The Coca-Cola Company Reports Second Quarter And Year-To-Date 2005 Results

ATLANTA, – The Coca-Cola Company (NYSE:KO) reported second quarter earnings per share of $0.72, compared with $0.65 for the prior year second quarter. Second quarter earnings per share included a benefit of $0.04 per share due to a gain from the favorable high fructose corn syrup (HFCS) lawsuit settlement, the favorable resolution of tax matters, a reduction of the tax accrual related to the repatriation of foreign earnings, and a benefit from certain items impacting an equity investee.

Neville Isdell, chairman and chief executive officer, said, “Improved system execution in the first half of this year, assisted by favorable weather in June, together with strong performance in Latin America, central and eastern Europe and northern Asia, as well as stabilization from an increasingly focused North American system produced results. However, we still have considerable work ahead of us in the U.S. and in markets like Germany, the Philippines and, in particular, India, as well as to improve our performance in the areas of innovation and marketing. In the second half of the year, the work, already underway to rebuild the system for profitable long-term growth, will intensify.”

(All references to growth rate percentages and share compare the results of the period to the prior year comparable period.)

Financial Highlights
* Reported second quarter revenues increased 7 percent. Revenue growth reflected a 2 percent increase in gallons sales, favorable pricing and mix, and positive currency benefits.

* Cash from operations was $3.5 billion year-to-date, compared with $3.0 billion in the prior year period, an increase of 20 percent.

* The Company repurchased $1 billion of its stock in the second quarter and intends to repurchase a total of at least $2 billion of its stock for the full year 2005.

Operational Highlights
(Group operational highlights are reported in line with the Company’s new operating structure. Refer to the Company’s amended 8-K filing dated July 19, 2005 for more information.)

Total Company
* Unit case volume increased 5 percent in the second quarter and 4 percent year-to-date. For the quarter, the Company maintained share in the nonalcoholic ready-to-drink category.

* The unit case volume growth in the quarter was led by a 7 percent increase in the International Operations, reflecting double-digit growth in many of the emerging markets including Brazil, China, Russia, central and eastern Europe, Nigeria, east and central Africa, Venezuela, Turkey and the Middle East. Offsetting the overall results for the quarter were unit case volume declines in Germany, the Philippines and particularly India. Actions have been taken to reorganize the business in India in recognition of this poor performance. Acquisitions, primarily of Multon, the Russian juice company, slightly benefited unit case volume growth in the quarter.

* Carbonated soft drink unit case volume grew by 3 percent in the quarter, led by 5 percent growth in the International Operations. Trademark Coca-Cola unit case volume increased 3 percent for the quarter globally. The Company increased its share position in the carbonated soft drink category in the second quarter.

* Unit case volume for noncarbonated beverages, excluding water, grew by 11 percent for the quarter, led by 23 percent growth in the POWERade trademark and 7 percent growth in the Minute Maid trademark. In the quarter, the Company increased share in the sports drink category and maintained share in the juices and juice drinks category. Share declined in the ready-to-drink coffee and tea category, but is being addressed with new innovation.

* Unit case volume for water grew 19 percent for the quarter, driven by worldwide growth in the Dasani trademark of 34 percent, along with solid growth in many of the regional brands. For the quarter, share increased in this competitive category.

North America

                                 
                                      Percent Change
                                      From Prior Year

                                    Second      Year-
                                    Quarter    To-Date
    Unit Case Volume                   1%          1%
    Net Revenues                       1%         Even
    Operating Income                  (7%)        (9%)

* Unit case volume in the North America operating group for the quarter was up 1 percent, driven by improved results in the Retail division and even performance in the Foodservice and Hospitality division. Net revenues for the quarter were up 1 percent. This reflects a 2 percent decline in gallon sales, due to the cycling of higher gallon sales in the prior year quarter related to the launch of Coca-Cola C2, offset by improved pricing and mix. Gallon sales growth is expected to lag unit case volume growth for the full year. This is due to the cycling of higher gallon sales in the prior year resulting from the change in shipping routes and the timing of bottler orders at year end 2004. Operating income in the quarter was negatively impacted by the planned double-digit increase in marketing expense and higher raw material and freight costs.

* The Retail division’s unit case volume was up 2 percent in the quarter, reflecting improved performance in the bottler delivered business, which was up 2 percent in the quarter.

* The Foodservice and Hospitality division’s unit case volume was even for the quarter, cycling a 4 percent increase in the prior year quarter, and reflecting softness in discretionary consumer restaurant spending as a result of higher fuel costs.

