EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: Media: Ben Deutsch
(404) 676-2683
Investors: Larry M. Mark
(404) 676-8054
THE COCA-COLA COMPANY ANNOUNCES
SECOND QUARTER AND YEAR-TO-DATE 2003 RESULTS
* Chairman and CEO Doug Daft: "Given our emphasis on profitable growth and cash
flow generation throughout our business, we are encouraged by the results we
have generated in the current global operating environment."
* Reported earnings per share were $0.55 for the second quarter, as compared to
$0.49 in the prior year second quarter. Current year second quarter results
include a reduction of $0.02 per share related to the previously announced
streamlining initiatives.
* Worldwide unit case volume grew 5 percent in the second quarter.
* Cash from operations for the first six months was $2.1 billion and the
Company expects strong cash flows to continue in the future.
* The Company reaffirms its plan to repurchase approximately $1.5 billion of
its stock in 2003.
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ATLANTA, July 17, 2003 - The Coca-Cola Company reported second quarter
earnings per share of $0.55, a 12 percent increase from the prior year second
quarter earnings of $0.49 per share. Current quarter results include a reduction
of $0.02 per share related to the previously announced streamlining initiatives.
Results in the quarter were driven by underlying operating profit growth,
improved equity income, currency benefits and a lower effective tax rate. During
the quarter, the Company delivered strong cash flows, improved unit case volume,
and continued to grow share across key nonalcoholic beverage categories.
Worldwide unit case volume increased 5 percent in the second quarter and 4
percent for the first six months. Results in the quarter were driven by 2
percent carbonated soft drink growth and nearly 20 percent growth in
noncarbonated beverages. Year-to-date unit case growth reflects an increase of 5
percent in International operations and 3 percent in North America.
The Company continues to concentrate on maximizing value for customers and
the entire Coca-Cola system based on a balanced approach to volume and pricing
through the execution of brand, package, and channel strategies on a
country-by-country basis. Further, the Company remains focused on efficiency
drivers and supply chain management projects that will generate additional
resources for investments in growth-driving and brand-building initiatives.
Doug Daft, chairman and chief executive officer, said, "Given our emphasis
on profitable growth and cash flow generation throughout our business, we are
encouraged by the results we have generated in the current global operating
environment. We will continue to execute this strategy while balancing
performance across our global portfolio of countries and key markets."
FINANCIAL HIGHLIGHTS
- --------------------
* Cash from operations for the first six months was $2.1 billion, compared to
$2.2 billion in the prior year period. The Company expects strong cash flows
to continue in the future.
* Reported operating income increased 3 percent in the second quarter, which
included a negative 5 percentage point impact as a result of streamlining
initiatives and increased stock-based compensation expense.
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* Factors impacting operating income growth in the quarter were an increase in
gallon shipments of 1 percent, improved concentrate pricing and effective
management of operating expenses. In addition, operating income benefited by
approximately 3 percent due to favorable currency movements in the quarter.
* During the quarter, the Company's results benefited from a lower effective
tax rate than previously indicated. In the current quarter, the underlying
effective tax rate declined to 22.8 percent versus the rate of 26.5 percent
that was communicated in the first quarter. This reduction benefited earnings
in the current quarter by approximately $0.03 per share.
* For the remainder of 2003, the Company expects to maintain an effective tax
rate on operations of 22.8 percent because of effective tax planning,
improved earnings from equity investees, and strong profit contributions from
lower taxed locations where currencies are having a favorable impact.
Earnings per share for the third and fourth quarters of this year are
expected to increase to reflect the lower tax rate.
* The Company repurchased 11.6 million shares of its common stock for $470
million during the first six months and intends to repurchase approximately
$1.5 billion of its stock in 2003.
* The Company increased its dividend 10 percent in 2003, reflecting the 41st
consecutive annual increase.
