Exhibit 99.1

 

Media Relations Department P.O. Box 1734, Atlanta, GA 30301 Telephone (404) 676-2121

 

CONTACT:    Investors: Jackson Kelly

(404) 676-7563

 

Media:  Dana Bolden

(404) 676-2683

pressinquiries@na.ko.com

 

THE COCA-COLA COMPANY REPORTS
2010 FIRST QUARTER RESULTS

 

Today, our Company reports solid growth in the first quarter of 2010.  We continued to win in the marketplace, gaining global value share and delivering volume and profit in line with our long-term targets, all while taking decisive action to strategically advance our North America business and further strengthen our franchise system in Europe.

 

·                  Solid worldwide unit case volume growth of 3% in the quarter, in line with our long-term volume target, and driven by international volume growth of 5%.

 

·                  First quarter reported EPS was $0.69, up 19%, with comparable EPS up 23% to $0.80.

 

·                  Reported operating income increased 17% in the quarter, and comparable currency neutral operating income grew 9%.

 

·                  Strong cash flow generation continued, with first quarter cash from operations up 52% to $1.3 billion.

 

·                  Gained global nonalcoholic ready-to-drink beverage value share and maintained global volume share.  International volume and value share gains continued.

 

·                  Integration planning for the Coca-Cola Enterprises deal strategically advances and remains on track with an expected fourth quarter close.

 

·                  Productivity initiatives are well on track to achieve goal of $500 million in annualized savings by year-end 2011.

 

 

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ATLANTA, April 20, 2010 — The Coca-Cola Company reports solid first quarter 2010 operating results, with unit case volume increasing a strong 3%, in line with our long-term volume target and underscoring the strength of our brands even as global macroeconomic challenges continue.  We achieved broad-based international unit case volume growth of 5%.  Eurasia and Africa unit case volume grew 11% with continued strong growth of 29% in India and 18% growth in Turkey.  Pacific unit case volume grew 5%, cycling 4% in the prior year quarter, and Latin America unit case volume grew 4% with strong 12% growth in Brazil.  Europe unit case volume was even with the prior year quarter, with growth in France and the Benelux countries as well as in our Bottling Investment territories including 5% growth in Germany and 2% growth in the Nordic Region.  Growth continued in countries with per capita consumption of Company products less than 150 eight-ounce servings per year, with unit case volume up 10% in the quarter.

 

We gained global value share and maintained volume share in nonalcoholic ready-to-drink (NARTD) beverages and core sparkling beverages.  We also realized volume and value share gains across juices and juice drinks, sports drinks, coffee and packaged water.  Importantly, internationally we gained volume and value share in total NARTD beverages.

 

The continued power of the global “Open Happiness” campaign combined with the initial roll-out of our FIFA World Cup program and an increased focus on Coke with Meals drove growth in brand Coca-Cola, with unit case volume up 3% in the quarter.  The strong brand Coca-Cola growth came from a diversity of global markets, including double-digit growth in India, Vietnam, the Philippines, Brazil, Russia and Egypt.  During the quarter unit case volume for brand Coca-Cola grew over 1 million unit cases in 24 different countries.  Total sparkling beverage unit case volume increased 2% in the quarter, with international sparkling beverage unit case volume increasing 3%.  Total still beverage unit case volume increased 8% in the quarter, led by continued growth in juices and juice drinks, teas and water brands.  Still beverage unit case volume increased 12% internationally.

 

Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company said, “I am once again pleased with the results of the quarter as we continue to grow our dynamic global business.  During the quarter we continued to achieve solid business results worldwide, all while taking decisive action to strategically advance our North America business and further strengthen our franchise system in Europe.  Despite expected ongoing challenges in global

 

 

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economic conditions, we continue to invest in our business and build the health of our brands fueled by world-class marketing and innovation.  This led to continued value share gains and strong and consistent cash flow.

