The Coca-Cola Company Reports Third Quarter 2015 Results

CokeATLANTA–(BUSINESS WIRE)–The Coca-Cola Company today reported third quarter 2015 operating results. “Our third quarter results were in line with our expectations and reflect the continued execution of our strategic initiatives to restore momentum, which are beginning to take hold across our global business,” said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. “By aggressively driving productivity and streamlining the business, we are funding investments to accelerate growth. We have aligned and incented the organization against a clear revenue segmentation strategy. Finally, we have announced significant steps that evolve and strengthen our unparalleled global distribution system, including the planned creation of Coca-Cola Beverages Africa, Coca-Cola European Partners, and most recently in the United States, the National Product Supply System. Despite a continued challenging macro environment, all of us at The Coca-Cola Company remain confident in our strategies and committed to the creation of long-term shareowner value.”

THIRD QUARTER 2015 OPERATING REVIEW

TOTAL COMPANY

Percent Change
Third Quarter YTD
Unit Case Volume 3 2

Sparkling Beverages

2 1
Still Beverages 6 4
Concentrate Sales/Reported Volume 0 3
Price/Mix 3 2
Currency (8) (7)
Acquisitions & Divestitures 0 0
Reported Net Revenues (5) (2)
Organic Revenues * 3 5
Reported Income Before Taxes (35) (2)
Comparable CN Income Before Taxes (Structurally Adjusted) * 8 8

* Organic revenue and comparable currency neutral (CN) income before taxes (structurally adjusted) are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • We had positive organic revenue growth in each of our operating groups except for Asia Pacific in the quarter, and we gained global value share in nonalcoholic ready-to-drink (NARTD) beverages. Organic revenue growth was driven by 3 points of positive price/mix and reflects positive pricing and packaging initiatives across many key markets. Price/mix also benefited from geographic mix due to the strong performance of certain Company-owned bottling operations within our Bottling Investments group. After adjusting for the six additional days in the first quarter, concentrate sales growth trailed unit case volume growth year to date. We expect concentrate sales and unit case sales to be generally in line for the full year.
  • We gained global value share in sparkling beverages in the quarter. Global sparkling beverage volume growth was led by 1% growth in Trademark Coca-Cola which included 1% growth in brand Coca-Cola and 8% growth in Coke Zero, partially offset by an 8% decline in Diet Coke. Low single-digit growth in Sprite and Fanta also contributed to global sparkling beverage volume growth in the quarter.
  • We gained global value share in still beverages and gained value and volume share in the juice and juice drinks and ready-to-drink tea categories in the quarter. Global still beverage volume growth reflects 4% growth in ready-to-drink tea, 5% growth in sports drinks and 11% growth in packaged water.
  • Comparable currency neutral income before taxes (structurally adjusted) outpaced organic revenue growth in the quarter primarily due to gross margin expansion and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments, a decrease in net interest income and lower equity income.
  • The reported effective tax rate and the underlying annual effective tax rate in the quarter were 15.8% and 22.5%, respectively. The variance between the reported rate and the underlying rate was due to the tax effect of various items impacting comparability, separately disclosed in the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
  • Reported EPS was $0.33 and comparable EPS was $0.51 in the quarter. Items impacting comparability decreased reported EPS by a net $0.18 and were primarily related to noncash charges related to refranchising certain territories in North America and costs associated with our previously announced productivity program.
  • Fluctuations in foreign currency exchange rates resulted in a 12 point headwind on comparable operating income, income before taxes and EPS in the quarter.
  • Year-to-date cash from operations was $8.4 billion, up 5%. The increase was primarily due to efficient management of working capital and the impact of six additional days in the first quarter, partially offset by fluctuations in foreign currency exchange rates and the impact of refranchised territories in North America.
  • Year-to-date net share repurchases totaled $1.3 billion.

EURASIA AND AFRICA

Percent Change
Third Quarter YTD
Unit Case Volume 4 4
Sparkling Beverages 3 3
Still Beverages 6 5
Concentrate Sales 4 4
Price/Mix (2) 0
Currency (15) (12)
Acquisitions & Divestitures (2) (1)
Reported Net Revenues (15) (9)
Organic Revenues * 2 4
Reported Income Before Taxes (22) (12)
Comparable CN Income Before Taxes * (8) 2

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue growth in the quarter was driven by concentrate sales growth, partially offset by unfavorable geographic mix. Acquisitions and divestitures reflect the unfavorable impact from the brand transfer agreement associated with the closing of the transaction with Monster Beverage Corporation. After adjusting for the additional selling days in the first quarter and unit case volume related to joint ventures that do not have equivalent concentrate sales, concentrate sales growth trailed unit case volume growth year to date primarily due to timing of shipments in the prior year. We expect concentrate sales and unit case sales to be generally in line for the full year.
  • Comparable currency neutral income before taxes trailed organic revenue growth in the quarter primarily due to lower equity income associated with our joint ventures in the juice and juice drinks category in the region and a low single-digit unfavorable impact from the closing of the transaction with Monster Beverage Corporation.
  • We gained value and volume share in total NARTD beverages, sparkling beverages and still beverages in the quarter. Sparkling beverage volume growth was driven by 4% growth in Trademark Coca-Cola and 7% growth in Sprite. Still beverage volume growth was primarily driven by 6% growth in juice and juice drinks and 8% growth in packaged water. Unit case volume growth was driven by 11% growth in our Central, East & West Africa business unit and 7% growth in our Middle East & North Africa business unit. Growth in these markets was partially offset by a high single-digit decline in Russia.

EUROPE

Percent Change
Third Quarter YTD
Unit Case Volume 4 1
Sparkling Beverages 2 0
Still Beverages 12 8
Concentrate Sales 2 3
Price/Mix 0 0
Currency (8) (10)
Acquisitions & Divestitures (1) 0
Reported Net Revenues (7) (7)
Organic Revenues * 3 3
Reported Income Before Taxes (4) (4)
Comparable CN Income Before Taxes * (2) 0

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue growth in the quarter was driven by concentrate sales growth, including strong growth in our expanding still beverage portfolio. Positive price/mix across certain key markets was offset by unfavorable geographic mix primarily due to strong concentrate sales growth in our Central and Southern Europe business unit. Acquisitions and divestitures reflect the unfavorable impact from the brand transfer agreement associated with the closing of the transaction with Monster Beverage Corporation. After adjusting for the additional selling days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
  • Comparable currency neutral income before taxes trailed organic revenue growth in the quarter primarily due to increased marketing investments and a low single-digit unfavorable impact from the closing of the transaction with Monster Beverage Corporation, partially offset by the impact of ongoing productivity initiatives.
  • Sparkling beverage volume growth was driven by 9% growth in Coke Zero and 6% growth in Fanta, partially offset by a 6% decline in Diet Coke/Coke Light. Still beverage volume growth was driven by the continued expansion of our still beverage portfolio and included double-digit growth in packaged water, sports drinks and the innocent brand. We gained value and volume share in still beverages and the packaged water category. We also gained value share in the sports drinks and juice and juice drinks categories.

