The Coca-Cola Company Reports 2009 Fourth Quarter and Full Year Results
Today, our Company reports continued worldwide unit case volume growth in 2009, which drove share gains in sparkling, still and total nonalcoholic ready-to-drink beverages for the year, and full year profit growth in line with our long-term target.
-- Strong worldwide unit case volume growth of 5 percent in the quarter and
3 percent for the full year, in line with our long-term volume target,
and driven by international volume growth of 6 percent in the quarter
and 4 percent for the full year.
-- Fourth quarter reported EPS was $0.66, up 53 percent, with comparable
EPS up 3 percent to $0.66. Full year reported EPS was $2.93, up 18
percent, while comparable EPS was down 3 percent to $3.06 reflecting a
negative currency impact.
-- Reported operating income increased 4 percent in the quarter, and
decreased 3 percent for the full year. Comparable currency neutral
operating income was even for the quarter, and grew 7 percent for the
full year, in line with our long-term target.
-- Strong cash flow generation continued, with full year cash from
operations up 8 percent to $8.2 billion.
-- Global nonalcoholic ready-to-drink beverage volume and value share gains
continued for the tenth consecutive quarter.
-- Productivity initiatives are well on track to achieve our goal of $500
million in annualized savings by year-end 2011, with more than half of
the savings realized by year-end 2009.
ATLANTA--(BUSINESS WIRE)-- The Coca-Cola Company reports solid fourth quarter 2009 operating results, with unit case volume increasing 5 percent, successfully cycling 4 percent growth in the prior year quarter. For the full year, unit case volume increased 3 percent, in line with our long-term volume target. Internationally, we achieved broad-based unit case volume growth of 6 percent in the fourth quarter, cycling 6 percent growth in the prior year quarter. In the quarter, unit case volume increased strongly in key emerging markets (China +29 percent, India +20 percent), developing markets (Brazil +8 percent, Mexico +4 percent) and developed markets (France +12 percent, Germany +3 percent). Further, in the 118 countries with per capita consumption of Company products less than 150 eight-ounce servings per year, we achieved 12 percent unit case volume growth in the quarter.
We gained volume and value share globally in nonalcoholic ready-to-drink (NARTD) beverages for the tenth consecutive quarter with share gains across most key categories. For the year, we gained volume and value share in total NARTD beverages as well as in both the sparkling and still beverage categories. The combined power of the global "Open Happiness" campaign and the strength of holiday programs drove growth in brand Coca-Cola. Brand Coca-Cola unit case volume grew a solid 4 percent in the quarter, with strong growth across global markets, including 22 percent in India, 13 percent in China, 12 percent in France, 5 percent in Mexico and 4 percent in Germany. Total sparkling beverage unit case volume increased 3 percent in the quarter, with international sparkling beverage unit case volume increasing 5 percent, cycling 4 percent growth in the prior year quarter. Total still beverage unit case volume increased 9 percent in the quarter, led by growth across the portfolio, including juices and fruit stills, teas and water brands. Still beverage unit case volume increased 14 percent internationally and was even in North America.
"We ended this year on a high note, delivering global volume and value share gains, comparable currency neutral revenue growth, improved productivity and increased cash flows," said Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company.
"In a year marked by unprecedented economic uncertainty, our foundation leading brands, unmatched global footprint, great bottling partners and a solid financial position proved that we have the right ingredients for growth even under challenging economic conditions. Early last year we committed to align our Company and our system to emerge from this global crisis stronger. Our performance results for the year underscore that we are doing just that. Now, with our 2020 Vision as our roadmap, we look forward to entering our next decade of growth as we work closely together with our bottling partners to usher in a new era of winning for the Coca-Cola system."
FINANCIAL HIGHLIGHTS
-- Fourth quarter 2009 reported net revenues increased 5 percent and were
impacted by six fewer selling days, which offset the impact of five
additional selling days in first quarter 2009 results. Excluding the
impact of six fewer selling days, we estimate that fourth quarter
currency neutral net revenues would have been in line with our long-term
target. Reported net revenues for the full year decreased 3 percent.
Excluding structural changes, full year net revenues increased 4 percent
on a comparable currency neutral basis.
-- Fourth quarter 2009 reported operating income increased 4 percent, and
comparable currency neutral operating income was even. Excluding the
impact of six fewer selling days, we estimate that fourth quarter
comparable currency neutral operating income would have been ahead of
our long-term target. Reported operating income for the full year
decreased 3 percent. Comparable currency neutral full year operating
income increased 7 percent, in line with our long-term growth target.
This was driven by a continued strong focus on cost management and the
leveraging of productivity initiatives.
-- Cash from operations for the full year increased 8 percent to $8.2
billion, and we repurchased $1.5 billion of our stock for the full year.
OPERATING REVIEW
Three Months Ended December 31, 2009
% Favorable / (Unfavorable)
Comparable
Currency
Unit Case Operating
Net Revenues Neutral
Volume Income
Operating
Income
Total Company 5 5 4 0
Eurasia & Africa 5 7 11 7
Europe 1 1 (1) (1)
Latin America 7 19 11 16
North America (1) (4) (7) (10)
Pacific 11 5 5 3
Bottling Investments 13 12 72 17
Year Ended December 31, 2009
% Favorable / (Unfavorable)
Comparable
Currency
Unit Case Operating
Net Revenues Neutral
Volume Income
Operating
Income
Total Company 3 (3) (3) 7
Eurasia & Africa 4 (6) (3) 12
Europe (1) (10) (7) 4
Latin America 6 1 (3) 15
North America (2) 0 7 7
Pacific 7 4 2 (2)
Bottling Investments 2 (7) (32) 23
Eurasia & Africa
-- Our Eurasia and Africa Group's unit case volume increased 5 percent in
the quarter, cycling 7 percent growth in the prior year quarter. Full
year unit case volume increased 4 percent, cycling 7 percent growth in
the prior year. Net revenues for the quarter increased 7 percent,
reflecting a 6 percent increase in concentrate sales and a positive
currency impact, partially offset by the impact of six fewer selling
days in the quarter as well as negative price/mix. Reported operating
income increased 11 percent in the quarter. Comparable currency neutral
operating income increased 7 percent in the quarter due to the increase
in concentrate sales and focused expense management. For the full year,
reported operating income decreased 3 percent, while comparable currency
neutral operating income increased 12 percent as the group continued to
focus on driving favorable operating leverage.
