ATLANTA — The Coca-Cola Company today reported full-year and fourth quarter 2013 results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company said, “2013 was marked by ongoing global macroeconomic challenges in many markets around the world. And while our business was not immune to these pressures leading to moderated global volume growth, we delivered sound financial results in line with our long-term profit targets and gained global value share in total nonalcoholic ready-to-drink beverages as well as global volume and value share in core sparkling and still beverages for the year.
“While we move forward in what remains an uncertain global economy, the long-term fundamentals driving our business and industry have not changed. A rising middle class, greater urbanization and increasing personal consumption expenditures in markets around the world will continue to drive greater demand for our beverages as consumers look for moments of refreshment. As we work to restore momentum in our business during 2014, we see many reasons to believe we can accelerate our growth and achieve our 2020 Vision. We are committed to accelerating marketing investments in our brands, further advancing our innovation strategies and maximizing productivity and reinvestment for growth. All of us at The Coca-Cola Company remain resolute in our commitment to deliver results in line with our long-term growth model and 2020 Vision for sustainable value and success.”
PERFORMANCE HIGHLIGHTS
The Coca-Cola Company reported worldwide volume growth of 2% for the full year and 1% for the fourth quarter. While economic, political and environmental conditions across various regions impacted consumer spending and overall nonalcoholic ready-to-drink (NARTD) beverage industry performance during the year, we grew global value share in NARTD beverages, with volume and value share gains in core sparkling and still beverages for the year, supported by the strongest portfolio of brands in the industry. The Company reported solid volume growth for the full year in certain developed markets, including Germany (+2%), the Northwest Europe and Nordics business unit (+1%) and Japan (+1%). Our China and India businesses both grew slower than in recent years amidst slowing economic environments, but saw stronger performance in the second half of the year due to a focus on execution and normalized weather.
Despite global volume growth below our expectations and long-term growth target, we delivered sound financial results for the full year. Excluding the impact of structural changes, primarily the deconsolidation of certain Company-owned bottling operations, the Company delivered comparable currency neutral net revenue growth of 3%, capturing global price/mix of 1%. Importantly, excluding the impact of structural changes, we grew comparable currency neutral operating income 6% for 2013. We also grew comparable currency neutral EPS 8% for the year. Both of these profit growth rates are in line with our long-term targets. In 2013, we returned $8.5 billion in cash to our shareowners through dividends and net share repurchases. This performance underscores our ability to generate sound financial results even in a challenging year.
Worldwide sparkling beverage volume was up 1% for the year, led by brand Coca-Cola, and was even for the fourth quarter. Growth for the year was broad based across our sparkling portfolio, including Fanta and Sprite, enabling us to capture global core sparkling volume share for the eighth consecutive year. We continued to drive innovation in our portfolio, launching Coca-Cola Life, a naturally sweetened mid-calorie cola, in Argentina and Chile. We grew worldwide still beverage volume 5% for the full year and 6% for the fourth quarter, with growth across multiple beverage categories, including juices and juice drinks, ready-to-drink teas, packaged water, sports drinks and energy drinks.
OPERATING REVIEW
Three Months Ended December 31, 2013
% Favorable / (Unfavorable)
Unit Case
Volume
Net
Revenues
Operating
Income
Comparable
Currency
Neutral
Operating
Income
Comparable
Currency
Neutral
Operating
Income
Excluding
Structural
Total Company
1
(4)
(4)
1
6
Eurasia & Africa
6
1
(11)
(2)
Europe
1
11
(11)
(6)
Latin America
—
(1)
(2)
13
North America
(1)
—
—
(12)
Pacific
4
(10)
7
16
Bottling Investments
(29)
(25)
(153)
(60)
Three Months Ended December 31, 2013
% Favorable / (Unfavorable)
Concentrate Sales/
Reported
Volume *
Price/Mix
Currency
Structural
Changes
Net
Revenues
Comparable
Currency
Neutral Net
Revenues
Comparable
Currency
Neutral Net
Revenues
Excluding
Structural
Total Company
2
1
(2)
(5)
(4)
(1)
4
Eurasia & Africa
6
2
(7)
—
1
9
Europe
1
7
3
—
11
8
Latin America
2
10
(11)
(2)
(1)
11
North America
—
1
(1)
—
—
—
Pacific
3
(5)
(9)
1
(10)
(1)
Bottling Investments
8
1
—
(34)
(25)
(25)
*
Represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For our Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only and is computed on a reported basis.
