Market Overview

The Coca-Cola Company to Acquire Costa

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Acquisition to Give Coca-Cola a Strong, Global Coffee Platform with a
Footprint in More than 30 Countries and Potential for Future Growth

Fast-Growing Coffee Category Offers Opportunities for Expansion of Costa
Brand in Multiple Channels and Formats

The Coca-Cola Company today announced that it has reached a definitive
agreement to acquire Costa Limited, which was founded in London in 1971
and has grown to become a major coffee brand across the world.

This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180830005927/en/

The acquisition of Costa from parent company Whitbread PLC is valued at
$5.1 billion and will give Coca-Cola a strong coffee platform across
parts of Europe, Asia Pacific, the Middle East and Africa, with the
opportunity for additional expansion. Costa operations include a leading
brand, nearly 4,000 retail outlets with highly trained baristas, a
coffee vending operation, for-home coffee formats and Costa's
state-of-the-art roastery.

For Coca-Cola, the expected acquisition adds a scalable coffee platform
with critical know-how and expertise in a fast-growing, on-trend
category. Costa ranks as the leading coffee company in the United
Kingdom and has a growing footprint in China, among other markets. Costa
has a solid presence with Costa Express, which offers barista-quality
coffee in a variety of on-the-go locations, including gas stations,
movie theaters and travel hubs. Costa, in various formats, has the
potential for further expansion with customers across the Coca-Cola
system.

The acquisition will expand the existing Coca-Cola coffee lineup by
adding another leading brand and platform. The portfolio already
includes the market-leading Georgia brand in Japan, plus coffee products
in many other countries.

Costa also provides Coca-Cola with strong expertise across the coffee
supply chain, including sourcing, vending and distribution. This will be
a complement to existing capabilities within the Coca-Cola system.

"Costa gives Coca-Cola new capabilities and expertise in coffee, and our
system can create opportunities to grow the Costa brand worldwide," said
Coca-Cola President and CEO James Quincey. "Hot beverages is one of the
few segments of the total beverage landscape where Coca-Cola does not
have a global brand. Costa gives us access to this market with a strong
coffee platform."

Coffee is a significant and growing segment of the global beverage
business. Worldwide, coffee remains a largely fragmented market, and no
single company operates across all formats on a global basis.

"The Costa team and I are extremely excited to be joining The Coca-Cola
Company," said Costa Managing Director Dominic Paul. "Costa is a
fantastic business with committed and passionate associates, a great
track record and enormous global potential. Being part of the Coca-Cola
system will enable us to grow the business farther and faster. I would
like to say a huge thank you to our customers and to everyone in the
Costa team who have helped us build the business to this position, and I
look forward to the next exciting chapter in Costa's vision of Inspiring
the World to Love Great Coffee."

Transaction details

The purchase price is £3.9 billion. This translates to approximately
$5.1 billion. Upon the closing, The Coca-Cola Company will acquire all
issued and outstanding shares of Costa Limited, a wholly owned
subsidiary of Whitbread. This subsidiary contains all of the existing
operating businesses of Costa.

Whitbread will be seeking shareholder approval for the transaction,
which is expected to take place by mid-October. The deal is subject to
customary closing conditions, including antitrust approvals in the
European Union and China. It is expected to close in the first half of
2019.

Coca-Cola expects the transaction to be slightly accretive in the first
full year, not taking into account any impact from purchase accounting.
For the fiscal year 2018 (ending March 1, 2018), Costa generated revenue
and EBITDA of £1.3 billion and £238 million GBP, respectively. This
equates to roughly $1.7 billion in revenue and $312 million in EBITDA.

Because Coca-Cola expects the transaction to close in the first half of
2019, there is no change to 2018 guidance. The company's long-term
targets also remain unchanged. Coca-Cola will provide additional
information as part of comprehensive guidance provided during the fourth
quarter 2018 earnings call.

