Asset Impairments/Restructuring
Equity Investees
Gains on Sales of Assets
Certain Tax Matters (1)
Net Operating Revenues $7,733 $7,733 19 (2) 19
Cost of goods sold 2,736 ($6) 2,730 30 29
Gross Profit 4,997 6 5,003 14 15
Selling, general and administrative expenses 2,685 2,685 17 17
Other operating charges 42 (42) - -- --
Operating Income (3) 2,270 48 2,318 11 12
Interest income 54 54 15 15
Interest expense 102 102 62 62
Equity income - net 190 $89 279 (25) 21
Other income (loss) - net (4) $1 (3) -- --
Income Before Income Taxes 2,408 48 89 1 2,546 1 12
Income taxes 557 12 26 - ($30) 565 0 3
Net Income $1,851 $36 $63 $1 $30 $1,981 1 14
Diluted Net Income Per Share $0.80 $0.02 $0.03 $0.00 $0.01 $0.85 (4) 3 15
Average Shares Outstanding - Diluted 2,326 2,326 2,326 2,326 2,326 2,326
Gross Margin 64.6% 64.7%Operating Margin 29.4% 30.0%Effective Tax Rate 23.1% 22.2%
Asset Impairments/Restructuring
Equity Investee
Transaction Gains
Certain Tax Matters (1)
Net Operating Revenues $6,476 $6,476
Cost of goods sold 2,110 2,110
Gross Profit 4,366 4,366
Selling, general and administrative expenses 2,296 2,296
Other operating charges 31 ($31) -
Operating Income 2,039 31 2,070
Interest income 47 47
Interest expense 63 63
Equity income - net 252 ($21) 231
Other income (loss) - net 116 ($123) (7)
Income Before Income Taxes 2,391 31 (21) (123) 2,278
Income taxes 555 1 (2) 14 ($22) 546
Net Income $1,836 $30 ($19) ($137) $22 $1,732
Diluted Net Income Per Share $0.78 $0.01 ($0.01) ($0.06) $0.01 $0.74 (4)
Average Shares Outstanding - Diluted 2,352 2,352 2,352 2,352 2,352 2,352
Gross Margin 67.4% 67.4%Operating Margin 31.5% 32.0%Effective Tax Rate 23.2% 24.0%
Note: 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.
(1) Primarily related to changes in reserves related to certain tax matters.
(2) Net operating revenues excluding structural changes:2007 2006 % Change
Reported net operating revenues $7,733 $6,476 19% Structural changes (474) -- -- Net operating revenues excluding structural changes $7,259 $6,476 12%
(3) Operating income for the three months ended June 29, 2007 includes a positive currency impact of approximately 3%. Ongoing, currency neutral operating income growth is 9%.
(4) Per share amounts do not add due to rounding.
(In millions except per share data)
Three Months Ended June 29, 2007
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 resultsand results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trendsof the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also usesthese non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below forsupplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended June 29, 2007 and June 30, 2006. Non-GAAPfinancial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
THE COCA-COLA COMPANY AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Financial Measures
(UNAUDITED)
% Change - Reported (GAAP)
% Change - After
Considering Items
(Non-GAAP)Reported (GAAP)
After Considering
Items(Non-GAAP)
Reported (GAAP)
Items Impacting Comparability
Three Months Ended June 30, 2006Items Impacting Comparability
After Considering
Items(Non-GAAP)
Page 1 of 4
Asset Impairments/Restructuring
Equity Investees
Gains on Sales of Assets
Certain Tax Matters (1)
Net Operating Revenues $13,836 $13,836 18 18
Cost of goods sold 4,881 ($10) 4,871 27 27
Gross Profit 8,955 10 8,965 14 14
Selling, general and administrative expenses 5,010 5,010 15 15
Other operating charges 48 (48) - -- --
Operating Income (2) 3,897 58 3,955 13 13
Interest income 91 91 (22) (22)
Interest expense 173 173 37 37
Equity income - net 210 $162 372 (38) 14
Other income (loss) - net 112 ($136) (24) -- --
Income Before Income Taxes 4,137 58 162 (136) 4,221 7 11
Income taxes 1,024 14 26 (73) ($41) 950 11 4
Net Income $3,113 $44 $136 ($63) $41 $3,271 6 13
Diluted Net Income Per Share $1.34 $0.02 $0.06 ($0.03) $0.02 $1.41 7 15
Average Shares Outstanding - Diluted 2,324 2,324 2,324 2,324 2,324 2,324
Gross Margin 64.7% 64.8%Operating Margin 28.2% 28.6%Effective Tax Rate 24.8% 22.5%
Asset Impairments/Restructuring
Equity Investee
Transaction Gains
Certain Tax Matters (1)
Net Operating Revenues $11,702 $11,702
Cost of goods sold 3,836 3,836
Gross Profit 7,866 7,866
Selling, general and administrative expenses 4,356 4,356
Other operating charges 76 ($76) -
Operating Income 3,434 76 3,510
Interest income 117 117
Interest expense 126 126
Equity income - net 338 ($12) 326
Other income (loss) - net 103 ($123) (20)
Income Before Income Taxes 3,866 76 (12) (123) 3,807
Income taxes 924 8 (1) 14 ($32) 913
Net Income $2,942 $68 ($11) ($137) $32 $2,894
Diluted Net Income Per Share $1.25 $0.03 $0.00 ($0.06) $0.01 $1.23
Average Shares Outstanding - Diluted 2,359 2,359 2,359 2,359 2,359 2,359
Gross Margin 67.2% 67.2%Operating Margin 29.3% 30.0%Effective Tax Rate 23.9% 24.0%
Note: 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.