* Second quarter 2003 reported earnings were $0.55 per share, which included a
reduction of $0.02 per share related to the previously announced streamlining
initiatives. Prior year earnings for the second quarter were $0.49 per share.
* Year-to-date 2003 reported earnings were $0.89 per share, which included a
net reduction of $0.05 per share related to the previously announced
streamlining initiatives and a gain related to a litigation settlement. Prior
year results for the first six months reflected a net income of $0.41 per
share, which included the net reduction of $0.42 per share reflecting the
adoption of SFAS No. 142 - "Goodwill and Other Intangible Assets," and other
charges/gains.
The individual impact of certain items on earnings per share in the quarter and
on a year-to-date basis is summarized as follows:
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- ----------------------------------------------------------------------------------------------
Income (Expense) Per Share
--------------------------
Second Quarter Six Months Ended June 30,
2003 2002 2003 2002
---- ---- ---- ----
ITEMS IMPACTING RESULTS:
- -----------------------
Streamlining Initiatives ($ 0.02) ($ 0.06)
Gain on Litigation Settlement $ 0.01
Cumulative Effect of Adopting SFAS 142 -
Goodwill and Other Intangible Assets ($ 0.37)
Gain on Sale of Kaiser $ 0.01
Non-Cash Charge - Primarily Related to
Investments in Latin America ($ 0.06)
-----------------------------------------------------
($ 0.02) $ 0.00 ($ 0.05) ($ 0.42)
======== ======= ======== ========
- -----------------------------------------------------------------------------------------------
OPERATIONAL HIGHLIGHTS
- ----------------------
North America
- -------------
* Unit case growth was 3 percent for the second quarter and 3 percent on a
year-to-date basis. During the second quarter, results were driven by
solid performance from the bottler-delivered products and improved trends in
the Foodservice and Hospitality Division, partially offset by softness in the
warehouse-delivered juice business.
* Throughout the first six months, the Coca-Cola system remained focused on
marketing execution and product and package innovation, resulting in growth
that outpaced the total nonalcoholic ready-to-drink industry, and included
share position improvements in the major beverage categories. The Coca-Cola
system remains focused on maximizing value for the entire category with a
balanced price/volume approach.
* Year-to-date results in the Retail Division benefited from an increased share
position for Trademark Coca-Cola driven by innovation and strong performance
from Vanilla Coke, diet Vanilla Coke, diet Coke, and the expansion of the
Fridge Pack availability.
* During the quarter, Trademark Sprite had growth of 12 percent in the Retail
Division, led by the launch of Sprite Remix. Early consumer reaction to the
launch of Sprite
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Remix has been very positive, leading to improving brand health scores for
the entire Sprite brand.
* Noncarbonated beverages continued solid growth in the quarter led by 14
percent growth in Powerade and 9 percent growth in Dasani, which continues to
maintain a strong price premium within the water category.
* The Company's position in the water category has also benefited from last
year's strategic transactions involving the Evian and Danone water brands.
The Company has captured increased value from the entire water category by
continuing to implement its three-tiered water strategy. The Company's share
of revenue has expanded through a comprehensive strategy to differentiate
brands, packages and channels to maximize value for customers and the entire
Coca-Cola system. The Coca-Cola system is now the largest provider of
packaged water in the United States in terms of retail dollar revenue.
* Unit cases in the Foodservice and Hospitality Division declined 1 percent
compared to the prior year second quarter, resulting from weak overall
restaurant traffic in the quarter. Improved trends during the second quarter,
along with anticipated improving consumer spending trends, should lead to
stronger performance from this division throughout the remainder of the year.
Europe, Eurasia and Middle East
- -------------------------------
* Unit case volume increased 7 percent in the second quarter and increased 4
percent for the first six months. During the quarter, the Company had strong
performance in Western Europe, as well as in key markets in Central and
Eastern Europe.