 

As we look ahead to the year 2020, we see tremendous growth opportunities for our franchise system and for the entire nonalcoholic ready-to-drink beverage industry.  We are working closely with our bottling partners around the globe, leveraging our scale and the increased presence of our brands.  We remain confident in our ability to deliver against our strategies while laying the foundation for consistent, profitable and sustainable long-term growth, inspired by our 2020 Vision in a growing world of refreshment.”

 

FINANCIAL HIGHLIGHTS

 

·                  First quarter 2010 reported net revenues increased 5%.  Net revenues increased 1% on a comparable currency neutral basis, reflecting a 2% impact due to the deconsolidation of certain entities required by a change in accounting guidance, as well as geographic mix.

 

·                  First quarter 2010 reported operating income increased 17%, and comparable currency neutral operating income increased 9%.  This was driven by a continued strong focus on cost management and the leveraging of productivity initiatives as well as favorable timing of selling, general and administrative expenses.

 

·                  Cash from operations in the quarter increased 52% to $1.3 billion.  There were no share repurchases during the first quarter due to the pending Coca-Cola Enterprises (CCE) transaction.

 

·                  During the quarter, the Company announced its 48th consecutive annual dividend increase, raising the quarterly dividend 7% from 41 cents to 44 cents per common share. This is equivalent to an annual dividend of $1.76 per share, up from $1.64 per share in 2009.

 

 

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OPERATING REVIEW

 

		Three Months Ended April 2, 2010
		% Favorable / (Unfavorable)
		Unit Case Volume		Net Revenues		Operating Income		Comparable Currency Neutral Operating Income
Total Company		3		5		17		9
Eurasia & Africa		11		21		23		10
Europe		0		7		3		1
Latin America		4		15		33		27
North America		(2)		(6)		(1)		(1)
Pacific		5		5		5		(3)
Bottling Investments		3		9		—		—

 

Eurasia & Africa

 

·                  Our Eurasia and Africa Group’s unit case volume increased 11% in the quarter, cycling 3% growth in the prior year quarter.  Net revenues for the quarter increased 21%, reflecting a 13% increase in concentrate sales and a 13% positive currency impact, partially offset by  price/mix.  Reported operating income increased 23% in the quarter.  Comparable currency neutral operating income increased 10% in the quarter due to the increase in concentrate sales, partially offset by increased World Cup spending as well as country and product mix.

 

·                  In Eurasia and Africa, sparkling beverages increased 9% and still beverages increased 24% in the quarter, with brand Coca-Cola growing 8%.  The broad-based growth in unit case volume was led by a 29% increase in India and share gains across key beverage categories in that market.  Turkey unit case volume was up 18% and Africa also reported strong unit case volume growth in the quarter with the North and West Region growing 12% and the East and Central Region growing 9%.  Russia unit case volume was down 1%, with share gains in core sparkling beverages and showing sequential unit case volume improvement on strong brand Coca-Cola performance, up 12%.

 

 

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Europe

 

·                  Our Europe Group’s unit case volume in the quarter was even, with sequential improvement during the quarter.  Net revenues for the quarter increased 7%, primarily driven by positive price/mix of 2% and a 6% positive currency impact, partially offset by a 2% decline in concentrate sales.  Reported operating income increased 3% in the quarter and was impacted by certain one-time charges related to the recently announced new organizational structure.  Comparable currency neutral operating income increased 1% on positive price/mix and continued expense management.

 

·                  Unit case volume in the quarter was positively impacted by growth in France and the Benelux countries as well as in our Bottling Investments territories with 5% growth in Germany and 2% growth in the Nordic Region.  Unit case volume for brand Coca-Cola and Coca-Cola Zero was up 1% and 7%, respectively, with core sparkling value share gains across Europe.  Volume results were impacted by continued softness in Spain and the Adriatic and Balkans Region as challenging economic conditions persist.

