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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 001-02217
The Coca-Cola Company
(Exact name of Registrant as specified in its Charter)
Delaware 58-0628465
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Coca-Cola Plaza 30313
Atlanta, Georgia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (404) 676-2121
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at July 25, 1997
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$.25 Par Value 2,480,344,149 Shares
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THE COCA-COLA COMPANY AND SUBSIDIARIES
Index
Part I. Financial Information
Item 1. Financial Statements (Unaudited) Page Number
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Income
Three and six months ended June 30, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 16
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Part I. Financial Information
Item 1. Financial Statements (Unaudited)
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions except share data)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
<S> <C> <C>
CURRENT
Cash and cash equivalents $ 2,552 $ 1,433
Marketable securities 190 225
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2,742 1,658
Trade accounts receivable, less
allowances of $23 at June 30
and $30 at December 31 1,941 1,641
Inventories 1,130 952
Prepaid expenses and other assets 1,770 1,659
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TOTAL CURRENT ASSETS 7,583 5,910
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INVESTMENTS AND OTHER ASSETS
Equity method investments
Coca-Cola Enterprises Inc. 285 547
Coca-Cola Amatil Limited 1,363 881
Other, principally bottling companies 2,385 2,004
Cost method investments,
principally bottling companies 641 737
Marketable securities and other assets 1,478 1,779
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6,152 5,948
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PROPERTY, PLANT AND EQUIPMENT
Land 206 204
Buildings and improvements 1,612 1,528
Machinery and equipment 3,870 3,649
Containers 206 200
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5,894 5,581
Less allowances for depreciation 2,120 2,031
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3,774 3,550
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GOODWILL AND OTHER INTANGIBLE ASSETS 814 753
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$ 18,323 $ 16,161
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</TABLE>
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THE COCA-COLA COMPANY AND SUBSIDIARIES
LIABILITIES AND SHARE-OWNERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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<S> <C> <C>
CURRENT
Accounts payable and accrued expenses $ 3,591 $ 2,972
Loans and notes payable 2,979 3,388
Current maturities of long-term debt 154 9
Accrued income taxes 1,616 1,037
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TOTAL CURRENT LIABILITIES 8,340 7,406
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LONG-TERM DEBT 952 1,116
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OTHER LIABILITIES 1,445 1,182
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DEFERRED INCOME TAXES 322 301
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SHARE-OWNERS' EQUITY
Common stock, $.25 par value
Authorized: 5,600,000,000 shares
Issued: 3,438,826,444 shares at June 30;
3,432,956,518 shares at December 31 860 858
Capital surplus 1,160 1,058
Reinvested earnings 16,735 15,127
Unearned compensation related to
outstanding restricted stock (54) (61)
Foreign currency translation adjustment (858) (662)
Unrealized gain on securities
available for sale 146 156
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17,989 16,476
Less treasury stock, at cost
(958,700,434 shares at June 30;
951,963,574 shares at December 31) 10,725 10,320
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7,264 6,156
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$ 18,323 $ 16,161
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<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
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THE COCA-COLA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions except per share data)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES $ 5,075 $ 5,286 $ 9,213 $ 9,510
Cost of goods sold 1,609 1,906 2,904 3,436
---------- ---------- ---------- ----------
GROSS PROFIT 3,466 3,380 6,309 6,074
Selling, administrative
and general expenses 2,023 1,998 3,724 3,659
---------- ---------- ---------- ----------
OPERATING INCOME 1,443 1,382 2,585 2,415
Interest income 51 70 100 124
Interest expense 62 71 130 143
Equity income 134 94 106 87
Gains on issuances
of stock by
equity investees 363 18 363 18
Other income - net 6 29 342 54
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INCOME BEFORE
INCOME TAXES 1,935 1,522 3,366 2,555
Income taxes 621 472 1,065 792
---------- ---------- ---------- ----------
NET INCOME $ 1,314 $ 1,050 $ 2,301 $ 1,763
========== ========== ========== ==========
NET INCOME PER SHARE $ .53 $ .42 $ .93 $ .71
========== ========== ========== ==========
DIVIDENDS PER SHARE $ .14 $ .125 $ .28 $ .25
========== ========== ========== ==========
AVERAGE SHARES
OUTSTANDING 2,480 2,496 2,480 2,499
========== ========== ========== ==========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
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THE COCA-COLA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,301 $ 1,763
Depreciation and amortization 301 235
Deferred income taxes (13) 41
Equity income, net of dividends received (71) (19)
Foreign currency adjustments 38 (17)
Gains on issuances of stock by