Year Ended December 31, 2013
% Favorable / (Unfavorable)
Unit Case
Volume
Net
Revenues
Operating
Income
Comparable
Currency
Neutral
Operating
Income
Comparable
Currency
Neutral
Operating
Income
Excluding
Structural
Total Company
2
(2)
(5)
4
6
Eurasia & Africa
7
2
1
9
Europe
(1)
4
(3)
(1)
Latin America
1
2
1
12
North America
—
—
(6)
(3)
Pacific
3
(7)
(2)
6
Bottling Investments
(17)
(14)
(18)
—
Year Ended December 31, 2013
% Favorable / (Unfavorable)
Concentrate
Sales /
Reported
Volume *
Price / Mix
Currency
Structural
Changes
Net
Revenues
Comparable
Currency
Neutral
Net
Revenues
Comparable
Currency
Neutral Net
Revenues
Excluding
Structural
Total Company
2
1
(2)
(3)
(2)
—
3
Eurasia & Africa
7
2
(7)
—
2
9
Europe
(1)
5
—
—
4
4
Latin America
1
10
(8)
(1)
2
10
North America
—
1
—
(1)
—
—
Pacific
5
(4)
(6)
(2)
(7)
—
Bottling Investments
4
1
(1)
(18)
(14)
(13)
* Represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For our Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only.
Eurasia & Africa
Our Eurasia and Africa Group grew volume 6% in the quarter. All five of the group’s business units delivered volume growth for the quarter and full year, even with social unrest and challenging macroeconomic environments in certain markets. During the quarter, we gained volume share in NARTD beverages, with share gains in sparkling beverages, juices and juice drinks and sports drinks. Sparkling beverage volume grew mid single digits in the quarter, led by brand Coca-Cola, as we focused on driving executional capabilities in the marketplace and leveraging our marketing platforms including the Sochi Olympics and “Share a Coke”.
Reported operating income declined 11% in the quarter with comparable currency neutral operating income down 2% in the quarter, reflecting volume growth and positive price/mix offset by the timing of certain operating expenses. Reported operating income increased 1% for the full year. Comparable currency neutral operating income increased 9% for the full year, driven by revenue growth across most business units, partially offset by investments in our brands.
Europe
For the quarter, our Europe Group’s volume grew 1% representing a sequential improvement versus the third quarter year-to-date results, with our sparkling beverage volume also growing 1% in the quarter. While there has been some improvement in our performance, we are still seeing ongoing macroeconomic uncertainty and weak consumer confidence impacting consumer spending, particularly in the southern region of Europe. We continue to focus on our share positions with the Europe Group maintaining volume share in NARTD beverages and gaining volume and value share in core sparkling beverages and sports drinks.
The consolidation of the innocent branded juice and smoothie business contributed significantly to the group’s price/mix and thus net revenues in both the quarter and the year. However, it contributed less meaningfully to the group’s operating income due to the higher cost of goods sold associated with a finished goods business and our level of investment as we continue to build and expand the business.
Reported operating income declined 11% in the quarter, with comparable currency neutral operating income down 6% in the quarter. The decline in comparable currency neutral operating income in the quarter was primarily due to cycling the impact of the timing of operating expenses in the prior year quarter. For the full year, reported operating income declined 3%. Comparable currency neutral operating income declined 1% for the full year, reflecting the decline in volume.
Latin America
Our Latin America Group’s volume was even in the quarter with the group gaining volume share in NARTD beverages, resulting in the ninth consecutive year of share gains. However, sparkling beverage volume was down 3% as the category’s performance moderated primarily due to ongoing economic challenges, particularly in Mexico and Brazil, while we maintained volume share in sparkling beverages.
Reported operating income decreased 2% in the quarter, with comparable currency neutral operating income up 13%, reflecting favorable pricing across all business units in the group coupled with volume growth in the Latin Center and South Latin business units, partially offset by investments in our brands. Comparable currency neutral operating income increased 12% for the full year, reflecting volume growth and strong pricing for the group, partially offset by continued investments in the business, including investments related to the 2014 FIFA World CupTM.
