0000021344-15-000029.txt : 20150722 0000021344-15-000029.hdr.sgml : 20150722 20150722073342 ACCESSION NUMBER: 0000021344-15-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20150722 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150722 DATE AS OF CHANGE: 20150722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COCA COLA CO CENTRAL INDEX KEY: 0000021344 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 580628465 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02217 FILM NUMBER: 15999035 BUSINESS ADDRESS: STREET 1: ONE COCA COLA PLAZA CITY: ATLANTA STATE: GA ZIP: 30313 BUSINESS PHONE: 404-676-2121 MAIL ADDRESS: STREET 1: ONE COCA COLA PLAZA CITY: ATLANTA STATE: GA ZIP: 30313 8-K 1 a2015q2form8-kearningsrele.htm 8-K 2015 Q2 Form 8-K (Earnings Release)


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
July 22, 2015
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction
of incorporation)
001-02217
(Commission
File Number)
58-0628465
(IRS Employer
Identification No.)

One Coca-Cola Plaza
Atlanta, Georgia
(Address of principal executive offices)
 
30313
(Zip Code)

Registrant's telephone number, including area code: (404) 676-2121

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Item 2.02.     Results of Operations and Financial Condition.

Attached as Exhibit 99.1 is a copy of a press release of The Coca-Cola Company, dated July 22, 2015, reporting The Coca-Cola Company's financial results for the second quarter and year-to-date 2015. Such information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01(d).    Financial Statements and Exhibits.

Exhibit No.
Description
Exhibit 99.1
Press Release of The Coca-Cola Company, dated July 22, 2015, reporting
The Coca-Cola Company's financial results for the second quarter and year-to-date 2015.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
THE COCA-COLA COMPANY
(REGISTRANT)
 
 
 
Date: July 22, 2015
By:
/s/ LARRY M. MARK
 
 
Larry M. Mark
Vice President and Controller






EXHIBIT INDEX

Exhibit No.
Description
Exhibit 99.1
Press Release of The Coca-Cola Company, dated July 22, 2015, reporting
The Coca-Cola Company's financial results for the second quarter and year-to-date 2015.



EX-99.1 2 a2015q2earningsreleaseex-9.htm EXHIBIT 99.1 2015 Q2 Earnings Release (Ex-99.1)

Contacts:
Investors and Analysts:
Tim Leveridge
T +01 404.676.7563

Media:
Petro Kacur
T +01 404.676.2683
The Coca-Cola Company
Global Public Affairs & Communications Department

P.O. Box 1734
Atlanta, GA 30301
THE COCA-COLA COMPANY REPORTS
SECOND QUARTER 2015 RESULTS

Reported net revenue declined 3% and organic revenue grew 4%
Reported EPS was $0.71 and comparable EPS was $0.63
Global volume growth of 2%
Gained global value and volume share in nonalcoholic ready-to-drink beverages
Year-to-date cash from operations increased 14% to a record $5.1 billion
Full-year comparable currency neutral growth expectations remain unchanged

ATLANTA, July 22, 2015 – The Coca-Cola Company today reported second quarter 2015 operating results.  "Our second quarter results were in line with our expectations and mark continued progress toward restoring momentum in our global business," said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. "We are executing against our strategic initiatives and remain focused on driving efficiencies through productivity and making disciplined investment decisions to accelerate growth. While there is more work to do, we remain confident that we have the right plans in place and are committed to leveraging our superior brand portfolio together with our unparalleled global distribution system to continue creating long-term shareowner value."





SECOND QUARTER 2015 OPERATING REVIEW
TOTAL COMPANY
 
Percent Change
 
Second Quarter
 
YTD
Unit Case Volume
2
 
1
Sparkling Beverages
1
 
1
Still Beverages
5
 
3
Concentrate Sales/Reported Volume
3
 
4
Price/Mix
1
 
2
Currency
(7)
 
(7)
Acquisitions & Divestitures
0
 
0
Reported Net Revenues
(3)
 
(1)
Organic Revenues *
4
 
6
Reported Income Before Taxes
29
 
13
Comparable CN Income Before Taxes (Structurally Adjusted) *
3
 
7
*
Organic revenue and comparable currency neutral (CN) income before taxes (structurally adjusted) are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
We had positive organic revenue growth in each of our operating groups and gained global value and volume share in nonalcoholic ready-to-drink (NARTD) beverages in the quarter. After adjusting for the six additional days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
Global sparkling beverage volume growth in the quarter was led by 1% growth in brand Coca-Cola, 6% growth in Coca-Cola Zero, 3% growth in Sprite and 2% growth in Fanta. Growth in these brands was partially offset by a 7% decline in Diet Coke. We gained global value and volume share in sparkling beverages in the quarter.
Global still beverage volume growth in the quarter reflects 7% growth in ready-to-drink tea, 8% growth in packaged water and double-digit growth in value-added dairy. Volume growth in these categories was partially offset by a 1% decline in juice and juice drinks attributable to price increases taken to cover higher input costs and continued industry softness in certain markets. We gained global value and volume share in still beverages, juice and juice drinks, ready-to-drink tea and sports drinks in the quarter.
Comparable currency neutral operating income growth outpaced organic revenue growth in the quarter primarily due to gross margin expansion and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments.