-- In Eurasia and Africa, sparkling beverages increased 4 percent and still
beverages increased 9 percent in the quarter, with brand Coca-Cola
growing 2 percent. The growth in unit case volume was led by a 20
percent increase in India, cycling a 28 percent increase in the prior
year quarter. Africa also reported strong unit case volume growth in the
quarter with the East and Central Region growing 12 percent, cycling 5
percent growth in the prior year quarter, and the North and West Region
also growing 12 percent, cycling 6 percent growth in the prior year
quarter. Russia gained share in total NARTD beverages and in sparkling
beverages for the year while reporting a unit case volume decline of 13
percent in the quarter and a decline of 14 percent for the year. The
results in Russia continue to reflect the impact of a challenging
economic environment.
-- In the quarter, Eurasia and Africa gained share in NARTD beverages.
India gained volume and value share across most categories, including
sparkling, still and juice and juice drinks.
Europe
-- Our Europe Group's unit case volume increased 1 percent in the quarter,
cycling 2 percent growth in the prior year quarter, demonstrating
sequential improvement relative to the first nine months of the year in
very challenging economic conditions. Unit case volume for the year
decreased 1 percent, cycling 3 percent growth in the prior year. Net
revenues for the quarter increased 1 percent, primarily driven by a 6
percent positive currency impact partially offset by a 5 percent decline
in concentrate sales as a result of six fewer selling days in the
quarter. Reported operating income decreased 1 percent in the quarter,
with comparable currency neutral operating income also decreasing 1
percent on lower concentrate sales, partially offset by tight expense
management. For the full year, reported operating income is down 7
percent while comparable currency neutral operating income increased 4
percent as the group continues to drive efficiencies and effectiveness
in overall SG&A spend.
-- Unit case volume growth in the quarter was driven by France, Great
Britain, Germany and Italy, with strong growth in brand Coca-Cola. This
growth was partially offset by results in Eastern Europe which continue
to be impacted by challenging economic conditions.
-- In the quarter, Europe gained value share in total NARTD beverages as
did Spain, France, Germany, Great Britain and Italy. For the full year,
we achieved both volume and value share gains in Europe and across most
key countries.
Latin America
-- Our Latin America Group continued to deliver strong unit case volume
growth with 7 percent growth in the quarter, cycling 6 percent growth in
the prior year quarter. Unit case volume for the year increased 6
percent, cycling 8 percent growth in the prior year. Net revenues for
the quarter increased 19 percent, primarily due to a high single-digit
benefit from price/mix, combined with 4 percent concentrate sales growth
and a positive currency impact, partially offset by the impact of six
fewer selling days in the quarter. Reported operating income was up 11
percent in the quarter, with comparable currency neutral operating
income up 16 percent, primarily reflecting the solid revenue growth and
consistent investment behind both our sparkling and still brands. For
the full year, reported operating income was down 3 percent, but was up
15 percent on a comparable currency neutral basis due to continued
favorable volume and pricing.
-- Strong unit case volume growth in the quarter was led by an 8 percent
increase in Brazil, a 4 percent increase in Mexico and an 18 percent
increase in our Latin Center Region.
-- Latin America delivered growth across the portfolio with sparkling
beverages increasing 5 percent and still beverages increasing 20 percent
in the quarter. Sparkling beverage growth was led by brand Coca-Cola
with 7 percent growth in the quarter.
-- In the quarter and for the full year, the Latin America Group gained
volume and value share in total NARTD beverages and across most key
countries. In addition, the group posted volume and value share gains in
both the sparkling and still categories.
North America
-- Our North America Group's unit case volume declined 1 percent in the
quarter primarily due to continued macroeconomic pressures impacting
consumer spending and foodservice traffic. Full year unit case volume
decreased 2 percent. Net revenues for the quarter decreased 4 percent,
reflecting a 6 percent decrease in concentrate sales as a result of six
fewer selling days in the quarter, partially offset by a 1 percent
positive currency impact and a 1 percent positive impact from price/mix.
Reported operating income decreased 7 percent in the quarter, reflecting
the impact of lower concentrate sales, and increased 7 percent for the
year. Comparable currency neutral operating income decreased 10 percent
in the quarter, but increased 7 percent for the year driven by business
mix and productivity savings.
-- Unit case volume for sparkling beverages declined 2 percent in the
quarter, as consumer spending continues to be impacted by unemployment
and economic uncertainty. Brand Coca-Cola has continued to increase its
favorite brand score advantage versus the competition among the
important teen and mom consumer segments. Coca-Cola Zero delivered
double-digit unit case volume growth in the quarter, achieving 15
consecutive quarters of double-digit growth.
-- Still beverage unit case volume was even in the quarter. Still beverage
volume in our Foodservice and Hospitality business continued to grow,
driven by innovation and new segmented customer offerings in our tea
portfolio.
-- In the quarter, North America gained value share in NARTD beverages for
the fifth consecutive quarter, with both volume and value share gains
for the full year. Still beverages also gained value share for the fifth
consecutive quarter, led by strong performance in our Foodservice and
Hospitality business, Trademark Simply and Fuze. Trademark Simply and
Minute Maid continued to perform strongly with new flavor innovations
and expanded availability, contributing to volume and value share gains
in the juice and juice drinks category for both the quarter and the full
year. In 2009, Simply became our Company's 14th billion dollar brand.
Pacific
-- Our Pacific Group delivered unit case volume growth of 11 percent in the
quarter, cycling 9 percent growth in the prior year quarter. Full year
unit case volume increased 7 percent, cycling 8 percent growth in the
prior year. Net revenues for the quarter increased 5 percent, reflecting
an 8 percent increase in concentrate sales and a 7 percent positive
impact from currencies, partially offset by the impact of six fewer
selling days in the quarter as well as negative country and channel mix.
Reported operating income increased 5 percent in the quarter. Comparable
currency neutral operating income increased 3 percent in the quarter,
reflecting higher concentrate sales partially offset by negative country
and channel mix, primarily in Japan. For the full year, reported
operating income increased 2 percent, but declined 2 percent on a
comparable currency neutral basis as a result of the same country and
channel mix drivers.
