company's Form 8-K filing dated April 10, 2006.)
Total Company
-- Unit case volume increased 4 percent in the fourth quarter and
for the year, achieving the top end of the Company's long-term
growth targets.
-- International operations delivered 6 percent unit case volume
growth in the quarter and for the year. Fourth quarter unit
case volume reflected strong growth across Latin America,
double-digit growth in key emerging markets, including China,
Russia, India, Nigeria, North and West Africa and the Middle
East. Western Europe delivered solid unit case volume growth
and Japan unit case volume growth of 2 percent reflected
sequential improvement in the quarter. Double-digit unit case
volume declines in the Philippines offset the benefit of brand
acquisitions in the quarter and for the year.
-- The Company continued to deliver strong growth in sparkling
beverages, which increased unit case volume 3 percent in the
quarter and 4 percent for the year - the highest full year
growth since 1998. Key brands drove the results with
Trademarks Coca-Cola and Fanta growing unit case volume 3 and
4 percent, respectively, for the quarter and the year, and
Trademark Sprite increasing unit case volume 3 percent in the
quarter and 5 percent for the year.
-- In still beverages, Trademarks Dasani and POWERade continued
their strong performance in the quarter. Trademark Dasani
increased unit case volume 23 percent, cycling 25 percent
growth in the prior year quarter, and Trademark POWERade
increased unit case volume 7 percent, cycling 20 percent
growth in the prior year quarter. Additionally, high
single-digit growth in Trademark Minute Maid contributed to
still beverage growth in the quarter. For the year, Trademarks
Dasani and POWERade grew unit case volume double-digits, while
Trademark Minute Maid increased high single-digits.
Africa
---------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume 6% 4%
Net Revenues (9%) 2%
Operating Income 1% 7%
-- The Africa Group's unit case volume increased 6 percent in the
quarter and 4 percent for the year. Net revenues for the year
increased 2 percent, primarily reflecting a 3 percent increase
in gallon sales and positive price and mix, partially offset
by a negative currency impact. Full year operating income
growth of 7 percent primarily reflected the net revenue
increase and expense leverage.
-- In the quarter, South Africa unit case volume decreased 2
percent, as results were impacted by an industry-wide
temporary shortage in the supply of carbon dioxide. Nigeria
unit case volume increased 13 percent in the quarter
reflecting improving business conditions and the cycling of a
price increase implemented in September of 2005. In addition,
double-digit unit case volume growth in North and West Africa
and solid unit case volume growth in East and Central Africa
contributed to the overall unit case volume results.
East, South Asia and Pacific Rim
--------------------------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume (6%) (5%)
Net Revenues 26% 12%
Operating Income Even 26%
-- The East, South Asia and Pacific Rim Group's unit case volume
decreased 6 percent in the quarter and 5 percent for the year,
primarily reflecting unit case volume declines in the
Philippines. Net revenues for the year increased 12 percent,
reflecting a 4 percent decrease in gallon sales, offset by
positive pricing, currency benefits and strong product and
country mix. The full year operating income increase of 26
percent is due primarily to the cycling of a higher non-cash
charge in the prior year for asset write-downs in the
Philippines.
-- In India, unit case volume increased 12 percent in the
quarter, cycling a decline of 4 percent in the prior year
quarter. Continued investment in marketing initiatives around
the quality and safety of our products and focus on execution
in the consolidated bottling operations resulted in solid
growth and share gains in sparkling beverages and in juices
and juice drinks for the quarter.
-- In the Philippines, unit case volume declined double-digits in
the quarter as affordability and availability issues continued
to negatively impact performance. In December, the Company and
San Miguel Corporation ("SMC") entered into an agreement for
the Company to acquire, subject to certain conditions, the 65
percent ownership in Coca-Cola Bottlers Philippines, Inc. held
by SMC. The transaction is expected to close during the first
quarter of 2007.
European Union
---------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume 7% 6%
Net Revenues (6%) (11%)
Operating Income 5% 2%
-- Unit case volume in the European Union Group increased 7
percent in the quarter and 6 percent for the year. All key
countries delivered solid growth in the quarter as marketing
and innovation initiatives continued to gain traction and
favorable weather benefited results. In addition, the
acquisitions of Apollinaris and Traficante in Germany and
Italy, respectively, contributed 2 percentage points of unit
case volume growth in the quarter and for the year. Net
revenues for the year declined 11 percent, reflecting a 4
percent increase in gallon sales, positive pricing and
negligible currency impact, offset by a 16 percent negative
impact from structural changes due to the change in the
business model in Spain. As noted in the Company's 2005 Form
10-K, the Company transferred its canning rights to the
Company's bottlers in Spain at the beginning of 2006. This
change did not materially impact operating income for the
group but did reduce net revenues and cost of goods sold by
similar amounts. Operating income increased 2 percent for the
year, primarily reflecting the growth in gallon sales,
positive pricing, partially offset by a slight negative
currency impact and the continued investment in key marketing
initiatives, including the launch of Coca-Cola Zero in 9
countries.
-- Unit case volume in Northwest Europe increased mid-single
digits in the quarter, the fourth consecutive quarter of
growth, as performance stabilized. Growth was driven by
mid-single digit unit case volume growth in sparkling
beverages, led by growth of Trademark Coca-Cola, and strong
growth in still beverages. Coca-Cola Zero continued to perform
well in Great Britain, driving sparkling beverage category
share gains for the year.
-- Unit case volume in Germany increased 7 percent in the quarter
and 5 percent for the year, reflecting strong growth of
Trademark Coca-Cola. The results were driven by improved
marketplace execution capabilities, the continued success of
Coca-Cola Zero, increased availability in the discounter
channel and generally favorable weather. The acquisition of
Apollinaris, a premium source water brand, contributed 6
percentage points of unit case volume growth in the quarter
and 3 percentage points for the year.