 

Latin America

 

·                  Our Latin America Group delivered unit case volume growth of 4% in the quarter, cycling 5% growth in the prior year quarter.  Net revenues for the quarter increased 15%, reflecting positive price/mix of 10% along with 6% concentrate sales growth and a 9% positive currency impact, partially offset by the impact of the deconsolidation of certain entities due to a change in accounting guidance.  Reported operating income was up 33% in the quarter, with comparable currency neutral operating income up 27%, primarily reflecting favorable volume and pricing and continued management of expenses.

 

·                  Solid unit case volume growth in the quarter was led by a 12% increase in Brazil and a 10% increase in our Latin Center Region.  Mexico unit case volume was down 2% in the quarter due to unseasonably cold weather, but showed sequential improvement during the quarter.  Mexico continued to gain share in total NARTD beverages as well as in the sparkling and still beverage categories.

 

·                  In the quarter, the Latin America Group gained volume and value share in total NARTD beverages and across most key countries.  In addition, the group posted volume and value

 

 

Page 6 of 17

 

share gains in the sparkling beverage category and volume share gains in the still beverage category.  Brand Coca-Cola unit case volume was up 5% in the quarter.

 

North America

 

·                  Our North America Group’s unit case volume declined 2% in a challenging economic environment, combined with unseasonably cold weather in January and February.  Net revenues for the quarter decreased 6%, reflecting a 6% decrease in concentrate sales and a 1% impact from price/mix, partially offset by a 1% positive currency impact.  Reported and comparable currency neutral operating income decreased 1% in the quarter, reflecting the impact of lower concentrate sales partially offset by favorable timing of marketing expenses and lower cost of goods sold due to business mix and lower input costs.

 

·                  Unit case volume for sparkling beverages declined 1% in the quarter, showing sequential improvement quarter on quarter and positively impacted by strong marketing initiatives, including the Vancouver Olympics and Super Bowl advertising.  Brand Coca-Cola continued to increase its favorite brand score advantage versus the competition among the important teen and mom consumer segments.  Coca-Cola Zero again delivered double-digit unit case volume growth in the quarter, achieving 16 consecutive quarters of double-digit growth.

 

·                  Still beverage unit case volume was down 2% in the quarter, as premium still beverages continue to be impacted by economically pressured consumers.  In addition, the first quarter is cycling the shift of the Rockstar energy drink business out of the Coca-Cola system.  In the quarter, North America held value share in still beverages with expansion of Trademark Simply single-serve packaging in the cold drink channel.  Trademark Simply unit case volume grew 26% in the quarter.

 

Pacific

 

·                  Our Pacific Group delivered unit case volume growth of 5% in the quarter, cycling 4% growth in the prior year quarter.  Net revenues for the quarter increased 5%, primarily reflecting a 3% increase in concentrate sales and a 6% positive currency impact, partially offset by country and channel mix.  Reported operating income increased 5% in the quarter.  Comparable

 

 

Page 7 of 17

 

currency neutral operating income decreased 3% in the quarter, reflecting country and channel mix, primarily in Japan, which also drove lower cost of sales.

 

·                  Pacific Group unit case volume growth was led by China, Southeast and West Asia, the Philippines and Korea.  China volume grew 6% in the quarter, following 29% growth in the fourth quarter which was led by growth across our portfolio and new product launches.  China juices and juice drinks grew 16% in the quarter due to the continued strong momentum of Minute Maid Pulpy and the continued expansion of Minute Maid Pulpy Super Milky, launched in September 2009.  China achieved volume and value share gains in still beverages and the juices and juice drinks category as a result.

 

·                  In Japan, unit case volume declined 3% in the quarter, which is a sequential improvement from the prior two quarters.  While Japan performance continues to be impacted by a weak economy and unfavorable weather, we gained value share in total NARTD and still beverages with volume and value share gains in the coffee, sports drinks and water categories.  Importantly, Coca-Cola Zero maintained its strong momentum with unit case volume growth of 24% in the quarter, and I LOHAS natural mineral water in the award winning eco-crush PET bottle performed strongly in the competitive convenience store channel.

