ATLANTA, July 22, 2015 – The Coca-Cola Company today reported second quarter 2015 operating results. "Our second quarter results were in line with our expectations and mark continued progress toward restoring momentum in our global business," said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. "We are executing against our strategic initiatives and remain focused on driving efficiencies through productivity and making disciplined investment decisions to accelerate growth. While there is more work to do, we remain confident that we have the right plans in place and are committed to leveraging our superior brand portfolio together with our unparalleled global distribution system to continue creating long-term shareowner value."
The company had positive organic revenue growth in each of our operating groups and gained global value and volume share in nonalcoholic ready-to-drink (NARTD) beverages in the quarter. After adjusting for the six additional days in the first quarter, concentrate sales growth and unit case volume growth were generally in line year to date.
Global sparkling beverage volume growth in the quarter was led by 1% growth in brand Coca-Cola, 6% growth in Coca-Cola Zero, 3% growth in Sprite and 2% growth in Fanta.
Growth in these brands was partially offset by a 7% decline in Diet Coke. We gained global value and volume share in sparkling beverages in the quarter.
Global still beverage volume growth in the quarter reflects 7% growth in ready-to-drink tea, 8% growth in packaged water and double-digit growth in value-added dairy. Volume growth in these categories was partially offset by a 1% decline in juice and juice drinks attributable to price increases taken to cover higher input costs and continued industry softness in certain markets. We gained global value and volume share in still beverages, juice and juice drinks, ready-to-drink tea and sports drinks in the quarter.
Comparable currency neutral operating income growth outpaced organic revenue growth in the quarter primarily due to gross margin expansion and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments.
Comparable currency neutral income before taxes lagged comparable currency neutral operating income growth in the quarter primarily due to lower equity income and a decrease in net interest income.
The reported effective tax rate and the underlying annual effective tax rate in the quarter were 28.7% and 22.5%, respectively. The variance between the reported rate and the underlying rate was due to the tax effect of various items impacting comparability, separately disclosed in the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Reported EPS was $0.71 and comparable EPS was $0.63. Items impacting comparability increased reported EPS by a net $0.08 and were primarily related to a net gain recognized in connection with the closing of the transaction with Monster Beverage Corporation, partially offset by costs associated with our previously announced productivity program. For additional details on items impacting comparability, refer to the Reconciliation of GAAP and Non-GAAP Financial Measures schedule.
Fluctuations in foreign currency exchange rates resulted in an 11 point headwind on comparable operating income and a 6 point headwind on both comparable income before taxes and EPS in the quarter.
The currency impact on income before taxes was consistent with the outlook we provided earlier this year.
Year-to-date cash from operations was $5.1 billion, up 14%, primarily due to efficient management of working capital and the impact of six additional days in the first quarter, partially offset by fluctuations in foreign currency exchange rates.
Year-to-date net share repurchases totaled $876 million.
In North America organic revenue growth in the quarter was driven primarily by 4 points of positive price/mix. Acquisitions and divestitures reflect the impact of refranchised territories, which was mostly offset by the benefit of our expanded distribution of Monster beverage products in North America.
The expanded distribution contributed 1 point of unit case volume growth in both the quarter and year to date.
After adjusting for the additional days in the first quarter and the impact of acquired volume, concentrate sales growth and unit case volume growth were generally in line year to date.
Comparable currency neutral income before taxes outpaced organic revenue growth in the quarter primarily due to lower input costs and the impact of our ongoing productivity initiatives, partially offset by increased marketing investments. Structural changes had a nominal net impact on income before taxes as the impact of refranchised territories was offset by the benefit of expanded distribution of Monster beverage products in North America.
We gained value share in total NARTD beverages for the 21st consecutive quarter driven by an increase in both the quality and quantity of our marketing investments and our continued rational approach to pricing and disciplined price/pack strategies. We also gained value and volume share in sparkling beverages, still beverages, juice and juice drinks and ready-to-drink tea. Still beverage volume growth was driven by double-digit growth in smartwater, Gold Peak and Honest tea. Read the full report here.