Advisers

Rothschild acted as exclusive financial adviser to The Coca-Cola
Company. Clifford Chance acted as legal counsel to The Coca-Cola
Company, and Skadden, Arps, Slate, Meagher & Flom acted as tax counsel
to The Coca-Cola Company.

Investor conference call details

Coca-Cola is hosting a conference call with investors and analysts to
discuss this announcement today, Aug. 31, 2018, at 8:30 a.m. ET.
Supplementary materials to the call will be available in advance of the
call on the company's website, http://www.coca-colacompany.com,
in the "Investors" section. The company invites participants to listen
to a live webcast of the conference call on the company's website, http://www.coca-colacompany.com,
also located in the "Investors" section. An audio replay in downloadable
digital format and a transcript of the call will be available on the
website within 24 hours following the call.

About The Coca-Cola Company

The Coca-Cola Company (NYSE:KO) is a total beverage company, offering
over 500 brands in more than 200 countries and territories. In addition
to the company's Coca-Cola brands, our portfolio includes some of the
world's most valuable beverage brands, such as AdeS soy-based beverages,
Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta,
Georgia coffee, Gold Peak teas and coffees, Honest Tea, innocent
smoothies and juices, Minute Maid juices, Powerade sports drinks, Simply
juices, smartwater, Sprite, vitaminwater and ZICO coconut water. We're
constantly transforming our portfolio, from reducing sugar in our drinks
to bringing innovative new products to market. We're also working to
reduce our environmental impact by replenishing water and promoting
recycling. With our bottling partners, we employ more than 700,000
people, helping bring economic opportunity to local communities
worldwide. Learn more at Coca-Cola Journey at www.coca-colacompany.com
and follow us on Twitter,
Instagram,
Facebook
and LinkedIn.

The fairlife® brand is owned by fairlife LLC, our joint venture with
Select Milk Producers Inc. Products from fairlife are distributed by our
company and certain of our bottling partners.