(1) Primarily related to changes in reserves related to certain tax matters.
(2) Operating income for the six months ended June 29, 2007 includes a positive currency impact of approximately 3%. Ongoing, currency neutral operating income growth is 10%.
% Change - After
Considering Items
(Non-GAAP)Reported (GAAP)
After Considering
Items(Non-GAAP)
The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes thatcertain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons betweencurrent results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflectionof 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'sperformance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the six months ended June29, 2007 and June 30, 2006. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported resultsprepared in accordance with GAAP.
Items Impacting Comparability
(In millions except per share data)
Six Months Ended June 29, 2007
THE COCA-COLA COMPANY AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Financial Measures
(UNAUDITED)
Six Months Ended June 30, 2006Items Impacting Comparability
After Considering
Items(Non-GAAP)
% Change - Reported (GAAP)
Reported (GAAP)
Page 2 of 4
Items Impacting Comparability
Items Impacting Comparability
Asset Impairments/Restructuring
Asset Impairments/Restructuring
% Favorable (Unfavorable) -
Reported (GAAP)
% Favorable (Unfavorable) -
After Considering Items
(Non-GAAP)
Africa $79 $18 $97 $87 $87 (9) 11
Eurasia 162 162 126 126 29 29European Union 829 5 834 687 $27 714 21 17Latin America 413 2 415 346 346 19 20North America 500 500 493 493 1 1Pacific 506 1 507 492 2 494 3 3Bottling Investments 75 23 98 87 2 89 (14) 10Corporate (294) (1) (295) (279) (279) (5) (6)Consolidated $2,270 $48 $2,318 $2,039 $31 $2,070 11 12
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 andresults in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of thebusiness 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 Table below for supplementalfinancial data and corresponding reconciliations to GAAP financial measures for the three months ended June 29, 2007 and June 30, 2006. Non-GAAP financialmeasures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
Reported (GAAP)
After Considering
Items (Non-GAAP)
Reported (GAAP)
After Considering
Items (Non-GAAP)
(UNAUDITED)(In millions)
THE COCA-COLA COMPANY AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended June 30, 2006Three Months Ended June 29, 2007
Operating Income (Loss) by Segment
Page 3 of 4
Items Impacting Comparability
Items Impacting Comparability
Asset Impairments/Restructuring
Asset Impairments/Restructuring
% Favorable (Unfavorable) -
Reported (GAAP)
% Favorable (Unfavorable) -
After Considering Items
(Non-GAAP)
Africa $191 $20 $211 $190 $190 1 11
Eurasia 249 249 190 190 31 31European Union 1,433 5 1,438 1,142 $27 1,169 25 23Latin America 828 2 830 695 695 19 19North America 847 847 881 881 (4) (4)Pacific 878 1 879 855 5 860 3 2Bottling Investments 73 29 102 30 44 74 143 38Corporate (602) 1 (601) (549) (549) (10) (9)Consolidated $3,897 $58 $3,955 $3,434 $76 $3,510 13 13
Six Months Ended June 30, 2006Six Months Ended June 29, 2007
Operating Income (Loss) by Segment
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 andresults in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of thebusiness 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 Table below for supplementalfinancial data and corresponding reconciliations to GAAP financial measures for the six months ended June 29, 2007 and June 30, 2006. Non-GAAP financial measuresshould be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
Reported (GAAP)
After Considering
Items (Non-GAAP)
Reported (GAAP)
After Considering
Items (Non-GAAP)
(UNAUDITED)(In millions)
THE COCA-COLA COMPANY AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Financial Measures
Page 4 of 4