equity investees (363) (18)
Other items (396) (39)
Net change in operating assets
and liabilities 331 (301)
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Net cash provided by operating activities 2,128 1,645
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INVESTING ACTIVITIES
Acquisitions and investments,
principally bottling companies (635) (207)
Purchases of investments and other assets (147) (145)
Proceeds from disposals of investments
and other assets 1,263 190
Purchases of property, plant and equipment (472) (380)
Proceeds from disposals of property, plant
and equipment 44 23
Other investing activities 42 (11)
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Net cash provided by (used in)
investing activities 95 (530)
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Net cash provided by operations after
reinvestment 2,223 1,115
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FINANCING ACTIVITIES
Issuances of debt 106 944
Payments of debt (494) (521)
Issuances of stock 76 56
Purchases of stock for treasury (405) (637)
Dividends (347) (313)
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Net cash used in financing activities (1,064) (471)
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EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (40) (37)
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CASH AND CASH EQUIVALENTS
Net increase during the period 1,119 607
Balance at beginning of period 1,433 1,167
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Balance at end of period $ 2,552 $ 1,774
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INTEREST PAID $ 135 $ 149
=========== ===========
INCOME TAXES PAID $ 344 $ 528
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<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do
not include all information and notes required by generally accepted
accounting principles for complete financial statements. However,
except as disclosed herein, there has been no material change in the
information disclosed in the notes to consolidated financial
statements included in the Annual Report on Form 10-K of The Coca-Cola
Company (the Company) for the year ended December 31, 1996. In the
opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the six month period ended June 30,
1997, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period presentation.
NOTE B - SEASONAL NATURE OF BUSINESS
Unit sales of the Company's soft drink and noncarbonated beverage
products are generally greater in the second and third quarters due to
seasonal factors.
NOTE C - TREASURY STOCK
The Company purchased approximately 3 million shares of its common
stock in the second quarter and approximately 7 million shares for
the six months ended June 30, 1997.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE D - BOTTLING TRANSACTIONS
On February 10, 1997, the Company sold its 49 percent interest in
Coca-Cola & Schweppes Beverages Ltd. to Coca-Cola Enterprises. This
transaction resulted in gross proceeds of approximately $1 billion and
an after-tax gain of approximately $.08 per share.
On August 7, 1997, the Company sold its 48 percent interest in
Coca-Cola Beverages, Ltd. of Canada and its 49 percent ownership of
The Coca-Cola Bottling Company of New York, Inc. to Coca-Cola
Enterprises in exchange for aggregate net consideration valued at
approximately $456 million.
NOTE E - GAINS ON ISSUANCES OF STOCK BY EQUITY INVESTEES
In June 1997, the Company and San Miguel Corporation ("San Miguel")
agreed to sell their interests in Coca-Cola Bottlers Philippines, Inc.
to Coca-Cola Amatil Limited ("Coca-Cola Amatil") in exchange for
approximately 293 million shares in Coca-Cola Amatil. In connection
with this transaction, Coca-Cola Amatil issued approximately 210
million shares to San Miguel valued at $2,429 million. The issuance
to San Miguel resulted in a one-time noncash pretax gain for the
Company of approximately $343 million. The Company has provided
deferred taxes of approximately $141.5 million related to this gain.
This transaction resulted in the Company's 36 percent interest in
Coca-Cola Amatil being diluted to 33 percent.
In May 1997, the Company and The Cisneros Group of Companies ("The
Cisneros Group") agreed to sell their interests in Coca-Cola y Hit de
Venezuela to Panamerican Beverages, Inc. ("Panamco") in exchange for
approximately 30.6 million shares in Panamco. In connection with this
transaction, Panamco issued approximately 13.6 million shares to The
Cisneros Group valued at approximately $402 million. The issuance to
The Cisneros Group resulted in a one-time noncash pretax gain for the
Company of approximately $20 million. The Company has provided
deferred taxes of approximately $7.2 million related to this gain. At
the completion of this transaction, the Company's ownership in Panamco
was approximately 23 percent.
In 1996, Coca-Cola FEMSA de Buenos Aires, S.A. issued approximately
19 million shares to Coca-Cola FEMSA, S.A. de C.V. This issuance
reduced the Company's ownership in Coca-Cola FEMSA de Buenos Aires,
S.A. from 49 percent to approximately 32 percent. The Company
recognized a noncash pretax gain of approximately $18 million as a
result of this transaction. In a subsequent transaction, the
Company's ownership in Coca-Cola FEMSA de Buenos Aires, S.A. was
reduced to 25 percent.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE F - ACCOUNTING PRONOUNCEMENTS
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share," which is required to be adopted on December 31, 1997. In
addition to the Company's current presentation of net income per
share, this Statement will require the Company to present diluted net
income per share, which includes the dilutive effect of stock options.