-- Pacific delivered unit case volume growth across the portfolio with
sparkling beverages increasing 9 percent and still beverages increasing
15 percent in the quarter. Importantly, brand Coca-Cola grew 11 percent
in the quarter. Unit case volume growth was led by China, Thailand,
Australia, the Philippines, Korea and Vietnam. In the quarter, Pacific
gained volume and value share in total NARTD beverages.
-- In China, unit case volume grew 29 percent in the quarter driven by
strong double-digit growth in Minute Maid Pulpy and the successful
launch of Minute Maid Pulpy Super Milky, the Company's first entry into
the value-added dairy segment. Trademark Sprite was also up double
digits, and brand Coca-Cola was up 13 percent. China achieved volume and
value share gains in total NARTD beverages as well as the sparkling and
still categories in both the quarter and full year.
-- In Japan, unit case volume declined 4 percent in the quarter reflecting
the continued weak economy and unfavorable weather. However, our
business in Japan continued to outperform the NARTD industry, resulting
in the seventh consecutive quarter of share gains. Importantly,
Coca-Cola Zero maintained its strong momentum with unit case volume
growth of 23 percent in the quarter, and I LOHAS mineral water in new
lightweight eco-friendly crushable PET bottles has gained volume and
value share in this competitive category.
Bottling Investments
-- Our Bottling Investments Group's unit case volume increased 13 percent
in the quarter, primarily driven by strong growth in China, India and
the Philippines. Net revenues for the quarter increased 12 percent,
primarily reflecting the increase in unit case volume and a high
single-digit currency benefit, partially offset by negative country mix.
Reported operating income increased 72 percent in the quarter while
comparable currency neutral operating income increased 17 percent,
primarily driven by the increase in volume and disciplined expense
management. For the full year, reported operating income was down 32
percent, but was up 23 percent on a comparable currency neutral basis as
volume and favorable cost of goods continued to fuel growth.
FINANCIAL REVIEW
Net revenues for the quarter increased 5 percent, driven by a 5 percent positive currency impact and a 1 percent increase in concentrate sales, offset by a 1 percent negative impact from price/mix. While net revenue was favorably impacted during the quarter by positive concentrate pricing, geographic country mix offset this benefit as economic recovery in emerging markets outpaces the rest of the world. Additionally, fourth quarter net revenues were impacted by six fewer selling days versus the prior year quarter. Excluding the impact of six fewer selling days, we estimate that fourth quarter currency neutral net revenues would have been in line with our long-term target. For the full year, comparable currency neutral net revenues excluding structural changes increased 4 percent.
Cost of goods sold increased 3 percent in the quarter. This increase is primarily driven by the 1 percent increase in concentrate sales and a 6 percent impact from currencies, offset by a favorable impact from lower input costs.
Selling, general and administrative expenses increased 9 percent in the quarter, and increased 2 percent on a currency neutral basis. The increase was partly attributable to a net increase in pension and incentive costs offset by our continued effective management of general and administrative expenses.
Reported and comparable operating income both increased 4 percent in the quarter. Items impacting comparability reduced operating income by $101 million in 2009 and by $108 million in 2008. These items were primarily related to restructuring charges and costs related to global productivity initiatives. Comparable currency neutral operating income was even in the quarter. Currency positively impacted comparable operating income by 4 percent in the quarter. Excluding the impact of six fewer selling days, we estimate that comparable currency neutral operating income for the quarter would have been ahead of our long-term target. After considering current spot rates, the anticipated benefits of our hedging coverage and the cycling of prior year exchange rates, we expect currencies to have a slightly positive impact on full year 2010 operating income with the benefit more heavily weighted to the first half of 2010.
For the fourth quarter of 2009, our reported earnings per share were $0.66, an increase of 53 percent. Reported earnings per share for the fourth quarter of 2009 and 2008 included a net charge of $0.00 and $0.21 per share, respectively. The net charge in both years included restructuring charges and costs related to global productivity initiatives. The 2008 net charge also included a non-cash impairment charge related to Coca-Cola Enterprises Inc. (CCE), an equity investee. After considering the items impacting comparability, earnings per share for the quarter were $0.66, an increase of 3 percent. Earnings per share for the quarter were positively impacted by the relative weakness of the U.S. dollar versus other currencies around the world as compared to the prior year.
Cash from operations was $8.2 billion for the year compared with $7.6 billion in the prior year, an increase of 8 percent. This increase was primarily driven by better management of working capital versus the prior year as well as higher dividends from equity investees. For the full year, we repurchased $1.5 billion of our stock.
Effective Tax Rate
The reported effective tax rate for the quarter and full year was 19.5 percent and 22.8 percent, respectively. The underlying effective tax rate on operations for both the quarter and full year was 23.0 percent. The variance between the reported rate and the underlying rate was due to the tax impact of various separately disclosed items impacting comparability.
The Company anticipates that its underlying effective tax rate on operations for the full year 2010 will be in the range of 23.0 percent to 23.5 percent. Our estimated underlying effective tax rate does not reflect the impact of significant or unusual items and discrete events, which, if and when they occur, are separately recognized in the appropriate period.
Items Impacting Prior Year Results
Fourth quarter 2008 results included a net charge of $0.21 per share primarily related to a non-cash impairment charge at CCE, restructuring charges and asset write-downs.
Third quarter 2008 results included a net charge of $0.02 per share primarily due to restructuring charges and costs related to global productivity initiatives partially offset by a gain on the sale of a portion of our investment in the Pakistan bottler.
Second quarter 2008 results included a net charge of $0.40 per share primarily related to charges recorded by our equity method investees, restructuring charges and asset write-downs.
First quarter 2008 results included a net charge of $0.03 per share primarily related to restructuring charges and asset write-downs.
NOTES
-- All references to growth rate percentages and share compare the results
of the period to those of the prior year comparable period. References
to cycling of growth rates compare the growth rate of the current period
to that of the prior year comparable period.
-- "Concentrate sales" represents the amount of concentrates, syrups,
beverage bases and powders sold by, or used in finished beverages sold
by, the Company to its bottling partners or other customers.
-- "Sparkling beverages" means nonalcoholic ready-to-drink beverages with
carbonation, including energy drinks and carbonated waters and flavored
waters.
-- "Still beverages" means nonalcoholic beverages without carbonation,
including noncarbonated waters, flavored waters and enhanced waters,
juices and juice drinks, teas, coffees and sports drinks.
