coca cola Reconciliation of Q4 and Full Year 2006 Non-GAAP Financial Measures
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coca cola Reconciliation of Q4 and Full Year 2006 Non-GAAP Financial Measures

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coca cola Reconciliation of Q4 and Full Year 2006 Non-GAAP Financial Measures coca cola Reconciliation of Q4 and Full Year 2006 Non-GAAP Financial Measures Document Transcript

  • Page 1 of 4 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2006 and December 31, 2005. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures (UNAUDITED) (In millions except per share data and percentages) Three Months Ended December 31, 2006 Items Impacting Comparability After Asset % Change - % Change - After Considering Impairments/ Foundation Certain Tax Reported Considering Items Reported Items Restructuring Equity Investees Transaction Gains Donation Matters (1) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Net Operating Revenues $5,932 $5,932 7 7 Cost of goods sold 2,063 ($4) 2,059 3 3 Gross Profit 3,869 4 3,873 9 9 Selling, general and administrative expenses (2) 2,587 ($100) 2,487 13 8 Other operating charges 70 (70) - -- -- Operating Income 1,212 74 100 1,386 (4) 10 Interest income 41 41 (43) (43) Interest expense 47 47 (23) (23) Equity income - net (467) $615 148 -- (16) Other income (loss) - net 147 ($175) (28) -- -- Income Before Income Taxes 886 74 615 (175) 100 1,500 (35) 6 Income taxes 208 10 57 (76) 38 $37 274 (59) (18) Net Income $678 $64 $558 ($99) $62 ($37) $1,226 (22) 13 Diluted Net Income Per Share $0.29 $0.03 $0.24 ($0.04) $0.03 ($0.02) $0.52 (3) (19) 13 Average Shares Outstanding - Diluted 2,341 2,341 2,341 2,341 2,341 2,341 2,341 Gross Margin 65.2% 65.3% Operating Margin 20.4% 23.4% Effective Tax Rate 23.5% 18.2% (4) Three Months Ended December 31, 2005 Items Impacting Comparability After Considering Resolution of Tax Repatriation of Reported Items HFCS Settlement Matters Foreign Earnings Equity Investee (GAAP) (Non-GAAP) Net Operating Revenues $5,551 $5,551 Cost of goods sold 1,996 $5 2,001 Gross Profit 3,555 (5) 3,550 Selling, general and administrative expenses 2,293 2,293 Operating Income 1,262 (5) 1,257 Interest income 72 72 Interest expense 61 61 Equity income - net 127 $49 176 Other income (loss) - net (27) (27) Income Before Income Taxes 1,373 (5) 49 1,417 Income taxes 509 (2) $10 ($188) 4 333 Net Income $864 ($3) ($10) $188 $45 $1,084 Diluted Net Income Per Share $0.36 $0.00 $0.00 $0.08 $0.02 $0.46 Average Shares Outstanding - Diluted 2,375 2,375 2,375 2,375 2,375 2,375 Gross Margin 64.0% 64.0% Operating Margin 22.7% 22.6% Effective Tax Rate 37.1% 23.5% Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains and accounting changes positively impacting net income are reflected as deductions to reported net income. (1) Primarily related to changes in reserves related to certain tax matters. (2) Selling, general and administrative expenses excluding items impacting comparability and structural changes: 2006 2005 % Change Reported selling, general and administrative expenses $2,587 $2,293 13% Donation to The Coca-Cola Foundation (100) -- Structural changes (63) -- Selling, general and administrative expenses excluding items impacting comparability and structural changes $2,424 $2,293 6% (3) Per share amounts do not add due to rounding. (4) Effective tax rate calculated on full figures.
