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The Coca-Cola Company Reports Full-Year and Fourth Quarter 2012 Results


Attachment:

  The Coca-Cola Company Reports Full-Year and Fourth Quarter 2012 Results

               Strong 4% global volume growth for the full year

           Worldwide brand Coca-Cola growth of 3% for the full year

Volume and value share gains continue in nonalcoholic ready-to-drink beverages

Full-Year and Fourth Quarter 2012 Highlights

  * Strong full-year global volume growth of 4%, in line with our long-term
    growth target and led by brand Coca-Cola, up 3%. Global volume grew 3% in
    the quarter, driven by international volume growth of 4% and North America
    volume growth of 1%.
  * Full-year reported net revenues grew 3% and comparable currency neutral
    net revenues grew 6%, in line with our long-term growth target. Fourth
    quarter reported net revenues grew 4% and comparable currency neutral net
    revenues grew 5%.
  * Full-year reported and comparable currency neutral operating income both
    grew 6%, in line with our long-term growth target. Fourth quarter reported
    operating income grew 12% and comparable currency neutral operating income
    grew 14%.
  * Currency was a 3% headwind on comparable net revenues and a 5% headwind on
    comparable operating income for the full year.
  * Full-year reported EPS was $1.97, up 6%, and comparable EPS was $2.01, up
    5%. Fourth quarter reported EPS was $0.41, up 14%, and comparable EPS was
    $0.45, up 15%.
  * Full-year cash from operations was up 12%.
  * Evolution of global bottling system continues, with bottler-led
    consolidation announced in Japan and Brazil, and a majority interest in
    our Philippine bottling operations sold to Coca-Cola FEMSA (transaction
    completed in January 2013).

Business Wire

ATLANTA -- February 12, 2013

The Coca-Cola Company today reported full-year and fourth quarter 2012
results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola
Company said, “We are pleased with our results we announced today. In a year
marked by continued uncertainty in the global economy, we delivered solid
volume, revenue and profit growth, and we realized further volume and value
share gains in nonalcoholic ready-to-drink beverages. The Coca-Cola Company
has consistently delivered quality results and met or exceeded its long-term
volume, revenue and profit growth targets every year since the announcement of
our 2020 Vision at the end of 2009. This reflects the commitment of our entire
system to invest together for a better tomorrow and to sustainably create
shared value while making a positive difference in the communities we serve.
Together we are delivering on our priorities and achieving success.

“As we enter 2013 in what is still an uncertain global economy, we know that
it is critical to seize the opportunity to keep leading and succeeding in any
environment. We must continue investing in our business so that we get even
better -- better at collaborating, at innovating, at listening to consumers,
customers and our bottling partners and most importantly, at executing with
precision. All of us at Coca-Cola remain diligent about our results as we
manage our business for continued sustainable long-term success,” continued
Mr. Kent.

PERFORMANCE HIGHLIGHTS

The Coca-Cola Company reported worldwide volume growth of 4% for the full year
and 3% in the quarter. The Company reported solid growth for the full year in
key developed markets, including North America (+2%) and Japan (+2%). Europe
volume declined 1% for the full year, reflecting ongoing uncertain
macroeconomic conditions. In addition, the Company delivered strong volume
growth in key emerging markets such as Thailand (+22%), India (+16%) and
Russia (+8%) for the full year. Our China business delivered 4% volume growth
for the full year, cycling double-digit growth in the prior year, and was
impacted by the further effects of a slowing economy, poor weather and a later
Chinese New Year. Solid growth continued in countries with per capita
consumption of Company brands less than 150 eight-ounce servings per year,
with volume up 7% for the full year.

For both the full year and the quarter, we grew global volume and value share
in nonalcoholic ready-to-drink (NARTD) beverages, with volume and value share
gains across nearly every beverage category. Further, our immediate
consumption volume grew a solid 5% globally in 2012, leading to transaction
growth of 5%, driven by focused in-store activation efforts and cold-drink
equipment expansion. In addition to increasing the total placement of our
branded cold-drink equipment to more than 14 million units as of the end of
2012, our global system remains focused on innovations in cooler design, cost
efficiency and effectiveness, and sustainability. We have achieved a 40% to
50% improvement in energy efficiency in new equipment placed today compared to
equipment placed in 2000, and we maintain our commitment to placing HFC-free
units around the world.

Worldwide sparkling beverage volume grew 3% for the full year and 1% in the
quarter. This represents approximately 550 million incremental unit cases in
2012, or the equivalent of adding 13.2 billion new servings to our global
business. We grew volume and value share in global core sparkling beverages
for the full year and in the quarter, led by brand Coca-Cola and reflecting a
balanced portfolio approach to growth in the core sparkling beverage category.
Worldwide brand Coca-Cola volume grew 3% for the full year, with growth across
diverse markets, including India (+33%), Thailand (+31%), Russia (+20%), the
Philippines (+8%), Brazil (+3%) and Mexico (+3%). In addition, Fanta volume
grew 5% and Sprite volume grew 4% for the full year, as we activated global
marketing campaigns in locally relevant ways such as the Fanta Play campaign,
now in nearly 200 markets, and the Sprite Uncontainable Game NBA partnership.

Worldwide still beverage volume grew 10% for the full year and 9% in the
quarter, with growth across beverage categories, including packaged water,
ready-to-drink tea and coffee, juices and juice drinks, sports drinks and
energy drinks. Excluding the impact of acquisitions, still beverage volume
grew 8% for the full year and 7% in the quarter. We grew global volume and
value share in still beverages and delivered volume and value share gains
across nearly every still beverage category.

Ready-to-drink tea volume grew 14% for the full year and 16% in the quarter,
with continued strong performance of key brands such as Gold Peak and Honest
Tea in North America, Ayataka green tea in Japan and Fuze Tea, which we
continued to expand across many markets worldwide during the year. Packaged
water volume grew 12% for both the full year and the quarter, driven by our
focus on innovative and sustainable packaging and immediate consumption
occasions. Our PlantBottle^TM PET packaging is now present in 10 countries
that represent more than 50% of our global packaged water business. Energy
drink volume grew 20% for the full year and 12% in the quarter, driven by
growth across our global portfolio of energy brands, with burn now available
in 75 countries.

In 2012, I LOHAS water and Ayataka green tea in Japan became our fourth and
fifth new billion-dollar brands since the announcement of our 2020 Vision,
building on our strong portfolio of brands across beverage categories,
occasions and geographies.

 
 
OPERATING REVIEW
 
                       Three Months Ended December 31, 2012
                       % Favorable / (Unfavorable)
                                                          Comparable

                                                          Currency
                       Unit Case   Net        Operating
                                                          Neutral
                       Volume      Revenues   Income
                                                          Operating

                                                          Income
                                                           
Total Company          3           4          12          14
                                                           
Eurasia & Africa       10          5          18          23
Europe                 (5    )     (6   )     13          12
Latin America          5           8          10          16
North America          1           6          12          11
Pacific                2           (1   )     11          10
Bottling Investments   5           6          —           27

 
 
                       Year Ended December 31, 2012
                       % Favorable / (Unfavorable)
                                                          Comparable

                                                          Currency
                       Unit Case   Net        Operating
                                                          Neutral
                       Volume      Revenues   Income
                                                          Operating

                                                          Income
                                                           
Total Company          4           3          6           6      
                                                           
Eurasia & Africa       11          5          7           16     
Europe                 (1    )     (6   )     (4    )     (1    )
Latin America          5           3          2           12     
North America          2           5          12          2      
Pacific                5           3          13          6      
Bottling Investments   10          4          (37   )     10     
                                                           
                                                           

Eurasia & Africa

  * Our Eurasia and Africa Group’s volume grew 10% in the quarter and 11% for
    the full year (up 7% and 9%, respectively, excluding the benefit of
    acquired volume), cycling 4% growth in the prior year quarter and 6%
    growth in the prior year. Growth in the quarter was led by the Middle East
    and North Africa, up 26% (up 13% excluding the benefit of acquired
    volume), Turkey, up 13%, and Russia, up 12%. Reported net revenues for the
    quarter increased 5%, reflecting a 10% increase in concentrate sales,
    partially offset by unfavorable price/mix of 1%, primarily geographic mix
    due to strong growth in the Middle East and North Africa, and a 4%
    currency impact. After adjusting for unit case sales without concentrate
    sales equivalents and the effect of two additional selling days,
    concentrate sales in the quarter were in line with unit case sales.
    Comparable currency neutral net revenues increased 9% in the quarter.
    Reported operating income increased 18% in the quarter. Comparable
    currency neutral operating income increased 23% in the quarter, driven by
    pricing and product mix, as well as operating leverage as a result of two
    additional selling days in the quarter, partially offset by increased
    investments in the business. For the full year, reported net revenues
    increased 5%, reflecting a 10% increase in concentrate sales and positive
    4% price/mix, partially offset by a 9% currency impact. After adjusting
    for unit case sales without concentrate sales equivalents, concentrate
    sales for the full year were slightly ahead of unit case volume, primarily
    due to timing. Comparable currency neutral net revenues increased 13% for
    the full year. Reported operating income increased 7% for the full year.
    Comparable currency neutral operating income increased 16% for the full
    year, driven by volume and revenue growth across all business units.
  * During the quarter, Eurasia and Africa grew volume and value share in
    NARTD beverages as well as in core sparkling beverages, juices and juice
    drinks, sports drinks and energy drinks. Sparkling beverage volume grew 7%
    in the quarter, led by brand Coca-Cola, which also grew 7%. Sprite and
    Fanta volume both grew 6% in the quarter. Still beverage volume grew 23%
    in the quarter, including the benefit of acquired volume which added
    12 points of growth. In India, we gained strong volume and value share in
    NARTD beverages as well as in sparkling and still beverages in the
    quarter. India sparkling beverage growth in the quarter was led by brand
    Coca-Cola, up 32% and driven by customized integrated marketing campaigns
    centered on the mealtime occasion. India has now delivered six consecutive
    years of double-digit volume growth. Russia volume growth in the quarter
    continued to be led by our sparkling beverage brands, including brand
    Coca-Cola, up 19%, Fanta, up 25% and Sprite, up 16%. We gained volume and
    value share in NARTD beverages as well as in core sparkling and still
    beverages in Russia, with a strong marketing campaign tied to the
    Christmas holidays as well as a continued focus on packaging segmentation
    to drive household penetration. As a result, our business in Russia has
    now achieved an all-time high market share. The momentum behind our juice
    business in Russia continued in the quarter, with flagship brand Dobriy up
    18% and premium brand Rich up 32%.