However, the Company does not believe the additional disclosure of
diluted net income per share will materially impact the financial
statements.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
VOLUME
BEVERAGES (UNIT CASE VOLUME EXCLUDES THE MINUTE MAID COMPANY):
Worldwide unit case volume increased 7 percent and gallon shipments of
concentrates and syrups grew 9 percent in the second quarter of 1997
when compared to the second quarter of 1996. Unit case volume
increased 8 percent and gallon shipments grew 8 percent for the first
six months of 1997.
Unit case volume in the Company's North America Group increased 4
percent, on a comparable days basis, in the second quarter, including
an increase of 4 percent in the United States. Unit case volume in
North America grew 6 percent for the first six months of 1997,
including 6 percent growth in the United States. Solid increases in
the Company's core brands and the introduction of new products such as
Surge and Citra contributed to the volume gains. North American
gallon shipments of concentrates and syrups increased 5 percent for
the second quarter and 4 percent for the first six months of 1997.
Gallon shipments rose 5 percent in the United States for the second
quarter and 3 percent for the first six months of 1997 versus the
comparable periods of 1996.
In the Latin America Group, unit case volume grew 11 percent in the
second quarter. The increase in volume was led by gains of 18 percent
in Chile, 15 percent in Argentina, and 7 percent in Mexico. Growth in
the Latin America group was tempered by a 3 percent decline in unit
cases in Brazil due to reduced consumer purchasing power. Gallon
shipments in the Latin America group increased 14 percent in the
second quarter of 1997. For the first six months of the year, unit
case volume has increased 10 percent and gallon shipments have grown
7 percent in the Latin America Group.
In the Africa Group, second quarter 1997 unit case volume increased
7 percent and gallon shipments increased 16 percent. Unit case volume
rose 1 percent in the Southern Africa Division and increased 14 percent
in the Northern Africa Division. When compared with the first six
months of 1996, unit case volume has increased 9 percent and gallon
shipments have increased 21 percent in the Africa group.
Unit case volume in the Middle and Far East Group grew 11 percent in
the second quarter, including gains of 8 percent in Japan, 28 percent
in China, and 21 percent in the Middle East Division. Gallon
shipments in the Middle and Far East Group increased 10 percent in the
second quarter. For the first six months of the year, unit case
volume has grown 9 percent over the prior year and gallon shipments
have increased 11 percent.
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RESULTS OF OPERATIONS (Continued)
In the Greater Europe Group, second quarter unit case volume
increased 5 percent. Unit case volume grew 12 percent in the East
Central European Division, 6 percent in Italy, and 24 percent in the
Nordic and North Eurasia Division. Unit case volume in Germany
declined 4 percent in the second quarter due to the continued
difficult economic environment. Gallon shipments in the Greater
Europe Group grew 9 percent in the second quarter. For the first six
months of the year, unit case volume and gallon shipments in the
Greater Europe Group increased 7 percent and 11 percent, respectively.
THE MINUTE MAID COMPANY: At The Minute Maid Company, unit volume
continued to be impacted, as expected, by the decision to exit the not-
from-concentrate juice category during 1996. In the second quarter of
1997, unit volume decreased 6 percent versus the second quarter of
1996. During the quarter, aggressive advertising and marketing
support for the new taste of Minute Maid Premium from-concentrate
orange juice drove an 11 percent volume increase for that product in
the United States. For the first six months of the year, unit volume
for The Minute Maid Company has declined 7 percent.
NET OPERATING REVENUES AND GROSS MARGIN
Net operating revenues declined 4 percent in the second quarter of
1997 and 3 percent year to date versus the prior year. The decline is
primarily due to a stronger U.S. dollar and the sale in 1996 of
previously consolidated bottling operations in France, Belgium and
eastern Germany, partially offset by increased gallon shipments and
price increases in certain markets.
The Company's gross margin increased to 68.3 percent in the second
quarter of 1997 from 63.9 percent in the second quarter of 1996. The
increase in gross margin for the second quarter of 1997 was due
primarily to the sale in 1996 of previously consolidated bottling
operations in France, Belgium and eastern Germany, shifting
proportionately more revenues to the higher margin concentrate
business.
SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
Selling expenses were $1,611 million in the second quarter of 1997,
compared to $1,607 million in the second quarter of 1996. For the
first six months of the year, selling expenses were $2,957 million,
compared to $2,897 million in the same period in 1996. The increase
in selling expenses is primarily due to higher marketing investments
in support of the Company's volume growth, offset by decreased sales
and service costs as a result of the sale in 1996 of previously
consolidated bottling operations in France, Belgium and eastern
Germany.
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RESULTS OF OPERATIONS (Continued)
Administrative and general expenses were $412 million in the second
quarter of 1997, compared to $391 million in the second quarter of
1996. The increase in the second quarter resulted from a nonrecurring
provision of $60 million, related primarily to enhancing manufacturing
efficiencies in North America, offset by reduced expenses due
primarily to the sale in 1996 of previously consolidated bottling
operations in France, Belgium and eastern Germany. Administrative and
general expenses were $767 million and $762 million for the first six
months of 1997 and 1996, respectively.
OPERATING INCOME AND OPERATING MARGIN
Operating income for the second quarter of 1997 increased to $1,443
million, an increase of 4 percent over the second quarter of 1996.
Operating income in the second quarter of 1997 was negatively impacted
by the $60 million nonrecurring charge for enhancing manufacturing
efficiencies. Operating margin for the second quarter of 1997 was
28.4 percent, compared to 26.1 percent for the comparable period in
1996. Operating income and operating margin for the six months ended
June 30, 1997 were $2,585 million and 28.1 percent, respectively,
compared to $2,415 million and 25.4 percent for the six months ended
June 30, 1996.
INTEREST INCOME AND INTEREST EXPENSE
Interest income decreased in the second quarter and the six months
ended June 30, 1997 relative to the comparable period in 1996, due
primarily to decreases in international interest rates over the past
12 months. Interest expense decreased in the second quarter and for
the six months ended June 30, 1997, relative to the comparable periods
in 1996, due to lower average commercial paper debt balances.
EQUITY INCOME
Equity income for the second quarter of 1997 totaled $134 million,
compared to $94 million in the second quarter of 1996. This increase
is due primarily to stronger results from key equity investees such as
Coca-Cola Enterprises and The Coca-Cola Bottling Company of New York,
Inc. In addition, equity income has benefited from other investments
that are now accounted for under the equity method, such as Coca-Cola
Erfrischungsgetranke A.G., a German bottler, and Panamerican
Beverages, Inc. For the first six months of 1997, equity income
totaled $106 million, compared to $87 million for the same period in
1996.
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RESULTS OF OPERATIONS (Continued)
OTHER INCOME - NET
Other income - net was $6 million for the second quarter of 1997
compared to $29 million for the second quarter of 1996. For the first
six months of 1997, other income - net was $342 million, compared to
$54 million in the comparable period of the prior year. The increase
in the first six months of 1997 as compared to the first six months of
1996 was due primarily to the gain on the sale of the Company's
interest in Coca-Cola & Schweppes Beverages Ltd.
GAINS ON ISSUANCES OF STOCK BY EQUITY INVESTEES
In June 1997, the Company and San Miguel Corporation ("San Miguel")
agreed to sell their interests in Coca-Cola Bottlers Philippines, Inc.
to Coca-Cola Amatil Limited ("Coca-Cola Amatil") in exchange for
approximately 293 million shares in Coca-Cola Amatil. In connection
with this transaction, Coca-Cola Amatil issued approximately 210
million shares to San Miguel valued at $2,429 million. The issuance
to San Miguel resulted in a one-time noncash pretax gain for the
Company of approximately $343 million. This transaction resulted in
the Company's 36 percent interest in Coca-Cola Amatil being diluted to
33 percent.
In May 1997, the Company and The Cisneros Group of Companies ("The
Cisneros Group") agreed to sell their interests in Coca-Cola y Hit de
Venezuela to Panamerican Beverages, Inc. ("Panamco") in exchange for
approximately 30.6 million shares in Panamco. In connection with this
transaction, Panamco issued approximately 13.6 million shares to The
Cisneros Group valued at approximately $402 million. The issuance to
The Cisneros Group resulted in a one-time noncash pretax gain for the
Company of approximately $20 million. At the completion of this
transaction, the Company's ownership in Panamco was approximately
23 percent.