North America
We gained volume and value share in NARTD beverages in the fourth quarter, while our volume was down 1%. The overall NARTD industry in North America continued to be impacted by a challenging external environment. While our sparkling beverage volume declined 3% in the quarter, we outperformed the rest of the industry in both volume and value share, as we leveraged our occasion-brand-price-package-channel (OBPPC) strategy to provide increased consumer choice along with preferred price points. Still beverage volume grew 4% in the quarter, with balanced growth and volume and value share gains across every still beverage category, making this the 15th consecutive quarter that our still beverage portfolio has either maintained or gained both volume and value share. Powerade delivered high single-digit growth in the quarter, gaining both volume and value share, with growth coming from both the base business and new Powerade Zero Drops.
Fourth quarter reported operating income was even. Comparable currency neutral operating income declined 12% in the quarter, reflecting softer volume trends, especially in sparkling beverages, and the timing of certain operating expenses. Full-year reported operating income decreased 6% with comparable currency neutral operating income down 3%, reflecting a challenging external environment and the impact of product and package mix.
Pacific
Our Pacific Group’s volume grew 4% in the quarter, representing a sequential improvement versus the third quarter year-to-date results. Growth was broad based with 8% growth in India, 5% growth in China and 3% growth in Japan. Sparkling beverage volume growth was up low single digits in the quarter, led by brand Coca-Cola and Sprite, both up 2%. Still beverage volume grew high single digits in the quarter, with double-digit growth in packaged water and mid single-digit growth in teas and juices and juice drinks.
Reported operating income increased 7% in the quarter and comparable currency neutral operating income increased 16% in the quarter, reflecting volume growth, a shift in product and channel mix within certain markets, productivity initiatives and the tight control and timing of expenses. Reported operating income decreased 2% for the full year while comparable currency neutral operating income increased 6% for the full year, reflecting volume growth and the tight control of expenses.
Bottling Investments
Our Bottling Investments Group’s (BIG) volume grew 7% in the quarter on a comparable basis, led by Germany, China and India, after adjusting for the net impact of structural changes, primarily the deconsolidation of the Philippine and Brazilian bottling operations in 2013. BIG volume, including the impact of structural changes, was down 29% in the quarter and down 17% for the full year.
Reported operating loss in the quarter increased $43 million, primarily reflecting the deconsolidation of Company-owned bottling operations. Comparable currency neutral operating income decreased 60% in the quarter due to the structural changes referenced above, but was partially offset by improved performance in a number of our markets and the benefit of an additional selling day in the quarter. Reported operating income for the full year declined 18%, and comparable currency neutral operating income was even for the full year, reflecting an increase in revenues resulting from volume growth and positive pricing in the majority of our markets, offset by the deconsolidation of Company-owned bottling operations in 2013.
FINANCIAL REVIEW
Summary of Fourth Quarter 2013 Financial Performance
Reported net revenues declined 4%. Excluding the impact of structural changes, comparable currency neutral net revenues grew 4% in the quarter, reflecting an increase in concentrate sales and positive price/mix. Structural changes that impacted net revenues were primarily the deconsolidation of bottling operations in the Philippines and Brazil.
Reported operating income decreased 4%, reflecting a 6% currency headwind, a 4% unfavorable impact due to the structural changes referenced above, as well as the effect of items impacting comparability. Excluding the impact of structural changes, comparable currency neutral operating income increased 6%. Items impacting comparability reduced fourth quarter 2013 operating income by $278 million and reduced fourth quarter 2012 operating income by $300 million.
Reported EPS was $0.38 and comparable EPS was $0.46. Items impacting comparability reduced fourth quarter 2013 reported EPS by a net $0.08 and reduced fourth quarter 2012 reported EPS by a net $0.04. Comparable currency neutral EPS was up 7% for the quarter.
Summary of Full-Year 2013 Financial Performance
Reported net revenues declined 2%. Excluding the impact of the structural changes referenced above, comparable currency neutral net revenues grew 3%. We achieved 1% global price/mix for the year, with positive pricing across key markets, leading to global NARTD value share growth for the 26th consecutive quarter.