Europe

  * Our Europe Group’s volume declined 5% in the quarter and 1% for the full
    year, cycling 1% growth in the prior year quarter and 2% growth in the
    prior year, reflecting the ongoing macroeconomic uncertainty and weak
    consumer confidence across the region. Reported net revenues declined 6%
    in the quarter, reflecting a 3% decline in concentrate sales, unfavorable
    price/mix of 1% and a 2% currency impact. After adjusting for unit case
    sales without concentrate sales equivalents and the effect of two
    additional selling days, concentrate sales were in line with unit case
    sales in the quarter. Comparable currency neutral net revenues declined 4%
    in the quarter. Reported operating income increased 13% in the quarter.
    Comparable currency neutral operating income increased 12% in the quarter,
    reflecting operating leverage as a result of two additional selling days
    in the quarter as well as the tight management and timing of operating
    expenses. For the full year, reported net revenues declined 6%, reflecting
    a 2% decline in concentrate sales, even price/mix and a 4% currency
    impact. Full-year concentrate sales were in line with unit case sales.
    Comparable currency neutral net revenues declined 2% for the full year.
    Reported operating income declined 4% for the full year. Comparable
    currency neutral operating income declined 1% for the full year,
    reflecting the impact of volume performance and mix shifts, partially
    offset by efficient expense management.
  * During the quarter, the Europe Group maintained volume share and gained
    value share in still beverages. In a quarter marked by declines in the
    overall beverage industry in Europe, our sparkling beverage volume in
    Europe declined 5% in the quarter and our still beverage volume declined
    3% as a result of continued weak consumer confidence, adverse weather and
    aggressive competitive pricing. For the year, we leveraged integrated
    marketing campaigns centered on holiday activation, our 2012 Olympic Games
    partnership and Coke with Meals programming. Germany volume declined 5% in
    the quarter, cycling 9% growth in the prior year quarter, and grew 1% for
    the full year, cycling 6% growth in the prior year. Performance for
    Germany during the year was driven by strong commercial campaigns such as
    our 2012 Olympic Games partnership and the Coca-Cola Christmas Truck Tour,
    music-themed integrated marketing campaigns, a continued focus on
    low-calorie and no-calorie sparkling beverages and packaging segmentation
    to drive recruitment and household penetration. Volume in the Central and
    Southern Europe region declined 3% in the quarter and 1% for the full
    year, with share gains in sparkling beverages supported by strong brand
    health scores and growth in Coca-Cola Zero, up 15% in the quarter. Volume
    in the Northwest Europe & Nordics region declined 5% in the quarter and 3%
    for the full year, and the Iberia region declined 8% in the quarter and 1%
    for the full year.

Latin America

  * Our Latin America Group’s volume grew 5% in the quarter and for the full
    year, cycling 4% growth in the prior year quarter and 6% growth in the
    prior year. All business units in Latin America grew volume in the quarter
    and for the full year, with 9% growth in Latin Center, 5% growth in both
    Mexico and Brazil and 4% growth in South Latin during the quarter.
    Reported net revenues for the quarter increased 8%, reflecting concentrate
    sales growth of 6% and positive price/mix of 8%, offset by a currency
    impact of 4% and a 2% impact related to structural changes. After
    adjusting for unit case sales without concentrate sales equivalents and
    the effect of two additional selling days, concentrate sales in the
    quarter lagged unit case volume due to timing. Comparable currency neutral
    net revenues increased 12% in the quarter. Reported operating income
    increased 10% in the quarter, with comparable currency neutral operating
    income up 16%, primarily reflecting operating leverage as a result of two
    additional selling days in the quarter as well as solid volume growth and
    favorable pricing across all business units in the group. For the full
    year, reported net revenues increased 3%, reflecting concentrate sales
    growth of 5% and positive price/mix of 7%, offset by a currency impact of
    8% and a 1% impact related to structural changes. Full-year concentrate
    sales slightly lagged unit case volume. Comparable currency neutral net
    revenues increased 11% for the full year. Reported operating income
    increased 2% for the full year. Comparable currency neutral operating
    income increased 12% for the full year, primarily reflecting solid volume
    growth and favorable pricing across the group, partially offset by
    continued investments in the business, including some initial investments
    related to the 2014 World Cup.
  * During the quarter, the Latin America Group gained volume and value share
    in NARTD beverages, resulting in the eighth consecutive year of share
    gains. This consistently strong performance is driven by continued
    investments behind our brands, strong activation of holiday programming
    and a competitively advantaged package/price portfolio. Sparkling beverage
    volume was up 3% in the quarter, with a strong focus on growing our
    portfolio of flavored sparkling brands. Brand Coca-Cola volume grew 3% in
    the quarter while Fanta was up 7% and Sprite was up 5%. Still beverage
    volume grew 16% in the quarter, driven by ready-to-drink tea, up double
    digits as a result of the newly launched Fuze Tea, as well as 22% growth
    in sports drinks, 16% growth in packaged water and 8% growth in juices and
    juice drinks. Both Mexico and Brazil grew volume and value share in the
    quarter in NARTD beverages, with a continued focus on both single-serve
    and returnable packaging.

North America

  * Our North America Group’s volume grew 1% in the quarter and 2% for the
    full year, cycling 1% growth in the prior year quarter and 1% organic
    growth in the prior year. Reported net revenues for the quarter increased
    6%, reflecting “as reported” volume growth of 5%, including the benefit of
    two additional selling days in the quarter, and a 1% benefit from
    structural changes, primarily related to the acquisition of Great Plains
    Coca-Cola Bottling Company. North America price/mix in the quarter was
    even. Fourth quarter reported operating income grew 12%. Comparable
    currency neutral operating income grew 11% in the quarter, reflecting
    positive volume growth and operating leverage as a result of two
    additional selling days in the quarter, partially offset by higher
    commodity costs and ongoing investments in marketplace executional
    capabilities. This operating income growth represents continued sequential
    improvement quarterly throughout 2012. For the full year, reported net
    revenues increased 5%, reflecting volume growth of 2%, positive price/mix
    of 2% and a 1% benefit from structural changes, primarily related to the
    acquisition of Great Plains Coca-Cola Bottling Company. Full-year reported
    operating income increased 12%, which includes the effect of items
    impacting comparability, principally costs related to the integration of
    the former North America business of Coca-Cola Enterprises (CCE), as well
    as net gains/losses related to our economic hedges, primarily commodities.
    Comparable currency neutral operating income grew 2% for the full year,
    primarily due to positive volume growth and favorable pricing, partially
    offset by higher commodity costs and ongoing investments in marketplace
    executional capabilities.
  * During the quarter and for the full year, North America gained volume and
    value share in NARTD beverages as we continue to build strong
    value-creating brands, improve customer service and develop system
    capabilities. In addition, we gained volume and value share in sparkling
    beverages as well as in all still beverage categories, except the packaged
    water category, where Dasani maintains a significant price premium over
    private label competition, supported by our PlantBottle PET packaging.
    Sparkling beverage volume declined 2% in the quarter with sparkling
    beverage price/mix growth of 1%. Sparkling beverage volume declined 1% for
    the full year. Coca-Cola Zero volume grew mid single digits in the quarter
    and high single digits for the full year. Fanta volume was up 10% in the
    quarter, led by strong Halloween programming, and Seagram’s grew 9% in the
    quarter driven by the continued expansion of Seagram’s Sparkling Seltzer
    Water and Diet Seagram’s. Still beverage volume grew 8% in the quarter,
    led by Powerade growth of 11% as well as continued strong growth in our
    ready-to-drink tea portfolio of Gold Peak, Honest Tea and Fuze.
    Importantly, Powerade led the broader North America sports drink category
    in both absolute volume and value growth in full year 2012, building on
    its strong 2012 Olympic Games activation and the Power Through campaign.
    Our portfolio of juice and juice drink brands grew 1% in the quarter and
    2% for the full year, with the Simply trademark up 12% in the quarter,
    driven by the continued expansion of Simply Cranberry Cocktail and Simply
    Lemonade with Mango.
  * As part of our previously announced global Productivity and Reinvestment
    Program, we are reorganizing our Coca-Cola Refreshments business in the
    United States to align its sales and operating functions around three
    geographies — East, Central and West. We are taking this action as part of
    our ongoing effort to further improve our processes and systems, and to
    ensure greater operating effectiveness and productivity across our North
    America operations. This new alignment is in keeping with the ongoing
    evolution of our North America business model, as we work to further
    enhance our capabilities to deliver our 2020 Vision.

Pacific

  * Our Pacific Group’s volume grew 2% in the quarter and 5% for the full
    year, cycling 5% growth in both the prior year quarter and full year. All
    business units in the Pacific Group delivered volume growth for full-year
    2012, with 11% growth in the ASEAN region, 5% growth in the Greater China
    and Korea region, 2% growth in Japan and 1% growth in the South Pacific
    region. Reported net revenues for the quarter declined 1%, reflecting a 1%
    decline in concentrate sales and even price/mix. After adjusting for unit
    case sales without concentrate sales equivalents and the effect of two
    additional selling days, concentrate sales in the quarter lagged unit case
    sales, primarily due to timing, including a later Chinese New Year in
    2013. Comparable currency neutral net revenues were even in the quarter.
    Reported operating income increased 11% in the quarter, reflecting
    operating leverage as a result of two additional selling days in the
    quarter and ongoing productivity initiatives, as well as positive
    geographic mix, partially offset by shifts in product and channel mix. In
    addition, fourth quarter reported operating income reflects a 2% currency
    benefit. Comparable currency neutral operating income increased 10% in the
    quarter. For the full year, reported net revenues increased 3%, reflecting
    3% concentrate sales growth and a 1% currency benefit, partially offset by
    a 1% impact due to structural changes and the cycling of prior year
    one-time items related to the natural disasters in Japan. Price/mix for
    the full year was even. After adjusting for unit case sales without
    concentrate sales equivalents, full-year concentrate sales lagged unit
    case sales, primarily due to timing, including a later Chinese New Year in
    2013. Comparable currency neutral net revenues grew 2% for the full year.
    Reported operating income increased 13% for the full year, reflecting
    operating leverage as a result of productivity initiatives, as well as
    positive geographic mix, partially offset by shifts in product and channel
    mix. Full-year reported operating income also includes a 2% currency
    benefit. Comparable currency neutral operating income increased 6% for the
    full year.
  * During the quarter, South Korea and Thailand volume and share growth
    momentum continued. The Philippines volume grew 6% in the quarter,
    reflecting the benefit of consistent investment in executional
    capabilities there by our Bottling Investments Group over time. Japan
    volume declined 4% in the quarter, cycling 5% growth in the prior year
    quarter, and China volume declined 4%, cycling 10% growth in the prior
    year quarter. In Japan, our continued focus on investing in new and
    growing categories has led to two new billion-dollar brands in our global
    portfolio, Ayataka premium green tea and I LOHAS single-serve packaged
    water. Our fourth quarter China volume was impacted by the ongoing
    economic slowdown as well as poor weather, the cycling of double-digit
    growth from the prior year and a later Chinese New Year in 2013. During
    the year, our strong sparkling beverage portfolio in China continued to
    expand our nearly 2 to 1 share advantage over our primary competitor. As
    we look ahead to 2013, we continue to expect China’s recent economic
    slowdown to have a short-term effect on our industry and on our business,
    although we do expect to see some improvement in consumer disposable
    income as the year progresses. As such, we expect our China business to
    deliver sequential improvement as we move through the rest of 2013. We
    have every confidence in the long-term resilience of our China business
    and we remain very excited about our opportunities in this region.