LATIN AMERICA

Percent Change
Third Quarter YTD
Unit Case Volume 2 1
Sparkling Beverages 1 0
Still Beverages 6 4
Concentrate Sales 1 3
Price/Mix 13 9
Currency (28) (22)
Acquisitions & Divestitures 0 0
Reported Net Revenues (14) (10)
Organic Revenues * 14 12
Reported Income Before Taxes (18) (16)
Comparable CN Income Before Taxes * 15 11

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue growth in the quarter reflects positive price/mix in each of our four business units, particularly in the higher inflationary markets within our South Latin business unit. After adjusting for the additional selling days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
  • Comparable currency neutral income before taxes modestly outpaced organic revenue growth in the quarter as positive operating leverage driven by organic revenue growth was mostly offset by increased marketing investments.
  • We gained value and volume share in sparkling beverages and still beverages (excluding packaged water) in the quarter. Still beverage volume growth included 8% growth in juice and juice drinks and double-digit growth in sports drinks. Unit case volume growth was driven by 4% growth in both Mexico and our Latin Center business unit and 3% growth in our South Latin business unit. Growth in these markets was partially offset by a 4% decline in Brazil.

NORTH AMERICA

Percent Change
Third Quarter YTD
Unit Case Volume 1 1
Sparkling Beverages (1) (1)
Still Beverages 7 4
Concentrate Sales 0 2
Price/Mix 3 3
Currency (1) (1)
Acquisitions & Divestitures (1) (1)
Reported Net Revenues 1 3
Organic Revenues * 3 6
Reported Income Before Taxes NM (22)
Comparable CN Income Before Taxes * 4 11

NM: Calculation is not meaningful.

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue growth in the quarter was driven by positive price/mix. Acquisitions and divestitures primarily reflect the unfavorable impact of refranchised territories, partially offset by the benefit of our expanded distribution of Monster beverage products in North America. The expanded distribution contributed 1 point of unit case volume growth in both the quarter and year to date. After adjusting for the additional selling days in the first quarter and the impact of acquired volume, concentrate sales growth and unit case volume growth were in line year to date.
  • Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter primarily due to lower input costs and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments and a high single-digit unfavorable impact from structural changes. Structural changes included 5 points related to refranchised territories, as well as a net unfavorable impact from the brand transfer agreement associated with the closing of the transaction with Monster Beverage Corporation and expanded distribution of Monster beverage products.
  • We gained value share in total NARTD beverages for the 22nd consecutive quarter driven by an increase in both the quality and quantity of our marketing investments and our continued rational approach to pricing and disciplined price/pack strategies.

ASIA PACIFIC

Percent Change
Third Quarter YTD
Unit Case Volume 4 3
Sparkling Beverages 3 3
Still Beverages 6 3
Concentrate Sales (2) 3
Price/Mix 1 (1)
Currency (9) (9)
Acquisitions & Divestitures (1) 0
Reported Net Revenues (11) (7)
Organic Revenues * (1) 2
Reported Income Before Taxes (11) (8)
Comparable CN Income Before Taxes * (2) 0

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue declined in the quarter driven by a decrease in concentrate sales, partially offset by positive price/mix. Acquisitions and divestitures primarily reflect the unfavorable impact from the brand transfer agreement associated with the closing of the transaction with Monster Beverage Corporation. After adjusting for the additional selling days in the first quarter, concentrate sales growth trailed unit case volume growth year to date primarily due to timing of shipments in the prior year. We expect concentrate sales and unit case sales to be generally in line for the full year.
  • Comparable currency neutral income before taxes trailed organic revenue growth in the quarter primarily due to a low single-digit unfavorable impact from the closing of the transaction with Monster Beverage Corporation, partially offset by the efficient management of operating expenses.
  • Unit case volume growth in the quarter reflected 5% growth in China and 4% growth in India, partially offset by a 2% decline in Japan. China’s performance included double-digit growth in Trademark Coca-Cola and we gained value and volume share in sparkling beverages.

BOTTLING INVESTMENTS

Percent Change
Third Quarter YTD
Unit Case Volume 11 7
Reported Volume 8 7
Price/Mix (5) (4)
Currency (11) (9)
Acquisitions & Divestitures 4 2
Reported Net Revenues (4) (4)
Organic Revenues * 3 4
Reported Income Before Taxes (27) (21)
Comparable CN Income Before Taxes * 15 15

* Organic revenue and comparable currency neutral (CN) income before taxes are non-GAAP financial measures. Refer to the Notes and Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

  • Organic revenue growth in the quarter was driven by reported volume growth, partially offset by unfavorable price/mix primarily attributable to geographic, channel and product mix.
  • Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter primarily due to the continued strong performance of our Company-owned bottling operations in several markets including Germany, China and Vietnam.

2015 OUTLOOK

  • We estimate that the net impact of structural items on full-year 2015 results will be a 1 point headwind on both net revenues and income before taxes.
  • We expect fluctuations in foreign currency exchange rates to have an unfavorable impact on our comparable 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 7 point headwind on net revenues, an 11 point headwind on operating income and an 8 point headwind on income before taxes for the full year. For the fourth quarter, we estimate that currency will be an approximate 6 point headwind on net revenues, a 12 point headwind on operating income and a 10 point headwind on income before taxes.
  • The underlying effective annual tax rate on operations for 2015 is expected to be 22.5%.
  • We expect full-year 2015 net share repurchases of $2.0 to $2.5 billion.
  • We expect full-year 2015 comparable currency neutral EPS growth of 5%, in line with the range we laid out at the beginning of the year.

ITEMS IMPACTING COMPARABILITY

  • For details on items impacting comparability in the quarter, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.

NOTES

  • All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.
  • “Comparable currency neutral income before taxes” is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability and the impact of changes in foreign currency exchange rates. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
  • “Comparable currency neutral income before taxes (structurally adjusted)” is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability, the impact of changes in foreign currency exchange rates and the impact of structural items. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
  • “Concentrate sales” represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.
  • “Concentrate sales/reported volume” represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For our Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only and is computed on a reported basis.
  • “Organic revenue” is a non-GAAP financial measure that excludes or otherwise adjusts for the impact of changes in foreign currency exchange rates and acquisitions and divestitures, as applicable. For details on these adjustments, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
  • “Sparkling beverages” means NARTD beverages with carbonation, including carbonated energy drinks and waters.
  • “Still beverages” means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees, sports drinks and noncarbonated energy drinks.
  • All references to volume and volume percentage changes indicate unit case volume, unless otherwise noted. All volume percentage changes are computed based on average daily sales, unless otherwise noted. “Unit case” means a unit of measurement equal to 24 eight ounce servings of finished beverage. “Unit case volume” means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
  • First quarter 2015 financial results were impacted by six additional days, and fourth quarter 2015 financial results will be impacted by six fewer days. Unit case volume results for the quarters are not impacted by the variance in selling days due to the average daily sales computation referenced above.
  • The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non- GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.

