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coca cola Reconciliation of Q1 2007 Non-GAAP Financial Measures

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The document provides a reconciliation of the company's GAAP and non-GAAP financial measures for the quarters ending March 30, 2007 and March 31, 2006. It summarizes that management believes the non-GAAP measures provide a more meaningful comparison by excluding certain items that impact comparability between periods. The tables show reconciliations of key financial figures between GAAP and non-GAAP reporting, including revenues, expenses, profits, and margins. It also provides segment-level comparisons of operating income growth between the two periods under GAAP and non-GAAP measures.

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Page 1 of 2 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 30, 2007 and March 31, 2006. 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. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures (UNAUDITED) (In millions except per share data) Three Months Ended March 30, 2007 Items Impacting Comparability % Change - After After Asset % Change - Considering Considering Impairments/ Equity Gains on Sales Certain Tax Reported Items Reported Items Restructuring Investees of Assets Matters (1) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Net Operating Revenues $6,103 $6,103 17 17 Cost of goods sold 2,145 ($4) 2,141 24 24 Gross Profit 3,958 4 3,962 13 13 Selling, general and administrative expenses 2,325 2,325 13 13 Other operating charges 6 (6) - -- -- Operating Income (2) 1,627 10 1,637 17 14 Interest income 37 37 (47) (47) Interest expense 71 71 13 13 Equity income - net 20 $73 93 (77) (2) Other income (loss) - net 116 ($137) (21) -- -- Income Before Income Taxes 1,729 10 73 (137) 1,675 17 10 Income taxes 467 2 - (73) ($11) 385 27 5 Net Income $1,262 $8 $73 ($64) $11 $1,290 14 11 Diluted Net Income Per Share $0.54 $0.00 $0.03 ($0.03) $0.00 $0.56 (3) 15 14 Average Shares Outstanding - Diluted 2,321 2,321 2,321 2,321 2,321 2,321 Gross Margin 64.9% 64.9% Operating Margin 26.7% 26.8% Effective Tax Rate 27.0% 23.0% Three Months Ended March 31, 2006 Items Impacting Comparability After Asset Considering Impairments/ Equity Certain Tax Items Reported Restructuring Investee Matters (1) (Non-GAAP) (GAAP) Net Operating Revenues $5,226 $5,226 Cost of goods sold 1,726 1,726 Gross Profit 3,500 3,500 Selling, general and administrative expenses 2,060 2,060 Other operating charges 45 ($45) - Operating Income 1,395 45 1,440 Interest income 70 70 Interest expense 63 63 Equity income - net 86 $9 95 Other income (loss) - net (13) (13) Income Before Income Taxes 1,475 45 9 1,529 Income taxes 369 7 1 ($10) 367 Net Income $1,106 $38 $8 $10 $1,162 Diluted Net Income Per Share $0.47 $0.02 $0.00 $0.00 $0.49 Average Shares Outstanding - Diluted 2,366 2,366 2,366 2,366 2,366 Gross Margin 67.0% 67.0% Operating Margin 26.7% 27.6% Effective Tax Rate 25.0% 24.0% Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains and accounting changes positively impacting net income are reflected as deductions to reported net income. (1) Primarily related to changes in reserves related to certain tax matters. (2) Operating Income for the three months ended March 30, 2007 includes a positive currency impact of approximately 3%. Ongoing, currency neutral operating income growth is 11%. (3) Per share amounts do not add due to rounding.
Page 2 of 2 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non- GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non- GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 30, 2007 and March 31, 2006. 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. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures Operating Income (Loss), by Segment (UNAUDITED) (In millions except percentages) Three Months Ended March 30, 2007 Three Months Ended March 31, 2006 Items Items Impacting Impacting Comparability Comparability % Favorable (Unfavorable) - % Favorable After After After (Unfavorable) - Considering Considering Considering Asset Reported Reported Items Reported Items Asset Impairments/ Impairments/ Items (GAAP) Restructuring Restructuring (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) (Non-GAAP) Africa $112 $2 $114 $103 $103 9 11 Eurasia 87 87 64 64 36 36 European Union 604 604 455 455 33 33 Latin America 415 415 349 349 19 19 North America 347 347 388 388 (11) (11) Pacific 372 372 363 $3 366 2 2 Bottling Investments (2) 6 4 (57) 42 (15) 96 -- Corporate (308) 2 (306) (270) (270) (14) (13) Consolidated $1,627 $10 $1,637 $1,395 $45 $1,440 17 14

