- Global volume growth of 2% for the
full year and 1% in the quarter
- Reported net revenues declined 2% in
the quarter; excluding the impact of structural items, comparable
currency neutral net revenues grew 4%
- Fourth quarter reported EPS was
$0.17; comparable EPS was $0.44
- Gained global value share in
nonalcoholic ready-to-drink beverages in both the quarter and full
year
- Full-year cash from operations
increased to $10.6 billion
The Coca-Cola Company today reported fourth quarter and
full-year 2014 operating results. Muhtar Kent, Chairman and Chief
Executive Officer of The Coca-Cola Company said, “We are making
solid progress on the implementation of the strategic initiatives
we announced in October as evidenced by some early positive signs
in the quarter. We remain resolutely focused on accelerating growth
and taking advantage of opportunities to solidify our position in
key markets and categories. However, we continue to see 2015 as a
transition year as the benefits from the announced initiatives will
take time to materialize amidst an uncertain and volatile
macroeconomic environment. We remain confident that we have the
right strategies in place, and our associates and bottling partners
are embracing these initiatives and are enthusiastic about the
opportunity ahead. We will continue to strengthen our brand
portfolio and leverage our unparalleled global distribution system
to create sustainable long-term shareowner value.”
OPERATING REVIEW
TOTAL COMPANY
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 1 2 Sparkling Beverages 1
1 Still Beverages 2 4 Concentrate
Sales/Reported Volume 3 1 Price/Mix * 1 1 Currency (4 ) (2 )
Structural Changes (2 ) (2 ) Reported Net Revenues (2 ) (2 )
Comparable CN Net Revenues (Structurally Adjusted) ** 4
3 Reported Operating Income (31 ) (5 ) Comparable CN
Operating Income (Structurally Adjusted) ** 7 6
* Price/mix includes the impact of certain economic
(nondesignated) hedges. After adjusting for the impact of these
economic hedges, price/mix increased 2% in the fourth quarter and
1% for the full year. For details on these adjustments, refer to
the Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.
** Comparable currency neutral (CN) net revenues (structurally
adjusted) and comparable currency neutral operating income
(structurally adjusted) are non-GAAP financial measures that
exclude or otherwise adjust 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.
Performance Highlights
- We gained global value share and held
volume share in nonalcoholic ready-to-drink (NARTD) beverages in
the quarter. Additionally, we gained global volume and value share
in sparkling and still beverages as well as in the juice and juice
drinks, ready-to-drink tea and packaged water categories as we
continue to strengthen our brands and our product portfolio across
key markets and categories.
- Global sparkling beverage volume grew
1% in both the quarter and full year driven by growth in brand
Coca-Cola, Sprite and Fanta. Brand Coca-Cola was up 1% in the
quarter and grew slightly for the full year, rounding to even.
- Global still beverage volume grew 2% in
the quarter and 4% for the full year driven by growth in
ready-to-drink tea, sports drinks and packaged water. Volume growth
in these beverage categories was partially offset by a decline in
juice and juice drinks, due in part to price increases to cover
higher input costs.
- We continue to take steps to strengthen
our brand portfolio in fast-growing categories and key markets as
evidenced by the addition of Gold Peak tea, FUZE TEA and I LOHAS
mineral water to our portfolio of billion-dollar brands, bringing
the total number of billion-dollar brands to 20.
Financial Review
- Comparable currency neutral net
revenues (structurally adjusted) grew 4% in the quarter driven by
positive price/mix and the impact of one additional selling day. We
delivered favorable price/mix of 2 points, after adjusting for
items impacting comparability, primarily attributable to 4 points
of positive price/mix in North America driven by our continued
rational approach to pricing and supported by incremental media
investments and improving commercial execution.
- Comparable currency neutral operating
income (structurally adjusted) grew 7% in the quarter driven by
comparable currency neutral net revenue (structurally adjusted)
growth, a slight benefit from commodity costs and efficient
management of operating expenses, partially offset by continued
investments in our brands including a double-digit increase in
media investments. Fluctuations in foreign currency exchange rates
resulted in a 7 point headwind on comparable operating income
growth during the quarter.
- The reported effective tax rates for
the quarter and full year were 28.3% and 23.6%, respectively. The
underlying annual effective tax rate was 22.5% for the quarter and
full year. The variance between the reported rates 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. The 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.
- Reported EPS was $0.17 and comparable
EPS was $0.44 for the quarter. Items impacting comparability
reduced reported EPS by a net $0.27 and were primarily related to
the impact of changing the exchange rate used to remeasure our
Venezuelan subsidiary’s net monetary assets into U.S. dollars, a
write-down on concentrate sales receivables from our bottling
partner in Venezuela, noncash charges related to refranchising
certain territories in North America and costs associated with our
previously announced productivity program. Foreign currency was a
10 point headwind on comparable EPS growth during the quarter.
- Full-year cash from operations was
$10.6 billion, up 1%, primarily due to the efficient management of
working capital and cycling incremental pension contributions last
year, partially offset by an unfavorable impact from foreign
currency exchange rate fluctuations and the deconsolidation of the
Company’s Brazilian bottling operations in July 2013.
- Full-year net share repurchases totaled
$2.6 billion.
EURASIA AND AFRICA
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 3 4 Sparkling Beverages 3
3 Still Beverages 4 8 Concentrate Sales 7 3
Price/Mix (2 ) 4 Currency (9 ) (8 ) Structural Changes 0
0 Reported Net Revenues (4 ) (1 ) Comparable CN Net
Revenues (Structurally Adjusted) * 5 8
Reported Operating Income (7 ) 0 Comparable CN Operating Income *
14 14
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) grew 5% in the quarter driven by
concentrate sales growth, including the benefit of one additional
selling day, partially offset by unfavorable price/mix. The
unfavorable price/mix was primarily due to geographic mix.
Comparable currency neutral operating income grew 14% driven by
comparable currency neutral net revenue growth and timing of
operating expenses.
- Growth in concentrate sales outpaced
growth in unit case sales in the quarter primarily due to timing of
shipments in the Middle East & North Africa business unit in
the prior year and the impact of one additional selling day.
Concentrate sales and unit case sales were mostly in line for the
full year.
- Unit case volume growth in the quarter
resulted in value share gains in total NARTD beverages. Volume
growth was relatively balanced with mid single-digit growth in our
Southern Africa, Middle East & North Africa and Central, East
& West Africa business units. Sparkling beverage volume grew
3%, led by Trademark Coca-Cola, resulting in volume and value share
gains in sparkling beverages. Still beverage volume grew 4%,
capturing value share in total still beverages as well as in the
juice and juice drinks, sports drinks and packaged water
categories.
EUROPE
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume (1 ) (2 ) Sparkling
Beverages (2 ) (3 ) Still Beverages 7 1
Concentrate Sales 0 (2 ) Price/Mix 2 4 Currency (4 ) 2 Structural
Changes 0 0 Reported Net Revenues (2 ) 4
Comparable CN Net Revenues (Structurally Adjusted) * 2
2 Reported Operating Income (18 ) 0 Comparable CN
Operating Income * (5 ) 0
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) grew 2% in the quarter driven by
positive price/mix and the benefit of one additional selling day.
Comparable currency neutral operating income growth trailed
comparable currency neutral net revenue (structurally adjusted)
growth primarily due to timing of operating expenses.
- Europe’s full-year financial
performance was impacted by the consolidation of the innocent juice
and smoothie business in May 2013, which contributed 2 points of
Europe’s full-year price/mix. Additionally, the consolidation of
the innocent business unfavorably impacted operating margins due to
the higher cost structure associated with finished goods businesses
and our level of investment in innocent to continue building and
expanding the business.
- Growth in concentrate sales outpaced
growth in unit case sales in the quarter primarily due to the
impact of one additional selling day. Concentrate sales and unit
case sales were in line for the full year.
- Unit case volume in the quarter
continued to be unfavorably impacted by competitive pressures and
softness in the macroeconomic environment. The decline in sparkling
beverage volume also reflected the continued impact of downsizing
our primary future consumption package in key markets to strengthen
our price/pack architecture. Still beverage volume grew 7% as we
captured value share in total still beverages as well as in the
juice and juice drinks and sports drinks categories.
LATIN AMERICA
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 2 1 Sparkling Beverages 1
0 Still Beverages 3 6 Concentrate Sales 4 0
Price/Mix 10 8 Currency (10 ) (10 ) Structural Changes (5 )
(4 ) Reported Net Revenues (1 ) (6 ) Comparable CN Net Revenues
(Structurally Adjusted) * 14 9 Reported
Operating Income (48 ) (20 ) Comparable CN Operating Income * 3
2
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) grew 14% in the quarter driven
primarily by a 10% increase in price/mix and the benefit of one
additional selling day. The strong price/mix reflects positive
pricing and favorable product mix in our Brazil and South Latin
business units. Comparable currency neutral operating income growth
trailed comparable currency neutral net revenue (structurally
adjusted) growth primarily due to increased marketing investments
and the impact of the provision enacted in Venezuela early in 2014
that imposes a maximum threshold on profit margins.
