The Coca-Cola Company Reports 2010 Second Quarter and Year-to-Date Results
Today, our Company reports strong performance in the second quarter, delivering volume, profit and earnings growth ahead of our long-term targets. We are winning in the marketplace with global volume and value share gains in total nonalcoholic ready-to-drink beverages as well as across the sparkling and still beverage categories.
-- Strong worldwide volume growth of 5% in the quarter, ahead of our
long-term target, with balanced growth around the world, including 2%
growth in North America and 6% international growth. Year-to-date
worldwide volume grew 4%. Volume growth led by brand Coca-Cola, up 5% in
the quarter and 4% year-to-date.
-- Second quarter reported EPS was $1.02, up 16%, with comparable EPS up
15% to $1.06, ahead of our long-term target.
-- Reported operating income increased 13% in the quarter and 15%
year-to-date. Comparable currency neutral operating income grew 11% in
Q2, ahead of our long-term target.
-- Reported net revenues grew 5% in the quarter and year-to-date, with
comparable currency neutral net revenue growth of 5% in Q2, in line with
our long-term target.
-- Extensive global nonalcoholic ready-to-drink beverage volume and value
share gains, driven by both sparkling and still beverages. International
volume and value share gains continued, with widespread share gains in
North America as well.
-- Strong cash flow continued, with year-to-date cash from operations up
18% to $4.3 billion.
-- Integration planning for the pending acquisition of Coca-Cola
Enterprises' North American business remains on track with an expected
fourth quarter close.
ATLANTA--(BUSINESS WIRE)-- The Coca-Cola Company reports strong second quarter 2010 operating results, with volume increasing 5%, ahead of our long-term target and cycling 4% growth in the prior year. We achieved 2% volume growth in North America, demonstrating the momentum we are building for our system in this important market. International volume increased 6%. Eurasia and Africa volume grew 10% in the quarter, cycling 7% in the prior year, with a return to growth in Russia, which was up 6%. India demonstrated continued strong growth of 22% in the quarter, cycling prior year growth of 33%. Latin America volume grew 7%, cycling 6% growth in the prior year quarter, with 13% growth in Brazil and 5% growth in Mexico. Pacific volume grew 6%, cycling 6% in the prior year quarter, with 6% growth in China and double-digit growth in the Philippines and Thailand. Although Europe volume was down 1% in the quarter due to continued challenging economic conditions, Germany and Iberia both grew volume 1% and France was up high single digits.
Strong growth continued in countries with per capita consumption of Company brands less than 150 eight-ounce servings per year, with volume up 10% in the quarter and year-to-date in those countries.
We gained global volume and value share in total nonalcoholic ready-to-drink (NARTD) beverages as well as sparkling and still beverages, driven by gains in both North America and many international markets. We also realized volume and value share gains across core sparkling beverages, juices and juice drinks, sports drinks and packaged water.
Brand Coca-Cola, which was up 5% in the second quarter and 4% year-to-date, continues to energize the Company's growth through our investment in global properties like the FIFA World Cup(TM) sponsorship and the "Open Happiness" global integrated marketing campaign, resulting in continued volume and value share gains. The strong brand Coca-Cola growth came from a diversity of markets, including Brazil, Mexico, the Philippines, Turkey, Thailand, Russia, India and the United States. Total sparkling beverage volume increased 3% in the quarter, with international sparkling beverage volume increasing 4%. Total still beverage volume increased 10% in the quarter, led by continued growth in juices and juice drinks, sports drinks, teas and water brands. Still beverage volume increased 11% internationally.
Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company said, "I am pleased with the performance of our Company, where we once again delivered a solid quarter of growth with consistent profitable results inspired by our 2020 Vision and fueled by our strategic marketing, innovation and focused execution. We continue executing around the globe in close alignment with our bottling partners, leveraging our scale and unique global platforms - such as our FIFA World Cup(TM) campaign - to build the equity and global share of our brands."
Mr. Kent continued, "It is clear, however, that the state of the global economy remains uncertain in many regions, affected by ongoing deficit concerns in Europe, recent downward revisions to China's economy and weakened consumer confidence. While this uncertainty weighs on us all, we remain resolute in our commitment to invest in our global operations and our brands for the long-term. Even during these challenging times, our brand equity is growing stronger around the world, as consumers continue to choose our brands, with 4% global growth for brand Coca-Cola year-to-date. Additionally, we continue to make tangible progress with our planning related to the efficient and effective integration of Coca-Cola Enterprises' (CCE) North American bottling business and we remain on track to complete the transaction in the fourth quarter of 2010.
"Looking forward to the balance of the year, we remain cautious, yet confident in our ability to deliver our 2010 plan while continuing our efforts to achieve our 2020 Vision through consistent long-term profitable growth."
FINANCIAL HIGHLIGHTS
-- Second quarter and year-to-date 2010 reported net revenues increased 5%.
Second quarter reported net revenues included a positive currency impact
of 2% offset by a 2% impact due to the deconsolidation of certain
entities required by a change in accounting guidance. Comparable
currency neutral net revenues increased 5% in the quarter, reflecting a
5% increase in concentrate sales. Price/mix for the quarter was even,
with our positive revenue growth management strategies being offset by
geographic mix. Year-to-date comparable currency neutral net revenues
increased 3%.
-- Reported operating income increased 13% in the quarter and 15%
year-to-date. Second quarter 2010 comparable currency neutral operating
income increased 11%. This was driven by strong top-line performance as
well as a continued strong focus on cost management and the leveraging
of productivity initiatives as well as favorable timing of marketing
expenses versus the prior year. Year-to-date comparable currency neutral
operating income increased 10%.