* The Group's overall financial performance has benefited from strong results
in key markets such as Spain, Great Britain, France, Belgium and Italy,
resulting from strong volume growth, effective concentrate price and brand
mix management, as well as a diligent focus on the management of operating
expenses.
* Overall results for the Group benefited from innovations in profitable
packages, especially around diet Coke with lemon, Vanilla Coke, Sprite Ice
Cube, and the Powerade Matrix package and flavor.
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* In Germany, unit case volume in the second quarter was flat versus the prior
year second quarter, reflecting a significant improvement from the first
quarter disruptions that resulted from the implementation of a deposit law on
non-returnable packages. The Coca-Cola system remains extremely well
positioned to take advantage of the move by German consumers back to
returnable packaging and to expand in other beverage categories that are not
yet impacted by the deposit law. The Company has successfully introduced new
packages and initiatives that are expected to lead to growth in Germany
during the second half of the year.
Asia
- ----
* Unit case volume increased 4 percent for the quarter, cycling 14 percent
growth in the prior year second quarter. For the first six months, unit case
volume increased 6 percent, cycling 12 percent growth during the prior year
period.
* Strong results during the first six months were driven by growth in
Australia, the Philippines, India and Thailand. Core carbonated soft drinks
continued to drive growth across Asia, particularly in single-serve packages,
along with strong performance of local brands such as Thums Up, Qoo and
Kinley.
* Growth trends in the region during the second quarter were affected by the
SARS virus in China, Hong Kong, Taiwan and Singapore. The Company estimates
that SARS reduced the region's unit case growth rate by approximately 3
percentage points during the quarter. However, these trends did not
significantly impact the profit for the Group due to measures taken early in
the quarter to redirect resources and postpone investments until consumer
confidence returned. In China, unit case volume declined approximately 2
percent during the second quarter, and increased 9 percent during the first
six months of the year. The Company has seen encouraging signs that the worst
impact on its business from the SARS virus is now over.
* In Japan, unit case volume declined 3 percent in the second quarter, cycling
3 percent growth in the prior year second quarter. To cycle the very
successful World Cup programs from the prior year second quarter, the
Company's strategy during the quarter was to pursue share of retail dollars
and to focus on the most profitable volume and package sizes. As a result of
this strategy, the Company experienced positive
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growth in every month of the quarter for highly profitable packages including
small cans (120-200 ml), small PET (200-350 ml), and the innovative
bottle/can package.
* Unit case volume in Japan during the second quarter was impacted by a
voluntary product recall of two products, BOCO and Pooh Honey Lemon. The
recall by the Company and other beverage manufacturers arose because of an
ingredient supplier's confusion over the government's approval of a
proprietary flavor ingredient. While the ingredient is widely used in many
countries around the world, including the United States and the European
Union, and poses no threat to consumers, the ingredient supplier had failed
to identify it was not an approved ingredient for Japan. The products have
been reformulated and are both back in the market. The Company estimates that
the product recall reduced Japan volume by approximately 2 percentage points
of growth during the second quarter.
Latin America
- -------------
* Unit case volume increased 5 percent in the second quarter and 5 percent for
the first six months, led by strong growth in Mexico and improving trends in
Argentina, partially offset by volume softness in Brazil relating to a system
profit realization strategy.
* Mexico unit case volume grew 14 percent in the second quarter and 14 percent
during the first six months. Performance in the second quarter benefited from
carbonated soft drink growth of 4 percent, led by strong performance from
core brands resulting from packaging innovations, new flavor introductions
and the effect of the Real marketing platform. In the fast-growing water
category, the Company is benefiting from national marketing programs behind
Ciel, the continued expansion of single-serve water packages, and the
availability of Ciel in former Risco brand territories.
* In Argentina, unit case volume grew 18 percent in the second quarter and 11
percent year-to-date, reflecting the Company's long-term strategy of
investing in the country during last year's economic crisis. Further, as a
result of a strong emphasis on refillable packages, Trademark Coca-Cola grew
by 27 percent in the second quarter.