2



Comparable currency neutral income before taxes lagged comparable currency neutral operating income growth in the quarter primarily due to lower equity income and a decrease in net interest income.
The reported effective tax rate and the underlying annual effective tax rate in the quarter were 28.7% and 22.5%, respectively. The variance between the reported rate and the underlying rate was due to the tax effect of various items impacting comparability, separately disclosed in the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Reported EPS was $0.71 and comparable EPS was $0.63. Items impacting comparability increased reported EPS by a net $0.08 and were primarily related to a net gain recognized in connection with the closing of the transaction with Monster Beverage Corporation, partially offset by costs associated with our previously announced productivity program. For additional details on items impacting comparability, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Fluctuations in foreign currency exchange rates resulted in an 11 point headwind on comparable operating income and a 6 point headwind on both comparable income before taxes and EPS in the quarter. The currency impact on income before taxes was consistent with the outlook we provided earlier this year.
Year-to-date cash from operations was $5.1 billion, up 14%, primarily due to efficient management of working capital and the impact of six additional days in the first quarter, partially offset by fluctuations in foreign currency exchange rates.
Year-to-date net share repurchases totaled $876 million.

3



EURASIA AND AFRICA
 
Percent Change
 
Second Quarter

YTD
Unit Case Volume
4
 
3
Sparkling Beverages
3
 
3
Still Beverages
7
 
5
Concentrate Sales
4
 
4
Price/Mix
(1)
 
1
Currency
(13)
 
(12)
Acquisitions & Divestitures
0
 
0
Reported Net Revenues
(10)
 
(7)
Organic Revenues *
4
 
5
Reported Income Before Taxes
(8)
 
(8)
Comparable CN Income Before Taxes *
9
 
6
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter was driven by concentrate sales growth, positive pricing and favorable product mix across most key markets, partially offset by unfavorable geographic mix. After adjusting for the additional days in the first quarter and unit case volume related to joint ventures that do not have equivalent concentrate sales, concentrate sales growth trailed unit case volume growth year to date. We expect concentrate sales and unit case sales to be generally in line for the full year.
Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter due to favorable timing of operating expenses, partially offset by lower equity income associated with our joint ventures in the juice and juice drinks category in our Eurasia and Africa group.
We gained value and volume share in total NARTD beverages, sparkling beverages and still beverages. Sparkling beverage volume growth was driven by 5% growth in Trademark Coca-Cola. Still beverage volume growth was primarily driven by 9% growth in juice and juice drinks and 6% growth in packaged water. Unit case volume growth included 7% growth in our Central, East & West Africa business unit and 3% growth in our Middle East & North Africa business unit. Volume growth in these markets was partially offset by a low single-digit decline in Russia.

4



EUROPE
 
Percent Change
 
Second Quarter
 
YTD
Unit Case Volume
1
 
0
Sparkling Beverages
0
 
(1)
Still Beverages
7
 
5
Concentrate Sales
2
 
3
Price/Mix
1
 
1
Currency
(11)
 
(12)
Acquisitions & Divestitures
(1)
 
0
Reported Net Revenues
(9)
 
(8)
Organic Revenues *
3
 
4
Reported Income Before Taxes
(7)
 
(4)
Comparable CN Income Before Taxes *
(1)
 
1
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter was driven by strong growth in our expanding still beverage portfolio and 1 point of positive price/mix despite the deflationary environment. After adjusting for the additional days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
Comparable currency neutral income before taxes trailed organic revenue growth in the quarter primarily due to increased marketing investments and higher input costs partially offset by the impact of ongoing productivity initiatives.
We gained value and volume share in core sparkling and value share in still beverages driven by strong marketing investments and new product launches in both categories. Still beverage volume growth was driven by juice and juice drinks, including double-digit growth of the innocent brand, and packaged water, including the introduction of smartwater at the end of 2014.

5



LATIN AMERICA
 
Percent Change
 
Second Quarter
 
YTD
Unit Case Volume
2
 
1
Sparkling Beverages
0
 
0
Still Beverages
5
 
3
Concentrate Sales
1
 
4
Price/Mix
10
 
7
Currency
(24)
 
(19)
Acquisitions & Divestitures
0
 
0
Reported Net Revenues
(13)
 
(8)
Organic Revenues *
11
 
11
Reported Income Before Taxes
(17)
 
(15)
Comparable CN Income Before Taxes *
13
 
10
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter was driven by positive price/mix in each of our four business units, particularly in the higher inflationary markets within our South Latin business unit. After adjusting for the additional days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter primarily due to timing of operating expenses, partially offset by higher input costs and increased marketing investments.
We gained value and volume share in total NARTD beverages, sparkling beverages and still beverages in the quarter. Unit case volume reflected 7% growth in our South Latin business unit, 4% growth in our Latin Center business unit and 1% growth in Mexico, partially offset by a low single-digit decline in Brazil.


6



NORTH AMERICA

Percent Change

Second Quarter
 
YTD
Unit Case Volume
2
 
1
Sparkling Beverages
1
 
0
Still Beverages
4
 
3
Concentrate Sales
1
 
4
Price/Mix
4
 
3
Currency
(1)
 
(1)
Acquisitions & Divestitures
(1)
 
(1)
Reported Net Revenues
3
 
5
Organic Revenues *
5
 
7
Reported Income Before Taxes
28
 
23
Comparable CN Income Before Taxes *
8
 
15
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter was driven primarily by 4 points of positive price/mix. Acquisitions and divestitures reflect the impact of refranchised territories, which was mostly offset by the benefit of our expanded distribution of Monster beverage products in North America. The expanded distribution contributed 1 point of unit case volume growth in both the quarter and year to date. After adjusting for the additional days in the first quarter and the impact of acquired volume, concentrate sales growth and unit case volume growth were generally in line year to date.
Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter primarily due to lower input costs and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments. Structural changes had a nominal net impact on income before taxes as the impact of refranchised territories was offset by the benefit of expanded distribution of Monster beverage products in North America.
We gained value share in total NARTD beverages for the 21st consecutive quarter driven by an increase in both the quality and quantity of our marketing investments and our continued rational approach to pricing and disciplined price/pack strategies. We also gained value and volume share in sparkling beverages, still beverages, juice and juice drinks and ready-to-drink tea. Still beverage volume growth was driven by double-digit growth in smartwater, Gold Peak and Honest tea.


