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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-2217
The Coca Cola Company
(Exact name of Registrant as specified in its charter)
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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)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (404) 676-2121
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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COMMON STOCK, $.25 PAR VALUE NEW YORK STOCK EXCHANGE
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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 BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. X
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT (ASSUMING FOR THESE PURPOSES, BUT WITHOUT CONCEDING, THAT ALL
EXECUTIVE OFFICERS AND DIRECTORS ARE "AFFILIATES" OF THE REGISTRANT) AS OF MARCH
4, 1994 (BASED ON THE CLOSING SALE PRICE AS REPORTED ON THE NEW YORK STOCK
EXCHANGE ON SUCH DATE) WAS $46,265,177,636.
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF MARCH 4,
1994 WAS 1,295,468,897.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE COMPANY'S ANNUAL REPORT TO SHARE OWNERS FOR THE YEAR ENDED
DECEMBER 31, 1993, ARE INCORPORATED BY REFERENCE IN PARTS I, II AND IV.
PORTIONS OF THE COMPANY'S PROXY STATEMENT FOR THE ANNUAL MEETING OF SHARE OWNERS
TO BE HELD ON APRIL 20, 1994, ARE INCORPORATED BY REFERENCE IN PART III.
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PART I
ITEM 1. BUSINESS
The Coca-Cola Company (the "Company" or the "Registrant") was incorporated
in September 1919 under the laws of the State of Delaware and succeeded to the
business of a Georgia corporation with the same name that had been organized in
1892. The Company is the largest manufacturer, marketer and distributor of
carbonated soft drink concentrates and syrups in the world. Its soft drink
products, sold in the United States since 1886, are now sold in more than 195
countries around the world and are the leading carbonated soft drink products in
most of these countries. Within the last two years, the Company has gained entry
into several countries such as Romania and India. The Company also manufactures,
produces, markets and distributes juice and juice drink products.
SOFT DRINKS
General Business Description
The Company manufactures soft drink concentrates and syrups, which it sells
to bottling and canning operations, and manufactures fountain/post-mix soft
drink syrups, which it sells to authorized fountain/post-mix wholesalers and
some fountain/post-mix retailers. Syrups are composed of sweetener, water and
flavoring concentrate. Bottling and canning operations, whether independent or
Company-owned, combine the syrup with carbonated water or combine the
concentrate with sweetener and carbonated water, and package the final soft
drink product in authorized cans, refillable and non-refillable glass bottles
and plastic containers for sale to retailers. Fountain/post-mix wholesalers sell
soft drink syrups to fountain/post-mix retailers, who sell soft drinks to
consumers in cups and glasses.
The Company's soft drink products, including bottled and canned beverages
produced by independent and Company-owned bottling and canning operations, as
well as concentrates and syrups, include Coca-Cola, Coca-Cola classic,
caffeine free Coca-Cola, caffeine free Coca-Cola classic, diet Coke
(sold under the trademark Coke light in many territories outside the United
States), caffeine free diet Coke, cherry Coke, diet cherry Coke, Sprite,
diet Sprite, Mr. PiBB, Mello Yello, Fanta brand soft drinks,
Hi-C brand fruit drinks, TAB, caffeine free TAB, TAB Clear, Fresca, PowerAde,
Minute Maid soft drinks and other products developed for specific markets,
including Georgia brand coffee, a non-carbonated drink.
Coca-Cola Nestle Refreshments ("CCNR"), the Company's 50% joint venture with
Nestle S.A., produces ready-to-drink teas and coffees.
The Company's soft drink products accounted for 87% of the Company's net
operating revenues in 1993 and 1992 and 86% in 1991. Soft drink products
accounted for 96% of the Company's operating income in 1993, 1992 and 1991. In
1993, products bearing the trademark "Coca-Cola" accounted for approximately 73%
of the soft drink operations' gallon shipments worldwide.
In 1993, sales of the Company's soft drink products in the United States
accounted for approximately 31% of the Company's soft drink gallon shipments. In
1993, the Company's principal markets outside the United States, in terms of
gallon shipments, were Mexico, Germany, Japan and Brazil, which together
accounted for approximately 40% of the remaining 69% of soft drink gallon
shipments. Net operating revenues outside the United States, including an
immaterial amount from Coca-Cola Foods, were 67% of net operating revenues in
1993 and 1992 and 64% in 1991. Operating income attributable to soft drink
products outside the United States amounted to 79% of total operating income
from all geographic areas in 1993, 80% in 1992 and 79% in 1991.
In 1993, the Company made approximately 64% of its gallon shipments of soft
drink concentrates and syrups in the United States to bottlers in approximately
397 licensed territories. Those bottlers prepare and sell the products for the
food store and vending machine distribution channels and for other distribution
channels supplying home and on-premise consumption. The remaining 36% was sold
to fountain/post-mix retailers and to approximately 1,000 authorized
fountain/post-mix wholesalers, some of whom are bottlers, who in turn sold the
syrup to restaurants and other fountain/post-mix retailers, including fast food
restaurants. Coca-Cola
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Enterprises Inc. ("Coca-Cola Enterprises") and its bottling subsidiaries and
divisions account for approximately 36% of the Company's total gallon shipments
of soft drink concentrates and syrups sold in the United States. The Company
holds an approximate 43.5% ownership interest in Coca-Cola Enterprises, which is
the world's largest bottler of Company soft drink products. Outside the United
States, soft drink concentrate was sold to independently owned bottling and
canning operations and to Company-owned operations.
In the United States, approximately 75% of the Company's fountain/post-mix
syrups are sold through national or regional retail chains. The remaining 25% of
the Company's fountain/post-mix syrups are sold through local outlets, which
account for approximately 50% of the total number of retail fountain/post-mix
outlets that sell the Company's fountain/post-mix products.
In addition to conducting its own independent advertising and marketing
activities, the Company may provide promotional and marketing services and
consultation to its bottlers and fountain/post-mix customers. It may also
develop and introduce new products, packages and equipment in order to assist
its bottlers, fountain/post-mix wholesalers and fountain/post-mix retailers.
The profitability of the Company's business outside the United States is
subject to many factors, including governmental trade regulations, monetary
policies, economic conditions in the countries in which such business is
conducted and the risk of changes in currency exchange rates and regulations.
Agreements with Bottlers and Fountain Wholesalers of Soft Drink Products
The bottling subsidiaries and divisions of Coca-Cola Enterprises and
bottlers for 71 other territories in the United States have entered into
substantially similar bottling contracts (the form of these contracts being
referred to herein individually as the "1987 Contract") with the Company which
differ from some other bottling contracts in force between the Company and its
bottlers in the United States. The 1987 Contract grants exclusive territorial
rights to manufacture, market and distribute beverages bearing the trademarks
"Coca-Cola" or "Coke" ("Coca-Cola Trademark Beverages") and provides that
bottlers purchase all concentrates and syrups for Coca-Cola Trademark Beverages
from the Company at prices and with terms of payment and other terms and
conditions of supply as determined from time to time by the Company. The 1987
Contract is perpetual, subject to termination by the Company in the event of
default. Events of default include: (1) bottlers' insolvency, dissolution,
receivership or the like; (2) any disposition by bottlers or any of their
bottler subsidiaries of any voting securities of any bottler subsidiary without
the consent of the Company; and (3) any material breach of any obligation under
the 1987 Contract. The Company has the right to terminate the 1987 Contract of
any bottler if a person or affiliated group acquires or obtains any right to
acquire beneficial ownership of more than 10% of any class or series of voting
securities of the bottler unless authorized by the Company. The Company has
agreed with Coca-Cola Enterprises, Coca-Cola Bottling Co. Consolidated
("Consolidated") and Swire Pacific Limited ("Swire") that this provision will
not apply with respect to the ownership of any class or series of voting
securities of Coca-Cola Enterprises, Consolidated or Swire, or any corporation,
not a direct or indirect subsidiary of Swire, owning stock in Swire. The Company
has no obligation under the 1987 Contract to participate with bottlers in
expenditures for advertising and marketing, but it may, at its discretion,
contribute such expenditures and undertake independent advertising and marketing
activities, as well as cooperative advertising and sales promotion programs.
Under the 1987 Contract, each bottler is obligated to cause any United States
bottler of which it acquires control, to amend that bottler's contract for
Coca-Cola Trademark Beverages to conform to the terms of the 1987 Contract. The
1987 Contract is not assignable without the prior consent of the Company. The
1987 Contract has been signed by bottlers representing approximately 74% of
domestic gallon shipments for bottled and canned beverages, including Coca-Cola
Enterprises which represents approximately 54% of domestic gallon shipments for
bottled and canned beverages.
Prior to 1978, contracts with bottlers in the United States provided for a
fixed price for the sale of Coca-Cola syrup used in bottles and cans, subject to
quarterly adjustments to reflect changes in the quoted price of sugar. By
December 31, 1993, bottlers representing approximately 98% of the Company's
Coca-Cola bottler gallon shipments in the United States were parties to
contracts with the Company, including the 1987 Contract, which provide certain
additional pricing flexibility. This percentage includes bottlers which had
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entered into amendments to their contracts relating to brand Coca-Cola (the
"1978 Amendment") that provide certain additional pricing flexibility to, and
impose additional marketing obligations on, the Company with respect to
Coca-Cola concentrate and syrup. Under the 1978 Amendment, concentrate or syrup
is sold to the bottler by the Company at a price established in 1978 and
adjusted annually by the Company up to a maximum ceiling price indexed to
reflect increases in the Consumer Price Index from 1978 and, in the case of
syrup, adjusted quarterly based upon changes in the average price per pound of
fine granulated cane and beet sugar in the United States. In the event the
Company modifies the syrup formula to substitute another sweetening ingredient
in whole or in part for sugar, the 1978 Amendment requires the Company to adjust
the pricing formula so as to give the bottler the benefit of any cost savings
realized as a result of such modification.
By December 31, 1993, bottlers in the United States representing
approximately 98% of the Company's one-calorie cola-flavored gallon shipments in
the United States either had entered into the 1987 Contract or had executed an
amendment to their contracts to include under those contracts bottling rights
for all of the Company's one-calorie and caffeine free cola-flavored products in
bottles and cans and to provide formula pricing (based on an initial price for
beverage base or syrup established in 1983, adjusted annually by the Company to
a maximum ceiling price indexed to reflect increases in the Consumer Price Index
and the volume of one-calorie beverage base or syrup sold by the Company and
adjusted quarterly to reflect changes in the price of sweetener) and minimum
marketing obligations on the Company with respect to these products.
In 1979, the Company authorized its bottlers who had agreed to the 1978
Amendment to produce syrup for Coca-Cola from concentrate. This authorization
allows such bottlers to purchase concentrate from the Company and sweetener on
the open market. Bottlers responsible for most of the volume in the United
States purchase sweeteners through the Company under a pass-through arrangement
and, accordingly, related collections from bottlers and payments to suppliers
are not included in the Company's consolidated statements of income.
Approximately 123 bottlers in the United States, representing approximately 95%
of the Company's sugar cola-flavored gallon shipments in the United States,
produce syrup from concentrate (or have the syrup manufactured from concentrate
by an authorized agent) or have notified the Company of their intentions to do
so.
Standard contracts with bottlers in the United States for the sale of
concentrate and syrup for non-cola-flavored products in bottles and cans permit
flexible pricing by the Company.
In the United States, the Company sells syrup to about 1,000 fountain
wholesalers pursuant to a non-exclusive annual letter of appointment, which does
not restrict the pricing of fountain/post-mix syrups by the Company and does not
restrict the territory in which the wholesaler may resell in the United States.
In addition, the Company has contracted in about 259 territories with bottlers
of Coca-Cola for the local bottler to provide certain marketing and operational
services to local retail accounts and to other wholesalers in those territories
that otherwise would be performed by Company employees. Such contracts typically
extend for more than one year's duration.
Standard contracts with bottlers outside the United States for the sale of
concentrate and syrup for Company soft drink products generally do not contain
restrictions on the Company for the pricing of syrup and concentrate and have
stated durations. Outside the United States, with some exceptions, distribution
of the Company's products for sale in cups and glasses is handled through
bottlers, on a non-exclusive basis, under the terms of the bottlers' agreements
with the Company.
The Bottler System
The Company is committed to continuing to strengthen its existing strong
bottler system, as evidenced by the following examples. In April 1993, the
Company purchased majority ownership interests in two bottling companies in
Tennessee along with the rights to purchase the remaining minority interests.
Such ownership interests and a bottling operation in the Netherlands were sold
to Coca-Cola Enterprises in June 1993. The Company received approximately $260
million in cash plus assumption of indebtedness plus carrying costs. Also in
June 1993, the Company acquired a 30% equity interest in Coca-Cola FEMSA, S.A.
de C.V. ("Coca-Cola FEMSA"), a holding company with bottling subsidiaries in the
Valley of Mexico and Mexico's southeastern region, for approximately $195
million. In the third quarter, the Company entered into a joint
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venture with Consolidated, establishing Piedmont Coca-Cola Bottling Partnership
("Piedmont"), which will operate certain bottling territories in the Carolinas
acquired from each company. The Company has made a cash contribution of $70
million to the partnership for a 50% ownership interest. Consolidated has
contributed bottling assets valued at approximately $48 million and
approximately $22 million in cash to the partnership for the remaining 50%
interest. Piedmont has purchased assets and stock of certain bottling operations
from the Company for approximately $163 million, which approximated the
Company's carrying costs, and certain bottling assets from Consolidated for
approximately $130 million. The Company beneficially owns a 30% economic
interest and a 23% voting interest in Consolidated. In August 1993, the Company
purchased shares which now constitute a 10% voting interest and an 8.6% equity
interest in Panamerican Beverages, Inc., a holding company with bottling
subsidiaries in Colombia, Brazil and Mexico, for approximately $32 million. See
"Significant Equity Investments and Company Bottling Operations."
Significant Equity Investments and Company Bottling Operations
Over the last decade, bottling investments have represented a significant
portion of the Company's capital investments. The principal objective of these
investments is to ensure strong and efficient production, distribution and
marketing systems in order to maximize long-term growth in volume, cash flows
and share-owner value of the bottler and the Company.
When considered appropriate, the Company makes equity investments in
bottling companies (typically between 20% and 50%). Through these investments,
the Company is able to help focus and improve sales and marketing programs,
assist in the development of effective business and information systems and help
establish capital structures appropriate for these respective operations.
In certain situations, management believes it is advantageous to own a
controlling interest in bottling operations. For example, in 1990 in eastern
Germany, the Company's objective was to establish a modern soft drink business
quickly, which was accomplished through a wholly-owned bottling subsidiary.
The Company's consolidated bottling and fountain/post-mix operations
produced and distributed approximately 16% of worldwide unit case volume and,
together with consolidated canning operations, generated approximately $4.6
billion in revenues in 1993.
The Company also has substantial equity positions in bottlers that
represent approximately 40% of domestic bottling, canning and fountain/post-mix
unit case volume. Equity investee bottlers, including entities in which the
Company holds, or during 1993 held, a temporary majority interest, produced and
distributed approximately 38% of worldwide bottling, canning and
fountain/post-mix unit case volume in 1993.
In restructuring the bottling system, the Company periodically participates
in bottler ownership changes or takes temporary ownership positions in bottlers.
The length of ownership is influenced by various factors, including operational
changes, management changes and the process of identifying appropriate new
investors.
Coca-Cola Enterprises. The Company's ownership interest in Coca-Cola
Enterprises is approximately 43.5%. On June 30, 1993, Coca-Cola Enterprises
purchased from the Company majority ownership interests in two bottling
companies in Tennessee, along with the rights to purchase the remaining minority
interests, and a bottling operation in the Netherlands. See "The Bottler
System."
Coca-Cola Enterprises is the world's largest bottler of the Company's soft
drink products. Net sales of concentrates and syrups by the Company to Coca-Cola
Enterprises were $961 million in 1993. Coca-Cola Enterprises purchases high
fructose corn syrup (HFCS-55 & HFCS-42) through the Company under a pass-through
arrangement and, accordingly, related collections from Coca-Cola Enterprises and
payments to suppliers are not included in the Company's consolidated statements
of income. Sweetener transactions with Coca-Cola Enterprises amounted to $211
million in 1993. Coca-Cola Enterprises estimates that the territories in which
it markets such soft drink products to retailers (which include portions of 38
states, the District of Columbia, the U.S. Virgin Islands and the Netherlands)
contain approximately 52% of the United States population and 100% of the
population of the Netherlands. Coca-Cola Enterprises is the principal bottler of
products of the Company in the five states in the United States (California,
Florida, Texas, Washington and Virginia) with the largest gains in population
from 1989 to 1993.
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As used herein, the term "equivalent unit case volume" refers to 192 U.S.
ounces of finished beverage product (24 eight-ounce servings).
In 1993, approximately 72% of the equivalent unit case volume of Coca-Cola
Enterprises (excluding products in post-mix form) were Coca-Cola Trademark
Beverages, approximately 17% of its equivalent unit case volume were other soft
drink products of the Company, and approximately 11% of its equivalent unit case
volume were soft drink products of other companies. Coca-Cola Enterprises' net
sales of beverage products were approximately $5.5 billion in 1993.
Coca-Cola Beverages Ltd. ("Coca-Cola Beverages"). The Company owns
approximately 49% of the outstanding common stock of Coca-Cola Beverages.
Coca-Cola Beverages is the largest bottler of the Company's soft drink products
in Canada. Coca-Cola Beverages estimates that the territories in which it
markets soft drink products (which include all or significant portions of each
of Canada's ten provinces) contained approximately 27 million people in 1993, or
approximately 94% of the Canadian population. In 1993, Coca-Cola Beverages' net
sales of beverage products were approximately U.S. $687 million.
In 1993, approximately 68% of the equivalent unit case volume of Coca-Cola
Beverages were Coca-Cola Trademark Beverages, approximately 17% of its
equivalent unit case volume were other soft drink products of the Company and
approximately 15% of its equivalent unit case volume were soft drink products of
other companies.
Coca-Cola Amatil Limited ("Coca-Cola Amatil"). The Company owns
approximately 51% of Coca-Cola Amatil, an Australian-based bottler of Company
products. The Company intends to reduce its ownership interest in Coca-Cola
Amatil to below 50% within the next year. Accordingly, the investment has been
accounted for by the equity method of accounting.
Coca-Cola Amatil is the largest overall bottler, as well as the largest
bottler of the Company's soft drink products, in Australia and also has bottling
and distribution territories, through direct ownership or joint ventures, in New
Zealand, Fiji, Austria, Hungary, Papua New Guinea, the Czech Republic, Slovakia,
Indonesia and Belarus. Coca-Cola Amatil estimates that the territories in which
it markets soft drink products contain approximately 99% of the Australian
population, 100% of the New Zealand and Fiji populations, 80% of the Austrian
population, 100% of the Hungarian population, 84% of the Papua New Guinean
population, 100% of the Czech Republic and Slovakian populations, 92% of the
Indonesian population and 100% of the Belarussian population. In 1993, Coca-Cola
Amatil's net sales of beverage products were approximately U.S. $1,315 million.
In January 1993, Coca-Cola Amatil sold its snack food operation for
approximately U.S. $299 million, and recognized a gain of U.S. $169 million. The
Company's ownership interest in the sale proceeds received by Coca-Cola Amatil
approximated the carrying value of the Company's investment in the snack food
segment.
In 1993, approximately 61% of the equivalent unit case volume of Coca-Cola
Amatil were Coca-Cola Trademark Beverages, approximately 25% of its equivalent
unit case volume were other soft drink products of the Company, approximately
11% of its equivalent unit case volume were soft drink products of Coca-Cola
Amatil and approximately 3% of its equivalent unit case volume were soft drink
products of other companies.
Coca-Cola & Schweppes Beverages Ltd. ("CC&SB"). The Company owns an
approximate 49% interest in CC&SB, the leading marketer of soft drink products
in Great Britain. CC&SB handles bottling and distribution of products of the
Company and Cadbury Schweppes PLC throughout Great Britain. In 1993, CC&SB's net
sales of beverage products were approximately $1.1 billion.
In 1993, approximately 54% of the equivalent unit case volume of CC&SB were
Coca-Cola Trademark Beverages, approximately 10% of its equivalent unit case
volume were other soft drink products of the Company, approximately 35% of its
equivalent unit case volume were soft drink products of Cadbury Schweppes PLC
and approximately 1% of its equivalent unit case volume were soft drink products
of other companies.
