01—Abstract
Summary
Summary of the 10-K filed February 21, 2023. Cited figures are marked; the original filing is the authoritative source.
The Coca-Cola Company reported solid performance in its 2022 10-K filing, demonstrating resilience despite a challenging macroeconomic environment.
The company saw an 11% increase in net operating revenues, reaching $43,004 milliona, driven by a 5% growth in both unit case and concentrate sales volume, alongside favorable pricing and product/geographic mix. This growth was achieved across all operating segments, particularly notable in Latin America and North America. Despite inflationary pressures and increased commodity and transportation costs which impacted gross profit margin, Coca-Cola's strategic focus on brand investment, innovation, and consumer-centric marketing continues to drive results.
The company also highlighted its commitment to sustainability and its robust financial position, supported by strong cash flow generation and prudent capital allocation. Investors should note the ongoing significant tax dispute with the IRS, which could have a material impact on future financial results if decided unfavorably, although the company remains confident in its defense.
02—Key points
Key Highlights
- Net operating revenues increased by 11% to $43,004 million in 2022.
- Unit case volume and concentrate sales volume both grew by 5% year-over-year.
- Gross profit margin decreased to 58.1% from 60.3% due to increased costs and foreign currency headwinds.
- The company continues to focus on strategic priorities including brand investment, innovation, and consumer-centric marketing.
- A significant risk factor highlighted is the ongoing IRS tax dispute, with potential liabilities estimated up to $14 billion.
- The company repurchased approximately 21.3 million shares of common stock for $1.3 billion in 2022.
- Dividends paid increased to $7,616 million in 2022, marking the 61st consecutive annual increase.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Coca Cola Co kept $0.22.
- Revenue$43.00B100.0%
- Cost of revenue−$18.00B41.9%
- Gross profit$25.00B58.1%
- Operating costs−$14.10B32.8%
- Operating income$10.91B25.4%
- Interest, other & tax−$1.37B3.2%
- Net income$9.54B22.2%
Where FY2022 revenue went
$43.00B- Cost of revenue: $18.00B, 42% of revenue
- SG&A: $12.88B, 30% of revenue
- Net income: $9.54B, 22% of revenue
- Other operating costs: $1.22B, 2.8% of revenue
- Interest, other & tax: $1.37B, 3.2% of revenue
Kept 22% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 21, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $43.00B$38.66B | +11.3% |
| Cost of Revenue | $18.00B$15.36B | +17.2% |
| Gross Profit | $25.00B$23.30B | +7.3% |
| SG&A Expenses | $12.88B$12.14B | +6.1% |
| Operating Income | $10.91B$10.31B | +5.8% |
| Interest Expense | $882.00M$1.60B | −44.8% |
| Net Income | $9.54B$9.77B | −2.3% |
| EPS (Basic) | $2.20$2.26 | −2.7% |
| EPS (Diluted) | $2.19$2.25 | −2.7% |
| Shares Outstanding (Basic) | 4.33B4.32B | +0.3% |
| Shares Outstanding (Diluted) | 4.35B4.34B | +0.2% |
05—Questions
Frequently Asked Questions
What was Coca-Cola's net operating revenue for 2022?
Coca-Cola's net operating revenue for 2022 was $43,004 million, an increase of 11% compared to 2021.
How did the company manage increased costs and inflation?
The company faced increased commodity and transportation costs, which impacted gross profit margin. They managed this through favorable pricing initiatives and favorable channel and package mix, and plan to continue taking actions to mitigate these costs in 2023.
What is the status of the IRS tax dispute?
The company is involved in a significant tax dispute with the IRS concerning transfer pricing for tax years 2007-2009. While the Tax Court has predominantly sided with the IRS, the company is appealing and estimates a potential aggregate incremental tax and interest liability of approximately $14 billion as of December 31, 2022, should the IRS's methodology be applied to subsequent years. The company maintains its position is strong and is defending it vigorously.
06—Continue