CONFERENCE CALL

We are hosting a conference call with investors and analysts to discuss third quarter 2015 results today, Oct. 21, 2015 at 9:30 a.m. EDT. We invite investors to listen to a live audiocast of the conference call on the Company’s website, http://www.coca-colacompany.com in the “Investors” section. A replay in downloadable MP3 format and a transcript of the call will also be available within 24 hours after the audiocast on the Company’s website. Further, the “Investors” section of the website includes a reconciliation of non-GAAP financial measures, which may be used periodically by management when discussing financial results with investors and analysts, to the Company’s results as reported under GAAP.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(UNAUDITED)
(In millions except per share data)
Three Months Ended
October 2, September 26, %
2015 2014

Change1

Net Operating Revenues $ 11,427 $ 11,976 (5 )
Cost of goods sold 4,577 4,630 (1 )
Gross Profit 6,850 7,346 (7 )
Selling, general and administrative expenses 4,207 4,507 (7 )
Other operating charges 264 128 107
Operating Income 2,379 2,711 (12 )
Interest income 155 169 (8 )
Interest expense 138 113 22
Equity income (loss) — net 200 205 (2 )
Other income (loss) — net (871 ) (312 ) (180 )
Income Before Income Taxes 1,725 2,660 (35 )
Income taxes 272 538 (49 )
Consolidated Net Income 1,453 2,122 (32 )
Less: Net income (loss) attributable to noncontrolling interests 4 8 (50 )
Net Income Attributable to Shareowners of The Coca-Cola Company $ 1,449 $ 2,114 (31 )
Diluted Net Income Per Share2 $ 0.33 $ 0.48 (31 )
Average Shares Outstanding — Diluted2 4,399 4,445
1 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the three months ended October 2, 2015 and September 26, 2014, basic net income per share was $0.33 for 2015 and $0.48 for 2014 based on average shares outstanding — basic of 4,349 million for 2015 and 4,383 million for 2014. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(UNAUDITED)
(In millions except per share data)
Nine Months Ended
October 2, September 26, %
2015 2014

Change1

Net Operating Revenues $ 34,294 $ 35,126 (2 )
Cost of goods sold 13,428 13,532 (1 )
Gross Profit 20,866 21,594 (3 )
Selling, general and administrative expenses 12,490 12,880 (3 )
Other operating charges 1,166 457 155
Operating Income 7,210 8,257 (13 )
Interest income 459 436 5
Interest expense 713 344 107
Equity income (loss) — net 402 530 (24 )
Other income (loss) — net 709 (630 )
Income Before Income Taxes 8,067 8,249 (2 )
Income taxes 1,937 1,896 2
Consolidated Net Income 6,130 6,353 (4 )
Less: Net income (loss) attributable to noncontrolling interests 16 25 (36 )
Net Income Attributable to Shareowners of The Coca-Cola Company $ 6,114 $ 6,328 (3 )
Diluted Net Income Per Share2 $ 1.39 $ 1.42 (2 )
Average Shares Outstanding — Diluted2 4,410 4,454
1 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the nine months ended October 2, 2015 and September 26, 2014, basic net income per share was $1.40 for 2015 and $1.44 for 2014 based on average shares outstanding — basic of 4,357 million for 2015 and 4,392 million for 2014. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(UNAUDITED)
(In millions except par value)
October 2, December 31,
2015 2014

ASSETS

Current Assets
Cash and cash equivalents $ 9,983 $ 8,958
Short-term investments 9,177 9,052
Total Cash, Cash Equivalents and Short-Term Investments 19,160 18,010
Marketable securities 3,614 3,665
Trade accounts receivable, less allowances of $361 and $331, respectively 4,028 4,466
Inventories 2,910 3,100
Prepaid expenses and other assets 3,029 3,066
Assets held for sale 3,853 679
Total Current Assets 36,594 32,986
Equity Method Investments 12,504 9,947
Other Investments 2,430 3,678
Other Assets 4,446 4,407
Property, Plant and Equipment — net 12,615 14,633
Trademarks With Indefinite Lives 6,032 6,533
Bottlers’ Franchise Rights With Indefinite Lives 6,133 6,689
Goodwill 11,357 12,100
Other Intangible Assets 897 1,050
Total Assets $ 93,008 $ 92,023

LIABILITIES AND EQUITY

Current Liabilities
Accounts payable and accrued expenses $ 9,877 $ 9,234
Loans and notes payable 17,545 19,130
Current maturities of long-term debt 2,692 3,552
Accrued income taxes 383 400
Liabilities held for sale 1,048 58
Total Current Liabilities 31,545 32,374
Long-Term Debt 25,949 19,063
Other Liabilities 4,194 4,389
Deferred Income Taxes 5,053 5,636
The Coca-Cola Company Shareowners’ Equity

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

1,760 1,760
Capital surplus 13,715 13,154
Reinvested earnings 65,209 63,408
Accumulated other comprehensive income (loss) (10,813 ) (5,777 )
Treasury stock, at cost — 2,698 and 2,674 shares, respectively (43,822 ) (42,225 )
Equity Attributable to Shareowners of The Coca-Cola Company 26,049 30,320
Equity Attributable to Noncontrolling Interests 218 241
Total Equity 26,267 30,561
Total Liabilities and Equity $ 93,008 $ 92,023

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(UNAUDITED)
(In millions)
Nine Months Ended
October 2, September 26,
2015 2014
Operating Activities
Consolidated net income $ 6,130 $ 6,353
Depreciation and amortization 1,443 1,477
Stock-based compensation expense 171 143
Deferred income taxes 212 (179 )
Equity (income) loss — net of dividends (150 ) (259 )
Foreign currency adjustments (76 ) 305
Significant (gains) losses on sales of assets — net (550 ) 410
Other operating charges 697 192
Other items 859 38
Net change in operating assets and liabilities (346 ) (501 )
Net cash provided by operating activities 8,390 7,979
Investing Activities
Purchases of investments (12,006 ) (14,098 )
Proceeds from disposals of investments 10,403 9,558

Acquisitions of businesses, equity method investments and nonmarketable securities

(2,489 ) (343 )

Proceeds from disposals of businesses, equity method investments and nonmarketable securities

416 73
Purchases of property, plant and equipment (1,670 ) (1,618 )
Proceeds from disposals of property, plant and equipment 50 150
Other investing activities (117 ) (280 )
Net cash provided by (used in) investing activities (5,413 ) (6,558 )
Financing Activities
Issuances of debt 34,298 33,292
Payments of debt (30,159 ) (28,494 )
Issuances of stock 732 1,058
Purchases of stock for treasury (1,966 ) (2,963 )
Dividends (4,313 ) (2,680 )
Other financing activities 230 (409 )
Net cash provided by (used in) financing activities (1,178 ) (196 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents (774 ) (555 )
Cash and Cash Equivalents
Net increase (decrease) during the period 1,025 670
Balance at beginning of period 8,958 10,414
Balance at end of period $ 9,983 $ 11,084