-- Year-to-date cash from operations increased 18%. There were no share
repurchases during the first half of 2010 (except for minimal treasury
share activity related to employee benefit plans) due to the proposed
acquisition of Coca-Cola Enterprises' North American bottling business.
-- Productivity initiatives are well on track to achieve our target of $500
million in annualized savings by year-end 2011.
OPERATING REVIEW
Three Months Ended July 2, 2010
% Favorable / (Unfavorable)
Comparable
Unit Case Net Operating Currency
Volume Revenues Income Neutral
Operating
Income
Total Company 5 5 13 11
Eurasia & Africa 10 14 26 17
Europe (1 ) 2 9 7
Latin America 7 12 22 20
North America 2 3 11 9
Pacific 6 (1 ) 0 (5 )
Bottling Investments 1 3 12 17
Six Months Ended July 2, 2010
% Favorable / (Unfavorable)
Comparable
Unit Case Net Operating Currency
Volume Revenues Income Neutral
Operating
Income
Total Company 4 5 15 10
Eurasia & Africa 11 17 24 14
Europe (1 ) 4 6 4
Latin America 5 13 27 24
North America 0 (1 ) 6 4
Pacific 6 2 2 (4 )
Bottling Investments 2 6 170 51
Eurasia & Africa
-- Our Eurasia and Africa Group's volume increased 10% in the quarter,
cycling 7% growth in the prior year quarter. Year-to-date volume
increased 11%, cycling 5% growth in the prior year. Net revenues for the
quarter increased 14%, reflecting a 13% increase in concentrate sales
and a 6% positive currency impact, partially offset by negative country
and price/mix of 5%. Reported operating income increased 26% in the
quarter. Comparable currency neutral operating income increased 17% in
the quarter due to the increase in concentrate sales, partially offset
by increased FIFA World Cup(TM) marketing investments and continued
investment in the business as well as country and product mix.
-- In Eurasia and Africa, sparkling beverages increased 9% and still
beverages increased 18% in the quarter, with brand Coca-Cola growing
10%. The broad-based volume growth was led by a 22% increase in India in
the quarter, up 24% year-to-date, with share gains across most key
beverage categories in that market. Volume in Turkey was up 10%, and
Africa also reported strong volume growth in the quarter with the East
and Central Region growing double digits and high single-digit growth in
the North and West Region. Russia volume grew 6% in the quarter, showing
sequential improvement as well as strong brand Coca-Cola performance,
which was up 19%.
Europe
-- Our Europe Group's volume in the quarter declined 1%, cycling 1% growth
in the prior year quarter, yet showed improving volume trends in June.
Year-to-date volume decreased 1%, cycling a decline of 1% in the prior
year. Net revenues for the quarter increased 2%, primarily driven by
positive country and price/mix of 2% and partially offset by a 1%
decline in concentrate sales. There was no impact from currency.
Reported operating income increased 9% in the quarter as a result of
positive price/mix and continued expense management as well as favorable
timing of marketing expenses. Comparable currency neutral operating
income increased 7%.
-- Volume performance in the quarter was positively impacted by strong
growth in France as well as volume growth in Germany and Iberia.
Coca-Cola Zero volume grew 6% in the quarter and brand Coca-Cola was
even, with volume and value share gains in total NARTD beverages and
value share gains in core sparkling and still beverages. Europe also
gained volume and value share in sports drinks and energy drinks. Volume
results were impacted by ongoing challenges in South and Eastern Europe
and the Adriatic and Balkans region, and we continue to monitor consumer
confidence throughout Europe as economic challenges persist and consumer
confidence remains weak.
Latin America
-- Our Latin America Group delivered volume growth of 7% in the quarter,
cycling 6% growth in the prior year quarter. Year-to-date volume grew
5%, cycling 6% growth in the prior year. Brand Coca-Cola volume was up
7% in the quarter and 6% year-to-date driven by strong activation of our
FIFA World Cup(TM) programs. Net revenues for the quarter increased 12%,
reflecting positive price/mix of 12% along with 6% concentrate sales
growth and a 4% positive currency impact, partially offset by the impact
of the deconsolidation of certain entities required by a change in
accounting guidance. Reported operating income was up 22% in the
quarter, with comparable currency neutral operating income up 20%,
primarily reflecting favorable volume and pricing and the continued
management of expenses.
-- Solid volume growth in the quarter was led by a 13% increase in Brazil,
a 5% increase in Mexico and a 5% increase in our South Latin Region.
Brazil's focus on single-serve and returnable packaging has resulted in
steady volume growth as well as strong volume and value share gains in
total NARTD and sparkling beverages. Additionally, Mexico continued to
gain volume and value share in total NARTD beverages as well as in the
sparkling and still beverage categories, driven by volume and value
share gains across juices and juice drinks, sports drinks, energy drinks
and tea.
-- In the quarter 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 sparkling beverages, sports
drinks, energy drinks and tea, with volume share gains in juices and
juice drinks.
North America
-- Our North America Group's volume improved 2% during the quarter with
volume and value share gains across most categories, and driven by a
continued focus on building strong value-creating brands, led by brand
Coca-Cola. Year-to-date volume growth was even, cycling a decline of 1%
in the prior year. Net revenues for the quarter increased 3%, reflecting
a 2% increase in concentrate sales and a 1% positive currency impact.
Reported operating income increased 11%, while comparable currency
neutral operating income increased 9% in the quarter, reflecting the
impact of higher concentrate sales coupled with favorable timing of
marketing expenses and the continued focus on executing a well-defined
price, package and channel strategy.