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* In Brazil, unit case volume declined 12 percent in the quarter and 6 percent
year-to-date as a result of significant price increases that were implemented
in the marketplace to cover increased raw material costs, the effect of
devaluation and to improve the overall profitability of the Company and its
bottling partners.
Africa
- ------
* Unit case volume increased 3 percent for the quarter, cycling 7 percent
growth in the prior year second quarter. For the first six months, unit case
volume increased 3 percent, cycling 9 percent growth during the prior year
period.
* Strong performance in the Southern and East Africa Division was led by unit
case growth of 12 percent in South Africa, the Company's largest market in
Africa. Within South Africa, Trademark Coca-Cola brands grew by 22 percent
resulting from the introduction of the Real marketing platform, the
successful launch of Vanilla Coke, the roll-out of 300 ml returnable glass
bottles, and superior local execution by the Company's bottling partners.
* Results in parts of the North and West Africa Division have been negatively
impacted by the challenging operating environment. In Nigeria, the second
largest market in Africa, the Company has focused on price realization in the
marketplace to improve the overall profitability for the Company and its
bottling partners.
* Throughout Africa, the Company continues to invest and focus on business
fundamentals to drive profitable volume for the system. These initiatives
include new cold outlet creation, improvements in market execution and
availability and affordable packaging.
STREAMLINING INITIATIVES
- ------------------------
During the first quarter of 2003, the Company initiated steps to streamline
and simplify its operations, primarily in North America and Germany. In North
America, the Company is integrating the operations of its three separate North
American business units -- Coca-Cola North America, Minute Maid, and Fountain.
In Germany, Coca-Cola Erfrischungsgetraenke AG (CCEAG) is taking steps to
improve its efficiency in sales, distribution and manufacturing.
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These initiatives are proceeding as planned and have resulted in a second
quarter charge of $70 million pre-tax ($43 million after-tax or $0.02 per share)
and a year-to-date charge of $229 million pre-tax ($146 million after-tax or
$0.06 per share).
As previously announced, the streamlining initiatives are expected to
result in a full-year 2003 charge to earnings of approximately $400 million on a
pre-tax basis and the remainder of the charge will be recorded throughout the
second half of the year.
Separate from the streamlining charge, as a result of the above
initiatives, the Company's financial results are expected to benefit by at least
$50 million (pre-tax) in 2003 and at least $100 million (pre-tax) on an
annualized basis beginning in 2004.
CONFERENCE CALL
- ---------------
The Company will host a conference call with financial analysts to discuss
the second quarter and year-to-date 2003 results on July 17, 2003, at 9:00 a.m.
(EDT). The Company invites investors to listen to the live audiocast of the
conference call at the Company's website, www.coca-cola.com in the "investors"
section. Further, the "investors" section of the Company's website includes a
disclosure and reconciliation of non-GAAP financial measures that may be used
periodically by management when discussing the Company's financial results with
investors and analysts.
-- FINANCIAL SECTION FOLLOWS --
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions, except per share data)
Three Months Ended
June 30,
---------------------------------
2003 2002 % Change
---- ---- --------
NET OPERATING REVENUES $ 5,691 $ 5,368 6
Cost of goods sold 2,113 1,927 10
------- -------
GROSS PROFIT 3,578 3,441 4
Selling, general and administrative expenses
(includes $105 in 2003 and $92 in 2002
related to the impact of the adoption of
the fair value method of accounting for
stock-based compensation) 1,906 1,881 1
Other operating charges 70 -- --
------- -------
OPERATING INCOME 1,602 1,560 3
Interest income 45 52 (13)
Interest expense 43 58 (26)
Equity income 190 176 8
Other income (loss) - net (44) (55) --
------- -------
INCOME BEFORE INCOME TAXES 1,750 1,675 4
Income taxes 388 452 (14)
------- -------
NET INCOME $ 1,362 $ 1,223 11
======= =======
DILUTED NET INCOME PER SHARE* $ 0.55 $ 0.49 12
======= =======
AVERAGE SHARES OUTSTANDING - DILUTED* 2,466 2,487 (1)
======= =======
- -----------
* For the second quarter, "Basic Net Income Per Share" was $0.55 for 2003 and
$0.49 for 2002 based on "Average Shares Outstanding - Basic" of 2,463 and
2,479 for 2003 and 2002, respectively.