- Growth in concentrate sales outpaced
growth in unit case sales in the quarter primarily due to timing of
shipments and the impact of one additional selling day. Concentrate
sales and unit case sales were mostly in line for the full
year.
- Unit case volume growth in the quarter
was driven primarily by 5% growth in both our Brazil and Latin
Center business units, partially offset by a 1% decline in Mexico.
We continue to implement strategies focused on affordability to
help mitigate the impact of high inflation and declining consumer
confidence in key markets. Sparkling beverage volume grew 1%, led
by brand Coca-Cola, resulting in volume and value share gains in
sparkling beverages. Growth in still beverage volume was
attributable to packaged water, value-added dairy and sports
drinks.
NORTH AMERICA
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 1 0 Sparkling Beverages 0
(1 ) Still Beverages 3 1 Concentrate Sales 0
(1 ) Price/Mix 4 1 Currency 0 0 Structural Changes (2 ) (1 )
Reported Net Revenues 2 (1 ) Comparable CN Net Revenues
(Structurally Adjusted) * 5 1 Reported
Operating Income (22 ) 1 Comparable CN Operating Income * 7
1
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) grew 5% in the quarter primarily
due to a 4% increase in price/mix and the benefit of one additional
selling day. Comparable currency neutral operating income grew 7%
reflecting strong comparable currency neutral net revenue
(structurally adjusted) growth and a favorable impact from
commodities, partially offset by increased brand investments and
the impact of structural items.
- Growth in concentrate sales lagged
growth in unit case sales in the quarter primarily due to timing of
shipments, partially offset by the impact of one additional selling
day. Concentrate sales and unit case sales were mostly in line for
the full year.
- A continued rational approach to
pricing, incremental media investments and disciplined price/pack
strategies drove value share gains in total NARTD beverages, making
this the 19th consecutive quarter of value share gains. We also
gained volume and value share in sparkling and still beverages as
well as in the juice and juice drinks and ready-to-drink tea
categories. Brand Coca-Cola grew slightly in the United States in
both the quarter and full year.
ASIA PACIFIC
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 1 5 Sparkling Beverages 3
5 Still Beverages (1 ) 4 Concentrate Sales 2 5
Price/Mix (4 ) (2 ) Currency (8 ) (6 ) Structural Changes 0
1 Reported Net Revenues (10 ) (2 ) Comparable CN Net
Revenues (Structurally Adjusted) * (1 ) 3 Reported
Operating Income (10 ) (1 ) Comparable CN Operating Income * 2
4
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) declined 1% in the quarter
primarily due to unfavorable price/mix partially offset by the
benefit of one additional selling day. The unfavorable price/mix
was primarily attributable to product and channel mix. Comparable
currency neutral operating income growth was ahead of comparable
currency neutral net revenue (structurally adjusted) growth
primarily due to timing and efficient management of operating
expenses.
- Growth in concentrate sales outpaced
growth in unit case sales in the quarter primarily due to the
impact of one additional selling day. Concentrate sales and unit
case sales were in line for the full year.
- Unit case volume growth in the quarter
reflected high single-digit growth in India, partially offset by a
1% decline in Japan and a 3% decline in China. In Japan, sparkling
beverage volume grew 2% led by 2% growth in brand Coca-Cola, offset
by a 1% decline in still beverage volume. In China, sparkling
beverage volume grew 1% driven by 3% growth in brand Coca-Cola,
offset by a high single-digit decline in still beverage volume
primarily due to industry softness in the juice and juice drinks
category. Importantly, despite the unit case volume declines in
Japan and China, we gained volume and value share in total NARTD
beverages in both of these markets in the quarter.
BOTTLING INVESTMENTS
Period Ended December 31, 2014 % Favorable / (Unfavorable)
Three MonthsEnded
Year Ended Unit Case Volume 3 (2 ) Reported
Volume 5 5 Price/Mix (4 ) (2 ) Currency (4 ) (2 ) Structural
Changes (2 ) (9 ) Reported Net Revenues (5 ) (8 ) Comparable
CN Net Revenues (Structurally Adjusted) * 1 3
Reported Operating Income 77 (92 ) Comparable CN Operating Income *
87 (13 )
* Comparable currency neutral (CN) net revenues
(structurally adjusted) and comparable currency neutral operating
income are non-GAAP financial measures that exclude or otherwise
adjust for items impacting comparability and the impact of changes
in foreign currency exchange rates. Additionally, comparable
currency neutral net revenues (structurally adjusted) have been
adjusted for the impact of structural items. For details on these
adjustments, refer to the Reconciliation of GAAP and Non-GAAP
Financial Measures schedule.
- Comparable currency neutral net
revenues (structurally adjusted) grew 1% in the quarter driven by
reported volume growth, including the benefit of one additional
selling day, partially offset by unfavorable price/mix.
- Comparable currency neutral operating
income growth in the quarter was driven by reported volume growth
and lower commodity costs.
2015 OUTLOOK
- As discussed during the Company’s
December 2014 modeling call, we estimate that the net impact of
structural items on full-year 2015 results will be as follows:
- a slight positive on net revenue
growth;
- a 1 to 2 point headwind on gross profit
growth;
- a 1 point headwind on operating income
growth; and
- a slight headwind on profit before tax
growth.
- 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 5 point headwind on
net revenues and a 7 to 8 point headwind on profit before tax for
the full year. For the first quarter of 2015, we estimate that
currency will be an approximate 6 point headwind on net revenues
and an approximate 8 point headwind on profit before tax.
- The underlying effective annual tax
rate in 2015 is expected to be 22.5%.
- We are targeting full-year 2015 net
share repurchases of $2.0 to $3.0 billion.
- Given the above, the Company expects
full-year comparable currency neutral EPS growth to be mid single
digits, roughly in line with our growth rate in 2014.
ITEMS IMPACTING
COMPARABILITY
- For details on items impacting
comparability in the quarter and for the full year, 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.
- “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.
- For the Company’s geographic operating
segments, “concentrate sales” growth rates shown in the tables
represent the percentage change in net revenues attributable to the
increase (decrease) in concentrate sales volume (expressed in
equivalent unit cases) after considering the impact of structural
items. For the Company’s Bottling Investments operating segment,
“reported volume” growth rates shown in the table represent the
percentage change in net revenues attributable to the increase
(decrease) in unit case volume, computed on a reported basis, after
considering the impact of structural items. Bottling Investments
operating segment data reflects unit case volume for consolidated
bottlers only.
- “Sparkling beverages” means NARTD
beverages with carbonation, including carbonated energy drinks and
waters.
- “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 2014 financial results
were impacted by one less selling day, and fourth quarter 2014
financial results were impacted by one additional selling day. 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.
- As previously announced, effective Jan.
1, 2014, the Company renamed its Pacific operating segment the Asia
Pacific operating segment.
- 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 fourth quarter and full-year 2014 results today, Feb. 10,
2015 at 9:30 a.m. EST. We invite investors to listen to a live
audiocast of the conference call at our website, http://www.coca-colacompany.com in the “Investors”
section. Supplemental materials that support the prepared remarks
for the conference call will also be available for download. 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.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Income
(UNAUDITED) (In millions except per share data)
Three Months Ended
December 31, 2014
December 31,2013
%Change1
Net Operating Revenues $ 10,872 $ 11,040 (2 )
Cost of goods sold
4,357 4,315 1
Gross Profit 6,515 6,725 (3 ) Selling, general
and administrative expenses
4,338 4,319 0 Other operating
charges
726 301 142
Operating Income 1,451 2,105 (31 ) Interest income
158 153 3 Interest expense
139 149 (7 ) Equity income
(loss) — net
239 65 268 Other income (loss) — net
(633 ) 54 —
Income
Before Income Taxes 1,076 2,228 (52 ) Income taxes
305 520 (41 )
Consolidated
Net Income 771 1,708 (55 ) Less: Net income (loss)
attributable to noncontrolling interests
1 (2
) —
Net Income Attributable to Shareowners of The
Coca-Cola Company $ 770 $ 1,710
(55 )
Diluted Net Income Per Share2
$ 0.17 $ 0.38 (54 )
Average Shares Outstanding — Diluted2 4,437
4,482
1 Certain growth rates may not recalculate using the rounded
dollar amounts provided.