THE COCA-COLA COMPANY AND SUBSIDIARIES

Operating Segments

(UNAUDITED)
(In millions)

Three Months Ended

Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income Taxes

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

Eurasia & Africa $ 603 $ 709 (15 ) $ 208 $ 265 (22 ) $ 212 $ 272 (22 )
Europe 1,330 1,429 (7 ) 722 752 (4 ) 733 763 (4 )
Latin America 1,012 1,177 (14 ) 538 653 (18 ) 535 654 (18 )
North America 5,639 5,599 1 681 760 (10 ) (116 ) 486
Asia Pacific 1,406 1,575 (11 ) 571 638 (11 ) 576 648 (11 )
Bottling Investments 1,746 1,823 (4 ) (11 ) 14 150 205 (27 )
Corporate 55 43 33 (330 ) (371 ) 11 (365 ) (368 ) 1
Eliminations (364 ) (379 ) 4
Consolidated $ 11,427 $ 11,976 (5 ) $ 2,379 $ 2,711 (12 ) $ 1,725 $ 2,660 (35 )

Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.

1 During the three months ended October 2, 2015, intersegment revenues were $15 million for Eurasia and Africa, $154 million for Europe, $19 million for Latin America, $4 million for North America, $159 million for Asia Pacific and $13 million for Bottling Investments. During the three months ended September 26, 2014, intersegment revenues were $187 million for Europe, $16 million for Latin America, $3 million for North America, $154 million for Asia Pacific and $19 million for Bottling Investments.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Operating Segments

(UNAUDITED)
(In millions)

Nine Months Ended

Net Operating Revenues 1 Operating Income (Loss) Income (Loss) Before Income Taxes

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

October 2,
2015

September 26,

2014

% Fav. /
(Unfav.)

Eurasia & Africa $ 1,899 $ 2,099 (9 ) $ 762 $ 858 (11 ) $ 785 $ 893 (12 )
Europe 3,977 4,291 (7 ) 2,274 2,363 (4 ) 2,300 2,398 (4 )
Latin America 3,051 3,406 (10 ) 1,641 1,954 (16 ) 1,649 1,957 (16 )
North America 16,657 16,109 3 2,079 2,015 3 1,245 1,593 (22 )
Asia Pacific 4,292 4,613 (7 ) 1,876 2,041 (8 ) 1,890 2,059 (8 )
Bottling Investments 5,354 5,556 (4 ) 34 26 30 380 481 (21 )
Corporate 120 126 (4 ) (1,456 ) (1,000 ) (46 ) (182 ) (1,132 ) 84
Eliminations (1,056 ) (1,074 ) 2
Consolidated $ 34,294 $ 35,126 (2 ) $ 7,210 $ 8,257 (13 ) $ 8,067 $ 8,249 (2 )

Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.

1 During the nine months ended October 2, 2015, intersegment revenues were $22 million for Eurasia and Africa, $449 million for Europe, $56 million for Latin America, $14 million for North America, $476 million for Asia Pacific and $39 million for Bottling Investments. During the nine months ended September 26, 2014, intersegment revenues were $530 million for Europe, $46 million for Latin America, $13 million for North America, $432 million for Asia Pacific and $53 million for Bottling Investments.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Reconciliation of GAAP and Non-GAAP Financial Measures

(UNAUDITED)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.

ITEMS IMPACTING COMPARABILITY

The following information is provided to give qualitative and quantitative information related to items impacting comparability. Items impacting comparability are not defined terms within GAAP. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies. We determine which items to consider as “items impacting comparability” based on how management views our business; makes financial, operating and planning decisions; and evaluates the Company’s ongoing performance. Items such as charges, gains and accounting changes which are viewed by management as impacting only the current period or the comparable period, but not both, or as relating to different and unrelated underlying activities or events across comparable periods, are generally considered “items impacting comparability”. In addition, we provide the impact that changes in foreign currency exchange rates had on our financial results (“currency neutral”).

Asset Impairments and Restructuring

Restructuring

During the three and nine months ended October 2, 2015, the Company recorded charges of $75 million and $204 million, respectively. The Company recorded charges of $34 million and $142 million during the three and nine months ended September 26, 2014, respectively. These charges were related to the integration of our German bottling and distribution operations.

Productivity and Reinvestment

During the three and nine months ended October 2, 2015, the Company recorded charges of $141 million and $323 million, respectively, related to our productivity and reinvestment program. The Company also recorded charges of $84 million and $259 million during the three and nine months ended September 26, 2014, respectively. These productivity and reinvestment initiatives are focused on four key areas: restructuring the Company’s global supply chain, including manufacturing in North America; implementing zero-based work, an evolution of zero-based budget principles across the organization; streamlining and simplifying the Company’s operating model; and further driving increased discipline and efficiency in direct marketing investments. The savings realized from the program will enable the Company to fund marketing initiatives and innovation required to deliver sustainable net revenue growth. The savings will also support margin expansion and increased returns on invested capital over time.

Equity Investees

During the three and nine months ended October 2, 2015, the Company recorded a net gain of $3 million and a net charge of $79 million, respectively. During the three and nine months ended September 26, 2014, the Company recorded net charges of $8 million and $20 million, respectively. These amounts represent the Company’s proportionate share of unusual or infrequent items recorded by certain of our equity method investees.

Transaction Gains/Losses

During the three and nine months ended October 2, 2015, the Company recorded charges of $815 million and $848 million, respectively. The Company recorded charges of $270 million and $410 million during the three and nine months ended September 26, 2014, respectively. These charges were primarily due to the derecognition of intangible assets relating to the refranchising of territories in North America to certain of its unconsolidated bottling partners.

During the nine months ended October 2, 2015, the Company recorded a net gain of $1,402 million as a result of our transaction with Monster Beverage Corporation (“Monster”), primarily due to the difference in the recorded carrying value of the assets transferred, including an allocated portion of goodwill, compared to the value of the total assets and business acquired. This net gain was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. Additionally, under the terms of this transaction, the Company is required to discontinue selling energy products under certain trademarks, including one trademark in the glacéau portfolio. As a result, the Company recognized an impairment charge of $380 million in the line item other operating charges in our condensed consolidated statement of income upon the closing of the transaction with Monster, primarily related to the discontinuation of the energy products in the glacéau portfolio.

During the three and nine months ended October 2, 2015, the Company recorded an impairment charge of $38 million on a trademark in the glacéau portfolio. This charge was primarily a result of foreign currency exchange rate fluctuations that impacted the fair value of the asset.

