01—Abstract
Summary
Summary of the 10-K filed February 26, 2009. Cited figures are marked; the original filing is the authoritative source.
For the fiscal year ended December 31, 2008, The Coca-Cola Company reported strong revenue growth, with net operating revenues increasing by 11% to $31.9 billiona, driven by a combination of volume growth across most segments and favorable foreign currency impacts.
Despite facing a challenging economic environment, the company demonstrated resilience, with unit case volume increasing by 5%b globally, led by strong performance in Eurasia and Africa, Latin America, and the Pacific regions. North America saw a slight decline of 1% in unit case volume, attributed to economic headwinds and price increases. The company continued to invest in its brand portfolio and global distribution system, while also managing expenses effectively.
Operating income saw a healthy increase of 16% to $8.4 billionc. However, net income experienced a slight decrease of 3% to $5.8 billion, largely due to a significant increase in equity losses, primarily from impairments at Coca-Cola Enterprises Inc. (CCE).
This highlights the impact of the global economic downturn on key strategic investments. The company also maintained its commitment to shareowners through dividends, increasing its quarterly dividend by 8%d in February 2009.
02—Key points
Key Highlights
- Net operating revenues grew 11% to $31.9 billion.
- Global unit case volume increased by 5%, with strong performance in Eurasia & Africa, Latin America, and Pacific segments.
- Operating income rose 16% to $8.4 billion, indicating effective cost management.
- Net income decreased by 3% to $5.8 billion, impacted by significant equity losses from CCE impairments.
- The company announced an 8% increase in its quarterly dividend, marking its 47th consecutive annual increase.
- Significant investments in acquisitions, including brands and licenses from Carlsberg, and a proposed acquisition of Huiyuan Juice Group, demonstrate a continued focus on portfolio expansion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Coca Cola Co kept $0.18.
- Revenue$31.94B100.0%
- Cost of revenue−$11.37B35.6%
- Gross profit$20.57B64.4%
- Operating costs−$12.12B38.0%
- Operating income$8.45B26.4%
- Interest, other & tax−$2.64B8.3%
- Net income$5.81B18.2%
Where FY2008 revenue went
$31.94B- SG&A: $11.77B, 37% of revenue
- Cost of revenue: $11.37B, 36% of revenue
- Net income: $5.81B, 18% of revenue
- Other operating costs: $350.0M, 1.1% of revenue
- Interest, other & tax: $2.64B, 8.3% of revenue
Kept 18% as net incomeOther operating costs $350.0M · 1.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2008filed February 26, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $31.94B$28.86B | +10.7% |
| Cost of Revenue | $11.37B$10.41B | +9.3% |
| Gross Profit | $20.57B$18.45B | +11.5% |
| SG&A Expenses | $11.77B$10.95B | +7.6% |
| Operating Income | $8.45B$7.25B | +16.5% |
| Interest Expense | $438.00M$456.00M | −3.9% |
| Net Income | $5.81B$5.98B | −2.9% |
| EPS (Basic) | $1.25$1.29 | −3.1% |
| EPS (Diluted) | $1.25$1.28 | −3.1% |
| Shares Outstanding (Basic) | 4.63B4.63B | +0.1% |
| Shares Outstanding (Diluted) | 4.67B4.66B | +0.2% |
05—Questions
Frequently Asked Questions
What was Coca-Cola's overall financial performance in 2008?
In 2008, Coca-Cola reported a 11% increase in net operating revenues to $31.9 billion and a 16% increase in operating income to $8.4 billion. However, net income saw a slight decrease of 3% to $5.8 billion due to significant impairment charges at a key equity investment, CCE. Global unit case volume grew by 5%, showcasing the company's ability to navigate a challenging economic climate.
How did the company's geographic segments perform in 2008?
Performance varied by region. Eurasia and Africa, Latin America, and the Pacific segments showed strong unit case volume growth. North America experienced a 1% decline in unit case volume, attributed to economic conditions and bottler price increases. Europe saw a modest 3% growth in unit case volume.
What were the major factors affecting net income in 2008?
While revenue and operating income grew, net income was impacted by a significant equity loss of $874 million, primarily driven by $1.6 billion in impairment charges recorded by Coca-Cola Enterprises Inc. (CCE). This reflects the adverse effects of challenging macroeconomic conditions and financial market instability on some of the company's major equity investments.
What is the company's strategy regarding acquisitions and investments?
Coca-Cola continued its strategy of strategic acquisitions and investments. In 2008, this included acquiring brands and licenses from Carlsberg and announcing its intention to acquire China Huiyuan Juice Group. The company also maintains significant equity stakes in major bottling operations like CCE, Coca-Cola Hellenic, Coca-Cola FEMSA, and Coca-Cola Amatil, which are crucial to its global distribution network.
06—Continue