Latin America
---------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume 7% 7%
Net Revenues 25% 21%
Operating Income 29% 22%
-- The Latin America Group delivered strong unit case volume
growth of 7 percent in the quarter and for the year, driven by
7 percent growth in Trademark Coca-Cola. Net revenues for the
year increased 21 percent, reflecting a 7 percent increase in
gallon sales, positive pricing and mix as well as low
single-digit currency benefits. Operating income for the year
increased 22 percent reflecting the net revenue increase, and
the continued investment in key marketing initiatives.
-- In Mexico, unit case volume increased 3 percent in the quarter
and 5 percent for the year. Results were driven by strong
growth in Trademark Coca-Cola, which led to share gains.
Additionally, the Company and Coca-Cola FEMSA, S.A. de C.V.
("Coca-Cola FEMSA") announced an agreement with the
controlling shareholders of Jugos del Valle, S.A. de C.V.
("Jugos del Valle") to conduct a public tender offer in Mexico
for up to 100 percent of the outstanding public shares of
Jugos del Valle, the second largest producer of packaged
juices, nectars and fruit flavored beverages in Mexico, the
largest producer in Brazil, and with presence in other Latin
American markets.
-- In Brazil, unit case volume growth for the quarter and the
year was 9 percent, cycling 7 percent and 11 percent growth in
the prior year quarter and year. High single-digit unit case
volume growth in sparkling beverages, including Trademark
Coca-Cola, drove the results and led to share gains.
-- In Argentina, strong sparkling beverage growth across core
brands contributed to unit case volume growth of 12 percent in
the quarter and 10 percent for the year.
North America
---------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume (2%) Even
Net Revenues 2% 5%
Operating Income 14% 8%
-- Unit case volume in the North America Group declined 2 percent
in the quarter, cycling 3 percent growth from the prior year
quarter. Full year unit case volume was even. Net revenues for
the year increased 5 percent, reflecting even gallon sales,
positive pricing and growth of finished goods businesses.
Operating income increased 8 percent for the year as favorable
pricing and mix and operating expense leverage offset higher
input costs in the finished goods businesses.
-- Retail unit case volume growth decreased 3 percent in the
quarter, cycling 4 percent growth in the prior year quarter.
Results in the quarter reflected weak sparkling beverage
industry trends and a 19 percent decline in
warehouse-delivered water due to the strategic decision to
refocus resources behind the more profitable Dasani business.
Full year Retail unit case volume decreased 1 percent.
-- Foodservice and Hospitality unit case volume was even for the
quarter and increased 1 percent for the year. Full year
results benefited from growth in all key beverage categories
including sparkling beverages, juice and water.
-- Sparkling beverage unit case volume declined 3 percent in the
quarter reflecting weak category trends. For the year,
sparkling beverage unit case volume declined 1 percent but
gained category share. Coca-Cola Zero continued to
successfully cycle its launch in the summer of 2005 with unit
case volume increasing double-digits in the quarter. The
Company's portfolio of energy drinks continued to gain
category share in the year as distribution and display
activity increased. Vault and Vault Zero continued to perform
well in the quarter.
-- Unit case volume for still beverages excluding
warehouse-delivered water increased 4 percent in the quarter
led by double-digit growth in Trademark Dasani, which
continued to gain share, and double-digit growth in teas.
Trademark POWERade unit case volume increased mid-single
digits, cycling 25 percent growth in the prior year quarter.
Total juice unit case volume declined mid-single digits in the
quarter. Warehouse-delivered juices continued to gain category
share in the quarter, even though unit case volume was
negatively impacted by price increases to cover higher
ingredient costs. This decline was partially offset by unit
case volume growth in Odwalla and Trademark Simply juices.
North Asia, Eurasia and Middle East
--------------------------------------------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume 11% 11%
Net Revenues (2%) (2%)
Operating Income (21%) (10%)
-- The North Asia, Eurasia and Middle East Group increased unit
case volume 11 percent for the quarter and the year. A return
to unit case volume growth in Japan and continued strong
double-digit unit case volume growth in China and Russia drove
the unit case volume results for the quarter. Net revenues for
the year decreased 2 percent, reflecting a 7 percent increase
in gallon sales and favorable pricing, offset by an
unfavorable currency impact and negative country and product
mix. Operating income for the year decreased 10 percent,
primarily driven by the decrease in net revenues and
investment in key marketing initiatives.
-- In Japan, unit case volume increased 2 percent in the quarter
reflecting continued sequential improvement. Growth across
most core brands, including Trademarks Coca-Cola and Fanta,
Sokenbicha and Aquarius, drove the volume improvements and
share gains in the quarter. Georgia Coffee gained category
share as core flavors delivered solid growth; however, this
was offset by underperformance of new flavor launches,
resulting in overall volume declines for Georgia Coffee in the
quarter.
-- In China, Russia and Turkey, full year unit case volume grew
double-digits led by strong growth in sparkling beverages.
Bottling Investments
--------------------------------
Percent Change
From Prior Year
--------------------------------------
Fourth Full
Quarter Year
------------------ ------------------
Unit Case Volume 29% 16%
Net Revenues 39% 22%
Operating Income 48% n/a
-- The Bottling Investments Group's unit case volume increased 29
percent in the quarter and 16 percent for the year reflecting
acquisitions of certain bottlers and unit case volume growth
across the bottling group. Net revenues increased 22 percent
for the year due to the unit case volume increase,
acquisitions, favorable pricing and mix, and positive currency
benefits. Positive operating income results for the year
reflect the focus on driving sustained financial growth
through revenue increases and expense leverage.