In the fourth quarter of 2014, the owners of the majority interest of a Brazilian bottler exercised their option to acquire from us a 10 percent interest in the entity’s outstanding shares resulting in our recognizing an estimated loss of $32 million due to the exercise price being lower than our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of $6 million during the nine months ended October 2, 2015, calculated based on the final option price. Also during the nine months ended October 2, 2015, the Company recorded a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015.

During the three and nine months ended September 26, 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.

Other Items

Economic (Nondesignated) Hedges

The Company uses derivatives as economic hedges primarily to mitigate the price risk associated with the purchase of materials used in the manufacturing process as well as the purchase of vehicle fuel. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in fair values of these economic hedges are immediately recognized into earnings.

The Company excludes the net impact of mark-to-market adjustments for outstanding hedges and realized gains/losses for settled hedges from our non-GAAP financial information until the period in which the underlying exposure being hedged impacts our condensed consolidated statement of income. We believe this adjustment provides meaningful information related to the impact of our economic hedging activities. During the three months ended October 2, 2015 and September 26, 2014, the net impact of the Company’s adjustment related to our economic hedging activities described above resulted in an increase of $87 million and a decrease of $21 million, respectively, to our non-GAAP income before income taxes. During the nine months ended October 2, 2015 and September 26, 2014, the net impact of the Company’s adjustment related to our economic hedging activities described above resulted in an increase of $76 million and a decrease of $120 million, respectively, to our non-GAAP income before income taxes.

Restructuring and Transitioning Russian Juice Operations

During the three and nine months ended September 26, 2014, the Company recorded losses of $5 million and $30 million, respectively, related to restructuring and transitioning the Company’s Russian juice operations to an existing joint venture with an unconsolidated bottling partner.

Hyperinflationary Economies

During the three and nine months ended October 2, 2015, the Company recorded net charges of $3 million and $138 million, respectively, related to our Venezuelan operations. These charges were primarily a result of the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate, an impairment of a Venezuelan trademark due to higher exchange rates, and a write-down of receivables from our bottling partner in Venezuela. The write-down was recorded primarily as a result of the continued lack of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of the Venezuelan bolivar into U.S. dollars by our bottling partner to pay our receivables.

During the nine months ended September 26, 2014, the Company recorded charges of $268 million related to the devaluation of the Venezuelan bolivar, including a write-down of receivables from our bottling partner in Venezuela as well as our proportionate share of the charge incurred by our bottling partner in Venezuela, an equity method investee.

Donation to The Coca-Cola Foundation

During the nine months ended October 2, 2015, the Company recorded a charge of $100 million due to a contribution made to The Coca-Cola Foundation, which was recorded in the line item other operating charges in our condensed consolidated statement of income.

Early Extinguishment of Long-Term Debt

During the nine months ended October 2, 2015, the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt, which were recorded in the line item interest expense in our condensed consolidated statement of income.

Certain Tax Matters

During the three and nine months ended October 2, 2015, the Company recorded a net tax benefit of $6 million related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. During the three and nine months ended September 26, 2014, the Company recorded a net tax benefit of $29 million and a net tax charge of $2 million, respectively, related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties.

CURRENCY NEUTRAL

Management evaluates the operating performance of our Company and our international subsidiaries on a currency neutral basis. We determine our currency neutral operating results by dividing or multiplying, as appropriate, our current period actual U.S. dollar operating results, normalizing for certain structural items in hyperinflationary economies, by the current period actual exchange rates (that include the impact of current period currency hedging activities), to derive our current period local currency operating results. We then multiply or divide, as appropriate, the derived current period local currency operating results by the foreign currency exchange rates (that also include the impact of the comparable prior period currency hedging activities) used to translate the Company’s financial statements in the comparable prior year period to determine what the current period U.S. dollar operating results would have been if the foreign currency exchange rates had not changed from the comparable prior year period.

ORGANIC REVENUE

Organic revenue is a non-GAAP financial measure that excludes or otherwise adjusts for the impact of changes in foreign currency exchange rates and acquisitions and divestitures (including structural changes), as applicable. The adjustments related to acquisitions and divestitures for the three and nine months ended October 2, 2015 and September 26, 2014 consisted entirely of the structural changes discussed below.

STRUCTURAL CHANGES

Structural changes generally refer to acquisitions or dispositions of bottling, distribution or canning operations and consolidation or deconsolidation of bottling and distribution entities for accounting purposes. In 2015, the Company refranchised additional territories in North America to certain of its unconsolidated bottling partners; sold its global energy drink business to Monster; acquired Monster’s non-energy drink business; acquired an equity interest in Monster; amended its current distribution coordination agreements with Monster to expand into additional territories; and acquired a South African bottler. In 2014, the Company refranchised territories in North America to certain of its unconsolidated bottling partners; changed its process of buying and selling recyclable materials in North America; acquired bottling operations in Sri Lanka and Nepal; and restructured and transitioned its Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Accordingly, these activities have been included as structural items in our analysis of the impact of these changes on certain line items in our condensed consolidated statements of income.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Reconciliation of GAAP and Non-GAAP Financial Measures

(UNAUDITED)
(In millions except per share data)
Three Months Ended October 2, 2015
Selling,
Net Cost of general and Other
operating goods Gross Gross administrative operating Operating Operating
revenues sold profit margin expenses charges income margin
Reported (GAAP) $ 11,427 $ 4,577 $ 6,850 59.9 % $ 4,207 $ 264 $ 2,379 20.8 %
Items Impacting Comparability:
Asset Impairments/Restructuring (75 ) 75
Productivity & Reinvestment (141 ) 141
Equity Investees
Transaction Gains/Losses (44 ) 44
Other Items (27 ) (93 ) 66 4 (4 ) 66
Certain Tax Matters
After Considering Items (Non-GAAP) $ 11,400 $ 4,484 $ 6,916 60.7 % $ 4,211 $ $ 2,705 23.7 %
Three Months Ended September 26, 2014
Selling,
Net Cost of general and Other
operating goods Gross Gross administrative operating Operating Operating
revenues sold profit margin expenses charges income margin
Reported (GAAP) $ 11,976 $ 4,630 $ 7,346 61.3 % $ 4,507 $ 128 $ 2,711 22.6 %
Items Impacting Comparability:
Asset Impairments/Restructuring (34 ) 34
Productivity & Reinvestment (84 ) 84
Equity Investees
Transaction Gains/Losses (7 ) 7
Other Items 5 19 (14 ) (15 ) (3 ) 4
Certain Tax Matters
After Considering Items (Non-GAAP) $ 11,981 $ 4,649 $ 7,332 61.2 % $ 4,492 $ $ 2,840 23.7 %
Selling,
Net Cost of general and Other
operating goods Gross administrative operating Operating
revenues sold profit expenses charges income
% Change — Reported (GAAP) (5) (1) (7) (7) 107 (12)
% Currency Impact (8) (5) (9) (7) (12)
% Change — Currency Neutral Reported 3 4 2 1 (1)
% Change — After Considering Items

(Non-GAAP)