2 For the three months ended December 31, 2014 and December 31,
2013, basic net income per share was $0.18 for 2014 and $0.39 for
2013 based on average shares outstanding — basic of 4,375 million
for 2014 and 4,410 million for 2013. Basic net income per share and
diluted net income per share are calculated based on net income
attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Income
(UNAUDITED) (In millions except per share data)
Year Ended December 31, 2014
December 31,2013
%Change1
Net Operating Revenues $ 45,998 $ 46,854 (2 )
Cost of goods sold
17,889 18,421
(3 )
Gross Profit 28,109 28,433 (1 ) Selling, general
and administrative expenses
17,218 17,310 (1 ) Other
operating charges
1,183 895 32
Operating Income 9,708 10,228 (5 ) Interest
income
594 534 11 Interest expense
483 463 4 Equity
income (loss) — net
769 602 28 Other income (loss) — net
(1,263 ) 576 —
Income
Before Income Taxes 9,325 11,477 (19 ) Income taxes
2,201 2,851 (23 )
Consolidated Net Income 7,124 8,626 (17 ) Less: Net
income (loss) attributable to noncontrolling interests
26
42 (38 )
Net Income Attributable to
Shareowners of The Coca-Cola Company $ 7,098
$ 8,584 (17 )
Diluted Net Income Per
Share2 $ 1.60 $ 1.90
(16 )
Average Shares Outstanding — Diluted2
4,450 4,509
1 Certain growth rates may not recalculate using the rounded
dollar amounts provided.
2 For the years ended December 31, 2014 and December 31, 2013,
basic net income per share was $1.62 for 2014 and $1.94 for 2013
based on average shares outstanding — basic of 4,387 million for
2014 and 4,434 million for 2013. Basic net income per share and
diluted net income per share are calculated based on net income
attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(UNAUDITED) (In millions except par value)
December 31, 2014 December 31,2013
ASSETS
Current Assets Cash and cash equivalents
$
8,958 $ 10,414 Short-term investments
9,052
6,707
Total Cash, Cash Equivalents and Short-Term
Investments 18,010 17,121
Marketable securities
3,665 3,147 Trade accounts receivable,
less allowances of $331 and $61, respectively
4,466 4,873
Inventories
3,100 3,277 Prepaid expenses and other assets
3,066 2,886 Assets held for sale
679 —
Total Current Assets 32,986
31,304
Equity Method Investments 9,947 10,393
Other Investments 3,678 1,119
Other Assets
4,407 4,661
Property, Plant and Equipment — net
14,633 14,967
Trademarks With Indefinite Lives
6,533 6,744
Bottlers' Franchise Rights With Indefinite
Lives 6,689 7,415
Goodwill 12,100 12,312
Other Intangible Assets 1,050 1,140
Total Assets $ 92,023 $
90,055
LIABILITIES AND
EQUITY
Current Liabilities Accounts payable and accrued expenses
$ 9,234 $ 9,577 Loans and notes payable
19,130
16,901 Current maturities of long-term debt
3,552 1,024
Accrued income taxes
400 309 Liabilities held for sale
58 —
Total Current Liabilities
32,374 27,811
Long-Term Debt
19,063 19,154
Other Liabilities 4,389 3,498
Deferred Income Taxes 5,636 6,152
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
13,154
12,276 Reinvested earnings
63,408 61,660 Accumulated other
comprehensive income (loss)
(5,777 ) (3,432 )
Treasury stock, at cost — 2,674 and 2,638 shares, respectively
(42,225 ) (39,091 )
Equity Attributable to
Shareowners of The Coca-Cola Company 30,320 33,173
Equity Attributable to Noncontrolling Interests 241
267
Total Equity 30,561
33,440
Total Liabilities and Equity $
92,023 $ 90,055
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(UNAUDITED) (In millions) Year Ended
December 31, 2014 December 31,2013
Operating
Activities Consolidated net income
$ 7,124 $
8,626 Depreciation and amortization
1,976 1,977 Stock-based
compensation expense
209 227 Deferred income taxes
(40 ) 648 Equity (income) loss — net of dividends
(371 ) (201 ) Foreign currency adjustments
415
168 Significant (gains) losses on sales of assets — net
831
(670 ) Other operating charges
761 465 Other items
149 234 Net change in operating assets and liabilities
(439 ) (932 ) Net cash provided by operating
activities
10,615 10,542
Investing
Activities Purchases of investments
(17,800 )
(14,782 ) Proceeds from disposals of investments
12,986
12,791 Acquisitions of businesses, equity method investments and
nonmarketable securities
(389 ) (353 ) Proceeds from
disposals of businesses, equity method investments andnonmarketable
securities
148 872 Purchases of property, plant and
equipment
(2,406 ) (2,550 ) Proceeds from disposals
of property, plant and equipment
223 111 Other investing
activities
(268 ) (303 ) Net cash provided by
(used in) investing activities
(7,506 ) (4,214
)
Financing Activities Issuances of debt
41,674
43,425 Payments of debt
(36,962 ) (38,714 ) Issuances
of stock
1,532 1,328 Purchases of stock for treasury
(4,162 ) (4,832 ) Dividends
(5,350 )
(4,969 ) Other financing activities
(363 ) 17
Net cash provided by (used in) financing activities
(3,631 ) (3,745 )
Effect of Exchange Rate
Changes on Cash and Cash Equivalents (934 )
(611 )
Cash and Cash Equivalents Net increase
(decrease) during the year
(1,456 ) 1,972 Balance at
beginning of year
10,414 8,442 Balance
at end of year
$ 8,958 $ 10,414
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Three Months
Ended
Net Operating Revenues Operating Income (Loss)
Income (Loss) Before Income Taxes
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
Eurasia & Africa
$ 631 $ 660 (4 )
$
226 $ 242 (7 )
$ 232 $ 241 (4 ) Europe
1,245 1,269 (2 )
489 598 (18 )
494 605 (18 )
Latin America
1,251 1,266 (1 )
362 699 (48 )
362 707 (49 ) North America
5,370 5,271 2
432
557 (22 )
40 555 (93 ) Asia Pacific
1,133 1,253 (10 )
407 454 (10 )
405 452 (10 ) Bottling Investments
1,483 1,568 (5 )
(17 ) (71 ) 77
234 2 —
Corporate
10 30 (66 )
(448 ) (374 ) (20 )
(691 ) (334 ) (107 ) Eliminations
(251
) (277 ) 10
— — —
— —
— Consolidated
$ 10,872 $
11,040 (2 )
$
1,451 $ 2,105 (31
)
$ 1,076 $ 2,228
(52 )
Note: Certain growth rates may not recalculate using the rounded
dollar amounts provided.
During the three months ended December 31, 2014, the results of
our operating segments were impacted by the following items:
- Intersegment revenues were $162 million
for Europe, $14 million for Latin America, $4 million for North
America, $57 million for Asia Pacific and $14 million for Bottling
Investments.
- Operating income (loss) and income
(loss) before income taxes were reduced by $25 million for Eurasia
and Africa, $109 million for Europe, $20 million for Latin
America, $89 million for North America, $26 million for Asia
Pacific, $69 million for Bottling Investments and $70 million for
Corporate due to charges related to the Company's productivity and
reinvestment program as well as other restructuring
initiatives.
- Operating income (loss) and income
(loss) before income taxes were reduced by $10 million for Bottling
Investments as a result of the restructuring and transition of the
Company's Russian juice operations to an existing joint venture
with an unconsolidated bottling partner.
- Operating income (loss) and income
(loss) before income taxes were reduced by $1 million for Asia
Pacific due to a charge associated with certain of the Company's
fixed assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $15 million for
Corporate due to noncapitalizable transaction costs.
- Income (loss) before income taxes was
reduced by $2 million for Europe and increased by $4 million for
Bottling Investments due to the Company's proportionate share of
unusual or infrequent items recorded by certain of our equity
method investees.
- Income (loss) before income taxes was
reduced by $389 million for North America due to the refranchising
of certain territories.
- Income (loss) before income taxes was
reduced by $164 million for Corporate due to the remeasurement of
the net monetary assets of our local Venezuelan subsidiary into
U.S. dollars using the SICAD 2 exchange rate, and for the
impairment of a Venezuelan trademark.
- Income (loss) before income taxes was
reduced by $275 million for Latin America due to a write-down on
concentrate sales receivables from our bottling partner in
Venezuela.
- Income (loss) before income taxes was
increased by $46 million for Bottling Investments due to the
elimination of intercompany profit resulting from a write-down the
Company recorded on concentrate sales receivables from our bottling
partner in Venezuela, an equity method investee.
- Income (loss) before income taxes was
reduced by $32 million for Corporate as a result of a Brazilian
bottling entity's majority interest owners exercising their option
to acquire from us an additional equity interest at an exercise
price less than that of our carrying value.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Three Months
Ended (continued)
During the three months ended December 31, 2013, the results of
our operating segments were impacted by the following items:
- Intersegment revenues were $169 million
for Europe, $22 million for Latin America, $3 million for North
America, $66 million for Asia Pacific and $17 million for Bottling
Investments.
- Operating income (loss) and income
(loss) before taxes were reduced by $50 million for Europe, $92
million for North America, $10 million for Asia Pacific, $108
million for Bottling Investments and $24 million for Corporate due
to charges related to the Company's productivity and reinvestment
program as well as other restructuring initiatives.