In 1996, Coca-Cola FEMSA de Buenos Aires, S.A. issued approximately
19 million shares to Coca-Cola FEMSA, S.A. de C.V. This issuance
reduced the Company's ownership in Coca-Cola FEMSA de Buenos Aires,
S.A. from 49 percent to approximately 32 percent. The Company
recognized a noncash pretax gain of approximately $18 million as a
result of this transaction.
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RESULTS OF OPERATIONS (Continued)
INCOME TAXES
The Company's effective tax rate during the second quarter of 1997,
when compared to the second quarter of 1996, increased to 32.1 percent
from 31.0 percent. The effective tax rate was 31.6 percent for the
first six months of 1997 compared to 31.0 percent for the first six
months of 1996. The effective tax rate increased over the comparable
periods in the prior year due to deferred tax provisions related to
the gains on the issuances of stock by equity investees, partially
offset by tax benefits derived from significant operations outside the
United States which are taxed at rates lower than the U.S. statutory
rate of 35 percent.
NET INCOME
Net income per share for the second quarter increased at a slightly
higher rate than net income due to the Company's share repurchase
program.
FINANCIAL CONDITION
NET CASH FLOW PROVIDED BY OPERATIONS AFTER REINVESTMENT
In the first six months of 1997, net cash flow after reinvestment
totaled $2,223 million, an increase of $1,108 million over the
comparable period in 1996. Net cash provided by operating activities
increased $483 million in the first six months of 1997 due to higher
net income and a reduced use of cash for operating assets and
liabilities in the first six months of 1997 relative to the comparable
period in 1996. As previously discussed, the Company recorded a gain
on the sale of its interest in Coca-Cola & Schweppes Beverages Ltd. in
the first quarter of 1997 and gains on issuances of stock by Coca-Cola
Amatil and Panamco in the second quarter.
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FINANCIAL CONDITION (Continued)
Net cash provided by investing activities increased $625 million in
the first six months of 1997 as compared to the first six months of
1996. This net change included a $1,073 million increase in proceeds
from disposals of investments and other assets, primarily as a result of
the cash proceeds received from the sale of the Company's interest in
Coca-Cola & Schweppes Beverages Ltd., offset by increased acquisition
and investment activity and increased investments in property, plant
and equipment. The decrease in the Company's investment in Coca-Cola
Enterprises in the first six months of 1997 is primarily the result of
a deferred gain related to the sale of the Company's interest in
Coca-Cola & Schweppes Beverages Ltd. The deferred gain resulted from
the Company's ownership in Coca-Cola Enterprises. The value of the
Company's investment in Coca-Cola Amatil increased during the six
months ended June 30, 1997 primarily as a result of Coca-Cola Amatil
issuing shares to San Miguel Corporation at a value per share greater
than the carrying value per share of the Company's interest in
Coca-Cola Amatil.
FINANCING
Financing activities primarily represent the Company's net borrowing
activities, dividend payments and share repurchases. Net cash used in
financing activities totaled $1,064 million and $471 million for the
first six months of 1997 and 1996, respectively. For the first six
months of 1997, the Company had net repayments of borrowings of $388
million, versus net borrowings of $423 million for the comparable
period of 1996. This reduction in net borrowings in 1997 was funded
by proceeds received from the sale of the Company's interest in
Coca-Cola & Schweppes Beverages Ltd. The Company has earned long-term
credit ratings of "AA-" from Standard & Poor's and "Aa3" from Moody's,
and the highest credit ratings available for its commercial paper
program.
Cash used for share repurchases was $405 million for the first six
months of 1997, compared to $637 million for the first six months of
1996.
EXCHANGE
International operations are subject to certain opportunities and
risks, including currency fluctuations and governmental actions. The
Company closely monitors its methods of operating in each country and
adopts appropriate strategies responsive to each environment. On a
weighted average basis, the U.S. dollar was approximately 9 percent
stronger during the second quarter of 1997 versus key currencies for
the comparable period of the prior year. However, the Company's
foreign currency management program mitigates over time the impact
of exchange on net income and earnings per share.