7



ASIA PACIFIC

Percent Change

Second Quarter
 
YTD
Unit Case Volume
3
 
3
Sparkling Beverages
1
 
3
Still Beverages
5
 
2
Concentrate Sales
7
 
5
Price/Mix
(6)
 
(2)
Currency
(8)
 
(8)
Acquisitions & Divestitures
0
 
0
Reported Net Revenues
(7)
 
(5)
Organic Revenues *
1
 
3
Reported Income Before Taxes
(10)
 
(7)
Comparable CN Income Before Taxes *
(2)
 
1
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter reflects strong concentrate sales growth, mostly offset by unfavorable price/mix. After adjusting for the additional days in the first quarter, concentrate sales growth lagged unit case volume growth year to date primarily due to timing of shipments. We expect concentrate sales and unit case sales to be generally in line for the full year.
Comparable currency neutral income before taxes trailed organic revenue growth due to increased marketing investments partially offset by the efficient management of operating expenses.
Unit case volume growth in the quarter reflected 6% growth in China and 1% growth in Japan, partially offset by a mid single-digit decline in India. China's performance includes strong growth across our sparkling brand portfolio. In Japan, volume growth was driven by solid performance in the tea category. We gained value and volume share in total NARTD beverages in both China and Japan in the quarter. In India, unseasonable weather during the quarter drove an overall decline in the industry.

8



BOTTLING INVESTMENTS

Percent Change

Second Quarter
 
YTD
Unit Case Volume
7
 
5
Reported Volume
5
 
7
Price/Mix
(3)
 
(3)
Currency
(10)
 
(9)
Acquisitions & Divestitures
2
 
2
Reported Net Revenues
(6)
 
(3)
Organic Revenues *
1
 
4
Reported Income Before Taxes
(9)
 
(17)
Comparable CN Income Before Taxes *
11
 
14
*
Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Organic revenue growth in the quarter was driven by reported volume growth, partially offset by unfavorable price/mix attributable to channel, product and package mix.
Comparable currency neutral income before taxes outpaced organic revenue growth primarily due to the continued strong performance of our Company-owned bottling operations in several markets including Germany, China and Vietnam.
2015 OUTLOOK
We estimate that the net impact of structural items on full-year 2015 results will be a 1 point headwind on both net revenues and income before taxes.
We expect fluctuations in foreign currency exchange rates to have an unfavorable impact on our reported results in 2015. Based on current spot rates, our existing hedge positions, and the cycling of our prior year rates, we estimate that currency will be an approximate 6 point headwind on net revenues, an 11 point headwind on operating income, and a 7 to 8 point headwind on income before taxes for the full year. For the third quarter, we estimate that currency will be an approximate 7 point headwind on net revenues, a 13 point headwind on operating income and a 10 point headwind on income before taxes.
The underlying effective annual tax rate on operations for 2015 is expected to be 22.5%.
We are now targeting full-year 2015 net share repurchases of $2.0 to $2.5 billion.
Given the above, our full-year comparable currency neutral growth expectations remain unchanged.

9



ITEMS IMPACTING COMPARABILITY    
For details on items impacting comparability in the quarter, see the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
NOTES
All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.
"Comparable currency neutral income before taxes" is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability and the impact of changes in foreign currency exchange rates. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
"Comparable currency neutral income before taxes (structurally adjusted)" is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability, the impact of changes in foreign currency exchange rates and the impact of structural items. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
"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.
"Concentrate sales/reported volume" represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For our Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only and is computed on a reported basis.
"Organic revenue" is a non-GAAP financial measure that excludes or otherwise adjusts for the impact of changes in foreign currency exchange rates and acquisitions and divestitures, as applicable. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
"Sparkling beverages" means NARTD beverages with carbonation, including carbonated energy drinks and waters.

10



"Still beverages" means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees, sports drinks and noncarbonated energy drinks.
All references to volume and volume percentage changes indicate unit case volume, unless otherwise noted. All volume percentage changes are computed based on average daily sales, unless otherwise noted. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage. "Unit case volume" means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
First quarter 2015 financial results were impacted by six additional days, and fourth quarter 2015 financial results will be impacted by six fewer days. Unit case volume results for the quarters are not impacted by the variance in selling days due to the average daily sales computation referenced above.
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. 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 Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.
CONFERENCE CALL
We are hosting a conference call with investors and analysts to discuss second quarter 2015 results today, July 22, 2015 at 9:30 a.m. EDT. We invite investors to listen to a live audiocast of the conference call on the Company’s website, http://www.coca-colacompany.com in the "Investors" section. A replay in downloadable MP3 format and a transcript of the call will also be available within 24 hours after the audiocast on the Company’s website. Further, the "Investors" section of the website includes a reconciliation of non-GAAP financial measures, which may be used periodically by management when discussing financial results with investors and analysts, to the Company’s results as reported under GAAP.