-- All unit case volume percentage changes are computed based on average
daily sales for the fourth quarter and are computed on a reported basis
for the full year. "Unit case" means a unit of measurement equal to 24
eight-ounce servings of finished beverage, and "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.
-- Fourth quarter 2009 results were impacted by six fewer selling days,
which offset the impact of five additional selling days in first quarter
2009 results.
-- "Structural changes" refers to acquisitions or dispositions of bottling,
distribution or canning operations and consolidation or deconsolidation
of bottling and distribution entities for accounting purposes.
-- Our long-term growth targets referenced in this release are on a
comparable currency neutral basis and exclude structural changes.
CONFERENCE CALL
We are hosting a conference call with investors and analysts to discuss our fourth quarter and full year 2009 results today at 9:30 a.m. (EST). We invite investors to listen to the live audiocast of the conference call at our website, http://www.thecoca-colacompany.com/investors/index.html in the "Investors" section. A replay in downloadable MP3 format will also be available within 24 hours after the audiocast on our website. Further, the "Investors" section of our website includes a reconciliation of non-GAAP financial measures that may be used periodically by management when discussing our financial results with investors and analysts to our results as reported under GAAP.
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,
% Change
2009 2008
Net Operating Revenues $ 7,510 $ 7,126 5
Cost of goods sold 2,651 2,568 3
Gross Profit 4,859 4,558 7
Selling, general and administrative 2,978 2,744 9
expenses
Other operating charges 101 108 --
Operating Income 1,780 1,706 4
Interest income 65 94 (31)
Interest expense 84 121 (31)
Equity income (loss) - net 172 (440 ) --
Other income (loss) - net 27 (79 ) --
Income Before Income Taxes 1,960 1,160 69
Income taxes 382 155 146
Consolidated Net Income 1,578 1,005 57
Less: Net income attributable to 35 10 250
noncontrolling interests
Net Income Attributable to Shareowners $ 1,543 $ 995 55
of The Coca-Cola Company
Diluted Net Income Per Share* $ 0.66 $ 0.43 53
Average Shares Outstanding - Diluted* 2,342 2,321
For the three months ended December 31, 2009 and December 31, 2008, "Basic Net Income Per Share" was $0.67 for 2009 and $0.43 for 2008 based on "Average * Shares Outstanding - Basic" of 2,312 for 2009 and 2,312 for 2008. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
Year Ended
December 31, December 31,
% Change
2009 2008
Net Operating Revenues $ 30,990 $ 31,944 (3)
Cost of goods sold 11,088 11,374 (3)
Gross Profit 19,902 20,570 (3)
Selling, general and administrative 11,358 11,774 (4)
expenses
Other operating charges 313 350 --
Operating Income 8,231 8,446 (3)
Interest income 249 333 (25)
Interest expense 355 438 (19)
Equity income (loss) - net 781 (874 ) --
Other income (loss) - net 40 39 --
Income Before Income Taxes 8,946 7,506 19
Income taxes 2,040 1,632 25
Consolidated Net Income 6,906 5,874 18
Less: Net income attributable to 82 67 22
noncontrolling interests
Net Income Attributable to Shareowners $ 6,824 $ 5,807 18
of The Coca-Cola Company
Diluted Net Income Per Share* $ 2.93 $ 2.49 18
Average Shares Outstanding - Diluted* 2,329 2,336
For the years ended December 31, 2009 and December 31, 2008, "Basic Net Income Per Share" was $2.95 for 2009 and $2.51 for 2008 based on "Average * Shares Outstanding - Basic" of 2,314 for 2009 and 2,315 for 2008. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions except par value)
December 31, 2009 December 31, 2008
Assets
Current Assets
Cash and cash equivalents $ 9,151 $ 4,701
Marketable securities 62 278
Trade accounts receivable, less 3,758 3,090
allowances of $55 and $51, respectively
Inventories 2,354 2,187
Prepaid expenses and other assets 2,226 1,920
Total Current Assets 17,551 12,176
Equity Method Investments 6,217 5,316
Other Investments, Principally Bottling 538 463
Companies
Other Assets 1,976 1,733
Property, Plant and Equipment - net 9,561 8,326
Trademarks With Indefinite Lives 6,183 6,059
Goodwill 4,224 4,029
Other Intangible Assets 2,421 2,417
Total Assets $ 48,671 $ 40,519
Liabilities and Equity
Current Liabilities
Accounts payable and accrued expenses $ 6,657 $ 6,205
Loans and notes payable 6,749 6,066
Current maturities of long-term debt 51 465
Accrued income taxes 264 252
Total Current Liabilities 13,721 12,988
Long-Term Debt 5,059 2,781
Other Liabilities 2,965 3,011
Deferred Income Taxes 1,580 877
The Coca-Cola Company Shareowners'
Equity
Common stock, $0.25 par value;
Authorized - 5,600 shares; Issued - 880 880
3,520 and 3,519 shares, respectively
Capital surplus 8,537 7,966
Reinvested earnings 41,537 38,513
Accumulated other comprehensive income (757 ) (2,674 )
(loss)
Treasury stock, at cost - 1,217 and (25,398 ) (24,213 )
1,207 shares, respectively
Equity Attributable to Shareowners of 24,799 20,472
The Coca-Cola Company
Equity Attributable to Noncontrolling 547 390
Interests
Total Equity 25,346 20,862
Total Liabilities and Equity $ 48,671 $ 40,519
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flow
(UNAUDITED)
(In millions)
Year Ended
December 31, 2009 December 31, 2008
Operating Activities
Consolidated net income $ 6,906 $ 5,874
Depreciation and amortization 1,236 1,228
Stock-based compensation expense 241 266
Deferred income taxes 353 (360 )
Equity income or loss, net of dividends (359 ) 1,128
Foreign currency adjustments 61 (42 )
Gains on sales of assets, including (43 ) (130 )
bottling interests
Other operating charges 134 209
Other items 221 153
Net change in operating assets and (564 ) (755 )
liabilities
Net cash provided by operating 8,186 7,571
activities
Investing Activities
Acquisitions and investments,
principally beverage and bottling (300 ) (759 )
companies and trademarks
Purchases of other investments (22 ) (240 )
Proceeds from disposals of bottling 240 479
companies and other investments
Purchases of property, plant and (1,993 ) (1,968 )
equipment
Proceeds from disposals of property, 104 129
plant and equipment
Other investing activities (48 ) (4 )
Net cash used in investing activities (2,019 ) (2,363 )
Financing Activities
Issuances of debt 14,689 4,337
Payments of debt (12,326 ) (4,308 )
Issuances of stock 662 586
Purchases of stock for treasury (1,518 ) (1,079 )
Dividends (3,800 ) (3,521 )
Net cash used in financing activities (2,293 ) (3,985 )
Effect of Exchange Rate Changes on Cash 576 (615 )
and Cash Equivalents
Cash and Cash Equivalents
Net increase during the year 4,450 608
Balance at beginning of year 4,701 4,093
Balance at end of year $ 9,151 $ 4,701
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
Three Months Ended
Net Operating Revenues Operating Income (Loss) Income (Loss) Before Income
Taxes
December December December December December December
31, 31, 31, 31, 31, 31,
% Fav. / % Fav. / % Fav. /
2009 2008 2009 2008 2009 2008
(Unfav.) (Unfav.) (Unfav.)