- Operating income (loss) and income
(loss) before income taxes were reduced by $5 million for Corporate
due to impairment charges recorded on certain of the Company's
intangible assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $11 million for Asia
Pacific due to a charge associated with certain of the Company's
fixed assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $1 million for Corporate
due to transaction costs associated with certain of the Company's
bottling partners.
- Income (loss) before income taxes was
reduced by a net $134 million for Bottling Investments due to the
Company's proportionate share of unusual or infrequent items
recorded by certain of our equity method investees.
- Income (loss) before income taxes was
reduced by $30 million for Corporate due to a charge the Company
recognized on the early extinguishment of certain long-term
debt.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Year
Ended
Net Operating Revenues Operating Income (Loss)
Income (Loss) Before Income Taxes
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
December 31, 2014
December 31,2013
% Fav. /(Unfav.)
Eurasia & Africa
$ 2,730 $ 2,763 (1 )
$
1,084 $ 1,087 0
$ 1,125 $ 1,109 1 Europe
5,536 5,334 4
2,852 2,859 0
2,892 2,923 (1 )
Latin America
4,657 4,939 (6 )
2,316 2,908 (20 )
2,319 2,920 (21 ) North America
21,479 21,590 (1 )
2,447 2,432 1
1,633 2,434 (33 ) Asia Pacific
5,746 5,869 (2 )
2,448 2,478 (1 )
2,464 2,494
(1 ) Bottling Investments
7,039 7,676 (8 )
9 115 (92
)
715 679 5 Corporate
136 154 (12 )
(1,448
) (1,651 ) 12
(1,823 ) (1,082 ) (68 )
Eliminations
(1,325 ) (1,471 )
10
— —
—
—
— — Consolidated
$
45,998 $ 46,854 (2
)
$ 9,708 $ 10,228
(5 )
$ 9,325
$ 11,477 (19 )
Note: Certain growth rates may not recalculate using the rounded
dollar amounts provided.
During the year ended December 31, 2014, the results of our
operating segments were impacted by the following items:
- Intersegment revenues were $692 million
for Europe, $60 million for Latin America, $17 million for North
America, $489 million for Asia Pacific and $67 million for Bottling
Investments.
- Operating income (loss) and income
(loss) before income taxes were reduced by $26 million for Eurasia
and Africa, $111 million for Europe, $20 million for Latin
America, $281 million for North America, $36 million for Asia
Pacific, $211 million for Bottling Investments and $124 million for
Corporate due to charges related to the Company's productivity and
reinvestment program as well as other restructuring
initiatives.
- Operating income (loss) and income
(loss) before income taxes were reduced by $42 million for Bottling
Investments as a result of the restructuring and transition of the
Company's Russian juice operations to an existing joint venture
with an unconsolidated bottling partner.
- Operating income (loss) and income
(loss) before income taxes were reduced by $2 million for Asia
Pacific due to a charge associated with certain of the Company's
fixed assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $7 million for Corporate
due to a charge related to our indemnification of a previously
consolidated entity.
- Operating income (loss) and income
(loss) before income taxes were reduced by $15 million for
Corporate due to noncapitalizable transaction costs.
- Income (loss) before income taxes was
reduced by $2 million for Europe and $16 million for Bottling
Investments due to the Company's proportionate share of unusual or
infrequent items recorded by certain of our equity method
investees.
- Income (loss) before income taxes was
reduced by $799 million for North America due to the refranchising
of certain territories.
- Income (loss) before income taxes was
reduced by $275 million for Latin America and $411 million for
Corporate due to the remeasurement of the net monetary assets of
our local Venezuelan subsidiary into U.S. dollars using the SICAD 2
exchange rate, an impairment of a Venezuelan trademark, and a
write-down the Company recorded on the concentrate sales
receivables from our bottling partner in Venezuela.
- Income (loss) before income taxes was
increased by $25 million for Bottling Investments due to the
elimination of intercompany profit resulting from a write-down we
recorded on the concentrate sales receivables from our bottling
partner in Venezuela, an equity method investee, partially offset
by our proportionate share of their remeasurement loss.
- Income (loss) before income taxes was
reduced by $32 million for Corporate as a result of a Brazilian
bottling entity's majority interest owners exercising their option
to acquire from us an additional equity interest at an exercise
price less than that of our carrying value.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Operating
Segments
(UNAUDITED) (In millions)
Year Ended
(continued)
During the year ended December 31, 2013, the results of our
operating segments were impacted by the following items:
- Intersegment revenues were $689 million
for Europe, $191 million for Latin America, $16 million for North
America, $497 million for Asia Pacific and $78 million for Bottling
Investments.
- Operating income (loss) and income
(loss) before income taxes were reduced by $2 million for Eurasia
and Africa, $57 million for Europe, $282 million for
North America, $26 million for Asia Pacific, $194 million for
Bottling Investments and $121 million for Corporate due to charges
related to the Company's productivity and reinvestment program as
well as other restructuring initiatives. Operating income (loss)
and income (loss) before income taxes were increased by $2 million
for North America due to the refinement of previously established
accruals related to the Company's integration of Coca-Cola
Enterprises Inc.'s former North America business. Operating income
(loss) and income (loss) before income taxes were increased by $1
million for Asia Pacific and $1 million for Corporate due to
the refinement of previously established accruals related to the
Company's 2008-2011 productivity initiatives.
- Operating income (loss) and income
(loss) before income taxes were reduced by $195 million for
Corporate due to impairment charges recorded on certain of the
Company's intangible assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $22 million for Asia
Pacific due to charges associated with certain of the Company's
fixed assets.
- Operating income (loss) and income
(loss) before income taxes were reduced by $8 million for Corporate
due to transaction costs associated with certain of the Company's
bottling partners.
- Operating income (loss) and income
(loss) before income taxes were increased by $3 million for North
America due to the refinement of previously established accruals
related to the loss or damage of certain fixed assets as a result
of Hurricane Sandy.
- Income (loss) before income taxes was
increased by $615 million for Corporate due to a gain the Company
recognized on the deconsolidation of our Brazilian bottling
operations as a result of their combination with an independent
bottling partner.
- Income (loss) before income taxes was
reduced by $9 million for Bottling Investments and $140 million for
Corporate due to the devaluation of the Venezuelan bolivar,
including our proportionate share of the charge incurred by an
equity method investee which has operations in Venezuela.
- Income (loss) before income taxes was
reduced by a net $114 million for Corporate due to the merger of
four of the Company's Japanese bottling partners in which we held
equity method investments prior to their merger.
- Income (loss) before income taxes was
increased by $139 million for Corporate due to a gain the Company
recognized as a result of Coca-Cola FEMSA issuing additional shares
of its own stock during the period at a per share amount greater
than the carrying value of the Company's per share investment.
- Income (loss) before income taxes was
reduced by a net $159 million for Bottling Investments due to the
Company’s proportionate share of unusual or infrequent items
recorded by certain of our equity method investees.
- Income (loss) before income taxes was
reduced by $53 million for Corporate due to charges the Company
recognized on the early extinguishment of certain long-term debt.
These charges include both the difference between the reacquisition
price and the net carrying amount of the debt extinguished as well
as hedge accounting adjustments reclassified from accumulated
comprehensive income to earnings.
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
Asset Impairments
During the three months and year ended December 31, 2013,
the Company recorded charges of $5 million and $195 million,
respectively, related to certain intangible assets. The charges of
$195 million included $113 million related to the impairment of
trademarks recorded in our Bottling Investments and Asia Pacific
operating segments. These impairments were primarily due to a
strategic decision to phase out certain local-market value brands
which resulted in a change in the expected useful life of the
intangible assets. The charges were determined by comparing the
fair value of the trademarks, derived using discounted cash flow
analyses, to the current carrying value. Additionally, the
remaining charge of $82 million was related to goodwill recorded in
our Bottling Investments operating segment. This charge was
primarily the result of management's revised outlook on market
conditions and volume performance. The total impairment charges of
$195 million were recorded in our Corporate operating segment.
Restructuring
During the three months and year ended December 31, 2014,
the Company recorded charges of $66 million and $208 million,
respectively. The Company also recorded charges of $102 million and
$188 million during the three months and year ended
December 31, 2013, respectively. These charges were primarily
related to the integration of our German bottling and distribution
operations.
Productivity and Reinvestment
During the three months and year ended December 31, 2014,
the Company recorded charges of $342 million and $601 million,
respectively. The Company also recorded charges of $182 million and
$494 million during the three months and year ended
December 31, 2013, respectively. These charges were related to
our productivity and reinvestment program. This program is focused
on the following initiatives: global supply chain optimization;
global marketing and innovation effectiveness; operating expense
leverage and operational excellence; data and information
technology systems standardization.
In February 2014, the Company announced that we are expanding
our productivity and reinvestment program to drive an incremental
$1 billion in productivity by 2016 that will primarily be
redirected into increased media investments. Our incremental
productivity goal consists of two relatively equal components.