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coca cola Reconciliation of Q1 2007 Non-GAAP Financial Measures

  • 1. Page 1 of 2 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 30, 2007 and March 31, 2006. 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. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures (UNAUDITED) (In millions except per share data) Three Months Ended March 30, 2007 Items Impacting Comparability % Change - After After Asset % Change - Considering Considering Impairments/ Equity Gains on Sales Certain Tax Reported Items Reported Items Restructuring Investees of Assets Matters (1) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Net Operating Revenues $6,103 $6,103 17 17 Cost of goods sold 2,145 ($4) 2,141 24 24 Gross Profit 3,958 4 3,962 13 13 Selling, general and administrative expenses 2,325 2,325 13 13 Other operating charges 6 (6) - -- -- Operating Income (2) 1,627 10 1,637 17 14 Interest income 37 37 (47) (47) Interest expense 71 71 13 13 Equity income - net 20 $73 93 (77) (2) Other income (loss) - net 116 ($137) (21) -- -- Income Before Income Taxes 1,729 10 73 (137) 1,675 17 10 Income taxes 467 2 - (73) ($11) 385 27 5 Net Income $1,262 $8 $73 ($64) $11 $1,290 14 11 Diluted Net Income Per Share $0.54 $0.00 $0.03 ($0.03) $0.00 $0.56 (3) 15 14 Average Shares Outstanding - Diluted 2,321 2,321 2,321 2,321 2,321 2,321 Gross Margin 64.9% 64.9% Operating Margin 26.7% 26.8% Effective Tax Rate 27.0% 23.0% Three Months Ended March 31, 2006 Items Impacting Comparability After Asset Considering Impairments/ Equity Certain Tax Items Reported Restructuring Investee Matters (1) (Non-GAAP) (GAAP) Net Operating Revenues $5,226 $5,226 Cost of goods sold 1,726 1,726 Gross Profit 3,500 3,500 Selling, general and administrative expenses 2,060 2,060 Other operating charges 45 ($45) - Operating Income 1,395 45 1,440 Interest income 70 70 Interest expense 63 63 Equity income - net 86 $9 95 Other income (loss) - net (13) (13) Income Before Income Taxes 1,475 45 9 1,529 Income taxes 369 7 1 ($10) 367 Net Income $1,106 $38 $8 $10 $1,162 Diluted Net Income Per Share $0.47 $0.02 $0.00 $0.00 $0.49 Average Shares Outstanding - Diluted 2,366 2,366 2,366 2,366 2,366 Gross Margin 67.0% 67.0% Operating Margin 26.7% 27.6% Effective Tax Rate 25.0% 24.0% Note: Items to consider for comparability include primarily charges, gains, and accounting changes. Charges and accounting changes negatively impacting net income are reflected as increases to reported net income. Gains and accounting changes positively impacting net income are reflected as deductions to reported net income. (1) Primarily related to changes in reserves related to certain tax matters. (2) Operating Income for the three months ended March 30, 2007 includes a positive currency impact of approximately 3%. Ongoing, currency neutral operating income growth is 11%. (3) Per share amounts do not add due to rounding.
  • 2. Page 2 of 2 The Company reports its financial results in accordance with U. S. generally accepted accounting principles (GAAP). However, management believes that certain non- GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non- GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 30, 2007 and March 31, 2006. 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. THE COCA-COLA COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures Operating Income (Loss), by Segment (UNAUDITED) (In millions except percentages) Three Months Ended March 30, 2007 Three Months Ended March 31, 2006 Items Items Impacting Impacting Comparability Comparability % Favorable (Unfavorable) - % Favorable After After After (Unfavorable) - Considering Considering Considering Asset Reported Reported Items Reported Items Asset Impairments/ Impairments/ Items (GAAP) Restructuring Restructuring (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) (Non-GAAP) Africa $112 $2 $114 $103 $103 9 11 Eurasia 87 87 64 64 36 36 European Union 604 604 455 455 33 33 Latin America 415 415 349 349 19 19 North America 347 347 388 388 (11) (11) Pacific 372 372 363 $3 366 2 2 Bottling Investments (2) 6 4 (57) 42 (15) 96 -- Corporate (308) 2 (306) (270) (270) (14) (13) Consolidated $1,627 $10 $1,637 $1,395 $45 $1,440 17 14