 

Bottling Investments

 

·                  Our Bottling Investments Group’s unit case volume increased 3% in the quarter, driven by growth across most markets and especially in India, the Philippines, China, Brazil and Germany, partially offset by the impact of the deconsolidation of certain bottlers due to a change in accounting guidance.  On a comparable basis, after adjusting for the impact of the deconsolidation, unit case volume increased 11%.  Net revenues for the quarter increased 9%, reflecting the 3% increase in unit case volume and a high single-digit currency benefit, partially offset by country mix.  Reported operating income improved to $6 million in the first quarter from a loss of $69 million in the prior year quarter, reflecting the increase in revenues, the benefits of disciplined capital investments and expense management, and the cycling of higher non-recurring items in the prior year period.

 

 

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FINANCIAL REVIEW

 

Net revenues for the quarter increased 5%, with comparable net revenues up 7%, reflecting a 2% impact due to the deconsolidation of certain entities required by a change in accounting guidance.  Net revenues were further impacted by a 6% positive currency impact and a 3% increase in concentrate sales, partially offset by a 2% impact from price/mix.  Net revenue was impacted during the quarter by geographic country mix as economic recovery in emerging markets continues to outpace the rest of the world.  At the same time, we effectively executed our revenue growth management initiatives to realize positive pricing.  This enabled us to grow global value share for the eleventh consecutive quarter while maintaining global volume share for the quarter.

 

Cost of goods sold decreased 2% in the quarter.  After adjusting for items impacting comparability, currency neutral cost of goods sold decreased 3%, as a result of a shift in mix.

 

Selling, general and administrative (SG&A) expenses increased 3% in the quarter.  After adjusting for items impacting comparability, SG&A expenses increased 5% in the quarter and decreased 1% on a currency neutral basis.  This decrease was primarily driven by our continued benefits associated with our ongoing productivity initiatives as well as timing of marketing expenses.

 

Reported and comparable operating income both increased 17% in the quarter.  Items impacting comparability reduced operating income by $96 million in 2010 and by $77 million in 2009.  These items were primarily related to restructuring charges and costs related to global productivity initiatives.  Currency positively impacted comparable operating income by 8% in the quarter.  Comparable currency neutral operating income was up 9% in the quarter.

 

For the first quarter of 2010, our reported earnings per share were $0.69, an increase of 19%.  Reported earnings per share for the first quarter of 2010 and 2009 included a net charge of $0.11 and $0.07 per share, respectively.  The net charge in both years included restructuring charges and costs related to global productivity initiatives.  The 2010 net charge also included the impact of the Venezuela currency devaluation.  After considering these items impacting comparability, earnings per share for the quarter were $0.80, an increase of 23%.  Earnings per share for the quarter were positively impacted by the relative weakness of the U.S. dollar versus other currencies around the world as compared to the prior year.

 

 

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Cash from operations was $1.3 billion in the quarter compared with $0.9 billion in the prior year, an increase of 52%.  This increase was primarily driven by our improved performance, including the effect of currency, and the cycling of higher than normal pension funding of $193 million in the prior year period.

 

Effective Tax Rate

 

The reported effective tax rate for the quarter was 25.4%.  The underlying effective tax rate on operations for the quarter was 23.2%.  The variance between the reported rate and the underlying rate was due to the tax impact of various separately disclosed items impacting comparability.

 

Our underlying effective tax rate does not reflect the impact of significant or unusual items and discrete events, which, if and when they occur, are separately recognized in the appropriate period.

 

Items Impacting Prior Year Results

 

First quarter 2009 results included a net charge of $0.07 per share primarily related to restructuring charges and asset write-downs.

 

NOTES

 

·                  All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.  References to cycling of growth rates compare the growth rate of the current period to that of the prior year comparable period.

 

·                  “Concentrate sales” represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.

 

·                  “Sparkling beverages” means nonalcoholic ready-to-drink beverages with carbonation, including energy drinks and carbonated waters and flavored waters.

 

·                  “Still beverages” means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees and sports drinks.

