-------------------------------------------------------
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 quarter ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 1-2217
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, N.W. 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 and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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 April 29, 1994
--------------------- -----------------------------
$.25 Par Value 1,293,362,931 Shares
-------------------------------------------------------
<PAGE> -2-
THE COCA-COLA COMPANY AND SUBSIDIARIES
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
March 31, 1994 and December 31, 1993 3
Condensed Consolidated Statements of Income
Three months ended March 31, 1994 and 1993 5
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1994 and 1993 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information
Item 4. Submissions of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
<PAGE> -3-
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>
March 31, December 31,
1994 1993
----------- -----------
<S> <C> <C>
CURRENT
Cash and cash equivalents $ 959 $ 998
Marketable securities 141 80
----------- -----------
1,100 1,078
Trade accounts receivable, less
allowances of $40 at March 31
and $39 at December 31 1,237 1,210
Finance subsidiary receivables 33 33
Inventories 1,071 1,049
Prepaid expenses and other assets 1,127 1,064
----------- -----------
TOTAL CURRENT ASSETS 4,568 4,434
----------- -----------
INVESTMENTS AND OTHER ASSETS
Equity method investments
Coca-Cola Enterprises Inc. 494 498
Coca-Cola Amatil Limited 632 592
Other affiliated businesses 1,041 1,037
Cost method investments in affiliated
businesses 149 88
Finance subsidiary receivables 264 226
Marketable securities and other assets 887 868
----------- -----------
3,467 3,309
----------- -----------
PROPERTY, PLANT AND EQUIPMENT
Land 207 197
Buildings and improvements 1,676 1,616
Machinery and equipment 3,500 3,380
Containers 381 403
----------- -----------
5,764 5,596
Less allowances for depreciation 1,940 1,867
----------- -----------
3,824 3,729
----------- -----------
GOODWILL AND OTHER INTANGIBLE ASSETS 550 549
----------- -----------
$ 12,409 $ 12,021
=========== ===========
</TABLE>
<PAGE> -4-
THE COCA-COLA COMPANY AND SUBSIDIARIES
LIABILITIES AND SHARE-OWNERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
----------- -----------
<S> <C> <C>
CURRENT
Accounts payable and accrued expenses $ 2,130 $ 2,217
Loans and notes payable 1,596 1,409
Finance subsidiary notes payable 275 244
Current maturities of long-term debt 14 19
Accrued taxes 1,277 1,282
----------- -----------
TOTAL CURRENT LIABILITIES 5,292 5,171
----------- -----------
LONG-TERM DEBT 1,440 1,428
----------- -----------
OTHER LIABILITIES 731 725
----------- -----------
DEFERRED INCOME TAXES 130 113
----------- -----------
SHARE-OWNERS' EQUITY
Common stock, $.25 par value -
Authorized: 2,800,000,000 shares
Issued: 1,704,671,967 shares at March 31;
1,703,526,299 shares at December 31 426 426
Capital surplus 1,107 1,086
Reinvested earnings 9,726 9,458
Unearned compensation related to
outstanding restricted stock (81) (85)
Foreign currency translation adjustment (369) (420)
Unrealized gain on securities
available-for-sale 54 --
----------- -----------
10,863 10,465
Less treasury stock, at cost
(410,048,000 common shares at March 31;
406,072,817 common shares at
December 31) 6,047 5,881
----------- -----------
4,816 4,584
----------- -----------
$ 12,409 $ 12,021
=========== ===========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE> -5-
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1994 1993
----------- -----------
<S> <C> <C>
NET OPERATING REVENUES $ 3,352 $ 3,056
Cost of goods sold 1,242 1,093
----------- -----------
GROSS PROFIT 2,110 1,963
Selling, administrative and general expenses 1,338 1,286
----------- -----------
OPERATING INCOME 772 677
Interest income 35 35
Interest expense 43 46
Equity income 7 29
Other deductions - net 11 39
----------- -----------
INCOME BEFORE INCOME TAXES AND CHANGE
IN ACCOUNTING PRINCIPLE 760 656
Income taxes 239 202
----------- -----------
INCOME BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 521 454
Transition effect of change in
accounting for postemployment
benefits -- (12)
----------- -----------
NET INCOME $ 521 $ 442
=========== ===========
INCOME PER SHARE
Before change in
accounting principle $ .40 $ .35
Transition effect of change in
accounting for postemployment
benefits -- (.01)
----------- -----------
NET INCOME PER SHARE $ .40 $ .34
=========== ===========
DIVIDENDS PER SHARE $ .195 $ .170
=========== ===========
AVERAGE SHARES OUTSTANDING 1,296 1,306
=========== ===========
<FN>
See Notes to Condensed Consolidated Financial Statements.