Bottling Investments

  * Our Bottling Investments Group’s volume grew 5% in the quarter on an
    average daily sales basis, and grew 10% for the full year. Reported net
    revenues for the quarter grew 6%. This reflects 3% growth in “as reported”
    volume, positive price/mix of 1% and a 5% benefit due to structural
    changes, primarily the acquisition of the Vietnam, Cambodia and Guatemala
    bottling operations, partially offset by a currency impact of 3%. The
    favorable price/mix was driven by positive pricing across a number of our
    bottling operations, partially offset by geographic mix. The growth in “as
    reported” volume in the quarter was primarily driven by the Philippines,
    India and Brazil. Comparable currency neutral net revenues increased 9% in
    the quarter. Reported operating income in the quarter declined $64 million
    primarily due to the impact of currency as well as restructuring
    initiatives. Comparable currency neutral operating income increased 27% in
    the quarter, reflecting the increase in revenues resulting from volume
    growth and positive pricing in select markets as well as operating
    leverage as a result of two additional selling days in the quarter,
    partially offset by shifts in package and channel mix and continued
    investments in our in-market capabilities. For the full year, reported net
    revenues grew 4%. This reflects 6% “as reported” volume growth, positive
    price/mix of 1% and a 3% benefit due to structural changes, partially
    offset by a currency impact of 6%. Reported operating income for the full
    year declined 37% primarily due to the impact of currency as well as
    restructuring initiatives. Comparable currency neutral operating income
    increased 10% for the full year, reflecting the increase in revenues
    resulting from volume growth and positive pricing in select markets,
    partially offset by shifts in package and channel mix and continued
    investments in our in-market capabilities.

FINANCIAL REVIEW

Fourth quarter reported net revenues grew 4%, with comparable net revenues
also up 4%. This reflects a 4% increase in concentrate sales and a 1% benefit
due to structural changes, principally the acquisition of bottling operations.
Currency had a 1% unfavorable effect on net revenues in the quarter and
price/mix was even. Comparable currency neutral net revenues grew 5% in the
quarter. After adjusting for unit case sales without concentrate sales
equivalents and the effect of two additional selling days in the quarter,
concentrate sales lagged unit case sales in the quarter, primarily due to the
timing of shipments in certain markets. For the full year, concentrate sales
were in line with unit case sales. Our price/mix results in the quarter were
in line with our expectations, as the quarter is cycling higher price/mix
comparisons from the prior year. Despite the tougher comparisons, we continued
to grow global NARTD value share for the 22^nd consecutive quarter. For the
full year, both reported and comparable net revenues grew 3%. This reflects a
4% increase in concentrate sales, positive price/mix of 1% and a 1% benefit
due to structural changes. Currency had a 3% unfavorable effect on net
revenues for the full year. Comparable currency neutral net revenues grew 6%
for the full year.

Reported cost of goods sold increased 5% in the quarter, with comparable cost
of goods sold up 4%, driven by a 4% increase in concentrate sales and
reflecting moderately higher commodity costs compared to the prior year
quarter, primarily in North America and the Bottling Investments Group.
Currency had minimal impact on comparable cost of goods sold in the quarter.
For the full year, reported and comparable cost of goods sold both increased
5%, driven by a 4% increase in concentrate sales and incremental commodity
costs of approximately $225 million for sweeteners, juices, metals and PET,
primarily impacting North America and the Bottling Investments Group. Currency
decreased comparable cost of goods sold by 2% for the full year. Items
impacting comparability in the quarter and for the full year primarily
included net gains/losses on commodities hedging. We currently estimate
full-year 2013 incremental commodity costs of approximately $100 million for
sweeteners, juices, metals and PET compared to 2012.

Reported SG&A expenses grew 1% in the quarter, and comparable SG&A expenses
were even in the quarter. Currency decreased comparable SG&A expenses by 1% in
the quarter. We captured nine points of operating expense leverage in the
quarter, reflecting the benefit of two additional selling days in the quarter.
In addition, operating expense leverage benefited from the timing of certain
operating expenses and the reversal of expenses related to our long-term
incentive plans for certain performance periods due to the unfavorable impact
that currencies had, or are projected to have, on those plans. It is important
to remember that a portion of our stock-based compensation is based on
multi-year performance periods and includes the impact of currency. For the
full year, both reported and comparable SG&A expenses increased 2%. Comparable
currency neutral SG&A expenses increased 5%, which reflects our continued
investments around the world in the health and strength of our brands, as well
as the cost of adding incremental “feet on the street,” primarily in North
America and the Bottling Investments Group, in support of our growing
business. SG&A also included a benefit from the reversal of expenses related
to our long-term incentive plans for certain performance periods due to the
unfavorable impact that currencies had, or are projected to have, on those
plans. We captured one point of operating expense leverage in 2012, consistent
with our prior expectations of slightly positive operating expense leverage
for the full year. For 2013, we estimate operating expense leverage to be even
to slightly positive for the full year.

Fourth quarter reported operating income increased 12%, with comparable
currency neutral operating income up 14%. Full-year reported and comparable
currency neutral operating income both increased 6%. Items impacting
comparability reduced fourth quarter 2012 operating income by $300 million and
reduced full-year 2012 operating income by $471 million. Items impacting
comparability reduced fourth quarter 2011 operating income by $283 million and
reduced full-year 2011 operating income by $896 million. Currency reduced
comparable operating income by 4% in the quarter and 5% for the full year. For
2013, including our hedge positions, current spot rates and the cycling of our
prior year rates, as well as the recent devaluation announcement in Venezuela,
we estimate currency will have a  4% unfavorable impact on operating income
for the first quarter of 2013 and a 1% unfavorable impact for the full year.

On a full-year basis, our net share repurchases totaled $3.1 billion, slightly
above the high end of our previous outlook of $2.5 to $3.0 billion. In 2013,
we are targeting net share repurchases of $3.0 to $3.5 billion for the full
year.

Fourth quarter reported EPS was $0.41 and comparable EPS was $0.45. Items
impacting comparability reduced fourth quarter 2012 reported EPS by a net
$0.04 and reduced fourth quarter 2011 reported EPS by a net $0.03. In both
periods, these items included restructuring charges, costs related to global
productivity initiatives, gains/charges related to equity investees, net
gains/losses on transactions, net gains/losses related to our economic hedges,
primarily commodities, and certain tax matters. Items impacting comparability
in fourth quarter 2012 also included charges related to changes in the
structure of Beverage Partners Worldwide (BPW). Items impacting comparability
in fourth quarter 2011 also included CCE integration costs.

Full-year cash from operations was $10,645 million, up 12%, primarily due to
an improvement in working capital of approximately $800 million, which
partially benefited from the timing of certain working capital items.

Effective Tax Rate

The reported effective tax rates for the quarter and full year were 20.5% and
23.1%, respectively. The underlying effective annual tax rate on operations in
2012 was 24.0%, and we expect it to be approximately the same for 2013. The
variance between the reported rate and the underlying rate was due to the tax
effect of various items impacting comparability, separately disclosed in this
document in the Reconciliation of GAAP and Non-GAAP Financial Measures
schedule.

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

Items Impacting Prior Year Results

First quarter 2011 results included a net charge of $0.02 per share due to
restructuring charges, costs related to global productivity initiatives and
the CCE integration, and charges related to the natural disasters in Japan,
partially offset by a gain on the sale of the Company’s stake in Chilean
bottler Coca-Cola Embonor S.A.

Second quarter 2011 results included a net gain of $0.02 per share due to a
noncash gain on the adjustment to fair value of our investment in Mexican
bottler Grupo Continental S.A.B., partially offset by restructuring charges,
costs related to global productivity initiatives and the CCE integration, and
charges related to the natural disasters in Japan.

Third quarter 2011 results included a net charge of $0.04 per share due to
restructuring charges and costs related to global productivity initiatives and
the CCE integration.

Fourth quarter 2011 results included a net charge of $0.03 per share due to
restructuring charges and costs related to global productivity initiatives and
the CCE integration, partially offset by transaction gains.

NOTES

  * All references to growth rate percentages, share and cycling of growth
    rates compare the results of the period to those of the prior year
    comparable period.
  * “Concentrate sales” represents the amount of concentrates, syrups,
    beverage bases and powders sold by, or used in finished beverages sold by,
    the Company to its bottling partners or other customers.
  * “Sparkling beverages” means NARTD beverages with carbonation, including
    energy drinks and carbonated waters and flavored waters.
  * “Still beverages” means nonalcoholic beverages without carbonation,
    including noncarbonated waters, flavored waters and enhanced waters,
    juices and juice drinks, teas, coffees, sports drinks and noncarbonated
    energy drinks.
  * All references to volume and volume percentage changes indicate unit case
    volume, except for the reference to volume included in the explanation of
    net revenue growth for North America. All volume percentage changes are
    computed based on average daily sales for the fourth quarter, unless
    otherwise noted, and are computed on a reported basis for the full year.
    “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.
  * For both North America and Bottling Investments Group, net revenue growth
    attributable to volume reflects the increase in “as reported” volume,
    which is based on as reported sales rather than average daily sales and
    may include the impact of structural changes. For North America, this
    volume represents Coca-Cola Refreshments’ unit case sales (which are
    equivalent to concentrate sales) plus concentrate sales to
    non-Company-owned bottling operations.
  * Fourth quarter 2012 financial results were impacted by two additional
    selling days, which offset the impact of one less selling day in first
    quarter 2012 results. 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.
  * Due to the refocusing in 2012 of the Beverage Partners Worldwide (BPW)
    ready-to-drink tea joint venture with Nestlé S.A. (Nestlé), we have
    eliminated the BPW joint venture volume and associated concentrate sales
    from our reported results for both 2011 and 2012 in those countries in
    which the joint venture was phased out during 2012. In addition, we have
    eliminated the Nestea licensed volume and associated concentrate sales in
    the U.S. due to our U.S. license agreement with Nestlé terminating at the
    end of 2012. These changes did not materially impact the Company’s
    reported volume results for fourth quarter or full-year 2012 on a
    consolidated basis or for any individual operating group. However, these
    changes increased the Company’s reported fourth quarter and full-year 2012
    volume for still beverages by 2 points in both periods, and ready-to-drink
    tea by 18 points and 11 points, respectively.
  * 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 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.

CONFERENCE CALL

We are hosting a conference call with investors and analysts to discuss
full-year and fourth quarter 2012 results today, Feb. 12, 2013 at 9:30 a.m.
EST. We invite investors to listen to a live audiocast of the conference call
at our website, http://www.coca-colacompany.com in the “Investors” section. A
replay in downloadable MP3 format and transcript of the call will also be
available within 24 hours after the audiocast on our website. Further, the
“Investors” section of our website includes a reconciliation of non-GAAP
financial measures that may be used periodically by management when discussing
our financial results with investors and analysts to our results as reported
under GAAP.