First, expanded savings through global supply chain optimization,
data and information technology system standardization, and
resource and cost reallocation. These savings will be reinvested in
global brand-building initiatives, with an emphasis on increased
media spending. Second, we will be increasing the effectiveness of
our marketing investments by transforming our marketing and
commercial model to redeploy resources into more consumer-facing
marketing investments to accelerate growth.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Productivity and Reinvestment (continued)
In October 2014, the Company announced that it is further
expanding our productivity and reinvestment program. The expansion
of the productivity and reinvestment initiatives will focus 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 Company expects
that the expanded productivity initiatives will generate an
incremental $2 billion in annualized savings, making the expected
total annualized savings from the expanded productivity program $3
billion by 2019. These savings 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.
Transaction Gains/Losses
During the three months and year ended December 31, 2014,
the Company recorded charges of $389 million and $799 million,
respectively, primarily due to the derecognition of intangible
assets relating to the refranchising of territories in North
America to certain of its unconsolidated bottling partners. These
charges include $494 million related to assets classified as held
for sale as a result of the Company entering into definitive
agreements during the year ended December 31, 2014, to refranchise
additional territories. Under the terms of the new agreements, the
bottlers will purchase finished products from the Company for
distribution in these newly granted territories. In exchange for
the grant of the exclusive rights to distribute, promote, market
and sell the Company's products in the assigned territories, the
bottlers will make ongoing quarterly payments to the Company based
on their future gross profit in these territories.
During the year ended December 31, 2014, the Company
recorded a charge of $7 million associated with our indemnification
of a previously consolidated entity. The impact of this charge
effectively reduced the initial gain the Company recognized when we
sold the entity. In addition to this charge, during the three
months and year ended December 31, 2014, the Company recorded
a charge of $15 million due to noncapitalizable transaction
costs.
During the year ended December 31, 2013, the Company
recorded a gain of $615 million related to the deconsolidation of
our Brazilian bottling operations upon their combination with an
independent bottler. Subsequent to this transaction, the Company
accounts for our investment in the newly combined Brazilian
bottling operations under the equity method of accounting. The
owners of the majority interest received the option to acquire from
us up to 24 percent of the new entity's outstanding shares at any
time for a period of six years beginning December 31, 2013. In the
fourth quarter of 2014, the owners of the majority interest
exercised their option to acquire from us a 10 percent
interest in the entity's outstanding shares resulting in a loss of
$32 million due to the exercise price being lower than our
carrying value. The transaction closed in January 2015.
During the year ended December 31, 2013, the Company
recorded a net loss of $114 million related to our investment in
the four bottling partners that merged in July 2013 to form
Coca-Cola East Japan Bottling Company, Ltd. ("CCEJ"), through a
share exchange.
As a result of the transactions described above in Brazil and
Japan, the Company recorded a charge of $60 million during the year
ended December 31, 2013. This charge was due to the deferral
of the revenue and corresponding gross profit associated with the
intercompany portion of our concentrate sales to CCEJ and the newly
combined Brazilian bottling operations until the finished beverage
products made from those concentrates are sold to a third
party.
During the year ended December 31, 2013, the Company
recorded a gain of $139 million due to Coca-Cola FEMSA, S.A.B.
de C.V. ("Coca-Cola FEMSA"), an equity method investee, issuing
additional shares of its own stock during the period at a per share
amount greater than the carrying value of the Company's per share
investment. Accordingly, the Company is required to treat these
types of transactions as if the Company sold a proportionate share
of its investment in the equity method investee.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Transaction Gains/Losses (continued)
In addition to the items above, during the three months and year
ended December 31, 2013, the Company recorded charges of $1
million and $8 million, respectively, due to transaction costs
associated with certain of our bottling partners. During the year
ended December 31, 2013, the Company recorded a benefit of $1
million due to an adjustment to the Company's loss on the sale of a
majority interest in our previously consolidated Philippine
bottling operations to Coca-Cola FEMSA in January 2013.
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 and year
ended December 31, 2014, the net impact of the Company's
adjustment related to our economic hedging activities described
above resulted in increases of $175 million and $55 million,
respectively, to our non-GAAP income before income taxes. During
the three months and year ended December 31, 2013, the net
impact of the Company's adjustment related to our economic hedging
activities described above resulted in a decrease of $23 million
and an increase of $72 million, respectively, to our non-GAAP
income before income taxes.
Hyperinflationary Economies
During the three months and year ended December 31, 2014,
the Company recorded net charges of $393 million and
$661 million, respectively, related to our Venezuelan
operations. These charges are a result of the remeasurement of the
net monetary assets of our Venezuelan subsidiary using the SICAD 2
exchange rate, an impairment of a Venezuelan trademark due to
higher exchange rates, and a write-down on the concentrate sales
receivables from our bottling partner in Venezuela, net of the
elimination of intercompany profit. 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 concentrate sales receivables.
During the year ended December 31, 2013, the Company
recorded charges of $149 million related to the devaluation of
the Venezuelan bolivar, including 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 months and year ended December 31, 2014,
the Company recorded losses of $10 million and $40 million,
respectively, related to restructuring and transitioning its
Russian juice operations to an existing joint venture with an
unconsolidated bottling partner.
Early Extinguishment of Long-Term Debt
During the three months and year ended December 31, 2013,
the Company recorded charges of $30 million and $53 million,
respectively, due to the early extinguishment of certain long-term
debt.
Impact of Natural Disasters
On October 29, 2012, Hurricane Sandy caused widespread flooding
and wind damage across the mid-Atlantic region of the United
States, primarily in New York and New Jersey. During the year ended
December 31, 2013, the Company reversed charges of $3 million
due to the refinement of previously established accruals related to
the loss or damage of certain fixed assets resulting from the
hurricane.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Fixed Assets
During the three months and year ended December 31, 2014,
the Company recorded charges of $1 million and $2 million,
respectively, associated with certain of the Company's fixed
assets.
During the three months and year ended December 31, 2013,
the Company recorded charges of $11 million and $22 million,
respectively, associated with certain of the Company's fixed
assets.
Certain Tax Matters
During the three months and year ended December 31, 2014,
the Company recorded a net tax charge of $5 million and
$7 million, respectively, related to amounts required to be
recorded for changes to our uncertain tax positions, including
interest and penalties. During the three months and year ended
December 31, 2013, the Company recorded a net tax benefit of
$15 million and $35 million, respectively, related to amounts
required to be recorded for changes to our uncertain tax positions,
including interest and penalties.
Equity Investees
During the three months and year ended December 31, 2014,
the Company recorded net gains of $2 million and net charges of $18
million, respectively. During the three months and year ended
December 31, 2013, the Company recorded net charges of $134
million and $159 million, respectively. These amounts represent the
Company’s proportionate share of unusual or infrequent items
recorded by certain of our equity method investees.
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 by the current period actual exchange rates (that
include the impact of current period currency hedging activities),
to derive our current period local currency operating results. We
then multiply or divide, as appropriate, the derived current period
local currency operating results by the foreign currency exchange
rates (that also include the impact of the comparable prior period
currency hedging activities) used to translate the Company's
financial statements in the comparable prior year period to
determine what the current period U.S. dollar operating results
would have been if the foreign currency exchange rates had not
changed from the comparable prior year period.