11



THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
 
 
 
 
 
 
 
Three Months Ended
 
July 3,
2015

 
June 27,
2014

 
% Change1
Net Operating Revenues
$
12,156

 
$
12,574

 
(3
)
Cost of goods sold
4,748

 
4,819

 
(1
)
Gross Profit
7,408

 
7,755

 
(4
)
Selling, general and administrative expenses
4,204

 
4,384

 
(4
)
Other operating charges
669

 
201

 
233

Operating Income
2,535

 
3,170

 
(20
)
Interest income
149

 
144

 
4

Interest expense
128

 
107

 
19

Equity income (loss) — net
200

 
254

 
(21
)
Other income (loss) — net
1,605

 
(77
)
 

Income Before Income Taxes
4,361

 
3,384

 
29

Income taxes
1,250

 
779

 
60

Consolidated Net Income
3,111

 
2,605

 
19

Less: Net income (loss) attributable to noncontrolling interests
3

 
10

 
(76
)
Net Income Attributable to Shareowners of The Coca-Cola Company
$
3,108

 
$
2,595

 
20

Diluted Net Income Per Share2
$
0.71

 
$
0.58

 
21

Average Shares Outstanding — Diluted2
4,408

 
4,454

 
 
1 
Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 
For the three months ended July 3, 2015 and June 27, 2014, basic net income per share was $0.71 for 2015 and $0.59 for 2014 based on average shares outstanding — basic of 4,355 million for 2015 and 4,391 million for 2014. 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.

12



THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
 
 
 
 
 
 
 
Six Months Ended
 
July 3,
2015

 
June 27,
2014

 
% Change1
Net Operating Revenues
$
22,867

 
$
23,150

 
(1
)
Cost of goods sold
8,851

 
8,902

 
(1
)
Gross Profit
14,016

 
14,248

 
(2
)
Selling, general and administrative expenses
8,283

 
8,373

 
(1
)
Other operating charges
902

 
329

 
174

Operating Income
4,831

 
5,546

 
(13
)
Interest income
304

 
267

 
14

Interest expense
575

 
231

 
149

Equity income (loss) — net
202

 
325

 
(38
)
Other income (loss) — net
1,580

 
(318
)
 

Income Before Income Taxes
6,342

 
5,589

 
13

Income taxes
1,665

 
1,358

 
23

Consolidated Net Income
4,677

 
4,231

 
11

Less: Net income (loss) attributable to noncontrolling interests
12

 
17

 
(28
)
Net Income Attributable to Shareowners of The Coca-Cola Company
$
4,665

 
$
4,214

 
11

Diluted Net Income Per Share2
$
1.06

 
$
0.95

 
12

Average Shares Outstanding — Diluted2
4,415

 
4,459

 
 
1 
Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 
For the six months ended July 3, 2015 and June 27, 2014, basic net income per share was $1.07 for 2015 and $0.96 for 2014 based on average shares outstanding — basic of 4,360 million for 2015 and 4,396 million for 2014. 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.

13



THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions except par value)
 
 
 
 
 
July 3,
2015

 
December 31,
2014

ASSETS
Current Assets
 
 
 
Cash and cash equivalents
$
8,805

 
$
8,958

Short-term investments
8,709

 
9,052

Total Cash, Cash Equivalents and Short-Term Investments
17,514

 
18,010

Marketable securities
3,433

 
3,665

Trade accounts receivable, less allowances of $363 and $331, respectively
4,976

 
4,466

Inventories
3,224

 
3,100

Prepaid expenses and other assets
3,159

 
3,066

Assets held for sale
497

 
679

Total Current Assets
32,803

 
32,986

Equity Method Investments
12,771

 
9,947

Other Investments
3,002

 
3,678

Other Assets
4,517

 
4,407

Property, Plant and Equipment — net
14,365

 
14,633

Trademarks With Indefinite Lives
6,085

 
6,533

Bottlers' Franchise Rights With Indefinite Lives
7,313

 
6,689

Goodwill
11,706

 
12,100

Other Intangible Assets
976

 
1,050

Total Assets
$
93,538

 
$
92,023

 
 
 
 
LIABILITIES AND EQUITY
Current Liabilities
 
 
 
Accounts payable and accrued expenses
$
9,997

 
$
9,234

Loans and notes payable
16,306

 
19,130

Current maturities of long-term debt
2,031

 
3,552

Accrued income taxes
437

 
400

Liabilities held for sale
81

 
58

Total Current Liabilities
28,852

 
32,374

Long-Term Debt
25,977

 
19,063

Other Liabilities
4,283

 
4,389

Deferred Income Taxes
5,785

 
5,636

The Coca-Cola Company Shareowners' Equity

 

Common stock, $0.25 par value; Authorized — 11,200 shares;
Issued — 7,040 and 7,040 shares, respectively
1,760

 
1,760

Capital surplus
13,486

 
13,154

Reinvested earnings
65,196

 
63,408

Accumulated other comprehensive income (loss)
(8,736
)
 
(5,777
)
Treasury stock, at cost — 2,691 and 2,674 shares, respectively
(43,288
)
 
(42,225
)
Equity Attributable to Shareowners of The Coca-Cola Company
28,418

 
30,320

Equity Attributable to Noncontrolling Interests
223

 
241

Total Equity
28,641

 
30,561

Total Liabilities and Equity
$
93,538

 
$
92,023



14



THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)
 
 
 
 
 
Six Months Ended
 
July 3,
2015

 
June 27,
2014

Operating Activities
 
 
 
Consolidated net income
$
4,677

 
$
4,231

Depreciation and amortization
961

 
967

Stock-based compensation expense
117

 
112

Deferred income taxes
643

 
(67
)
Equity (income) loss — net of dividends
(44
)
 
(124
)
Foreign currency adjustments
(144
)
 
260

Significant (gains) losses on sales of assets — net
(1,346
)
 
140

Other operating charges
609

 
120

Other items
609

 
6

Net change in operating assets and liabilities
(964
)
 
(1,175
)
   Net cash provided by operating activities
5,118

 
4,470

Investing Activities
 
 
 
Purchases of investments
(6,981
)
 
(7,895
)
Proceeds from disposals of investments
6,316

 
6,192

Acquisitions of businesses, equity method investments and nonmarketable securities
(2,284
)
 
