COCA COLA CO Quarterly Report for Q3 Ended Sep 29, 2017

Summary

The Coca-Cola Company's (KO) third-quarter 2017 results, filed on October 25, 2017, reflect a period of significant strategic restructuring, particularly the ongoing refranchising of its North American bottling operations. Net operating revenues for the three months ended September 29, 2017, decreased to $9.08 billion from $10.63 billion in the prior year, a 15% decline, largely attributable to divestitures and structural changes within the business. Despite the revenue dip, the company demonstrated resilience, with consolidated net income attributable to shareowners increasing to $1.45 billion from $1.05 billion, and diluted earnings per share rising to $0.33 from $0.24. The company continues to make progress on its long-term productivity and reinvestment program, which is designed to drive cost efficiencies and fund marketing and innovation. Significant charges related to the bottling refranchising, including asset impairments and other operating charges, impacted profitability in certain segments. However, the company's core business performance, coupled with strategic financial management, including debt management and share repurchases, aimed to support shareholder value. Investors should note the substantial one-time gains from divestitures, which influenced net income, and continue to monitor the execution of the refranchising strategy and its impact on future revenue and profitability.

Key Highlights

• 1Net operating revenues decreased by 15% to $9.08 billion for the three months ended September 29, 2017, compared to $10.63 billion in the prior year, primarily due to refranchising of bottling operations.
• 2Consolidated net income attributable to shareowners increased to $1.45 billion, or $0.33 per diluted share, from $1.05 billion, or $0.24 per diluted share, in the prior year.
• 3The company incurred significant 'Other Operating Charges' of $360 million for the quarter, largely related to refranchising costs, productivity initiatives, and tax litigation.
• 4Total assets increased by 4% to $90.52 billion, driven by increases in cash, short-term investments, marketable securities, and equity method investments.
• 5Total liabilities increased by 7% to $68.36 billion, with notable increases in loans and notes payable and long-term debt.
• 6The company made substantial progress on its refranchising of North American bottling territories and China bottling operations, which significantly impacted revenues and operating income in the Bottling Investments segment.
• 7Cash and cash equivalents increased by 46% to $12.53 billion, indicating a strong liquidity position.

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