 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
                                                                   
                           Three Months Ended
                           December 31,         December 31,
                                                                     % Change
                           2012                 2011
                                                As Adjusted^1
Net Operating              $   11,455           $    11,040          4
Revenues
Cost of goods sold         4,628                4,403                5      
Gross Profit               6,827                6,637                3
Selling, general and
administrative             4,430                4,406                1
expenses
Other operating            214                  275                  —      
charges
Operating Income           2,183                1,956                12
Interest income            126                  127                  (1    )
Interest expense           95                   104                  (9    )
Equity income (loss)       182                  155                  17
— net
Other income (loss) —      (19          )       82                   —      
net
Income Before Income       2,377                2,216                7
Taxes
Income taxes               487                  539                  (10   )
Consolidated Net           1,890                1,677                13
Income
Less: Net income
attributable to            24                   20                   20     
noncontrolling
interests
Net Income
Attributable to            $   1,866            $    1,657           13     
Shareowners of The
Coca-Cola Company
Diluted Net Income         $   0.41             $    0.36            14     
Per Share^2,3
Average Shares
Outstanding —              4,557                4,611                 
Diluted^2,3
^1 Effective January 1, 2012, the Company elected to change our accounting
methodology for determining the market-related value of assets for our U.S.
qualified defined benefit pension plans. The Company's change in accounting
methodology has been applied retrospectively, and we have adjusted all prior
period financial information presented herein as required.
^2 For the three months ended December 31, 2012 and 2011, basic net income per
share was $0.42 for 2012 and $0.37 for 2011 based on average shares
outstanding — basic of 4,479 for 2012 and 4,536 for 2011. 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.
^3 Following shareowner approval, the Company amended its certificate of
incorporation on July 27, 2012, to increase the number of authorized shares of
common stock from 5.6 billion to 11.2 billion and effect a two-for-one stock
split of the common stock. Accordingly, all share and per share data presented
herein reflects the impact of the increase in authorized shares and the stock
split.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
                                                                   
                           Year Ended
                           December 31,         December 31,         % Change
                           2012                 2011
                                                As Adjusted^1
Net Operating Revenues     $   48,017           $    46,542          3
Cost of goods sold         19,053               18,215               5      
Gross Profit               28,964               28,327               2
Selling, general and
administrative             17,738               17,422               2
expenses
Other operating            447                  732                  —      
charges
Operating Income           10,779               10,173               6
Interest income            471                  483                  (2    )
Interest expense           397                  417                  (5    )
Equity income (loss) —     819                  690                  19
net
Other income (loss) —      137                  529                  —      
net
Income Before Income       11,809               11,458               3
Taxes
Income taxes               2,723                2,812                (3    )
Consolidated Net           9,086                8,646                5
Income
Less: Net income
attributable to            67                   62                   8      
noncontrolling
interests
Net Income
Attributable to            $   9,019            $    8,584           5      
Shareowners of The
Coca-Cola Company
Diluted Net Income Per     $   1.97             $    1.85            6      
Share^2,3
Average Shares
Outstanding —              4,584                4,646                 
Diluted^2,3
^1 Effective January 1, 2012, the Company elected to change our accounting
methodology for determining the market-related value of assets for our U.S.
qualified defined benefit pension plans. The Company's change in accounting
methodology has been applied retrospectively, and we have adjusted all prior
period financial information presented herein as required.
^2 For the years ended December 31, 2012 and 2011, basic net income per share
was $2.00 for 2012 and $1.88 for 2011 based on average shares outstanding —
basic of 4,504 for 2012 and 4,568 for 2011. 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.
^3 Following shareowner approval, the Company amended its certificate of
incorporation on July 27, 2012, to increase the number of authorized shares of
common stock from 5.6 billion to 11.2 billion and effect a two-for-one stock
split of the common stock. Accordingly, all share and per share data presented
herein reflects the impact of the increase in authorized shares and the stock
split.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions except par value)
                                                      
                                 December 31,             December 31,
                                 2012                     2011
                                                          As Adjusted^1
ASSETS
Current Assets
Cash and cash equivalents        $    8,442               $     12,803
Short-term investments           5,017                    1,088            
Total Cash, Cash
Equivalents and Short-Term       13,459                   13,891           
Investments
Marketable securities            3,092                    144
Trade accounts receivable,
less allowances of $53 and       4,759                    4,920
$83, respectively
Inventories                      3,264                    3,092
Prepaid expenses and other       2,781                    3,450
assets
Assets held for sale             2,973                    —                
Total Current Assets             30,328                   25,497           
Equity Method Investments        9,216                    7,233
Other Investments,
Principally Bottling             1,232                    1,141
Companies
Other Assets                     3,585                    3,495
Property, Plant and              14,476                   14,939
Equipment — net
Trademarks With Indefinite       6,527                    6,430
Lives
Bottlers' Franchise Rights       7,405                    7,770
With Indefinite Lives
Goodwill                         12,255                   12,219
Other Intangible Assets          1,150                    1,250            
Total Assets                     $    86,174              $     79,974     
                                                           
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and             $    8,680               $     9,009
accrued expenses
Loans and notes payable          16,297                   12,871
Current maturities of            1,577                    2,041
long-term debt
Accrued income taxes             471                      362
Liabilities held for sale        796                      —                
Total Current Liabilities        27,821                   24,283           
Long-Term Debt                   14,736                   13,656
Other Liabilities                5,468                    5,420
Deferred Income Taxes            4,981                    4,694
The Coca-Cola Company
Shareowners' Equity
Common stock, $0.25 par
value; Authorized — 11,200
shares; Issued — 7,040 and       1,760                    1,760
7,040 shares,
respectively^2
Capital surplus                  11,379                   10,332
Reinvested earnings              58,045                   53,621
Accumulated other
comprehensive income             (3,385         )         (2,774          )
(loss)
Treasury stock, at cost —
2,571 and 2,514 shares,          (35,009        )         (31,304         )
respectively^2
Equity Attributable to
Shareowners of The               32,790                   31,635
Coca-Cola Company
Equity Attributable to           378                      286              
Noncontrolling Interests
Total Equity                     33,168                   31,921           
Total Liabilities and            $    86,174              $     79,974     
Equity
^1 Effective January 1, 2012, the Company elected to change our accounting
methodology for determining the market-related value of assets for our U.S.
qualified defined benefit pension plans. The Company's change in accounting
methodology has been applied retrospectively, and we have adjusted all prior
period financial information presented herein as required.
^2 Following shareowner approval, the Company amended its certificate of
incorporation on July 27, 2012, to increase the number of authorized shares of
common stock from 5.6 billion to 11.2 billion and effect a two-for-one stock
split of the common stock. Accordingly, all share and per share data presented
herein reflects the impact of the increase in authorized shares and the stock
split.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)
                                                      
                                Year Ended
                                December 31,              December 31,
                                2012                      2011
                                                          As Adjusted^1
Operating Activities
Consolidated net income         $      9,086              $     8,646
Depreciation and                1,982                     1,954
amortization
Stock-based compensation        259                       354
expense
Deferred income taxes           632                       1,035
Equity (income) loss —          (426            )         (269            )
net of dividends
Foreign currency                (130            )         7
adjustments
Significant (gains)
losses on sales of assets       (98             )         (220            )
— net
Other operating charges         166                       214
Other items                     254                       (354            )
Net change in operating         (1,080          )         (1,893          )
assets and liabilities
Net cash provided by            10,645                    9,474            
operating activities
Investing Activities
Purchases of short-term         (9,590          )         (4,057          )
investments
Proceeds from disposals         5,622                     5,647
of short-term investments
Acquisitions and                (1,535          )         (977            )
investments
Purchases of other              (5,266          )         (787            )
investments
Proceeds from disposals
of bottling companies and       2,189                     562
other investments
Purchases of property,          (2,780          )         (2,920          )
plant and equipment
Proceeds from disposals
of property, plant and          143                       101
equipment
Other investing                 (187            )         (93             )
activities
Net cash provided by
(used in) investing             (11,404         )         (2,524          )
activities
Financing Activities
Issuances of debt               42,791                    27,495
Payments of debt                (38,573         )         (22,530         )
Issuances of stock              1,489                     1,569
Purchases of stock for          (4,559          )         (4,513          )
treasury
Dividends                       (4,595          )         (4,300          )
Other financing                 100                       45               
activities
Net cash provided by
(used in) financing             (3,347          )         (2,234          )
activities
Effect of Exchange Rate
Changes on Cash and Cash        (255            )         (430            )
Equivalents
Cash and Cash Equivalents
Net increase (decrease)         (4,361          )         4,286
during the period
Balance at beginning of         12,803                    8,517            
period
Balance at end of period        $      8,442              $     12,803     
^1 Effective January 1, 2012, the Company elected to change our accounting
methodology for determining the market-related value of assets for our U.S.
qualified defined benefit pension plans. The Company's change in accounting
methodology has been applied retrospectively, and we have adjusted all prior
period financial information presented herein as required.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
 
Three Months Ended
 
               Net Operating Revenues               Operating Income (Loss)^1          Income (Loss) Before Income
                                                                                       Taxes^1
               December     December     % Fav. /   December    December    % Fav. /   December    December    % Fav. /
               31,          31,                     31,         31,                    31,         31,        
                                         (Unfav.)                           (Unfav.)                           (Unfav.)
               2012         2011                    2012        2011                   2012        2011
Eurasia &      $ 697        $ 663        5          $ 273       $ 231       18         $ 281       $ 233       21
Africa
Europe         1,143        1,212        (6    )    670         593         13         675         598         13
Latin          1,274        1,177        8          715         652         10         718         658         9
America
North          5,292        4,993        6          558         498         12         558         500         12
America
Pacific        1,346        1,357        (1    )    426         382         11         434         383         13
Bottling       2,087        1,977        6          (29     )   35          —          154         197         (22   )
Investments
Corporate      19           34           (46   )    (430    )   (435    )   1          (443    )   (353    )   (25   )
Eliminations   (403     )   (373     )   —          —           —           —          —           —           —      
Consolidated   $ 11,455     $ 11,040     4          $ 2,183     $ 1,956     12         $ 2,377     $ 2,216     7      
^1 Effective January 1, 2012, the Company elected to change our accounting methodology for determining the
market-related value of assets for our U.S. qualified defined benefit pension plans. The Company's change in accounting
methodology has been applied retrospectively, and we have adjusted all prior period financial information presented
herein as required.
 
Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
 
 

During the three months ended December 31, 2012, the results of our operating
segments were impacted by the following items:

  * Intersegment revenues were $26 million for Eurasia and Africa, $154
    million for Europe, $95 million for Latin America, $2 million for North
    America, $104 million for Pacific and $22 million for Bottling
    Investments.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $1 million for Europe, $70 million for North America, $2 million for
    Pacific, $119 million for Bottling Investments and $20 million for
    Corporate due to charges related to the Company’s productivity and
    reinvestment program as well as other restructuring initiatives. Operating
    income (loss) and income (loss) before income taxes were increased by $1
    million for Europe due to the refinement of previously established
    accruals related to the Company’s 2008-2011 productivity initiatives.
    Operating income (loss) and income (loss) before income taxes were
    increased by $1 million for North America due to the refinement of
    previously established accruals related to the Company’s integration of
    Coca-Cola Enterprises Inc.’s (“CCE”) former North America business.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $6 million for North America due to the loss or damage of certain fixed
    assets as a result of Hurricane Sandy.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $6 million for Corporate due to the elimination of the Company’s
    proportionate share of gross profit in inventory on sales to Embotelladora
    Andina S.A. (“Andina”) following its merger with Embotelladoras Coca-Cola
    Polar S.A. (“Polar”). Subsequent to this transaction, the Company has an
    ownership interest in Andina that we account for under the equity method
    of accounting.
  * Operating income (loss) and income (loss) before income taxes were
    increased by $3 million for Corporate due to a net gain on the sale of
    land held by one of the Company’s consolidated bottling operations,
    partially offset by transaction costs associated with the Company’s
    acquisition of an equity ownership interest in Mikuni Coca-Cola Bottling
    Co., Ltd. (“Mikuni”), a bottling partner with operations in Japan.
  * Income (loss) before income taxes was increased by $185 million for
    Corporate due to the gain the Company recognized as a result of the merger
    of Andina and Polar.
  * Income (loss) before income taxes was reduced by $108 million for
    Corporate due to the loss the Company recognized on the pending sale of a
    majority ownership interest in our Philippine bottling operations to
    Coca-Cola FEMSA S.A.B. de C.V. (“Coca-Cola FEMSA”). This transaction was
    completed in January 2013. As of December 31, 2012, the assets and
    liabilities associated with our Philippine bottling operations were
    classified as held for sale in our consolidated balance sheets.
  * Income (loss) before income taxes was reduced by $82 million for Corporate
    due to the Company acquiring an ownership interest in Mikuni for which we
    paid a premium over the publicly traded market price. This premium was
    expensed on the acquisition date. Subsequent to this transaction, the
    Company accounts for our investment in Mikuni under the equity method of
    accounting
  * Income (loss) before income taxes was reduced by $25 million for Bottling
    Investments due to the Company’s proportionate share of unusual or
    infrequent items recorded by certain of our equity method investees.
  * Income (loss) before income taxes was reduced by $16 million for Corporate
    due to other-than-temporary declines in the fair values of certain cost
    method investments.
  * Income (loss) before income taxes was reduced by $1 million for Europe and
    was increased by $1 million for Eurasia and Africa, $1 million for Latin
    America, $1 million for North America and $1 million for Pacific due to
    changes in the structure of Beverage Partners Worldwide (“BPW”), our 50/50
    joint venture with Nestlé S.A. (“Nestlé”) in the ready-to-drink tea
    category.
  * Income (loss) before income taxes was reduced by $5 million for Corporate
    due to charges associated with the Company’s indemnification of a
    previously consolidated entity.

During the three months ended December 31, 2011, the results of our operating
segments were impacted by the following items:

  * Intersegment revenues were $28 million for Eurasia and Africa, $160
    million for Europe, $82 million for Latin America, $1 million for North
    America, $78 million for Pacific and $24 million for Bottling Investments.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $3 million for Eurasia and Africa, $20 million for Europe, $1 million
    for Latin America, $145 million for North America, $1 million for Pacific,
    $31 million for Bottling Investments and $64 million for Corporate,
    primarily due to the Company’s productivity, integration and restructuring
    initiatives.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $10 million for Corporate due to charges associated with the floods in
    Thailand that impacted the Company’s supply chain operations in the
    region.
  * Income (loss) before income taxes was reduced by $13 million for Bottling
    Investments due to the Company’s proportionate share of unusual or
    infrequent items recorded by certain of our equity method investees.
  * Income (loss) before income taxes was increased by a net $122 million for
    Corporate, primarily due to gains the Company recognized as a result of an
    equity method investee issuing additional shares of its own stock during
    the period at a per share amount greater than the carrying value of the
    Company’s per share investment. These gains were partially offset by
    charges associated with certain of the Company’s equity method investments
    in Japan.
  * Income (loss) before income taxes was reduced by $17 million for Corporate
    due to other-than-temporary declines in the fair values of certain
    available-for-sale securities.
  * Income (loss) before income taxes was reduced by $1 million for Corporate
    due to costs associated with the early extinguishment of certain long-term
    debt. This debt existed prior to the Company’s acquisition of CCE’s former
    North America business.

 
 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
 
Year Ended
 
               Net Operating Revenues               Operating Income (Loss)^1            Income (Loss) Before Income
                                                                                         Taxes^1
               December     December     % Fav. /   December     December     % Fav. /   December     December     % Fav. /
               31,          31,                     31,          31,                     31,          31,         
                                         (Unfav.)                             (Unfav.)                             (Unfav.)
               2012         2011                    2012         2011                    2012         2011
Eurasia &      $ 2,970      $ 2,841      5          $ 1,169      $ 1,091      7          $ 1,192      $ 1,089      9
Africa
Europe         5,123        5,474        (6    )    2,960        3,090        (4    )    3,015        3,134        (4    )
Latin          4,831        4,690        3          2,879        2,815        2          2,882        2,832        2
America
North          21,680       20,571       5          2,597        2,319        12         2,624        2,327        13
America
Pacific        6,035        5,838        3          2,425        2,151        13         2,432        2,154        13
Bottling       8,895        8,591        4          140          224          (37   )    904          897          1
Investments
Corporate      127          159          (20   )    (1,391   )   (1,517   )   8          (1,240   )   (975     )   (27   )
Eliminations   (1,644   )   (1,622   )   —          —            —            —          —            —            —      
Consolidated   $ 48,017     $ 46,542     3          $ 10,779     $ 10,173     6          $ 11,809     $ 11,458     3      
^1 Effective January 1, 2012, the Company elected to change our accounting methodology for determining the market-related
value of assets for our U.S. qualified defined benefit pension plans. The Company's change in accounting methodology has
been applied retrospectively, and we have adjusted all prior period financial information presented herein as required.
 
Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
 
 

During the year ended December 31, 2012, the results of our operating segments
were impacted by the following items:

  * Intersegment revenues were $152 million for Eurasia and Africa, $642
    million for Europe, $271 million for Latin America, $15 million for North
    America, $476 million for Pacific and $88 million for Bottling
    Investments.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $1 million for Europe, $227 million for North America, $3 million for
    Pacific, $164 million for Bottling Investments and $38 million for
    Corporate due to charges related to the Company’s productivity and
    reinvestment program as well as other restructuring initiatives. Operating
    income (loss) and income (loss) before income taxes were increased by $4
    million for Europe, $1 million for Pacific and $5 million for Corporate
    due to the refinement of previously established accruals related to the
    Company’s 2008-2011 productivity initiatives. Operating income (loss) and
    income (loss) before income taxes were increased by $6 million for North
    America due to the refinement of previously established accruals related
    to the Company’s integration of CCE’s former North America business.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $21 million for North America due to costs associated with the Company
    detecting residues of carbendazim, a fungicide that is not registered in
    the U.S. for use on citrus products, in orange juice imported from Brazil
    for distribution in the U.S. As a result, the Company began purchasing
    additional supplies of Florida orange juice at a higher cost than
    Brazilian orange juice.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $20 million for North America due to changes in the Company’s
    ready-to-drink tea strategy as a result of our current U.S. license
    agreement with Nestlé terminating at the end of 2012.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $6 million for North America due to the loss or damage of certain fixed
    assets as a result of Hurricane Sandy.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $6 million for Corporate due to the elimination of the Company’s
    proportionate share of gross profit in inventory on sales to Andina
    following its merger with Polar. Subsequent to this transaction, the
    Company has an ownership interest in Andina that we account for under the
    equity method of accounting.
  * Operating income (loss) and income (loss) before income taxes were
    increased by $3 million for Corporate due to a gain on the sale of land
    held by one of the Company’s consolidated bottling operations, partially
    offset by transaction costs associated with the Company’s acquisition of
    an equity ownership interest in Mikuni, a bottling partner with operations
    in Japan.
  * Income (loss) before income taxes was increased by $185 million for
    Corporate due to the gain the Company recognized as a result of the merger
    of Andina and Polar.
  * Income (loss) before income taxes was increased by $92 million for
    Corporate due to a gain the Company recognized as a result of Coca-Cola
    FEMSA issuing additional shares of its own stock during the period at a
    per share amount greater than the carrying amount of the Company’s per
    share investment.
  * Income (loss) before income taxes was reduced by $108 million for
    Corporate due to the loss the Company recognized on the pending sale of a
    majority ownership interest in our Philippine bottling operations to
    Coca-Cola FEMSA. This transaction was completed in January 2013. As of
    December 31, 2012, the assets and liabilities associated with our
    Philippine bottling operations were classified as held for sale in our
    consolidated balance sheets.
  * Income (loss) before income taxes was reduced by $82 million for Corporate
    due to the Company acquiring an ownership interest in Mikuni for which we
    paid a premium over the publicly traded market price. This premium was
    expensed on the acquisition date. Subsequent to this transaction, the
    Company accounts for our investment in Mikuni under the equity method of
    accounting.
  * Income (loss) before income taxes was increased by $8 million for Bottling
    Investments due to the Company’s proportionate share of unusual or
    infrequent items recorded by certain of our equity method investees.
  * Income (loss) before income taxes was reduced by $16 million for Corporate
    due to other-than-temporary declines in the fair values of certain cost
    method investments.
  * Income (loss) before income taxes was reduced by $1 million for Eurasia
    and Africa, $4 million for Europe, $2 million for Latin America and $4
    million for Pacific due to changes in the structure of BPW, our 50/50
    joint venture with Nestlé in the ready-to-drink tea category.
  * Income (loss) before income taxes was reduced by $5 million for Corporate
    due to charges associated with the Company’s indemnification of a
    previously consolidated entity.