(332
)
Proceeds from disposals of businesses, equity method investments and
nonmarketable securities
413

 
45

Purchases of property, plant and equipment
(1,114
)
 
(1,030
)
Proceeds from disposals of property, plant and equipment
33

 
134

Other investing activities
(139
)
 
(242
)
   Net cash provided by (used in) investing activities
(3,756
)
 
(3,128
)
Financing Activities

 
 
Issuances of debt
24,878

 
21,267

Payments of debt
(22,358
)
 
(18,122
)
Issuances of stock
410

 
650

Purchases of stock for treasury
(1,298
)
 
(1,953
)
Dividends
(2,877
)
 
(1,342
)
Other financing activities
115

 
(438
)
   Net cash provided by (used in) financing activities
(1,130
)
 
62

Effect of Exchange Rate Changes on Cash and Cash Equivalents
(385
)
 
(200
)
Cash and Cash Equivalents
 
 
 
Net increase (decrease) during the period
(153
)
 
1,204

Balance at beginning of period
8,958

 
10,414

   Balance at end of period
$
8,805

 
$
11,618



15



THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
 
Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Revenues 1
Operating Income (Loss)
Income (Loss) Before Income Taxes
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
Eurasia & Africa
$
658

 
$
732

 
(10
)
 
$
275

 
$
290

 
(6
)
 
$
287

 
$
313

 
(8
)
 
Europe
1,435

 
1,569

 
(9
)
 
836

 
892

 
(6
)
 
843

 
904

 
(7
)
 
Latin America
973

 
1,118

 
(13
)
 
525

 
633

 
(17
)
 
526

 
636

 
(17
)
 
North America
5,917

 
5,717

 
3

 
887

 
827

 
7

 
874

 
682

 
28

 
Asia Pacific
1,601

 
1,723

 
(7
)
 
761

 
846

 
(10
)
 
766

 
851

 
(10
)
 
Bottling Investments
1,930

 
2,060

 
(6
)
 
31

 
38

 
(16
)
 
231

 
254

 
(9
)
 
Corporate
25

 
50

 
(50
)
 
(780
)
 
(356
)
 
(120
)
 
834

 
(256
)
 

 
Eliminations
(383
)
 
(395
)
 
3

 

 

 

 

 

 

 
Consolidated
$
12,156

 
$
12,574

 
(3
)
 
$
2,535

 
$
3,170

 
(20
)
 
$
4,361

 
$
3,384

 
29

 
Note:
Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 
During the three months ended July 3, 2015, intersegment revenues were $7 million for Eurasia and Africa, $151 million for Europe, $18 million for Latin America, $6 million for North America, $188 million for Asia Pacific and $13 million for Bottling Investments. During the three months ended June 27, 2014, intersegment revenues were $184 million for Europe, $13 million for Latin America, $7 million for North America, $173 million for Asia Pacific and $18 million for Bottling Investments.

16



THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
 
Six Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Revenues 1
Operating Income (Loss)
Income (Loss) Before Income Taxes
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
July 3, 2015
June 27, 2014
% Fav. / (Unfav.)
Eurasia & Africa
$
1,296

 
$
1,390

 
(7
)
 
$
554

 
$
593

 
(7
)
 
$
573

 
$
621

 
(8
)
 
Europe
2,647

 
2,862

 
(8
)
 
1,552

 
1,611

 
(4
)
 
1,567

 
1,635

 
(4
)
 
Latin America
2,039

 
2,229

 
(8
)
 
1,103

 
1,301

 
(15
)
 
1,114

 
1,303

 
(15
)
 
North America
11,018

 
10,510

 
5

 
1,398

 
1,255

 
11

 
1,361

 
1,107

 
23

 
Asia Pacific
2,886

 
3,038

 
(5
)
 
1,305

 
1,403

 
(7
)
 
1,314

 
1,411

 
(7
)
 
Bottling Investments
3,608

 
3,733

 
(3
)
 
45

 
12

 
283

 
230

 
276

 
(17
)
 
Corporate
65

 
83

 
(23
)
 
(1,126
)
 
(629
)
 
(79
)
 
183

 
(764
)
 

 
Eliminations
(692
)
 
(695
)
 
1

 

 

 

 

 

 

 
Consolidated
$
22,867

 
$
23,150

 
(1
)
 
$
4,831

 
$
5,546

 
(13
)
 
$
6,342

 
$
5,589

 
13

 
Note:
Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 
During the six months ended July 3, 2015, intersegment revenues were $7 million for Eurasia and Africa, $295 million for Europe, $37 million for Latin America, $10 million for North America, $317 million for Asia Pacific and $26 million for Bottling Investments. During the six months ended June 27, 2014, intersegment revenues were $343 million for Europe, $30 million for Latin America, $10 million for North America, $278 million for Asia Pacific and $34 million for Bottling Investments.





