8-KOther EventsExhibits & Filings

COCA COLA CO 8-K Report, Corporate Update (Sep 20, 2019)

Filed September 20, 2019For Securities:KO

Summary

The Coca-Cola Company has filed an 8-K to update its financial reporting to reflect significant changes in its operational structure and accounting treatment. Primarily, Coca-Cola Beverages Africa (CCBA), previously classified as held for sale and a discontinued operation, will now be included in continuing operations. This change stems from the company's decision in the second quarter of 2019 to maintain its controlling stake in CCBA for the foreseeable future, reversing its original intent to refranchise. CCBA will now be reported within the Bottling Investments operating segment. Furthermore, Coca-Cola has established a new operating segment called Global Ventures, effective January 1, 2019. This segment consolidates results from the recently acquired Costa Limited, as well as the innocent and doğadan businesses, and fees from distribution agreements with Monster Beverage Corporation. These businesses and agreements were previously dispersed across various operating segments. These adjustments necessitate updates to historical financial information and disclosures in the company's 2018 Form 10-K.

Key Highlights

  • 1Coca-Cola will now include Coca-Cola Beverages Africa (CCBA) in its continuing operations, reversing its prior classification as held for sale and a discontinued operation.
  • 2The decision to keep a controlling stake in CCBA is a strategic shift, indicating a long-term commitment to this significant market.
  • 3A new 'Global Ventures' operating segment has been created, effective January 1, 2019.
  • 4The Global Ventures segment includes the recently acquired Costa Limited and other acquired businesses like innocent and doğadan.
  • 5Fees earned from distribution coordination agreements with Monster Beverage Corporation are now reported under the Global Ventures segment.
  • 6These reporting changes require amendments to historical financial data and disclosures in the company's 2018 Form 10-K.
  • 7CCBA will be reported within the Bottling Investments operating segment.

Frequently Asked Questions

The company updated its plans in the second quarter of 2019 and now intends to maintain its controlling stake in CCBA for the foreseeable future, rather than refranchising it as originally planned. Consequently, CCBA no longer meets the criteria to be classified as held for sale or a discontinued operation.

The Global Ventures segment is a new operating segment established effective January 1, 2019. It consolidates the financial results of Costa Limited (acquired in early 2019), the innocent and doğadan businesses, and fees generated from distribution coordination agreements with Monster Beverage Corporation.

CCBA's financial results will now be presented within continuing operations and the Bottling Investments operating segment, instead of being shown as a discontinued operation. The creation of the Global Ventures segment will also alter the reporting structure for the businesses and agreements housed within it, reallocating them from previously reported segments. These changes necessitate restatements of historical financial data found in the 2018 Form 10-K.

No, this 8-K filing primarily serves to update historical financial information and disclosures in the company's 2018 Form 10-K to reflect the changes in accounting treatment for CCBA and the establishment of the new Global Ventures operating segment. For material developments since the 2018 10-K, investors should refer to the company's Quarterly Reports on Form 10-Q for the periods ended March 29, 2019, and June 28, 2019.