Structural Changes
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 2014, the Company refranchised
territories in North America to certain of its unconsolidated
bottling partners; changed our 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. In 2013, the Company acquired
bottling operations in Myanmar and deconsolidated our Philippine
and Brazilian bottling operations. 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.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Three Months
Ended December 31, 2014
Netoperatingrevenues
Cost ofgoodssold
Grossprofit
Grossmargin
Selling,general
andadministrativeexpenses
Otheroperatingcharges
Operatingincome
Operatingmargin
Reported (GAAP) $ 10,872 $ 4,357
$ 6,515 59.9 % $ 4,338
$ 726 $ 1,451 13.3 %
Items Impacting Comparability: Asset Impairments/Restructuring — —
— — (66 ) 66 Productivity & Reinvestment — — — — (342 ) 342
Productivity Initiatives — — — — — — Equity Investees — — — — — —
CCE Transaction — — — — — — Transaction Gains/Losses — — — — (15 )
15 Other Items 29 (75 ) 104 (48 ) (303 ) 455 Certain Tax Matters —
— — — — — After
Considering Items (Non-GAAP) $ 10,901 $ 4,282
$ 6,619 60.7 % $ 4,290
$ — $ 2,329 21.4 %
Three Months Ended December 31, 2013 Net operating
revenues
Cost ofgoodssold
Gross profit Gross margin
Selling,general
andadministrativeexpenses
Other operating charges Operating income Operating
margin
Reported (GAAP) $ 11,040 $
4,315 $ 6,725 60.9 % $
4,319 $ 301 $ 2,105 19.1
% Items Impacting Comparability: Asset
Impairments/Restructuring — — — — (107 ) 107 Productivity &
Reinvestment — — — — (182 ) 182 Productivity Initiatives — — — — —
— Equity Investees — — — — — — CCE Transaction — — — — — —
Transaction Gains/Losses — — — — (1 ) 1 Other Items (7 ) 13 (20 ) 3
(11 ) (12 ) Certain Tax Matters — — — —
— — After Considering Items (Non-GAAP) $
11,033 $ 4,328 $ 6,705
60.8 % $ 4,322 $ — $
2,383 21.6 %
Currency
Neutral:
Net operating revenues
Cost ofgoodssold
Gross profit
Selling,general
andadministrativeexpenses
Other operating charges Operating income
% Change
— Reported (GAAP) (2 ) 1 (3
) 0 142 (31 ) % Currency Impact
(4 ) (2 ) (5 ) (4 ) — (8 ) % Change — Currency Neutral Reported 2 3
2 4 — (24 ) % Structural Impact (2 ) (1 ) (2 ) (1 ) — (3 ) % Change
— Currency Neutral Reported and Adjusted for Structural Items
4 5 4 6
— (21 ) % Change — After
Considering Items
(Non-GAAP)
(1 ) (1 ) (1 ) (1 ) — (2 ) % Currency Impact After Considering
Items (Non-GAAP) (4 ) (2 ) (5 ) (4 ) — (7 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) 3 1 4 3 — 5 % Structural
Impact After Considering Items (Non-GAAP) (2 ) (1 ) (2 ) (1 ) — (2
) % Change — Currency Neutral After Considering Items and Adjusted
for Structural Items (Non-GAAP) 4 3
5 4 — 7
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Three Months Ended December 31, 2014
Interestexpense
Equityincome(loss)—net
Otherincome(loss) —net
Incomebeforeincometaxes
Incometaxes
Effectivetax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributableto shareowners ofThe
Coca-ColaCompany
Dilutednetincomepershare1
Reported (GAAP) $ 139 $ 239
$ (633 ) $ 1,076 $
305 28.3 % $ 1 $
770 $ 0.17 Items Impacting Comparability:
Asset Impairments/Restructuring — — — 66 — — 66 0.01 Productivity
& Reinvestment — — — 342 95 — 247 0.06 Productivity Initiatives
— — — — — — — — Equity Investees — (2 ) — (2 ) 3 — (5 ) — CCE
Transaction — — — — — — — — Transaction Gains/Losses — — 421 436
149 — 287 0.06 Other Items — (46 ) 170 579 14 — 565 0.13 Certain
Tax Matters — — — — (5 ) —
5 — After Considering Items (Non-GAAP)
$ 139 $ 191 $ (42 ) $ 2,497
$ 561 22.5 % $ 1
$ 1,935 $ 0.44
Three Months
Ended December 31, 2013 Interest expense Equity
income (loss) — net Other income (loss) — net Income
before income taxes Income
taxes
Effective
tax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Diluted net income
per share2
Reported (GAAP) $ 149 $ 65
$ 54 $ 2,228 $ 520
23.3 % $ (2 ) $
1,710 $ 0.38 Items Impacting Comparability:
Asset Impairments/Restructuring — — — 107 — — 107 0.02 Productivity
& Reinvestment — — — 182 60 — 122 0.03 Productivity Initiatives
— — — — 1 — (1 ) — Equity Investees — 134 — 134 12 — 122 0.03 CCE
Transaction — — — — — — — — Transaction Gains/Losses — — — 1 — — 1
— Other Items (30 ) — — 18 7 — 11 — Certain Tax Matters — —
— — 15 — (15 ) —
After Considering Items (Non-GAAP) $ 119 $ 199
$ 54 $ 2,670 $ 615
23.0 % $ (2 ) $ 2,057 $
0.46
Interestexpense
Equity income (loss) — net Other income (loss) — net
Income before income taxes Income
taxes
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributableto shareowners ofThe
Coca-ColaCompany
Diluted net income
per share
% Change — Reported (GAAP) (7 ) 268
— (52 ) (41 ) —
(55 ) (54 ) % Change — After
Considering Items (Non-GAAP) 17 (4 ) —
(6 ) (8 ) — (6 )
(5 )
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 4,437 million average shares outstanding — diluted
2 4,482 million average shares outstanding — diluted
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Year Ended December
31, 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) $
45,998 $ 17,889 $ 28,109
61.1 % $ 17,218 $ 1,183
$ 9,708 21.1 % Items Impacting
Comparability: Asset Impairments/Restructuring — — — — (208 ) 208
Productivity & Reinvestment — — — — (601 ) 601 Productivity
Initiatives — — — — — — Equity Investees — — — — — — CCE
Transaction — — — — — — Transaction Gains/Losses — — — — (22 ) 22
Other Items 14 13 1 (62 ) (352 ) 415 Certain Tax Matters — —
— — — — After Considering Items
(Non-GAAP) $ 46,012 $ 17,902 $
28,110 61.1 % $ 17,156 $ —
$ 10,954 23.8 %
Year Ended December
31, 2013 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) $
46,854 $ 18,421 $ 28,433
60.7 % $ 17,310 $ 895
$ 10,228 21.8 % Items Impacting
Comparability: Asset Impairments/Restructuring — — — — (383 ) 383
Productivity & Reinvestment — — — — (494 ) 494 Productivity
Initiatives — — — — 2 (2 ) Equity Investees — — — — — — CCE
Transaction — — — — 2 (2 ) Transaction Gains/Losses 78 18 60 (5 )
(3 ) 68 Other Items 3 (68 ) 71 (1 ) (19 ) 91 Certain Tax Matters —
— — — — — After
Considering Items (Non-GAAP) $ 46,935 $ 18,371
$ 28,564 60.9 % $ 17,304
$ — $ 11,260 24.0 %
Currency
Neutral:
Net operating revenues Cost of goods sold
Gross profit Selling, general and administrative
expenses Other operating charges Operating income
%
Change — Reported (GAAP) (2 ) (3 )
(1 ) (1 ) 32 (5 )
% Currency Impact (2 ) (1 ) (3 ) (2 ) — (6 ) % Change — Currency
Neutral Reported 1 (2 ) 2 1 — 1 % Structural Impact (2 ) (2 ) (2 )
(2 ) — (3 ) % Change — Currency Neutral Reported and Adjusted for
Structural Items 3 0 4
3 — 4 % Change —
After Considering Items
(Non-GAAP)
(2 ) (3 ) (2 ) (1 ) — (3 ) % Currency Impact After Considering
Items (Non-GAAP) (2 ) (1 ) (3 ) (2 ) — (6 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) 1 (1 ) 2 1 — 3 %
Structural Impact After Considering Items (Non-GAAP) (2 ) (2 ) (2 )
(2 ) — (3 ) % Change — Currency Neutral After Considering Items and
Adjusted for Structural Items (Non-GAAP) 3 1
4 3 — 6
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions except per share data)
Year Ended
December 31, 2014 Interest expense Equity income
(loss) — net Other income (loss) — net Income before
income taxes Income
taxes
Effective
tax rate
Net income(loss)attributable
tononcontrolling
interests
Net incomeattributable toshareowners ofThe
Coca-Cola
Company
Diluted net income
per share1
Reported (GAAP) $ 483 $ 769
$ (1,263 ) $ 9,325 $
2,201 23.6 % $ 26 $
7,098 $ 1.60 Items Impacting Comparability:
Asset Impairments/Restructuring — — — 208 — — 208 0.05 Productivity
& Reinvestment — — — 601 191 — 410 0.09 Productivity
Initiatives — — — — — — — — Equity Investees — 18 — 18 6 — 12 — CCE
Transaction — — — — — — — — Transaction Gains/Losses — — 831 853
296 — 557 0.13 Other Items — (25 ) 368 758 (41 ) — 799 0.18 Certain
Tax Matters — — — — (7 ) — 7
— After Considering Items (Non-GAAP) $ 483
$ 762 $ (64 ) $ 11,763 $
2,646 22.5 % $ 26 $ 9,091
$ 2.04
Year Ended December 31, 2013
Interest expense Equity income (loss) — net
Other income (loss) — net Income before income taxes Income
taxes
Effective
tax rate
Net income(loss)attributable
tononcontrollinginterests
Net incomeattributable toshareowners ofThe
Coca-ColaCompany
Diluted net income
per share2
Reported (GAAP) $ 463 $ 602