CCNR. In 1991, the Company and Nestle S.A. formed CCNR, which is equally
owned by the Company and Nestle S.A. CCNR was created in order to manufacture
and sell concentrates and beverage
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bases to third parties, including some bottlers of the Company's soft drink
products, for the production and distribution of ready-to-drink coffee, tea and
chocolate beverages on a worldwide basis, except for Japan. The Company and
Nestle S.A. have contributed approximately $35 million each. It is expected that
capitalization will eventually total approximately $50 million each.
CCNR launched its first product, a ready-to-drink canned coffee marketed
under the NESCAFE brand, in Korea in September 1991. In January 1992, CCNR
launched its first products in the United States, NESTEA sweetened iced tea with
lemon flavor and diet NESTEA iced tea with lemon flavor, sold through Company
bottlers in all fifty states. Subsequently, additional flavors of NESTEA iced
tea have been added in the United States, as well as post-mix NESTEA syrups
which are sold through authorized Coca-Cola fountain/post-mix wholesalers.
As of early 1994, CCNR had also launched NESTEA iced tea flavors in Taiwan,
Italy, Korea, Belgium, Spain, Germany, Canada and Switzerland. NESCAFE
ready-to-drink coffee is also available in Taiwan, Hong Kong and Macau.
Coca-Cola FEMSA. On June 21, 1993, the Company, through its indirect
subsidiary, The Inmex Corporation, entered into a joint venture with Fomento
Economico Mexicano, S.A. de C.V. ("FEMSA"), the largest "food, beverage and
tobacco" company listed on the Mexican Stock Exchange (Bolsa Mexicana de
Valores). The Company invested approximately $195 million in exchange for a 30%
equity interest in Coca-Cola FEMSA, a Mexican holding company with bottling
subsidiaries in the Valley of Mexico and in Mexico's southeastern region.
In September 1993, a wholly owned subsidiary of FEMSA sold shares of Series
L common stock of Coca-Cola FEMSA in a registered public offering in Mexico
while simultaneously offering in the United States and elsewhere American
Depository Shares ("ADSs"). As a result, Coca-Cola FEMSA's Series L shares are
now listed and traded on the Mexican Stock Exchange and the ADSs are listed and
traded on the New York Stock Exchange. The sale represented a 19% equity
interest in Coca-Cola FEMSA; the remaining 51% is held by FEMSA. The Company
continues to hold its 30% interest.
Other Bottling Interests. The Company holds an indirect 32% equity
interest in The Philadelphia Coca-Cola Bottling Company. In January 1994, the
Company sold common stock representing a 9% voting interest and a 4% economic
interest in The Coca-Cola Bottling Company of New York, Inc. ("CCNY") to
Coca-Cola Enterprises for approximately $6 million thereby reducing its voting
and economic ownership interest in CCNY to 49%, consistent with its stated
intention of ending temporary control after completing certain organizational
changes. In total, including the bottling operations discussed herein, the
Company holds ownership positions in approximately 35 unconsolidated bottling,
canning and distribution operations for its products worldwide.
Seasonality
Soft drink sales are somewhat seasonal, with the second and third calendar
quarters accounting for the highest sales volumes in the Northern Hemisphere.
The volume of sales in the soft drink business may be affected by weather
conditions.
Competition
The commercial beverages industry, of which the soft drink business is a
part, is competitive. The soft drink business itself is highly competitive. In
many parts of the world in which the Company does business, demand for soft
drinks is growing at the expense of other commercial beverages. Advertising and
sales promotional programs, product innovation, increased efficiency in
production techniques, the introduction of new packaging, new vending and
dispensing equipment and brand and trademark development and protection are
important competitive factors.
Raw Materials
The principal raw material used by the soft drink industry in the United
States is high fructose corn syrup (HFCS-55), a form of sugar, which is
available from numerous domestic sources and is historically subject to
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fluctuations in its market price. The principal raw material used by the soft
drink industry outside the United States is sucrose. The Company has a
specialized sweetener procurement staff and has not experienced any difficulties
in obtaining its requirements. In the United States and certain other countries,
the Company has authorized the use of HFCS-55 in syrup for Coca-Cola and allied
products for use in both fountain/post-mix syrup and product in bottles and
cans.
Another raw material used by the soft drink industry is aspartame, a
sweetening agent used in low-calorie soft drink products. Generally, raw
materials utilized by the Company in its soft drink business are readily
available from numerous sources. However, aspartame, which is usually used alone
or in combination with saccharin in the Company's one-calorie soft drink
products, is currently purchased by the Company for use in the United States
from The NutraSweet Company, a subsidiary of Monsanto Company. While The
NutraSweet Company is also a major worldwide supplier of aspartame to the
Company, other suppliers of aspartame are utilized in certain countries outside
of the United States.
FOODS
General Business Description
The Company's Foods Business Sector is an operating unit which includes
Coca-Cola Foods, with operations in the United States, Canada and Puerto Rico.
Coca-Cola Foods, a division of the Company, is the world's largest marketer and
distributor of juice and juice drink products. In North America, Coca-Cola Foods
manufactures and markets the following products: Minute Maid chilled
ready-to-serve and frozen concentrated citrus and variety juices, lemonades and
fruit punches; Minute Maid shelf-stable ready-to-serve juice and juice drink
products in single and multi-serve containers; Five Alive refreshment beverages;
Bright & Early breakfast beverages; Bacardi tropical fruit mixers, which are
manufactured and marketed under a license from Bacardi & Company Limited; and
Hi-C brand ready-to-serve fruit drinks in single and multi-serve containers.
Both directly and through a network of brokers, Coca-Cola Foods products
are sold to retailers and wholesalers in North America and to military
commissaries and exchanges in the United States and abroad. Outside North
America, Coca-Cola Foods provides both technical and marketing assistance to
other units of the Company relating to the production and marketing of branded
juice and juice drink products.
Minute Maid Foodservice, a division of Coca-Cola Foods, provides airlines,
restaurants, hotels, colleges, hospitals and other institutions with a full line
of juice and juice drink products and specialty dairy products. Minute Maid
Foodservice manufactures and distributes foodservice juice products under the
Minute Maid, Hi-C and other trademarks.
In 1993, Coca-Cola Foods achieved record results for both volume and
operating income and widened its leadership in the juice and juice drink
category. Operating income grew 13% to $127 million. Volume increased 16% as
aggressive pricing and marketing drove strong gains across all lines of
business. Minute Maid orange juice volume was up 18% while volume of other
juices and juice drink products was up 14%.
Product Line Development
During 1993, Coca-Cola Foods began the national rollout of Minute Maid
Naturals, a line of shelf-stable juice and juice drink products packaged in
multi-serve PET bottles. The rollout followed a successful test market of these
products, which were developed to increase the presence of the Minute Maid
trademark in the shelf-stable category.
Coca-Cola Foods also successfully introduced in 1993 frozen and chilled
versions of Minute Maid cranberry lemonade and raspberry lemonade. In
conjunction with increased marketing efforts, these products helped to generate
a 9% increase in the division's lemonade and fruit punch volume.
The division also introduced a 128 ounce plastic bottle for Hi-C fruit
drinks, which capitalized on the strength of larger sizes in this line of
business. Hi-C multi-serve volume during the year increased 11% as this package
generated incremental volume growth to the business.
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<PAGE> 9
Minute Maid In-The-Box volume grew 20% as a result of lower prices,
significant distribution increases and the successful launch of Minute Maid
Berry Punch in this package.
In conjunction with Coca-Cola Enterprises and other Coca-Cola bottlers,
Coca-Cola Foods continued to generate significant volume increases for Minute
Maid Juices To Go, which are juice and juice drink products packaged in
single-serve bottles and cans and sold through a variety of distribution
channels, including vending machines. Volume for Minute Maid Juices To Go grew
160% due to increased availability and strong marketing support. The products
are currently available nationwide.
Seasonality
Demand for juice and juice drink products does not fluctuate in any
significant manner throughout the calendar year.
Competition
The juice and juice drink products manufactured, marketed and distributed
by Coca-Cola Foods face strong competition from other producers of regionally
and nationally advertised brands of juice and juice drink products. Significant
competitive factors include advertising and trade promotion programs, new
product introductions, new and more efficient production and distribution
methods, new packaging and dispensing equipment, and brand and trademark
development and protection.
Raw Materials
The citrus industry is subject to the variability of weather conditions, in
particular the possibility of freezes in central Florida, which may result in
higher prices and lower consumer demand for orange juice throughout the
industry. Due to the Company's long-standing relationship with a supplier of
high-quality Brazilian orange juice concentrate, the supply of juice available
that meets the Company's standards is normally adequate to meet demand.
PATENTS, TRADE SECRETS, TRADEMARKS AND COPYRIGHTS
The Company is the owner of numerous patents, copyrights and trade secrets,
as well as substantial know-how and technology (hereinafter referred to as
"technology"), which relate to its products and the processes for their
production, the packages used for its products, the design and operation of
various processes and equipment used in its business and certain quality
assurance and financial software. Some of the technology is licensed to
suppliers and other parties. The Company's soft drink and other beverage
formulae are among the important trade secrets of the Company.
Trademarks are very important to the Company's business. Depending upon the
jurisdiction, trademarks are valid as long as they are in use and/or their
registrations are properly maintained and they have not been found to have
become generic. Registrations of trademarks in the United States can generally
be renewed indefinitely as long as the trademarks are in use. The majority of
the Company's trademark license agreements are included in the Company's bottler
agreements. The Company has registered and licenses the right to use its
trademarks in conjunction with certain merchandise other than soft drinks.
GOVERNMENTAL REGULATION
The production, distribution and sale in the United States of many of the
Company's products are subject to the Federal Food, Drug and Cosmetic Act; the
Occupational Safety and Health Act; the Lanham Act; various environmental
statutes; and various other Federal, state and local statutes regulating the
production, sale, safety, advertising, labeling and ingredients of such
products.
On January 6, 1993, the United States Food and Drug Administration (the
"FDA") published new labeling requirements for all food products, with a
compliance deadline set for May 8, 1994. The Company does not expect the rules
to have any significant impact on its products nor does the Company expect
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<PAGE> 10
compliance to have any material adverse effect upon the Company's capital
expenditures, net income or competitive position.
A California law, enacted in 1986 by ballot initiative, requires that any
person who exposes another to a carcinogen or a reproductive toxicant must
provide a warning to that effect. Because the law does not define quantitative
thresholds below which a warning is not required, virtually all food
manufacturers are confronted with the possibility of having to provide warnings
on their food products due to the presence of trace amounts of defined
substances. Regulations implementing the law exempt manufacturers from providing
the required warning if it can be demonstrated that the defined substances occur
naturally in the product or are present in municipal water used to manufacture
the product. The Company has assessed the impact of the law and its implementing
regulations on its soft drink products and other products and has concluded that
none of its products currently requires a warning under the law. The Company
cannot predict whether, or to what extent, food industry efforts to minimize the
law's impact on foods will succeed; nor can the Company predict what impact,
either in terms of direct costs or diminished sales, imposition of the law will
have.
Bottlers of the Company's soft drink products presently offer
non-refillable containers in almost all areas of the United States and Canada.
Many such bottlers also offer refillable containers. Measures have been enacted
in certain localities and are currently in effect in nine states prohibiting the
sale of certain beverages unless a deposit is charged for the container. Similar
proposals have been introduced in other states and localities and in past
sessions of Congress, and it is anticipated that similar legislation will be
introduced in the current session of Congress.
All of the Company's facilities in the United States are subject to
federal, state and local environmental laws and regulations. Compliance with
these provisions has not had, and the Company does not expect such compliance to
have, any material adverse effect upon the Company's capital expenditures, net
income or competitive position.
EMPLOYEES
As of December 31, 1993, the Company and its subsidiaries employed nearly
34,000 persons, of whom nearly 10,500 are located in the United States. The
Company, through its divisions and subsidiaries, has entered into numerous
collective bargaining agreements, and the Company has no reason to believe it
will not be able to renegotiate any such agreements on satisfactory terms. The
Company believes that its relations with its employees are generally
satisfactory.
FINANCIAL INFORMATION ON INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
For financial information on industry segments and operations in geographic
areas, see pages 69 and 70 of the Annual Report to Share Owners for the year
ended December 31, 1993, which are incorporated herein by reference.
ITEM 2. PROPERTIES
The Company's international headquarters is located on a 35-acre office
complex in Atlanta, Georgia. The complex includes the approximately 480,000
square feet headquarters building, the approximately 721,000 square feet
Coca-Cola USA building and an additional 232,000 square feet office building of
which Coca-Cola Enterprises currently occupies a significant portion of the
space. Also located on the complex are several other buildings including the
technical and engineering facilities, training center and the Company's
Reception Center. The Company and its subsidiaries and divisions have facilities
for administrative operations, manufacturing, processing, packaging, packing,
storage and warehousing throughout the United States.
Coca-Cola Enterprises is presently renting approximately 104,000 square
feet of office space, located in the Atlanta office complex, from the Company
pursuant to a lease agreement. In 1993, Coca-Cola Enterprises
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paid approximately $1.7 million under the lease arrangements. It is expected
that Coca-Cola Enterprises will materially reduce the amount of space leased in
1994.
The Company owns 42 principal soft drink concentrate and/or syrup
manufacturing plants throughout the world. The Company currently owns or holds a
majority interest in 29 operations with 42 principal soft drink bottling and
canning plants located in foreign countries, excluding entities in which the
Company's majority interest is temporary.
Coca-Cola Foods, whose primary business headquarters is located in Houston,
Texas, occupies its own office building, which contains approximately 330,000
square feet. Coca-Cola Foods operates 10 production facilities throughout the
United States, Canada and Puerto Rico and utilizes a system of co-packers which
produce and distribute products in areas where Coca-Cola Foods does not have its
own manufacturing centers or when it experiences manufacturing overflow. In
1993, the Company sold its citrus groves and related assets located in central
and southern Florida.
The Company directly or through wholly-owned subsidiaries owns or leases
additional real estate throughout the world, including an office building at 711
Fifth Avenue in New York, New York. This real estate is used as office space by
the Company or, in the case of some owned property, leased to others.
Management believes that the facilities for the production of its soft
drink and food products are suitable and adequate for the business conducted
therein, that they are being appropriately utilized in line with past experience
and that they have sufficient production capacity for their present intended
purposes. The extent of utilization of such facilities varies based upon the
seasonal demand for product. While it is not possible to measure with any degree
of certainty or uniformity the productive capacity and extent of utilization of
these facilities, management believes that additional production can be obtained
at the existing facilities by the addition of personnel and capital equipment
and, in some facilities, the addition of shifts of personnel or expansion of
such facilities. The Company continuously reviews its anticipated requirements
for facilities and, on the basis of that review, may from time to time acquire
additional facilities and/or dispose of existing facilities.
ITEM 3. LEGAL PROCEEDINGS
In May 1993, the Company discovered that its Carolina, Puerto Rico plant
was unintentionally discharging, without a permit, process wastewater to a
stormwater sewer which ultimately discharged to a surface waterbody. The Company
immediately remedied the unintentional discharge and reported it to appropriate
environmental agencies. The statutory maximum penalty which could be sought
against the Company is in excess of $100,000.
Joseph Siegman, as custodian for Gregory and Michelle Siegman, filed suit
in Delaware Chancery Court on December 15, 1987 against the Company, Tri-Star
Pictures, Inc. ("Tri-Star"), CPI Film Holdings, Inc., Home Box Office, Inc. and
the directors of Tri-Star at that time. Plaintiff, a Tri-Star stockholder acting
on behalf of a class of Tri-Star stockholders other than defendants and their
affiliates and derivatively on behalf of Tri-Star, challenges a transfer
agreement, dated October 1, 1987, among the Company, certain of its subsidiaries
and Tri-Star as the product of an alleged self-dealing breach of fiduciary duty
by the Company and the Tri-Star Board of Directors. Plaintiff also alleges that
the proxy statement issued by Tri-Star in connection with the transaction
inadequately disclosed material facts about the transaction. Pursuant to the
transfer agreement, the Company transferred its Entertainment Business Sector
(other than certain retained assets) to Tri-Star in exchange for approximately
75 million shares of Tri-Star common stock. The complaint seeks judgment
imposing a constructive trust upon the Tri-Star shares received by the Company
pursuant to the transfer agreement, rescinding the transfer agreement and
awarding compensatory damages in an unspecified amount.
During 1991 and 1992, the Chancery Court granted defendants' motion to
dismiss the case, and plaintiff appealed. On November 24, 1993, the Delaware
Supreme Court issued an opinion reversing in part the judgment entered by the
Chancery Court and remanding the case for trial on the merits. The Supreme
Court's opinion treated all of the factual allegations in plaintiff's complaint
as true for purposes of the appeal and
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determined that the complaint was legally adequate to permit plaintiff an
opportunity to prove the complaint allegations. No date has yet been established
for trial on remand. The Company believes it has meritorious legal and factual
defenses and intends to defend the case vigorously.
On February 26, 1992, suit was brought against the Company in Texas state
court by The Seven-Up Company, a competitor of the Company. An amended complaint
was filed by The Seven-Up Company on February 8, 1994. The suit alleges that the
Company is attempting to dominate the lemon-lime segment of the soft drink
industry by tortious acts designed to induce certain independent bottlers of the
Company's products to terminate existing contractual relationships with the
plaintiff pursuant to which such bottlers bottle and distribute the plaintiff's
lemon-lime soft drink products. As amended, the complaint alleges that
Coca-Cola/Seven-Up bottlers in several different territories, including
Nacagdoches, Texas; Oklahoma City, Oklahoma; Fargo, North Dakota; Shreveport,
Louisiana; Elkins, West Virginia; Salem, New Hampshire; Fayetteville, Arkansas;
Pine Bluff, Arkansas and Vicksburg, Mississippi, were illegally induced into
initiating Sprite distribution and discontinuing Seven-Up distribution. The
Company is accused of using several different purportedly improper tactics to
bring about those bottler decisions, including false and misleading statements
by the Company about the plaintiff's past, present and future business
operations, improper financial advancements and various forms of alleged
coercion.
The complaint seeks unspecified money damages for (1) alleged tortious
interference with the plaintiff's contractual relations, (2) alleged intentional
tortious conduct to injure plaintiff, (3) alleged disparagement of the plaintiff
and its business, and (4) alleged false and injurious statements harmful to
plaintiff's interests. The complaint also seeks an injunction prohibiting future
allegedly tortious conduct by the Company and seeks an award of punitive damages
in the amount of at least $500 million. In 1993, the Company filed a
counterclaim against The Seven-Up Company in the matter alleging that The
Seven-Up Company has tortiously interfered with the Company's efforts to obtain
distribution of its lemon-lime soft drink, Sprite, through bottlers of
Coca-Cola. Since the inception of the suit, the parties have been engaged in
discovery. Trial is presently scheduled to commence in late June 1994. The
Company believes it has meritorious legal and factual defenses and intends to
defend the suit vigorously.
On July 22, 1992, The Seven-Up Company filed a related suit in federal
court in Texas alleging that the facts and circumstances giving rise to the
state court suit (described above) also constitute a violation of the federal
Lanham Act which, inter alia, proscribes false advertisement and disparagement
of a competitor's goods and services. The suit seeks injunctive relief, treble
damages and attorneys' fees. Discovery in this case has been consolidated with
discovery in the state court case, and trial is presently scheduled for June
1994. The Company believes it has meritorious legal and factual defenses and
intends to defend the suit vigorously.
The Company is involved in various other legal proceedings. The Company
believes that any liability to the Company which may arise as a result of these
proceedings, including the proceedings specifically discussed above, will not
have a material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM X. EXECUTIVE OFFICERS OF THE COMPANY
The following are the executive officers of the Company:
Roberto C. Goizueta, 62, is Chief Executive Officer and Chairman of
the Board of Directors of the Company. In August 1980, Mr. Goizueta was
elected Chief Executive Officer and Chairman of the Board effective March
1981, at which time he assumed these positions.
M. Douglas Ivester, 46, is Executive Vice President of the Company,
Principal Operating Officer/North America and President of Coca-Cola USA.
In January 1985, Mr. Ivester was elected Senior Vice President and Chief
Financial Officer of the Company and served in that capacity until June
1989, when he was elected President of the European Community Group of the
International Business
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Sector. He was appointed President of Coca-Cola USA in August 1990, and was
appointed President of the North America Business Sector in September 1991.