Financial Review
Operating Results
Net operating revenues for the fourth quarter increased 7 percent, driven by a 3 percent increase in gallon sales, a 3 percent favorable impact from price and mix and a 1 percent currency benefit. Structural changes had minimal impact in the quarter. For the year, net operating revenues increased 4 percent, reflecting a 4 percent increase in gallon sales and a 2 percent favorable impact from pricing and mix, partially offset by a net 2 percent negative impact from structural change, primarily related to the change of the business model in Spain. Excluding the impact of structural changes, net operating revenues increased 6 percent for the year.
Cost of goods sold increased 3 percent for the quarter. This reflects a 3 percent increase in gallon sales along with increases in commodity-based input and freight costs and a 2 percent increase from currency, partially offset by a 2 percent decrease due to structural changes, primarily related to the change of the business model in Spain. For the year, cost of goods sold was flat versus the prior year, reflecting a 4 percent increase in gallon sales, increased commodity-based input and freight costs and the cycling of the favorable high fructose corn syrup lawsuit settlement in the prior year, offset by a 6 percent decrease due to structural changes, primarily related to the change of the business model in Spain.
Selling, general and administrative expenses for the quarter increased 13 percent, reflecting continued investments in marketing, increased costs in the consolidated bottling operations, including acquisitions, a $100 million pre-tax donation to The Coca-Cola Foundation and a 2 percent increase from currency. For the year, selling, general and administrative expenses increased 8 percent primarily as a result of continued investment in marketing initiatives, increased costs in the consolidated bottling operations, including acquisitions and a $100 million pre-tax donation to The Coca-Cola Foundation. Excluding items impacting comparability and acquisitions of bottling operations, selling, general and administrative expenses increased 6 percent in the quarter and for the year.
The Company had other operating charges in the fourth quarter amounting to $70 million pre-tax, primarily related to asset impairment and restructuring charges. For the year, the Company had other operating charges of $185 million pre-tax, primarily related to asset impairment and restructuring charges.
Operating income for the quarter decreased 4 percent, reflecting the growth in gross profit offset by the investments in marketing, increased costs in the consolidated bottling operations and charges for items impacting comparability. After considering items impacting comparability, operating income increased 10 percent for the quarter. Currency had a slight negative impact in the quarter. For the year, operating income increased 4 percent reflecting the growth in gross profit offset by investments in marketing, increased costs in the consolidated bottling operations and charges for items impacting comparability. After considering items impacting comparability, operating income increased 7 percent for the year. Currency negatively impacted operating income for the year by 1 percent. Based on current spot rates and the anticipated benefits of hedging coverage in place, the Company currently expects currencies to have very little impact on operating income in 2007.
Equity income for the quarter and the year was reduced by $602 million pre-tax due to a non-cash impairment charge recorded by CCE and further reflected the reduction of the Company's equity ownership positions in Coca-Cola FEMSA and Coca-Cola Icecek during the year.
In the fourth quarter, the Company sold a portion of its ownership interest in Coca-Cola FEMSA, reducing its interest from 39.6 percent to 31.6 percent, and recorded a gain of $175 million pre-tax. In the second quarter, the Company recorded a gain of $123 million pre-tax related to the sale of a portion of its ownership interest in the initial public offering of Coca-Cola Icecek.
Effective Tax Rate
The reported effective tax rates for the quarter and year were 23.5 percent and 22.8 percent, respectively. The rates were impacted primarily by the tax on the charges at equity investees being recorded at a 9 percent rate and reflect a full year underlying effective tax rate on operations of 22.4 percent. The Company previously estimated the underlying effective tax rate for the year to be 23.5 percent. The Company's underlying effective tax rate was 18.2 percent in the fourth quarter. Income taxes for the quarter and the year were $0.03 per share lower than previously estimated.
The Company anticipates that its underlying effective tax rate on operations for the full year 2007 will be approximately 23.0 percent. The Company's estimated underlying effective tax rate does not reflect the impact of discrete events, which, if and when they occur, are separately recognized in the appropriate period.
Operating Structure
As previously announced, effective January 1, 2006, the Company made certain changes to its operating structure to establish a new, separate internal organization for its consolidated bottling operations and its unconsolidated bottling investments. This new structure resulted in the reporting of a separate Bottling Investments operating segment, along with the six existing geographic operating segments and Corporate, beginning with the first quarter of 2006. Reclassified operating segment information can be found in the Company's Form 8-K filing dated April 10, 2006.
As recently announced, effective January 1, 2007, the Company made certain changes to its operating structure to align geographic responsibility. This new structure resulted in the reconfiguration of two operating segments which were renamed Eurasia Group and Pacific Group. The reconfiguration did not impact the other existing geographic operating segments, Bottling Investments or Corporate. Operating results will be reported based on the new geographic operating segments beginning with the first quarter of 2007.
Transfer of Spain Canning Rights
Effective January 1, 2006, the Company granted its bottling partners in Spain the rights to manufacture and distribute Company trademarked products in can packages. At the same time, the Company also reduced future marketing support payments to the bottlers. As a result, there was a reduction of revenues, but no material impact on gross profit. Revenues for full year 2005 would have been reduced by approximately $779 million with no material impact to gross profit if the change had occurred as of January 1, 2005.