During the year ended December 31, 2011, the results of our operating segments
were impacted by the following items:

  * Intersegment revenues were $152 million for Eurasia and Africa, $697
    million for Europe, $287 million for Latin America, $12 million for North
    America, $384 million for Pacific and $90 million for Bottling
    Investments.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $12 million for Eurasia and Africa, $25 million for Europe, $4 million
    for Latin America, $374 million for North America, $4 million for Pacific,
    $89 million for Bottling Investments and $164 million for Corporate,
    primarily due to the Company’s productivity, integration and restructuring
    initiatives as well as costs associated with the merger of Embotelladoras
    Arca S.A.B. de C.V. (“Arca”) and Grupo Continental S.A.B. (“Contal”).
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $2 million for North America and $82 million for Pacific due to charges
    associated with the earthquake and tsunami that devastated northern and
    eastern Japan on March 11, 2011.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $19 million for North America due to the amortization of favorable
    supply contracts acquired in connection with our acquisition of CCE’s
    former North America business.
  * Operating income (loss) and income (loss) before income taxes were reduced
    by $10 million for Corporate due to charges associated with the floods in
    Thailand that impacted the Company’s supply chain operations in the
    region.
  * Income (loss) before income taxes was increased by a net $417 million for
    Corporate, primarily due to the gain the Company recognized as a result of
    the merger of Arca and Contal.
  * Income (loss) before income taxes was increased by a net $122 million for
    Corporate, primarily due to gains the Company recognized as a result of an
    equity method investee issuing additional shares of its own stock during
    the period at a per share amount greater than the carrying value of the
    Company’s per share investment. These gains were partially offset by
    charges associated with certain of the Company’s equity method investments
    in Japan.
  * Income (loss) before income taxes was increased by $102 million for
    Corporate due to the gain on the sale of our investment in Coca-Cola
    Embonor S.A. (“Embonor”), a bottling partner with operations primarily in
    Chile. Prior to this transaction, the Company accounted for our investment
    in Embonor under the equity method of accounting.
  * Income (loss) before income taxes was reduced by $53 million for Bottling
    Investments due to the Company’s proportionate share of unusual or
    infrequent items recorded by certain of our equity method investees.
  * Income (loss) before income taxes was reduced by $41 million for Corporate
    due to the impairment of an investment in an entity accounted for under
    the equity method of accounting.
  * Income (loss) before income taxes was reduced by $17 million for Corporate
    due to other-than-temporary declines in the fair values of certain
    available-for-sale securities.
  * Income (loss) before income taxes was reduced by $9 million for Corporate
    due to the net charge we recognized on the repurchase and/or exchange of
    certain long-term debt assumed in connection with our acquisition of CCE’s
    former North America business as well as the early extinguishment of
    certain other long-term debt.
  * Income (loss) before income taxes was reduced by $5 million for Corporate
    due to the finalization of working capital adjustments related to the sale
    of our Norwegian and Swedish bottling operations to New CCE.

 
 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)

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

ITEMS IMPACTING COMPARABILITY

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

Asset Impairments and Restructuring

Asset Impairments

During the three months and year ended December 31, 2012, the Company recorded
charges of $16 million due to other-than-temporary declines in the fair values
of certain cost method investments. These charges were recorded in the line
item other income (loss) — net.

During the three months and year ended December 31, 2011, the Company recorded
charges of $17 million due to other-than-temporary declines in the fair values
of certain available-for-sale securities. In addition, during the year ended
December 31, 2011, the Company recorded charges of $41 million due to the
impairment of an investment in an entity accounted for under the equity method
of accounting. These charges were recorded in the line item other income
(loss) — net.

Restructuring

During the three months and year ended December 31, 2012, the Company recorded
charges of $119 million and $163 million, respectively, associated with the
integration of our German bottling and distribution operations as well as
other restructuring initiatives outside the scope of our recently announced
productivity and reinvestment program. These restructuring charges were
recorded in the line item other operating charges. See below for a discussion
of our productivity and reinvestment program.

During the three months and year ended December 31, 2011, the Company recorded
charges of $40 million and $119 million, respectively, associated with the
integration of our German bottling and distribution operations as well as
other restructuring initiatives outside the scope of our productivity
initiatives and the integration of Coca-Cola Enterprises Inc.’s (“CCE”) former
North America business. These restructuring charges were recorded in the line
item other operating charges. See below for a discussion of our productivity
and CCE integration initiatives.

Productivity and Reinvestment

During the three months and year ended December 31, 2012, the Company recorded
charges of $93 million and $270 million, respectively, in the line item other
operating charges related to our productivity and reinvestment program which
was announced in February 2012. This program will further enable our efforts
to strengthen our brands and reinvest our resources to drive long-term
profitable growth. The first component of this program is a new global
productivity initiative focused around four primary areas: global supply chain
optimization; global marketing and innovation effectiveness; operating expense
leverage and operational excellence; and data and information technology
systems standardization.

The second component of our productivity and reinvestment program involves a
new integration initiative in North America related to our acquisition of
CCE’s former North America business. The Company has identified incremental
synergies in North America, primarily in the area of our North American
product supply operations, which will better enable us to serve our customers
and consumers.

As a combined productivity and reinvestment program, the Company anticipates
generating annualized savings of $550 million to $650 million which will be
phased in over four years starting in 2012. We expect to begin fully realizing
the annual benefits of these savings in 2015, the final year of the program.

Productivity Initiatives

During the three months and year ended December 31, 2012, the Company reversed
charges of $1 million and $10 million, respectively, related to previously
established accruals associated with our 2008-2011 productivity initiatives.
These reversals were recorded in the line item other operating charges.

During the three months and year ended December 31, 2011, the Company recorded
charges of $80 million and $156 million, respectively, related to our
2008-2011 productivity initiatives. These initiatives were focused on
providing additional flexibility to invest for growth and impacted a number of
areas, including aggressively managing operating expenses supported by lean
techniques; redesigning key processes to drive standardization and
effectiveness; better leveraging our size and scale; and driving savings in
indirect costs.

The Company incurred total costs of $498 million related to these initiatives
since inception. These initiatives delivered annualized savings of over $500
million beginning in 2011, exceeding the upper end of the Company’s original
savings target of $400 million to $500 million.

Equity Investees

During the three months and year ended December 31, 2012, the Company recorded
net charges of $25 million and net gains of $8 million, respectively, in the
line item equity income (loss) — net. These amounts represent the Company’s
proportionate share of unusual or infrequent items recorded by certain of our
equity method investees.

During the three months and year ended December 31, 2011, the Company recorded
net charges of $13 million and $53 million, respectively, in the line item
equity income (loss) — net. These charges represent the Company’s
proportionate share of unusual or infrequent items recorded by certain of our
equity method investees.

CCE Transaction

During the three months and year ended December 31, 2012, the Company reversed
charges of $1 million and $6 million, respectively, related to previously
established accruals associated with the Company’s integration of CCE’s former
North America business. These reversals were recorded in the line item other
operating charges.

During the three months and year ended December 31, 2011, the Company recorded
charges of $145 million and $386 million, respectively, primarily related to
our integration of CCE’s former North America business. These charges were
primarily due to the development, design and initial implementation of our
future operating framework in North America.

The Company realized nearly $350 million in annualized savings by the end of
2011 and incurred total costs of $487 million related to our integration of
CCE’s former North America business. These charges were primarily due to the
development, design and initial implementation of our future operating
framework in North America. This initiative was completed at the end of 2011.
See above for a discussion of the Company’s productivity and reinvestment
program which involves a new integration initiative in North America related
to our acquisition of CCE’s former North America business.

 
 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)

Transaction Gains

During the three months and year ended December 31, 2012, the Company
recognized a gain of $185 million due to the merger of Embotelladora Andina
S.A. (“Andina”) and Embotelladoras Coca-Cola Polar S.A. (“Polar”), two Latin
American bottling partners, with Andina being the acquiring company. The
merger of the two companies was a noncash transaction that resulted in Polar
shareholders exchanging their existing Polar shares for newly issued shares of
Andina at a specified exchange rate. Prior to the merger, the Company held an
investment in Andina that was classified as an available-for-sale security,
and we also held an investment in Polar that was accounted for under the
equity method of accounting. Subsequent to this transaction, the Company holds
an investment in Andina that we account for under the equity method of
accounting. The Company recorded the gain in the line item other income (loss)
— net. In addition, the Company recorded a charge of $6 million during the
three months and year ended December 31, 2012, due to the elimination of our
proportionate share of gross profit in inventory on sales to Andina as a
result of the merger. The Company recorded this charge in the line item net
operating revenues.

On December 13, 2012, the Company and Coca-Cola FEMSA, S.A.B. de C.V.
(“Coca-Cola FEMSA”) executed a share purchase agreement for the sale of a
majority ownership interest in our consolidated Philippine bottling
operations. This transaction was completed in January 2013. As a result of
this agreement, the Company was required to classify our Philippine bottling
operations as held for sale, and we recognized a loss of $108 million during
the three months and year ended December 31, 2012, based on the agreed upon
sale price and related transaction costs.

During the three months and year ended December 31, 2012, the Company recorded
a charge of $82 million due to the acquisition of an ownership interest in
Mikuni Coca-Cola Bottling Co., Ltd. (“Mikuni”) for which we paid a premium
over the publicly traded market price. Although the Company paid this premium
to obtain specific rights that have an economic and strategic value to the
Company, they do not qualify as an asset and were therefore expensed on the
acquisition date. This charge was recorded in the line item other income
(loss) — net. The Company accounts for our investment in Mikuni under the
equity method of accounting.

During the three months and year ended December 31, 2012, the Company
recognized a net gain of $4 million due to the sale of land held by one of the
Company’s consolidated bottling operations. This gain was recorded in the line
item other operating charges.

During the three months and year ended December 31, 2012, the Company recorded
a charge of $5 million associated with our indemnification of a previously
consolidated entity. The impact of this charge effectively reduced the gain
the Company recognized when we initially sold the entity. The Company recorded
this charge in the line item other income (loss) — net.

During the year ended December 31, 2012, the Company recognized a gain of $92
million as a result of Coca-Cola FEMSA issuing additional shares of its own
stock during the period at a per share amount greater than the carrying amount
of the Company’s per share investment. Accordingly, the Company is required to
treat these types of transactions as if the Company sold a proportionate share
of its investment in the equity method investee. The Company recorded this
gain in the line item other income (loss) — net.

During the three months and year ended December 31, 2011, the Company
recognized a net gain of $122 million, primarily due to gains associated with
Coca-Cola FEMSA issuing additional common shares of its own stock at a per
share amount greater than the carrying value of the Company’s per share
investment. The gains recognized during the three months and year ended
December 31, 2011, were partially offset by charges associated with certain of
the Company’s equity method investments in Japan. The Company recorded this
net gain in other income (loss) — net.

During the year ended December 31, 2011, the Company also recognized a net
gain of $417 million, primarily due to the merger of Embotelladoras Arca
S.A.B. de C.V. (“Arca”) and Grupo Continental S.A.B. (“Contal”), two bottling
partners headquartered in Mexico, into a combined entity known as Arca
Continental, S.A.B. de C.V. (“Arca Contal”). The Company recorded this net
gain in the line item other income (loss) — net. Prior to this transaction,
the Company held an investment in Contal that we accounted for under the
equity method of accounting. The merger of the two companies was a noncash
transaction that resulted in Contal shareholders exchanging their existing
Contal shares for new shares in Arca Contal at a specified exchange rate.
Subsequent to this transaction, the Company holds an investment in Arca Contal
that we account for as an available-for-sale security. During the year ended
December 31, 2011, the Company also recorded charges of $35 million in the
line item other operating charges related to costs associated with the merger
of Arca and Contal.

In addition, the Company recognized a gain of $102 million during the year
ended December 31, 2011, as a result of the sale of our investment in
Coca-Cola Embonor S.A. (“Embonor”), a bottling partner with operations
primarily in Chile. Prior to this transaction, the Company accounted for our
investment in Embonor under the equity method of accounting. The Company
recorded this gain in the line item other income (loss) — net.