<PAGE> -6-
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In millions)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1994 1993
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 521 $ 442
Transition effect of change in
accounting principle -- 12
Depreciation and amortization 91 88
Deferred income taxes 8 16
Equity income, net of dividends -- (21)
Foreign currency adjustments (5) 8
Other noncash items 2 16
Net change in operating assets
and liabilities (274) (302)
----------- -----------
Net cash provided by operating activities 343 259
----------- -----------
INVESTING ACTIVITIES
Additions to finance subsidiary receivables (43) (5)
Collections of finance subsidiary receivables 5 14
Acquisitions and investments in affiliated
businesses (7) (22)
Purchases of securities (91) (49)
Proceeds from disposals of securities
and other assets 25 109
Purchases of property, plant and equipment (185) (209)
Proceeds from disposals of property, plant
and equipment 17 17
Other investing activities 14 --
----------- -----------
Net cash used in investing activities (265) (145)
----------- -----------
Net cash provided by operations after
reinvestment 78 114
----------- -----------
FINANCING ACTIVITIES
Issuances of debt 228 268
Payments of debt (12) (262)
Common stock issued 18 15
Purchases of common stock for treasury (166) (107)
Dividends (187) (200)
----------- -----------
Net cash used in financing activities (119) (286)
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 2 (10)
----------- -----------
CASH AND CASH EQUIVALENTS
Net decrease during the period (39) (182)
Balance at beginning of period 998 956
----------- -----------
Balance at end of period $ 959 $ 774
=========== ===========
INTEREST PAID $ 57 $ 59
=========== ===========
INCOME TAXES PAID $ 228 $ 178
=========== ===========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE> -7-
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, 1993. 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 three month period ended March 31, 1994, are not necessarily
indicative of the results that may be expected for the year ending December 31,
1994.
The Company adopted Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities (SFAS 115) as
of January 1, 1994. The Company recorded an increase to share-owners' equity
of $60 million from the adoption of SFAS 115.
The Company filed a Form 8-K on January 27, 1994, restating the 1993
quarterly reports for the adoption of Statement of Financial Accounting
Standards No. 112, Employers' Accounting for Postemployment Benefits (SFAS
112). Results for the first quarter of 1993 were restated to include the
recognition of a one-time, noncash, after-tax charge of $12 million which
is net of income tax benefits of $8 million. The transition effect charge
consists primarily of health benefits for surviving spouses and disabled
employees. The adoption impact of SFAS 112 on the Company's bottling
investees accounted for by the equity method was immaterial and, therefore,
was not included in the transition effect charge. Net income per share for
the first quarter of 1993 was reduced by $0.01 for the adoption of SFAS 112.
Certain amounts in the 1993 condensed consolidated financial statements have
been reclassified to conform to the current year presentation.
NOTE B - SEASONAL NATURE OF BUSINESS
Unit sales of the Company's soft drink products are generally greater in the
second and third quarters due to seasonal factors.
<PAGE> -8-
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE C - INVENTORIES
Inventories consist of the following (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
----------- ------------
<S> <C> <C>
Raw materials and supplies $ 678 $ 689
Work in process 8 4
Finished goods 385 356
----------- -----------
$ 1,071 $ 1,049
=========== ===========
</TABLE>
NOTE D - SUMMARIZED INCOME STATEMENT DATA OF COCA-COLA ENTERPRISES INC.