He served in the latter capacity until he was elected to his current
positions, effective April 15, 1993.
John Hunter, 56, is Executive Vice President of the Company and
Principal Operating Officer/International. Mr. Hunter served as managing
director of the South Pacific Division in 1984, and in 1987 was named
President of both Coca-Cola (Japan) Company, Limited and the North Pacific
Division. He was elected Senior Vice President of the Company and appointed
President of the Pacific Group of the International Business Sector in
January 1989. He served as deputy to the President of the International
Business Sector from August 1990 until September 1991 and as President of
the International Business Sector from September 1991 until April 1993. He
was elected to his current positions, effective April 15, 1993.
Jack L. Stahl, 40, is Senior Vice President and Chief Financial
Officer of the Company. In March 1985, Mr. Stahl was named Manager,
Planning and Business Development and was appointed Assistant Vice
President in April 1985. He was elected Vice President and Controller in
February 1988 and served in that capacity until he was elected to his
current position in June 1989.
Weldon H. Johnson, 56, is Senior Vice President of the Company and
President of the Latin America Group of the International Business Sector.
In January 1983, Mr. Johnson was named President of Coca-Cola (Japan)
Company, Limited. In April 1987, he was elected Executive Vice President of
the Latin America Group of the International Business Sector. He was
elected Senior Vice President in December 1987 and was appointed President
of the Latin America Group of the International Business Sector in January
1988.
E. Neville Isdell, 50, is Senior Vice President of the Company and
President of the Northeast Europe/Middle East Group of the International
Business Sector. Mr. Isdell became President of the Company's Central
European Division in July 1985 and was elected Senior Vice President of the
Company and appointed President of the Northeast Europe/Africa Group in
January 1988. He was appointed to his current position, effective January
1993.
Ralph H. Cooper, 54, is Senior Vice President of the Company and
President of the European Community Group of the International Business
Sector. Mr. Cooper was appointed Senior Vice President of the Europe and
Africa Group in July 1984 and was named Senior Vice President of Coca-Cola
International and President of the Northwest European Division in January
1989. He served in those capacities until August 1990 when he was elected
to his current position.
Douglas N. Daft, 50, is Senior Vice President of the Company and
President of the Pacific Group of the International Business Sector. In
November 1984, Mr. Daft was appointed President of Coca-Cola Central
Pacific Ltd. In October 1987, he was appointed Senior Vice President of the
Pacific Group of the International Business Sector. In January 1989, he was
named President of Coca-Cola (Japan) Company, Limited and President of the
North Pacific Division of the International Business Sector. He served in
those capacities until he was elected to his current position, effective
September 1991.
Carl Ware, 50, is Senior Vice President of the Company and President
of the Africa Group of the International Business Sector. In 1979, Mr. Ware
was appointed Vice President, Special Markets, Coca-Cola USA. In March
1982, he was appointed Vice President, Urban Affairs, of the Company. He
was elected Senior Vice President and Manager, Corporate External Affairs
in 1986 and became Deputy Group President of the Northeast Europe/Africa
Group of the International Business Sector in July 1991, a position which
he held until he was named to his current position, effective January 1993.
Joseph R. Gladden, Jr., 51, is Senior Vice President and General
Counsel of the Company. In October 1985, Mr. Gladden was elected Vice
President. He was named Deputy General Counsel in October 1987 and served
in that capacity until he was elected Vice President and General Counsel in
April 1990. He was elected Senior Vice President in April 1991.
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Sergio Zyman, 48, is Senior Vice President of the Company and Chief
Marketing Officer. Mr. Zyman first joined the Company in 1979 and
eventually served as Senior Vice President of Marketing for Coca-Cola USA.
After a seven year absence from the Company, during which he acted as
consultant to different companies through Sergio Zyman & Co. and Core
Strategy Group, he returned to assume his current position in August 1993.
Earl T. Leonard, Jr., 57, is Senior Vice President of Corporate
Affairs of the Company. Mr. Leonard was elected to his current position in
April 1983.
Anton Amon, 50, is Senior Vice President of the Company and manager of
the Company's Product Integrity Division. Dr. Amon was named Senior Vice
President of Coca-Cola USA in 1983. In 1988, he joined Coca-Cola
Enterprises as Vice President, Operations. In September 1989, Dr. Amon
returned to the Company as director, Corporate Quality Assurance. He was
elected Vice President in 1989. He became manager, Product Integrity
Division, in January 1992 and was elected to his current position in July
1992.
George Gourlay, 52, is Senior Vice President of the Company and
manager of the Technical Operations Division. Mr. Gourlay was named
manager, Corporate Concentrate Operations in 1986, named Assistant Vice
President in 1988, and was elected Vice President in 1989. Mr. Gourlay
became head of the Technical Operations Division in January 1992 and was
elected to his current position in July 1992.
Timothy J. Haas, 47, is Vice President of the Company and President
and Chief Executive Officer of Coca-Cola Foods. In January 1985, Mr. Haas
was named Senior Vice President of Sales of Coca-Cola Foods and served in
that capacity until he was appointed President and Chief Executive Officer
of Coca-Cola Foods in March 1991. He was elected Vice President of the
Company in April 1991.
All executive officers serve at the pleasure of the Board of Directors.
There is no family relationship between any of the executive officers of
the Company.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
"Financial Review Incorporating Management's Discussion and Analysis" on
pages 44 through 51, "Stock Prices" on page 73 and "Share-Owner Information" on
page 77 of the Company's Annual Report to Share Owners for the year ended
December 31, 1993, are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1989 through 1993, on pages 52 and
53 of the Company's Annual Report to Share Owners for the year ended December
31, 1993, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
"Financial Review Incorporating Management's Discussion and Analysis" on
pages 44 through 51 of the Company's Annual Report to Share Owners for the year
ended December 31, 1993, is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries, included in the Company's Annual Report to Share Owners for the
year ended December 31, 1993, are incorporated herein by reference:
Consolidated Balance Sheets -- December 31, 1993 and 1992.
Consolidated Statements of Income -- Years ended December 31, 1993,
1992 and 1991.
Consolidated Statements of Cash Flows -- Years ended December 31,
1993, 1992 and 1991.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
"Quarterly Data", on page 73 of the Company's Annual Report to Share Owners
for the year ended December 31, 1993, is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The section under the heading "Election of Directors" entitled "Board of
Directors" on pages 2 through 6 of the Company's Proxy Statement for the Annual
Meeting of Share Owners to be held April 20, 1994, is incorporated herein by
reference for information on Directors of the Registrant. See Item X in Part I
hereof for information regarding executive officers of the Registrant.
ITEM 11. EXECUTIVE COMPENSATION
The section under the heading "Election of Directors" entitled "Committees
of the Board of Directors; Meetings and Compensation of Directors" on pages 9
and 10 and the section entitled "Executive Compensation" on pages 11 through 17
of the Company's Proxy Statement for the Annual Meeting of Share Owners to be
held April 20, 1994, are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section under the heading "Election of Directors" entitled "Ownership
of Equity Securities in the Company" on pages 7 through 9, and the section under
the heading "The Major Investee Companies" entitled "Ownership of Securities in
Coca-Cola Enterprises, Coca-Cola Consolidated, Coca-Cola Amatil, Coca-Cola
Beverages and Coca-Cola FEMSA" on page 24 of the Company's Proxy Statement for
the Annual Meeting of Share Owners to be held April 20, 1994, are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The sections under the heading "Election of Directors" entitled "Committees
of the Board of Directors; Meetings and Compensation of Directors" on pages 9
and 10 and "Certain Transactions" on page 10, the section under the heading
"Executive Compensation" entitled "Compensation Committee Interlocks and Insider
Participation" on page 23 and the section under the heading "The Major Investee
Companies" entitled "Certain Transactions with Coca-Cola Enterprises and
Coca-Cola Beverages" on pages 23 and 24 of the Company's Proxy Statement for the
Annual Meeting of Share Owners to be held April 20, 1994, are incorporated
herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following consolidated financial statements of The Coca-Cola
Company and subsidiaries, included in the Registrant's Annual Report
to Share Owners for the year ended December 31, 1993, are
incorporated by reference in Part II, Item 8:
Consolidated Balance Sheets -- December 31, 1993 and 1992.
Consolidated Statements of Income -- Years ended December 31, 1993,
1992 and 1991.
Consolidated Statements of Cash Flows -- Years ended December 31,
1993, 1992 and 1991.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. (a) Financial Statement Schedules of The Coca-Cola Company and
subsidiaries:
Report of Independent Auditors.
Schedule II -- Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees Other Than Related Parties.
Schedule V -- Property, Plant and Equipment.
Schedule VI -- Accumulated Depreciation and Amortization of Property,
Plant and Equipment.
Schedule VIII -- Valuation and Qualifying Accounts.
Schedule IX -- Short-Term Borrowings.
Schedule X -- Supplementary Income Statement Information.
(b) The following consolidated financial statements and financial
statement schedules of Coca-Cola Enterprises are incorporated
herein by reference from the Annual Report on Form 10-K of
Coca-Cola Enterprises for the year ended December 31, 1993:
Consolidated Statements of Operations for each of the three fiscal
years in the period ended December 31, 1993.
Consolidated Balance Sheets as of December 31, 1993 and December 31,
1992.
Consolidated Statements of Share-Owners' Equity for each of the three
fiscal years in the period ended December 31, 1993.
Consolidated Statements of Cash Flows for each of the three fiscal
years in the period ended December 31, 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
Financial Statement Schedules -- Coca-Cola Enterprises.
Schedule V -- Property, Plant and Equipment.
Schedule VI -- Accumulated Depreciation and Amortization of Property,
Plant and Equipment.
Schedule VIII -- Valuation and Qualifying Accounts.
Schedule IX -- Short-Term Borrowings.
Schedule X -- Supplementary Income Statement Information.
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All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable and,
therefore, have been omitted.
3. Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C>
3.1 Certificate of Elimination of the Certificate of Designation, filed with the
Restated Certificate of Incorporation of the Company on September 30,
1993 -- incorporated herein by reference to Exhibit 3.1 of the Registrant's Form
10-Q Quarterly Report for the quarter ended September 30, 1993.
3.2 Restated Certificate of Incorporation of the Registrant, effective October 1,
1993 -- incorporated herein by reference to Exhibit 3.2 of the Registrant's Form
10-Q Quarterly Report for the quarter ended September 30, 1993.
3.3 By-Laws of the Registrant, effective April 15, 1993 -- incorporated herein by
reference to Exhibit 3.2 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1993.
4.1 The Registrant agrees to furnish to the Securities and Exchange Commission, upon
request, a copy of any instrument defining the rights of holders of long-term
debt of the Registrant and all of its consolidated subsidiaries and
unconsolidated subsidiaries for which financial statements are required to be
filed with the Securities and Exchange Commission.
10.1 Long Term Performance Incentive Plan of the Registrant, as amended -- incorporated
herein by reference to Exhibit 10.1 of the Registrant's Form 10-K Annual Report
for the year ended December 31, 1989.*
10.2 The Key Executive Retirement Plan of the Registrant, as amended.*
10.3 Supplemental Disability Plan of the Registrant, as amended -- incorporated herein
by reference to Exhibit 10.3 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1991.*
10.4 Annual Performance Incentive Plan of the Registrant, as amended -- incorporated
herein by reference to Exhibit 10.4 of the Registrant's Form 10-K Annual Report
for the year ended December 31, 1989.*
10.5 Agreement, dated February 28, 1983, between the Registrant and Roberto C.
Goizueta -- incorporated herein by reference to Exhibit 10.5 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1988.*
10.6 Amendment, dated February 10, 1984, to the Agreement dated February 28, 1983,
between the Registrant and Roberto C. Goizueta -- incorporated herein by
reference to Exhibit 10.6 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1988.*
10.7 1983 Stock Option Plan of the Registrant, as amended -- incorporated herein by
reference to Exhibit 10.8 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1991.*
10.8 1987 Stock Option Plan of the Registrant, as amended -- incorporated herein by
reference to Exhibit 10.9 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1991.*
10.9 1991 Stock Option Plan of the Registrant, as amended -- incorporated herein by
reference to Exhibit 10.10 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1991.*
10.10 1983 Restricted Stock Award Plan of the Registrant, as amended -- incorporated
herein by reference to Exhibit 10.11 of the Registrant's Form 10-K Annual Report
for the year ended December 31, 1991.*
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C>
10.11 1989 Restricted Stock Award Plan of the Registrant, as amended -- incorporated
herein by reference to Exhibit 10.12 of the Registrant's Form 10-K Annual Report
for the year ended December 31, 1991.*
10.12 Performance Unit Agreement, dated December 19, 1985, between the Registrant and
Roberto C. Goizueta, as amended -- incorporated herein by reference to Exhibit
10.10 of the Registrant's Form 10-K Annual Report for the year ended December
31, 1989.*
10.13 1986 Compensation Deferral and Investment Program, as amended -- incorporated
herein by reference to Exhibit 10.15 of the Registrant's Form 10-K Annual Report
for the year ended December 31, 1991.*
10.14 Restricted Stock Agreement, dated August 4, 1982, between the Registrant and
Roberto C. Goizueta, as amended -- incorporated herein by reference to Exhibit
10.13 of the Registrant's Form 10-K Annual Report for the year ended December
31, 1989.*
10.15 Incentive Unit Agreement, dated November 29, 1988, between the Registrant and
Roberto C. Goizueta, as amended -- incorporated herein by reference to Exhibit
10.15 of the Registrant's Form 10-K Annual Report for the year ended December
31, 1989.*
10.16 Supplemental Health Plan of the Registrant -- incorporated herein by reference to
Exhibit 10.19 of the Registrant's Form 10-K Annual Report for the year ended
December 31, 1990.*
10.17 Supplemental Benefit Plan of the Registrant, as amended.*
10.18 Retirement Plan for the Board of Directors of Registrant, as
amended -- incorporated herein by reference to Exhibit 10.22 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1991.*
10.19 Deferral Plan for the Board of Directors of Registrant -- incorporated herein by
reference to Exhibit 10.23 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1992.*
10.20 Deferred Compensation Agreement for Officers or Key Executives of the Registrant.*
10.21 Long Term Performance Incentive Plan, as amended.*
10.22 Executive Performance Incentive Plan.*
12.1 Computation of Ratio of Earnings to Fixed Charges for the years ended December 31,
1993, 1992, 1991, 1990 and 1989.
13.1 1993 Annual Report to Share Owners. (Pages 44-71, 73, 76 (definitions of "Dividend
Payout Ratio," "Economic Profit," "Net Debt and Net Capital," "Return on
Capital," "Return on Common Equity" and "Total Capital") and 77).
21.1 List of subsidiaries of the Registrant as of December 31, 1993.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this report.
99.1 Consolidated financial statements and financial statement schedules for Coca-Cola
Enterprises included in the Form 10-K Annual Report of Coca-Cola Enterprises for
the fiscal year ended December 31, 1993.
</TABLE>
- ---------------
* Management contracts and compensatory plans and arrangements required to be
filed as exhibits to this form pursuant to Item 14(c) of this report.
(b) Reports on Form 8-K
The Registrant filed a report on Form 8-K on January 27, 1994 in connection
with the January 1, 1993 adoption of Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits."
(c) See Item 14(a)3 above.
(d) See Item 14(a)2 above.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By: /s/ ROBERTO C. GOIZUETA
------------------------------------
ROBERTO C. GOIZUETA
Chairman, Board of Directors,
Chief Executive Officer and a
Director
Date: March 14, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ ROBERTO C. GOIZUETA
- ------------------------------------------------------
ROBERTO C. GOIZUETA
Chairman, Board of Directors, Chief Executive
Officer and a Director
(Principal Executive Officer)
March 14, 1994
/s/ JACK L. STAHL
- ------------------------------------------------------
JACK L. STAHL
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
March 14, 1994
/s/ JAMES E. CHESTNUT
- ------------------------------------------------------
JAMES E. CHESTNUT
Vice President and Controller
(Principal Accounting Officer)
March 14, 1994
*
- ------------------------------------------------------
HERBERT A. ALLEN
Director
March 14, 1994
*
- ------------------------------------------------------
RONALD W. ALLEN
Director
March 14, 1994
*
- ------------------------------------------------------
CATHLEEN P. BLACK
Director
March 14, 1994
*
- ------------------------------------------------------
WARREN E. BUFFETT
Director
March 14, 1994
*
- ------------------------------------------------------
CHARLES W. DUNCAN, JR.
Director
March 14, 1994
*
- ------------------------------------------------------
SUSAN B. KING
Director
March 14, 1994
*
- ------------------------------------------------------
DONALD F. MCHENRY
Director
March 14, 1994
*
- ------------------------------------------------------
PAUL F. OREFFICE
Director
March 14, 1994
19
<PAGE> 21
*
- ------------------------------------------------------
JAMES D. ROBINSON, III
Director
March 14, 1994
*
- ------------------------------------------------------
WILLIAM B. TURNER
Director
March 14, 1994
*
- ------------------------------------------------------
PETER V. UEBERROTH
Director
March 14, 1994
*
- ------------------------------------------------------
JAMES B. WILLIAMS
Director
March 14, 1994
*By /s/ CAROL C. HAYES
- ------------------------------------------------------
CAROL C. HAYES
Attorney-in-fact
March 14, 1994
20
<PAGE> 22
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)2(A)
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1993
THE COCA-COLA COMPANY AND SUBSIDIARIES
<PAGE> 23
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Share Owners
The Coca-Cola Company
We have audited the consolidated financial statements and schedules of The
Coca-Cola Company and subsidiaries listed in the accompanying index to financial
statements and schedules (Item 14(a)(1) and (a)(2)(a)). These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The Coca-Cola Company and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
As discussed in Note 1 to the consolidated financial statements, in 1993
the Company changed its method of accounting for postemployment benefits. As
discussed in Note 14 to the consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement benefits other than
pensions.
/s/ Ernst & Young
Atlanta, Georgia
January 25, 1994
F-1
<PAGE> 24
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
DEDUCTIONS BALANCE AT END OF PERIOD
BALANCE AT ------------------- --------------------
BEGINNING AMOUNTS AMOUNTS
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED FORGIVEN CURRENT NONCURRENT
- ---------------------------------- --------- -------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
H. Frey(c)........................ $ 233 $ -- $ 74 $ 12(f) $ 74 $ 73
G. J. Marazzini(a)................ 232 -- 5 227 -- --
E. Kappertz(d).................... 227 -- -- 12(f) 215 --
G. F. Muller(c)................... 154 -- 49 8(f) 49 48
K. Schick(e)...................... 153 -- 25 8(f) 25 95
R. Kluter(c)...................... 117 -- 37 6(f) 37 37
C. Davidson(b).................... 113 -- 113 -- -- --
B. Hader(c)....................... 107 -- 34 6(f) 34 33
--------- -------- -------- -------- ------- ----------
$ 1,336 $ -- $337 $279 $ 434 $286
--------- -------- -------- -------- ------- ----------
--------- -------- -------- -------- ------- ----------
</TABLE>
- ---------------
(a) Twenty-five year mortgage loan at 4 percent interest.
(b) Term of less than one year (non-interest bearing).
(c) Three year unsecured notes receivable (non-interest bearing).
(d) Two year unsecured note receivable (non-interest bearing).
(e) Four year unsecured note receivable (non-interest bearing).
(f) Represents exchange variances.
F-2
<PAGE> 25
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
DEDUCTIONS BALANCE AT END OF PERIOD
BALANCE AT ------------------- --------------------
BEGINNING AMOUNTS AMOUNTS
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED FORGIVEN CURRENT NONCURRENT
- ---------------------------------- --------- -------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
G. J. Marazzini(a)................ $ 308 $ -- $ 11 $ 65(g) $ 10 $ 222
J. D. Giganti(b).................. 240 -- 240 -- -- --
C. Stucchi(a)..................... 126 -- 4 26(g) 4 92
V. Buda(a)........................ 102 -- 5 21(g) 4 72
H. Frey(d)........................ -- 233 -- -- 78 155
E. Kappertz(e).................... -- 227 -- -- -- 227
G. F. Muller(d)................... -- 154 -- -- 51 103
K. Schick(f)...................... -- 153 -- -- 25 128
R. Kluter(d)...................... -- 117 -- -- 39 78
B. Hader(d)....................... -- 107 -- -- 36 71
C. Davidson(c).................... -- 113 -- -- 113 --
--------- -------- -------- -------- ------- ----------
$ 776 $1,104 $260 $112 $ 360 $1,148
--------- -------- -------- -------- ------- ----------
--------- -------- -------- -------- ------- ----------
</TABLE>
- ---------------
(a) Twenty-five year mortgage loans at 4 percent interest.