 

·                  All unit case volume percentage changes are computed based on average daily sales for

 

 

Page 10 of 17

 

the first quarter.  “Unit case” means a unit of measurement equal to 24 eight-ounce servings of finished beverage, and “unit case volume” means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.

 

·                  First quarter 2010 results were impacted by one fewer selling day, which will be offset by the impact of one additional selling day in fourth quarter 2010 results.

 

·                  Comparable growth rates for the first quarter 2010 reflect the impact of the deconsolidation of certain entities required by a change in accounting guidance.

 

·                  Our long-term growth targets referenced in this release are on a comparable currency neutral basis and exclude structural changes.

 

CONFERENCE CALL

 

We are hosting a conference call with investors and analysts to discuss our first quarter 2010 results today at 9:30 a.m. (EDT). We invite investors to listen to the live audiocast of the conference call at our website, http://www.thecoca-colacompany.com in the “Investors” section.  A replay in downloadable MP3 format will also be available within 24 hours after the audiocast on our website.  Further, the “Investors” section of our website includes a reconciliation of non-GAAP financial measures that may be used periodically by management when discussing our financial results with investors and analysts to our results as reported under GAAP.

 

 

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THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(UNAUDITED)

(In millions except per share data)

 

		Three Months Ended
		April 2, 2010			April 3, 2009			% Change
Net Operating Revenues		$	7,525		$	7,169		5
Cost of goods sold		2,541			2,590			(2)
Gross Profit		4,984			4,579			9
Selling, general and administrative expenses		2,705			2,624			3
Other operating charges		96			92			—
Operating Income		2,183			1,863			17
Interest income		60			60			0
Interest expense		85			85			0
Equity income (loss) - net		136			17			700
Other income (loss) - net		(115		)	(40		)	—
Income Before Income Taxes		2,179			1,815			20
Income taxes		553			456			21
Consolidated Net Income		1,626			1,359			20
Less: Net income attributable to noncontrolling interests		12			11			9
Net Income Attributable to Shareowners of The Coca-Cola Company		$	1,614		$	1,348		20
Diluted Net Income Per Share*		$	0.69		$	0.58		19
Average Shares Outstanding - Diluted*		2,327			2,319

 

*      For the three months ended April 2, 2010 and April 3, 2009, “Basic Net Income Per Share” was $0.70 for 2010 and $0.58 for 2009 based on “Average Shares Outstanding - Basic” of 2,304 for 2010 and 2,313 for 2009.  Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.

 

 

Page 12 of 17

 

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(UNAUDITED)

(In millions except par value)

 

		April 2, 2010			December 31, 2009
Assets
Current Assets
Cash and cash equivalents		$	5,684		$	7,021
Short-term investments		3,038			2,130
Total Cash, Cash Equivalents and Short-Term Investments		8,722			9,151
Marketable securities		72			62
Trade accounts receivable, less allowances of $44 and $55, respectively		3,705			3,758
Inventories		2,327			2,354
Prepaid expenses and other assets		2,382			2,226
Total Current Assets		17,208			17,551
Equity Method Investments		6,230			6,217
Other Investments, Principally Bottling Companies		519			538
Other Assets		2,095			1,976
Property, Plant and Equipment - net		9,036			9,561
Trademarks With Indefinite Lives		6,261			6,183
Goodwill		3,905			4,224
Other Intangible Assets		2,149			2,421
Total Assets		$	47,403		$	48,671
Liabilities and Equity
Current Liabilities
Accounts payable and accrued expenses		$	5,963		$	6,657
Loans and notes payable		6,670			6,749
Current maturities of long-term debt		546			51
Accrued income taxes		404			264
Total Current Liabilities		13,583			13,721
Long-Term Debt		4,419			5,059
Other Liabilities		2,763			2,965
Deferred Income Taxes		1,481			1,580
The Coca-Cola Company Shareowners’ Equity
Common stock, $0.25 par value; Authorized - 5,600 shares; Issued - 3,520 and 3,520 shares, respectively		880			880
Capital surplus		8,646			8,537
Reinvested earnings		42,136			41,537
Accumulated other comprehensive income (loss)		(1,445		)	(757		)
Treasury stock, at cost - 1,214 and 1,217 shares, respectively		(25,345		)	(25,398		)
Equity Attributable to Shareowners of The Coca-Cola Company		24,872			24,799
Equity Attributable to Noncontrolling Interests		285			547
Total Equity		25,157			25,346
Total Liabilities and Equity		$	47,403		$	48,671