-- Volume for sparkling beverages was even in the quarter, showing
sequential improvement quarter on quarter and positively impacted by
strong summer marketing initiatives, including activations around the
FIFA World Cup(TM). Brand Coca-Cola was up 1% in the quarter and
continued to increase its favorite brand score advantage versus the
competition among key consumer segments. Coca-Cola Zero again delivered
double-digit volume growth in the quarter, achieving 17 consecutive
quarters of double-digit growth. North America gained volume and value
share in sparkling beverages.
-- Still beverage volume was up 7% in the quarter, led by the strong growth
of POWERADE, which was up 17%, resulting in volume and value share gains
in sports drinks. In addition, the glaceau business grew volume 6% in
North America. In the quarter, North America gained volume and value
share in total still beverages and juices and juice drinks with the
expansion of Trademark Simply single-serve packaging in the cold drink
channel. Trademark Simply volume grew 29% in the quarter.
Pacific
-- Our Pacific Group delivered volume growth of 6% in the quarter, cycling
6% growth in the prior year quarter. Volume in the Pacific Group was
partially impacted by poor weather in the key markets of China and
Japan. Year-to-date volume grew 6%, cycling 5% growth in the prior year.
Net revenues for the quarter decreased 1%, primarily reflecting a 3%
increase in concentrate sales and a 5% positive currency impact, offset
by a 10% impact from country and channel mix. Reported operating income
was even in the quarter. Comparable currency neutral operating income
decreased 5% in the quarter, reflecting negative country and channel
mix, primarily in Japan.
-- Pacific Group volume growth in the quarter was led by the Philippines,
China and Southeast and West Asia. Volume in China grew 6%, with
sequential monthly improvement from April to June. Importantly, we
gained volume and value share in total NARTD beverages as well as volume
and value share in key beverage categories, including still beverages,
packaged water and juices and juice drinks. China also posted value
share gains in sparkling beverages. China juices and juice drinks grew
21% in the quarter due to the continued strong momentum of Minute Maid
Pulpy, a brand which has expanded into the value-added dairy category
with the successful launch of Minute Maid Pulpy Super Milky.
-- In Japan, volume declined 3% in the quarter, consistent with volume
performance in the first quarter, but showed sequentially improving
volume and share performance during the quarter. While our Japan
business continues to be impacted by a weak economy and unfavorable
weather, we saw improved performance in the key convenience store
channel, driven by the continued strong momentum of Coca-Cola Zero, up
21% in the quarter, and package diversification of the I LOHAS natural
mineral water in the award winning eco-crush PET bottle and Sokenbicha
tea in the lightweight "double eco" plant bottle.
Bottling Investments
-- Our Bottling Investments Group's volume increased 1% in the quarter on a
reported basis, and increased 11% on a comparable basis after adjusting
for the impact of the deconsolidation of certain bottlers required by a
change in accounting guidance. This performance was driven by growth
across most markets, especially India, the Philippines and Brazil.
Reported net revenues for the quarter increased 3%, while comparable net
revenues were up 11% after adjusting for the impact of the
deconsolidation. This reflects the 11% increase in volume and a low
single-digit currency benefit, partially offset by country mix. Reported
operating income increased 12%. Comparable currency neutral operating
income increased 17% reflecting the increase in revenues and the
benefits of disciplined capital investments and expense management,
partially offset by continued investment in our in-market capabilities.
FINANCIAL REVIEW
Reported net revenues for the quarter increased 5%, with comparable net revenues up 7%, reflecting a 2% impact due to the deconsolidation of certain entities required by a change in accounting guidance. Net revenues were further impacted by a 2% positive currency impact and a 5% increase in concentrate sales, and reflected price/mix even with the prior year. Net revenues were negatively impacted during the quarter by geographic country mix as economic recovery in emerging markets generally continues to outpace the rest of the world. At the same time, however, we effectively executed our revenue growth management initiatives to realize positive pricing. This enabled us to grow global value share for the twelfth consecutive quarter while also gaining global volume share for the quarter.
Cost of goods sold increased 1% in the quarter. After adjusting for items impacting comparability, currency neutral cost of goods sold increased 3%, as a result of a shift in mix.
Selling, general and administrative (SG&A) expenses increased 1% in the quarter. After adjusting for items impacting comparability, SG&A expenses increased 3% in the quarter and increased 1% on a currency neutral basis. This increase was primarily driven by the continued investment behind our bottling operations partly offset by the continued benefits associated with our ongoing productivity initiatives as well as timing of marketing expenses versus the prior year.
Reported operating income increased 13% and our comparable operating income increased 15% in the quarter. Items impacting comparability reduced second quarter operating income by $78 million in 2010 and by $34 million in 2009. These items were primarily related to restructuring charges and costs related to global productivity initiatives as well as costs in 2010 related to the CCE transaction. In addition, items impacting comparability in 2009 included the deconsolidation of certain entities required by a change in accounting guidance. Currency positively impacted comparable operating income by 4% in the quarter. Comparable currency neutral operating income was up 11% in the quarter.
For the second quarter of 2010, our reported earnings per share were $1.02, an increase of 16%. Reported earnings per share for the second quarter of 2010 and 2009 included a net charge of $0.04 in both years. The net charge in both years included restructuring charges and costs related to global productivity initiatives. The net charge in 2010 also included costs related to the CCE transaction. After considering the items impacting comparability, earnings per share for the quarter were $1.06, an increase of 15%. 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 $4.3 billion for the first six months of the year as compared with $3.7 billion in the prior year, an increase of 18%. This increase was primarily driven by our improved performance, including the effect of currency.
Effective Tax Rate
The reported effective tax rate for the quarter was 23.7%. The underlying effective tax rate on operations for the quarter was 23.2%. The variance between the reported rate and the underlying rate was due to the tax impact of various separately disclosed items impacting comparability.