(b) Term of less than one year at 8.5 percent interest.
(c) Term of less than one year (non-interest bearing).
(d) Three year unsecured notes receivable (non-interest bearing).
(e) Two year unsecured note (non-interest bearing).
(f) Four year unsecured note (non-interest bearing).
(g) Represents exchange variances.
F-3
<PAGE> 26
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
DEDUCTIONS BALANCE AT END OF PERIOD
BALANCE AT ------------------- --------------------
BEGINNING AMOUNTS AMOUNTS
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED FORGIVEN CURRENT NONCURRENT
- ---------------------------------- --------- -------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
G. J. Marazzini(a)................ $ 325 $ -- $ 11 $ 6(c) $ 12 $296
V. Buda(a)........................ 109 -- 5 2(c) 5 97
C. Stucchi(a)..................... 133 -- 4 3(c) 4 122
J. D. Giganti(b).................. -- 240 -- -- 240 --
--------- -------- -------- -------- ------- ----------
$ 567 $240 $ 20 $ 11 $ 261 $515
--------- -------- -------- -------- ------- ----------
--------- -------- -------- -------- ------- ----------
</TABLE>
- ---------------
(a) Twenty-five year mortgage loans at 4 percent interest.
(b) Term of less than one year at 8.5 percent interest.
(c) Represents exchange variances.
F-4
<PAGE> 27
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------------
OTHER
BALANCE AT CHANGES-- BALANCE
BEGINNING ADDITIONS ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS (NOTE 1) OF PERIOD
- ---------------------------------- ----------- --------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
AT COST
Land and citrus trees............. $ 203 $ 23 $ 30 $ 1 $ 197
Buildings and improvements........ 1,529 204 118 1 1,616
Machinery and equipment........... 3,137 507 280 16 3,380
Containers........................ 140 9 20 5 134
----------- --------- ----------- ------ ---------
5,009 743 448 23 5,327
AT COST OR INVENTORY AMOUNTS
Bottles and shells................ 234 65 64 34 269
----------- --------- ----------- ------ ---------
$ 5,243 $ 808 $ 512 $ 57 $ 5,596
----------- --------- ----------- ------ ---------
----------- --------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
LAND AND AND AND AND
CITRUS TREES IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ ------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation............... $ (4) $(23) $ (49) $ (1) $ (17) $ (94)
Property, plant and equipment amounts of
acquired companies at dates of acquisition... 5 26 65 6 51 153
Amortization of leasehold improvements..... -- (2) -- -- -- (2)
------ ------ --------- ---------- ------- -----
$ 1 $ 1 $ 16 $ 5 $ 34 $ 57
------ ------ --------- ---------- ------- -----
------ ------ --------- ---------- ------- -----
</TABLE>
F-5
<PAGE> 28
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------------
OTHER
BALANCE AT CHANGES-- BALANCE
BEGINNING ADDITIONS ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS (NOTE 1) OF PERIOD
- ---------------------------------- ----------- --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
AT COST
Land and citrus trees............. $ 173 $ 37 $ 3 $ (4) $ 203
Buildings and improvements........ 1,201 368 3 (37) 1,529
Machinery and equipment........... 2,680 589 106 (26) 3,137
Containers........................ 225 8 92 (1) 140
----------- --------- ----------- ------ ---------
4,279 1,002 204 (68) 5,009
AT COST OR INVENTORY AMOUNTS
Bottles and shells................ 166 81 22 9 234
----------- --------- ----------- ------ ---------
$ 4,445 $ 1,083 $ 226 $ (59) $ 5,243
----------- --------- ----------- ------ ---------
----------- --------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
LAND AND AND AND AND
CITRUS TREES IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ ------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation.............. $ (8) $(48) $ (85) $ (2) $ (6) $(149)
Property, plant and equipment amounts of
acquired companies at dates of acquisition... 4 10 62 1 15 92
Amortization of leasehold improvements.... -- (2) -- -- -- (2)
Reclassifications between accounts........ -- 3 (3) -- -- --
------ ------ --------- ---------- ------- -----
$ (4) $(37) $ (26) $ (1) $ 9 $ (59)
------ ------ --------- ---------- ------- -----
------ ------ --------- ---------- ------- -----
</TABLE>
F-6
<PAGE> 29
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- --------------------------------------------------------------------------------------------------------------
OTHER
BALANCE AT CHANGES-- BALANCE
BEGINNING ADDITIONS ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS (NOTE 1) OF PERIOD
- ---------------------------------- ------------ --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
AT COST
Land and citrus trees............. $ 147 $ 21 $ 6 $ 11 $ 173
Buildings and improvements........ 1,060 152 30 19 1,201
Machinery and equipment........... 2,204 530 127 73 2,680
Containers........................ 254 7 41 5 225
------------ --------- ----------- ------ ---------
3,665 710 204 108 4,279
AT COST OR INVENTORY AMOUNTS
Bottles and shells................ 121 82 28 (9) 166
------------ --------- ----------- ------ ---------
$3,786 $ 792 $ 232 $ 99 $ 4,445
------------ --------- ----------- ------ ---------
------------ --------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
LAND AND AND AND AND
CITRUS TREES IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ ------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation............... $ 6 $ 11 $30 $5 $(5) $47
Property, plant and equipment amounts of
acquired companies at dates of acquisition... 5 13 39 -- (4) 53
Amortization of leasehold improvements..... -- (1) -- -- -- (1)
Reclassifications between accounts......... -- (4) 4 -- -- --
--- --- --- -- ------- -----
$ 11 $ 19 $73 $5 $(9) $99
--- --- --- -- ------- -----
--- --- --- -- ------- -----
</TABLE>
F-7
<PAGE> 30
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------------
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES-- BALANCE
BEGINNING COSTS AND ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS (NOTE 1) OF PERIOD
- --------------------------------- ----------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Citrus trees..................... $ 9 $ -- $ 9 $ -- $ --
Buildings and improvements....... 295 42 12 (11) 314
Machinery and equipment.......... 1,305 282 180 34 1,441
Containers....................... 89 8 18 1 80
Bottles and shells............... 19 1 5 17 32
----------- ---------- ----------- ------ ---------
$ 1,717 $333 $ 224 $ 41 $ 1,867
----------- ---------- ----------- ------ ---------
----------- ---------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
AND AND AND
IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C>
Foreign currency translation................. $(13) $ (19) $ -- $ (1) $(33 )
Accumulated depreciation amounts of acquired
companies at dates of acquisition.......... 2 53 1 18 74
------ --------- ---------- ------- -----
$(11) $ 34 $ 1 $ 17 $ 41
------ --------- ---------- ------- -----
------ --------- ---------- ------- -----
</TABLE>
F-8
<PAGE> 31
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------------
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES-- BALANCE
BEGINNING COSTS AND ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS (NOTE 1) OF PERIOD
- --------------------------------- ----------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Citrus trees..................... $ 9 $ -- $ -- $ -- $ 9
Buildings and improvements....... 260 39 1 (3) 295
Machinery and equipment.......... 1,110 259 56 (8) 1,305
Containers....................... 169 9 88 (1) 89
Bottles and shells............... 7 3 3 12 19
----------- ---------- ----------- ------ ---------
$ 1,555 $310 $ 148 $ -- $ 1,717
----------- ---------- ----------- ------ ---------
----------- ---------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
AND AND AND
IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C>
Foreign currency translation......................... $ (6) $ (32) $ (1) $ (3) $ (42)
Accumulated depreciation amounts of acquired
companies at dates of acquisition.................. 3 24 -- 15 42
------ --------- ---------- ------- -----
$ (3) $ (8) $ (1) $ 12 $ --
------ --------- ---------- ------- -----
------ --------- ---------- ------- -----
</TABLE>
F-9
<PAGE> 32
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------------
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES-- BALANCE
BEGINNING COSTS AND ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS (NOTE 1) OF PERIOD
- --------------------------------- ----------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Citrus trees..................... $ 9 $ -- $ -- $ -- $ 9
Buildings and improvements....... 228 35 11 8 260
Machinery and equipment.......... 948 209 83 36 1,110
Containers....................... 189 9 31 2 169
Bottles and shells............... 26 1 15 (5) 7
----------- ---------- ----------- ------ ---------
$ 1,400 $254 $ 140 $ 41 $ 1,555
----------- ---------- ----------- ------ ---------
----------- ---------- ----------- ------ ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column E consist of the following:
<TABLE>
<CAPTION>
BUILDINGS MACHINERY BOTTLES
AND AND AND
IMPROVEMENTS EQUIPMENT CONTAINERS SHELLS TOTAL
------------ --------- ---------- ------- -----
<S> <C> <C> <C> <C> <C>
Foreign currency translation..................... $ 2 $ 15 $ 3 $ -- $ 20
Accumulated depreciation amounts of acquired
companies at dates of acquisitions............. 6 21 (1) (5) 21
------ --------- ---------- ------- -----
$ 8 $ 36 $ 2 $ (5) $ 41
------ --------- ---------- ------- -----
------ --------- ---------- ------- -----
</TABLE>
F-10
<PAGE> 33
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------
ADDITIONS
---------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (NOTE 1) OF PERIOD
- ----------------------------------------------- ---------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowance for losses on:
Trade accounts receivable................. $ 33 $ 24 $ -- $ 18 $ 39
Miscellaneous investments and other
assets.................................. 61 17 -- 7 71
Deferred tax assets....................... 63 12 -- -- 75
---------- ---------- -------- ---------- ---------
$157 $ 53 $ -- $ 25 $ 185
---------- ---------- -------- ---------- ---------
---------- ---------- -------- ---------- ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts.................... $ 17 $ -- $ -- $ 17
Foreign exchange adjustments............................ 1 -- -- 1
Other transactions...................................... -- 7 -- 7
---------- ------ -------- -----
$ 18 $ 7 $ -- $ 25
---------- ------ -------- -----
---------- ------ -------- -----
</TABLE>
F-11
<PAGE> 34
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------
ADDITIONS
---------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (NOTE 1) OF PERIOD
- ----------------------------------------------- ---------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowance for losses on:
Trade accounts receivable................. $ 35 $ 19 $ -- $ 21 $ 33
Miscellaneous investments and other
assets.................................. 39 23 -- 1 61
Deferred tax assets....................... 76 14 -- 27 63
---------- ---------- -------- ---------- ---------
$150 $ 56 $ -- $ 49 $ 157
---------- ---------- -------- ---------- ---------
---------- ---------- -------- ---------- ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
MISCELLANEOUS
TRADE INVESTMENTS DEFERRED
ACCOUNTS AND OTHER TAX
RECEIVABLE ASSETS ASSETS TOTAL
---------- ------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts..................... $ 19 $ 1 $ -- $ 20
Expiration or recognition of net operating loss
carryforwards.......................................... -- -- 27 27
Foreign exchange adjustments............................. 2 -- -- 2
---------- ------ -------- -----
$ 21 $ 1 $ 27 $ 49
---------- ------ -------- -----
---------- ------ -------- -----
</TABLE>
F-12
<PAGE> 35
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------
ADDITIONS
---------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (NOTE 1) OF PERIOD
- ----------------------------------------------- ---------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowance for losses on:
Trade accounts receivable................. $ 30 $ 23 $ -- $ 18 $ 35
Miscellaneous investments and other
assets.................................. 46 2 -- 9 39
Deferred tax assets....................... 42 34 -- -- 76
---------- ---------- -------- ---------- ---------
$118 $ 59 $ -- $ 27 $ 150
---------- ---------- -------- ---------- ---------
---------- ---------- -------- ---------- ---------
</TABLE>
- ---------------
Note 1 -- The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
MISCELLANEOUS
TRADE INVESTMENTS DEFERRED
ACCOUNTS AND OTHER TAX
RECEIVABLE ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts.................... $ 18 $ -- $ -- $ 18
Reversal of allowance for unrealized loss............... -- 7 -- 7
Other transactions...................................... -- 2 -- 2
---------- ------ -------- -----
$ 18 $ 9 $ -- $ 27
---------- ------ -------- -----
---------- ------ -------- -----
</TABLE>
F-13
<PAGE> 36
SCHEDULE IX -- SHORT-TERM BORROWINGS
THE COCA-COLA COMPANY AND SUBSIDIARIES
(IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -----------------------------------------------------------------------------------------------------------------------
BALANCE AVERAGE AMOUNT WEIGHTED AVERAGE
AT END MAXIMUM AMOUNT OUTSTANDING DURING INTEREST RATE
CATEGORY OF AGGREGATE OF WEIGHTED AVERAGE OUTSTANDING DURING THE PERIOD DURING THE
SHORT-TERM BORROWINGS PERIOD INTEREST RATE THE PERIOD (NOTE 1) PERIOD (NOTE 2)
- ------------------------------- ------ ---------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C> <C>
Year Ended
December 31, 1993:
Notes payable to financial
institutions.............. $ 190 9.65% $ 222 $ 184 12.33%
Commercial paper............. 1,463 3.29% 2,298 1,754 3.25%
Year Ended
December 31, 1992:
Notes payable to financial
institutions.............. $ 216 12.14% $ 216 $ 185 14.15%
Commercial paper............. 1,856 3.47% 2,031 1,349 3.66%
Year Ended
December 31, 1991:
Notes payable to financial
institutions.............. $ 156 12.35% $ 219 $ 184 15.59%
Commercial paper............. 1,036 5.55% 2,044 1,212 6.13%
</TABLE>
- ---------------
Note 1 -- The average amount outstanding during the period was computed by
dividing the sum of the month-end outstanding principal balances by 12
for notes payable and other short-term borrowings and by dividing the
sum of the daily weighted average outstanding principal balances by
365 for 1993, 366 for 1992 and 365 for 1991 for commercial paper.
Note 2 -- The weighted average interest rate during the period was computed by
dividing the actual interest expense by average short-term debt
outstanding. The Company's weighted average interest rates for United
States and international borrowings were approximately 5 and 15
percent, respectively, for 1993, 4 and 18 percent, respectively for
1992 and 7 and 18 percent, respectively, for 1991 on average amounts
outstanding during these years. Interest rates for international
operations are generally higher due primarily to borrowings in certain
high inflation countries.
F-14
<PAGE> 37
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
THE COCA-COLA COMPANY AND SUBSIDIARIES
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
COL. A COL. B
- --------------------------------------------------------------------------------------------------
CHARGED TO COSTS AND
EXPENSES
--------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1993 1992 1991
------ ------ ----
<S> <C> <C> <C>
Maintenance and repairs............................................... $ 141 $ 162 $138
Advertising costs -- (Note 2)......................................... $1,126 $1,107 $988
</TABLE>
- ---------------
Note 1 -- Royalties, taxes other than payroll and income taxes, and amortization
of intangible assets do not exceed one percent of net revenues and,
accordingly, are not included.
Note 2 -- Advertising costs as shown above do not include administrative
expenses, as it is not practical to determine these expenses.
F-15
<PAGE> 38
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
3.1 Certificate of Elimination of the Certificate of Designation, filed with the Restated
Certificate of Incorporation of the Company on September 30, 1993 -- incorporated herein by
reference to Exhibit 3.1 of the Registrant's Form 10-Q Quarterly Report for the quarter ended
September 30, 1993.
3.2 Restated Certificate of Incorporation of the Registrant, effective October 1, 1993 ---
incorporated herein by reference to Exhibit 3.2 of the Registrant's Form 10-Q Quarterly Report
for the quarter ended September 30, 1993.
3.3 By-Laws of the Registrant, effective April 15, 1993 -- incorporated herein by reference to
Exhibit 3.2 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1993.
4.1 The Registrant agrees to furnish to the Securities and Exchange Commission, upon request, a copy
of any instrument defining the rights of holders of long-term debt of the Registrant and all of
its consolidated subsidiaries and unconsolidated subsidiaries for which financial statements are
required to be filed with the Securities and Exchange Commission.
10.1 Long Term Performance Incentive Plan of the Registrant, as amended--incorporated herein by
reference to Exhibit 10.1 of the Registrant's Form 10-K Annual Report for the year ended
December 31, 1989.
10.2 The Key Executive Retirement Plan of the Registrant, as amended.
10.3 Supplemental Disability Plan of the Registrant, as amended--incorporated herein by reference to
Exhibit 10.3 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1991.
10.4 Annual Performance Incentive Plan of the Registrant, as amended--incorporated herein by
reference to Exhibit 10.4 of the Registrant's Form 10-K Annual Report for the year ended
December 31, 1989.
10.5 Agreement, dated February 28, 1983, between the Registrant and Roberto C. Goizueta--incorporated
herein by reference to Exhibit 10.5 of the Registrant's Form 10-K Annual Report for the year
ended December 31, 1988.
10.6 Amendment, dated February 10, 1984, to the Agreement dated February 28, 1983, between the
Registrant and Roberto C. Goizueta--incorporated herein by reference to Exhibit 10.6 of the
Registrant's Form 10-K Annual Report for the year ended December 31, 1988.
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
10.7 1983 Stock Option Plan of the Registrant, as amended--incorporated herein by reference to
Exhibit 10.8 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1991.
10.8 1987 Stock Option Plan of the Registrant, as amended--incorporated herein by reference to
Exhibit 10.9 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1991.
10.9 1991 Stock Option Plan of the Registrant, as amended--incorporated herein by reference to
Exhibit 10.10 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1991.
10.10 1983 Restricted Stock Award Plan of the Registrant, as amended--incorporated herein by reference
to Exhibit 10.11 of the Registrant's Form 10-K Annual Report for the year ended December 31,
1991.
10.11 1989 Restricted Stock Award Plan of the Registrant, as amended--incorporated herein by reference
to Exhibit 10.12 of the Registrant's Form 10-K Annual Report for the year ended December 31,
1991.
10.12 Performance Unit Agreement, dated December 19, 1985, between the Registrant and Roberto
C. Goizueta, as amended--incorporated herein by reference to Exhibit 10.10 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1989.
10.13 1986 Compensation Deferral and Investment Program, as amended--incorporated herein by reference
to Exhibit 10.15 of the Registrant's Form 10-K Annual Report for the year ended December 31,
1991.
10.14 Restricted Stock Agreement, dated August 4, 1982, between the Registrant and Roberto
C. Goizueta, as amended--incorporated herein by reference to Exhibit 10.13 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1989.
10.15 Incentive Unit Agreement, dated November 29, 1988, between the Registrant and Roberto
C. Goizueta, as amended--incorporated herein by reference to Exhibit 10.15 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1989.
10.16 Supplemental Health Plan of the Registrant--incorporated herein by reference to Exhibit 10.19 of
the Registrant's Form 10-K Annual Report for the year ended December 31, 1990.
10.17 Supplemental Benefit Plan of the Registrant, as amended.
10.18 Retirement Plan for the Board of Directors of Registrant, as amended--incorporated herein by
reference to Exhibit 10.22 of the Registrant's Form 10-K Annual Report for the year ended
December 31, 1991.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
10.19 Deferral Plan for the Board of Directors of Registrant--incorporated herein by reference to
Exhibit 10.23 of the Registrant's Form 10-K Annual Report for the year ended December 31, 1992.
10.20 Deferred Compensation Agreement for Officers or Key Executives of the Registrant.
10.21 Long Term Performance Incentive Plan, as amended.
10.22 Executive Performance Incentive Plan.
12.1 Computation of Ratio of Earnings to Fixed Charges for the years ended December 31, 1993, 1992,
1991, 1990 and 1989.
13.1 1993 Annual Report to Share Owners. (Pages 44-71, 73, 76 (definitions of "Dividend Payout Ratio,"
"Economic Profit," "Net Debt and Net Capital," "Return on Capital," "Return on Common Equity" and
"Total Capital") and 77).
21.1 List of subsidiaries of the Registrant as of December 31, 1993.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this report.
99.1 Consolidated financial statements and financial statement schedules for Coca-Cola Enterprises
included in the Form 10-K Annual Report of Coca-Cola Enterprises for the fiscal year ended
December 31, 1993.