  • Page 2 of 4 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the years ended December 31, 2006 and December 31, 2005. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures (UNAUDITED) (In millions except per share data and percentages) Year Ended December 31, 2006 Items Impacting Comparability % Change - After After Asset Considering % Change - Considering Impairments/ Equity Transaction Foundation Certain Tax Reported Items Reported Items Restructuring Investees Gains Donation Matters (1) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Net Operating Revenues (2) $24,088 $24,088 4 4 Cost of goods sold 8,164 ($4) 8,160 0 (1) Gross Profit 15,924 4 15,928 7 7 Selling, general and administrative expenses (3) 9,431 ($100) 9,331 8 7 Other operating charges 185 (185) - -- -- Operating Income (4) 6,308 189 100 6,597 4 7 Interest income 193 193 (18) (18) Interest expense 220 220 (8) (8) Equity income - net 102 $606 708 (85) (1) Other income (loss) - net 195 ($298) (103) -- -- Income Before Income Taxes 6,578 189 606 (298) 100 7,175 (2) 6 Income taxes 1,498 30 57 8 38 ($24) 1,607 (18) 1 Net Income $5,080 $159 $549 ($306) $62 $24 $5,568 4 7 Diluted Net Income Per Share $2.16 $0.07 $0.23 ($0.13) $0.03 $0.01 $2.37 6 9 Average Shares Outstanding - Diluted 2,350 2,350 2,350 2,350 2,350 2,350 2,350 Gross Margin 66.1% 66.1% Operating Margin 26.2% 27.4% Effective Tax Rate 22.8% 22.4% Year Ended December 31, 2005 Items Impacting Comparability Issuances of Accelerated After Resolution Repatriation of Stock by Amortization of Asset Considering Reported of Tax Foreign Equity Stock-Based Write- Items (GAAP) HFCS Settlement Matters Earnings Investees Compensation Equity Investee downs (Non-GAAP) Net Operating Revenues 23,104 $23,104 Cost of goods sold 8,195 $47 8,242 Gross Profit 14,909 (47) 14,862 Selling, general and administrative expenses 8,739 ($50) 8,689 Other operating charges 85 ($85) - Operating Income 6,085 (47) 50 85 6,173 Interest income 235 235 Interest expense 240 240 Equity income - net 680 $33 4 717 Other income (loss) - net (93) (93) Gain on issuances of stock by equity investees 23 ($23) - Income Before Income Taxes 6,690 (47) (23) 50 33 89 6,792 Income taxes 1,818 (18) $101 ($315) (8) 12 2 4 1,596 Net Income $4,872 ($29) ($101) $315 ($15) $38 $31 $85 $5,196 Diluted Net Income Per Share $2.04 ($0.01) ($0.04) $0.13 ($0.01) $0.02 $0.01 $0.04 $2.17 (5) Average Shares Outstanding - Diluted 2,393 2,393 2,393 2,393 2,393 2,393 2,393 2,393 2,393 Gross Margin 64.5% 64.3% Operating Margin 26.3% 26.7% Effective Tax Rate 27.2% 23.5% Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains and accounting changes positively impacting net income are reflected as deductions to reported net income. (1) Primarily related to changes in reserves related to certain tax matters. (2) Net operating revenues excluding structural changes: 2006 2005 % Change Reported net operating revenues $24,088 $23,104 4% Structural changes (460) (779) -- Net operating revenues excluding structural changes $23,628 $22,325 6% (3) Selling, general and administrative expenses excluding items impacting comparability and structural changes: 2006 2005 % Change Reported selling, general and administrative expenses $9,431 $8,739 8% Donation to The Coca-Cola Foundation (100) -- Accelerated amortization of stock-based compensation expense (50) -- Structural changes (130) -- Selling, general and administrative expenses excluding items impacting comparability and structural changes $9,201 $8,689 6% (4) Operating Income for the year ended December 31, 2006 includes a negative currency impact of approximately 1%. Ongoing, currency neutral operating income growth is 8%. (5) Per share amounts do not add due to rounding.
  • Page 3 of 4 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2006 and December 31, 2005. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures Operating Income (Loss), by Segment (UNAUDITED) (In millions except percentages) Three Months Ended December 31, 2006 Three Months Ended December 31, 2005 Items Impacting Items Impacting Comparability Comparability % Favorable (Unfavorable) - % Favorable After After After (Unfavorable) - Considering Considering Considering Asset Foundation HFCS Reported Items Impairments/ Reported Items Reported Items Donation Settlement (GAAP) (Non-GAAP) Restructuring (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Africa $137 $2 $139 $135 $135 1 3 East, South Asia and Pacific Rim 75 25 100 75 75 0 33 European Union 480 2 482 458 458 5 5 Latin America 390 390 303 303 29 29 North America 419 419 366 366 14 14 North Asia, Eurasia and Middle East 333 17 350 419 419 (21) (16) Bottling Investments (59) 27 (32) (40) (40) (48) 20 Corporate (563) 1 $100 (462) (454) ($5) (459) (24) (1) Consolidated $1,212 $74 $100 $1,386 $1,262 ($5) $1,257 (4) 10
  • Page 4 of 4 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the twelve months ended December 31, 2006 and December 31, 2005. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures Operating Income (Loss), by Segment (UNAUDITED) (In millions except percentages) Year Ended December 31, 2006 Year Ended December 31, 2005 Items Impacting Comparability Items Impacting Comparability % Favorable (Unfavorable) - % Favorable After After After Accelerated HFCS (Unfavorable) - Considering Considering Amortization of Considering Asset Lawsuit Reported Items Impairments/ Foundation Asset Stock-Based Reported Items Reported Items Settlement Write-downs Compensation (Non-GAAP) (GAAP) Restructuring Donation (Non-GAAP) (GAAP) (Non-GAAP) (GAAP) Africa $424 $3 $427 $396 $3 $399 7 7 East, South Asia and Pacific Rim 358 44 402 284 $85 3 372 26 8 European Union 2,254 36 2,290 2,219 3 2,222 2 3 Latin America 1,438 1,438 1,176 4 1,180 22 22 North America 1,683 1,683 1,553 12 1,565 8 8 North Asia, Eurasia and Middle East 1,557 17 1,574 1,735 3 1,738 (10) (9) Bottling Investments 18 88 106 (37) (37) - - Corporate (1,424) 1 $100 (1,323) (1,241) ($47) 22 (1,266) (15) (5) Consolidated $6,308 $189 $100 $6,597 $6,085 ($47) $85 $50 $6,173 4 7