(1) (5) (2) (6) (2), (3), (6), (7),
(4) (8)
Eurasia & $ 542 $ 507 7 $ 176 $ 158 11 $ 173 $ 153 13
Africa
Europe 1,190 1,175 1 619 628 (1 ) 615 602 2
Latin 1,120 941 19 559 503 11 558 497 12
America
North 1,886 1,974 (4 ) 383 411 (7 ) 379 399 (5 )
America
Pacific 1,144 1,091 5 395 375 5 391 371 5
Bottling 2,044 1,832 12 43 25 72 234 (384 ) --
Investments
Corporate 24 16 50 (395 ) (394 ) 0 (390 ) (478 ) 18
Eliminations (440 ) (410 ) -- -- -- -- -- -- --
Consolidated $ 7,510 $ 7,126 5 $ 1,780 $ 1,706 4 $ 1,960 $ 1,160 69
Intersegment revenues for the three months ended December 31, 2009, were
(1) approximately $34 million for Eurasia and Africa, $210 million for Europe,
$69 million for Latin America, $24 million for North America, $74 million
for Pacific and $29 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the three
months ended December 31, 2009, were reduced by approximately $1 million
(2) for Eurasia and Africa, $4 million for Europe, $16 million for North
America, $32 million for Bottling Investments and $48 million for
Corporate, primarily due to restructuring costs and the Company's ongoing
productivity initiatives.
Income (loss) before income taxes for the three months ended December 31,
(3) 2009, was reduced by approximately $18 million for Bottling Investments,
primarily attributable to the Company's proportionate share of
restructuring charges recorded by certain of our equity method investees.
Income (loss) before income taxes for the three months ended December 31,
2009, was increased by approximately $34 million for Corporate, primarily
due to realized gains on the sale of equity securities that were classified
(4) as available-for-sale. In 2008, the Company recognized an
other-than-temporary impairment related to these securities. The gains on
the sale of these securities represent the appreciation in market value
since the impairment was recognized.
Intersegment revenues for the three months ended December 31, 2008, were
(5) approximately $33 million for Eurasia and Africa, $206 million for Europe,
$48 million for Latin America, $28 million for North America, $65 million
for Pacific and $30 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the three
months ended December 31, 2008, were reduced by approximately $1 million
(6) for Eurasia and Africa, $44 million for North America, $21 million for
Bottling Investments and $42 million for Corporate, primarily due to
restructuring costs, productivity initiatives, asset impairments and
contract termination fees.
Income (loss) before income taxes for the three months ended December 31,
2008, was reduced by approximately $19 million for Europe, $8 million for
(7) North America and $529 million for Bottling Investments, primarily
attributable to the Company's proportionate share of asset impairment
charges recorded by certain of our equity method investees.
Income (loss) before income taxes for the three months ended December 31,
(8) 2008, was reduced by approximately $2 million for North America, $30
million for Bottling Investments and $52 million for Corporate, primarily
due to other-than-temporary impairments of available-for-sale securities.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
Year Ended
Net Operating Revenues Operating Income (Loss) Income (Loss) Before Income Taxes
December December December December December December
31, 31, 31, 31, 31, 31,
% Fav. / % Fav. / % Fav. /
2009 2008 2009 2008 2009 2008
(Unfav.) (Unfav.) (Unfav.)
(1) (6) (2) (7) (2), (3), (7), (8),
(4), (5) (9), (10)
Eurasia & $ 2,197 $ 2,327 (6 ) $ 810 $ 834 (3 ) $ 810 $ 823 (2 )
Africa
Europe 5,203 5,801 (10 ) 2,946 3,175 (7 ) 2,976 3,182 (6 )
Latin 3,882 3,835 1 2,042 2,099 (3 ) 2,039 2,098 (3 )
America
North 8,271 8,280 0 1,699 1,584 7 1,701 1,579 8
America
Pacific 4,875 4,695 4 1,887 1,858 2 1,866 1,841 1
Bottling 8,320 8,931 (7 ) 179 264 (32 ) 980 (582 ) --
Investments
Corporate 88 107 (18 ) (1,332 ) (1,368 ) 3 (1,426 ) (1,435 ) 1
Eliminations (1,846 ) (2,032 ) -- -- -- -- -- -- --
Consolidated $ 30,990 $ 31,944 (3 ) $ 8,231 $ 8,446 (3 ) $ 8,946 $ 7,506 19
Intersegment revenues for the year ended December 31, 2009, were
(1) approximately $220 million for Eurasia and Africa, $895 million for
Europe, $182 million for Latin America, $80 million for North America,
$342 million for Pacific and $127 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the year
ended December 31, 2009, were reduced by approximately $4 million for
(2) Eurasia and Africa, $7 million for Europe, $31 million for North America,
$1 million for Pacific, $141 million for Bottling Investments and $129
million for Corporate, primarily as a result of restructuring costs, the
Company's ongoing productivity initiatives and asset impairments.
Income (loss) before income taxes for the year ended December 31, 2009,
was reduced by approximately $84 million for Bottling Investments and $2
(3) million for Corporate, primarily attributable to the Company's
proportionate share of asset impairment and restructuring charges recorded
by certain of our equity method investees.
Income (loss) before income taxes for the year ended December 31, 2009,
(4) was reduced by approximately $27 million for Corporate due to an
other-than-temporary impairment of a cost method investment.