 

 

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THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flow

(UNAUDITED)

(In millions)

 

		Three Months Ended
		April 2, 2010			April 3, 2009
Operating Activities
Consolidated net income		$	1,626		$	1,359
Depreciation and amortization		295			283
Stock-based compensation expense		53			53
Deferred income taxes		34			(20		)
Equity income or loss, net of dividends		(118		)	(3		)
Foreign currency adjustments		93			42
Gains on sales of assets, including bottling interests		(14		)	(5		)
Other operating charges		71			74
Other items		73			100
Net change in operating assets and liabilities		(787		)	(1,010		)
Net cash provided by operating activities		1,326			873
Investing Activities
Acquisitions and investments, principally beverage and bottling companies and trademarks		(6		)	(179		)
Purchases of other investments		(915		)	(6		)
Proceeds from disposals of bottling companies and other investments		14			37
Purchases of property, plant and equipment		(393		)	(467		)
Proceeds from disposals of property, plant and equipment		16			7
Other investing activities		(84		)	9
Net cash provided by (used in) investing activities		(1,368		)	(599		)
Financing Activities
Issuances of debt		2,773			5,758
Payments of debt		(2,922		)	(3,001		)
Issuances of stock		123			10
Purchases of stock for treasury		(2		)	—
Dividends		(1,015		)	(950		)
Net cash provided by (used in) financing activities		(1,043		)	1,817
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(252		)	24
Cash and Cash Equivalents
Net increase (decrease) during the period		(1,337		)	2,115
Balance at beginning of period		7,021			4,701
Balance at end of period		$	5,684		$	6,816

 

 

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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
		April 2, 2010 (1)			April 3, 2009 (6)			% Fav. / (Unfav.)		April 2, 2010 (2)			April 3, 2009 (7)			% Fav. / (Unfav.)		April 2, 2010 (2), (3), (4), (5)			April 3, 2009 (7), (8), (9)			% Fav. / (Unfav.)
Eurasia & Africa		$	611		$	503		21		$	254		$	207		23		$	258		$	202		28
Europe		1,262			1,180			7		712			692			3		722			697			4
Latin America		985			860			15		602			454			33		608			457			33
North America		1,932			2,056			(6	)	425			428			(1	)	424			426			0
Pacific		1,202			1,140			5		480			456			5		477			453			5
Bottling Investments		1,977			1,822			9		6			(69		)	—		110			(43		)	—
Corporate		18			17			6		(296		)	(305		)	3		(420		)	(377		)	(11	)
Eliminations		(462		)	(409		)	—		—			—			—		—			—			—
Consolidated		$	7,525		$	7,169		5		$	2,183		$	1,863		17		$	2,179		$	1,815		20

 

