Our global momentum advances with strong volume growth ahead of our long-term target and comparable EPS growth in line with our long-term target. We continued to grow worldwide volume and value share in total nonalcoholic ready-to-drink beverages, driven by volume and value share gains in both sparkling and still beverages.

  • Worldwide volume grew a strong 6% in the quarter, with growth in all five geographic operating groups. Excluding new cross-licensed brands, primarily Dr Pepper brands, worldwide volume growth was 5% in the quarter. International volume growth was 6%.
  • North America volume growth was 6% in the quarter. Excluding new cross-licensed brands, North America volume growth was 2% in the quarter, marking the fourth consecutive quarter of organic growth for our flagship market.
  • Worldwide volume growth was led by brand Coca-Cola, up 3% in the quarter. Global volume and value share gains continued in total nonalcoholic ready-to-drink (NARTD) beverages and across both sparkling and still beverages.
  • First quarter reported EPS was $0.82, up 19%, with comparable EPS at $0.86, up 7% and in line with our long-term target. Comparable EPS includes a $0.01 dilutive effect, which will reverse primarily in the fourth quarter, due to the timing of marketing expenses as we conform the newly acquired North American bottling business to our accounting policies. We also estimate the events in Japan had a $0.01 dilutive effect on first quarter comparable EPS as a result of lost revenues.
  • First quarter reported net revenue was $10.5 billion, up 40%, with comparable net revenue also up 40%, reflecting solid growth in concentrate sales, a 2% currency benefit, positive price/mix and the acquisition of Coca-Cola Enterprises' (CCE) North American operations.
  • First quarter reported operating income was $2.3 billion, up 4%, with comparable operating income up 10%, reflecting strong top-line performance, a 3% currency benefit and the acquisition of CCE's North American operations.
  • Coca-Cola Refreshments (CCR) integration efforts are on plan, with expected 2011 net cost synergies of $140 to $150 million. Company-wide productivity initiatives are on plan and on track to achieve our targeted $500 million in annualized savings by year-end 2011.

ATLANTA, April 26, 2011 - The Coca-Cola Company reports strong first quarter 2011 operating results, with comparable EPS growth in line with our long-term target and with reported worldwide volume growth of 6%, cycling 3% growth in the prior year quarter. Excluding new cross-licensed brands in North America, primarily Dr Pepper brands, worldwide volume grew 5% in the quarter, ahead of our long-term target. We achieved broad-based volume growth in the quarter across each of our five geographic operating groups, with growth of 8% in Eurasia and Africa, 7% in Latin America, 6% in North America (2% excluding new cross-licensed brands), 5% in Pacific and 1% in Europe. North America achieved its fourth consecutive quarter of organic volume growth.

In the quarter, we grew global volume and value share in NARTD beverages, with share gains across most beverage categories. We continued to see growth in sparkling beverages, with worldwide brand Coca-Cola volume growth of 3% in the quarter driven by a wide array of global markets, including 24% in Russia, 20% in Turkey, 14% in China, 11% in Mexico, 9% in India, 8% in South Korea and 4% in Germany. Worldwide sparkling beverage volume grew 4% in the quarter (3% excluding new cross-licensed brands in North America), with international sparkling beverage volume also growing 4%.

Worldwide still beverage volume grew 11% in the quarter, led by growth across the portfolio, including juices and juice drinks, ready-to-drink teas, sports drinks and water brands. Still beverage volume in the quarter grew 12% internationally and 8% in North America. Juice brand Del Valle recently became our 15 th billion dollar brand, and is the first billion dollar Company brand with roots in Latin America. Minute Maid Pulpy, a billion dollar brand with roots in China, continues to expand globally and achieved 25% growth in the quarter. And vitaminwater grew in the quarter, with solid double-digit growth internationally and 8% growth in North America.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company said, "I am pleased with our first quarter results. Despite ongoing global geopolitical challenges, we once again delivered consistent, quality growth across all five of our geographic operating groups, with broad worldwide share gains across beverage categories. The growing value of our brands, our consistent quality operating results and our solid financial performance underscore how our system is steadily and strategically advancing its momentum around the world.

"This year on May 8 we celebrate the 125 th anniversary of one of the world's greatest consumer product innovations -- Coca-Cola. As we mark this milestone, we see a company and a system shaped by its youth and not its age.

"And as we look forward, the opportunities before us are clearly abundant. We see one unified system, guided by 700,000 of the world's greatest people and aligned behind one compelling and achievable 2020 Vision. Collectively, we own, inspire and drive our 2020 Vision each and every day. Our strong alignment has not only helped us weather recent storms, it has put us in a position of real strength. That is why, as we look ahead to 2020 and beyond, I am confident that our system has only just begun to achieve its potential in ushering in a new era of winning for all of our shareowners."

FINANCIAL HIGHLIGHTS

  • First quarter reported net revenue was up 40%. C omparable net revenue also increased 40%, reflecting a 4% increase in concentrate sales, a 2% currency benefit, positive price/mix and the acquisition of CCE's North American operations, partially offset by the effect of structural changes. Our international and Bottling Investments Group (BIG) price/mix was 2% positive and our focus in North America on driving our revenue growth management strategies led to positive price realization in the quarter.
  • First quarter reported operating income was up 4%. Comparable operating income was up 10%, reflecting strong top-line performance, a 3% currency benefit and the acquisition of CCE's North American operations.
  • Reported first quarter cash from operations was $458 million. Net cash provided by financing activities was $986 million.
  • The Company is actively engaged in hedging activities principally related to commodity exposures associated with the North American business acquired from CCE. During the first quarter, this hedging activity resulted in net unrealized gains of $36 million, which would have added $0.01 to comparable EPS. These net unrealized gains were excluded from first quarter comparable earnings and are reflected in the Reconciliation of GAAP and Non-GAAP Financial Measures schedule. These gains will be reflected in comparable earnings in the period that the related underlying transactions occur.
  • CCR integration efforts are on schedule, with expected 2011 net cost synergies of $140 to $150 million. This is in addition to the $150 million in annual synergies previously identified in North America as part of Coca-Cola Supply.
  • Productivity initiatives are on plan and on track to achieve our target of $500 million in annualized savings by year-end 2011.

NOTES

  • All references to growth rate percentages, share and cycling of growth rates compare the results of the period to those of the prior year comparable period.
  • "Concentrate sales" represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.
  • "Sparkling beverages" means NARTD beverages with carbonation, including energy drinks and carbonated waters and flavored waters.
  • "Still beverages" means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees and sports drinks.
  • All references to volume and volume percentage changes indicate unit case volume. All volume percentage changes are computed based on average daily sales. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage. "Unit case volume" means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
  • First quarter 2011 financial results were impacted by one fewer selling day, which will be offset by the impact of one additional selling day in fourth quarter 2011 results. Unit case volume results are not impacted by the variance in selling days due to the average daily sales computation referenced above.
  • The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.
  • Our long-term revenue and operating income growth targets are on a comparable currency neutral basis and exclude structural changes. Our long-term volume growth target is on a comparable basis, excluding the effect of structural changes. Our long-term EPS growth target is on a comparable basis.

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