$ 576 $ 11,477 $ 2,851
24.8 % $ 42 $ 8,584
$ 1.90 Items Impacting Comparability: Asset
Impairments/Restructuring — — — 383 — — 383 0.08 Productivity &
Reinvestment — — — 494 175 — 319 0.07 Productivity Initiatives — —
— (2 ) — — (2 ) — Equity Investees — 159 — 159 7 — 152 0.03 CCE
Transaction — — — (2 ) (1 ) — (1 ) — Transaction Gains/Losses — —
(641 ) (573 ) (307 ) — (266 ) (0.06 ) Other Items (53 ) 9 140 293
53 — 240 0.05 Certain Tax Matters — — — — 35 —
(35 ) (0.01 ) After Considering Items
(Non-GAAP) $ 410 $ 770 $ 75
$ 12,229 $ 2,813 23.0 % $
42 $ 9,374 $ 2.08
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) 4 28 —
(19 ) (23 ) (38 )
(17 ) (16 ) % Change — After
Considering Items (Non-GAAP) 18 (1 ) —
(4 ) (6 ) (38 ) (3 ) (2 )
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
1 4,450 million average shares outstanding — diluted
2 4,509 million average shares outstanding — diluted
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Income Before
Income Taxes and Diluted Net Income Per Share:
Three Months Ended December 31, 2014
Income beforeincome taxes
Diluted net incomeper share
% Change — Reported (GAAP) (52 ) (54
) % Currency Impact (19 ) (18 ) % Change — Currency Neutral
Reported (33 ) (37 ) % Structural Impact (2 ) N/A % Change —
Currency Neutral Reported and Adjusted for Structural Items
(31 ) N/A % Change —
After Considering Items (Non-GAAP) (6 ) (5 ) % Currency Impact
After Considering Items (Non-GAAP) (10 ) (10 ) % Change — Currency
Neutral After Considering Items (Non-GAAP) 4 5 % Structural Impact
After Considering Items (Non-GAAP) (2 ) N/A % Change — Currency
Neutral After Considering Items and Adjusted for Structural Items
(Non-GAAP) 6 N/A
Year
Ended December 31, 2014
Income beforeincome taxes
Diluted net incomeper share
% Change — Reported (GAAP) (19 ) (16
) % Currency Impact (9 ) (10 ) % Change — Currency Neutral
Reported (9 ) (6 ) % Structural Impact (2 ) N/A % Change — Currency
Neutral Reported and Adjusted for Structural Items (8 )
N/A % Change — After
Considering Items (Non-GAAP) (4 ) (2 ) % Currency Impact After
Considering Items (Non-GAAP) (7 ) (7 ) % Change — Currency Neutral
After Considering Items (Non-GAAP) 3 5 % Structural Impact After
Considering Items (Non-GAAP) (2 ) N/A % Change — Currency Neutral
After Considering Items and Adjusted for Structural Items
(Non-GAAP) 5 N/A
Note: Certain columns may not add due to rounding.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Net Operating
Revenues by Segment:
Three Months Ended December 31, 2014
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 631 $
1,245 $ 1,251 $
5,370 $ 1,133 $
1,483 $ 10 $ (251
) $ 10,872 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — — — — —
Productivity & Reinvestment — — — — — — — — — Productivity
Initiatives — — — — — — — — — CCE Transaction — — — — — — — — —
Transaction Gains/Losses — — — — — — — — — Other Items —
— — 28 —
— 1 — 29
After Considering Items (Non-GAAP) $ 631 $
1,245 $ 1,251 $
5,398 $ 1,133 $ 1,483
$ 11 $ (251 ) $
10,901
Three Months Ended December 31, 2013
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 660 $ 1,269
$ 1,266 $ 5,271 $ 1,253
$ 1,568 $ 30 $ (277
) $ 11,040 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Productivity Initiatives — — —
— — — — — — CCE Transaction — — — — — — — — — Transaction
Gains/Losses — — — — — — — — — Other Items — —
— (2 ) — —
(5 ) — (7 ) After Considering Items (Non-GAAP)
$ 660 $ 1,269 $
1,266 $ 5,269 $ 1,253
$ 1,568 $ 25
$ (277 ) $ 11,033
Currency Neutral
Net Operating Revenues by Segment:
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
%
Change — Reported (GAAP) (4 ) (2 )
(1 ) 2 (10 ) (5 )
(66 ) — (2 ) % Currency Impact
(9 ) (4 ) (10 ) 0 (8 ) (4 ) (21 ) — (4 ) % Change — Currency
Neutral Reported 5 2 9 2 (1 ) (1 ) (44 ) — 2 % Structural Impact 0
0 (5 ) (2 ) 0 (2 ) 0 — (2 ) % Change — Currency Neutral Reported
and Adjusted for Structural Items 5 2
14 4 (1 ) 1
(44 ) — 4
% Change — After Considering
Items (Non-GAAP) (4 ) (2 ) (1 ) 2 (10 ) (5 ) (57 ) — (1 ) %
Currency Impact After Considering Items (Non-GAAP) (9 ) (4 ) (10 )
0 (8 ) (4 ) (3 ) — (4 ) % Change — Currency Neutral After
Considering Items (Non-GAAP) 5 2 9 3 (1 ) (1 ) (55 ) — 3 %
Structural Impact After Considering Items (Non-GAAP) 0 0 (5 ) (2 )
0 (2 ) 0 — (2 )
% Change — Currency Neutral After
Considering Items and Adjusted for Structural Items (Non-GAAP)
5 2 14 5
(1 ) 1 (55 ) — 4
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Net Operating
Revenues by Segment:
Year Ended December 31, 2014
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 2,730 $
5,536 $ 4,657 $
21,479 $ 5,746 $
7,039 $ 136 $
(1,325 ) $ 45,998 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
— — — — Productivity & Reinvestment — — — — — — — — —
Productivity Initiatives — — — — — — — — — CCE Transaction — — — —
— — — — — Transaction Gains/Losses — — — — — — — — — Other Items —
— — 37 —
(20 ) (3 ) — 14 After
Considering Items (Non-GAAP) $ 2,730 $
5,536 $ 4,657 $ 21,516
$ 5,746 $ 7,019 $
133 $ (1,325 ) $ 46,012
Year Ended December 31, 2013
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
Reported (GAAP) $ 2,763 $ 5,334
$ 4,939 $ 21,590 $ 5,869
$ 7,676 $ 154 $ (1,471
) $ 46,854 Items Impacting Comparability:
Asset Impairments/Restructuring — — — — — — — — — Productivity
& Reinvestment — — — — — — — — — Productivity Initiatives — — —
— — — — — — CCE Transaction — — — — — — — — — Transaction
Gains/Losses — — 5 — 73 — — — 78 Other Items — —
— — — —
3 — 3 After Considering
Items (Non-GAAP) $ 2,763 $ 5,334
$ 4,944 $ 21,590 $
5,942 $ 7,676 $ 157
$ (1,471 ) $ 46,935
Currency Neutral
Net Operating Revenues by Segment:
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Eliminations Consolidated
%
Change — Reported (GAAP) (1 ) 4 (6
) (1 ) (2 ) (8 )
(12 ) — (2 ) % Currency Impact
(8 ) 2 (10 ) 0 (6 ) (2 ) 0 — (2 ) % Change — Currency Neutral
Reported 8 2 5 0 4 (7 ) (12 ) — 1 % Structural Impact 0 0 (4 ) (1 )
1 (9 ) 0 — (2 ) % Change — Currency Neutral Reported and Adjusted
for Structural Items 8 2 9
1 3 3 (12 )
— 3
% Change — After Considering Items (Non-GAAP)
(1 ) 4 (6 ) 0 (3 ) (9 ) (16 ) — (2 ) % Currency Impact After
Considering Items (Non-GAAP) (8 ) 2 (10 ) 0 (6 ) (1 ) (4 ) — (2 ) %
Change — Currency Neutral After Considering Items (Non-GAAP) 8 2 5
0 3 (7 ) (12 ) — 1 % Structural Impact After Considering Items
(Non-GAAP) 0 0 (4 ) (1 ) 0 (10 ) 0 — (2 )
% Change — Currency Neutral After
Considering Items and Adjusted for Structural Items (Non-GAAP)
8 2 9 1 3
3 (12 ) — 3
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Operating Income
(Loss) by Segment:
Three Months Ended December 31, 2014
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 226 $ 489 $
362 $ 432 $ 407
$ (17 ) $ (448
) $ 1,451 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 66 — 66
Productivity & Reinvestment 25 109 20 89 26 3 70 342
Productivity Initiatives — — — — — — — — CCE Transaction — — — — —
— — — Transaction Gains/Losses — — — — — — 15 15 Other Items —
— 275 151 1
9 19 455 After
Considering Items (Non-GAAP) $ 251 $
598 $ 657 $ 672
$ 434 $ 61 $
(344 ) $ 2,329
Three Months Ended December 31, 2013
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 242 $ 598 $ 699
$ 557 $ 454 $ (71
) $ (374 ) $ 2,105 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
102 5 107 Productivity & Reinvestment — 50 — 92 10 6 24 182
Productivity Initiatives — — — — — — — — CCE Transaction — — — — —
— — — Transaction Gains/Losses — — — — — — 1 1 Other Items —
— — (19 ) 11
— (4 ) (12 ) After Considering Items
(Non-GAAP) $ 242 $ 648 $
699 $ 630 $ 475
$ 37 $ (348 ) $
2,383
Currency Neutral
Operating Income (Loss) by Segment:
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
% Change — Reported
(GAAP) (7 ) (18 ) (48
) (22 ) (10 ) 77
(20 ) (31 ) % Currency Impact (10 ) (3
) (9 ) 0 (11 ) 0 0 (8 ) % Change — Currency Neutral Reported
3 (15 ) (39 ) (22 ) 0
77 (20 ) (24 )
% Change — After Considering
Items(Non-GAAP) 4 (8 ) (6 ) 7 (8 ) 66 2 (2 ) % Currency Impact
After Considering Items (Non-GAAP) (10 ) (3 ) (9 ) 0 (10 ) (21 ) 2
(7 ) % Change — Currency Neutral After Considering Items (Non-GAAP)
14 (5 ) 3 7
2 87 0 5
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Operating Income
(Loss) by Segment:
Year Ended December 31, 2014