At March 31, 1994 and 1993, the Company owned approximately 43 percent and
44 percent, respectively, of the outstanding common stock of Coca-Cola
Enterprises Inc. (Coca-Cola Enterprises) and, accordingly, accounted for its
related investment therein under the equity method of accounting. Coca-Cola
Enterprises meets the definition of a significant equity investee as defined
by Rule 3-09 of Regulation S-X. Summarized income statement data for
Coca-Cola Enterprises is as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
April 1, April 2,
1994 1993
----------- -----------
<S> <C> <C>
Net operating revenues $ 1,320 $ 1,208
Gross profit 521 477
Net loss (6) (5)
Net loss available to
common share owners (7) (5)
</TABLE>
NOTE E - SHARE REPURCHASE PROGRAM
During the first quarter of 1994, the Company purchased approximately 4
million shares of its common stock.
NOTE F - FINANCIAL INSTRUMENTS
As discussed in Note A, the Company adopted SFAS 115 at January 1,
1994, changing the method of accounting for certain debt and marketable
equity security investments from a historical cost basis to a fair
value approach. Under SFAS 115, investments in debt and marketable
<PAGE> -9-
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
equity securities, other than investments accounted for by the equity method,
are categorized as either trading securities, securities available-for-sale or
securities held-to-maturity. At January 1, 1994, the Company had no trading
securities. Securities categorized as available-for-sale are stated at fair
value, with unrealized gains and losses, net of deferred taxes, reported in
share-owners' equity. Debt securities categorized as held-to-maturity are
stated at amortized cost. Available-for-sale and held-to-maturity securities,
at January 1, 1994, consisted of the following (in millions):
<TABLE>
<CAPTION>
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Available-for-sale
securities
Equity securities $ 43 $ 103 $ -- $ 146
Collateralized
mortgage
obligations 105 1 -- 106
Other debt securities 36 -- -- 36
---------- ---------- ---------- ----------
Total $ 184 $ 104 $ -- $ 288
========== ========== ========== ==========
Held-to-maturity
securities
Bank and corporate
debt $ 1,008 $ -- $ 2 $ 1,006
Other securities 124 -- 1 123
---------- ---------- ---------- ----------
Total $ 1,132 $ -- $ 3 $ 1,129
========== ========== ========== ==========
</TABLE>
These investments were included in the following captions on the condensed
consolidated balance sheet (in millions):
<TABLE>
<CAPTION>
January 1, 1994
------------------------
Available- Held-to-
for-Sale Maturity
Securities Securities
----------- -----------
<S> <C> <C>
Cash and cash equivalents $ -- $ 777
Marketable securities 93 9
Cost method investments
in affiliated businesses 84 --
Marketable securities and
other assets 111 346
----------- -----------
$ 288 $ 1,132
=========== ===========
</TABLE>
<PAGE> -10-
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The contractual maturities of these investments as of January 1, 1994, were as
follows (in millions):
<TABLE>
<CAPTION>
Available-for-Sale Securities Held-to-Maturity Securities
----------------------------- ---------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
<S> <C> <C> <C> <C>
1994 $ 34 $ 34 $ 786 $ 786
1995 - 1998 2 2 326 323
After 1998 -- -- 20 20
--- --- --- ---
36 36 1,132 1,129
Collateralized
mortgage obligations 105 106 -- --
Equity securities 43 146 -- --
---- ---- ------ ------
Total $184 $288 $1,132 $1,129
==== ==== ====== ======
</TABLE>
NOTE G - CONTINGENCIES
In March 1994, the Tokyo Regional Taxation Bureau in Japan issued an
assessment claiming that royalties paid by a wholly-owned subsidiary of the
Company were in excess of an arm's length price during fiscal years 1990, 1991
and 1992. The Company complied with the National Tax Administration Agency's
pre-confirmation system through prompt communication of royalty rates existing
during the assessment period and strongly disagrees with the assessment. This
matter will be reviewed by the United States and Japanese tax authorities under
the treaty signed by the two nations to prevent double taxation. If upheld,
the assessment would require the Company to pay additional taxes in Japan.
However, any additional tax liability in Japan should be fully offset by tax
credits in the United States.
<PAGE> -11-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
VOLUME
SOFT DRINKS: Worldwide unit case volume increased approximately 7 percent
and worldwide gallon shipments of soft drink concentrates and syrups grew 6
percent in the first quarter of 1994 when compared to the first quarter of
1993.