</TABLE>
<PAGE> 1
EXHIBIT 10.2
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
<PAGE> 2
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
<S> <C> <C> <C>
I Establishment of Plan
1.1 Establishment 1
1.2 Purpose 1
1.3 Application of Plan 1
II Definitions
2.1 Definitions 2
2.2 Gender and Number 4
III Participation
3.1 Eligibility for Participation 5
3.2 Date of Participation 5
3.3 Duration of Participation 5
IV Benefits
4.1 Normal Retirement Benefit 6
4.2 Early Retirement Benefit 7
4.3 Pre-Retirement Surviving Spouse Benefit 7
4.4 Post-Retirement Surviving Spouse Benefit 8
4.5 Protection of Accrued Benefit 9
4.6 Change in Control 9
V Forfeitability
5.1 Forfeitability of Benefits 14
VI Financing
6.1 Financing 15
6.2 No Trust Created 15
6.3 Unsecured Interest 15
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
VII Administration
7.1 Administration 16
7.2 Key Executive Retirement Plan Committee 16
7.3 Expenses 17
7.4 Indemnification 17
7.5 Amendment or Termination of the Plan 17
7.6 Applicable Law 18
7.7 Nonalienation 18
7.8 Limitation on Rights 18
7.9 Tax Withholding 19
</TABLE>
ii
<PAGE> 4
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
Article I. Establishment of Plan
1.1 Establishment. Effective as of January 1, 1984, THE COCA-COLA
COMPANY established as part of The Coca-Cola Company Supplemental Retirement
Plan an unfunded supplemental retirement plan for eligible executives and their
beneficiaries as described herein, which, effective January 1, 1990, shall be
known as "THE COCA-COLA COMPANY KEY EXECUTIVE RETIREMENT PLAN" (hereinafter
called the "Plan").
1.2 Purpose. The purpose of this Plan is to provide key executives
of the Employer a retirement benefit which reflects their contributions to the
Company and to supplement the benefits payable from the Employer's Qualified
Pension Plan.
1.3 Application of Plan. The terms of this Plan are applicable only
to eligible executives who are in the employ of the Employer on or after
January 1, 1984. Any executive who retires or terminates his employment
relationship prior to such date shall not be covered under this plan.
Article II. Definitions
2.1 Definitions. Whenever used in the Plan, the following terms
shall have the respective meanings set forth below unless otherwise expressly
provided herein, and when the defined meaning is intended, the term is
capitalized.
(a) "Benefit Service" has the same meaning in this Plan as is
found in the Qualified Pension Plan.
(b) "Code" means the Internal Revenue Code of 1986 as amended from
time to time.
(c) "Committee" means the administrative body designated by the
Chief Executive Officer of the Company to administer the Plan
as described in Article VII.
(d) "Company" means The Coca-Cola Company.
<PAGE> 5
(e) "Compensation Committee" means the Compensation Committee of
the Board of Directors of The Coca-Cola Company.
(f) "Early Retirement Age" means the first to occur of (1) a
Participant's age when he has both attained his fifty-fifth
birthday (but not his sixty-fifth) and completed at least ten
years of Vesting Service or (2) age 60 with the approval of
the Employer.
(g) "Effective Date" means January 1, 1984.
(h) "Employer" means the Company and any other subsidiary
corporation of the Company approved by the Committee.
(i) "Final Average Pay" means the monthly average of a
Participant's Pay for the period of the five consecutive
calendar years during which he received the largest total
amount of Pay treating as a whole calendar year the last
calendar year in which he earned any Pay.
(j) "Normal Retirement Age" means a Participant's sixty-fifth
birthday.
(k) "Participant" means any executive of the Employer who has met
the eligibility requirements of the Plan, as set forth in
Article III hereof.
(l) "Pay" means the wage or salary paid to the Participant for the
Plan Year. Pay will include (a) contributions made after 1983
to a qualified salary reduction plan or cafeteria plan, (b)
earnings from any subsidiary with whom the Company has
executed a reciprocal agreement to recognize earnings for
retirement plan purposes, for a period of work during which
the Participant earns Vesting Service under the Qualified
Pension Plan, and (c) severance payments made after
involuntary termination under a formal severance pay policy in
a form other than a lump-sum payment incentive plan, and (d)
performance incentive plan awards, long-term
2
<PAGE> 6
incentive plan and deferred compensation. Pay will exclude
interest accrued on long-term incentives.
(m) "Plan" means the supplemental retirement plan described in
this instrument as the same may from time to time be amended.
(n) "Plan Year" means the calendar year.
(o) "Qualified Pension Plan" means the Employee Retirement Plan of
The Coca-Cola Company and any other defined benefit pension
plan maintained by the Employer.
(p) "Vesting Service" has the same meaning in this Plan as is
found in the Qualified Pension Plan.
(q) "Change in Control" means a change in control of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") as in
effect on November 15, 1988, provided that such a change in
control shall be deemed to have occurred at such time as (i)
any "person" (as that term is used in Sections 13(d) and 14(d)
(2) of the Exchange Act) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities representing 20% or more of the
combined voting power for election of directors of the then
outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or
less, individuals who at the beginning of such period
constituted the Board of Directors of the Company, cease, for
any reason, to constitute at least a majority of the Board of
Directors, unless the election or nomination for election of
each new director was approved by a vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of the period; (iii) the
shareholders of the Company approve any merger or
consolidation as a
3
<PAGE> 7
result of which its stock shall be changed, converted or
exchanged (other than a merger with a wholly-owned subsidiary
of the Company) or any liquidation of the Company or any sale
or other disposition of 50% or more of the assets or earning
power of the Company; or (iv) the shareholders of the Company
approve any merger or consolidation to which the Company is a
party as a result of which the persons who were shareholders
of the Company immediately prior to the effective date of the
merger or consolidation shall have beneficial ownership of
less than 50% of the combined voting power for election of
directors of the surviving corporation following the effective
date of such merger or consolidation; provided, however, that
no Change in Control shall be deemed to have occurred if,
prior to such time as a Change in Control would otherwise be
deemed to have occurred, the Board of Directors determines
otherwise.
2.2 Gender and Number. Except when otherwise indicated by the
context, any masculine terminology herein shall also include the feminine and
neuter, and the definition of any term herein in the singular may also include
the plural.
Article III. Participation
3.1 Eligibility for Participation. Each Key Senior Vice President in
charge of a major functional group as defined by the Chief Executive Officer of
the Company and higher-level executives of the Company and each other executive
of the Employer approved by the Chief Executive Officer from time to time shall
be eligible to participate in this Plan. Notwithstanding any other provisions
to the contrary, all decisions relating to participation are subject to the
review and approval of the Compensation Committee.
4
<PAGE> 8
3.2 Date of Participation. Each executive who is eligible to become
a Participant under Section 3.1 shall become a Participant on the later to
occur of (a) January 1, 1984, or (b) the date he meets the eligibility
requirements.
3.3 Duration of Participation. An executive who becomes a
Participant shall continue to be a Participant until his termination of
Employment with the Employer or the date he is no longer entitled to benefits
under this Plan.
Article IV. Benefits
4.1 Normal Retirement Benefit.
(a) Eligibility. A Participant whose employment with the Employer
terminates on or after he has attained his Normal Retirement
Age shall be eligible for a normal retirement benefit under
this Plan subject to Section 5.1.
(b) Amount. A Participant who is eligible pursuant to (a) above
shall be entitled to a monthly normal retirement benefit in an
amount equal to the excess of the greater of (1) or (2) below
over (3) below:
(1) the sum of (A) and (B) below:
(A) 20 percent of his Final Average Pay; and
(B) One percent of his Final Average Pay
multiplied by his years of Benefit Service
not in excess of 35 years;
(2) the monthly normal retirement benefit payable as a
life annuity he would have been entitled to receive
at his Normal Retirement Age (or later retirement)
under the Qualified Pension Plan, but for the
provisions of Section 415 and Section (401)(a)(17) of
the Code;
(3) the monthly normal retirement benefit he would be
entitled to receive at his Normal Retirement Age
5
<PAGE> 9
(or later retirement) under the Qualified Pension
Plan, under the payment form actually elected.
(c) Commencement and Duration. Monthly normal retirement benefit
payments in the form of a life annuity shall commence at the
same time as the normal retirement benefit payable from the
Qualified Pension Plan. When payments begin, they shall be
paid monthly thereafter as of the first day of each succeeding
month during his lifetime.
(d) Benefit Adjustment after Payments Begin. Any benefit payable
pursuant to Section 4.1(b) of this Article shall be adjusted
in accordance with new limitations, if any, established by the
Internal Revenue Service on payments that may be made from the
Qualified Pension Plan. In addition, benefits from this Plan
shall be adjusted if benefits payable from the Qualified
Pension Plan are increased because retirees are granted an
improvement in retirement income.
4.2 Early Retirement Benefit
(a) Eligibility. A Participant whose employment with the Employer
terminates on or after the date he has attained his Early
Retirement Age shall be eligible for an early retirement
benefit under this Plan subject to Section 5.1.
(b) Amount. A Participant who is eligible pursuant to (a) above
shall be entitled to a monthly early retirement benefit in an
amount equal to the greater of the amount computed under
Section 4.1(b)(1) hereof or the amount computed under Section
4.1(b)(2) hereof. Such amount shall be reduced, using the
same reduction factors as are in use under the Qualified
Pension Plan, for each month by which the Participant's first
payment under this Plan precedes age 62. The resulting amount
shall
6
<PAGE> 10
be reduced by any monthly benefit amount actually received
from the Qualified Pension Plan.
(c) Commencement and Duration. Monthly early retirement benefit
payments in the form of a life annuity shall commence at the
same time as the early retirement benefit payable from the
Employer's Qualified Pension Plan except for Participants not
eligible for early retirement under the Qualified Pension
Plan, in which case early retirement benefit payments shall
commence on the first of the month following retirement. When
payments begin, they shall be paid monthly thereafter as of
the first day of each succeeding month during his lifetime.
When the benefit from the Qualified Pension Plan commences,
the benefit from this Plan shall be reduced by the amount of
the benefit paid from the Qualified Pension Plan.
4.3 Pre-Retirement Surviving Spouse Benefit.
(a) Eligibility. The Surviving spouse of a Participant who dies
while employed by the Employer shall be eligible for a
surviving spouse benefit under this Plan as if the Participant
had elected pre-retirement death benefit coverage in the form
of a 100 percent joint and survivor annuity under the
Qualified Pension Plan.
(b) Amount. A surviving spouse who is eligible pursuant to (a)
above shall be entitled to a monthly surviving spouse benefit
computed in the same manner as a normal retirement benefit for
the Participant under Section 4.1(b) hereof, provided that the
amount determined under Subsection 4.1(b) (3) shall be the
benefit actually received by the surviving spouse from the
Qualified Pension Plan, if any, and provided further, that if
payment of the benefit commences before a Participant attains
his Normal Retirement Age, the
7
<PAGE> 11
amount of the benefit shall be actuarially reduced for each
full calendar month to occur between the later of (1) the date
the Participant would have attained age 55 or (2) the date of
his death and the month in which the Participant would have
attained age 62 by the amount of any actuarial reduction
applied in the Qualified Pension Plan relating to early
commencement of retirement benefits.
(c) Commencement and Duration. Monthly surviving spouse benefit
payments shall commence on the first of the month following
the Participant's death. When payments begin, they shall be
paid monthly thereafter as of the first day of each succeeding
month until the first to occur of the surviving spouse's death
or remarriage, and shall be subject to adjustment in
accordance with the provision of Section 4.1(d) of this
article. In the event of remarriage of the surviving spouse,
benefits from this Plan will cease, and benefits will be
payable from the Supplemental Retirement Plan beginning at the
Participant's earliest retirement age as defined in the
Employee Retirement Plan of The Coca-Cola Company.
4.4 Post-Retirement Surviving Spouse Benefit.
(a) Eligibility. The surviving spouse of a retired Participant
who is receiving a benefit from the Qualified Pension Plan in
the form of a 100 percent joint and surviving spouse payment
and who dies while receiving, or while entitled to in the
future receive, a benefit under Section 4.1 or 4.2 of this
article, shall be eligible for a surviving spouse benefit
under this Plan.
(b) Amount. A surviving spouse who is eligible pursuant to (a)
above shall be entitled to a monthly surviving spouse benefit
equal to the amount received or the
8
<PAGE> 12
amount that could have been received by the Participant at his
death.
(c) Commencement and Duration. Monthly surviving spouse benefit
payments shall commence on the first of the month following
the Participant's death. When payments begin, they shall be
paid monthly thereafter as of the first day of each succeeding
month during her lifetime and shall be subject to adjustment
in accordance with the provisions of Section 4.1 (d).
4.5 Protection of Accrued Benefit. In no event will the accrued benefit of
any participant at his retirement date on or after January 1, 1989 be less than
the benefit accrued at the end of any earlier calendar year at which he was a
participant in this Plan.
4.6 Change in Control.
(a) Coverage. If there is a Change in Control, each Participant
described in the first sentence of Section 3.1 shall be
covered by the special rules set forth in this Section 4.6 and
shall be referred to as a "Covered Participant".
(b) Full Vesting. If there is a Change in Control, each Covered
Participant's interest in his Accrued Benefit shall
immediately become fully vested and nonforfeitable as of such
date and as of any date thereafter.
(c) Accrued Benefit. Each Covered Participant's Accrued Benefit
under this Section 4.6 as of any date such benefit is
calculated shall equal (1) the benefit which would be payable
to him under Section 4.1 if he retired on such calculation
date or, if he had not reached his Normal Retirement Age by
such date, (2) the benefit which would be payable to him under
Section 4.2 if he retired early on such calculation date or,
if he had not reached his Early Retirement Age by such date,
(3)
9
<PAGE> 13
the benefit which would be payable to him under Section 4.2
based on his actual Final Average Pay and his actual Benefit
Service on such calculation date as if (i) he had continued to
work for the Employer until he reached his Early Retirement
Age and (ii) he had retired under Section 4.2 immediately
after he reached such age.
(d) Special Change in Control Benefit.
(1) Termination of Employment. If a Covered
Participant's employment with the Employer terminates for any
reason whatsoever before the end of the two-consecutive-year
period which begins on the date there is a Change in Control,
he shall be paid the Change in Control benefit calculated in
accordance with the rules set forth in Section 4.6(d)(2)
immediately after such termination of his employment in cash
in a lump sum in lieu of any other benefit under the Plan.
(2) Benefit Computation Rules.
(A) Benefit Service and Final Average Pay. A
Covered Participant's benefit under this Section 4.6(d) shall
be based on his actual Benefit Service on the date his
employment terminated for purposes of Section 4.6(d)(1) and
on his actual Final Average Pay on such date unless he had not
reached his Early Retirement Age on or before such date. If
he had not reached his Early Retirement Age on or before his
employment terminated for purposes of Section 4.6(d)(1), his
Final Average Pay shall be recalculated [as the first
calculation step under this Section 4.6(d)] for the purposes
of this Section 4.6(d) on the assumption that (i) he had
continued to work for the Employer until he reached his Early
Retirement Age and (ii) his Pay for each calendar year after
the calendar year which immediately preceded the date his
employment terminated for purposes of Section 4.6(d)(1) had
continued to
10
<PAGE> 14
increase until he reached his Early Retirement Age at the rate
of 8% per year (over his Pay for the calendar year which
immediately preceded the date his employment so terminated).
(B) Benefit Under Section 4.1 or Section 4.2. As
the second calculation step under this Section 4.6(d), a
Covered Participant's Accrued Benefit shall be recalculated as
of the date of his termination of employment for purposes of
Section 4.6(d)(1) using (1) his Benefit Service and his Final
Average Pay as calculated under Section 4.6(d)(2)(A), (2) an
assumption that he was unmarried and would remain unmarried
and (3) an assumption that he was ineligible for any benefit
under any Qualified Pension Plan.
(C) Actuarial Equivalent. As the third
calculation step under this Section 4.6(d), a Covered
Participant's monthly life-only benefit as calculated under
Section 4.6(d)(2)(B) plus the related monthly life-only
survivor benefit which would be payable under Section 4.4 to
the person, if any, who is his spouse on the date his
employment terminated for purposes of Section 4.6(d) (1) (if
such spouse survived him) shall be converted to an actuarial
equivalent lump sum benefit (1) using an 8% per annum simple
interest rate assumption, (2) using such other factors and
assumptions for making actuarial equivalent lump sum cash-out
calculations as in effect on the date his employment
terminated for purposes of Section 4.6(d) (1) under the
Employee Retirement Plan of The Coca-Cola Company or, if no
such other factors and assumptions are in effect on such date,
such other factors and assumptions for making such
calculations under such plan as in effect on the date of the
Change in Control and (3) assuming that (A) he remains married
to such spouse until his death, (B) such spouse survives him
11
<PAGE> 15
and actually receives a benefit from a Qualified Pension Plan
in the form of a 100 percent joint and surviving spouse
payment and (C) such spouse never remarries.
(D) Present Value.
(1) Post-Early Retirement Age. If a
Covered Participant's employment
actually terminated for purposes of
Section 4.6(d)(1) on or after his
Early Retirement Date, his benefit
under this Section 4.6(d)(2)(D)
shall be his actuarial equivalent
lump sum benefit as calculated under
Section 4.6(d)(2)(C) without any
further adjustments.
(2) Pre-Early Retirement Age. If a
Covered Participant's employment
actually terminated for purposes of
Section 4.6(d)(1) before he reached
his Early Retirement Age, his
benefit under this Section
4.6(d)(2)(D) shall equal the present
value of his actuarial equivalent
lump sum benefit under Section
4.6(d)(2)(C) as calculated (as the
fourth calculation step in this
Section 4.6(d)) using an 8% per
annum interest rate compounded
annually.
(E) Qualified Pension Plan Benefit. As the fifth
calculation step in this Section 4.6(d), the
Covered Participant's aggregate actual vested
accrued Qualified Pension Plan benefit, if
any, on the date his employment terminated
for purposes of Section 4.6(d)(1) shall be
calculated as an actuarial equivalent lump
sum benefit payable as of such date using (1)
an 8% per annum simple interest rate
12
<PAGE> 16
assumption and (2) such other factors and
assumptions for making actuarial equivalent
lump sum cash-out calculations as in effect
on the date his employment terminated for
purposes of Section 4.6(d) (1) under the
relevant Qualified Pension Plan or, if no
such other factors and assumptions are in
effect on such date, such other factors and
assumptions for making such calculations
under such plan as in effect on the date of
the Change in Control.
(F) Section 4.6(d)(1) Benefit. A Covered
Participant's benefit under Section 4.6(d)
(1) shall (as the final calculation step in
this Section 4.6(d)) equal the excess, if
any, of his benefit as calculated under
Section 4.6(d)(2)(D) over his Qualified
Pension Plan benefit as calculated under
Section 4.6(d)(2)(E).
(e) Termination of Employment. If a Covered Participant's
employment with the Employer terminates when he no longer is
eligible for a benefit under Section 4.6(d) but before he
otherwise is eligible for a benefit under Section 4.2, no
payment shall be made to him under the Plan until the date he
would have reached his Early Retirement Age if he had
continued to be employed by the Employer. When such a Covered
Participant so reaches his Early Retirement Age, he shall be
treated under Section 4.2 as if he had immediately retired,
and his benefit under Section 4.2 shall be calculated and paid
under Section 4.2 at that time based on his Final Average Pay
and his Benefit Service at his termination of employment. A
Covered Participant shall be treated as employed by the
Employer under Section 4.3, Pre-Retirement Surviving Spouse
Benefit, at his death if he
13
<PAGE> 17
dies on or after the date his employment terminates and before
the date he is treated under this Section 4.6(e) as retiring
early under Section 4.2.
(f) Excise Tax. Any federal golden parachute payment excise tax
paid or payable under Section 4999 of the Internal Revenue
Code of 1986, as amended, or any successor to such Section, by
a Participant for his taxable year for which he reports the
payment made under Section 4.6(d) (1) on his federal income
tax return shall be deemed attributable to such payment under
Section 4.6(d) (1), and the Company promptly on written demand
from the Participant (or, if he is dead, from his estate)
shall pay to him (or, if he is dead, to his estate) an amount
equal to such excise tax.