* Overall, carbonated soft drink unit case volume declined 1 percent in the quarter, reflecting soft category trends; however, category share increased. Diet and light products delivered mid-single digit unit case volume growth.

* In noncarbonated beverages, both POWERade and Dasani delivered strong
double-digit unit case volume growth in the quarter leading to continued share gains in these categories. Warehouse delivered juices increased unit case volume by 6 percent in the quarter and also increased share of the category, driven by the performance of Minute Maid premium chilled orange juice and Simply Orange.

* Packaging and product innovations are advancing in line or ahead of expectations with the rollout of Coca-Cola Zero and Diet Coke Sweetened with Splenda, along with the continued expansion of Dasani flavors and Full Throttle. The continued rollouts of the 8-pack small PET and the POWERade “clutch” bottle are driving both incremental volume and value with expanded availability.

European Union

                                  Percent Change
                                  From Prior Year

                                  Second    Year-
                                  Quarter  To-Date

    Unit Case Volume                 4%      Even
    Net Revenues                     8%       3%
    Operating Income                10%       1%

* Unit case volume in the European Union operating group increased 4 percent in the second quarter as a result of better trends in Germany, strong growth in Spain and central Europe, which were up 7 percent and 16 percent, respectively and favorable weather late in the quarter. Net revenues increased 8 percent in the quarter, reflecting the positive impact of pricing, currency benefits, and a 1 percent increase in gallon sales. Operating income in the quarter was negatively impacted by the planned increase in marketing and operating expenses, offset by the cycling of higher expenses in the prior year quarter due to timing.

* Germany, which declined unit case volume 12 percent in the first quarter, was down 1 percent in the second quarter due to the success in gaining limited availability of Company products in most discounters and the cycling of prior year double-digit unit case volume decline. Although the German legislature passed an amendment to the mandatory deposit legislation that eliminated the “island solutions,” the amendment allows for a transition period to last until mid-2006. Therefore, the Company expects the challenging environment in Germany to continue throughout 2005.

* Unit case volume growth in northwest Europe was positive in the second quarter supported by favorable weather late in the quarter. However, soft overall retail and carbonated soft drink category trends are expected to continue through 2005.

North Asia, Eurasia and Middle East

                                  Percent Change
                                  From Prior Year

                                  Second    Year-
                                  Quarter  To-Date

    Unit Case Volume                15%      14%
    Net Revenues                     9%      12%
    Operating Income                 7%       8%

* The North Asia, Eurasia and Middle East operating group increased unit
case volume 15 percent for the quarter, with double-digit growth in China, Russia, Turkey and the Middle East and 2 percent growth in Japan. The joint acquisition of Multon with Coca-Cola Hellenic Bottling Company S.A. was completed in April 2005 and contributed to volume growth in the quarter. Full year 2004 unit case volume for Multon was 86 million unit cases. Net revenues for the quarter increased 9 percent, reflecting a 7 percent increase in gallon sales, a slight currency benefit, and positive pricing, offset by the impact of country mix. In Japan, year-to-date gallon sales growth was ahead of unit case volume growth, as a result of higher gallon sales related to the launch of new products and the transition of production to the new national supply chain management company. Operating income increased 7 percent in the quarter as the net revenue increase was offset primarily by the planned increase in marketing expense.

* In Japan, unit case volume increased 2 percent in the quarter as strong innovation helped drive results, including Hajime, a new green tea, launched in March 2005. Aquarius Active Diet was launched in May 2005 and helped drive the total Aquarius trademark unit case volume growth of 34 percent in the quarter. Unit case volume growth of Georgia coffee was even in the quarter as growth in the profitable 190ml and 280ml cans was offset by the cycling of the small PET launch in the prior year. In the quarter, Sokenbicha, the blended non-sugar tea was negatively impacted by the launch of Hajime, and Trademark Coca-Cola was impacted by the cycling of the Coca-Cola C2 launch in the prior year. Both Sokenbicha and Trademark Coca-Cola continue to be a focus in 2005 and will be supported with a strong calendar of marketing activities in the remainder of the year.

* In China, second quarter unit case volume grew 22 percent, cycling 37 percent unit case volume growth in the prior year quarter. Carbonated soft drink unit case volume grew 17 percent in the quarter, led by 16 percent growth in Trademark Coca-Cola and 22 percent growth in Trademark Sprite. Noncarbonated beverages delivered strong unit case volume, up 37 percent, and share increases as the continued expansion of new products, including Nestea Ice Rush, Modern Tea Workshop and Orange Pulp by Minute Maid, drove the results.