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions, except per share data)
Six Months Ended
June 30,
---------------------------------
2003 2002 % Change
---- ---- --------
NET OPERATING REVENUES $ 10,189 $ 9,447 8
Cost of goods sold 3,715 3,321 12
-------- --------
GROSS PROFIT 6,474 6,126 6
Selling, general and administrative expenses
(includes $219 in 2003 and $187 in 2002
related to the impact of the adoption of
the fair value method of accounting for
stock-based compensation) 3,567 3,408 5
Other operating charges 229 -- --
-------- --------
OPERATING INCOME 2,678 2,718 (1)
Interest income 101 110 (8)
Interest expense 88 104 (15)
Equity income 239 237 1
Other income (loss) - net (57) (230) --
-------- --------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 2,873 2,731 5
Income taxes 676 776 (13)
-------- --------
NET INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 2,197 1,955 12
-------- --------
Cumulative effect of accounting change,
net of income taxes
SFAS 142: Company Operations -- (367) --
Equity Investees -- (559) --
-------- --------
NET INCOME $ 2,197 $ 1,029 114
======== ========
DILUTED NET INCOME PER SHARE BEFORE
CUMULATIVE EFFECT $ 0.89 $ 0.79 13
======== ========
DILUTED NET INCOME PER SHARE* $ 0.89 $ 0.41 117
======== ========
AVERAGE SHARES OUTSTANDING - DILUTED* 2,469 2,486 (1)
======== ========
- ----------
* For the first six months, "Basic Net Income Per Share" was $0.89 for 2003
and $0.41 for 2002 based on "Average Shares Outstanding - Basic" of 2,466
and 2,480 for 2003 and 2002, respectively.
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions, except share data)
ASSETS
------
June 30, 2003 December 31, 2002
------------- -----------------
CURRENT ASSETS
Cash and cash equivalents $ 3,324 $ 2,126
Marketable securities 236 219
-------- --------
3,560 2,345
Trade accounts receivable, less allowances
of $59 in 2003 and $55 in 2002 2,341 2,097
Inventories 1,458 1,294
Prepaid expenses and other assets 1,866 1,616
-------- --------
TOTAL CURRENT ASSETS 9,225 7,352
-------- --------
INVESTMENTS AND OTHER ASSETS
Equity method investments
Coca-Cola Enterprises Inc. 1,084 972
Coca-Cola Hellenic Bottling Company S.A. 1,066 872
Coca-Cola Amatil Limited 589 492
Other, principally bottling companies 2,422 2,401
Cost method investments,
principally bottling companies 252 254
Other assets 2,978 2,694
-------- --------
8,391 7,685
-------- --------
PROPERTY, PLANT AND EQUIPMENT
Land 422 385
Building and improvements 2,559 2,332
Machinery and equipment 6,278 5,888
Containers 399 396
-------- --------
9,658 9,001
Less allowances for depreciation 3,399 3,090
-------- --------
6,259 5,911
-------- --------
TRADEMARKS WITH INDEFINITE LIVES 1,879 1,724
GOODWILL AND OTHER INTANGIBLE ASSETS 2,195 1,829
-------- --------
$ 27,949 $ 24,501
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions, except share data)
LIABILITIES AND SHARE-OWNERS' EQUITY
------------------------------------
June 30, 2003 December 31, 2002
------------- -----------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 4,596 $ 3,692
Loans and notes payable 2,801 2,475
Current maturities of long-term debt 485 180
Accrued income taxes 1,199 994
-------- --------
TOTAL CURRENT LIABILITIES 9,081 7,341
-------- --------
LONG-TERM DEBT 2,550 2,701
-------- --------
OTHER LIABILITIES 2,488 2,260
-------- --------
DEFERRED INCOME TAXES 296 399
-------- --------
SHARE-OWNERS' EQUITY
Common Stock, $.25 par value
Authorized: 5,600,000,000 shares
Issued: 3,492,391,383 shares in 2003;
3,490,818,627 shares in 2002 873 873
Capital surplus 4,119 3,857
Reinvested earnings 25,617 24,506
Accumulated other comprehensive income (2,199) (3,047)
-------- --------
28,410 26,189