(g) Non-Competition. Neither the payment made under Section
4.6(d) (1) nor a Covered Participant who receives such payment
shall be subject to Article V of the Plan, and no Covered
Participant who receives such a payment shall have any
obligations whatsoever (exclusively as a result of the receipt
of such payment) to refrain from engaging in any activity
which competes directly or indirectly with the Employer.
Article V. Forfeitability
5.1 Forfeitability of Benefits. Any benefits under this Plan
which a Participant is receiving shall cease, and all rights under the Plan
shall be extinguished, if a Participant terminates employment with the Employer
and without the Employer's consent is subsequently (a) employed by or in any
manner provides services for any business organization that is in direct
competition with the Employer or (b) personally engages in direct competition
with the Employer. If a court of competent jurisdiction finds that the
restrictions provided for in (a) and (b) are unenforceable, then such benefits
shall be forfeited if a
14
<PAGE> 18
participant competes either as an employee or directly in the widest
geographical area and for the longest period of time that are legally
enforceable. Further, all rights under the Plan shall be extinguished and
forfeited if a Participant terminates employment with the Employer prior to his
Early Retirement Age for any reason other than death, unless otherwise
expressly provided in writing by the Compensation Committee of the Board of
Directors.
Article VI. Financing
6.1 Financing. The benefits under this Plan shall be paid out of
the general assets of the Employer. The benefits shall not be funded in
advance of payment in any way.
6.2 No Trust Created. Nothing contained in this Plan, and no
action taken pursuant to the provisions of this Plan, shall create or be
construed to create a trust of any kind or a fiduciary relationship between the
Employer and any Participant, his spouse, or any other person.
6.3 Unsecured Interest. No Participant hereunder shall have any
interest whatsoever in any specific asset of the Employer. To the extent that
any person acquires a right to receive payments under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Employer.
Article VII. Administration
7.1 Administration. The Company shall be the Plan Administrator
and shall have all of the powers and responsibilities of that office as
described in ERISA, which powers and duties shall be delegated to the extent
provided in this Article VII.
15
<PAGE> 19
7.2 Key Executive Retirement Plan Committee. The Company's Chief
Executive Officer (CEO) shall appoint a Committee of at least five members, who
may or may not be officers or employees of the Company or a Subsidiary. Each
Committee member shall serve at the pleasure of the CEO. Any member may resign
by submitting a written resignation to the CEO. The CEO shall appoint a
successor member to fill each vacancy on the Committee.
(a) Actions. The CEO shall designate a Committee member as the chairman
to preside at each meeting. In the event of the chairman's absence at
any meeting, the members present shall select one of their members to
serve as acting chairman. The Committee shall appoint a secretary,
who may or may not be a Committee member, to keep minutes of meetings
and to perform other duties assigned by the Committee. The Committee
may appoint such other officers as it deems necessary, who may or may
not be Committee members. Each action of the Committee shall be taken
by a majority vote of all members then in office, provided that the
Committee may establish procedures for taking written votes without a
meeting. The Committee may, by a properly executed resolution,
authorize any member or officer or any other person to sign
communication and to execute documents on its behalf, and may delegate
other duties and responsibilities as it considers to be in the best
interest of the Plan.
(b) Powers. The Committee shall have primary responsibility for the
administration of the Plan, and all powers necessary to enable it to
properly perform its duties, including but not limited to the
following powers and duties:
(1) The Company may adopt rules and regulations necessary for the
performance of its duties under the Plan.
(2) The Committee shall have the power to construe the Plan and to
decide all questions arising under the Plan.
(3) The Committee shall determine the eligibility of Participants
to receive benefits and the amount of
16
<PAGE> 20
benefits to which any Participant may be entitled under the
Plan.
(4) The Committee shall direct the payment of benefits from the
Company's general treasury, and shall specify the payee, the
amount and the conditions of each payment.
(5) The Committee shall prepare and distribute to the Participants
plan summaries, notices, and other information about the Plan
in such manner as it deems proper and in compliance with
applicable law.
(6) The Committee shall provide forms for use by Participants in
applying for benefits.
(7) The Committee shall appoint an enrolled actuary to make
periodic actuarial valuations of the Plan's experience and
liabilities and to prepare actuarial statements.
(8) The Committee shall retain legal counsel, accountants and such
other agents as it deems necessary to properly administer the
Plan.
(9) The Committee shall cause to be filed all reports under the
Code.
7.3 Expenses. The Company shall pay all expenses incurred by the
Committee in administering the Plan, including fees and charges of actuaries,
attorneys, accountants, and consultants.
7.4 Indemnification. The Company shall indemnify and hold
harmless the Committee and each member and each person to whom the Plan
Administrator or the Committee has delegated responsibility under this Article
VII, from all joint or several liability for their acts and omissions and for
the acts and omissions of their duly appointed agents in the administration of
the Plan, except for their own breach of fiduciary duty and willful misconduct.
17
<PAGE> 21
7.5 Amendment or Termination of the Plan. The Committee shall
have the right to amend or to terminate the Plan at any time, provided
(1) no such amendment or termination shall be effective before the
date the Committee properly acts to adopt such amendment or to
effect such termination if such amendment or termination
adversely affects any Participant's right to a benefit which
has vested under the Plan before such date, and
(2) the Committee shall have no right whatsoever on or after the
date there is a Change in Control to amend or to terminate the
Plan if
(A) such amendment or termination is effective as
of any date before the end of the
two-consecutive- year period which begins on
the date that there is a Change in Control
and
(B) such amendment or termination affects in any
manner whatsoever the rights or benefits of,
or the provisions of the Plan which directly
or indirectly relate to, a Covered
Participant (as described in Section 4.6(a))
unless
(C) all such Covered Participants affirmatively
consent in writing to such amendment or
termination.
Notice of any amendment or termination under this Section 7.5 shall be given
in writing to each participant and to each surviving spouse of a deceased
Participant who has an interest in the Plan.
7.6 Applicable Law. The Plan shall be construed in accordance
with the laws of the State of Georgia, except to the extent such laws are
preempted by the Code.
18
<PAGE> 22
7.7 Nonalienation. No benefits payable under the Plan shall be
subject to the claim or legal process of any creditor of any Participant or
Spouse, and no Participant or Spouse shall alienate, transfer, anticipate, or
assign any benefits under the Plan.
7.8 Limitation on Rights. No person shall have any right or
interest in any portion of the Plan except as specifically provided in the
Plan.
7.9 Tax Withholding. The Employer may withhold, or require the
withholding of, from any payment which it is required to make, any federal,
state, or local taxes required by law to be withheld with respect to such
payment and such payment and such sum as the Employer may reasonably estimate
as necessary to cover any taxes for which the Employer may be liable and which
may be assessed with regard to such payment. Upon discharge or settlement of
such tax liability, the Employer shall distribute the balance of such sum, if
any, to the Participant from whose payment it was withheld, or if such
Participant is then deceased, to the beneficiary of such Participant. Prior to
making any payment hereunder, the Employer may require such documents from any
taxing authority, or may require such indemnities or surety bond as the
Employer shall reasonably deem necessary for his protection.
19
<PAGE> 23
IN WITNESS WHEREOF, THE COCA-COLA COMPANY has caused this instrument
to be signed, effective as of January 1, 1990, on this _____ day of
_______________, 19____.
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT
ATTEST: PLAN COMMITTEE
_______________________________ BY______________________________
SECRETARY OF THE COMMITTEE CHAIRMAN
20
<PAGE> 24
AMENDMENT NUMBER 1
TO THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
Effective as of December 31, 1993, the Key Executive Retirement Plan
Committee of The Coca-Cola Company Key Executive Retirement Plan (the "Plan")
hereby amends the Plan as follows:
1. The following new Section 4.2A hereby is added immediately
following Section 4.2 of the Plan:
"4.2A Special Benefit for Certain Participants Terminating
Before Early Retirement Age.
(a) Eligibility. An executive of the Employer
who is a Participant on December 31, 1993, and whose
employment with the Employer terminates before the date he has
attained Early Retirement Age shall be eligible for a
retirement benefit under this Section 4.2A, subject to Section
5.1.
(b) Amount. A Participant who is eligible
pursuant to Subsection (a) above shall be entitled to a
monthly benefit in an amount equal to the greater of the
amount computed under Section 4.1(b)(1) or Section 4.1(b)(2)
hereof, determined as of December 31, 1993 based on his Final
Average Pay and years of Benefit Service as of such date.
Such amount shall be reduced, using the same reduction factors
as are in use under the Qualified Pension Plan for a vested
terminated participant, for each month by which the
Participant's first payment under this Plan precedes the first
day of the month on or after the Participant attains age 65.
The resulting amount shall be reduced by the monthly benefit
amount actually received from the Qualified Pension Plan (or
the monthly benefit amount that would have been payable
commencing at Early Retirement Age if the Participant had been
vested in the Qualified Pension Plan on his employment
termination date).
(c) Commencement and Duration. Monthly benefit
payments under this Section 4.2A in the form of a life annuity
shall commence at the same time as the benefit payable from
the Employer's Qualified Pension Plan; provided, if no benefit
is payable from the Qualified Pension Plan, then payments
shall commence on the first day of the month following the
date the Participant attains Early Retirement Age. When
payments begin, they shall be paid monthly thereafter as of
the first day of each succeeding month during his lifetime."
2. Subsection (a) of Section 4.4 of the Plan is hereby
<PAGE> 25
amended by deleting said subsection and substituting the following in
lieu thereof:
"(a) Eligibility. The surviving spouse
of a retired Participant who is receiving a benefit from the
Qualified Pension Plan in the form of a 100 percent joint and
surviving spouse payment and who dies while receiving, or
while entitled to in the future receive, a benefit under
Section 4.1, 4.2 or 4.2A of this article, shall be eligible
for a surviving spouse benefit under this Plan."
3. Section 5.1 of the Plan is hereby amended by deleting said
section and substituting the following in lieu thereof:
"5.1 Forfeitability of Benefits.
(a) Non-Competition. Any benefits under this
Plan which a Participant is receiving shall cease, and all
rights under the Plan shall be extinguished, if a Participant
terminates employment with the Employer and without the
Employer's consent is subsequently (i) employed by or in any
manner provides services for any business organization that is
in direct competition with the Employer; or (ii) personally
engages in direct competition with the Employer. If a court
of competent jurisdiction finds that the restrictions provided
for in (i) and (ii) are unenforceable, then such benefits
shall be forfeited if a Participant competes either as an
employee or directly in the widest geographical area and for
the longest period of time that are legally enforceable.
(b) Early Retirement Age.
Except as provided in Section 4.2A, all
rights to a benefit under the Plan shall be extinguished and
forfeited if a Participant terminates employment with the
Employer prior to his Early Retirement Age for any reason
other than death, unless otherwise expressly provided in
writing by the Compensation Committee of the Board of
Directors.
2
<PAGE> 1
EXHIBIT 10.17
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
<PAGE> 2
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - PURPOSE AND ESTABLISHMENT 1
1.1 Establishment 1
1.2 Purpose 1
1.3 Application of Plan
ARTICLE II - DEFINITIONS 2
2.1 Account 2
2.2 Employer 2
2.3 Beneficiary 2
2.4 Code 2
2.5 Common Stock 2
2.6 Company 2
2.7 Early Retirement Age 2
2.8 Effective Date 2
2.9 Employee 2
2.10 Market Price 3
2.11 Participant 3
2.12 Pension Benefit 3
2.13 Plan 3
2.14 Plan Year 3
2.15 Qualified Pension Plan 3
2.16 Thrift Benefit 3
2.17 Thrift Plan 3
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV - ELIGIBILITY 4
4.1 Eligibility for Participation 4
4.2 Determination of Eligibility 4
4.3 Date of Participation 4
4.4 Duration of Participation 4
ARTICLE V - BENEFITS 5
5.1 Pension Benefit 5
5.2 Distribution of Pension Benefit 5
5.3 Funding of Pension Benefit 6
5.4 Thrift Benefit 6
5.5 Distribution of Thrift Benefit 7
5.6 Pension Benefit Upon Change in Control 8
5.7 Thrift Benefit Upon Change in Control 10
ARTICLE VI - FORFEITABILITY 11
ARTICLE VII - ADMINISTRATION 12
7.1 Plan Administrator 12
7.2 Supplemental Benefit Plan Committee 12
7.3 Expenses 13
7.4 Indemnification 13
7.5 Amendment or Termination of the Plan 14
7.6 Applicable Law 14
7.7 Nonalienation 14
7.8 Limitation on Rights 15
7.9 Tax Withholding 15
7.10 No Trust Created 15
7.11 Unsecured Interest 15
7.12 No Guarantee of Employment 15
</TABLE>
ii
<PAGE> 4
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
ARTICLE I. PURPOSE AND ESTABLISHMENT
1.1 Establishment. The Coca-Cola Company (the "Company")
established as part of The Coca-Cola Company Supplemental Retirement Plan,
effective as of January 1, 1984 an unfunded supplemental retirement plan for
eligible employees and their beneficiaries as described herein which, effective
January 1, 1989, shall be known as The Coca-Cola Company Supplemental Benefit
Plan (the "Plan").
1.2 Purpose. The Plan is designed to provide certain retirement
benefits primarily for a select group of management or highly compensated
employees which are not otherwise payable or cannot otherwise be provided by
the Company under the Employee Retirement Plan of The Coca-Cola Company and The
Coca-Cola Company Thrift Plan, as a result of the limitations set forth under
sections 401, 402(g), and 415 of the Internal Revenue Code of 1986, as amended
from time to time.
1.3 Application of Plan. The terms of this Plan are applicable
only to eligible employees who are in the employ of the Employer on or after
January 1, 1984. Any employee who retires or terminates his employment
relationship prior to such date shall not be covered under this Plan.
<PAGE> 5
ARTICLE II. DEFINITIONS
2.1 "Account" shall mean the account or accounts established and
maintained by the Employer to reflect the interest of a Participant in the Plan
resulting from a Participant's Supplemental Thrift Benefit calculated in
accordance with Section 5.5.
2.2 "Employer" shall mean the Company and any subsidiary
Corporation of the Company approved by the Committee for coverage by the Plan.
2.3 "Beneficiary" shall mean, unless otherwise designated, the
beneficiary elected or deemed to have been elected under the Employee
Retirement Plan of The Coca-Cola Company or The Coca-Cola Company Thrift Plan.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.5 "Common Stock" shall mean common stock of The Coca-Cola
Company.
2.6 "Company" shall mean The Coca-Cola Company.
2.7 "Early Retirement Age" shall mean the first to occur of (1) a
Participant's age when he has both attained his fifty-fifth (but not his
sixty-fifth) birthday and completed at least ten years of service or (2) age 60
with the approval of the Employer.
2.8 "Effective Date" shall mean January 1, 1984.
2.9 "Employee" shall mean any person who is currently employed by
an Employer.
2
<PAGE> 6
2.10 "Market Price" shall mean the closing price per share of
Company common stock as reported on the New York Stock Exchange Composite
Transactions listing.
2.11 "Participant" shall mean an Employee or former Employee of an
Employer who is eligible to receive benefits provided by the Plan.
2.12 "Pension Benefit" shall mean the benefit described in Section
5.1.
2.13 "Plan" shall mean The Coca-Cola Company Supplemental Benefit
Plan , as amended from time to time.
2.14 "Plan Year" shall mean the calendar year.
2.15 "Qualified Pension Plan" shall mean the Employee Retirement
Plan of The Coca-Cola Company or any other defined benefit pension plan
maintained by the Employer, as amended from time to time.
2.16 "Thrift Benefit" shall mean the benefit described in Section
5.4.
2.17 "Thrift Plan" shall mean The Coca-Cola Company Thrift Plan or
any other defined contribution plan maintained by the Employer, as amended from
time to time.
Where the context requires, the definitions of all terms set forth in
the Qualified Pension Plan and the Thrift Plan shall apply with equal force and
effect for purposes of interpretation and administration of the Plan, unless
said terms are otherwise specifically defined in the Plan. The masculine
pronoun shall be construed to include the feminine pronoun and the singular
shall include the plural, where the context so requires.
3
<PAGE> 7
ARTICLE IV. ELIGIBILITY
4.1 Eligibility for Participation. All salaried employees of the
Employer (a) whose benefits under the Employee Retirement Plan of The Coca-Cola
Company are limited by the limitations set forth in Sections 401(a)(17) and 415
of the Code, or (b) for whom contributions by the Employer to the Thrift Plan
are limited by the limitations set forth in Sections 401(a)(17), 401(k),
401(m), 402(g), and 415 of the Code, shall be eligible to participate in the
Plan. Upon becoming a Participant, an Employee shall be deemed to have
assented to the Plan and to any amendments hereafter adopted.
4.2 Date of Participation. Each Employee who is eligible to
become a Participant under Section 4.1 shall become a Participant on the later
to occur of (a) January 1, 1984 or (b) the first day of the month coincident
with or next following the date he meets the eligibility requirements.
4.3 Duration of Participation. An executive who becomes a
Participant shall continue to be a Participant until the termination of
employment with the Employer or the date he is no longer entitled to benefits
under this Plan.
ARTICLE V. BENEFITS
5.1 Pension Benefit.
(a) If a Participant has Benefit Service with respect to
the Qualified Pension Plan of his Employer, he shall be entitled to a Pension
Benefit equal to that portion of his Retirement Income under the Qualified
Pension Plan of the Employer which is not payable under such Qualified Pension
Plan as result of the limitations imposed by Sections 401(a)(17), 415(b), and
415(e) of the Code.
4
<PAGE> 8
(b) To the extent that a Participant's Retirement Income
under a Qualified Pension Plan is recalculated as a result of an amendment to
such Qualified Pension Plan in order to increase the amount of his Retirement
Income, the Participant's Pension Benefit shall also be recalculated in order
to properly reflect such increase in determining payments of the Participant's
Pension Benefit made on or after the effective date of such increase.
(c) For purposes of this Section 5.1, the Pension Benefit
of a Participant shall be calculated based on the participant's compensation
that is considered under the Employee Retirement Plan of The Coca-Cola Company
in calculating his Retirement Income, without regard to the limitation of
Section 401(a)(17) of the code.
(d) Any benefit payable pursuant to this Section 5.1
shall be adjusted in accordance with new limitations, if any, established by
the Internal Revenue Service on payments that may be made from the Qualified
Pension Plan.
5.2 Distribution of Pension Benefit
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Qualified Pension Plan. The Beneficiary of a Participant's
Pension Benefit shall be the same as the beneficiary of the Participant's
Retirement Income under the Qualified Pension Plan unless the Participant
designates otherwise. Such designation is subject to the approval of the
Committee.
5
<PAGE> 9
(b) Pre-Retirement Survivor's Benefit. If a Participant dies
while employed by the Employer and his Beneficiary is eligible for the
pre-retirement Survivor's Benefit under the Qualified Pension Plan, his
Beneficiary shall be entitled to receive a survivor's benefit from this Plan
calculated in the same manner and payable at the same time as the
pre-retirement Survivor's Benefit under the Qualified Pension Plan.
(c) Post-Retirement Survivor's Benefit. If a Participant dies
after benefit payments have begun, his Beneficiary shall be entitled to receive
a survivor's benefit from this Plan calculated in the same manner and payable
at the same time as the post-retirement Survivor's Benefit under the Qualified
Pension Plan.
(d) Termination of Employment. If a Participant's employment with
the Employer terminates for a reason other than death before he attains his
Early Retirement Age, no benefits will be payable from this Plan.
5.3 Funding of Pension Benefit. The Employer shall not reserve or
otherwise set aside funds for the payment of its obligations under the Plan,
and such obligations shall be paid solely from the general assets of the
Employer. The assets from which such obligations shall be paid at all times
remain subject to the claims of the creditors of the Employer.
5.4 Thrift Benefit.
(a) A Participant shall be entitled to a Thrift Benefit which is
determined under this Section 5.4. An Account shall be established for the
Participant by the Employer, as of his initial Plan Year of participation in
the Plan. Each Plan Year such Account shall be credited with hypothetical
contributions equal to the amount that the Employer is prohibited from
contributing to the Thrift Plan on behalf of the Participant as a result of the
limitations imposed by Sections 401(a)(17), 401(k), 401(m), 402(g), 415(c), and
415(e) of the Code.
6
<PAGE> 10
(b) For purposes of this Section 5.4, the Thrift Benefit of a
Participant shall be calculated based on the Participant's compensation that
would have been considered in calculating allocations to his accounts under the
Thrift Plan, without regard to the limitations of Section 401(a)(17) or Section
402(g) of the Code.