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 1,084 $ 2,852 $
2,316 $ 2,447 $
2,448 $ 9 $ (1,448
) $ 9,708 Items Impacting
Comparability: Asset Impairments/Restructuring — — — — — 208 — 208
Productivity & Reinvestment 26 111 20 281 36 3 124 601
Productivity Initiatives — — — — — — — — CCE Transaction — — — — —
— — — Transaction Gains/Losses — — — — — — 22 22 Other Items —
— 275 61 1
39 39 415 After
Considering Items (Non-GAAP) $ 1,110 $
2,963 $ 2,611 $ 2,789
$ 2,485 $ 259
$ (1,263 ) $ 10,954
Year Ended December 31,
2013
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
Reported (GAAP)
$ 1,087 $ 2,859 $ 2,908
$ 2,432 $ 2,478 $ 115
$ (1,651 ) $ 10,228 Items
Impacting Comparability: Asset Impairments/Restructuring — — — — —
188 195 383 Productivity & Reinvestment 2 57 — 282 26 6 121 494
Productivity Initiatives — — — — (1 ) — (1 ) (2 ) CCE Transaction —
— — (2 ) — — — (2 ) Transaction Gains/Losses — — 5 — 55 — 8 68
Other Items — — — 66
22 (1 ) 4 91
After Considering Items (Non-GAAP) $ 1,089
$ 2,916 $ 2,913 $
2,778 $ 2,580 $
308 $ (1,324 ) $ 11,260
Currency Neutral
Operating Income (Loss) by Segment:
Eurasia &Africa
Europe Latin America North America Asia
Pacific
BottlingInvestments
Corporate Consolidated
% Change — Reported
(GAAP) 0 0 (20 ) 1 (1
) (92 ) 12 (5 ) %
Currency Impact (12 ) 2 (12 ) 0 (8 ) (4 ) 1 (6 ) % Change —
Currency Neutral Reported 11 (2 ) (8 )
1 7 (88 ) 12
1
%
Change — After Considering Items(Non-GAAP) 2 2 (10 ) 0 (4 ) (16 ) 5
(3 ) % Currency Impact After Considering Items (Non-GAAP) (12 ) 2
(12 ) 0 (8 ) (3 ) 0 (6 ) % Change — Currency Neutral After
Considering Items (Non-GAAP) 14 0
2 1 4 (13 )
4 3
Note: Certain columns may not add due to rounding. Certain
growth rates may not recalculate using the rounded dollar amounts
provided.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Operating Expense
Leverage:
Three Months Ended December 31, 2014 Operating
income Gross profit
Operating expenseleverage1
% Change — Reported (GAAP) (31 ) (3
) (28 ) % Change — Currency Neutral Reported
(24 ) 2 (25 ) % Change — Currency Neutral Reported and Adjusted for
Structural Items
(21 ) 4 (24 )
% Change — After Considering Items (Non-GAAP)
(2 ) (1 ) (1 ) % Change — Currency Neutral After Considering Items
(Non-GAAP)
5 4 1 % Change — Currency Neutral After Considering Items and
Adjusted for Structural Items (Non-GAAP) 7
5 2
Year Ended December 31,
2014 Operating income Gross profit
Operating expenseleverage1
% Change — Reported (GAAP) (5 ) (1
) (4 ) % Change — Currency Neutral Reported 1
2 (1 ) % Change — Currency Neutral Reported and Adjusted for
Structural Items
4 4 0
% Change — After Considering Items
(Non-GAAP) (3 ) (2 ) (1 ) % Change — Currency Neutral After
Considering Items
(Non-GAAP)
3 2 1 % Change — Currency Neutral After Considering Items and
Adjusted for Structural Items (Non-GAAP) 6
4 2
Note: Certain rows may not add due to rounding.
1 Operating expense leverage is calculated by subtracting gross
profit growth from operating income growth.
THE COCA-COLA
COMPANY AND SUBSIDIARIES
Reconciliation of
GAAP and Non-GAAP Financial Measures
(UNAUDITED) (In millions)
Purchases and
Issuances of Stock:
Year Ended December31,
2014
Year Ended December31,
2013
Reported (GAAP) Issuances of Stock $ 1,532 $ 1,328 Purchases
of Stock for Treasury (4,162 ) (4,832 ) Net Change in Stock
Issuance Receivables1 (14 ) — Net Change in Treasury Stock
Payables2 38 (5 ) Net Treasury Share Repurchases (Non-GAAP)
$ (2,606 ) $ (3,509 )
1 Represents the net change in receivables related to employee
stock options exercised but not settled prior to the end of the
quarter.
2 Represents the net change in payables for treasury shares
repurchased but not settled prior to the end of the quarter.
About 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. Led by Coca-Cola, one of the world's most valuable
and recognizable brands, our Company's portfolio features 20
billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola
Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del
Valle. Globally, we are the No. 1 provider of sparkling
beverages, ready-to-drink coffees, and juices and juice
drinks. Through the world's largest beverage distribution system,
consumers in more than 200 countries enjoy our beverages at a rate
of 1.9 billion servings a day. With an enduring commitment to
building sustainable communities, our Company is focused on
initiatives that reduce our environmental footprint, support
active, healthy living, create a safe, inclusive work environment
for our associates, and enhance the economic development of the
communities where we operate. Together with our bottling
partners, we rank among the world's top 10 private employers with
more than 700,000 system associates. For more
information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at
twitter.com/CocaColaCo, visit our
blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at
www.linkedin.com/company/the-coca-cola-company.
Forward-Looking
Statements
This press release may contain statements, estimates or
projections that constitute “forward-looking statements” as defined
under U.S. federal securities laws. Generally, the words “believe,”
“expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and
similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from The Coca-Cola Company’s
historical experience and our present expectations or projections.
These risks include, but are not limited to, obesity concerns;
water scarcity and poor quality; evolving consumer preferences;
increased competition and capabilities in the market place; product
safety and quality concerns; increased demand for food products and
decreased agricultural productivity; changes in the retail
landscape or the loss of key retail or foodservice customers; an
inability to expand operations in emerging and developing markets;
fluctuations in foreign currency exchange rates; interest rate
increases; an inability to maintain good relationships with our
bottling partners; a deterioration in our bottling partners'
financial condition; increases in income tax rates, changes in
income tax laws or unfavorable resolution of tax matters; increased
or new indirect taxes in the United States or in other major
markets; increased cost, disruption of supply or shortage of energy
or fuels; increased cost, disruption of supply or shortage of
ingredients, other raw materials or packaging materials; changes in
laws and regulations relating to beverage containers and packaging;
significant additional labeling or warning requirements or
limitations on the availability of our products; an inability to
protect our information systems against service interruption,
misappropriation of data or breaches of security; unfavorable
general economic conditions in the United States; unfavorable
economic and political conditions in international markets;
litigation or legal proceedings; adverse weather conditions;
climate change; damage to our brand image and corporate reputation
from negative publicity, even if unwarranted, related to product
safety or quality, human and workplace rights, obesity or other
issues; changes in, or failure to comply with, the laws and
regulations applicable to our products or our business operations;
changes in accounting standards; an inability to achieve our
overall long-term growth objectives; deterioration of global credit
market conditions; one or more of our counterparty financial
institutions default on their obligations to us or fail; an
inability to realize additional benefits targeted by our
productivity and reinvestment program; an inability to renew
collective bargaining agreements on satisfactory terms, or we or
our bottling partners experience strikes, work stoppages or labor
unrest; future impairment charges; multi-employer plan withdrawal
liabilities in the future; an inability to successfully integrate
and manage our Company-owned or -controlled bottling operations;
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 for the
year ended December 31, 2013 and our subsequently filed Quarterly
Reports on Form 10-Q, 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.
The Coca-Cola CompanyInvestors and Analysts:Tim
Leveridge, +01 404.676.7563orMedia:Petro Kacur,
+01 404.676.2683
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