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CNBC Exclusive: CNBC Transcript: CNBC’s Sara Eisen Speaks with Incoming Coca-Cola CEO James Quincey on CNBC’s “Squawk on the Street”

WHEN: Thursday, February 9th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with incoming Coca-Cola CEO James Quincey on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Thursday, February 9th. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000591888.

All references must be sourced to CNBC.

SARA EISEN: STOCKS ARE AT RECORD HIGHS, BUT ONE COMPANY THAT IS NOT JOINING THE PARTY, COCA-COLA. SHARES DOWN LITTLE OVER 2%. DELIVERING EARNINGS THIS MORNING IN LINE WITH ESTIMATES. REVENUE BEATING EXPECTATIONS, BUT GUIDANCE FALLING SHORT. JOINING US FOR MORE, THE INCOMING CEO OF COCA-COLA, JAMES QUINCEY. THIS IS HIS FIRST INTERVIEW SINCE BEING NAMED CEO. JAMES, CONGRATULATIONS AND WELCOME.

JAMES QUINCEY: THANK YOU, THANK YOU. GOOD MORNING.

EISEN: GOOD MORNING. WE'LL GET TO YOUR LEADERSHIP IN A MOMENT, BUT FIRST ON THE QUARTER, IT'S KIND OF MESSY THESE DAYS. I KNOW YOU'RE GOING THROUGH A LOT OF TRANSITIONS, SPINNING OFF SOME OF THE BOTTLERS, WORKING THROUGH SOME FOREIGN EXCHANGE IMPACTS. CAN YOU JUST SORT THROUGH THE NOISE AND TELL US WHERE THE BUSINESS IS IN TERMS OF WHERE YOU ARE IN THIS TRANSFORMATION?

QUINCEY: SURE. AS YOU SAY THERE'S SOME NOISE OUT THERE, WHETHER IT BE THE TAX RATE, THE INTEREST, OR IN FACT THE REFRANCHISING WHERE WE'RE SELLING – EFFECTIVELY SELLING DIVISIONS OF REVENUE AND PROFIT, BUT I THINK THE MOST IMPORTANT THING IS TO LOOK THROUGH ALL THAT AND LOOK AT THE CORE UNDERLYING BUSINESS, THE BUSINESS THAT'S GOING TO BE LEFT ONCE WE FINISH THIS TRANSFORMATION. IT GREW REVENUE IN THE FULL YEAR 2016, 4%. IT GREW PROFIT BEFORE TAX EVEN WITH A HIGHER INTEREST CHARGE, GREW 8%. SO WE'RE SEEING A STRONG, ROBUST, ON-THE-LINE BUSINESS BEING CREATED FROM THIS TRANSFORMATION AND ACCELERATION FROM '14. AND THAT'S THE BUSINESS WE SEE EMERGING INTO THE FUTURE. YES, STILL SOME NOISE AS WE COMPLETE THE TRANSFORMATION IN '17, BUT A ROBUST GROWTH BUSINESS EMERGING FROM THAT.

EISEN: SO IS YOUR MESSAGE TO INVESTORS YOU HAVE TO LOOK OUT INTO 2018 TO FINALLY START TO SEE A LEANER GROWING COCA-COLA?

QUINCEY: YEAH. I THINK, YOU KNOW, THE CENTRAL ISSUE IN '17 IS WITH THE BIGGEST YEAR OF REFRANCHISING, WE'RE MAKING A LOT OF STRUCTURAL ADJUSTMENTS, WE'RE SELLING A DIVISION. AND AS THEY LOOK AT THAT, THEY SHOULD PAY MOST ATTENTION TO IS, IS THE BUSINESS OF THE FUTURE GROWING STRONGLY, GROWING IN REVENUE, GROWING CONSUMERS AND GROWING PROFITS. AND THAT'S WHAT THEY'LL SEE IN '17. THEY'LL HAVE TO NET OFF THE STRUCTURAL. AND THAT WILL CONTINUE INTO '18. SO IT WILL BE A GOOD BUSINESS GOING INTO THE FUTURE.