In the North America sector, unit case volume sold to retail customers grew 7
percent in the first quarter, led by an increase of 7 percent in the United
States. The continuing strong unit case volume gains in the United States
resulted from increases in the Company's core brands as well as sales of new
products, such as Nestea, PowerAde and Minute Maid Juices To Go. Continued
focus on programs designed to increase customer volume and profit also
contributed to first quarter results. North American gallon shipments of
concentrates and syrups to bottlers increased 11 percent for the first quarter,
including growth of 11 percent in the United States.
International gallon shipments of concentrates and syrups advanced 3 percent
and unit case volume increased more than 6 percent in the first quarter of
1994. International unit case volume was led by a 33 percent increase in the
Northeast Europe/Middle East Group, which came on top of 20 percent growth in
the prior year. This group continues to benefit from rapid expansion into
emerging soft drink markets. Unit case volume in the Middle East Division, the
East Central European Division and the Nordic and Northern Eurasia Division
advanced 32 percent, 22 percent and 12 percent, respectively. First quarter
unit case volume in India reached 12 million cases, as the Company began its
first full year of operation in that country since 1977. Gallon shipments of
concentrates and syrups increased 13 percent in the first quarter in the
Northeast Europe/Middle East Group.
In the Latin America Group, first quarter unit case volume grew 5 percent led
by an 11 percent gain in Mexico and 7 percent growth in Chile, partially offset
by a 5 percent decline in Brazil due to the difficult economic environment.
Gallon shipments in Latin America increased 7 percent in the first quarter.
Unit case volume in the Africa Group declined 4 percent in the first quarter,
impacted by a difficult economic environment throughout the region and social
unrest in certain key markets. Gallon shipments in the Africa Group decreased
16 percent in the first quarter due to inventory depletion at the bottler
level.
<PAGE> -12-
RESULTS OF OPERATIONS (CONTINUED)
Unit case volume in the Pacific Group grew 10 percent in the first quarter,
led by increases of 29 percent in China, 13 percent in Australia and 11 percent
in the Philippines. First quarter unit case volume rose 1 percent in Japan,
impacted by a difficult economic environment. Gallon shipments of concentrates
and syrups in the Pacific Group increased 7 percent in the first quarter.
In the European Community Group, first quarter unit case volume grew 2
percent. Increases of 7 percent in Spain, 4 percent in France and 2 percent in
Germany were partially offset by a 3 percent decline in Great Britain, which
faced a tough comparison due to 11 percent growth in the prior year. Gallon
shipments in the European Community Group declined 3 percent in the first
quarter.
FOODS: At Coca-Cola Foods, operating income advanced strongly versus the
prior year. Unit volume increased 3 percent, impacted by a difficult
comparison to a 39 percent increase in the first quarter of 1993. During the
quarter, Coca-Cola Foods completed the national rollout of Minute Maid
Naturals, a line of shelf-stable multi-serve juices and juice drinks.
NET OPERATING REVENUES AND GROSS MARGIN
Net operating revenues grew 10 percent in the first quarter of 1994 while
gross profit grew 7 percent. Net revenue growth was due primarily to increased
soft drink gallon shipments, selected price increases and continued expansion
of the Company's bottling and canning operations.
The Company's gross margin decreased to 63 percent in the first quarter of
1994 as compared to 64 percent in the first quarter of 1993. The decrease in
gross margin was due primarily to a change in product mix for certain
international locations and higher sweetener costs.
SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
Selling expenses were $1,050 million in the first quarter of 1994, compared
to $965 million in the first quarter of 1993. The increase was primarily due
to higher marketing investments in support of the Company's volume growth.
Administrative and general expenses were $288 million in the first quarter, a
10 percent decrease from the first quarter of 1993. This decrease was due
primarily to a reduction in the costs of stock-related employee benefits and
increased efficiencies in the Company's domestic and corporate operations.
<PAGE> -13-
RESULTS OF OPERATIONS (CONTINUED)
OPERATING INCOME AND OPERATING MARGIN
Operating income in the first quarter increased to $772 million, a 14 percent
increase over the first quarter of 1993. The 1994 operating margin benefited
from reductions in administrative and general expenses.
INTEREST INCOME AND INTEREST EXPENSE
Interest income in the first quarter of 1994 was even with the first quarter
of 1993. Interest expense decreased 7 percent in the first quarter due
primarily to a reduction in the average outstanding balance of short-term
commercial paper borrowings.