17



THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP" or referred to herein as "reported"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. 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. Our non-GAAP financial information does not represent a comprehensive basis of accounting.
ITEMS IMPACTING COMPARABILITY
The following information is provided to give qualitative and quantitative information related to items impacting comparability. Items impacting comparability are not defined terms within GAAP. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies. We determine which items to consider as "items impacting comparability" based on how management views our business; makes financial, operating and planning decisions; and evaluates the Company's ongoing performance. Items such as charges, gains and accounting changes which are viewed by management as impacting only the current period or the comparable period, but not both, or as relating to different and unrelated underlying activities or events across comparable periods, are generally considered "items impacting comparability". In addition, we provide the impact that changes in foreign currency exchange rates had on our financial results ("currency neutral").
Asset Impairments and Restructuring
Restructuring
During the three and six months ended July 3, 2015, the Company recorded charges of $94 million and $129 million, respectively. The Company also recorded charges of $66 million and $108 million during the three and six months ended June 27, 2014, respectively. These charges were related to the integration of our German bottling and distribution operations.
Productivity and Reinvestment
During the three and six months ended July 3, 2015, the Company recorded charges of $92 million and $182 million, respectively, related to our productivity and reinvestment program. The Company also recorded charges of $89 million and $175 million during the three and six months ended June 27, 2014, respectively. These productivity and reinvestment initiatives are focused on four key areas: restructuring the Company's global supply chain, including manufacturing in North America; implementing zero-based budgeting across the organization; streamlining and simplifying the Company's operating model; and further driving increased discipline and efficiency in direct marketing investments. The savings realized from the program will enable the Company to fund marketing initiatives and innovation required to deliver sustainable net revenue growth. The savings will also support margin expansion and increased returns on invested capital over time.
Equity Investees
During the three and six months ended July 3, 2015, the Company recorded net charges of $9 million and $82 million, respectively. During the three and six months ended June 27, 2014, the Company recorded net charges of $6 million and $12 million, respectively. These amounts represent the Company’s proportionate share of unusual or infrequent items recorded by certain of our equity method investees.


18



THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Transaction Gains/Losses
During the three and six months ended July 3, 2015, the Company recorded a net gain of $1,402 million as a result of our transaction with Monster Beverage Corporation ("Monster"), primarily due to the difference in the recorded carrying value of the assets transferred, including an allocated portion of goodwill, compared to the value of the total assets and business acquired. This net gain was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. Additionally, under the terms of this transaction, the Company is required to discontinue selling energy products under certain trademarks, including one trademark in the glacéau portfolio. As a result, the Company recognized an impairment charge of $380 million in the line item other operating charges in our condensed consolidated statement of income upon the closing of the transaction with Monster, primarily related to the discontinuation of the energy products in the glacéau portfolio.
During the three and six months ended July 3, 2015, the Company recorded charges of $12 million and $33 million, respectively. The Company also recorded charges of $140 million during the three and six months ended June 27, 2014. These charges were primarily due to the derecognition of intangible assets relating to the refranchising of territories in North America to certain of its unconsolidated bottling partners.
In the fourth quarter of 2014, the owners of the majority interest of a Brazilian bottler exercised their option to acquire from us a 10 percent interest in the entity's outstanding shares resulting in our recognizing an estimated loss of $32 million due to the exercise price being lower than our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of $6 million during the six months ended July 3, 2015, calculated based on the final option price. Also during the six months ended July 3, 2015, the Company recorded a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015.
Other Items
Economic (Nondesignated) Hedges
The Company uses derivatives as economic hedges primarily to mitigate the price risk associated with the purchase of materials used in the manufacturing process as well as the purchase of vehicle fuel. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in fair values of these economic hedges are immediately recognized into earnings.
The Company excludes the net impact of mark-to-market adjustments for outstanding hedges and realized gains/losses for settled hedges from our non-GAAP financial information until the period in which the underlying exposure being hedged impacts our condensed consolidated statement of income. We believe this adjustment provides meaningful information related to the impact of our economic hedging activities. During the three months ended July 3, 2015 and June 27, 2014, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in decreases of $56 million and $54 million, respectively, to our non-GAAP income before income taxes. During the six months ended July 3, 2015 and June 27, 2014, the net impact of the Company's adjustment related to our economic hedging activities described above resulted in decreases of $11 million and $99 million, respectively, to our non-GAAP income before income taxes.
Donation to The Coca-Cola Foundation
During the three and six months ended July 3, 2015, the Company recorded a charge of $100 million due to a contribution that was made to The Coca-Cola Foundation, which was recorded in the line item other operating charges in our condensed consolidated statement of income.
Early Extinguishment of Long-Term Debt
During the six months ended July 3, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt, which were recorded in the line item interest expense in our condensed consolidated statement of income.


19



THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Other Items (continued)
Hyperinflationary Economies
During the six months ended July 3, 2015, the Company recorded net charges of $135 million related to our Venezuelan operations. These charges were a result of the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate, an impairment of a Venezuelan trademark due to higher exchange rates, and a write-down of receivables from our bottling partner in Venezuela. The write-down was recorded as a result of the continued lack of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of the Venezuelan bolivar into U.S. dollars by our bottling partner to pay our receivables.
During the three and six months ended June 27, 2014, the Company recorded charges of $21 million and $268 million, respectively, related to the devaluation of the Venezuelan bolivar, including a write-down of receivables from our bottling partner in Venezuela as well as our proportionate share of the charge incurred by our bottling partner in Venezuela, an equity method investee.
Restructuring and Transitioning Russian Juice Operations
During the three and six months ended June 27, 2014, the Company recorded a loss of $25 million related to restructuring and transitioning its Russian juice operations to an existing joint venture with an unconsolidated bottling partner.
Certain Tax Matters
During the three months ended July 3, 2015, the Company recorded a net tax charge of $16 million related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. During the three and six months ended June 27, 2014, the Company recorded net tax charges of $26 million and $31 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties.
CURRENCY NEUTRAL
Management evaluates the operating performance of our Company and our international subsidiaries on a currency neutral basis. We determine our currency neutral operating results by dividing or multiplying, as appropriate, our current period actual U.S. dollar operating results, normalizing for certain structural items in hyperinflationary economies, by the current period actual exchange rates (that include the impact of current period currency hedging activities), to derive our current period local currency operating results. We then multiply or divide, as appropriate, the derived current period local currency operating results by the foreign currency exchange rates (that also include the impact of the comparable prior period currency hedging activities) used to translate the Company's financial statements in the comparable prior year period to determine what the current period U.S. dollar operating results would have been if the foreign currency exchange rates had not changed from the comparable prior year period.
ORGANIC REVENUE
Organic revenue is a non-GAAP financial measure that excludes or otherwise adjusts for the impact of changes in foreign currency exchange rates and acquisitions and divestitures (including structural changes), as applicable. The adjustments related to acquisitions and divestitures for the three and six months ended July 3, 2015 and June 27, 2014 consisted entirely of the structural changes discussed below.