(c) All amounts so credited to the Account of the Participant
shall be deemed to be invested in the Company Stock Fund at the same time and
at the same share cost that such amounts would have been so invested if they
had been contributed by the Employer to the Thrift Plan. In addition, such
Account shall be credited with such additional hypothetical shares as could be
purchased with the dividends which would have been payable if the credited
shares had been outstanding.
5.5 Distribution of Thrift Benefit.
(a) Distribution of the total value of an Account of a
Participant may be received by the Participant when he is no longer an employee
in accordance with 5.5(b) or may be received by the Beneficiary of a deceased
Participant in accordance with 5.5(c). Distributions shall be made in the form
of lump sum cash payments, or in such other form as the Committee may approve.
Distribution of a Participant's Account shall be comprised of the cash value of
the sum of the hypothetical shares of Company Stock, if any, credited to the
Account in accordance with 5.4(c) plus the cash value of hypothetical
contributions and dividends which have accrued since the most recent Valuation
Date as defined in the Thrift Plan. The value of the hypothetical shares of
Company Stock shall be determined using the highest Market Price between the
fifteenth day of the month of termination of the Participant and the first
working day in the month following termination. A Participant or Beneficiary
who is entitled to distribution of an Account shall submit to the Employer a
written election to receive a distribution. If any benefits payable to, or on
behalf of, a Participant are not claimed for a period of
7
<PAGE> 11
seven years from the date of entitlement as determined by the Committee, the
Participant, or other potential payee, shall be presumed dead and the value of
the value of the Account shall revert to the Company. Notwithstanding any
provision to the contrary, no distribution shall occur unless the Participant
has filed a written claim with the Committee within one year after the date on
which the Participant's employment with the Employer is terminated.
(b) A Participant shall elect to receive distribution of
the total value of his Account upon his resignation, discharge, or retirement
and may elect to receive such a distribution upon his permanent and total
disability as determined by the Committee. In the event that a Participant
resumes his employment prior to the distribution of the value of his Account,
the distribution shall not be made, and no subsequent distribution shall be
made until the reemployed Participant again resigns, is discharged or retires.
The amounts to which a Participant may become entitled under this Section
5.5(b) shall be distributed to him as a single payment.
(c) Upon the death of a Participant, the total value of
his Account shall be paid to his designated Beneficiary or Beneficiaries. If
there is no surviving Beneficiary, the value will be disposed of as designated
by the will of a Participant, or by the intestate statute applicable. The
Beneficiary shall be the beneficiary elected or deemed to have been elected by
the Participant under The Coca-Cola Company Thrift Plan unless the Participant
designates otherwise. Such designation is subject to the approval of the
Committee.
(d) The Committee in its sole discretion upon application
made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by the Social Security Administration), to
extend or otherwise make payments in a manner different from the manner in
which such payment would be made under the method of distribution elected by
8
<PAGE> 12
the Participant in the absence of such determination.
5.6 Pension Benefit Upon Change in Control. In the event of a
Change in Control, as defined in Section 5.6 (a), while this provision remains
in effect, no amendment will thereafter be made to this Section for a period of
at least two consecutive years following the date when the Change in Control
occurs. The enhancement of benefits described in this Section is conditional
upon this Section remaining in effect until a Change in Control occurs, and is
not part of any Participant's Accrued Benefit as defined in the Qualified
Pension Plan.
(a) Definition of Change in Control. For purposes of this
Section, a Change in Control means any change required to be reported
in Item 6(e) of Schedule 14A of Regulation 14A issued under the
Securities Exchange Act of 1934 (the Exchange Act) as in effect on
November 15, 1988. A Change in Control will be considered to have
occurred under any of the following circumstances.
(1) Any person (within the meaning of Exchange Act Sections 13(d)
and 14(d)(2)) becomes the beneficial owner (within the meaning
of Exchange Act Rule 13d-3), directly or indirectly, of
securities representing 20 percent or more of the combined
voting power for election of directors of the then outstanding
securities of the Company or any successor of the Company;
(2) during any period of two consecutive years or less,
individuals who at the beginning of such period constituted
the Board of Directors of the Company cease, for any reason,
to constitute at least a majority of the Board of Directors,
unless the election or nomination for election of each new
Director was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the
beginning of the period;
9
<PAGE> 13
(3) The Company's shareholders approve any merger or consolidation
as a result of which its stock is or will be changed,
converted or exchanged (other than a merger with a
wholly-owned Subsidiary of the Company), or any liquidation of
the Company, or any sale or other disposition of 50 percent or
more of the assets or earning power of the Company; or
(4) the Company's shareholders approve any merger or consolidation
to which the Company is a party, and as a result of which the
persons who were Company shareholders immediately before the
effective date of the merger or consolidation have or will
have beneficial ownership of less than 50 percent of the
combined voting power for election of Directors of the
surviving corporation following the effective date of such
merger or consolidation; provided, however, that no Change in
Control will be considered to have occurred if, before the
time when a Change in Control would otherwise be considered to
have occurred, the Board of Directors determines otherwise.
(b) Coverage Upon Change in Control. If there is a Change in Control,
each Participant described in the first sentence of Section 3.1 shall
be covered by the special rules set forth in this Section 5.6(a) and
shall be referred to as a "Covered Participant."
(c) Provisions Which Will Become Effective in the Event of a Change in
Control. If any Participant's Employment terminates for any reason
whatsoever during the two-consecutive-year period which begins on the
date when a Change in Control occurs, the Change of Control provisions
in the Qualified Pension Plan will apply to the calculation of his
Pension Benefit under this Plan.
10
<PAGE> 14
5.7 Thrift Benefit Upon Change in Control. The Participant's
Thrift Benefit plus an adjustment for his payroll tax withholding will become
payable, regardless of his age or the number of his Years of Service, if his
Employment terminates because of a Change in Control.
11
<PAGE> 15
Article VI. Forfeitability
6.1 Forfeitability of Benefits. Any benefits under this Plan
which a Participant is receiving shall cease, and all rights under the Plan
shall be extinguished, if a Participant terminates employment with the Employer
and without the Employer's consent is subsequently (a) employed by or in any
manner provides services for any business organization that is in direct
competition with the Employer or (b) personally engages in direct competition
with the Employer. If a court of competent jurisdiction finds that the
restrictions provided for in (a) and (b) are unenforceable, then such benefits
shall be forfeited if a participant competes either as an employee or directly
in the widest geographical area and for the longest period of time that are
legally enforceable. Further, all rights under the Plan shall be extinguished
and forfeited if a Participant terminates employment with the Employer prior to
his Early Retirement Age for any reason other than death, unless otherwise
expressly provided in writing by the Compensation Committee of the Board of
Directors.
12
<PAGE> 16
ARTICLE VII. ADMINISTRATION
7.1 Plan Administrator. The Company shall be the Plan
Administrator and shall have all of the powers and responsibilities of that
office as described in ERISA, which powers and duties shall be delegated to the
extent provided in this Article VII.
7.2 Supplemental Benefit Plan Committee. The Company's Chief
Executive Officer (CEO) shall appoint a Committee of at least five members, who
may or may not be officers or employees of the Company or a Subsidiary. Each
Committee member shall serve at the pleasure of the CEO. Any member may resign
by submitting a written resignation to the CEO. The CEO shall appoint a
successor member to fill each vacancy on the Committee.
(a) Actions. The CEO shall designate a Committee member as the chairman
to preside at each meeting. In the event of the chairman's absence at
any meeting, the members present shall select one of their members to
serve as acting chairman. The Committee shall appoint a secretary,
who may or may not be a Committee member, to keep minutes of meetings
and to perform other duties assigned by the Committee. The Committee
may appoint such other officers as it deems necessary, who may or may
not be Committee members. Each action of the Committee shall be taken
by a majority vote of all members then in office, provided that the
Committee may establish procedures for taking written votes without a
meeting. The Committee may, by a properly executed resolution,
authorize any member or officer or any other person to sign
communication and to execute documents on its behalf, and may delegate
other duties and responsibilities as it considers to be in the best
interest of the Plan.
(b) Powers. The Committee shall have primary responsibility for the
administration of the Plan, and all powers necessary to enable it to
properly perform its duties, including but not
13
<PAGE> 17
limited to the following powers and duties:
(1) The Company may adopt rules and regulations necessary for the
performance of its duties under the Plan.
(2) The Committee shall have the power to construe the Plan and to
decide all questions arising under the Plan.
(3) The Committee shall determine the eligibility of Participants
to receive benefits and the amount of benefits to which any
Participant may be entitled under the Plan.
(4) The Committee shall direct the payment of benefits from the
Company's general treasury, and shall specify the payee, the
amount and the conditions of each payment.
(5) The Committee shall prepare and distribute to the Participants
plan summaries, notices, and other information about the Plan
in such manner as it deems proper and in compliance with
applicable law.
(6) The Committee shall provide forms for use by Participants in
applying for benefits.
(7) The Committee shall appoint an enrolled actuary to make
periodic actuarial valuations of the Plan's experience and
liabilities and to prepare actuarial statements.
(8) The Committee shall retain legal counsel, accountants and such
other agents as it deems necessary to properly administer the
Plan.
(9) The Committee shall cause to be filed all reports under the
Code.
7.3 Expenses. The Company shall pay all expenses incurred by the
Committee in administering the Plan, including fees and charges of actuaries,
attorneys, accountants, and consultants.
7.4 Indemnification. The Company shall indemnify and hold
harmless the Committee and each member and each person to whom the Plan
Administrator or the Committee has delegated responsibility under this Article
VII, from all joint or several
14
<PAGE> 18
liability for their acts and omissions and for the acts and omissions of their
duly appointed agents in the administration of the Plan, except for their own
breach of fiduciary duty and willful misconduct.
7.5 Amendment or Termination of the Plan. The Committee shall
have the right to amend or to terminate the Plan at any time, provided
(1) no such amendment or termination shall be effective before the
date the Committee properly acts to adopt such amendment or to
effect such termination if such amendment or termination
adversely affects any Participant's right to a benefit which
has vested under the Plan before such date, and
(2) the Committee shall have no right whatsoever on or after the
date there is a Change in Control to amend or to terminate the
Plan if
(A) such amendment or termination is effective as
of any date before the end of the
two-consecutive-year period which begins on
the date that there is a Change in Control
and
(B) such amendment or termination affects in any
manner whatsoever the rights or benefits of,
or the provisions of the Plan which directly
or indirectly relate to, a Covered
Participant (as described in Section 5.2)
unless
(C) all such Covered Participants affirmatively
consent in writing to such amendment or
termination.
Notice of any amendment or termination under this Section 7.5 shall be given in
writing to each participant and to each surviving Beneficiary of a deceased
Participant who has an interest in the Plan.
15
<PAGE> 19
7.6 Applicable Law. The Plan shall be construed in accordance
with the laws of the State of Georgia, except to the extent such laws are
preempted by the Code.
7.7 Nonalienation. No benefits payable under the Plan shall be
subject to the claim or legal process of any creditor of any Participant or
Beneficiary, and no Participant or Beneficiary shall alienate, transfer,
anticipate, or assign any benefits under the Plan.
16
<PAGE> 20
7.8 Limitation on Rights. No person shall have any right or
interest in any portion of the Plan except as specifically provided in the
Plan.
7.9 Tax Withholding. The Employer may withhold, or require the
withholding of, from any payment which it is required to make, any federal,
state, or local taxes required by law to be withheld with respect to such
payment and such payment and such sum as the Employer may reasonably estimate
as necessary to cover any taxes for which the Employer may be liable and which
may be assessed with regard to such payment. Upon discharge or settlement of
such tax liability, the Employer shall distribute the balance of such sum, if
any, to the Participant from whose payment it was withheld, or if such
Participant is then deceased, to the beneficiary of such Participant. Prior to
making any payment hereunder, the Employer may require such documents from any
taxing authority, or may require such indemnities or surety bond as the
Employer shall reasonably deem necessary for his protection.
7.10 No Trust Created. Nothing contained in this Plan, and no
action taken pursuant to the provisions of this Plan, shall create or be
construed to create a trust or any kind of a fiduciary relationship between the
Employer of any Participant, his spouse, or any other person.
7.11 Unsecured Interest. No Participant hereunder shall have any
interest whatsoever in any specific asset of the Employer. To the extent that
any person acquires a right to receive payments under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Employer.
7.12 No Guarantee of Employment. Participation hereunder shall not
be construed as creating any contract of employment
17
<PAGE> 21
between any Employing Company and a Participant, nor shall it limit the right
of an Employing Company to suspend, terminate, alter, modify, whether or not
for cause, the employment relationship between such Employing Company and a
Participant.
* * * * * * * * * * *
IN WITNESS WHEREOF, THE COCA-COLA COMPANY has caused this instrument
to be signed, effective as of January 1, 1989, on this _____ day of
_______________, 19____.
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT
ATTEST: PLAN COMMITTEE
_______________________________ BY_________________________
SECRETARY OF THE COMMITTEE CHAIRMAN
18
<PAGE> 22
AMENDMENT NUMBER TWO
TO THE
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
The Committee for The Coca-Cola Company Supplemental Benefit Plan hereby amends
such plan as follows:
Article 5, Section 5.5(a) shall be amended by deleting in its entirety and
replacing as follows:
"5.5 Distribution of Thrift Benefit
(a) Distribution of the total value of an Account of a
Participant may be received by the Participant when he is no longer an
employee in accordance with 5.5(b) or may be received by the
Beneficiary of a deceased Participant in accordance with 5.5(c).
Distributions shall be made in the form of lump sum cash payments, or
in such other form as the Committee may approve. Distribution of a
Participant's Account shall be comprised of the cash value of the sum
of the hypothetical shares of Company Stock, if any, credited to the
Account in accordance with 5.4(c) plus the cash value of hypothetical
contributions and dividends which have accrued since the most recent
Valuation Date as defined in the Thrift Plan. The value of the
hypothetical shares of Company Stock shall be determined using the
highest Market Price between the fifteenth day of the month of
termination of the Participant and the first working day in the month
following termination."
Article 5, Section 5.6(a)(4) shall be amended to make last sentence a separate
paragraph as follows:
"No Change in Control will be considered to have occurred if,
before the time when a Change in Control would otherwise be
considered to have occurred, the Board of Directors determines
otherwise."
Article 6, Section 6.1 shall be amended by deleting and replacing the last
sentence as follows:
"Further, all rights to the Pension Benefit under the Plan
shall be extinguished and forfeited if a Participant
terminates employment with the Employer prior to his Early
Retirement Age for any reason other than death, unless
otherwise expressly provided in writing by the Compensation
Committee of the Board of Directors. Thrift Benefits are not
subject to forfeiture for termination of employment with the
Employee prior to Early Retirement Age."
<PAGE> 23
Article 7, Section 7.5 shall be amended by adding subsection (3) as follows:
"(3) Notwithstanding anything to the contrary contained in
this Article VII, with regard to any Participant who
is subject to Section 16 of the Securities Exchange
Act of 1934 or any account of any such Participant,
no amendment can be made to any Plan provision
concerning the Thrift Benefit relating to the amount
and price of any benefits hereunder the categories of
participants, the timing of any awards or the formula
determining benefits hereunder more than once every
six months, except to comport with changes in the
Internal Revenue Code, the Employee Retirement Income
Security Act, or the rules thereunder."
1
<PAGE> 24
AMENDMENT NUMBER THREE
TO THE
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
The Committee for The Coca-Cola Company Supplemental Benefit Plan
hereby amends such plan as follows:
Effective as of July 1, 1991, Article 5.7 is deleted in its entirety
and is not replaced.
<PAGE> 25
AMENDMENT NUMBER 4
TO THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
Effective as of December 31, 1993. the Supplemental Benefit Plan
Committee of The Coca-Cola Company Supplemental Benefit Plan (the "Plan")
hereby amends the Plan as follows:
1. Section 5.1 of the Plan is hereby amended by adding the
following new subsection (e) immediately following the end thereof:
"(e) Any benefit payable pursuant to this Section
5.1 shall be offset by the monthly benefit, if any, payable to a
Participant under The Coca-Cola Company Key Executive Retirement
Plan."
2. Subsection (d) of Section 5.2 of the Plan is hereby amended by
deleting said subsection and substituting the following in lieu
thereof:
"(d) Termination of Employment. Except as provided
in Section 6.1(b)(2), if a Participant's employment with the Employer
terminates for a reason other than death before he attains his Early
Retirement Age, no Pension Benefit will be payable from this Plan."
3. Section 6.1 of the Plan is hereby amended by deleting said
section and substituting the following in lieu thereof:
"6.1 Forfeitability of Benefits.
(a) Non-Competition. Any benefits under this Plan
which a Participant is receiving shall cease,
and all rights under the Plan shall be
extinguished, if a Participant terminates
employment with the Employer and without the
Employer's consent is subsequently (i)
employed by or in any manner provides
services for any business organization that
is in direct competition with the Employer,
or (ii) personally engages in direct
competition with the Employer. if a court of
competent jurisdiction finds that the
restrictions provided for in (i) and (ii) are
unenforceable, then such benefits shall be
forfeited if a Participant competes either as
an employee or directly in the widest
geographical area and for the longest period
of time that are legally enforceable.
<PAGE> 26
(b) Early Retirement Age
(1) General Rule. Except as provided in
subsection (b)(2) of this Section 6.1, all rights to the
Pension Benefit under the Plan shall be extinguished and
forfeited if a Participant terminates employment with the
Employer prior to his Early Retirement Age for any reason
other than death, unless otherwise expressly provided in
writing by the Compensation Committee of the Board of
Directors. Thrift Benefits are not subject to forfeiture for
termination of employment with the Employer prior to Early
Retirement Age.
(2) Exception for Participants on
December 31.1993. Notwithstanding anything in the Plan to the
contrary, each Employee who is a Participant in the Plan as of
December 31,1993 shall be deemed vested in the portion of his
Pension Benefit, if any, calculated as of December 31,1993
(based on his compensation and years of benefit service as of
such date and assuming that he is vested under the Qualified
Pension Plan of the Employer), and such benefit under the Plan
shall not be subject to forfeiture under Section 5.2(d) or
Section 6.1 (b)(1) hereof. If the Participant terminates
employment with the Employer before attaining his Early
Retirement Age, such vested benefit shall be payable in
monthly increments on the first day of the month concurrently
and in the same manner as the Participant's Retirement Income
under the Qualified Pension Plan, or if no Retirement Income
is payable, then in monthly increments commencing on the first
day of the month following the date the Participant attains
Early Retirement Age. Such monthly benefit shall be reduced,
using the same reduction factors as are in use under the
Qualified Pension Plan for a vested terminated participant,
for each month by which the Participant's first payment under
this Plan precedes the first day of the month on or after the
Participant attains age 65."
<PAGE> 1
EXHIBIT 10.20
DEFERRED COMPENSATION AGREEMENT
FOR OFFICERS OR KEY EXECUTIVES
OF THE COCA-COLA COMPANY
THIS AGREEMENT, made and entered into this ____ day of
_______________, 199__, by and between The Coca-Cola Company, a Delaware
corporation (the "Company") and ___________________ of _____________,
____________ (the "Executive").
WHEREAS, the Company and the Executive desire to enter into a deferred
compensation agreement (the "Agreement"), effective _________ __, 199__;
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Deferral. Effective __________________, the Company will
credit _______ Dollars ($____________) per month of the Executive's salary to
a deferred account (the "Deferred Account") pursuant to this Agreement and will
reduce the amount of the Executive's salary currently paid to him in such month
by the amount of such credit. The Deferred Account will be subject to the
following terms and conditions:
(a) Beginning _________ ___, 19__ and at the end of every
calendar quarter thereafter (and, upon payment in accordance with
subparagraph 1(b) hereof) so long as there is a balance in the
Deferred Account, the Company will credit to the Deferred Account an
additional amount equal to the average daily balance of the Deferred
Account during such calendar quarter (or, in the event of payment
under subparagraph 1(b) hereof, the average daily balance of the
Deferred Account during the period commencing on the first day of the
calendar quarter during which such payment is made and ending on the
date of such payment) times a percentage rate equal to the Applicable
Federal Rate (as defined in regulations promulgated under Section 14
of the Securities Exchange Act of 1934) plus __ basis points times a
fraction, the numerator of which is the number of days which have
elapsed since the end of the immediately preceding calendar quarter
and the denominator of which is 365.