EQUITY INCOME
Equity income decreased $22 million in the first quarter due primarily to
lower earnings from Coca-Cola Amatil Limited and The Coca-Cola Bottling Company
of New York, Inc.
INCOME TAXES
The Company's effective tax rate increased from 30.8 percent in the first
quarter of 1993 to 31.5 percent in the first quarter of 1994. The increase
reflects the impact of the increase in the Corporate tax rate due to the
change in the U.S. tax law and a reduction in the Company's favorable U.S.
tax treatment from manufacturing facilities in Puerto Rico.
TRANSITION EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
As mentioned in Note A, the Company retroactively adopted SFAS 112,
Employers' Accounting for Postemployment Benefits, as of January 1, 1993. SFAS
112 requires employers to accrue the costs of benefits to former or inactive
employees after employment, but before retirement. In the first quarter of
1993 the Company recorded an accumulated obligation of $12 million, which is
net of deferred taxes of $8 million.
FINANCIAL CONDITION
NET CASH FLOW PROVIDED BY OPERATIONS AFTER REINVESTMENT
In the first quarter of 1994, net cash flow after reinvestment was $78
million, a decrease of $36 million from the comparable period in 1993. Net
cash provided by operating activities increased significantly in 1994 due
primarily to higher net income. Reinvestment in the form of property, plant
and equipment, the primary use of cash for investing activities, was $185
million for the first three months of 1994.
The increase in marketable securities and other assets is due in part to
additional investments in securities purchased in accordance with the
negotiated tax exemption grant for the Company's manufacturing facilities in
Puerto Rico and the Company's adoption of SFAS 115.
<PAGE> -14-
FINANCIAL CONDITION (CONTINUED)
FINANCING
Financing activities primarily represent the Company's net borrowing
activities, dividend payments and share repurchases. Cash used in financing
activities totaled $119 million and $286 million in the first quarters of 1994
and 1993, respectively. The change between quarters was due primarily to a
reduction in payments of debt during the first quarter of 1994. Net borrowings
for the first quarter of 1994 were used primarily to finance accelerated share
repurchases and investment activity.
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 1 percent stronger in the first quarter of 1994
versus key hard currencies for the comparable period of the prior year.
<PAGE> -15-
Part II. Other Information
Item 4. Submissions of Matters to a Vote of Security Holders
The Annual Meeting of Share Owners was held on Wednesday, April 20, 1994, in
Wilmington, Delaware, at which several matters were submitted to a vote of the
share owners:
(a) Votes cast for or withheld regarding the re-election of four Directors for
a term expiring in 1997 were as follows:
FOR WITHHELD
------------- ---------
Ronald W. Allen 1,127,983,805 6,205,184
Donald F. McHenry 1,127,600,466 6,588,523
Paul F. Oreffice 1,127,898,497 6,290,492
James B. Williams 1,127,995,953 6,193,036
Additional Directors, whose terms of office as Directors continued after
the meeting, are as follows:
Term expiring in 1995 Term expiring in 1996
--------------------- ---------------------
Herbert A. Allen Cathleen P. Black
Charles W. Duncan, Jr. Warren E. Buffett
Roberto C. Goizueta Susan B. King
James D. Robinson, III William B. Turner
Peter V. Ueberroth
(b) Votes cast for or against and the number of abstentions regarding each
other matter voted upon at the meeting were as follows:
<TABLE>
<CAPTION>
BROKER
DESCRIPTION OF MATTER FOR AGAINST ABSTAIN NON-VOTES
------------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Proposal to approve the
Long Term Performance
Incentive Plan of The
Coca-Cola Company, as
amended 1,057,806,554 66,978,796 9,403,639 0
Proposal to approve the
Executive Performance
Incentive Plan of The
Coca-Cola Company 1,047,640,495 75,738,027 10,810,467 0
Ratification of the
appointment of Ernst &
Young as independent
auditors of the Company
to serve for the 1994
fiscal year 1,128,048,474 2,681,586 3,458,929 0
</TABLE>
<PAGE> -16-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10 - Letter Agreement Dated May 3, 1994, Between the Company and
Mr. Sergio S. Zyman
12 - Computation of Ratios of Earnings to Fixed Charges
(b) Reports on Form 8-K:
A report on Form 8-K was filed on January 27, 1994, which included
restated condensed consolidated financial statements (unaudited) of
The Coca-Cola Company and subsidiaries (i) for the three months
ended March 31, 1993, (ii) for the three and six months ended June
30, 1993, and (iii) for the three and nine months ended September
30, 1993. Such financial statements were restated to reflect the
retroactive adoption by The Coca-Cola Company of Statement of
Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits, as of January 1, 1993.