(1)	Intersegment revenues for the three months ended April 2, 2010, were approximately $36 million for Eurasia and Africa, $228 million for Europe, $54 million for Latin America, $15 million for North America, $104 million for Pacific and $25 million for Bottling Investments.
(2)	Operating income (loss) and income (loss) before income taxes for the three months ended April 2, 2010, were reduced by approximately $1 million for Eurasia and Africa, $28 million for Europe, $4 million for North America, $33 million for Bottling Investments and $30 million for Corporate, primarily due to the Company’s ongoing productivity initiatives, restructuring charges and deal costs incurred in connection with our definitive agreements to acquire the assets and liabilities of CCE’s North American operations and to sell our Norwegian and Swedish bottling operations to CCE.
(3)	Income (loss) before income taxes for the three months ended April 2, 2010, was reduced by approximately $29 million for Bottling Investments, primarily attributable to the Company’s proportionate share of asset impairment charges and restructuring costs recorded by equity method investees.
(4)	Income (loss) before income taxes for the three months ended April 2, 2010, was reduced by approximately $103 million for Corporate due to the remeasurement of our Venezuelan subsidiary’s net assets. Subsequent to December 31, 2009, the Venezuelan government announced a currency devaluation, and Venezuela was determined to be a hyperinflationary economy.
(5)	Income (loss) before income taxes for the three months ended April 2, 2010, was reduced by approximately $23 million for Bottling Investments and $3 million for Corporate, primarily due to other-than-temporary impairments of available-for-sale securities.
(6)	Intersegment revenues for the three months ended April 3, 2009, were approximately $45 million for Eurasia and Africa, $200 million for Europe, $32 million for Latin America, $12 million for North America, $94 million for Pacific and $26 million for Bottling Investments.
(7)	Operating income (loss) and income (loss) before income taxes for the three months ended April 3, 2009, were reduced by approximately $5 million for North America, $65 million for Bottling Investments and $22 million for Corporate, primarily as a result of restructuring costs, productivity initiatives and an asset impairment.
(8)	Income (loss) before income taxes for the three months ended April 3, 2009, was reduced by approximately $51 million for Bottling Investments and $1 million for Corporate, primarily attributable to the Company’s proportionate share of asset impairment charges and restructuring costs recorded by equity method investees.
(9)	Income (loss) before income taxes for the three months ended April 3, 2009, was reduced by approximately $27 million for Corporate due to an other-than-temporary impairment of a cost method investment.

 

 

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THE COCA-COLA COMPANY AND SUBSIDIARIES

Reconciliation of GAAP and Non-GAAP Financial Measures

(UNAUDITED)

(In millions except per share data)

 

		Three Months Ended April 2, 2010																										% Change -
					Items Impacting Comparability																		After					After
		Reported (GAAP)			Asset Impairments/ Restructuring			Productivity Initiatives			Equity Investees			CCE Transaction			Certain Tax Matters			Other Items			Considering Items (Non-GAAP)			% Change - Reported (GAAP)		Considering Items  (Non-GAAP)
Net Operating Revenues		$	7,525																				$	7,525		5		7	(1)
Cost of goods sold		2,541																					2,541			(2	)	2	(2)
Gross Profit		4,984																					4,984			9		10	(3),(6)
Selling, general and administrative expenses		2,705																					2,705			3		5	(4)
Other operating charges		96			$	(40	)	$	(50	)				$	(6	)							—			—		—
Operating Income		2,183			40			50						6									2,279			17		17	(5),(6)
Interest income		60																					60			0		3
Interest expense		85																					85			0		5
Equity income (loss) - net		136									$	29											165			700		104
Other income (loss) - net		(115		)	26															$	103		14			—		—
Income Before Income Taxes		2,179			66			50			29			6						103			2,433			20		23
Income taxes		553			2			16			4			2			$	(13	)				564			21		22
Consolidated Net Income		1,626			64			34			25			4			13			103			1,869			20		23
Less: Net income attributable to noncontrolling interests		12																					12			9		33
Net Income Attributable to Shareowners of The Coca-Cola Company		$	1,614		$	64		$	34		$	25		$	4		$	13		$	103		$	1,857		20		23
Diluted Net Income Per Share		$	0.69		$	0.03		$	0.01		$	0.01		$	0.00		$	0.01		$	0.04		$	0.80	(7)	19		23
Average Shares Outstanding - Diluted		2,327			2,327			2,327			2,327			2,327			2,327			2,327			2,327
Gross Margin		66.2		%																			66.2		%
Operating Margin		29.0		%																			30.3		%
Effective Tax Rate		25.4		%																			23.2		%

 