Our 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
First quarter 2009 results included a net charge of $0.07 per share primarily related to restructuring charges and asset write-downs.
Second quarter 2009 results included a net charge of $0.04 per share primarily related to restructuring charges and asset write-downs.
NOTES
-- All references to growth rate percentages, share and cycling of growth
rates compare the results of the period to those 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 references to volume and volume percentage changes indicate unit
case volume. All volume percentage changes are computed based on average
daily sales. "Unit case" means a unit of measurement equal to 24
eight-ounce servings of finished beverage. "Unit case volume" means the
number of unit cases (or unit case equivalents) of Company beverages
directly or indirectly sold by the Company and its bottling partners to
customers.
-- Year-to-date 2010 results were impacted by one fewer selling day in the
first quarter, which will be offset by the impact of one additional
selling day in fourth quarter 2010 results.
-- Comparable results for the second quarter and year-to-date 2010 reflect
the impact of the deconsolidation of certain entities required by a
change in accounting guidance.
-- 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 second quarter and year-to-date 2010 results today at 9:00 a.m. (EDT). 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
July 2, 2010 July 3, 2009 % Change
Net Operating Revenues $ 8,674 $ 8,267 5
Cost of goods sold 2,955 2,913 1
Gross Profit 5,719 5,354 7
Selling, general and administrative 2,878 2,844 1
expenses
Other operating charges 78 72 --
Operating Income 2,763 2,438 13
Interest income 67 57 18
Interest expense 81 97 (16 )
Equity income (loss) - net 356 310 15
Other income (loss) - net 18 20 --
Income Before Income Taxes 3,123 2,728 14
Income taxes 741 679 9
Consolidated Net Income 2,382 2,049 16
Less: Net income attributable to 13 12 8
noncontrolling interests
Net Income Attributable to Shareowners of $ 2,369 $ 2,037 16
The Coca-Cola Company
Diluted Net Income Per Share* $ 1.02 $ 0.88 16
Average Shares Outstanding - Diluted* 2,325 2,323
* For the three months ended July 2, 2010 and July 3, 2009, "Basic Net Income
Per Share" was $1.03 for 2010 and $0.88 for 2009 based on "Average Shares
Outstanding - Basic" of 2,306 for 2010 and 2,313 for 2009. 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)
Six Months Ended
July 2, 2010 July 3, 2009 % Change
Net Operating Revenues $ 16,199 $ 15,436 5
Cost of goods sold 5,496 5,503 0
Gross Profit 10,703 9,933 8
Selling, general and administrative 5,583 5,468 2
expenses
Other operating charges 174 164 --
Operating Income 4,946 4,301 15
Interest income 127 117 9
Interest expense 166 182 (9 )
Equity income (loss) - net 492 327 50
Other income (loss) - net (97 ) (20 ) --
Income Before Income Taxes 5,302 4,543 17
Income taxes 1,294 1,135 14
Consolidated Net Income 4,008 3,408 18
Less: Net income attributable to 25 23 9
noncontrolling interests
Net Income Attributable to Shareowners of $ 3,983 $ 3,385 18
The Coca-Cola Company
Diluted Net Income Per Share* $ 1.71 $ 1.46 17
Average Shares Outstanding - Diluted* 2,326 2,319
* For the six months ended July 2, 2010 and July 3, 2009, "Basic Net Income Per
Share" was $1.73 for 2010 and $1.46 for 2009 based on "Average Shares
Outstanding - Basic" of 2,305 for 2010 and 2,313 for 2009. 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)
July 2, 2010 December 31, 2009
Assets
Current Assets
Cash and cash equivalents $ 7,735 $ 7,021
Short-term investments 2,364 2,130
Total Cash, Cash Equivalents and Short-Term 10,099 9,151
Investments
Marketable securities 67 62
Trade accounts receivable, less allowances of
$46 and $55, respectively 4,001 3,758
Inventories 2,363 2,354
Prepaid expenses and other assets 2,044 2,226
Total Current Assets 18,574 17,551
Equity Method Investments 6,199 6,217
Other Investments, Principally Bottling 539 538
Companies
Other Assets 2,092 1,976
Property, Plant and Equipment - net 8,931 9,561
Trademarks With Indefinite Lives 6,218 6,183
Goodwill 3,810 4,224
Other Intangible Assets 2,081 2,421
Total Assets $ 48,444 $ 48,671
Liabilities and Equity
Current Liabilities
Accounts payable and accrued expenses $ 6,202 $ 6,657
Loans and notes payable 6,738 6,749
Current maturities of long-term debt 544 51
Accrued income taxes 450 264
Total Current Liabilities 13,934 13,721
Long-Term Debt 4,427 5,059
Other Liabilities 2,719 2,965
Deferred Income Taxes 1,556 1,580
The Coca-Cola Company Shareowners' Equity
Common stock, $0.25 par value; Authorized -
5,600 shares;
Issued - 3,520 and 3,520 shares, respectively 880 880
Capital surplus 8,751 8,537
Reinvested earnings 43,490 41,537
Accumulated other comprehensive income (loss) (2,298 ) (757 )
Treasury stock, at cost - 1,213 and
1,217 shares, respectively (25,305 ) (25,398 )
Equity Attributable to Shareowners of The 25,518 24,799
Coca-Cola Company
Equity Attributable to Noncontrolling Interests 290 547
Total Equity 25,808 25,346
Total Liabilities and Equity $ 48,444 $ 48,671
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flow
(UNAUDITED)
(In millions)
Six Months Ended
July 2, 2010 July 3, 2009
Operating Activities
Consolidated net income $ 4,008 $ 3,408
Depreciation and amortization 611 585
Stock-based compensation expense 114 107
Deferred income taxes 33 (83 )
Equity income or loss, net of dividends (246 ) (191 )
Foreign currency adjustments 67 1
Gains on sales of assets, including bottling (19 ) (15 )