Less treasury stock, at cost
(1,031,977,112 shares in 2003;
1,019,839,490 shares in 2002) 14,876 14,389
-------- --------
13,534 11,800
-------- --------
$ 27,949 $ 24,501
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)
Six Months Ended
June 30,
--------------------------------
2003 2002
---- ----
OPERATING ACTIVITIES
Net income $ 2,197 $ 1,029
Depreciation and amortization 411 398
Stock-based compensation expense 222 217
Deferred income taxes (219) (196)
Equity income or loss, net of dividends (169) (173)
Foreign currency adjustments (108) 16
Gains on sales of assets (14) (8)
Cumulative effect of accounting changes -- 926
Other operating charges 196 --
Other items 167 203
Net change in operating assets and liabilities (553) (256)
-------- --------
Net cash provided by operating activities 2,130 2,156
-------- --------
INVESTING ACTIVITIES
Acquisitions and investments,
principally trademarks and bottling
companies (205) (267)
Purchases of investments and other assets (55) (62)
Proceeds from disposals of investments and
other assets 130 46
Purchases of property, plant and equipment (398) (374)
Proceeds from disposals of property, plant and
equipment 47 35
Other investing activities 17 36
-------- --------
Net cash used in investing activities (464) (586)
-------- --------
FINANCING ACTIVITIES
Issuances of debt 932 1,189
Payments of debt (614) (1,272)
Issuances of stock 24 85
Purchases of stock for treasury (433) (301)
Dividends (545) (497)
-------- --------
Net cash used in financing activities (636) (796)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 168 31
-------- --------
CASH AND CASH EQUIVALENTS
Net increase during the period 1,198 805
Balance at beginning of period 2,126 1,866
-------- --------
Balance at end of period $ 3,324 $ 2,671
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THE COCA-COLA COMPANY
Second Quarter and Year-To-Date 2003
Unit Case Volume Results
- -------------------------------------------------------------------------------
Unit Case Volume
(% Change)
---------------------------------------
2003 vs. 2002
---------------------------------------
Second Quarter Year-To-Date
-------------- ------------
WORLDWIDE 5 4
INTERNATIONAL OPERATIONS 5 5
Latin America 5 5
Europe, Eurasia and Middle East 7 4
Africa 3 3
Asia 4 6
NORTH AMERICA OPERATIONS 3 3
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FINANCIAL REVIEW
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Operating Results -
- -------------------
Revenues for the second quarter increased 6 percent, reflecting an increase
in gallon shipments of 1 percent, improving pricing of concentrate, positive
currency trends and the inclusion of the Evian and Danone water transactions,
partialy offset by the impact of structural change. Revenues for the first six
months increased 8 percent. The following reflects net operating revenues from
the Company's operations:
- --------------------------------------------------------------------------------------------------
(in millions) Second Quarter Six Months Ended June 30,
2003 2002 2003 2002
---- ---- ---- ----
Company Operations, Excluding Bottling $ 4,874 $ 4,582 $ 8,816 $ 8,237
Company-Owned Bottling Operations 817 786 1,373 1,210
-----------------------------------------------------
Consolidated Net Operating Revenues $ 5,691 $ 5,368 $ 10,189 $ 9,447
- --------------------------------------------------------------------------------------------------
Cost of goods sold in the quarter and on a year-to-date basis increased at
a rate greater than revenues, reflecting the consolidation of lower margin
bottling operations and the inclusion of the Evian and Danone water
transactions, partially offset by the gain related to a litigation settlement.