(5) (4) (6) (6) (5)
% Currency Impact After Considering Items (Non-GAAP) (8) (5) (9) (7) (12)
% Change — Currency Neutral After Considering Items (Non-GAAP) 3 2 4 1 8

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 October 2, 2015

Interest expense

Equity
income
(loss) —
net

Other
income
(loss) —
net

Income
before
income
taxes

Income
taxes

Effective
tax rate

Net income
(loss)
attributable to
noncontrolling
interests

Net income
attributable to
shareowners of
The Coca-Cola
Company

Diluted
net
income
per
share1

Reported (GAAP) $ 138 $ 200 $ (871 ) $ 1,725 $ 272 15.8 % $ 4 $ 1,449 $ 0.33
Items Impacting Comparability:
Asset Impairments/Restructuring 75 75 0.02
Productivity & Reinvestment 141 49 92 0.02
Equity Investees (3 ) (3 ) (1 ) (2 )
Transaction Gains/Losses 815 859 291 568 0.13
Other Items 25 91 33 58 0.01
Certain Tax Matters 6 (6 )
After Considering Items (Non-GAAP) $ 138 $ 197 $ (31 ) $ 2,888 $ 650 22.5 % $ 4 $ 2,234 $ 0.51

Three Months Ended September 26, 2014

Interest
expense

Equity
income
(loss) —
net

Other
income
(loss) —
net

Income
before
income
taxes

Income
taxes

Effective
tax rate

Net income
(loss)
attributable to
noncontrolling
interests

Net income
attributable to
shareowners of
The Coca-Cola
Company

Diluted
net
income
per
share2

Reported (GAAP) $ 113 $ 205 $ (312 ) $ 2,660 $ 538 20.2 % $ 8 $ 2,114 $ 0.48
Items Impacting Comparability:
Asset Impairments/Restructuring 34 34 0.01
Productivity & Reinvestment 84 30 54 0.01
Equity Investees 8 8 1 7
Transaction Gains/Losses 270 277 96 181 0.04
Other Items (19 ) (15 ) (8 ) (7 )
Certain Tax Matters 29 (29 ) (0.01 )
After Considering Items (Non-GAAP) $ 113 $ 213 $ (61 ) $ 3,048 $ 686 22.5 % $ 8 $ 2,354 $ 0.53

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) 22 (2) (180) (35) (49) (50) (31) (31)
% Change — After Considering Items (Non-GAAP) 22 (7) 48 (5) (5) (51) (5) (4)

Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.

1 4,399 million average shares outstanding — diluted
2 4,445 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)
Nine Months Ended October 2, 2015
Selling,
Net Cost of general and Other
operating goods Gross Gross administrative operating Operating Operating
revenues sold profit margin expenses charges income margin
Reported (GAAP) $ 34,294 $ 13,428 $ 20,866 60.8 % $ 12,490 $ 1,166 $ 7,210 21.0 %
Items Impacting Comparability:
Asset Impairments/Restructuring (204 ) 204
Productivity & Reinvestment (323 ) 323
Equity Investees
Transaction Gains/Losses (427 ) 427
Other Items (42 ) (66 ) 24 33 (212 ) 203
Certain Tax Matters
After Considering Items (Non-GAAP) $ 34,252 $ 13,362 $ 20,890 61.0 % $ 12,523 $ $ 8,367 24.4 %
Nine Months Ended September 26, 2014
Selling,
Net Cost of general and Other
operating goods Gross Gross administrative operating Operating Operating
revenues sold profit margin expenses charges income margin
Reported (GAAP) $ 35,126 $ 13,532 $ 21,594 61.5 % $ 12,880 $ 457 $ 8,257 23.5 %
Items Impacting Comparability:
Asset Impairments/Restructuring (142 ) 142
Productivity & Reinvestment (259 ) 259
Equity Investees
Transaction Gains/Losses (7 ) 7
Other Items (15 ) 88 (103 ) (14 ) (49 ) (40 )
Certain Tax Matters
After Considering Items (Non-GAAP) $ 35,111 $ 13,620 $ 21,491 61.2 % $ 12,866 $ $ 8,625 24.6 %
Selling,
Net Cost of general and Other
operating goods Gross administrative operating Operating
revenues sold profit expenses charges income
% Change — Reported (GAAP) (2) (1) (3) (3) 155 (13)
% Currency Impact (7) (5) (8) (7) (10)
% Change — Currency Neutral Reported 5 4 5 4 (2)

% Change — After Considering Items

(Non-GAAP)

(2) (2) (3) (3) (3)
% Currency Impact After Considering Items (Non-GAAP) (7) (5) (8) (7) (11)
% Change — Currency Neutral After Considering Items (Non-GAAP) 4 3 5 4 8

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)
Nine Months Ended October 2, 2015

Interest
expense

Equity
income
(loss) —
net

Other
income
(loss) —
net

Income
before
income
taxes

Income
taxes

Effective
tax rate

Net income
(loss)
attributable to
noncontrolling
interests

Net income
attributable to
shareowners of
The Coca-Cola
Company

Diluted
net
income
per
share1

Reported (GAAP) $ 713 $ 402 $ 709 $ 8,067 $ 1,937 24.0 % $ 16 $ 6,114 $ 1.39
Items Impacting Comparability:
Asset Impairments/Restructuring 204 204 0.05
Productivity & Reinvestment 323 124 199 0.05
Equity Investees 79 79 5 74 0.02
Transaction Gains/Losses (529 ) (102 ) (173 ) 71 0.02
Other Items (320 ) 113 636 173 463 0.10
Certain Tax Matters 6 (6 )
After Considering Items (Non-GAAP) $ 393 $ 481 $ 293 $ 9,207 $ 2,072 22.5 % $ 16 $ 7,119 $ 1.61
Nine Months Ended September 26, 2014

Interest
expense

Equity
income
(loss) —
net

Other
income
(loss) —
net

Income
before
income
taxes

Income
taxes

Effective
tax rate

Net income
(loss)
attributable to
noncontrolling
interests

Net income
attributable to
shareowners of
The Coca-Cola
Company

Diluted
net
income
per
share2

Reported (GAAP) $ 344 $ 530 $ (630 ) $ 8,249 $ 1,896 23.0 % $ 25 $ 6,328 $ 1.42
Items Impacting Comparability:
Asset Impairments/Restructuring 142 142 0.03
Productivity & Reinvestment 259 96 163 0.04
Equity Investees 20 20 3 17
Transaction Gains/Losses 410 417 147 270 0.06
Other Items 21 198 179 (55 ) 234 0.05
Certain Tax Matters (2 ) 2
After Considering Items (Non-GAAP) $ 344 $ 571 $ (22 ) $ 9,266 $ 2,085 22.5 % $ 25 $ 7,156 $ 1.61

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) 107 (24) (2) 2 (36) (3) (2)
% Change — After Considering Items (Non-GAAP) 14 (16) (1) (1) (36) (1) 0

Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.