Certain Tax Matters

During the three months and year ended December 31, 2012, the Company recorded
a net tax benefit of $124 million and $150 million, respectively. This benefit
was primarily related to the reversal of certain valuation allowances,
partially offset by amounts required to be recorded for changes to our
uncertain tax positions, including interest and penalties.

During the three months and year ended December 31, 2011, the Company recorded
a net tax benefit of $22 million and $7 million, respectively, related to
amounts required to be recorded for changes to our uncertain tax positions,
including interest and penalties.

Other Items

Impact of Natural Disasters

On October 29, 2012, Hurricane Sandy caused widespread flooding and wind
damage across the mid-Atlantic region of the United States, primarily in New
York and New Jersey, and as a result the Company experienced lost sales in the
impacted areas. In addition, during the three months and year ended
December 31, 2012, we recorded charges of $6 million due to the loss or damage
of certain fixed assets resulting from the hurricane.

On March 11, 2011, a major earthquake struck off the coast of Japan, resulting
in a tsunami that devastated the northern and eastern regions of the country.
As a result of these events, the Company made a donation to the Coca-Cola
Japan Reconstruction Fund which has helped rebuild schools and community
facilities across the impacted areas of the country. During the year ended
December 31, 2011, the Company recorded total charges of $84 million related
to these events. These charges were primarily related to the Company’s
donation and assistance provided to certain bottling partners in the affected
regions.

During the three months and year ended December 31, 2011, the Company also
recorded charges of $10 million as a result of the floods in Thailand that
impacted the Company’s supply chain operations in the region.

Economic (Nondesignated) Hedges

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

The Company excludes the net impact of mark-to-market adjustments for
outstanding hedges and realized gains/losses for settled hedges from our
non-GAAP financial information until the period in which the underlying
exposure being hedged impacts our condensed consolidated statement of income.
We believe this adjustment provides meaningful information related to the
impact of our economic hedging activities. During the three months and year
ended December 31, 2012, the net impact of the Company’s adjustment related to
our economic hedging activities described above resulted in an increase to our
non-GAAP operating income of $82 million and $5 million, respectively. During
the three months and year ended December 31, 2011, the net impact of the
Company’s adjustment related to our economic hedging activities described
above resulted in an increase to our non-GAAP operating income of $8 million
and $111 million, respectively.

Repurchase, Extinguishment and/or Exchange of Long-Term Debt

During the three months ended December 31, 2011, the Company recorded a charge
of $1 million in the line item interest expense due to costs associated with
the early extinguishment of debt. During the year ended December 31, 2011, the
Company recorded net charges of $9 million in the line item interest expense
related to the repurchase, extinguishment and/or exchange of certain long-term
debt.

Beverage Partners Worldwide and License Agreement with Nestlé S.A.

During the three months ended December 31, 2012, the Company reversed charges
of $3 million related to previously established accruals associated with
changes in the structure of Beverage Partners Worldwide (“BPW”), our 50/50
joint venture with Nestlé S.A. (“Nestlé”) in the ready-to-drink tea category.
During the year ended December 31, 2012, the Company recorded charges of $11
million due to these BPW changes. In addition, as a result of our current U.S.
license agreement with Nestlé terminating at the end of 2012, the Company
recorded charges of $20 million during the year ended December 31, 2012.

Brazilian Orange Juice

In December 2011, the Company learned that orange juice being imported from
Brazil contained residues of carbendazim, a fungicide that is not registered
in the U.S. for use on citrus products. As a result, the Company began
purchasing additional supplies of Florida orange juice at a higher cost than
Brazilian orange juice. During the year ended December 31, 2012, the Company
incurred charges of $21 million related to these events, including the
increased raw material costs.

Currency Neutral

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

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
                           
                             
                            Three Months Ended December 31, 2012
                                                                              Selling,
                              Net          Cost of                            general          Other
                                                       Gross       Gross                                   Operating   Operating
                              operating    goods                              and              operating              
                                                       profit      margin                                  income      margin
                              revenues     sold                               administrative   charges

                                                                              expenses
Reported (GAAP)               $ 11,455     $ 4,628     $ 6,827     59.6 %     $   4,430        $  214      $ 2,183     19.1   %
Items Impacting
Comparability:
Asset                         —            —           —                      —                (119    )   119
Impairments/Restructuring
Productivity &                —            —           —                      —                (93     )   93
Reinvestment
Productivity Initiatives      —            —           —                      —                1           (1      )
Equity Investees              —            —           —                      —                —           —
CCE Transaction               —            —           —                      —                1           (1      )
Transaction Gains             6            —           6                      —                3           3
Certain Tax Matters           —            —           —                      —                —           —
Other Items                   4            (70     )   74                     (6          )    (7      )   87       
After Considering Items       $ 11,465     $ 4,558     $ 6,907     60.2 %     $   4,424        $  —        $ 2,483     21.7   %
(Non-GAAP)
                             
                             
                            Three Months Ended December 31, 2011
                                                                              Selling,
                              Net          Cost of                            general          Other
                                                       Gross       Gross                                   Operating   Operating
                              operating    goods                              and              operating              
                                                       profit      margin                                  income      margin
                              revenues     sold                               administrative   charges

                                                                              expenses
Reported (GAAP) — As          $ 11,040     $ 4,403     $ 6,637     60.1 %     $   4,406        $  275      $ 1,956     17.7   %
Adjusted
Items Impacting
Comparability:
Asset                         —            —           —                      —                (40     )   40
Impairments/Restructuring
Productivity &                —            —           —                      —                —           —
Reinvestment
Productivity Initiatives      —            —           —                      —                (80     )   80
Equity Investees              —            —           —                      —                —           —
CCE Transaction               —            —           —                      —                (145    )   145
Transaction Gains             —            —           —                      —                —           —
Certain Tax Matters           —            —           —                      —                —           —
Other Items                   (3       )   (18     )   15                     7                (10     )   18       
After Considering Items       $ 11,037     $ 4,385     $ 6,652     60.3 %     $   4,413        $  —        $ 2,239     20.3   %
(Non-GAAP)
                                                                                                                        
Currency Neutral:                                                            
                                                                              Selling,
                              Net          Cost of                            general          Other
                                                       Gross                                               Operating
                              operating    goods                              and              operating              
                                                       profit                                              income
                              revenues     sold                               administrative   charges

                                                                              expenses
% Change — Reported           4            5           3                      1                —           12
(GAAP)
% Currency Impact             (1)          0           (2)                    (1)              —           (4)
% Change — Currency           5            6           5                      2                —           16         
Neutral Reported
                                                                             
% Change — After
Considering Items             4            4           4                      0                —           11

(Non-GAAP)
% Currency Impact After
Considering Items             (1)          0           (2)                    (1)              —           (4)
(Non-GAAP)
% Change — Currency
Neutral After Considering     5            4           6                      1                —           14         
Items (Non-GAAP)
                                                                                                                        
Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts
provided.
 
Reported currency neutral operating expense leverage for the three months ended December 31, 2012, is positive 11 percentage
points, which is calculated by subtracting reported currency neutral gross profit growth of 5% from reported currency neutral
operating income growth of 16%. Currency neutral operating expense leverage after considering items impacting comparability for
the three months ended December 31, 2012, is positive 9 percentage points, which is calculated by subtracting currency neutral
gross profit growth after considering items impacting comparability of 6% from currency neutral operating income growth after
considering items impacting comparability of 14%. Currency neutral operating expense leverage does not add using the rounded
growth rates provided.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
                           
                             
                            Three Months Ended December 31, 2012
                                                                                                                Net income
                                                                                                                               Diluted
                                         Equity    Other     Income                            Net income       attributable
                                                                                                                to             net
                              Interest   income    income    before      Income    Effective   attributable
                                                                                               to               shareowners    income
                              expense    (loss)    (loss)    income      taxes     tax rate                     of
                                         —         —                                           noncontrolling                  per
                                                             taxes                                              The
                                         net       net                                         interests        Coca-Cola      share^1

                                                                                                                Company
Reported (GAAP)               $  95      $ 182     $ (19 )   $ 2,377     $ 487     20.5  %     $    24          $  1,866       $ 0.41
Items Impacting
Comparability:
Asset                         —          —         16        135         —                     —                135            0.03
Impairments/Restructuring
Productivity &                —          —         —         93          35                    —                58             0.01
Reinvestment
Productivity Initiatives      —          —         —         (1      )   —                     —                (1        )    —
Equity Investees              —          25        —         25          4                     —                21             —
CCE Transaction               —          —         —         (1      )   —                     —                (1        )    —
Transaction Gains             —          —         10        13          (28   )               —                41             0.01
Certain Tax Matters           —          —         —         —           124                   —                (124      )    (0.03  )
Other Items                   —          (3    )   —         84          32                    —                52             0.01    
After Considering Items       $  95      $ 204     $ 7       $ 2,725     $ 654     24.0  %     $    24          $  2,047       $ 0.45  
(Non-GAAP)
                             
                             
                            Three Months Ended December 31, 2011
                                                                                                                Net income
                                                                                                                               Diluted
                                         Equity    Other     Income                            Net income       attributable
                                                                                                                to             net
                              Interest   income    income    before      Income    Effective   attributable
                                                                                               to               shareowners    income
                              expense    (loss)    (loss)    income      taxes     tax rate                     of
                                         —         —                                           noncontrolling                  per
                                                             taxes                                              The
                                         net       net                                         interests        Coca-Cola      share^2

                                                                                                                Company
Reported (GAAP) — As          $  104     $ 155     $ 82      $ 2,216     $ 539     24.3  %     $    20          $  1,657       $ 0.36
Adjusted
Items Impacting
Comparability:
Asset                         —          —         17        57          2                     —                55             0.01
Impairments/Restructuring
Productivity &                —          —         —         —           —                     —                —              —
Reinvestment
Productivity Initiatives      —          —         —         80          25                    —                55             0.01
Equity Investees              —          13        —         13          2                     —                11             —
CCE Transaction               —          —         —         145         55                    —                90             0.02
Transaction Gains             —          —         (122  )   (122    )   (84   )               —                (38       )    (0.01  )
Certain Tax Matters           —          —         —         —           22                    —                (22       )    —
Other Items                   (1     )   —         —         19          6                     —                13             —       
After Considering Items       $  103     $ 168     $ (23 )   $ 2,408     $ 567     23.5  %     $    20          $  1,821       $ 0.39  
(Non-GAAP)
                                                                                              
                                                                                              
                                                                                                                Net income

                                         Equity    Other     Income                            Net income       attributable   Diluted
                                                                                                                to
                              Interest   income    income    before      Income                attributable                    net
                                                                                               to               shareowners   
                              expense    (loss)    (loss)    income      taxes                                  of             income
                                         —         —                                           noncontrolling
                                                             taxes                                              The            per
                                         net       net                                         interests        Coca-Cola      share