Forward-Looking Statements

This press release may contain statements, estimates or projections that
constitute "forward-looking statements" as defined under U.S. federal
securities laws. Generally, the words "believe," "expect," "intend,"
"estimate," "anticipate," "project," "will," "plan," "seek" and similar
expressions identify forward-looking statements, which generally are not
historical in nature. However, the absence of these words or similar
expressions does not mean that a statement is not forward-looking.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
The Coca-Cola Company's historical experience and our present
expectations or projections. These risks include, but are not limited
to, obesity and other health-related concerns; water scarcity and poor
quality; evolving consumer preferences; increased competition; product
safety and quality concerns; perceived negative health consequences of
certain ingredients, such as non-nutritive sweeteners and
biotechnology-derived substances, and of other substances present in our
beverage products or packaging materials; an inability to be successful
in our innovation activities; increased demand for food products and
decreased agricultural productivity; an inability to protect our
information systems against service interruption, misappropriation of
data or breaches of security; changes in the retail landscape or the
loss of key retail or foodservice customers; an inability to expand
operations in emerging and developing markets; fluctuations in foreign
currency exchange rates; interest rate increases; an inability to
maintain good relationships with our bottling partners; a deterioration
in our bottling partners' financial condition; increases in income tax
rates, changes in income tax laws or unfavorable resolution of tax
matters; increased or new indirect taxes in the United States and
throughout the world; failure to realize the economic benefits from or
an inability to successfully manage the possible negative consequences
of our productivity initiatives; inability to attract or retain a highly
skilled and diverse workforce; increased cost, disruption of supply or
shortage of energy or fuels; increased cost, disruption of supply or
shortage of ingredients, other raw materials, packaging materials,
aluminum cans and other containers; changes in laws and regulations
relating to beverage containers and packaging; significant additional
labeling or warning requirements or limitations on the marketing or sale
of our products; unfavorable general economic conditions in the United
States; unfavorable economic and political conditions in international
markets; litigation or legal proceedings; failure to adequately protect,
or disputes relating to, trademarks, formulae and other intellectual
property rights; adverse weather conditions; climate change; damage to
our brand image or corporate reputation from negative publicity, even if
unwarranted, related to product safety or quality, human and workplace
rights, obesity or other issues; changes in, or failure to comply with,
the laws and regulations applicable to our products or our business
operations; changes in accounting standards; an inability to achieve our
overall long-term growth objectives; deterioration of global credit
market conditions; default by or failure of one or more of our
counterparty financial institutions; an inability to renew collective
bargaining agreements on satisfactory terms, or we or our bottling
partners experience strikes, work stoppages or labor unrest; future
impairment charges; multi-employer pension plan withdrawal liabilities
in the future; an inability to successfully integrate and manage our
company-owned or -controlled bottling operations or other acquired
businesses or brands; an inability to successfully manage our
refranchising activities; failure to realize a significant portion of
the anticipated benefits of our strategic relationship with Monster;
global or regional catastrophic events; risks and uncertainties relating
to the transaction, including the risk that the businesses will not be
integrated successfully or such integration may be more difficult,
time-consuming or costly than expected, which could result in additional
demands on our resources, systems, procedures and controls, disruption
of our ongoing business and diversion of management's attention from
other business concerns; the possibility that certain assumptions with
respect to Costa or the transaction could prove to be inaccurate; the
failure to receive, delays in the receipt of, or unacceptable or
burdensome conditions imposed in connection with, all required
regulatory approvals and the satisfaction of the closing conditions to
the transaction; the potential failure to retain key employees as a
result of the proposed transaction or during integration of the
businesses and disruptions resulting from the proposed transaction,
making it more difficult to maintain business relationships; the
response of customers, policyholders, brokers, service providers,
business partners and regulators to the announcement of the transaction
and other risks discussed in our company's filings with the Securities
and Exchange Commission (SEC), including our Annual Report on Form 10-K
for the year ended December 31, 2017 and our subsequently filed
Quarterly Reports on Form 10-Q, which filings are available from the
SEC. You should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. The Coca-Cola Company can
give no assurance that the expectations expressed or implied in the
forward-looking statements contained herein will be attained and
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.

Non-GAAP Financial Measures

This press release contains disclosure of the EBITDA, or underlying
earnings before interest, tax, depreciation and amortization, excluding
income from joint ventures, and revenue of Costa for the fiscal year
2018 (ending March 1, 2018), which may be deemed to be non-GAAP
financial measures within the meaning of Regulation G promulgated by the
SEC. Costa uses a range of measures to monitor its financial
performance, which include both statutory measures in accordance with
International Financial Reporting Standards ("IFRS") and alternative
performance measures which are consistent with the way that business
performance is measured internally and which are believed to provide
both management and investors with useful additional information about
the financial performance of Costa's business. Underlying measures of
profitability represent the equivalent IFRS measures adjusted for
specific items that Costa considers relevant for comparison of the
financial performance of Costa's business either from one period to
another or with other similar businesses. Costa's calculation of EBITDA
for the 52 weeks ended March 1, 2018, is as follows:

     
£m
Underlying profit before tax 158.3
Income from joint ventures (0.2)
Net finance revenue 0.6
Underlying depreciation and amortization       79.5
Underlying EBITDA 238.2
 

The above unaudited historical financial information relating to Costa
has been extracted without material adjustment from the underlying
consolidation schedules used in preparing Whitbread PLC's consolidated
financial statements for the financial year ended March 1, 2018.

EBITDA is not an earnings measure recognized by GAAP and does not have a
standardized meaning prescribed by GAAP; accordingly, EBITDA may not be
comparable to similar measures presented by other companies. EBITDA
should be considered in addition to, and not as a substitute for, or
superior to, operating income, cash flows, revenue, or other measures of
financial performance prepared in accordance with GAAP. EBITDA is not a
completely representative measure of either the historical performance
or, necessarily, the future potential of Costa.

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