Reported operating income decreased 5%, reflecting a 4% currency headwind, a 2% unfavorable impact due to the structural changes referenced above, as well as the effect of items impacting comparability. Excluding the impact of structural changes, comparable currency neutral operating income increased 6%, in line with our long-term target, reflecting volume growth, continued investments around the world in the health and strength of our brands and the efficient management of operating expenses. Items impacting comparability reduced 2013 operating income by $1,032 million and reduced 2012 operating income by $471 million.
Reported EPS was $1.90 and comparable EPS was $2.08. Items impacting comparability reduced 2013 reported EPS by a net $0.18 and reduced 2012 reported EPS by a net $0.04. Comparable currency neutral EPS was up 8% for the year.
Full-year cash from operations was $10,542 million, down 1%, primarily due to the unfavorable impact from currency exchange rates, an increase in tax payments and the deconsolidation of the Brazilian and Philippine bottling operations.
For the year, our dividend payout was $5.0 billion and our net share repurchases totaled $3.5 billion, at the high end of our stated outlook of $3.0 to $3.5 billion.
Effective Tax Rate
The reported effective tax rates for the quarter and full year were 23.3% and 24.8%, respectively. The underlying effective annual tax rate on operations in 2013 was 23.0%, and we expect it to be approximately the same for 2014. 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.
2014 Outlook
The bottling transactions completed in 2013 are anticipated to have an unfavorable 1% structural impact on both our full-year 2014 net revenues and operating income.
Currency exchange rates are expected to have an unfavorable impact on our reported results in 2014. Based on current spot rates, our existing hedge positions, and the cycling of our prior year rates, we estimate currency to be an approximate 7% headwind on our full-year operating income, and an approximate 10% headwind on first quarter operating income.
The underlying effective annual tax rate on operations in 2014 is currently expected to be approximately 23.0%.
In 2014, we are targeting net share repurchases of $2.5 to $3.0 billion.
Productivity Initiatives
In 2014, we are expanding our previously announced productivity and reinvestment program to drive an incremental $1 billion in productivity by 2016 that will be redirected primarily into increased media investments. This commitment is incremental to the productivity and reinvestment initiatives that we committed to delivering from 2012 through the end of 2015.
Productivity is a core pillar of our 2020 Vision and a priority of our Company as we design and implement the most effective and efficient business system. The primary components of the incremental productivity goal will consist of (i) expanded savings through global supply chain optimization as well as data and information technology system standardization, which will be reinvested in global brand-building initiatives with an emphasis on increased media spending, and (ii) improved effectiveness of our marketing investments by transforming our marketing and commercial model to redeploy into more consumer-facing marketing investments to generate the highest possible return and accelerate growth.
Items Impacting Comparability
For details on items impacting comparability in the quarter and for the full year, see the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
NOTES
All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.
“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, unless otherwise noted. 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.
Fourth quarter 2013 financial results were impacted by one additional selling day, which partially offset the impact of two fewer selling days in first quarter 2013 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.
In January 2012, the Company announced that Beverage Partners Worldwide (BPW), our joint venture with Nestlé in the ready-to-drink tea category, will focus its geographic scope primarily in Europe and Canada. The joint venture was phased out in all other territories by the end of 2012, and the Company’s agreement to distribute products in the United States terminated at the end of 2012. We have eliminated the BPW and Nestlé licensed volume and associated concentrate sales for the year ended Dec. 31, 2012 in those countries impacted by these structural changes.
As previously announced, effective Jan. 1, 2013, the Company transferred our India and South West Asia business unit from the Eurasia and Africa operating segment to the Pacific operating segment. The countries included in our India and South West Asia business unit are Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. This change in organizational structure did not impact the other geographic operating segments, Bottling Investments or Corporate. The reclassified historical operating segment data reflecting the change in organizational structure was disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission on March 21, 2013.