                                                                                                                Company
% Change — Reported           (9)        17        —         7           (10)                  20               13             14
(GAAP)
% Change — After
Considering Items             (8)        21        —         13          15                    20               12             15
(Non-GAAP)
 
Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
 
^1 4,557 million average shares outstanding — diluted
^2 4,611 million average shares outstanding — diluted

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
                           
                             
                            Year Ended December 31, 2012
                                                                                Selling,         Other
                              Net          Cost of                              general
                                                        Gross        Gross                       operating   Operating    Operating
                              operating    goods                                and                                      
                                                        profit       margin                      charges     income       margin
                              revenues     sold                                 administrative
                                                                                                  
                                                                                expenses
Reported (GAAP)               $ 48,017     $ 19,053     $ 28,964     60.3 %     $   17,738       $  447      $ 10,779     22.4   %
Items Impacting
Comparability:
Asset                         —            —            —                       —                (163    )   163
Impairments/Restructuring
Productivity &                —            —            —                       —                (270    )   270
Reinvestment
Productivity Initiatives      —            —            —                       —                10          (10      )
Equity Investees              —            —            —                       —                —           —
CCE Transaction               —            —            —                       —                6           (6       )
Transaction Gains             6            —            6                       —                3           3
Certain Tax Matters           —            —            —                       —                —           —
Other Items                   9            (20      )   29                      11               (33     )   51        
After Considering Items       $ 48,032     $ 19,033     $ 28,999     60.4 %     $   17,749       $  —        $ 11,250     23.4   %
(Non-GAAP)
                             
                             
                            Year Ended December 31, 2011
                                                                                Selling,         Other
                              Net          Cost of                              general
                                                        Gross        Gross                       operating   Operating    Operating
                              operating    goods                                and                                      
                                                        profit       margin                      charges     income       margin
                              revenues     sold                                 administrative
                                                                                                  
                                                                                expenses
Reported (GAAP) — As          $ 46,542     $ 18,215     $ 28,327     60.9 %     $   17,422       $  732      $ 10,173     21.9   %
Adjusted
Items Impacting
Comparability:
Asset                         —            —            —                       —                (119    )   119
Impairments/Restructuring
Productivity &                —            —            —                       —                —           —
Reinvestment
Productivity Initiatives      —            —            —                       —                (156    )   156
Equity Investees              —            —            —                       —                —           —
CCE Transaction               —            (19      )   19                      —                (362    )   381
Transaction Gains             —            —            —                       —                (35     )   35
Certain Tax Matters           —            —            —                       —                —           —
Other Items                   12           (110     )   122                     (23         )    (60     )   205       
After Considering Items       $ 46,554     $ 18,086     $ 28,468     61.2 %     $   17,399       $  —        $ 11,069     23.8   %
(Non-GAAP)
                                                                                                                           
Currency Neutral:                                                              
                                                                                Selling,
                              Net          Cost of                              general          Other
                                                        Gross                                                Operating
                              operating    goods                                and              operating               
                                                        profit                                               income
                              revenues     sold                                 administrative   charges

                                                                                expenses
% Change — Reported           3            5            2                       2                —           6
(GAAP)
% Currency Impact             (3)          (2)          (4)                     (3)              —           (5)
% Change — Currency           6            7            6                       4                —           11          
Neutral Reported
                                                                                                                         
% Change — After
Considering Items             3            5            2                       2                —           2

(Non-GAAP)
% Currency Impact After
Considering Items             (3)          (2)          (3)                     (3)              —           (5)
(Non-GAAP)
% Change — Currency
Neutral After Considering     6            7            5                       5                —           6           
Items (Non-GAAP)
 
Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts
provided.
 
Reported currency neutral operating expense leverage for the year ended December 31, 2012, is positive 5 percentage points, which
is calculated by subtracting reported currency neutral gross profit growth of 6% from reported currency neutral operating income
growth of 11%. Currency neutral operating expense leverage after considering items impacting comparability for the year ended
December 31, 2012, is positive 1 percentage point, which is calculated by subtracting currency neutral gross profit growth after
considering items impacting comparability of 5% from currency neutral operating income growth after considering items impacting
comparability of 6%.

 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions except per share data)
                           
                             
                            Year Ended December 31, 2012
                                                                                                                   Net income
                                                                                                                                  Diluted
                                         Equity    Other     Income                               Net income       attributable
                                                                                                                   to             net
                              Interest   income    income    before       Income      Effective   attributable
                                                                                                  to               shareowners    income
                              expense    (loss)    (loss)    income       taxes       tax rate                     of
                                         —         —                                              noncontrolling                  per
                                                             taxes                                                 The
                                         net       net                                            interests        Coca-Cola      share^1

                                                                                                                   Company
Reported (GAAP)               $  397     $ 819     $ 137     $ 11,809     $ 2,723     23.1  %     $    67          $  9,019       $ 1.97
Items Impacting
Comparability:
Asset                         —          —         16        179          —                       —                179            0.04
Impairments/Restructuring
Productivity &                —          —         —         270          100                     —                170            0.04
Reinvestment
Productivity Initiatives      —          —         —         (10      )   (3      )               —                (7        )    —
Equity Investees              —          (8    )   —         (8       )   2                       —                (10       )    —
CCE Transaction               —          —         —         (6       )   (2      )               —                (4        )    —
Transaction Gains             —          —         (82   )   (79      )   (61     )               —                (18       )    —
Certain Tax Matters           —          —         —         —            150                     —                (150      )    (0.03  )
Other Items                   —          11        —         62           23                      1                38             0.01    
After Considering Items       $  397     $ 822     $ 71      $ 12,217     $ 2,932     24.0  %     $    68          $  9,217       $ 2.01  
(Non-GAAP)
                             
                             
                            Year Ended December 31, 2011
                                                                                                                   Net income
                                                                                                                                  Diluted
                                         Equity    Other     Income                               Net income       attributable
                                                                                                                   to             net
                              Interest   income    income    before       Income      Effective   attributable
                                                                                                  to               shareowners    income
                              expense    (loss)    (loss)    income       taxes       tax rate                     of
                                         —         —                                              noncontrolling                  per
                                                             taxes                                                 The
                                         net       net                                            interests        Coca-Cola      share^2

                                                                                                                   Company
Reported (GAAP) — As          $  417     $ 690     $ 529     $ 11,458     $ 2,812     24.5  %     $    62          $  8,584       $ 1.85
Adjusted
Items Impacting
Comparability:
Asset                         —          —         58        177          23                      —                154            0.03
Impairments/Restructuring
Productivity &                —          —         —         —            —                       —                —              —
Reinvestment
Productivity Initiatives      —          —         —         156          49                      —                107            0.02
Equity Investees              —          53        —         53           8                       —                45             0.01
CCE Transaction               —          —         5         386          145                     —                241            0.05
Transaction Gains             —          —         (641  )   (606     )   (289    )               —                (317      )    (0.07  )
Certain Tax Matters           —          —         —         —            7                       —                (7        )    —
Other Items                   (9     )   —         —         214          77                      —                137            0.03    
After Considering Items       $  408     $ 743     $ (49 )   $ 11,838     $ 2,832     23.9  %     $    62          $  8,944       $ 1.92  
(Non-GAAP)
                                                                                                 
                                                                                                 
                                                                                                                   Net income
                                                                                                                                  Diluted
                                         Equity    Other     Income                               Net income       attributable
                                                                                                                   to             net
                              Interest   income    income    before       Income                  attributable
                                                                                                  to               shareowners    income
                              expense    (loss)    (loss)    income       taxes                                    of
                                         —         —                                              noncontrolling                  per
                                                             taxes                                                 The
                                         net       net                                            interests        Coca-Cola      share

                                                                                                                   Company
% Change — Reported           (5)        19        —         3            (3)                     8                5              6
(GAAP)
% Change — After
Considering Items             (3)        11        —         3            4                       10               3              5
(Non-GAAP)
 
Note: Certain columns may not add due to rounding. Certain growth rates may not recalculate using the rounded dollar amounts provided.
 
^1 4,584 million average shares outstanding — diluted
^2 4,646 million average shares outstanding — diluted

<td class="bw*Story too large*
 
 
 
 
 
 
THE COCA-COLA COMPANY AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(In millions)
                                                                                                         
Operating Income (Loss) by Segment:
                             
                            Three Months Ended December 31, 2012
                              Eurasia             Latin     North               Bottling
                              &         Europe                        Pacific                 Corporate   Consolidated
                                                  America   America             Investments
                              Africa
Reported (GAAP)               $ 273     $ 670     $ 715     $ 558     $ 426     $   (29  )    $  (430 )   $  2,183
Items Impacting
Comparability:
Asset                         —         —         —         —         —         119           —           119
Impairments/Restructuring
Productivity &                —         1         —         70        2         —             20          93
Reinvestment
Productivity Initiatives      —         (1    )   —         —         —         —             —           (1        )
CCE Transaction               —         —         —         (1    )   —         —             —           (1        )
Transaction Gains             —         —         —         —         —         —             3           3
Other Items                   —         —         —         86        (1    )   —             2           87         
After Considering Items       $ 273     $ 670     $ 715     $ 713     $ 427     $   90        $  (405 )   $  2,483   
(Non-GAAP)
                             
                             
                            Three Months Ended December 31, 2011
                              Eurasia             Latin     North               Bottling
                              &         Europe                        Pacific                 Corporate   Consolidated
                                                  America   America             Investments
                              Africa
Reported (GAAP) — As          $ 231     $ 593     $ 652     $ 498     $ 382     $   35        $  (435 )   $  1,956
Adjusted
Items Impacting
Comparability:
Asset                         1         —         —         2         —         31            6           40
Impairments/Restructuring
Productivity &                —         —         —         —         —         —             —           —
Reinvestment
Productivity Initiatives      2         20        1         —         1         —             56          80
CCE Transaction               —         —         —         143       —         —             2           145
Transaction Gains             —         —         —         —         —         —             —           —
Other Items                   —         —         —         (2    )   —         14            6           18         
After Considering Items       $ 234     $ 613     $ 653     $ 641     $ 383     $   80        $  (365 )   $  2,239   
(Non-GAAP)
                                                                                                           
Currency Neutral Operating Income (Loss) by Segment:
                                                                                                           
                              Eurasia             Latin     North               Bottling
                              &         Europe                        Pacific                 Corporate   Consolidated
                                                  America   America             Investments
                              Africa
% Change — Reported           18        13        10        12        11        —             1           12
(GAAP)
% Currency Impact             (7)       (3)       (6)       0         2         —             (1)         (4)
% Change — Currency           24        16        16        12        10        —             3           16
Neutral Reported
                                                                                                           
% Change — After
Considering Items             16        9         10        11        11        13            (11)        11
(Non-GAAP)
% Currency Impact After
Considering Items             (7)       (3)       (6)       0         2         (14)          0           (4)
(Non-GAAP)
% Change — Currency
Neutral After Considering     23        12       
Items (Non-GAAP)

[TRUNCATED]
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