Income (loss) before income taxes for the year ended December 31, 2009,
was increased by approximately $44 million for Corporate due to realized
gains on the sale of equity securities that were classified as
(5) available-for-sale. In 2008, the Company recognized an
other-than-temporary impairment related to these securities. The gains on
the sale of these securities represent the appreciation in market value
since the impairment was recognized.
Intersegment revenues for the year ended December 31, 2008, were
(6) approximately $192 million for Eurasia and Africa, $1,016 million for
Europe, $212 million for Latin America, $75 million for North America,
$337 million for Pacific and $200 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the year
ended December 31, 2008, were reduced by approximately $1 million for
(7) Eurasia and Africa, $1 million for Latin America, $56 million for North
America, $46 million for Bottling Investments and $246 million for
Corporate, primarily attributable to restructuring costs, contract
termination fees, productivity initiatives and asset impairments.
Income (loss) before income taxes for the year ended December 31, 2008,
was reduced by approximately $19 million for Europe, $8 million for North
(8) America and $1,659 million for Bottling Investments, primarily as a result
of our proportionate share of asset impairment charges recorded by certain
of our equity method investees.
Income (loss) before income taxes for the year ended December 31, 2008,
was increased by approximately $119 million for Bottling Investments and
(9) Corporate, primarily due to the gain on the sale of Refrigerantes Minas
Gerais Ltda. ("Remil"), a bottler in Brazil, to Coca-Cola FEMSA, S.A.B. de
C.V. and the sale of 49 percent of our interest in Coca-Cola Beverages
Pakistan Ltd. to Coca-Cola Icecek A.S.
Income (loss) before income taxes for the year ended December 31, 2008,
(10) was reduced by approximately $2 million for North America, $30 million for
Bottling Investments and $52 million for Corporate, primarily due to
other-than-temporary impairments of available-for-sale securities.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
Three Months Ended December 31, 2009
% Change -
Items Impacting Comparability % Change
After - After
Reported Asset Certain Considering Reported Considering
Productivity Equity Transaction Tax
(GAAP) Impairments/ Items (GAAP) Items
Initiatives Investees Gain Matters
Restructuring (Non-GAAP) (Non-GAAP)
Net Operating $7,510 $7,510 5 5 (1)
Revenues
Cost of goods 2,651 2,651 3 3
sold
Gross Profit 4,859 4,859 7 7 (2),
(5)
Selling,
general and 2,978 2,978 9 9 (3)
administrative
expenses
Other
operating 101 ($52 ) ($49 ) - -- --
charges
Operating 1,780 52 49 1,881 4 4 (4),
Income (5)
Interest 65 65 (31) (31)
income
Interest 84 84 (31) (31)
expense
Equity income 172 $18 190 -- 64
- net
Other income 27 ($34 ) (7 ) -- --
(loss) - net
Income Before 1,960 52 49 18 (34 ) 2,045 69 7
Income Taxes
Income taxes 382 7 18 3 $53 463 146 11
Consolidated 1,578 45 31 15 (34 ) (53 ) 1,582 57 6
Net Income
Less: Net
income
attributable 35 35 250 250
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $1,543 $45 $31 $15 ($34 ) ($53 ) $1,547 55 5
of The
Coca-Cola
Company
Diluted Net
Income Per $0.66 $0.02 $0.01 $0.01 ($0.01 ) ($0.02 ) $0.66 (6) 53 3
Share
Average Shares
Outstanding - 2,342 2,342 2,342 2,342 2,342 2,342 2,342
Diluted
Gross Margin 64.7 % 64.7 %
Operating 23.7 % 25.0 %
Margin
Effective Tax 19.5 % 22.6 % (7)
Rate
Three Months Ended December 31, 2008
Items Impacting Comparability
After
Reported Asset Certain Considering
Productivity Equity Transaction Tax
(GAAP) Impairments/ Items
Initiatives Investees Gains Matters
Restructuring (Non-GAAP)
Net Operating $7,126 $7,126
Revenues
Cost of goods 2,568 2,568
sold
Gross Profit 4,558 4,558
Selling,
general and 2,744 2,744
administrative
expenses
Other
operating 108 ($77 ) ($31 ) -
charges
Operating 1,706 77 31 1,814
Income
Interest 94 94
income
Interest 121 121
expense
Equity income (440 ) $556 116
(loss) - net
Other income (79 ) 84 ($1 ) 4
(loss) - net
Income Before 1,160 161 31 556 (1 ) 1,907
Income Taxes
Income taxes 155 23 12 197 $31 418
Consolidated 1,005 138 19 359 (1 ) (31 ) 1,489
Net Income
Less: Net
income
attributable 10 10
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $995 $138 $19 $359 ($1 ) ($31 ) $1,479
of The
Coca-Cola
Company
Diluted Net
Income Per $0.43 $0.06 $0.01 $0.15 $0.00 ($0.01 ) $0.64
Share
Average Shares
Outstanding - 2,321 2,321 2,321 2,321 2,321 2,321 2,321
Diluted
Gross Margin 64.0 % 64.0 %
Operating 23.9 % 25.5 %
Margin
Effective Tax 13.4 % 21.9 % (7)
Rate
Items to consider for comparability include primarily charges, gains,
and accounting changes. Charges and accounting changes negatively
Notes: 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.
The currency impact is equal to the difference between current year U.S.
dollar amounts at current year exchange rates compared to current year
U.S. dollar amounts recalculated using prior year comparable period
exchange rates. In all cases, the exchange rates include the impact of
hedging in the applicable periods.
Net operating revenues after considering items impacting comparability for
the three months ended December 31, 2009 include a positive currency impact
of approximately 5%. Currency neutral net operating revenue growth after
(1) considering items impacting comparability is 0%. Currency neutral net
operating revenue growth is not impacted by structural changes. Currency
neutral net operating revenue growth after considering items impacting
comparability and structural changes is 0%.
Gross profit after considering items impacting comparability for the three
(2) months ended December 31, 2009 includes a positive currency impact of
approximately 6%. Currency neutral gross profit growth after considering
items impacting comparability is 1%.
Selling, general and administrative expenses after considering items
impacting comparability for the three months ended December 31, 2009
(3) include a currency impact of approximately 6%. Currency neutral selling,
general and administrative expense growth after considering items impacting
comparability is 2%. Items do not add due to rounding.
