10-QPeriod: Q3 FY2009

COCA COLA CO Quarterly Report for Q3 Ended Jul 3, 2009

Filed July 30, 2009For Securities:KO

Summary

The Coca-Cola Company's (KO) Q2 2009 report shows resilience amidst a challenging economic environment, with net income attributable to shareowners increasing to $2.04 billion, up from $1.42 billion in the prior year's quarter. Diluted EPS also saw a significant rise to $0.88 from $0.61. Despite a decrease in net operating revenues, largely driven by unfavorable currency fluctuations and strategic divestitures, the company demonstrated strong operational execution and cost management. Key financial highlights include a robust increase in cash and cash equivalents to $7.65 billion, indicating strong liquidity. The company also continued its focus on operational efficiency through restructuring and productivity initiatives. While facing headwinds from a stronger U.S. dollar, the company's diverse geographic footprint and brand strength supported its performance, with positive volume growth observed in key international markets like Eurasia & Africa and Latin America.

Financial Highlights

50 data points
Beta

Revenue

$8.27B

64.8% Gross Margin

Net Income

$2.04B

24.6% Net Margin

EPS (Diluted)

$0.44

Total Assets

$46.05B

Cash & Equivalents

$7.65B

Free Cash Flow

$2.28B

Financial Statements
Beta
Revenue$8.27B
Cost of Revenue$2.91B
Gross Profit$5.35B
SG&A Expenses$2.84B
Operating Income$2.44B
Interest Expense$97.00M
Net Income$2.04B
EPS (Basic)$0.44
EPS (Diluted)$0.44
Shares Outstanding (Basic)4.63B
Shares Outstanding (Diluted)4.65B

Key Highlights

  • 1Consolidated net income attributable to shareowners rose to $2.04 billion for the quarter, up from $1.42 billion in Q2 2008.
  • 2Diluted earnings per share (EPS) increased to $0.88 from $0.61 year-over-year.
  • 3Net operating revenues decreased by 9% to $8.27 billion, primarily due to unfavorable currency fluctuations and structural changes from divestitures.
  • 4Cash and cash equivalents increased significantly to $7.65 billion as of July 3, 2009, up from $4.70 billion at the end of 2008.
  • 5Worldwide unit case volume increased by 4% in the quarter, driven by strong performance in Eurasia & Africa and Latin America.
  • 6The company incurred $72 million in other operating charges, including restructuring costs, asset impairment, and productivity initiatives.

Frequently Asked Questions

The Coca-Cola Company reported a substantial increase in net income attributable to shareowners, reaching $2.04 billion for the quarter ended July 3, 2009, a significant improvement from $1.42 billion in the same quarter of the prior year. Diluted earnings per share also saw a strong increase to $0.88 from $0.61.

Net operating revenues decreased by 9% to $8.27 billion. This decline was primarily attributed to unfavorable currency fluctuations, which had a significant negative impact due to a stronger U.S. dollar, and structural changes, mainly from the sale of certain bottling operations in 2008. Price and product/geographic mix also had a slight negative impact.

The company's liquidity position remains strong, with cash and cash equivalents increasing to $7.65 billion. In the first quarter of 2009, the company issued approximately $2.25 billion in long-term debt to replace commercial paper and short-term debt, optimizing its debt maturity profile. The company also has access to approximately $2.6 billion in committed, unused credit facilities.

The company recorded $72 million in other operating charges, which included $39 million for restructuring, $17 million for an asset impairment related to a building disposal strategy, and $16 million for ongoing productivity initiatives. Additionally, a $27 million charge was recognized for an other-than-temporary decline in the fair value of a cost method investment during the six-month period.