1

4,410 million average shares outstanding — diluted
2 4,454 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 October 2, 2015
Income before Diluted net income
income taxes per share
% Change — Reported (GAAP) (35) (31)
% Currency Impact (12) (13)
% Change — Currency Neutral Reported (23) (18)
% Structural Impact 0 N/A
% Change — Currency Neutral Reported and Adjusted for Structural Impact (22) N/A
% Change — After Considering Items (Non-GAAP) (5) (4)
% Currency Impact After Considering Items (Non-GAAP) (12) (12)
% Change — Currency Neutral After Considering Items (Non-GAAP) 7 8
% Structural Impact After Considering Items (Non-GAAP) (1) N/A
% Change — Currency Neutral After Considering Items and Adjusted for Structural Impact (Non-GAAP) 8 N/A
Nine Months Ended October 2, 2015
Income before Diluted net income
income taxes per share
% Change — Reported (GAAP) (2) (2)
% Currency Impact (5) (5)
% Change — Currency Neutral Reported 3 3
% Structural Impact 0 N/A
% Change — Currency Neutral Reported and Adjusted for Structural Impact 3 N/A
% Change — After Considering Items (Non-GAAP) (1) 0
% Currency Impact After Considering Items (Non-GAAP) (8) (8)
% Change — Currency Neutral After Considering Items (Non-GAAP) 7 8
% Structural Impact After Considering Items (Non-GAAP) 0 N/A
% Change — Currency Neutral After Considering Items and Adjusted for Structural Impact (Non-GAAP) 8 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 October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
Reported (GAAP) $ 603 $ 1,330 $ 1,012 $ 5,639 $ 1,406 $ 1,746 $ 55 $ (364 ) $ 11,427
Items Impacting Comparability:
Asset Impairments/Restructuring
Productivity & Reinvestment
Equity Investees
Transaction Gains/Losses
Other Items (2 ) (25 ) (27 )
After Considering Items (Non-GAAP) $ 603 $ 1,330 $ 1,012 $ 5,637 $ 1,406 $ 1,746 $ 30 $ (364 ) $ 11,400
Three Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
Reported (GAAP) $ 709 $ 1,429 $ 1,177 $ 5,599 $ 1,575 $ 1,823 $ 43 $ (379 ) $ 11,976
Items Impacting Comparability:
Asset Impairments/Restructuring
Productivity & Reinvestment
Equity Investees
Transaction Gains/Losses
Other Items 9 4 (8 ) 5
After Considering Items (Non-GAAP) $ 709 $ 1,429 $ 1,177 $ 5,608 $ 1,575 $ 1,827 $ 35 $ (379 ) $ 11,981
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
% Change — Reported (GAAP) (15) (7) (14) 1 (11) (4) 33 (5)
% Currency Impact (15) (8) (28) (1) (9) (11) 34 (8)
% Change — Currency Neutral Reported 0 1 14 2 (1) 7 (1) 3
% Acquisition & Divestiture Adjustments (2) (1) 0 (1) (1) 4 14 0
% Change — Organic Revenues (Non-GAAP) 2 3 14 3 (1) 3 (15) 3
% Change — After Considering Items (Non-GAAP) (15) (7) (14) 1 (11) (4) (10) (5)
% Currency Impact After Considering Items (Non-GAAP) (15) (8) (28) (1) (9) (11) (8) (8)
% Change — Currency Neutral After Considering Items (Non-GAAP) 0 1 14 2 (1) 7 (1) 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)

Net Operating Revenues by Segment:

Nine Months Ended October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
Reported (GAAP) $ 1,899 $ 3,977 $ 3,051 $ 16,657 $ 4,292 $ 5,354 $ 120 $ (1,056 ) $ 34,294
Items Impacting Comparability:
Asset Impairments/Restructuring
Productivity & Reinvestment
Equity Investees
Transaction Gains/Losses
Other Items (19 ) (23 ) (42 )
After Considering Items (Non-GAAP) $ 1,899 $ 3,977 $ 3,051 $ 16,638 $ 4,292 $ 5,354 $ 97 $ (1,056 ) $ 34,252
Nine Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
Reported (GAAP) $ 2,099 $ 4,291 $ 3,406 $ 16,109 $ 4,613 $ 5,556 $ 126 $ (1,074 ) $ 35,126
Items Impacting Comparability:
Asset Impairments/Restructuring
Productivity & Reinvestment
Equity Investees
Transaction Gains/Losses
Other Items 9 (20 ) (4 ) (15 )
After Considering Items (Non-GAAP) $ 2,099 $ 4,291 $ 3,406 $ 16,118 $ 4,613 $ 5,536 $ 122 $ (1,074 ) $ 35,111
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Eliminations Consolidated
% Change — Reported (GAAP) (9) (7) (10) 3 (7) (4) (4) (2)
% Currency Impact (12) (10) (22) (1) (9) (9) 8 (7)
% Change — Currency Neutral Reported 3 3 12 4 1 6 (12) 5
% Acquisition & Divestiture Adjustments (1) 0 0 (1) 0 2 6 0
% Change — Organic Revenues (Non-GAAP) 4 3 12 6 2 4 (18) 5
% Change — After Considering Items (Non-GAAP) (9) (7) (10) 3 (7) (3) (20) (2)
% Currency Impact After Considering Items (Non-GAAP) (12) (10) (22) (1) (9) (9) (8) (7)
% Change — Currency Neutral After Considering Items (Non-GAAP) 3 3 12 4 1 7 (12) 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)

Operating Income (Loss) by Segment:

Three Months Ended October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 208 $ 722 $ 538 $ 681 $ 571 $ (11 ) $ (330 ) $ 2,379
Items Impacting Comparability:
Asset Impairments/Restructuring 75 75
Productivity & Reinvestment 1 (2 ) 4 85 2 22 29 141
Equity Investees
Transaction Gains/Losses 44 44
Other Items 83 4 (21 ) 66
After Considering Items (Non-GAAP) $ 209 $ 720 $ 542 $ 849 $ 573 $ 90 $ (278 ) $ 2,705
Three Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 265 $ 752 $ 653 $ 760 $ 638 $ 14 $ (371 ) $ 2,711
Items Impacting Comparability:
Asset Impairments/Restructuring 34 34
Productivity & Reinvestment 1 2 59 2 20 84
Equity Investees
Transaction Gains/Losses 7 7
Other Items 2 10 (8 ) 4
After Considering Items (Non-GAAP) $ 266 $ 754 $ 653 $ 821 $ 640 $ 58 $ (352 ) $ 2,840
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
% Change — Reported (GAAP) (22) (4) (18) (10) (11) 11 (12)
% Currency Impact (16) (3) (33) 0 (9) 6 (12)
% Change — Currency Neutral Reported (6) (1) 16 (10) (1) 5 (1)
% Change — After Considering Items (Non-GAAP) (21) (4) (17) 4 (11) 54 21 (5)
% Currency Impact After Considering Items (Non-GAAP) (16) (3) (33) (1) (9) (22) 1 (12)
% Change — Currency Neutral After Considering Items (Non-GAAP) (6) (2) 16 4 (1) 76 20 8