Operating income after considering items impacting comparability for the
(4) three months ended December 31, 2009 includes a positive currency impact of
approximately 4%. Currency neutral operating income growth after
considering items impacting comparability is 0%.
Currency neutral operating expense leverage after considering items
impacting comparability for the three months ended December 31, 2009 is
(5) negative 1%, which is calculated by subtracting currency neutral gross
profit growth after considering items impacting comparability of 1% from
currency neutral operating income growth after considering items impacting
comparability of 0%.
(6) Per share amounts do not add due to rounding.
(7) Effective tax rate after considering impact of net income attributable to
noncontrolling interests:
2009 2008
Income before income taxes of $2,045 and $1,907 for 2009
and 2008, respectively, less net income attributable to $2,010 $1,897
noncontrolling interests of $35 and $10 for 2009 and
2008, respectively
Income taxes $463 $418
Effective tax rate after considering impact of net income 23.0% 22.0%
attributable to noncontrolling interests
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 tables above for supplemental financial data and
corresponding reconciliations to GAAP financial measures for the three months
ended December 31, 2009 and December 31, 2008. 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 and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
Year Ended December 31, 2009
% Change -
Items Impacting Comparability % Change
After - After
Reported Asset Certain Considering Reported Considering
Productivity Equity Transaction Tax
(GAAP) Impairments/ Items (GAAP) Items
Initiatives Investees Gain Matters
Restructuring (Non-GAAP) (Non-GAAP)
Net Operating $30,990 $30,990 (3) (3) (1)
Revenues
Cost of goods 11,088 11,088 (3) (3)
sold
Gross Profit 19,902 19,902 (3) (3) (2),
(4)
Selling,
general and 11,358 11,358 (4) (4)
administrative
expenses
Other
operating 313 ($206) ($107) - -- --
charges
Operating 8,231 206 107 8,544 (3) (3) (3),
Income (4)
Interest 249 249 (25) (25)
income
Interest 355 355 (19) (19)
expense
Equity income 781 $86 867 -- 7
- net
Other income 40 27 ($44) 23 -- --
(loss) - net
Income Before 8,946 233 107 86 (44) 9,328 19 (2)
Income Taxes
Income taxes 2,040 16 38 18 $15 2,127 25 2
Consolidated 6,906 217 69 68 (44) (15) 7,201 18 (3)
Net Income
Less: Net
income
attributable 82 82 22 22
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $6,824 $217 $69 $68 ($44) ($15) $7,119 18 (3)
of The
Coca-Cola
Company
Diluted Net
Income Per $2.93 $0.09 $0.03 $0.03 ($0.02) ($0.01) $3.06 (5) 18 (3)
Share
Average Shares
Outstanding - 2,329 2,329 2,329 2,329 2,329 2,329 2,329
Diluted
Gross Margin 64.2% 64.2%
Operating 26.6% 27.6%
Margin
Effective Tax 22.8% 22.8% (6)
Rate
Year Ended December 31, 2008
Items Impacting Comparability
After
Reported Asset Certain Considering
Productivity Equity Transaction Tax
(GAAP) Impairments/ Items
Initiatives Investees Gains Matters
Restructuring (Non-GAAP)
Net Operating $31,944 $31,944
Revenues
Cost of goods 11,374 11,374
sold
Gross Profit 20,570 20,570
Selling,
general and 11,774 11,774
administrative
expenses
Other
operating 350 ($295) ($55) -
charges
Operating 8,446 295 55 8,796
Income
Interest 333 333
income
Interest 438 438
expense
Equity income (874) $1,686 812
(loss) - net
Other income 39 84 ($119) 4
(loss) - net
Income Before 7,506 379 55 1,686 (119) 9,507
Income Taxes
Income taxes 1,632 66 21 392 (29) ($5) 2,077
Consolidated 5,874 313 34 1,294 (90) 5 7,430
Net Income
Less: Net
income
attributable 67 67
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $5,807 $313 $34 $1,294 ($90) $5 $7,363
of The
Coca-Cola
Company
Diluted Net
Income Per $2.49 $0.13 $0.01 $0.55 ($0.04) $0.00 $3.15 (5)
Share
Average Shares
Outstanding - 2,336 2,336 2,336 2,336 2,336 2,336 2,336
Diluted
Gross Margin 64.4% 64.4%
Operating 26.4% 27.5%
Margin
Effective Tax 21.7% 21.8% (6)
Rate
Items to consider for comparability include primarily charges, gains,
and accounting changes. Charges and accounting changes negatively
Notes: 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.
The currency impact is equal to the difference between current year U.S.
dollar amounts at current year exchange rates compared to current year
U.S. dollar amounts recalculated using prior year comparable period
exchange rates. In all cases, the exchange rates include the impact of
hedging in the applicable periods.
Net operating revenues after considering items impacting comparability for
the year ended December 31, 2009 include a negative currency impact of
approximately 5%. Currency neutral net operating revenue growth after
(1) considering items impacting comparability is 2%. Currency neutral net
operating revenue growth includes a negative impact due to structural
changes of $396, or approximately 1%. Currency neutral net operating
revenue growth after considering items impacting comparability and
structural changes is 4%. Items do not add due to rounding.
Gross profit after considering items impacting comparability for the year
(2) ended December 31, 2009 includes a negative currency impact of
approximately 7%. Currency neutral gross profit growth after considering
items impacting comparability is 4%.
Operating income after considering items impacting comparability for the
(3) year ended December 31, 2009 includes a negative currency impact of
approximately 10%. Currency neutral operating income growth after
considering items impacting comparability is 7%.
Currency neutral operating expense leverage after considering items
impacting comparability for the year ended December 31, 2009 is 3%, which
(4) is calculated by subtracting currency neutral gross profit growth after
considering items impacting comparability of 4% from currency neutral
operating income growth after considering items impacting comparability of
7%.
(5) Per share amounts do not add due to rounding.