EISEN: NORTH AMERICA IS A BRIGHT SPOT FOR YOU, PARTICULARLY IN THIS QUARTER. WHAT'S DRIVING THAT? IS IT THE BUMP IN CONSUMER CONFIDENCE THAT WE SAW AFTER THE ELECTION?

QUINCEY: THE NORTH AMERICAN BUSINESS HAD A GREAT FOURTH QUARTER. REALLY I THINK IT'S REALLY THE CULMINATION OF WHAT THEY'VE BEEN DOING OVER THE LAST FEW YEARS. WE MADE A TRANSFORMATION, OUR BUSINESS, IN NORTH AMERICA. WE FOCUSED THE PORTFOLIO ON MORE CATEGORIES. WE UPPED THE MARKETING INVESTMENT, WE IMPROVED THE EXECUTION, WE TRANSFORMED THE BOTTLING SYSTEM REFRANCHISING IT AND I THINK THE WHOLE TEAM HAS PULLED THAT TOGETHER. AND NOW THEY HAVE TWO REALLY STRONG YEARS CAPPED OFF WITH A GREAT FOURTH QUARTER. THE NORTH AMERICAN BUSINESS IS HUMMING. LOT TO DO IN 2017 WITH THE BIGGEST YEAR OF REFRANCHISING. BUT WE'RE CONFIDENT, THE TEAM IS CONFIDENT THAT WE CAN CONTINUE TO DRIVE THAT BUSINESS FORWARD.

EISEN: THOUGH EMERGING MARKETS HAVE BEEN PAINFUL. GLOBAL VOLUMES DECLINING BECAUSE OF LATIN AMERICA. WHAT'S THE OUTLOOK THERE?

QUINCEY: YEAH. THE DEVELOPING AND EMERGING MARKETS ARE MORE OF A MIXED BAG. SOME HAVE PERFORMED REALLY WELL THIS YEAR. NIGERIA, PAKISTAN, EVEN CHINA CAME BACK IN THE SECOND HALF. BUT THE CONCENTRATION OF THE ONES THAT ARE UNDER MORE MACRO ECONOMIC STRESSES IN LATIN AMERICA, PARTICULARLY VENEZUELA AND ALSO BRAZIL, A BIG MARKET FOR US. THAT CAME OFF A LITTLE TOWARDS THE END OF THE YEAR. AND NOW WE'RE REALLY FOCUSED ON THE GAME PLAN THAT WE KNOW WORKS. RESET THE PACKAGING, RESET THE PRICING APPROACH, BECOME MORE AFFORDABLE, WORK WITH THE CONSUMERS, GAIN SHARE AND AS THE ECONOMY IN BRAZIL EVENTUALLY IMPROVES, WE'LL SEE THAT BUSINESS REBOUND. IT'S A GAME PLAN THAT'S WORKED WELL FOR US BEFORE. WORKED WELL IN CHINA THIS YEAR. AND IT WILL COME THROUGH IN BRAZIL OVER TIME. SO IT'S STILL A MIXED BAG.

EISEN: UH-HUH. I WAS JUST GOING TO SAY MUHTAR KENT THIS MORNING ON THE CALL, WHO WILL BECOME THE CHAIRMAN IN A FEW MONTHS WHEN YOU BECOME CEO, CALLED YOU THE RIGHT LEADER AT THE RIGHT TIME. YOU'RE ABOUT TO TAKE OVER THE WORLD'S BIGGEST SOFT DRINK MAKER AT A TIME WHERE SOFT DRINK CONSUMPTION HAS GONE DOWN, AT LEAST IN THIS COUNTRY, AND CONTINUES TO DO SO FOR YEARS. SUGAR TAXES ARE RISING ACROSS THE UNITED STATES AND INTERNATIONALLY. HOW DO YOU WRAP YOUR HEAD AROUND SOME OF THESE MAJOR CHALLENGES AND START TO THINK ABOUT THIS COMPANY OF THE FUTURE?