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 2013 results today, Feb. 18, 2014 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 a 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,
2013
December 31,
2012
%
Change1
Net Operating Revenues
$
11,040
$
11,455
(4)
Cost of goods sold
4,315
4,628
(7)
Gross Profit
6,725
6,827
(2)
Selling, general and administrative expenses
4,319
4,430
(3)
Other operating charges
301
214
40
Operating Income
2,105
2,183
(4)
Interest income
153
126
22
Interest expense
149
95
56
Equity income (loss) — net
65
182
(64)
Other income (loss) — net
54
(19
)
—
Income Before Income Taxes
2,228
2,377
(6)
Income taxes
520
487
7
Consolidated Net Income
1,708
1,890
(10)
Less: Net income (loss) attributable to noncontrolling interests
(2
)
24
—
Net Income Attributable to Shareowners of The Coca-Cola Company
$
1,710
$
1,866
(8)
Diluted Net Income Per Share2
$
0.38
$
0.41
(7)
Average Shares Outstanding — Diluted2
4,482
4,557
1 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the three months ended December 31, 2013 and 2012, basic net income per share was $0.39 for 2013 and $0.42 for 2012 based on average shares outstanding — basic of 4,410 for 2013 and 4,479 for 2012. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(UNAUDITED)
(In millions except per share data)
Year Ended
December 31,
2013
December 31,
2012
%
Change1
Net Operating Revenues
$
46,854
$
48,017
(2)
Cost of goods sold
18,421
19,053
(3)
Gross Profit
28,433
28,964
(2)
Selling, general and administrative expenses
17,310
17,738
(2)
Other operating charges
895
447
100
Operating Income
10,228
10,779
(5)
Interest income
534
471
13
Interest expense
463
397
17
Equity income (loss) — net
602
819
(27)
Other income (loss) — net
576
137
321
Income Before Income Taxes
11,477
11,809
(3)
Income taxes
2,851
2,723
5
Consolidated Net Income
8,626
9,086
(5)
Less: Net income attributable to noncontrolling interests
42
67
(38)
Net Income Attributable to Shareowners of The Coca-Cola Company
$
8,584
$
9,019
(5)
Diluted Net Income Per Share2
$
1.90
$
1.97
(3)
Average Shares Outstanding — Diluted2
4,509
4,584
1 Certain growth rates may not recalculate using the rounded dollar amounts provided.
2 For the years ended December 31, 2013 and 2012, basic net income per share was $1.94 for 2013 and $2.00 for 2012 based on average shares outstanding — basic of 4,434 for 2013 and 4,504 for 2012. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
(In millions except par value)
December 31,
2013
December 31,
2012
ASSETS
Current Assets
Cash and cash equivalents
$
10,414
$
8,442
Short-term investments
6,707
5,017
Total Cash, Cash Equivalents and Short-Term Investments
17,121
13,459
Marketable securities
3,147
3,092
Trade accounts receivable, less allowances of $61 and $53, respectively
4,873
4,759
Inventories
3,277
3,264
Prepaid expenses and other assets
2,886
2,781
Assets held for sale
—
2,973
Total Current Assets
31,304
30,328
Equity Method Investments
10,393
9,216
Other Investments, Principally Bottling Companies
1,119
1,232
Other Assets
4,661
3,585
Property, Plant and Equipment — net
14,967
14,476
Trademarks With Indefinite Lives
6,744
6,527
Bottlers’ Franchise Rights With Indefinite Lives
7,415
7,405
Goodwill
12,312
12,255
Other Intangible Assets
1,140
1,150
Total Assets
$
90,055
$
86,174
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses
$
9,577
$
8,680
Loans and notes payable
16,901
16,297
Current maturities of long-term debt
1,024
1,577
Accrued income taxes
309
471
Liabilities held for sale
—
796
Total Current Liabilities
27,811
27,821
Long-Term Debt
19,154
14,736
Other Liabilities
3,498
5,468
Deferred Income Taxes
6,152
4,981
The Coca-Cola Company Shareowners’ Equity
Common stock, $0.25 par value; Authorized — 11,200 shares; Issued — 7,040 and 7,040 shares, respectively
1,760
1,760
Capital surplus
12,276
11,379
Reinvested earnings
61,660
58,045
Accumulated other comprehensive income (loss)
(3,432
)
(3,385
)
Treasury stock, at cost — 2,638 and 2,571 shares, respectively
(39,091
)
(35,009
)
Equity Attributable to Shareowners of The Coca-Cola Company
33,173
32,790
Equity Attributable to Noncontrolling Interests
267
378
Total Equity
33,440
33,168
Total Liabilities and Equity
$
90,055
$
86,174
THE COCA-COLA COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)
