Coca-Cola first-quarter earnings rose 19%

The Coca-Cola Company on April 20 reported solid first quarter 2010 operating results, with unit case volume increasing a strong 3 percent, in line with our long-term volume target and underscoring the strength of its brands even as global macroeconomic challenges continue. Coca-Cola achieved broad-based international unit case volume growth of 5%. Eurasia and Africa unit case volume grew 11% with continued strong growth of 29% in India and 18% growth in Turkey. Pacific unit case volume grew 5%, cycling 4% in the prior year quarter, and Latin America unit case volume grew 4% with strong 12% growth in Brazil. Europe unit case volume was even with the prior year quarter, with growth in France and the Benelux countries as well as in its Bottling Investment territories including 5% growth in Germany and 2% growth in the Nordic Region. Growth continued in countries with per capita consumption of company products less than 150 eight-ounce servings per year, with unit case volume up 10% in the quarter.

Coca-Cola gained global value share and maintained volume share in non-alcoholic ready-to-drink (NARTD) beverages and core sparkling beverages. It also realized volume and value share gains across juices and juice drinks, sports drinks, coffee and packaged water. Importantly, internationally we gained volume and value share in total NARTD beverages.

The continued power of the global "Open Happiness" campaign combined with the initial roll-out of our FIFA World Cup program and an increased focus on Coke with Meals drove growth in brand Coca-Cola, with unit case volume up 3% in the quarter. The strong brand Coca-Cola growth came from a diversity of global markets, including double-digit growth in India, Vietnam, the Philippines, Brazil, Russia and Egypt. During the quarter unit case volume for brand Coca-Cola grew over 1 million unit cases in 24 different countries. Total sparkling beverage unit case volume increased 2% in the quarter, with international sparkling beverage unit case volume increasing 3%. Total still beverage unit case volume increased 8% in the quarter, led by continued growth in juices and juice drinks, teas and water brands. Still beverage unit case volume increased 12% internationally.

Muhtar Kent, chairman and CEO, The Coca-Cola Company, said, "I am once again pleased with the results of the quarter as we continue to grow our dynamic global business. During the quarter, we continued to achieve solid business results worldwide, all while taking decisive action to strategically advance our North America business and further strengthen our franchise system in Europe. Despite expected ongoing challenges in global economic conditions, we continue to invest in our business and build the health of our brands fueled by world-class marketing and innovation. This led to continued value share gains and strong and consistent cash flow. As the company looks ahead to the year 2020, we see tremendous growth opportunities for our franchise system and for the entire nonalcoholic ready-to-drink beverage industry. We are working closely with our bottling partners around the globe, leveraging our scale and the increased presence of our brands. We remain confident in our ability to deliver against our strategies while laying the foundation for consistent, profitable and sustainable long-term growth, inspired by our 2020 Vision in a growing world of refreshment."

Financial Highlights

• First quarter 2010 reported net revenues increased 5%. Net revenues increased 1% on a comparable currency neutral basis, reflecting a 2% impact due to the deconsolidation of certain entities required by a change in accounting guidance, as well as geographic mix.
• First quarter 2010 reported operating income increased 17%, and comparable currency neutral operating income increased 9%. This was driven by a continued strong focus on cost management and the leveraging of productivity initiatives as well as favorable timing of selling, general and administrative expenses.
• Cash from operations in the quarter increased 52% to $1.3 billion. There were no share repurchases during the first quarter due to the pending Coca-Cola Enterprises (CCE) transaction.
• During the quarter, the company announced its 48th consecutive annual dividend increase, raising the quarterly dividend 7% from 41 cents to 44 cents per common share. This is equivalent to an annual dividend of $1.76 per share, up from $1.64 per share in 2009.

Notes

• All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period. References to cycling of growth rates compare the growth rate of the current period to that 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 nonalcoholic ready-to-drink beverages with carbonation, including energy drinks and carbonated waters and flavored waters.
• "Still beverages" means non-alcoholic beverages without carbonation, including non-carbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees and sports drinks.
• All unit case volume percentage changes are computed based on average daily sales for the first quarter. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage, and "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 2010 results were impacted by one fewer selling day, which will be offset by the impact of one additional selling day in fourth quarter 2010 results.
• Comparable growth rates for first quarter 2010 reflect the impact of the deconsolidation of certain entities required by a change in accounting guidance.
• Our long-term growth targets referenced in this release are on a comparable currency neutral basis and exclude structural changes.