20



THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
STRUCTURAL CHANGES
Structural changes generally refer to acquisitions or dispositions of bottling, distribution or canning operations and consolidation or deconsolidation of bottling and distribution entities for accounting purposes. In 2015, the Company sold its global energy drink business to Monster; acquired Monster's non-energy drink business; acquired an equity interest in Monster; amended its current distribution coordination agreements with Monster to expand into additional territories; refranchised additional territories in North America to certain of its unconsolidated bottling partners; acquired a South African bottler; and sold a 10 percent interest in a Brazilian bottler. In 2014, the Company refranchised territories in North America to certain of its unconsolidated bottling partners; changed its process of buying and selling recyclable materials in North America; was impacted by a new provision enacted by the Venezuelan government which imposes a maximum threshold for profit margins; acquired bottling operations in Sri Lanka and Nepal; and restructured and transitioned its Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Accordingly, these activities have been included as structural items in our analysis of the impact of these changes on certain line items in our condensed consolidated statements of income.


21



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 3, 2015
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
Gross margin
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
Operating margin
Reported (GAAP)
 
$
12,156

 
$
4,748

 
$
7,408

 
60.9
%
 
 
$
4,204

 
$
669

 
$
2,535

 
20.9
%
 
Items Impacting Comparability:
 

 

 

 

 
 

 

 

 

 
Asset Impairments/Restructuring
 

 

 

 

 
 

 
(94
)
 
94

 

 
Productivity & Reinvestment
 

 

 

 

 
 

 
(92
)
 
92

 

 
Equity Investees
 

 

 

 

 
 

 

 

 

 
Transaction Gains/Losses
 

 

 

 

 
 

 
(383
)
 
383

 

 
Other Items
 
(7
)
 
24

 
(31
)
 

 
 
19

 
(100
)
 
50

 

 
Certain Tax Matters
 

 

 

 

 
 

 

 

 

 
After Considering Items (Non-GAAP)
 
$
12,149

 
$
4,772

 
$
7,377

 
60.7
%
 
 
$
4,223

 
$

 
$
3,154

 
26.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 27, 2014
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
Gross margin
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
Operating margin
Reported (GAAP)
 
$
12,574

 
$
4,819

 
$
7,755

 
61.7
%
 
 
$
4,384

 
$
201

 
$
3,170

 
25.2
%
 
Items Impacting Comparability:
 

 

 

 

 
 

 

 

 

 
Asset Impairments/Restructuring
 

 

 

 

 
 

 
(66
)
 
66

 

 
Productivity & Reinvestment
 

 

 

 

 
 

 
(89
)
 
89

 

 
Equity Investees
 

 

 

 

 
 

 

 

 

 
Transaction Gains/Losses
 

 

 

 

 
 

 

 

 

 
Other Items
 
(28
)
 
13

 
(41
)
 

 
 
4

 
(46
)
 
1

 

 
Certain Tax Matters
 

 

 

 

 
 

 

 

 

 
After Considering Items (Non-GAAP)
 
$
12,546

 
$
4,832

 
$
7,714

 
61.5
%
 
 
$
4,388

 
$

 
$
3,326

 
26.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
 
 
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
 
 
% Change — Reported (GAAP)
 
(3)
 
(1)
 
(4)
 
 
 
 
(4)
 
233
 
(20)
 
 
 
% Currency Impact
 
(7)
 
(4)
 
(9)
 
 
 
 
(7)
 
 
(11)
 
 
 
% Change — Currency Neutral Reported
 
4
 
3
 
4
 
 
 
 
3
 
 
(9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change — After Considering Items
(Non-GAAP)
 
(3)
 
(1)
 
(4)
 
 
 
 
(4)
 
 
(5)
 
 
 
% Currency Impact After Considering Items (Non-GAAP)
 
(7)
 
(4)
 
(9)
 
 
 
 
(7)
 
 
(11)
 
 
 
% Change — Currency Neutral After Considering Items (Non-GAAP)
 
4
 
3
 
4
 
 
 
 
3
 
 
6
 
 
 
Note:
Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.


22



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 3, 2015
 
 
Interest expense
 
Equity income (loss) — net
 
Other income (loss) — net
 
Income before income taxes
 
Income
taxes
 
Effective
tax rate
 
Net income (loss) attributable to noncontrolling interests
 
Net income attributable to shareowners of The Coca-Cola Company
 
Diluted net income
per share1
Reported (GAAP)
 
$
128

 
$
200

 
$
1,605

 
$
4,361

 
$
1,250

 
28.7
%
 
 
$
3

 
$
3,108

 
$
0.71

 
Items Impacting Comparability:
 

 

 

 

 

 

 
 

 

 

 
Asset Impairments/Restructuring
 

 

 

 
94

 

 

 
 

 
94

 
0.02

 
Productivity & Reinvestment
 

 

 

 
92

 
33

 

 
 

 
59

 
0.01

 
Equity Investees
 

 
9

 

 
9

 

 

 
 

 
9

 

 
Transaction Gains/Losses
 

 

 
(1,390
)
 
(1,007
)
 
(474
)
 

 
 

 
(533
)
 
(0.12
)
 