* In Russia and Turkey, improving macroeconomic trends and strong performance by the system led to double-digit unit case volume growth in carbonated soft drinks and noncarbonated beverages.

Latin America

                                  Percent Change
                                  From Prior Year

                                  Second     Year-
                                  Quarter   To-Date

    Unit Case Volume                 9%        8%
    Net Revenues                    18%       15%
    Operating Income                20%       13%

* The Latin America operating group delivered unit case volume growth of 9 percent in the second quarter. Solid growth in all key markets supported by favorable weather across the group drove the results. Net revenues in the quarter increased 18 percent, reflecting a 9 percent increase in gallon sales, positive pricing and mix, and positive currency benefits. Operating income in the quarter increased 20 percent negatively impacted by the planned increase in marketing expense, offset by the cycling of asset write-downs in the prior year quarter.

* In Mexico, unit case volume increased 8 percent in the quarter with the continued focus on driving personal consumption, supporting brand value at home and investing in new beverage categories. Favorable weather contributed to the results. The solid performance was led by 6 percent unit case volume growth in carbonated soft drinks. Brand Coca-Cola, Diet Coke and Fanta unit case volumes grew 6, 8 and 10 percent, respectively. Noncarbonated beverage unit case volume growth of 20 percent was driven by POWERade and Nestea, as well as strong growth in the profitable single-serve water category under the Ciel brand.

* In Brazil, unit case volume growth for the quarter was 17 percent, driven by a focus on core brands, providing greater packaging choices to consumers and supported by improving macroeconomics and good weather. Carbonated soft drink unit case volume grew 17 percent in the quarter and continued to increase share. The results were led by Trademark Coca-Cola unit case volume growth of 16 percent.

* In Argentina, strong consumer marketing activities and bottler execution drove unit case volume growth of 5 percent, cycling 14 percent growth in the prior year quarter. Trademark Coca-Cola led the performance with unit case volume growth of 7 percent in the quarter.

East, South Asia and Pacific Rim

                                  Percent Change
                                  From Prior Year

                                  Second    Year-
                                  Quarter  To-Date

    Unit Case Volume                (4%)     (4%)
    Net Revenues                    (3%)     (4%)
    Operating Income                (5%)    (17%)

* The East, South Asia and Pacific Rim operating group unit case volume declined 4 percent in the second quarter. Unit case volume declines in India and the Philippines strongly impacted the results. Net revenues in the quarter decreased 3 percent, reflecting an 8 percent decline in gallon sales, offset by positive currency benefits and pricing. Operating income was further impacted by the planned increase in marketing expense.

* In India, unit case volume decreased 14 percent in the quarter. Price increases to cover rising raw material and distribution costs, the lingering effects of the false pesticide allegations and the de-emphasis of the powder business drove the declines. To address the poor performance, the business in India has been reorganized; however, results are expected to remain weak throughout 2005.

* In the Philippines, affordability and availability issues continued to negatively impact performance, with unit case volume for the quarter declining 6 percent. The issues in the Philippines are being addressed; however, this market is expected to remain challenging throughout 2005.

Africa

                                  Percent Change
                                  From Prior Year

                                  Second    Year-
                                  Quarter  To-Date

    Unit Case Volume                 8%       10%
    Net Revenues                    21%       24%
    Operating Income                18%       12%

*The Africa operating group delivered solid results as it continued to execute against key strategies. Growth in South Africa, Nigeria, Kenya and Egypt led to 8 percent unit case volume growth in the second qarter.

*Net revenues in the quarter increased 21 percent, reflecting an 11 percent increase in gallon sales, positive currency benefits, and positive pricing and mix. Operating income increased at a slower rate than revenues primarily due to the planned increase in marketing expense.

*Carbonated soft drink unit case volume in Africa increased 6 percent, as core brands drove the growth. Trademark Coca-Cola, Sprite and Fanta unit case volumes were up 7 percent, 18 percent and 9 percent, respectively, in the quarter.

*South Africa had another strong quarter with unit case volume growth of 7 percent led by Trademark Coca-Cola growth of 7 percent.

*Unit case volume in Nigeria grew 12 percent in the quarter. Strong marketing campaigns and solid bottler execution led to carbonated soft drink unit case volume growth of 12 percent.

CONTACT: Media, Ben Deutsch, +1-404-676-2683, or Investors, Ann Taylor, +1-404-676-5383, both of The Coca-Cola Company

Web site: http://www.coke.com/