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:

Nine Months Ended October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 762 $ 2,274 $ 1,641 $ 2,079 $ 1,876 $ 34 $ (1,456 ) $ 7,210
Items Impacting Comparability:
Asset Impairments/Restructuring 204 204
Productivity & Reinvestment 16 (13 ) 7 239 (1 ) 22 53 323
Equity Investees
Transaction Gains/Losses 427 427
Other Items 33 8 2 6 154 203
After Considering Items (Non-GAAP) $ 778 $ 2,261 $ 1,681 $ 2,326 $ 1,877 $ 266 $ (822 ) $ 8,367
Nine Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 858 $ 2,363 $ 1,954 $ 2,015 $ 2,041 $ 26 $ (1,000 ) $ 8,257
Items Impacting Comparability:
Asset Impairments/Restructuring 142 142
Productivity & Reinvestment 1 2 192 10 54 259
Equity Investees
Transaction Gains/Losses 7 7
Other Items (90 ) 30 20 (40 )
After Considering Items (Non-GAAP) $ 859 $ 2,365 $ 1,954 $ 2,117 $ 2,051 $ 198 $ (919 ) $ 8,625
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
% Change — Reported (GAAP) (11) (4) (16) 3 (8) 30 (46) (13)
% Currency Impact (13) (4) (25) 0 (8) 36 3 (10)
% Change — Currency Neutral Reported 2 0 9 4 0 (6) (48) (2)
% Change — After Considering Items (Non-GAAP) (9) (4) (14) 10 (8) 34 11 (3)
% Currency Impact After Considering Items (Non-GAAP) (13) (4) (25) 0 (8) (18) 1 (11)
% Change — Currency Neutral After Considering Items (Non-GAAP) 4 0 11 10 0 52 10 8

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)

Income (Loss) Before Income Taxes by Segment:

Three Months Ended October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 212 $ 733 $ 535 $ (116 ) $ 576 $ 150 $ (365 ) $ 1,725
Items Impacting Comparability:
Asset Impairments/Restructuring 75 75
Productivity & Reinvestment 1 (2 ) 4 85 2 22 29 141
Equity Investees (3 ) (3 )
Transaction Gains/Losses 794 65 859
Other Items 83 4 4 91
After Considering Items (Non-GAAP) $ 210 $ 731 $ 539 $ 846 $ 578 $ 251 $ (267 ) $ 2,888
Three Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 272 $ 763 $ 654 $ 486 $ 648 $ 205 $ (368 ) $ 2,660
Items Impacting Comparability:
Asset Impairments/Restructuring 34 34
Productivity & Reinvestment 1 2 59 2 20 84
Equity Investees 8 8
Transaction Gains/Losses 270 7 277
Other Items 2 10 (27 ) (15 )
After Considering Items (Non-GAAP) $ 273 $ 765 $ 654 $ 817 $ 650 $ 257 $ (368 ) $ 3,048
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
% Change — Reported (GAAP) (22) (4) (18) (11) (27) 1 (35)
% Currency Impact (15) (3) (32) (9) (14) 11 (12)
% Change — Currency Neutral Reported (7) (1) 14 (2) (12) (11) (23)

% Change — After Considering Items (Non-GAAP)

(23) (4) (17) 4 (11) (2) 27 (5)
% Currency Impact After Considering Items (Non-GAAP) (15) (3) (32) (1) (9) (17) 7 (12)
% Change — Currency Neutral After Considering Items (Non-GAAP) (8) (2) 15 4 (2) 15 20 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)

Income (Loss) Before Income Taxes by Segment:

Nine Months Ended October 2, 2015
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 785 $ 2,300 $ 1,649 $ 1,245 $ 1,890 $ 380 $ (182 ) $ 8,067
Items Impacting Comparability:
Asset Impairments/Restructuring 204 204
Productivity & Reinvestment 16 (13 ) 7 239 (1 ) 22 53 323
Equity Investees (3 ) 6 76 79
Transaction Gains/Losses 827 (929 ) (102 )
Other Items 33 8 2 6 587 636
After Considering Items (Non-GAAP) $ 798 $ 2,293 $ 1,689 $ 2,319 $ 1,891 $ 688 $ (471 ) $ 9,207
Nine Months Ended September 26, 2014
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
Reported (GAAP) $ 893 $ 2,398 $ 1,957 $ 1,593 $ 2,059 $ 481 $ (1,132 ) $ 8,249
Items Impacting Comparability:
Asset Impairments/Restructuring 142 142
Productivity & Reinvestment 1 2 192 10 54 259
Equity Investees 20 20
Transaction Gains/Losses 410 7 417
Other Items (90 ) 51 218 179
After Considering Items (Non-GAAP) $ 894 $ 2,400 $ 1,957 $ 2,105 $ 2,069 $ 694 $ (853 ) $ 9,266
Eurasia & Latin North Asia Bottling
Africa Europe America America Pacific Investments Corporate Consolidated
% Change — Reported (GAAP) (12) (4) (16) (22) (8) (21) 84 (2)
% Currency Impact (13) (4) (25) (1) (8) (11) 45 (5)
% Change — Currency Neutral Reported 1 0 9 (21) 0 (10) 39 3

% Change — After Considering Items (Non-GAAP)

(11) (4) (14) 10 (9) (1) 45 (1)
% Currency Impact After Considering Items (Non-GAAP) (13) (4) (25) (1) (8) (15) 34 (8)
% Change — Currency Neutral After Considering Items (Non-GAAP) 2 0 11 11 0 15 11 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)

Operating Expense Leverage:

Three Months Ended October 2, 2015
Operating expense
Operating income Gross profit

leverage1

% Change — Reported (GAAP) (12) (7) (6)
% Change — Currency Neutral Reported (1) 2 (3)
% Change — After Considering Items (Non-GAAP) (5) (6) 1

% Change — Currency Neutral After Considering Items (Non-GAAP)

8 4 4
Nine Months Ended October 2, 2015
Operating expense
Operating income Gross profit

leverage1

% Change — Reported (GAAP) (13) (3) (9)
% Change — Currency Neutral Reported (2) 5 (7)
% Change — After Considering Items (Non-GAAP) (3) (3) 0

% Change — Currency Neutral After Considering Items (Non-GAAP)

8 5 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:

Nine Months Ended Nine Months Ended
October 2, 2015 September 26, 2014
Reported (GAAP)
Issuances of Stock $ 732 $ 1,058
Purchases of Stock for Treasury (1,966 ) (2,963 )
Net Change in Stock Issuance Receivables1 16
Net Change in Treasury Stock Payables2 (37 ) (21 )
Net Treasury Share Repurchases (Non-GAAP) $ (1,255 ) $ (1,926 )
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.