QUINCEY: WELL, I THINK THE COMPANY OF THE FUTURE IS STARTING TO MERGE. AND I THINK WHAT IT'S ABOUT GOING FORWARD AND WHAT I'LL BE FOCUSED ON IS ACCELERATING THAT. MAKING US NOT JUST THE WORLD'S LARGEST SOFT DRINK MAKER, WHICH WE ARE, BUT WE'RE ALSO THE WORLD'S LARGEST BEVERAGE COMPANY. WE MAKE BEVERAGES ACROSS ALL CATEGORIES. WE'RE NOW NUMBER ONE OR NUMBER TWO IN VIRTUALLY EVERY CATEGORY. AND WE NOT ONLY SEE A PATH TO GROW THOSE OTHER CATEGORIES, WE SEE A PATH TO GROW SPARKLING. SPARKLING GREW IN NORTH AMERICA IN THE FOURTH QUARTER. SO SPARKLING GREW IN NORTH AMERICA, NOT JUST IN REVENUE, BUT IN VOLUME. SO WHAT WE'RE SEEING GOING FORWARD AS WE FOCUS ON SMALLER PACKAGES – SO IN NORTH AMERICA SMALLER PACKAGES GREW ALMOST 10% IN VOLUME – AS WE FOCUS ON SMALLER PACKAGES, AS WE FOCUS ON NO CALORIE SPARKLING BEVERAGES LIKE NO CALORIE COLAS, WHICH ACCELERATED IN THEIR GROWTH IN THE SECOND HALF OF '16 AND ARE NOW GLOBALLY GROWING WELL AHEAD OF THE REST OF THE PORTFOLIO, WE SEE A FUTURE EMERGING WITH A RESHAPED GROWTH EQUATION TOWARDS SPARKLING. MORE FOCUSED ON TRANSACTIONS, LESS WORRIED ABOUT VOLUME IN THE DEVELOPED COUNTRIES – YES VOLUME GROWTH IN THE EMERGING – BUT REALLY GETTING REVENUE GROWTH OF SPARKLING AND THAT'S BUILDING ON GROWTH IN '15 AND GROWTH IN '16 IN SPARKLING AS PART OF THE TOTAL PORTFOLIO. SO IT'S ABOUT PULLING ALL OF THE COMPONENTS TOGETHER.

EISEN: RIGHT. WHEN YOU SAY SPARKLING, I JUST WANT TO BE CLEAR, YOU'RE TALKING ABOUT THE CARBONATED BEVERAGES? BRAND COKE, DIET COKE, COKE ZERO, I KNOW SPRITE AND FANTA HAD A PRETTY GOOD QUARTER, BUT WHAT ARE YOU GOING TO DO ABOUT DIET?

QUINCEY: YES, ABSOLUTELY. I MEAN, OUR BIGGEST SPARKLING BEVERAGES, COKE, FANTA AND SPRITE IN THE U.S. SPRITE AND FANTA DID REALLY WELL. WE DIDN'T GET QUITE TO GROWTH IN DIET COKE, FOR EXAMPLE. WE'RE SLOWLY REDUCING THE RATE OF DECLINE. WE'RE GETTING THERE. I THINK THIS IS A GREAT BRAND. IT'S GOT A GREAT FUTURE. IT WILL COME BACK. WHAT'S REALLY IMPORTANT I THINK IS TO ALSO LOOK AT THE GROWTH OF COKE ZERO. WE GLOBALLY HAVE BEEN DRIVING COCA-COLA ZERO SUGAR WITH GRAPHIC CHANGES, WITH POSITIONING CHANGES, WITH FORMULA CHANGES, AND THAT'S STARTING TO BUILD REAL GLOBAL MOMENTUM. 2015 THE RATE OF GROWTH WAS BETTER THAN '14. 2016 THE RATE OF GROWTH WAS BETTER THAN '15. AND AS I SAID, ZERO CALORIE COLAS NOW GLOBALLY IS OUTPACING THE GROWTH OF OUR TOTAL PORTFOLIO AND SHOWING GOOD GROWTH ACROSS THE WORLD IN VOLUME. THERE'S A FUTURE FOR NO CALORIE.