interests
Other operating charges 105 106
Other items 75 141
Net change in operating assets and liabilities (438 ) (397 )
Net cash provided by operating activities 4,310 3,662
Investing Activities
Acquisitions and investments, principally beverage
and
bottling companies and trademarks (144 ) (248 )
Purchases of other investments (1,431 ) (17 )
Proceeds from disposals of bottling companies
and other investments 1,201 45
Purchases of property, plant and equipment (893 ) (980 )
Proceeds from disposals of property, plant and
equipment 65 32
Other investing activities (136 ) 4
Net cash provided by (used in) investing activities (1,338 ) (1,164 )
Financing Activities
Issuances of debt 5,450 8,058
Payments of debt (5,500 ) (6,087 )
Issuances of stock 207 74
Purchases of stock for (2 ) (4 )
treasury
Dividends (2,030 ) (1,899 )
Net cash provided by (used in) financing activities (1,875 ) 142
Effect of Exchange Rate Changes
on
Cash and Cash Equivalents (383 ) 306
Cash and Cash Equivalents
Net increase (decrease) during the period 714 2,946
Balance at beginning of period 7,021 4,701
Balance at end of period $ 7,735 $ 7,647
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
July 2, July 3, % Fav. / July 2, July 3, % Fav. / July 2, July 3, % Fav. /
2010 2009 (Unfav.) 2010 2009 (Unfav.) 2010 2009 (Unfav.)
(1) (4) (2) (5) (2), (3) (5), (6)
Eurasia & $ 702 $ 615 14 $ 306 $ 243 26 $ 319 $ 253 26
Africa
Europe 1,486 1,453 2 937 861 9 953 880 8
Latin 1,003 898 12 577 472 22 585 470 24
America
North 2,280 2,210 3 507 455 11 508 461 10
America
Pacific 1,315 1,322 (1 ) 592 594 0 594 587 1
Bottling 2,317 2,242 3 137 122 12 476 420 13
Investments
Corporate 33 35 (6 ) (293 ) (309 ) 5 (312 ) (343 ) 9
Eliminations (462 ) (508 ) -- -- -- -- -- -- --
Consolidated $ 8,674 $ 8,267 5 $ 2,763 $ 2,438 13 $ 3,123 $ 2,728 14
Intersegment revenues for the three months ended July 2, 2010, were approximately $49 million
(1) for Eurasia and Africa, $227 million for Europe, $57 million for Latin America, $20 million
for North America, $84 million for Pacific and $25 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the three months ended July
2, 2010, were reduced by approximately $2 million for Eurasia and Africa, $2 million for
Europe, $6 million for North America, $5 million for Pacific, $11 million for Bottling
(2) Investments and $52 million for Corporate, primarily due to the Company's ongoing
productivity, integration and restructuring initiatives as well as transaction costs incurred
in connection with our definitive agreements to acquire the assets and liabilities of CCE's
North American operations and to sell our Norwegian and Swedish bottling operations to CCE.
Income (loss) before income taxes for the three months ended July 2, 2010, was reduced by
(3) approximately $16 million for Bottling Investments, primarily attributable to the Company's
proportionate share of unusual tax charges and transaction costs recorded by equity method
investees.
Intersegment revenues for the three months ended July 3, 2009, were approximately $69 million
(4) for Eurasia and Africa, $242 million for Europe, $37 million for Latin America, $37 million
for North America, $87 million for Pacific and $36 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the three months ended July
3, 2009, were reduced by approximately $3 million for Eurasia and Africa, $1 million for
(5) Europe, $8 million for North America, $26 million for Bottling Investments and $34 million for
Corporate, primarily as a result of the Company's ongoing productivity, integration and
restructuring initiatives and an asset impairment.
Income (loss) before income taxes for the three months ended July 3, 2009, was reduced by
(6) approximately $10 million for Bottling Investments, primarily attributable to our
proportionate share of restructuring costs recorded by equity method investees.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In Millions)
Six Months Ended
Net Operating Revenues Operating Income (Loss) Income (Loss) Before Income
Taxes
July 2, July 3, July 2, July 3, July 2, July 3,
2010 2009 % Fav. / 2010 2009 % Fav. / 2010 2009 % Fav. /
(1) (6) (Unfav.) (2) (7) (Unfav.) (2), (3), (7), (8), (Unfav.)
(4), (5) (9)
Eurasia & $ 1,313 $ 1,118 17 $ 560 $ 450 24 $ 577 $ 455 27
Africa
Europe 2,748 2,633 4 1,649 1,553 6 1,675 1,577 6
Latin 1,988 1,758 13 1,179 926 27 1,193 927 29
America
North 4,212 4,266 (1 ) 932 883 6 932 887 5
America
Pacific 2,517 2,462 2 1,072 1,050 2 1,071 1,040 3
Bottling 4,294 4,064 6 143 53 170 586 377 55
Investments
Corporate 51 52 (2 ) (589 ) (614 ) 4 (732 ) (720 ) (2 )
Eliminations (924 ) (917 ) -- -- -- -- -- -- --
Consolidated $ 16,199 $ 15,436 5 $ 4,946 $ 4,301 15 $ 5,302 $ 4,543 17
Intersegment revenues for the six months ended July 2, 2010, were approximately $85 million for
(1) Eurasia and Africa, $455 million for Europe, $111 million for Latin America, $35 million for
North America, $188 million for Pacific and $50 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the six months ended July 2,
2010, were reduced by approximately $3 million for Eurasia and Africa, $30 million for Europe,
$10 million for North America, $5 million for Pacific, $44 million for Bottling Investments and
(2) $82 million for Corporate, primarily due to the Company's ongoing productivity, integration and
restructuring initiatives as well as transaction costs incurred in connection with our
definitive agreements to acquire the assets and liabilities of CCE's North American operations
and to sell our Norwegian and Swedish bottling operations to CCE.