Items Impacting Prior Year Results
In 2005, fourth quarter reported earnings per share included a net charge of $0.10 per share due to an accrual for taxes related to the repatriation of foreign earnings and for charges incurred by an equity investee. The 2005 third quarter reported earnings per share included a net charge of $0.03 per share due primarily to a non-cash charge related to asset write-downs in the Philippines, partially offset by a benefit related to the favorable resolution of tax matters. The 2005 second quarter results included a net benefit of $0.04 per share due to a gain from the favorable high fructose corn syrup lawsuit settlement, the favorable resolution of tax matters, a reduction of the tax accrual related to the repatriation of foreign earnings, and a benefit from certain items impacting an equity investee. In the first quarter of 2005, results included a net reduction of $0.05 per share due to a charge for accelerated amortization of stock-based compensation expenses and a tax charge related to the repatriation of foreign earnings, partially offset by a benefit related to the favorable resolution of tax matters and a gain on the issuance of stock by an equity investee.
Conference Call
The Company will host a conference call with investors and analysts to discuss the fourth quarter and full year 2006 results today at 8:00 a.m. (EST). The Company invites investors to listen to the live audiocast of the conference call at the Company's website, www.thecoca-colacompany.com in the "Investors" section. A replay in downloadable MP3 format will also be available within 24 hours after the audiocast on the Company's website. Further, the "Investors" section of the Company's website includes a disclosure and reconciliation of non-GAAP financial measures that may be used periodically by management when discussing the Company's financial results with investors and analysts.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
----------------------------------------------------------------------
Three Months Ended
------------------------------------
December 31, December 31,
2006 2005 % Change
------------ ------------ ---------
Net Operating Revenues $ 5,932 $ 5,551 7
Cost of goods sold 2,063 1,996 3
------------ ------------
Gross Profit 3,869 3,555 9
Selling, general and
administrative expenses 2,587 2,293 13
Other operating charges 70 - --
------------ ------------
Operating Income 1,212 1,262 (4)
Interest income 41 72 (43)
Interest expense 47 61 (23)
Equity income (loss) - net (467) 127 --
Other income (loss) - net 147 (27) --
------------ ------------
Income Before Income Taxes 886 1,373 (35)
Income taxes 208 509 (59)
------------ ------------
Net Income $ 678 $ 864 (22)
============ ============
Diluted Net Income Per Share(a) $ 0.29 $ 0.36 (19)
============ ============
Average Shares Outstanding -
Diluted(a) 2,341 2,375
============ ============
(a) For the three months ended December 31, "Basic Net Income Per
Share" was $0.29 for 2006 and $0.36 for 2005 based on "Average Shares
Outstanding - Basic" of 2,336 and 2,375 for 2006 and 2005,
respectively.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
----------------------------------------------------------------------
Year Ended
------------------------------------
December 31, December 31,
2006 2005 % Change
------------ ------------ ---------
Net Operating Revenues $ 24,088 $ 23,104 4
Cost of goods sold 8,164 8,195 0
------------ ------------
Gross Profit 15,924 14,909 7
Selling, general and
administrative expenses 9,431 8,739 8
Other operating charges 185 85 --
------------ ------------
Operating Income 6,308 6,085 4
Interest income 193 235 (18)
Interest expense 220 240 (8)
Equity income - net 102 680 (85)
Other income (loss) - net 195 (93) --
Gains on issuances of stock by
equity investees - 23 --
------------ ------------
Income Before Income Taxes 6,578 6,690 (2)
Income taxes 1,498 1,818 (18)
------------ ------------
Net Income $ 5,080 $ 4,872 4
============ ============
Diluted Net Income Per Share(a) $ 2.16 $ 2.04 6
============ ============
Average Shares Outstanding -
Diluted(a) 2,350 2,393
============ ============
(a) For the year ended December 31, "Basic Net Income Per Share" was
$2.16 for 2006 and $2.04 for 2005 based on "Average Shares
Outstanding - Basic" of 2,348 and 2,392 for 2006 and 2005,
respectively.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions except par value)
----------------------------------------------------------------------
December 31, December 31,
2006 2005
------------- -------------
Assets
----------------------------------------------------------------------
Current Assets
Cash and cash equivalents $ 2,440 $ 4,701
Marketable securities 150 66
Trade accounts receivable, less allowances
of $63 and $72, respectively 2,587 2,281
Inventories 1,641 1,379
Prepaid expenses and other assets 1,623 1,778
----------- -----------
Total Current Assets 8,441 10,205
----------- -----------
Investments
Equity method investments 6,117 6,562
Cost method investments, principally
bottling companies 473 360
----------- -----------
Total Investments 6,590 6,922
----------- -----------
Other Assets 2,701 2,648
Property, Plant and Equipment - net 6,903 5,831
Trademarks With Indefinite Lives 2,045 1,946
Goodwill 1,403 1,047
Other Intangible Assets 1,687 828
----------- -----------
Total Assets $ 29,770 $ 29,427
=========== ===========
Liabilities and Shareowners' Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued expenses $ 5,055 $ 4,493
Loans and notes payable 3,235 4,518
Current maturities of long-term debt 33 28
Accrued income taxes 567 797
----------- -----------
Total Current Liabilities 8,890 9,836
----------- -----------
Long-Term Debt 1,314 1,154
Other Liabilities 2,230 1,730
Deferred Income Taxes 539 352
Shareowners' Equity
Common stock, $0.25 par value; Authorized
- 5,600 shares; Issued - 3,511 shares and
3,507 shares, respectively 878 877
Capital surplus 5,983 5,492
Reinvested earnings 33,468 31,299
Accumulated other comprehensive income
(loss) (1,414) (1,669)
Treasury stock, at cost - 1,193 shares and