EISEN: YEAH. WHAT IS YOUR RELATIONSHIP LIKE, JAMES, WITH YOUR NUMBER ONE SHAREHOLDER, WARREN BUFFETT?

QUINCEY: WARREN BUFFETT IS CLEARLY AN IMPORTANT SHAREHOLDER. WE LOVE ALL OUR SHAREHOLDERS. I'VE BEEN UP TO SEE HIM UP THERE IN OMAHA AND I EXPECT TO GO AND SEE HIM THROUGHOUT THE YEAR INCLUDING HIS AGM, AND HE'S BEEN A LONG AND LOYAL SHAREHOLDER OF THE COCA-COLA COMPANY, BUT WE DELIVER FOR ALL OUR SHAREHOLDERS. AND WE'RE VERY FOCUSED ON MAKING SURE THAT WE START TO EMERGE FROM THIS BIG HEADWIND OF CURRENCY AND TO SOME EXTENT SELLING OUR BOTTLING BUSINESSES SO WE CAN GET FOCUSED ON GROWING OUR COMPARABLE EPS INTO THE FUTURE, DELIVER A BETTER NUMBER THERE THAT WILL DRIVE THE STOCK AND DRIVE RETURNS FOR SHAREHOLDERS INCLUDING WARREN AND INCLUDING THE SECRETARIES WHO HAVE THEM IN THE 401(k)s.

EISEN: I'M GLAD YOU MENTIONED DRIVING THE STOCK, YOU KNOW, THE STOCK HAS UNDERPERFORMED. IT IS DOWN ABOUT 3% IN THE LAST YEAR. UNDERPERFORMED STAPLES, UNDERPERFORMED YOUR BIGGEST COMPETITIOR, PEPSI, WHICH IS SIGNIFICANTLY HIGHER IN THAT PERIOD. DO YOU FEEL LIKE YOU HAVE A BIG JOB AHEAD OF YOU CONVINCING INVESTORS OF THIS TRANSFORMATION? THEY DON'T SEEM TO BE TOTALLY ONBOARD.

QUINCEY: I THINK THE INVESTORS SEE SOME OF THE HEADWINDS. I MEAN, WE'RE ONE OF THE COMPANIES IN THE U.S. MOST EXPOSED TO INTERNATIONAL EARNINGS. AND CLEARLY THE U.S. DOLLAR HAS GOTTEN STRONGER SO THAT'S PLAYED AGAINST US. WE'VE SOLD OFF OUR BOTTLING OPERATIONS, WE'RE SELLING PROFITABLE BUSINESSES, SO THAT'S CLEARLY GOING TO TAKE OUR EARNINGS DOWN. BUT I THINK WHAT INVESTORS ARE STARTING TO PAY ATTENTION TO AND STARTING TO SEE EMERGING FROM THE NOISE IS A BUSINESS WHICH IS GROWING REVENUES, GROWING – WE GREW THE CORE BUSINESS 4% IN 2016. WE GREW PROFITS DESPITE HIGHER INTEREST AT 8%. THAT'S THE BUSINESS THEY'LL SEE GROWING INTO THE FUTURE. AND THAT'S THE BUSINESS THEY'RE GOING TO GET EXCITED ABOUT.

EISEN: I WANTED TO ASK YOU, OF COURSE, ABOUT THE NEW ADMINISTRATION IN THE U.S. AND ON IMMIGRATION. BECAUSE YOU GUYS PUT OUT A STATEMENT OPPOSING THE NEW EXECUTIVE ORDER. MUHTAR KENT IS FROM TURKEY, YOU ARE AN IMMIGRANT FROM THE UK, CLEARLY THIS HAS TO HIT HOME. DO YOU HAVE ANY OTHER PLANS TO FIGHT IT? AND IS THIS AFFECTING YOUR BUSINESS?