Income (loss) before income taxes for the six months ended July 2, 2010, was reduced by
(3) approximately $45 million for Bottling Investments, primarily attributable to the Company's
proportionate share of unusual tax charges, asset impairments, restructuring charges and
transaction costs recorded by equity method investees.
Income (loss) before income taxes for the six months ended July 2, 2010, was reduced by
(4) approximately $103 million for Corporate due to the remeasurement of our Venezuelan subsidiary's
net assets.
Income (loss) before income taxes for the six months ended July 2, 2010, was reduced by
(5) approximately $23 million for Bottling Investments and $3 million for Corporate, primarily due
to other-than-temporary impairments of available-for-sale securities.
Intersegment revenues for the six months ended July 3, 2009, were approximately $114 million for
(6) Eurasia and Africa, $442 million for Europe, $69 million for Latin America, $49 million for
North America, $181 million for Pacific and $62 million for Bottling Investments.
Operating income (loss) and income (loss) before income taxes for the six months ended July 3,
2009, were reduced by approximately $3 million for Eurasia and Africa, $1 million for Europe,
(7) $13 million for North America, $91 million for Bottling Investments and $56 million for
Corporate, primarily as a result of the Company's ongoing productivity, integration and
restructuring initiatives and asset impairments.
Income (loss) before income taxes for the six months ended July 3, 2009, was reduced by
(8) approximately $61 million for Bottling Investments and $1 million for Corporate, primarily
attributable to our proportionate share of asset impairment charges and restructuring costs
recorded by equity method investees.
Income (loss) before income taxes for the six months ended July 3, 2009, was reduced by
(9) approximately $27 million for Corporate due to an other-than-temporary impairment of a cost
method investment.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
Three Months Ended July 2, 2010
% Change -
Items Impacting Comparability % Change After
After - Considering
Reported Asset Certain Considering Reported Items
(GAAP) Impairments/ Productivity Equity CCE Tax Items (GAAP) (Non-GAAP)
Restructuring Initiatives Investees Transaction Matters (Non-GAAP)
Net Operating $ 8,674 $ 8,674 5 7 (1)
Revenues
Cost of goods 2,955 2,955 1 5 (2)
sold
Gross 5,719 5,719 7 8 (3),
Profit (6)
Selling,
general and 2,878 2,878 1 3 (4)
administrative
expenses
Other
operating 78 ($19 ) ($35 ) ($24 ) - -- --
charges
Operating 2,763 19 35 24 2,841 13 15 (5),
Income (6)
Interest 67 67 18 20
income
Interest 81 81 (16 ) (13 )
expense
Equity income 356 $ 16 372 15 10
(loss) - net
Other income 18 18 -- --
(loss) - net
Income Before 3,123 19 35 16 24 3,217 14 15
Income Taxes
Income 741 2 13 2 5 ($16 ) 747 9 15
taxes
Consolidated 2,382 17 22 14 19 16 2,470 16 15
Net Income
Less: Net
income
attributable 13 13 8 117
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $ 2,369 $ 17 $ 22 $ 14 $ 19 $ 16 $ 2,457 16 15
of The
Coca-Cola
Company
Diluted Net
Income Per $ 1.02 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 1.06 (7 ) 16 15
Share
Average Shares
Outstanding - 2,325 2,325 2,325 2,325 2,325 2,325 2,325
Diluted
Gross 65.9 % 65.9 %
Margin
Operating 31.9 % 32.8 %
Margin
Effective Tax 23.7 % 23.2 %
Rate
Three Months Ended July 3, 2009
Items Impacting Comparability
After
Reported Considering
(GAAP) Asset Productivity Equity Certain Tax Accounting Items
Impairments/ Initiatives Investees Matters Guidance
Restructuring Changes (Non-GAAP)
Net Operating $ 8,267 ($187 ) $ 8,080
Revenues
Cost of goods 2,913 (111 ) 2,802
sold
Gross 5,354 (76 ) 5,278
Profit
Selling,
general and 2,844 (38 ) 2,806
administrative
expenses
Other
operating 72 ($56 ) ($16 ) -
charges
Operating 2,438 56 16 (38 ) 2,472
Income
Interest 57 (1 ) 56
income
Interest 97 (4 ) 93
expense
Equity income 310 $ 10 17 337
(loss) - net
Other income 20 1 21
(loss) - net
Income Before 2,728 56 16 10 (17 ) 2,793
Income Taxes
Income 679 4 6 2 ($33 ) (11 ) 647
taxes
Consolidated 2,049 52 10 8 33 (6 ) 2,146
Net Income
Less: Net
income
attributable 12 (6 ) 6
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $ 2,037 $ 52 $ 10 $ 8 $ 33 $ 0 $ 2,140
of The
Coca-Cola
Company
Diluted Net
Income Per $ 0.88 $ 0.02 $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.92 (7 )
Share
Average Shares
Outstanding - 2,323 2,323 2,323 2,323 2,323 2,323 2,323
Diluted
Gross 64.8 % 65.3 %
Margin
Operating 29.5 % 30.6 %
Margin
Effective Tax 24.9 % 23.2 %
Rate
Notes:
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.