1,138 shares, respectively (22,118) (19,644)
----------- -----------
Total Shareowners' Equity 16,797 16,355
----------- -----------
Total Liabilities and Shareowners' Equity $ 29,770 $ 29,427
=========== ===========
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)
----------------------------------------------------------------------
Year Ended
---------------------------
December 31, December 31,
2006 2005
------------- -------------
Operating Activities
Net income $ 5,080 $ 4,872
Depreciation and amortization 938 932
Stock-based compensation expense 324 324
Deferred income taxes (35) (88)
Equity income or loss, net of dividends 124 (446)
Foreign currency adjustments 52 47
Gains on issuances of stock by equity
investees - (23)
Gains on sales of assets, including
bottling interests (303) (9)
Other operating charges 159 85
Other items 233 299
Net change in operating assets and
liabilities (615) 430
------------- -------------
Net cash provided by operating
activities 5,957 6,423
------------- -------------
Investing Activities
Acquisitions and investments, principally
trademarks and bottling companies (901) (637)
Purchases of other investments (82) (53)
Proceeds from disposals of other
investments 640 33
Purchases of property, plant and
equipment (1,407) (899)
Proceeds from disposals of property,
plant and equipment 112 88
Other investing activities (62) (28)
------------- -------------
Net cash used in investing activities (1,700) (1,496)
------------- -------------
Financing Activities
Issuances of debt 617 178
Payments of debt (2,021) (2,460)
Issuances of stock 148 230
Purchases of stock for treasury (2,416) (2,055)
Dividends (2,911) (2,678)
------------- -------------
Net cash used in financing activities (6,583) (6,785)
------------- -------------
Effect of Exchange Rate Changes on Cash
and Cash Equivalents 65 (148)
------------- -------------
Cash and Cash Equivalents
Net decrease during the year (2,261) (2,006)
Balance at beginning of year 4,701 6,707
------------- -------------
Balance at end of year $ 2,440 $ 4,701
============= =============
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions except percentages)
Three Months Ended
----------------------------------------------------------------------
Net Operating Revenues Operating Income (Loss)
----------------------------------------------------------------------
December December December December
31, 31, 31, 31,
2006 2005 % Fav. / 2006 2005 % Fav. /
(1) (4) (Unfav.) (2) (5) (Unfav.)
-------------------------- ------------------------- -----------------
Africa $325 $356 (9) $137 $135 1
East, South Asia
and Pacific Rim 240 190 26 75 75 -
European Union 1,002 1,066 (6) 480 458 5
Latin America 737 591 25 390 303 29
North America 1,666 1,628 2 419 366 14
North Asia,
Eurasia and
Middle East 955 977 (2) 333 419 (21)
Bottling
Investments 1,351 971 39 (59) (40) (48)
Corporate 27 18 50 (563) (454) (24)
Eliminations (371) (246) - - -
-------- ------------------------- -----------------
Consolidated $5,932 $5,551 7 $1,212 $1,262 (4)
-------------------------- ------------------------- -----------------
Income (Loss) Before Income Taxes
----------------------------------------------------------------------
December 31, December 31,
2006 2005 % Fav. /
(2) (3) (5) (6) (Unfav.)
----------------------------------------------------------------------
Africa $134 $130 3
East, South Asia and Pacific Rim 75 74 1
European Union 480 460 4
Latin America 389 303 28
North America 418 367 14
North Asia, Eurasia and Middle
East 339 425 (20)
Bottling Investments (534) 75 -
Corporate (415) (461) 10
Eliminations - -
-------------------------------------
Consolidated $886 $1,373 (35)
----------------------------------------------------------------------
Note: Refer to the Company's Form 8-K filing dated April 10, 2006 for
more information on the changes to the Company's operating structure.
(1) Intersegment revenues for the fourth quarter of 2006 were $8
million for Africa, $15 million for East, South Asia and Pacific Rim,
$203 million for European Union, $42 million for Latin America, $16
million for North America, $72 million for North Asia, Eurasia and
Middle East and $15 million for Bottling Investments.
(2) Operating income (loss) and income (loss) before income taxes for
the fourth quarter of 2006 were reduced by $2 million for Africa, $25
million for East, South Asia and Pacific Rim, $2 million for European
Union, $17 million for North Asia, Eurasia and Middle East, $27
million for Bottling Investments and $1 million for Corporate
primarily due to contract termination costs related to production
capacity efficiencies, asset impairments and other restructuring
costs and were reduced by $100 million for Corporate as a result of a
donation made to The Coca-Cola Foundation.
(3) Income (loss) before income taxes for the fourth quarter of 2006
was increased by $175 million for Corporate as a result of a net gain
on the sale of Coca-Cola FEMSA shares and was reduced by $615 million
for Bottling Investments, primarily due to our proportionate share of
a non-cash impairment charge recorded by CCE.
(4) Intersegment revenues for the fourth quarter of 2005 were $2
million for Africa, $8 million for East, South Asia and Pacific Rim,
$175 million for European Union, $37 million for Latin America and
$24 million for North Asia, Eurasia and Middle East.
(5) Operating income (loss) and income (loss) before income taxes for
the fourth quarter of 2005 were increased by $5 million for Corporate
due to the high fructose corn syrup (HFCS) lawsuit settlement.
(6) Income (loss) before income taxes for the fourth quarter of 2005
was reduced by $49 million for Bottling Investments due to certain
items impacting an equity investee.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions except percentages)
Year Ended
----------------------------------------------------------------------
Net Operating Revenues Operating Income (Loss)
----------------------------------------------------------------------
December December December December
31, 31, 31, 31,
2006 2005 % Fav. / 2006 2005 % Fav. /
(1) (4) (Unfav.) (2) (5) (Unfav.)