Year Ended
December 31,
2013
December 31,
2012
Operating Activities
Consolidated net income
$
8,626
$
9,086
Depreciation and amortization
1,977
1,982
Stock-based compensation expense
227
259
Deferred income taxes
648
632
Equity (income) loss — net of dividends
(201
)
(426
)
Foreign currency adjustments
168
(130
)
Significant (gains) losses on sales of assets — net
(670
)
(98
)
Other operating charges
465
166
Other items
234
254
Net change in operating assets and liabilities
(932
)
(1,080
)
Net cash provided by operating activities
10,542
10,645
Investing Activities
Purchases of investments
(14,782
)
(14,824
)
Proceeds from disposals of investments
12,791
7,791
Acquisitions of businesses, equity method investments and nonmarketable securities
(353
)
(1,486
)
Proceeds from disposals of businesses, equity method investments and
nonmarketable securities
872
20
Purchases of property, plant and equipment
(2,550
)
(2,780
)
Proceeds from disposals of property, plant and equipment
111
143
Other investing activities
(303
)
(268
)
Net cash provided by (used in) investing activities
(4,214
)
(11,404
)
Financing Activities
Issuances of debt
43,425
42,791
Payments of debt
(38,714
)
(38,573
)
Issuances of stock
1,328
1,489
Purchases of stock for treasury
(4,832
)
(4,559
)
Dividends
(4,969
)
(4,595
)
Other financing activities
17
100
Net cash provided by (used in) financing activities
(3,745
)
(3,347
)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(611
)
(255
)
Cash and Cash Equivalents
Net increase (decrease) during the year
1,972
(4,361
)
Balance at beginning of year
8,442
12,803
Balance at end of year
$
10,414
$
8,442
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
Three Months Ended
Net Operating Revenues
Operating Income (Loss)
Income (Loss) Before Income Taxes
December 31,
2013
December 31,
2012
% Fav. /
(Unfav.)
December 31,
2013
December 31,
2012
% Fav. /
(Unfav.)
December 31,
2013
December 31,
2012
% Fav. /
(Unfav.)
Eurasia & Africa
$
660
$
656
1
$
242
$
272
(11
)
$
241
$
280
(14
)
Europe
1,269
1,143
11
598
670
(11
)
605
675
(10
)
Latin America
1,266
1,274
(1
)
699
715
(2
)
707
718
(2
)
North America
5,271
5,292
—
557
558
—
555
558
—
Pacific
1,253
1,387
(10
)
454
427
7
452
435
4
Bottling Investments
1,568
2,087
(25
)
(71
)
(29
)
(153
)
2
154
(98
)
Corporate
30
19
64
(374
)
(430
)
13
(334
)
(443
)
25
Eliminations
(277
)
(403
)
31
—
—
—
—
—
—
Consolidated
$
11,040
$
11,455
(4
)
$
2,105
$
2,183
(4
)
$
2,228
$
2,377
(6
)
Note: Certain growth rates may not recalculate using the rounded dollar amounts provided.
During the three months ended December 31, 2013, the results of our operating segments were impacted by the following items:
Intersegment revenues were $169 million for Europe, $22 million for Latin America, $3 million for North America, $66 million for Pacific and $17 million for Bottling Investments.
Operating income (loss) and income (loss) before taxes were reduced by $50 million for Europe, $92 million for North America, $10 million for Pacific, $108 million for Bottling Investments and $24 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 reduced by $5 million for Corporate due to impairment charges recorded on certain of the Company’s intangible assets.
Operating income (loss) and income (loss) before income taxes were reduced by $11 million for Pacific due to a charge associated with certain of the Company’s fixed assets.
Operating income (loss) and income (loss) before income taxes were reduced by $1 million for Corporate due to transaction costs associated with certain of the Company’s bottling partners.
Income (loss) before income taxes was reduced by a net $134 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 $30 million for Corporate due to a charge the Company recognized on the early extinguishment of certain long-term debt.
THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments
(UNAUDITED)
(In millions)
Three Months Ended (continued)
During the three months ended December 31, 2012, the results of our operating segments were impacted by the following items:
Intersegment revenues were $154 million for Europe, $95 million for Latin America, $2 million for North America, $130 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 incr