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)
Reported net operating revenue growth includes a negative impact of $187 million, or approximately 2%, due to items
impacting comparability, which represents accounting guidance changes that are structural in nature. Net operating revenue
growth after considering items impacting comparability for the three months ended July 2, 2010 includes a positive currency
impact of approximately 2%. Currency neutral net operating revenue growth after considering items impacting comparability
is 5%. Currency neutral net operating revenue growth also includes a negative impact of $3 million due to other structural
changes. Currency neutral net operating revenue growth after considering items impacting comparability and other structural
changes is 5%.
(2)
Cost of goods sold after considering items impacting comparability for the three months ended July 2, 2010 includes a
currency impact of approximately 2%. Currency neutral cost of goods sold after considering items impacting comparability
increased 3%.
(3)
Gross profit after considering items impacting comparability for the three months ended July 2, 2010 includes a positive
currency impact of approximately 2%. Currency neutral gross profit growth after considering items impacting comparability
is 6%.
(4)
Selling, general and administrative expenses after considering items impacting comparability for the three months ended
July 2, 2010 include a currency impact of approximately 2%. Currency neutral selling, general and administrative expenses
after considering items impacting comparability increased 1%.
(5)
Operating income after considering items impacting comparability for the three months ended July 2, 2010 includes a
positive currency impact of approximately 4%. Currency neutral operating income growth after considering items impacting
comparability is 11%.
(6)
Currency neutral operating expense leverage after considering items impacting comparability for the three months ended July
2, 2010 is positive 5 percentage points, which is calculated by subtracting currency neutral gross profit growth after
considering items impacting comparability of 6% from currency neutral operating income growth after considering items
impacting comparability of 11%.
(7) 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
tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended
July 2, 2010 and July 3, 2009. 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)
Six Months Ended July 2, 2010
% Change -
Items Impacting Comparability % Change After
After - Considering
Reported Asset Certain Considering Reported Items
(GAAP) Impairments/ Productivity Equity CCE Tax Other Items Items (GAAP) (Non-GAAP)
Restructuring Initiatives Investees Transaction Matters (Non-GAAP)
Net Operating $ 16,199 $ 16,199 5 7 (1)
Revenues
Cost of goods 5,496 5,496 0 4 (2)
sold
Gross 10,703 10,703 8 9 (3),
Profit (6)
Selling,
general and 5,583 5,583 2 4 (4)
administrative
expenses
Other
operating 174 ($59 ) ($85 ) ($30 ) - -- --
charges
Operating 4,946 59 85 30 5,120 15 16 (5),
Income (6)
Interest 127 127 9 11
income
Interest 166 166 (9 ) (5 )
expense
Equity income 492 $ 45 537 50 28
(loss) - net
Other income (97 ) 26 $ 103 32 -- --
(loss) - net
Income Before 5,302 85 85 45 30 103 5,650 17 18
Income Taxes
Income 1,294 4 29 6 7 ($29 ) 1,311 14 18
taxes
Consolidated 4,008 81 56 39 23 29 103 4,339 18 18
Net Income
Less: Net
income
attributable 25 25 9 67
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $ 3,983 $ 81 $ 56 $ 39 $ 23 $ 29 $ 103 $ 4,314 18 18
of The
Coca-Cola
Company
Diluted Net
Income Per $ 1.71 $ 0.03 $ 0.02 $ 0.02 $ 0.01 $ 0.01 $ 0.04 $ 1.85 (7) 17 18
Share
Average Shares
Outstanding - 2,326 2,326 2,326 2,326 2,326 2,326 2,326 2,326
Diluted
Gross 66.1 % 66.1%
Margin
Operating 30.5 % 31.6%
Margin
Effective Tax 24.4 % 23.2%
Rate
Six Months Ended July 3, 2009
Items Impacting Comparability
After
Reported Asset Accounting Considering
(GAAP) Impairments/ Productivity Equity Certain Tax Guidance Items
Restructuring Initiatives Investees Matters Changes (Non-GAAP)
Net Operating $ 15,436 ($338 ) $ 15,098
Revenues
Cost of goods 5,503 (207 ) 5,296
sold
Gross 9,933 (131 ) 9,802
Profit
Selling,
general and 5,468 (78 ) 5,390
administrative
expenses
Other
operating 164 ($131 ) ($33 ) -
charges
Operating 4,301 131 33 (53 ) 4,412
Income
Interest 117 (3 ) 114
income
Interest 182 (8 ) 174
expense
Equity income 327 $ 62 29 418
(loss) - net
Other income (20 ) 27 (3 ) 4
(loss) - net
Income Before 4,543 158 33 62 (22 ) 4,774
Income Taxes
Income 1,135 7 12 15 ($47 ) (14 ) 1,108
taxes
Consolidated 3,408 151 21 47 47 (8 ) 3,666
Net Income
Less: Net
income
attributable 23 (8 ) 15
to
noncontrolling
interests
Net Income
Attributable
to Shareowners $ 3,385 $ 151 $ 21 $ 47 $ 47 $ 0 $ 3,651
of The
Coca-Cola
Company
Diluted Net
Income Per $ 1.46 $ 0.07 $ 0.01 $ 0.02 $ 0.02 $ 0.00 $ 1.57 (7)
Share
Average Shares
Outstanding - 2,319 2,319 2,319 2,319 2,319 2,319 2,319
Diluted
Gross 64.3 % 64.9 %
Margin
Operating 27.9 % 29.2 %
Margin
Effective Tax 25.0 % 23.2 %
Rate
Notes:
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.