-------------------------- ------------------------- -----------------
Africa $1,140 $1,120 2 $424 $396 7
East, South Asia
and Pacific Rim 872 779 12 358 284 26
European Union 4,364 4,911 (11) 2,254 2,219 2
Latin America 2,616 2,158 21 1,438 1,176 22
North America 7,029 6,676 5 1,683 1,553 8
North Asia,
Eurasia and
Middle East 4,123 4,219 (2) 1,557 1,735 (10)
Bottling
Investments 5,198 4,262 22 18 (37) -
Corporate 93 83 12 (1,424) (1,241) (15)
Eliminations (1,347) (1,104) - - -
-------- ------------------------- -----------------
Consolidated $24,088 $23,104 4 $6,308 $6,085 4
-------------------------- ------------------------- -----------------
Income (Loss) Before Income Taxes
----------------------------------------------------------------------
December 31, December 31,
2006 2005 % Fav. /
(2) (3) (5) (6) (Unfav.)
----------------------------------------------------------------------
Africa $413 $382 8
East, South Asia and Pacific Rim 358 283 27
European Union 2,258 2,225 1
Latin America 1,434 1,175 22
North America 1,681 1,549 9
North Asia, Eurasia and Middle
East 1,579 1,748 (10)
Bottling Investments 67 590 (89)
Corporate (1,212) (1,262) 4
Eliminations - -
-------------------------------------
Consolidated $6,578 $6,690 (2)
----------------------------------------------------------------------
Note: Refer to the Company's Form 8-K filing dated April 10, 2006 for
more information on the changes to the Company's operating structure.
(1) Intersegment revenues for 2006 were $37 million for Africa, $77
million for East, South Asia and Pacific Rim, $859 million for
European Union, $132 million for Latin America, $16 million for North
America, $137 million for North Asia, Eurasia and Middle East and $89
million for Bottling Investments.
(2) Operating income (loss) and income (loss) before income taxes for
2006 were reduced by $3 million for Africa, $44 million for East,
South Asia and Pacific Rim, $36 million for European Union, $17
million for North Asia, Eurasia and Middle East, $88 million for
Bottling Investments and $1 million for Corporate primarily due to
contract termination costs related to production capacity
efficiencies, asset impairments and other restructuring costs and
were reduced by $100 million for Corporate as a result of a donation
made to The Coca-Cola Foundation.
(3) Income (loss) before income taxes for 2006 was increased by $298
for Corporate as a result of a net gain on the sale of Coca-Cola
FEMSA shares and the sale of a portion of our investment in Coca-Cola
Icecek in an initial public offering and was reduced by $606 million
for Bottling Investments, primarily due to our proportionate share of
a non-cash impairment charge recorded by CCE.
(4) Intersegment revenues for 2005 were $13 million for Africa, $60
million for East, South Asia and Pacific Rim, $807 million for
European Union, $94 million for Latin America and $130 million for
North Asia, Eurasia and Middle East.
(5) Operating income (loss) and income (loss) before income taxes for
2005 were reduced by $85 million for East, South Asia and Pacific Rim
primarily related to impairments of intangible assets, $3 million for
Africa, $3 million for East, South Asia and Pacific Rim, $3 million
for European Union, $4 million for Latin America, $12 million for
North America, $3 million for North Asia, Eurasia and Middle East and
$22 million for Corporate as a result of accelerated amortization of
stock-based compensation expense and were increased by $47 million
for Corporate due to the HFCS lawsuit settlement.
(6) Income (loss) before income taxes for 2005 was reduced for
Bottling Investments by $33 million due to certain items impacting an
equity investee and by $4 million due to impairments of intangible
assets and was increased by $23 million for Corporate due to non-cash
pre-tax gains on issuances of stock primarily by Coca-Cola Amatil,
one of our equity investees.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data and percentages)
----------------------------------------------------------------------
Three Months Ended December 31, 2006
------------------------------------------------
Items Impacting Comparability
----------------------------------------
Asset
Reported Impairments/ Equity Transaction
(GAAP) Restructuring Investees Gains
-------------------------------------------
Net Operating Revenues $5,932
Cost of goods sold 2,063 ($4)
-------------------------------------------
Gross Profit 3,869 4
Selling, general and
administrative
expenses (2) 2,587
Other operating
charges 70 (70)
-------------------------------------------
Operating Income 1,212 74
Interest income 41
Interest expense 47
Equity income - net (467) $615
Other income (loss) -
net 147 ($175)
-------------------------------------------
Income Before Income
Taxes 886 74 615 (175)
Income taxes 208 10 57 (76)
-------------------------------------------
Net Income $678 $64 $558 ($99)
===========================================
Diluted Net Income Per
Share $0.29 $0.03 $0.24 ($0.04)
===========================================
Average Shares
Outstanding - Diluted 2,341 2,341 2,341 2,341
===========================================
Gross Margin 65.2%
Operating Margin 20.4%
Effective Tax Rate 23.5%
-------------------------------------------
Three Months Ended December 31,
2006
-------------------------------
Items Impacting
Comparability
------------------- % Change -
Certain After % Change After
Tax Considering - Considering
Foundation Matters Items (Non- Reported Items
Donation (1) GAAP) (GAAP) (Non-GAAP)
------------------------------- ---------------------
Net Operating
Revenues $5,932 7 7
Cost of goods
sold 2,059 3 3
-------------------------------
Gross Profit 3,873 9 9
Selling,
general and
administrative
expenses (2) ($100) 2,487 13 8
Other operating
charges - -- --
-------------------------------
Operating
Income 100 1,386 (4) 10
Interest income 41 (43) (43)
Interest
expense 47 (23) (23)
Equity income -
net 148 -- (16)
Other income
(loss) - net (28) -- --
-------------------------------
Income Before
Income Taxes 100 1,500 (35) 6
Income taxes 38 $37 274 (59) (18)
-------------------------------
Net Income $62 ($37) $1,226 (22) 13
===============================
Diluted Net
Income Per
Share $0.03 ($0.02) $0.52 (3) (19) 13