Other Items
 

 

 
(6
)
 
44

 
16

 

 
 

 
28

 
0.01

 
Certain Tax Matters
 

 

 

 

 
(16
)
 

 
 

 
16

 

 
After Considering Items (Non-GAAP)
 
$
128

 
$
209

 
$
209

 
$
3,593

 
$
809

 
22.5
%
 
 
$
3

 
$
2,781

 
$
0.63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 27, 2014
 
 
Interest expense
 
Equity income (loss) — net
 
Other income (loss) — net
 
Income before income taxes
 
Income
taxes
 
Effective
tax rate
 
Net income (loss) attributable to noncontrolling interests
 
Net income attributable to shareowners of The Coca-Cola Company
 
Diluted net income
per share2
Reported (GAAP)
 
$
107

 
$
254

 
$
(77
)
 
$
3,384

 
$
779

 
23.0
%
 
 
$
10

 
$
2,595

 
$
0.58

 
Items Impacting Comparability:
 

 

 

 

 

 

 
 

 

 

 
Asset Impairments/Restructuring
 

 

 

 
66

 

 

 
 

 
66

 
0.01

 
Productivity & Reinvestment
 

 

 

 
89

 
34

 

 
 

 
55

 
0.01

 
Equity Investees
 

 
6

 

 
6

 
1

 

 
 

 
5

 

 
Transaction Gains/Losses
 

 

 
140

 
140

 
51

 

 
 

 
89

 
0.02

 
Other Items
 

 

 
(9
)
 
(8
)
 
(25
)
 

 
 

 
17

 

 
Certain Tax Matters
 

 

 

 

 
(26
)
 

 
 

 
26

 
0.01

 
After Considering Items (Non-GAAP)
 
$
107

 
$
260

 
$
54

 
$
3,677

 
$
814

 
22.2
%
 
 
$
10

 
$
2,853

 
$
0.64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
Equity income (loss) — net
 
Other income (loss) — net
 
Income before income taxes
 
Income
taxes
 
 
 
 
Net income (loss) attributable to noncontrolling interests
 
Net income attributable to shareowners of The Coca-Cola Company
 
Diluted net income
per share
% Change — Reported (GAAP)
 
19
 
(21)
 
 
29
 
60
 
 
 
 
(76)
 
20
 
21
 
% Change — After Considering Items (Non-GAAP)
 
19
 
(20)
 
284
 
(2)
 
(1)
 
 
 
 
(75)
 
(3)
 
(2)
 
Note:
Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
1 
4,408 million average shares outstanding — diluted
2 
4,454 million average shares outstanding — diluted

23



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 3, 2015
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
Gross margin
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
Operating margin
Reported (GAAP)
 
$
22,867

 
$
8,851

 
$
14,016

 
61.3
%
 
 
$
8,283

 
$
902

 
$
4,831

 
21.1
%
 
Items Impacting Comparability:
 

 

 

 

 
 

 

 

 

 
Asset Impairments/Restructuring
 

 

 

 

 
 

 
(129
)
 
129

 

 
Productivity & Reinvestment
 

 

 

 

 
 

 
(182
)
 
182

 

 
Equity Investees
 

 

 

 

 
 

 

 

 

 
Transaction Gains/Losses
 

 

 

 

 
 

 
(383
)
 
383

 

 
Other Items
 
(15
)
 
27

 
(42
)
 

 
 
29

 
(208
)
 
137

 

 
Certain Tax Matters
 

 

 

 

 
 

 

 

 

 
After Considering Items (Non-GAAP)
 
$
22,852

 
$
8,878

 
$
13,974

 
61.1
%
 
 
$
8,312

 
$

 
$
5,662

 
24.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 27, 2014
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
Gross margin
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
Operating margin
Reported (GAAP)
 
$
23,150

 
$
8,902

 
$
14,248

 
61.5
%
 
 
$
8,373

 
$
329

 
$
5,546

 
24.0
%
 
Items Impacting Comparability:
 

 

 

 

 
 

 

 

 

 
Asset Impairments/Restructuring
 

 

 

 

 
 

 
(108
)
 
108

 

 
Productivity & Reinvestment
 

 

 

 

 
 

 
(175
)
 
175

 

 
Equity Investees
 

 

 

 

 
 

 

 

 

 
Transaction Gains/Losses
 

 

 

 

 
 

 

 

 

 
Other Items
 
(20
)
 
69

 
(89
)
 

 
 
1

 
(46
)
 
(44
)
 

 
Certain Tax Matters
 

 

 

 

 
 

 

 

 

 
After Considering Items (Non-GAAP)
 
$
23,130

 
$
8,971

 
$
14,159

 
61.2
%
 
 
$
8,374

 
$

 
$
5,785

 
25.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating revenues
 
Cost of goods sold
 
Gross profit
 
 
 
 
Selling, general and administrative expenses
 
Other operating charges
 
Operating income
 
 
 
% Change — Reported (GAAP)
 
(1)
 
(1)
 
(2)
 
 
 
 
(1)
 
174
 
(13)
 
 
 
% Currency Impact
 
(7)
 
(5)
 
(8)
 
 
 
 
(6)
 
 
(10)
 
 
 
% Change — Currency Neutral Reported
 
5
 
4
 
6
 
 
 
 
5
 
 
(3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change — After Considering Items
(Non-GAAP)
 
(1)
 
(1)
 
(1)
 
 
 
 
(1)
 
 
(2)
 
 
 
% Currency Impact After Considering Items (Non-GAAP)
 
(7)
 
(4)
 
(8)
 
 
 
 
(6)
 
 
(10)
 
 
 
% Change — Currency Neutral After Considering Items (Non-GAAP)
 
5