QUINCEY: LOOK, COCA-COLA HAS STOOD FOR INCLUSIVITY. WE'RE IN 200 COUNTRIES AROUND THE WORLD. WE HAVE ALWAYS STOOD FOR THAT. WE'RE ALWAYS GOING TO STAND FOR THAT. SO WE THINK THAT THAT'S PART OF OUR CORE VALUES AND THAT'S WHAT OUR STATEMENT THAT MUHTAR PUT OUT WAS ALL ABOUT. IT DOESN'T AFFECT A LOT OF OUR EMPLOYEES BUT WE WANTED TO BE CLEAR ABOUT WHAT OUR BRAND STANDS FOR AND WHAT OUR COMPANY STANDS FOR. AND WE SEE OURSELVES CONTINUING TO OPERATE. NOW, IN THE END, WE ARE A LOCAL BUSINESS IN 200 COUNTRIES. SO WE WILL BE VIBRANT EVERYWHERE.

EISEN: WHAT ABOUT THE SUPER BOWL AD? I KNOW YOU'VE RE-UPPED THE AMERICA THE BEAUTIFUL AD WHICH GOT A LOT OF CHATTER ON SOCIAL MEDIA. HAVE YOU SEEN ANY BACKLASH FROM THAT?

QUINCEY: NOT EVERYONE LOVES EVERY AD, BUT I THINK GENERALLY OVERALL THE RESPONSE WAS POSITIVE. WE WERE TALKING ABOUT CELEBRATING OUR BEAUTIFUL COUNTRY AND ALL THE PEOPLE IN IT. WE RAN SOME OTHER ADS ON SPRITE WITH LeBRON AND ON COKE WITH MILS. WE'RE ABOUT CELEBRATING THE PEOPLE OF EVERY COUNTRY AND THE SUPER BOWL WAS ABOUT CELEBRATING AMERICA.

EISEN: FINALLY, YOU MENTIONED YOU'RE A LOCAL COMPANY IN 200 COUNTRIES. YOU'RE ONE OF THE MOST GLOBALLY EXPOSED AMERICAN COUNTRIES. HOW NERVOUS ARE YOU ABOUT WHAT YOU'RE HEARING FROM THE WHITE HOUSE – SOME OF THIS PROTECTIONIST TALK FROM THE NEW ADMINISTRATION?

QUINCEY: LOOK, THE GREAT BENEFIT OF BEING LOCAL EVERYWHERE IS WE CREATE GREAT JOBS. I MEAN, THE COCA-COLA COMPANY WITH ITS BOTTLING PARTNERS WE HAVE FACTORIES IN VIRTUALLY EVERY COUNTRY. WE HAVE MANY – OVER 100 FACTORIES IN THE U.S. WE EMPLOY TRUCK DRIVERS, WE EMPLOY SALESPEOPLE, WE CREATE GREAT BLUE COLLAR JOBS IN EVERY COUNTRY. I THINK THAT'S WHAT GOVERNMENTS APPRECIATE. THEY'RE LOOKING FOR PEOPLE WHO INVEST IN THEIR COUNTRIES AND CREATE ROBUST REAL JOBS. THAT'S PART OF WHAT THE COCA-COLA SYSTEM IS REALLY PROUD OF DOING IN EVERY COUNTRY.

EISEN: HAVE YOU HAD ANY INTERACTION WITH THE NEW ADMINISTRATION?

QUINCEY: NONE MYSELF PERSONALLY. I THINK THEY'VE GOT THEIR AGENDA FULL WITH OTHER ITEMS AT THE MOMENT.

EISEN: ALL RIGHT. WE WILL SEE. AND WE'LL TALK TO YOU AGAIN SOON, JAMES. THANK YOU SO MUCH FOR JOINING US HERE ON EARNINGS DAY. JAMES QUINCEY IS THE INCOMING COCA-COLA CEO.

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