		Three Months Ended April 3, 2009
					Items Impacting Comparability															After
		Reported (GAAP)			Asset Impairments/ Restructuring			Productivity Initiatives			Equity Investees			Certain Tax Matters			Accounting Guidance Changes			Considering Items (Non-GAAP)
Net Operating Revenues		$	7,169														$	(151	)	$	7,018
Cost of goods sold		2,590															(96		)	2,494
Gross Profit		4,579															(55		)	4,524
Selling, general and administrative expenses		2,624															(40		)	2,584
Other operating charges		92			$	(75	)	$	(17	)										—
Operating Income		1,863			75			17									(15		)	1,940
Interest income		60															(2		)	58
Interest expense		85															(4		)	81
Equity income (loss) - net		17									$	52					12			81
Other income (loss) - net		(40		)	27												(4		)	(17		)
Income Before Income Taxes		1,815			102			17			52						(5		)	1,981
Income taxes		456			3			6			13			$	(14	)	(3		)	461
Consolidated Net Income		1,359			99			11			39			14			(2		)	1,520
Less: Net income attributable to noncontrolling interests		11															(2		)	9
Net Income Attributable to Shareowners of The Coca-Cola Company		$	1,348		$	99		$	11		$	39		$	14		$	0		$	1,511
Diluted Net Income Per Share		$	0.58		$	0.04		$	0.00		$	0.02		$	0.01		$	0.00		$	0.65
Average Shares Outstanding - Diluted		2,319			2,319			2,319			2,319			2,319			2,319			2,319
Gross Margin		63.9		%																64.5		%
Operating Margin		26.0		%																27.6		%
Effective Tax Rate		25.1		%																23.3		% (8)

 

Notes:	Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains and accounting changes positively impacting net income are reflected as deductions to reported net income.
	The currency impact is equal to the difference between current year U.S. dollar amounts at current year exchange rates compared to current year U.S. dollar amounts recalculated using prior year comparable period exchange rates. In all cases, the exchange rates include the impact of hedging in the applicable periods.
(1)	Reported net operating revenue growth includes a negative impact of $151, or approximately 2%, due to items impacting comparability, which includes the effects of accounting guidance changes that are structural in nature. Net operating revenue growth after considering items impacting comparability for the three months ended April 2, 2010 includes a positive currency impact of approximately 6%. Currency neutral net operating revenue growth after considering items impacting comparability is 1%.
(2)	Cost of goods sold after considering items impacting comparability for the three months ended April 2, 2010 includes a positive currency impact of approximately 5%. Currency neutral cost of goods sold after considering items impacting comparability decreased 3%.
(3)	Gross profit after considering items impacting comparability for the three months ended April 2, 2010 includes a positive currency impact of approximately 7%. Currency neutral gross profit growth after considering items impacting comparability is 3%.
(4)	Selling, general and administrative expenses after considering items impacting comparability for the three months ended April 2, 2010 include a positive currency impact of approximately 5%. Currency neutral selling, general and administrative expenses after considering items impacting comparability decreased 1%. Items do not add due to rounding.
(5)	Operating income after considering items impacting comparability for the three months ended April 2, 2010 includes a positive currency impact of approximately 8%. Currency neutral operating income growth after considering items impacting comparability is 9%.
(6)	Currency neutral operating expense leverage after considering items impacting comparability for the three months ended April 2, 2010 is positive 6%, which is calculated by subtracting currency neutral gross profit growth after considering items impacting comparability of 3% from currency neutral operating income growth after considering items impacting comparability of 9%.
(7)	Per share amounts do not add due to rounding.
(8)	Effective tax rate after considering impact of net income attributable to noncontrolling interests:

 

			2009
	Income before income taxes of $1,981 less net income attributable to noncontrolling interests of $9		$	1,972
	Income taxes		$	461
	Effective tax rate after considering impact of net income attributable to noncontrolling interests		23.4		%

 

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. See the tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended April 2, 2010 and April 3, 2009. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.