<PAGE> -17-
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: May 6, 1994 By: /s/ James E. Chestnut
-------------------------------------
James E. Chestnut
Vice President and Controller
(On behalf of the Registrant and
as Chief Accounting Officer)
<PAGE> -18-
EXHIBIT INDEX
Exhibit Number and Description
10 - Letter Agreement Dated May 3, 1994, Between the Company and
Mr. Sergio S. Zyman
12 - Computation of Ratios of Earnings to Fixed Charges
Exhibit 10
THE COCA-COLA COMPANY
COCA-COLA PLAZA
ATLANTA, GEORGIA
ROBERTO C. GOIZUETA ADDRESS REPLY TO
CHAIRMAN OF THE BOARD P.O. DRAWER 1734
AND April 21, 1994 ATLANTA, GA 30301
CHIEF EXECUTIVE OFFICER --
404 676-2121
Mr. Sergio S. Zyman
The Coca-Cola Company
Atlanta, Georgia
Dear Sergio:
I am pleased to advise you that the Compensation Committee of the Board
approved an increase in your base annual salary to $360,000 effective May 1,
1994. The Committee also approved a special discretionary bonus for you to be
paid in February of each year from 1995 through 1998. These payments will
equal the payments you would have received had you been a participant in the
three-year plans under the Company's Long Term Incentive Plan beginning in
1990.
Your payments will be made at the same time as payments to Plan participants
and will be based on the same performance criteria as are applicable to the
participants under the Plan for those periods. To determine your earnings
opportunity, the actual midpoints for your job grade at the beginning of each
applicable performance period will be used.
These payments are in consideration of your necessary relinquishment of your
lucrative consulting business in order to accept employment with the Company.
Each payment is conditioned on your remaining in the employ of the Company
through the end of the year prior to the date when payment would be made
pursuant to the terms of the Plan.
This arrangement reflects the continuing discussions you and Doug Ivester have
held on this subject, and supersedes all prior negotiations.
Please indicate your agreement by signing and returning one copy of this
letter.
Sincerely,
/s/ ROBERTO C. GOIZUETA
Accepted by:
/s/ SERGIO S. ZYMAN 5/3/94
Date
c: Mr. M. Douglas Ivester
Exhibit 12
THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions except ratios)
<TABLE>
<CAPTION>
Three Months
Ended Year Ended December 31,
March 31, ---------------------------------------------
1994 1993 1992 1991 1990 1989
------------ -------- --------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income from
continuing
operations
before income
taxes and
changes in
accounting
principles $ 760 $ 3,185 $2,746 $2,383 $2,014 $1,764
Fixed charges 51 213 207 222 255 326
Less capitalized
interest, net (1) (16) (10) (8) (8) (7)
Equity income,
net of dividends -- (35) (30) (16) (94) (55)
------ -------- ------- ------- ------- -------
Adjusted earnings $ 810 $ 3,347 $2,913 $2,581 $2,167 $2,028
====== ======== ======= ======= ======= =======
Fixed Charges:
Gross interest
incurred $ 44 $ 184 $ 181 $ 200 $ 238 $ 315
Interest portion
of rent expense 7 29 26 22 17 11
------ -------- ------- ------ ------- -------
Total fixed charges $ 51 $ 213 $ 207 $ 222 $ 255 $ 326
====== ======== ======= ======= ======= =======
Ratios of earnings
to fixed charges 15.9 15.7 14.1 11.6 8.5 6.2
====== ======== ======= ======= ======= =======
<FN>
The Company is contingently liable for guarantees of indebtedness of
independent bottling companies and others (approximately $143 million at
March 31, 1994). 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>