Selling, general and administrative expenses increased 1 percent in the
second quarter and increased 5 percent during the first six months, primarily
reflecting effective management of operating expenses, structural changes and
the Evian and Danone water transactions. In addition, as a result of the
Company's policy to expense stock options, stock-based compensation expense
increased by approximately $13 million during the quarter and $32 million during
the first six months.
Reported operating income increased 3 percent in the second quarter, which
included the negative impact of the streamlining initiatives ($70 million) and
increased stock-based compensation expense ($13 million increase). On a
year-to-date basis, operating income declined 1 percent, which included the
negative impact of the streamlining initiatives ($229 million), increased
stock-based compensation expense ($32 million increase) and the positive effect
of a first quarter litigation settlement ($52 million).
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Currencies positively impacted operating income in the quarter by
approximately 3 percent, resulting from the strength in the Euro, partially
offset by less attractive year-over-year hedge rates on the Japanese Yen and
weakness in Latin American currencies. For the first six months, currencies
benefited operating income by approximately 1 percent.
Equity income for the second quarter improved versus the prior year,
demonstrating that current business strategies are leading to overall improving
health of the Coca-Cola bottling system around the world.
The reported tax rate for the second quarter was 22.2 percent, reflecting a
22.8 percent underlying effective tax rate on operations and the impact of
higher tax rates related to the streamlining initiatives.
Looking into 2004 and future years, the Company's effective tax rate on
operations is expected to be the longer-term rate of 25.5 percent because of
effective tax planning and improved earnings from equity investees. The lower
effective tax rate in the current and future periods represents real economic
benefit to the Company, as lower tax payments directly improve future cash
flows.
THE COCA-COLA COMPANY
- ---------------------
The Coca-Cola Company is the world's largest beverage company. Along with
Coca-Cola, recognized as the world's best-known brand, The Coca-Cola Company
markets four of the world's top five soft drink brands, including diet Coke,
Fanta and Sprite, and a wide range of other beverages, including diet and light
soft drinks, waters, juices and juice drinks, teas, coffees and sports drinks.
Through the world's largest distribution system, consumers in more than 200
countries enjoy The Coca-Cola Company's products at a rate exceeding 1 billion
servings each day. For more information about The Coca-Cola Company, please
visit our website at www.coca-cola.com.
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FORWARD-LOOKING STATEMENTS
- --------------------------
This press release may contain statements, estimates or projections that
constitute "forward-looking statements" as defined under U.S. federal securities
laws. Generally, the words "believe," "expect," "intend," "estimate,"
"anticipate," "project," "will" and similar expressions identify forward-looking
statements, which generally are not historical in nature. Forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from The Coca-Cola Company's historical
experience and our present expectations or projections. These risks include, but
are not limited to, changes in economic and political conditions; changes in the
nonalcoholic beverages business environment, including actions of competitors
and changes in consumer preferences; product boycotts; foreign currency and
interest rate fluctuations; adverse weather conditions; the effectiveness of our
advertising and marketing programs; fluctuations in the cost and availability of
raw materials; our ability to achieve earnings forecasts; regulatory and legal
changes; our ability to penetrate developing and emerging markets; litigation
uncertainties; and other risks discussed in our Company's filings with the
Securities and Exchange Commission (the "SEC"), including our Annual Report on
Form 10-K, which filings are available from the SEC. You should not place undue
reliance on forward-looking statements, which speak only as of the date they are
made. The Coca-Cola Company undertakes no obligation to publicly update or
revise any forward-looking statements.
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