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Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12 - Computation of Ratios of Earnings to Fixed Charges
27.1 - Restated Financial Data Schedule for the six months
ended June 30, 1996, submitted to the Securities and
Exchange Commission in electronic format
27.2 - Financial Data Schedule for the six months ended
June 30, 1997, submitted to the Securities and
Exchange Commission in electronic format
(b) Reports on Form 8-K:
No report on Form 8-K has been filed during the quarter for
which this report is filed.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
THE COCA-COLA COMPANY
(REGISTRANT)
Date: August 14, 1997 By: /s/ Gary P. Fayard
---------------------------------
Gary P. Fayard
Vice President and Controller
(On behalf of the Registrant and
as Chief Accounting Officer)
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EXHIBIT INDEX
Exhibit Number and Description
12 - Computation of Ratios of Earnings to Fixed Charges
27.1 - Restated Financial Data Schedule for the six months
ended June 30, 1996, submitted to the Securities and
Exchange Commission in electronic format
27.2 - Financial Data Schedule for the six months ended
June 30, 1997, submitted to the Securities and
Exchange Commission in electronic format
Exhibit 12
THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions except ratios)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, ------------------------------------------------
1997 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS:
Income before income
taxes and changes in
accounting principles $ 3,366 $ 4,596 $ 4,328 $ 3,728 $ 3,185 $ 2,746
Fixed charges 152 324 318 236 213 207
Adjustments:
Capitalized
interest, net (6) (7) (9) (5) (16) (10)
Equity (income) loss,
net of dividends
received (71) (89) (25) (4) (35) (30)
---------- -------- -------- -------- -------- --------
Adjusted earnings $ 3,441 $ 4,824 $ 4,612 $ 3,955 $ 3,347 $ 2,913
========== ======== ======== ======== ======== ========
FIXED CHARGES:
Gross interest
incurred $ 136 $ 293 $ 281 $ 204 $ 184 $ 181
Interest portion of
rent expense 16 31 37 32 29 26
---------- -------- -------- -------- -------- --------
Total fixed charges $ 152 $ 324 $ 318 $ 236 $ 213 $ 207
========== ======== ======== ======== ======== ========
Ratios of earnings
to fixed charges 22.6 14.9 14.5 16.8 15.7 14.1
========== ======== ======== ======== ======== ========
<FN>
At June 30, 1997, the Company is contingently liable for guarantees of
indebtedness owed by third parties in the amount of $294 million. Fixed charges
for these contingent liabilities have not been included in the computations of
the above ratios as the amounts are immaterial and, in the opinion of Management,
it is not probable that the Company will be required to satisfy the guarantees.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF
THE COCA-COLA COMPANY FOR THE QUARTER ENDED JUNE 30, 1996, AS SET
FORTH IN ITS FORM 10-Q FOR SUCH QUARTER AND FOR THE QUARTER ENDED
JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996<F1>
<CASH> 1,774
<SECURITIES> 163
<RECEIVABLES> 2,125
<ALLOWANCES> 35
<INVENTORY> 1,291
<CURRENT-ASSETS> 6,570
<PP&E> 6,844
<DEPRECIATION> 2,383
<TOTAL-ASSETS> 16,523
<CURRENT-LIABILITIES> 8,140
<BONDS> 1,144
0
0
<COMMON> 857
<OTHER-SE> 5,079
<TOTAL-LIABILITY-AND-EQUITY> 16,523
<SALES> 9,510
<TOTAL-REVENUES> 9,510
<CGS> 3,436
<TOTAL-COSTS> 3,436
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143
<INCOME-PRETAX> 2,555
<INCOME-TAX> 792
<INCOME-CONTINUING> 1,763
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,763
<EPS-PRIMARY> 0.71
<EPS-DILUTED> 0
<FN>
<F1> RESTATEMENT REFLECTED HEREIN IS THE RESULT OF RECLASSIFICATION
TO PRIOR PERIOD'S FINANCIAL STATEMENTS TO CONFORM TO THE CURRENT PERIOD
PRESENTATION.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE COCA-COLA COMPANY FOR THE
QUARTER ENDED JUNE 30, 1997, AS SET FORTH IN ITS FORM 10-Q
FOR SUCH QUARTER, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,552
<SECURITIES> 190
<RECEIVABLES> 1,964
<ALLOWANCES> 23
<INVENTORY> 1,130
<CURRENT-ASSETS> 7,583
<PP&E> 5,894
<DEPRECIATION> 2,120
<TOTAL-ASSETS> 18,323
<CURRENT-LIABILITIES> 8,340
<BONDS> 952
0
0
<COMMON> 860
<OTHER-SE> 6,404
<TOTAL-LIABILITY-AND-EQUITY> 18,323
<SALES> 9,213
<TOTAL-REVENUES> 9,213
<CGS> 2,904
<TOTAL-COSTS> 2,904
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130
<INCOME-PRETAX> 3,366
<INCOME-TAX> 1,065
<INCOME-CONTINUING> 2,301
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,301
<EPS-PRIMARY> 0.93
<EPS-DILUTED> 0
</TABLE>