===============================
Average Shares
Outstanding -
Diluted 2,341 2,341 2,341
===============================
Gross Margin 65.3%
Operating
Margin 23.4%
Effective Tax
Rate 18.2%(4)
------------------------------- ---------------------
Three Months Ended December 31,
2005
---------------------------------
Items Impacting
Comparability
-------------------------
Resolution
Reported HFCS of Tax
(GAAP) Settlement Matters
------------------------------
Net Operating Revenues $5,551
Cost of goods sold 1,996 $5
------------------------------
Gross Profit 3,555 (5)
Selling, general and administrative
expenses 2,293
------------------------------
Operating Income 1,262 (5)
Interest income 72
Interest expense 61
Equity income - net 127
Other income (loss) - net (27)
------------------------------
Income Before Income Taxes 1,373 (5)
Income taxes 509 (2) $10
------------------------------
Net Income $864 ($3) ($10)
==============================
Diluted Net Income Per Share $0.36 $0.00 $0.00
========----------------------
Average Shares Outstanding - Diluted 2,375 2,375 2,375
==============================
Gross Margin 64.0%
Operating Margin 22.7%
Effective Tax Rate 37.1%
------------------------------
Three Months Ended December 31,
2005
----------------------------------
Items Impacting
Comparability
---------------------- After
Repatriation Considering
of Foreign Equity Items (Non-
Earnings Investee GAAP)
----------------------------------
Net Operating Revenues $5,551
Cost of goods sold 2,001
----------------------------------
Gross Profit 3,550
Selling, general and
administrative expenses 2,293
----------------------------------
Operating Income 1,257
Interest income 72
Interest expense 61
Equity income - net $49 176
Other income (loss) - net (27)
----------------------------------
Income Before Income Taxes 49 1,417
Income taxes ($188) 4 333
----------------------------------
Net Income $188 $45 $1,084
==================================
Diluted Net Income Per Share $0.08 $0.02 $0.46
----------------------============
Average Shares Outstanding -
Diluted 2,375 2,375 2,375
==================================
Gross Margin 64.0%
Operating Margin 22.6%
Effective Tax Rate 23.5%
----------------------------------
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 and accounting changes positively
impacting net income are reflected as deductions to reported net
income.
(1) Primarily related to changes in reserves related to certain tax
matters.
(2) Selling, general and administrative expenses excluding items
impacting comparability and structural changes:
2006 2005 % Change
-----------------------
Reported selling, general and
administrative expenses $2,587 $2,293 13%
Donation to The Coca-Cola
Foundation (100) --
Structural changes (63) --
Selling, general and
administrative expenses
excluding items impacting
comparability and structural
changes $2,424 $2,293 6%
(3) Per share amounts do not add due to rounding.
(4) Effective tax rate calculated on full figures.
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2006 and December 31, 2005. 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
(UNAUDITED)
(In millions except per share data and percentages)
----------------------------------------------------------------------
Year Ended December 31, 2006
--------------------------------------------------
Items Impacting Comparability
------------------------------------------
Asset
Reported Impairments/ Equity Transaction
(GAAP) Restructuring Investees Gains
------------------------------- ------------
Net Operating
Revenues (2) $24,088
Cost of goods sold 8,164 ($4)
------------------------------- ------------
Gross Profit 15,924 4
Selling, general and
administrative
expenses (3) 9,431
Other operating
charges 185 (185)
------------------------------- ------------
Operating Income (4) 6,308 189
Interest income 193
Interest expense 220
Equity income - net 102 $606
Other income (loss)
- net 195 ($298)
------------------------------- ------------
Income Before Income
Taxes 6,578 189 606 (298)
Income taxes 1,498 30 57 8
------------------------------- ------------
Net Income $5,080 $159 $549 ($306)
------------------------------- ------------
Diluted Net Income
Per Share $2.16 $0.07 $0.23 ($0.13)
=============================== ============
Average Shares
Outstanding -
Diluted 2,350 2,350 2,350 2,350
=============================== ============
Gross Margin 66.1%
Operating Margin 26.2%
Effective Tax Rate 22.8%
------------------------------- ------------
Year Ended December 31, 2006
-------------------------------
Items Impacting
Comparability
------------------- % Change -
Certain After % Change After
Tax Considering - Considering
Foundation Matters Items (Non- Reported Items
Donation (1) GAAP) (GAAP) (Non-GAAP)
------------------------------- --------- ------------
Net Operating
Revenues (2) $24,088 4 4
Cost of goods
sold 8,160 0 (1)
-------------------------------
Gross Profit 15,928 7 7
Selling, general
and
administrative
expenses (3) ($100) 9,331 8 7
Other operating
charges - -- --
-------------------------------
Operating Income
(4) 100 6,597 4 7
Interest income 193 (18) (18)
Interest expense 220 (8) (8)
Equity income -
net 708 (85) (1)
Other income
(loss) - net (103) -- --
-------------------------------
Income Before
Income Taxes 100 7,175 (2) 6
Income taxes 38 ($24) 1,607 (18) 1
-------------------------------
Net Income $62 $24 $5,568 4 7
-------------------------------
Diluted Net
Income Per
Share $0.03 $0.01 $2.37 6 9
===============================
Average Shares
Outstanding -
Diluted 2,350 2,350 2,350
===============================
Gross Margin 66.1%
Operating Margin 27.4%
Effective Tax
Rate 22.4%
------------------------------- --------- ------------
Year Ended December 31, 2005
------------------------------------------------
Items Impacting Comparability
----------------------------------------
Resolution Repatriation
Reported HFCS of Tax of Foreign
(GAAP) Settlement Matters Earnings
----------------------------- -------------
Net Operating Revenues$23,104
Cost of goods sold 8,195 $47
----------------------------- -------------
Gross Profit 14,909 (47)
Selling, general and
administrative
expenses 8,739
Other operating
charges 85
----------------------------- -------------