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)
Reported net operating revenue growth includes a negative impact of $338 million, or approximately 2%, due to items impacting
comparability, which represents accounting guidance changes that are structural in nature. Net operating revenue growth after
considering items impacting comparability for the six months ended July 2, 2010 includes a positive currency impact of approximately 4%.
Currency neutral net operating revenue growth after considering items impacting comparability is 3%. Currency neutral net operating
revenue growth also includes a negative impact of $3 million due to other structural changes. Currency neutral net operating revenue
growth after considering items impacting comparability and other structural changes is 3%.
(2)
Cost of goods sold after considering items impacting comparability for the six months ended July 2, 2010 includes a currency impact of
approximately 4%. Currency neutral cost of goods sold after considering items impacting comparability remained constant over prior year.
(3)
Gross profit after considering items impacting comparability for the six months ended July 2, 2010 includes a positive currency impact
of approximately 4%. Currency neutral gross profit growth after considering items impacting comparability is 5%.
(4)
Selling, general and administrative expenses after considering items impacting comparability for the six months ended July 2, 2010
include a currency impact of approximately 4%. Currency neutral selling, general and administrative expenses after considering items
impacting comparability remained constant over prior year.
(5)
Operating income after considering items impacting comparability for the six months ended July 2, 2010 includes a positive currency
impact of approximately 6%. Currency neutral operating income growth after considering items impacting comparability is 10%.
(6)
Currency neutral operating expense leverage after considering items impacting comparability for the six months ended July 2, 2010 is
positive 5 percentage points, which is calculated by subtracting currency neutral gross profit growth after considering items impacting
comparability of 5% from currency neutral operating income growth after considering items impacting comparability of 10%.
(7) 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 tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the six months ended July 2, 2010 and July 3, 2009. 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 July 2, 2010 Three Months Ended July 3, 2009
% Favorable
Items Impacting Comparability Items Impacting (Unfavorable)
Comparability % Favorable -
After After (Unfavorable)- After
Reported Considering Reported Considering Reported Considering
(GAAP) Asset Productivity CCE Items Asset (GProductivity Accounting Items (GAAP) Items
Impairments/ Initiatives Transaction (Non-GAAImpairments/ Initiatives Guidance (Non-GAAP) (Non-GAAP)
Restructuring Restructuring Changes (1)
Eurasia & $ 306 $ 1 $ 1 $ 308 $ 243 $ 3 $ 246 26 25
Africa
Europe 937 2 939 861 $ 1 862 9 9
Latin 577 577 472 ($9 ) 463 22 25
America
North 507 6 513 455 8 2 465 11 10
America
Pacific 592 5 597 594 (7 ) 587 0 2
Bottling 137 11 148 122 26 (26 ) 122 12 21
Investments
Corporate (293 ) 1 27 $ 24 (241 ) (309 ) 19 15 2 (273 ) 5 12
Consolidated $ 2,763 $ 19 $ 35 $ 24 $ 2,841 $ 2,438 $ 56 $ 16 ($38 ) $ 2,472 13 15
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
(Unfavorable) % Currency (Unfavorable)
- Impact After -
After Considering Currency
Considering Items Neutral After
Items Impacting Considering
(Non-GAAP) Comparability Items
(Non-GAAP)
Eurasia & 25 8 17
Africa
Europe 9 2 7
Latin 25 5 20
America
North 10 1 9
America
Pacific 2 7 (5 )
Bottling 21 4 17
Investments
Corporate 12 (1 ) 13
Consolidated 15 4 11
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 July 2, 2010 and July 3, 2009. 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)
Six Months Ended July 2, 2010 Six Months Ended July 3, 2009
% Favorable
Items Impacting Comparability Items Impacting Comparability % Favorable (Unfavorable)
(Unfavorable) -
After After - After
Reported Asset ConsiderAsset Reported Accounting Considering Reported Considering
(GAAP) Impairments/ Productivity CCE Items Impairments/ (GAAP) Productivity Guidance Items (GAAP) Items
Restructuring Initiatives Transaction (Non-GAARestructuring Initiatives Changes (Non-GAAP) (Non-GAAP)
(1)
Eurasia & $ 560 $ 1 $ 2 $ 563 $ 450 $ 3 $ 453 24 24
Africa
Europe 1,649 30 1,679 1,553 $ 1 ($1 ) 1,553 6 8
Latin 1,179 1,179 926 (21 ) 905 27 30
America
North 932 9 1 942 883 13 5 901 6 5
America
Pacific 1,072 5 1,077 1,050 (10 ) 1,040 2 4
Bottling 143 44 187 53 91 (30 ) 114 170 64
Investments
Corporate (589 ) 5 47 $ 30 (507 ) (614 ) 24 32 4 (554 ) 4 8
Consolidated $ 4,946 $ 59 $ 85 $ 30 $ 5,120 $ 4,301 $ 131 $ 33 ($53 ) $ 4,412 15 16
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
(Unfavorable) % Currency (Unfavorable)
- Impact After -
After Considering Currency
Considering Items Neutral After
Items Impacting Considering
(Non-GAAP) Comparability Items
(Non-GAAP)
Eurasia & 24 10 14
Africa
Europe 8 4 4
Latin 30 6 24
America
North 5 1 4
America
Pacific 4 8 (4 )
Bottling 64 13 51
Investments
Corporate 8 0 8
Consolidated 16 6 10
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 six months ended July 2, 2010 and July 3, 2009. 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. Along with Coca-Cola(R), recognized as the world's most valuable brand, the Company's portfolio includes 12 other billion dollar brands, including Diet Coke(R), Fanta(R), Sprite(R), Coca-Cola Zero(R), vitaminwater(R), POWERADE(R), Minute Maid(R), Simply(R) and Georgia Coffee(R). 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 July 21, 2010