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COCA COLA CO 8-K Report, Financial Results (Feb 13, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 13, 2024
Period End
February 13, 2024
Security
KO
In the record · 2016–202610-K1110-Q338-K143

KO filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 143 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’22Aug ’22
  2. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed February 13, 2024. Cited figures are marked; the original filing is the authoritative source.

The Coca-Cola Company (KO) reported fourth quarter and full-year 2023 results on February 13, 2024, with net revenues of $10.8 billiona for the quarter (up 7% reported, 12% organic) and $45.8 billion for the year (up 6% reported, 12% organic).

Growth was driven primarily by price/mix (10 points for the full year) rather than volume, with global unit case volume up only 2% for both the quarter and the year. Reported EPS fell 2% to $0.46b in the quarter due to a 14-point currency headwind and a $1.7 billion non-cash charge tied to the remeasurement of the fairlife contingent consideration liability, while comparable EPS grew 10% to $0.49. For the full year, reported diluted EPS rose 13% to $2.47 and comparable EPS rose 8% to $2.69, with an 8-point currency headwind.

Cash generation remained strong, with full-year operating cash flow of $11.6 billionc (up 5%) and free cash flow (non-GAAP) of $9.7 billion (up 2%). The company returned substantial capital to shareholders, paying $8.0 billion in dividends, purchasing $2.3 billion of stock, and increasing its dividend for the 61st consecutive year. Capital expenditures rose 25% to $1.9 billion.

The company also continued its bottler refranchising program, including sales in Vietnam, Pakistan, Indonesia, India, the Philippines and Thailand. Management guided to 2024 organic revenue growth of 6% to 7%, comparable currency neutral EPS growth of 8% to 10%, and comparable EPS growth of 4% to 5% from the $2.69d base, citing a 4% to 5% currency headwind and roughly 2% headwind from divestitures. Projected 2024 free cash flow is approximately $9.2 billion, and the underlying effective tax rate is estimated at 19.2%, excluding any potential payments from the ongoing IRS tax litigation, which remains a significant unresolved risk for investors.

02—Key points

Key Highlights

  1. Net revenues grew 7% to $10.8 billion in Q4 and 6% to $45.8 billion for the full year; organic revenues (non-GAAP) grew 12% in both periods.
  2. Growth was price/mix-driven: price/mix contributed 9 points in Q4 and 10 points for the year, while unit case volume grew only 2% in both periods.
  3. Reported EPS declined 2% to $0.46 in Q4 but rose 13% to $2.47 for the full year; comparable EPS grew 10% to $0.49 in Q4 and 8% to $2.69 for the year.
  4. Full-year operating cash flow reached $11.6 billion (up 5%) and free cash flow was $9.7 billion (up 2%), with dividends of $8.0 billion paid and a $1.7 billion net share repurchase.
  5. The 2024 outlook calls for 6% to 7% organic revenue growth and 4% to 5% comparable EPS growth, with a 4% to 5% currency headwind and roughly 2% drag from divestitures.
  6. Projected 2024 free cash flow of approximately $9.2 billion, below 2023's $9.7 billion, reflects higher capital expenditures of about $2.2 billion.
  7. Refranchising of bottling operations continued (Vietnam, India, Thailand, Philippines pending), and the company disclosed an ongoing IRS tax dispute whose potential payments are excluded from guidance.

03—Questions

Frequently Asked Questions

  1. Why did reported EPS decline in Q4 2023 even though comparable EPS grew?

    Reported Q4 EPS fell 2% to $0.46 because of a $1.7 billion (full-year) charge tied to remeasuring the fairlife contingent consideration liability to fair value, a 14-point currency headwind, and other items. Management's comparable EPS (non-GAAP) excludes these items and grew 10% to $0.49.

  2. How much of the revenue growth came from pricing versus volume?

    Almost all of it came from price/mix. For the full year, price/mix contributed 10 points of growth, concentrate sales 2 points, and unit case volume grew only 2%, while currency subtracted 4 points and structural changes subtracted 1 point from reported revenue growth.

  3. What is the main risk to the company's cash flow and guidance?

    The ongoing tax litigation with the U.S. IRS. The company's guidance, including the $9.2 billion 2024 free cash flow projection and the 19.2% underlying tax rate, does not include any potential payments if the company does not prevail in that dispute.

  4. What does the 2024 guidance imply for earnings growth?

    Management expects comparable EPS growth of 4% to 5% from $2.69 in 2023, while comparable currency neutral EPS growth is expected at 8% to 10%. The gap reflects a 4% to 5% currency headwind and an approximate 2% headwind from acquisitions and divestitures.

  5. How is the company returning capital to shareholders?

    In 2023 KO paid $8.0 billion in dividends, purchased $2.3 billion of stock, and issued $0.5 billion through employee option exercises, for net repurchases of $1.7 billion. About $6 billion remains under its share repurchase authorization, and the dividend has increased for 61 consecutive years.

04—Continue

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