Operating Income 6,085 (47)
Interest income 235
Interest expense 240
Equity income - net 680
Other income (loss) -
net (93)
Gain on issuances of
stock by
equity investees 23
----------------------------- -------------
Income Before Income
Taxes 6,690 (47)
Income taxes 1,818 (18) $101 ($315)
----------------------------- -------------
Net Income $4,872 ($29) ($101) $315
============================= =============
Diluted Net Income Per
Share $2.04 ($0.01) ($0.04) $0.13
========--------------------- -------------
Average Shares
Outstanding - Diluted 2,393 2,393 2,393 2,393
============================= =============
Gross Margin 64.5%
Operating Margin 26.3%
Effective Tax Rate 27.2%
----------------------------- -------------
Year Ended December 31, 2005
----------------------------------------------------
Items Impacting Comparability
----------------------------------------
Accelerated
Issuances Amortization After
of Stock of Stock- Asset Considering
by Equity Based Equity Write- Items (Non-
Investees Compensation Investee downs GAAP)
----------------------------------------------------
Net Operating
Revenues $23,104
Cost of goods
sold 8,242
----------------------------------------------------
Gross Profit 14,862
Selling,
general
and
administrative
expenses ($50) 8,689
Other operating
charges ($85) -
----------------------------------------------------
Operating
Income 50 85 6,173
Interest income 235
Interest
expense 240
Equity income -
net $33 4 717
Other income
(loss) - net (93)
Gain on
issuances of
stock by
equity
investees ($23) -
----------------------------------------------------
Income Before
Income Taxes (23) 50 33 89 6,792
Income taxes (8) 12 2 4 1,596
----------------------------------------------------
Net Income ($15) $38 $31 $85 $5,196
====================================================
Diluted Net
Income Per
Share ($0.01) $0.02 $0.01 $0.04 $2.17 (5)
----------------------------------------============
Average Shares
Outstanding -
Diluted 2,393 2,393 2,393 2,393 2,393
====================================================
Gross Margin 64.3%
Operating
Margin 26.7%
Effective Tax
Rate 23.5%
----------------------------------------------------
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 and accounting changes positively
impacting net income are reflected as deductions to reported net
income.
(1) Primarily related to changes in reserves related to certain tax
matters.
(2) Net operating revenues excluding structural changes:
2006 2005 % Change
-------------------------
Reported net operating revenues $24,088 $23,104 4%
Structural changes (460) (779) --
Net operating revenues excluding
structural changes $23,628 $22,325 6%
(3) Selling, general and administrative expenses excluding items
impacting comparability and structural changes:
2006 2005 % Change
-------------------------
Reported selling, general and
administrative expenses $ 9,431 $ 8,739 8%
Donation to The Coca-Cola Foundation (100) --
Accelerated amortization of stock-
based compensation expense (50) --
Structural changes (130) --
Selling, general and administrative
expenses excluding items impacting
comparability and structural changes $ 9,201 $ 8,689 6%
(4) Operating Income for the year ended December 31, 2006 includes a
negative currency impact of approximately 1%. Ongoing, currency
neutral operating income growth is 8%.
(5) Per share amounts do not add due to rounding.
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the years ended December 31, 2006 and December 31, 2005. 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
The Coca-Cola Company is the world's largest beverage company. Along with Coca-Cola, recognized as the world's most valuable brand, the Company markets four of the world's top five nonalcoholic sparkling brands, including Diet Coke, Fanta and Sprite, and a wide range of other beverages, including diet and light beverages, waters, juices and juice drinks, teas, coffees, energy and sports drinks. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate exceeding 1.4 billion servings each day. For more information about The Coca-Cola Company, please visit our website at www.thecoca-colacompany.com.
Forward-Looking Statements
This press release may contain statements, estimates or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company's historical experience and our present expectations or projections. These risks include, but are not limited to, obesity concerns; the availability and quality of water; changes in the nonalcoholic beverages business environment, including actions of competitors and changes in consumer preferences, including changes based on health and nutrition considerations and obesity concerns; increased competition; our ability to enter or expand our operations in emerging markets; foreign currency and interest rate fluctuations and other capital and financial market conditions; our ability to effectively align ourselves with our bottling system, including maintaining good relationships with our bottlers; the financial condition of our bottlers; our ability to maintain good labor relations, including our ability to renew collective bargaining agreements on satisfactory terms and avoid strikes or work stoppages, which could lead to production output disruptions; fluctuations in cost and shortages of raw materials, including the cost of energy; adoption of or changes to laws relating to beverage containers and packaging, including mandatory deposit, recycling, eco-tax and/or product stewardship laws or regulations; adoption of significant additional labeling or warning requirements; changes in economic and political conditions in international markets, including civil unrest and product boycotts; changes in commercial or market practices and business model within the European Union; litigation uncertainties; adverse weather conditions; our ability to maintain brand image and product quality as well as other product issues such as product recalls; regulatory and legal changes; our ability to achieve overall long-term goals; and other risks discussed in our Company's filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company undertakes no obligation to publicly update or revise any forward-looking statements.
Source: The Coca-Cola Company
Released February 14, 2007