(6) Effective tax rate after considering impact of net income attributable to
noncontrolling interests:
2009 2008
Income before income taxes of $9,328 and $9,507 for 2009
and 2008, respectively, less net income attributable to $9,246 $9,440
noncontrolling interests of $82 and $67 for 2009 and
2008, respectively
Income taxes $2,127 $2,077
Effective tax rate after considering impact of net income 23.0% 22.0%
attributable to noncontrolling interests
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 tables above for supplemental financial data and
corresponding reconciliations to GAAP financial measures for the years ended
December 31, 2009 and December 31, 2008. 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 and Non-GAAP Financial Measures
Operating Income (Loss) by Segment
(UNAUDITED)
(In millions)
Three Months Ended December 31, 2009 Three Months Ended December 31, 2008
% Favorable
Items Impacting Items Impacting
(Unfavorable)
Comparability Comparability % Favorable -
After After
(Unfavorable) After
Reported Considering Reported Considering -
Asset Asset Considering
(GAAP) Productivity Items (GAAP) Productivity Items Reported
Impairments/ Impairments/ Items
Initiatives (Non-GAAP) Initiatives (Non-GAAP) (GAAP)
Restructuring Restructuring (Non-GAAP)
(1)
Eurasia & $176 $1 $177 $158 $1 $159 11 11
Africa
Europe 619 $1 3 623 628 628 (1) (1)
Latin 559 559 503 503 11 11
America
North 383 15 1 399 411 44 455 (7) (12)
America
Pacific 395 395 375 375 5 5
Bottling 43 32 75 25 21 46 72 63
Investments
Corporate (395) 4 44 (347) (394) 11 $31 (352) 0 1
Consolidated $1,780 $52 $49 $1,881 $1,706 $77 $31 $1,814 4 4
Note: The currency impact is equal to the difference between current year U.S. dollar amounts at current year exchange rates compared to current year U.S. dollar
amounts recalculated using prior year comparable period exchange rates. In all cases, the exchange rates include the impact of hedging in the applicable periods.
(1) Currency neutral operating income growth after considering items impacting comparability for each operating segment is calculated as follows:
% Favorable
% Favorable
% Currency (Unfavorable)
(Unfavorable) -
- Impact After
Currency
After Considering
Neutral After
Considering Items
Impacting Considering
Items
Comparability Items
(Non-GAAP)
(Non-GAAP)
Eurasia & 11 4 7
Africa
Europe (1) 0 (1)
Latin 11 (5) 16
America
North (12) (2) (10)
America
Pacific 5 2 3
Bottling 63 46 17
Investments
Corporate 1 18 (17)
Consolidated 4 4 0
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
tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2009 and
December 31, 2008. 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 and Non-GAAP Financial Measures
Operating Income (Loss) by Segment
(UNAUDITED)
(In millions)
Year Ended December 31, 2009 Year Ended December 31, 2008
% Favorable
Items Impacting Items Impacting
(Unfavorable)
Comparability Comparability % Favorable -
After After
(Unfavorable) After
Reported Considering Reported Considering -
Asset Asset Considering
(GAAP) Productivity Items (GAAP) Productivity Items Reported
Impairments/ Impairments/ Items
Initiatives (Non-GAAP) Initiatives (Non-GAAP) (GAAP)
Restructuring Restructuring (Non-GAAP)
(1)
Eurasia & $810 $2 $2 $814 $834 $1 $835 (3) (3)
Africa
Europe 2,946 2 5 2,953 3,175 3,175 (7) (7)
Latin 2,042 2,042 2,099 1 2,100 (3) (3)
America
North 1,699 30 1 1,730 1,584 56 1,640 7 5
America
Pacific 1,887 1 1,888 1,858 1,858 2 2
Bottling 179 141 320 264 46 310 (32) 3
Investments
Corporate (1,332) 31 98 (1,203) (1,368) 191 $55 (1,122) 3 (7)
Consolidated $8,231 $206 $107 $8,544 $8,446 $295 $55 $8,796 (3) (3)
Note: The currency impact is equal to the difference between current year U.S. dollar amounts at current year exchange rates compared to current year U.S. dollar
amounts recalculated using prior year comparable period exchange rates. In all cases, the exchange rates include the impact of hedging in the applicable periods.
(1) Currency neutral operating income growth after considering items impacting comparability for each operating segment is calculated as follows:
% Favorable
% Favorable
% Currency (Unfavorable)
(Unfavorable) -
- Impact After
Currency
After Considering
Neutral After
Considering Items
Impacting Considering
Items
Comparability Items
(Non-GAAP)
(Non-GAAP)
Eurasia & (3) (15) 12
Africa
Europe (7) (11) 4
Latin (3) (18) 15
America
North 5 (2) 7
America
Pacific 2 4 (2)
Bottling 3 (20) 23
Investments
Corporate (7) (4) (3)
Consolidated (3) (10) 7
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
tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the years ended December 31, 2009 and December 31,
2008. 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 (NYSE: KO) is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Together with Coca-Cola, recognized as the world's most valuable brand, the Company's portfolio includes 14 billion dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply and Georgia Coffee. Globally, we are the No. 1 provider of sparkling beverages, juices and juice drinks and ready-to-drink teas and coffees. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate of 1.6 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where we operate. For more information about our 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 and other health concerns; scarcity and quality of water; changes in the nonalcoholic beverages business environment, including changes in consumer preferences based on health and nutrition considerations and obesity concerns; shifting consumer tastes and needs, changes in lifestyles and competitive product and pricing pressures; impact of the global credit crisis on our liquidity and financial performance; our ability to expand our operations in developing and emerging markets; foreign currency exchange rate fluctuations; increases in interest rates; our ability to maintain good relationships with our bottling partners; the financial condition of our bottling partners; our ability and the ability of our bottling partners to maintain good labor relations, including the ability to renew collective bargaining agreements on satisfactory terms and avoid strikes, work stoppages or labor unrest; increase in the cost, disruption of supply or shortage of energy; increase in cost, disruption of supply or shortage of ingredients or packaging materials; changes in laws and regulations relating to beverage containers and packaging, including container deposit, recycling, eco-tax and/or product stewardship laws or regulations; adoption of significant additional labeling or warning requirements; unfavorable general economic conditions in the United States or other major markets; unfavorable 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 corporate reputation as well as other product issues such as product recalls; changes in legal and regulatory environments; changes in accounting standards and taxation requirements; our ability to achieve overall long-term goals; our ability to protect our information systems; additional impairment charges; our ability to successfully manage Company-owned bottling operations; the impact of climate change on our business; global or regional catastrophic events; 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.
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Source: The Coca-Cola Company
Released February 9, 2010