(b) Within sixty (60) days of Executive's death,
disability (within the meaning of Section 22(e) of the
<PAGE> 2
Internal Revenue Code of 1986, as amended) or on April 1 of the year
following the Executive's retirement, the entire amount of the
Deferred Account, including additional amounts credited thereto in
accordance with subparagraph 1(a) hereof, will be paid to Executive or
to such other person or persons as shall have been designated pursuant
to paragraph 2 of this Agreement.
2. Designation of Beneficiary. Any and all payments which may
fall due hereunder after the death of the Executive shall be paid to such
person or persons as shall have been designated in writing by the Executive
prior to the time of his death, provided that such designation has been filed
with the Office of the Secretary of the Company. In the event the Executive
should fail to make such designation, then any and all such payments shall be
made to the personal representative of the Executive. The receipt of any
person who has furnished the Company with evidence of his or her authority to
receive payments under this paragraph shall be a full and complete release to
the Company of all obligations in respect to such payments.
3. Assignment. The right of the Executive or any other person to
the payment of benefits under this Agreement shall not be assigned,
transferred, pledged or encumbered except by will or by the laws of descent and
distribution. Neither the Executive nor his estate shall under any
circumstances have any option or right to require payments hereunder otherwise
than in accordance with the terms hereof and after the terms and conditions
herein expressed have been met.
4. Segregation of Assets. The establishment of the Deferred
Account on the books of the Company and the maintenance of the Deferred Account
in accordance with the provisions of this Agreement shall not require the
Company to set aside or segregate any of its assets, and the Executive's
position shall be that of a general creditor.
5. Termination. The Executive may terminate this Agreement as to
future deferrals by delivering written notice to the Secretary of the Company
prior to the beginning of the calendar quarter in which such deferrals shall
cease; however, past deferrals and the election to make such deferrals prior to
the beginning of such quarter shall be irrevocable and amounts so deferred can
be paid out only in accordance with paragraph 1 hereof.
6. Waiver. All waivers must be in writing, and the waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
2
<PAGE> 3
7. Severability. If any term, covenant or condition of this
Agreement or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or the
application of such terms, covenants and conditions to persons or
circumstances, other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.
8. Governing Law. This Agreement shall be interpreted, construed
and governed according to the laws of the State of Georgia.
IN WITNESS WHEREOF, the Company has hereunto caused this Agreement to
be executed and sealed by its duly authorized officer, and the Executive has
hereunto set his hand and seal, all being done in duplicate originals with one
original being delivered to each party on the day and year first above written.
THE COCA-COLA COMPANY
By: _________________________________
Title: ______________________________
[Corporate Seal]
Attest:
_______________________________
Secretary
_______________________________(SEAL)
Executive
3
<PAGE> 1
EXHIBIT 10.21
LONG TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
Section 1. Purpose
The purpose of the Long Term Performance Incentive Plan of The
Coca-Cola Company (the "Plan") is to advance the interests of The Coca-Cola
Company (the "Company") by providing a competitive level of incentive for
eligible senior executives which will encourage them to more closely identify
with share-owner interests and to achieve financial results consistent with the
Company's long range business plans. It will also provide a vehicle to attract
and retain key executives who are responsible for moving the business forward.
Section 2. Administration
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company or a subcommittee thereof (the "Committee")
consisting of not less than two members of the Board of Directors. The
Committee shall determine which of the eligible key employees of the Company
and its Affiliates (as hereinafter defined) to whom, and the time or times at
which, Long Term Incentive Awards will be granted under the Plan, and the other
conditions of the grant of the Long Term Incentive Awards. The provisions and
conditions of the grants of Long Term Incentive Awards need not be the same
with respect to each grantee or with respect to each Long Term Incentive Award.
The Committee shall, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and shall make determinations and shall take such
other action in connection with or in relation to accomplishing the objectives
of the Plan as it deems necessary or advisable. Each determination or other
action made or taken pursuant to the Plan, including interpretation of the Plan
and the specific conditions and provisions of the Long Term Incentive Awards
granted hereunder by the Committee shall be final and conclusive for all
purposes and upon all persons including, but without limitation, the Company,
its Affiliates, the Committee, the Board, officers and the affected employees
of the Company and/or its Affiliates and their respective successors in
interest.
<PAGE> 2
Section 3. Eligibility
The Chief Executive Officer, the President (if any), each executive
officer and up to five additional senior officers of the Company ("Eligible
Officers") shall be eligible to participate in the Plan, but no individual
shall have a right to participate. Long Term Incentive Awards may be granted
to such Eligible Officers of the Company and its Affiliates as determined in
the sole discretion of the Committee. The term "Affiliates" shall mean any
corporation or business organization in which the Company owns, directly or
indirectly, twenty-five percent or more of the voting stock or capital during
the time to which the granting of the Long Term Incentive Award applies.
Section 4. Grants of Long Term Incentive Awards
(a) Annual Selection by the Committee of Participants. Annually,
participants shall be selected prior to or shortly after the beginning of a
three-year performance period ("Performance Period") in accordance with Section
162(m) of the Internal Revenue Code of 1986 (the "Code"). Following such
selection by the Committee, the Chief Executive Officer shall advise such
Eligible Officers that they are participants in the Plan for a Performance
Period. Each Performance Period will be of three years duration and shall
commence on the first day of January of the applicable year. A new three-year
Performance Period shall commence each year.
(b) Calculation of Performance Incentive Base. Annually, the
Committee shall calculate the participant's Performance Incentive Base for the
Performance Period then beginning. The Performance Incentive Base shall be the
participant's salary grade midpoint at the time of notification, times a
percentage predicated upon the participant's relative responsibility level
within the Company. The percentage will be progressively higher for
correspondingly higher levels of responsibility within the Company. Once the
Performance Incentive Base (i.e., the employee's salary grade midpoint and the
applicable percentage) is determined at the commencement of each Performance
Period, that Performance Incentive Base will not change for that Performance
Period.
Section 5. Performance Criterion
The measures of performance are objective and shall be based on two
criteria measured annually over the three-year Performance Period. The
criteria are (i) the Company's compounded average annual "growth in Unit Case
Sales" over the Performance Period and (ii) the compounded annual "growth in
Economic Profit" over the Performance Period.
- 2 -
<PAGE> 3
(a) Growth in Unit Case Sales. The annual compound "growth in
Unit Case Sales" shall mean the growth in the number of cases of 24 8 oz.
(U.S.) servings sold during a year compared to the number sold in the previous
year, as determined by the Controller.
(b) Growth in Economic Profit. "Growth in Economic Profit" for
each calendar year shall be determined in accordance with the definition of
Economic Profit in Accountant-in-Charge Memorandum Number 1987-10, as issued
and updated from time to time by the Corporate Controller's Group of the
Company and as in effect as of the beginning of each Performance Period.
Growth in Economic Profit is generally defined as growth in net operating
profit after taxes less a capital charge, where the capital charge is computed
by multiplying average operating capital invested by the weighted average cost
of capital.
Section 6. Award Determination
Awards will be determined after the close of each Performance Period
from an award matrix, based upon the two performance criteria, which matrix
shall be adopted by the Committee at the inception of each Performance Period.
The amount of an Award will equal the product of the Participant's Performance
Incentive Base and the percentage derived from the award matrix. In no event
shall an Award to a participant for any Performance Period exceed the amount of
$3,500,000, excluding interest on any Contingent Award or Vested Cash Award
deferred in accordance with Section 7(d). The Committee may, in its sole
discretion, reduce the amount of any Award or refuse to pay any Award.
Section 7. Payment of Awards
(a) Conditions to Payment of Awards. Prior to the payment of any
Award, the Committee shall certify the appropriate level of growth in Unit Case
Sales and Economic Profit to be used in determining the amount of such Award.
In addition, no Award shall be payable pursuant to this Plan until share owner
approval of the Plan (within the meaning of Code Section 162(m)) has been
received.
(b) Awards. Awards shall be paid in cash.
(c) The Vested Cash Award. One-half of the Award will be paid in
cash to each participant within sixty days after the date on which the
Committee certifies the criteria and makes the Award (the "Vested Cash Award").
The second half of the Award is
- 3 -
<PAGE> 4
referred to herein as the "Contingent Award", and it shall be paid to each
participant in the manner described in (e) below.
(d) Deferral of Vested Cash Awards. All Vested Cash Awards shall
be paid in cash at the time prescribed in subparagraph (c) above, unless the
Committee has received and approved, in its sole discretion, prior to the grant
of such Award, a request to defer payment. If such request to defer is
approved by the Committee, the participant may elect to receive deferred
payments of the Vested Cash Award from among the following options. Such
election shall be made at the time the request to defer is made.
(i) Full cash payment at a date not less than one year
from the date of the Vested Cash Award, nor more than one year after
the date of retirement,
(ii) Equal annual installments over a period not to exceed
fifteen years, commencing not less than one year from the date of the
Vested Cash Award, or
(iii) Upon retirement.
Any amounts deferred shall bear interest from the date a Vested Cash Award is
granted to the date of payment, such interest to be calculated pursuant to
rules promulgated by the Committee, but in no event shall constitute interest
which is "above-market" as set forth in Item 402 of Regulation S-K promulgated
by the Securities and Exchange Commission. Notwithstanding any election to
defer an Award as provided above, in the event of a participant's death, all
amounts elected to be deferred shall be paid in full to the executor or
administrator of a participant's estate within a reasonable time after notice
to the Committee of such participant's death.
(e) Payment and Forfeiture of Contingent Award. The Contingent
Award, plus interest thereon in accordance with the formula referred to in
Section 7(d) from the date of such Contingent Award as determined by the
Committee, shall be paid in cash to each participant within sixty days after
the expiration of the second year following the end of the final year of the
related Performance Period, provided that such Contingent Award has not been
forfeited as set forth in the following sentence. The Contingent Award shall
be forfeited to the Company (unless the Committee in its sole discretion shall
otherwise determine) if, within two years from the date the Contingent Award is
granted, the participant terminates his or her employment with the Company (for
reasons other than death, retirement or disability as such disability may be
determined by the Committee).
- 4 -
<PAGE> 5
(f) Retirement, Death or Disability During Forfeiture Period. If,
within two years after the end of a Performance Period for which a participant
receives a Contingent Award, the participant retires, dies or becomes disabled,
such participant (or his or her estate) shall be paid the full Contingent
Award.
(g) Deferral of Contingent Award. The participant may elect to
defer receipt of the Contingent Award at the same time and in the same manner
as provided with respect to the Vested Cash Award in subparagraph (d) above.
(h) Withholding for Taxes. The Company shall have the right to
deduct from all Long Term Incentive Award payments any taxes required to be
withheld with respect to such payments.
(i) Payments to Estates. Long Term Incentive Awards and earnings
thereon, if any, to the extent that they are due to a participant pursuant to
the provisions hereof and which remain unpaid at the time of the participant's
death, shall be paid in full to the executor or administrator of the
participant's estate.
Section 8. Termination of Employment During any Performance Period
(a) Termination for Reasons Other Than Retirement, Death or
Disability. If the participant's employment by the Company or an Affiliate
terminates for any reason (other than retirement, death or disability) during
any Performance Period, that participant shall not be entitled to any Long Term
Incentive Award for that Performance Period but may receive a pro-rated portion
of the Long Term Incentive Award calculated in accordance with Section 8(b)
below if the Committee so determines in its discretion.
(b) Death, Disability or Retirement During Performance Period. If
a participant retires, dies or becomes disabled during any Performance Period,
the amount of the Long Term Incentive Award shall be calculated as provided in
Sections 4, 5 and 6 as if the Performance Period ended on the last day of the
year in which the participant retired, died or became disabled. Such Long Term
Incentive Award will then be paid all in cash within sixty days after the date
on which the independent public accountants of the Company issue their report
on the financial statements of the Company for the last year of the Performance
Period. The amount of the Long Term Incentive Award will be prorated by a
fraction, the numerator of which shall be the number of whole calendar months
in the period commencing with the first month of the Performance Period and
ending with the whole calendar month immediately preceding the date of
retirement,
- 5 -
<PAGE> 6
death or disability, and the denominator of which will be thirty-six.
Section 9. Amendments, Modification and Termination of the Plan
The Board or the Committee may terminate the Plan, in whole or in
part, may suspend the Plan, in whole or in part from time to time, and may
amend the Plan from time to time, including the adoption of amendments deemed
necessary or desirable to correct any defect or supply an omission or reconcile
any inconsistency in the Plan or in any Long Term Incentive Award granted
hereunder so long as share owner approval has been obtained if required by Code
Section 162(m). No amendment, termination or modification of the Plan may in
any manner affect Long Term Incentive Awards theretofore granted without the
consent of the participant unless the Committee has made a determination that
an amendment or modification is in the best interest of all persons to whom
Long Term Incentive Awards have theretofore been granted, but in no event may
such amendment or modification result in an increase in the amount of
compensation payable pursuant to such award.
Section 10. Governing Law
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
Section 11. Effect on Benefit Plans
Awards will be included in the computation of benefits under the
Employees' Retirement Plan, Overseas Retirement Plan and other retirement plans
maintained by the Company under which the Participant may be covered and the
Thrift Plan, subject to all applicable laws and in accordance with the
provisions of those plans.
Awards shall not be included in the computation of benefits under any
Group Life Insurance Plan, Travel Accident Insurance Plan, Personal Accident
Insurance Plan or under Company policies such as severance pay and payment for
accrued vacation, unless required by applicable laws.
Section 12. Change in Control
If there is a Change in Control (as hereinafter defined) while the
Plan remains in effect, then
(a) each participant's Award accrued through the date of
such Change in Control for each Performance Period
- 6 -
<PAGE> 7
then in effect automatically shall become nonforfeitable on
such date,
(b) the Committee immediately after the date of such
Change in Control shall determine each participant's Award
accrued through the end of the calendar month which
immediately precedes the date of such Change in Control, and
such determination shall be made based on a formula
established by the Committee which computes such Award using
(1) actual performance data for each full Plan Year in each
Performance Period for which such data is available and (2)
projected data for each other Plan Year, which projection
shall be based on a comparison (for the Plan Year which
includes the Change in Control) of the actual performance
versus budgeted performance for compound unit case sales
growth for the full calendar months (in such Plan Year) which
immediately precede the Change in Control and the actual
performance versus budget performance for the compound growth
in Economic Profit for such period multiplied by (3) a
fraction, the numerator of which shall be the number of full
calendar months in each such Performance Period before the
date of the Change in Control and the denominator of which
shall be thirty-six,
(c) each participant's accrued Award (as determined under
Section 12(b) and his then unpaid Vested Cash Award and
Contingent Award(s) under Section 7 (computed with interest at
the weighted prime rate at Trust Company Bank, Atlanta,
Georgia, accrued on such awards under Section 7 through the
date of such Change in Control but in no event constituting an
"above-market" rate of interest as set forth in Item 402 of
Regulation S-K promulgated by the Securities and Exchange
Commission) shall be paid to him in a lump sum in cash
promptly after the date of such Change in Control in lieu of
any other additional payments under the Plan for the related
Performance Periods, and
(d) any federal golden parachute payment excise tax paid
or payable under Section 4999 of the Code, or any successor to
such Section, by a participant for his taxable year for which
he reports the payment made under Section 12(c) on his federal
income tax return shall be deemed attributable to such payment
under Section 12(c), and the Company promptly on written
demand from the participant (or, if he is dead, from his
estate) shall pay to him (or, if he is dead, to his estate) an
amount equal to such excise tax.
- 7 -
<PAGE> 8
A "Change in Control" for purposes of this Section 12 shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for election of directors
of the then outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or less, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease, for any reason, to constitute at least a majority of the Board
of Directors, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; (iii) the
share owners of the Company approve any merger or consolidation as a result of
which its stock shall be changed, converted or exchanged (other than a merger
with a wholly-owned subsidiary of the Company) or any liquidation of the
Company or any sale or other disposition of 50% or more of the assets or
earning power of the Company; or (iv) the share owners of the Company approve
any merger or consolidation to which the Company is a party as a result of
which the persons who were share owners of the Company immediately prior to the
effective date of the merger or consolidation shall have beneficial ownership
of less than 50% of the combined voting power for election of directors of the
surviving corporation following the effective date of such merger or
consolidation; provided, however, that no Change in Control shall be deemed to
have occurred if, prior to such time as a Change in Control would otherwise be
deemed to have occurred, the Board of Directors determines otherwise.
- 8 -
<PAGE> 1
EXHIBIT 10.22
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
I. Plan Objective
The purpose of the Executive Performance Incentive Plan of The
Coca-Cola Company is to promote the interests of The Coca-Cola Company by
providing additional incentive for participating executive officers who
contribute to the improvement of operating results of the Company and to reward
outstanding performance on the part of those individuals whose decisions and
actions most significantly affect the growth and profitability and efficient
operation of the Company.
II. Definitions
The terms used herein will have the following meanings:
a. "Plan" means this Executive Performance Incentive
Plan of The Coca-Cola Company.
b. "Code" means the Internal Revenue Code of 1986, as
amended.
c. "Company" means The Coca-Cola Company and any
corporation or other business organization in which the
Company owns, directly or indirectly, at least 25 percent of
the voting stock or capital.
d. "Board of Directors" means the Board of Directors of
the Company.
e. "Committee" means the Compensation Committee of the
Board of Directors or a subcommittee thereof consisting of not
less than two members of the Board of Directors.
f. "Opportunity" shall have the meaning set forth in
Section V(a) hereof.
g. "Award" means an award, with adjustments (if any),
paid pursuant to the provisions of the Plan.
h. "Plan Year" means the 12 month period beginning
January 1 and ending December 31.
<PAGE> 2
i. "Participant" means an executive officer who is
selected for participation by the Committee.
III. Administration of the Plan
The Committee will have full power and authority to interpret and
administer the Plan in accordance with the rules and determinations adopted by
it.
IV. Eligibility
Eligibility for participation in the Plan is limited to executive
officers who are selected in the sole discretion of the Committee. No person
is automatically entitled to participate in the Plan in any Plan Year. Any
person who is a Participant for a particular Plan Year shall be ineligible to
participate in the Annual Performance Incentive Plan of the Company for such
Plan Year.
The fact that an executive officer is eligible to participate in the
Plan in one Plan Year does not assure that such executive officer will be
eligible to participate in any subsequent year. The fact that an executive
officer participates in the Plan for any Plan Year does not mean that the
executive officer will receive an Award in any Plan Year.
The Committee will determine an executive officer's participation in
the Plan prior to the time when substantial services relating to the Plan Year
are rendered.
V. Determination of Goals
a. For each Plan Year, the Committee shall determine a dollar
amount for each Participant which shall represent a percentage of the
Participant's annual salary and level of responsibility (the "Opportunity").
The Opportunity cannot be increased for the plan year. The Committee shall
also, at the time the Opportunity is determined, construct a matrix in which
one axis shall consist of volume growth as compared to budget and the other
axis shall consist of operating profit growth as compared to budget for each
operating unit. These factors are given approximate equal weight. The
Committee shall construct a matrix pairing volume growth, although the actual
targets for performance may vary, for each of (i) the Company as a whole, (ii)
the North America Business Sector, and (iii) the International Business Sector,
in each case, with earnings per share gain. For each matrix, the intersection
of axes on each matrix shall be a percentage which shall be multiplied against
the Opportunity.
- 2 -
<PAGE> 3
After completion of the Plan Year, volume growth, operating profit and
earnings per share shall be calculated for the Company, operating units and
business sectors as required, and applied to the appropriate grids. The
resulting percentage shall then be multiplied against the Opportunity. The
resulting dollar amount shall be further adjusted by increasing the result by
5% if share of carbonated soft drink sales (as defined by the Committee)
increased for the business unit covered by the grid by at least 1% and
decreased by 5% if such share decreased by at least 1% of the prior share.
For the Chief Executive Officer, the President (if any) and other
executive officers with staff functions, the above-described calculations
shall be performed only on the grid relating to the Company's consolidated
results. For the executive officers having responsibility for the Company's
North America Business Sector and the International Business Sector, the Award
shall be determined 30% by the above calculation performed on the Company's
consolidated results and 70% based on the results of the matrix for the North
America Business Sector and the International Business Sector, respectively.
For an executive officer who heads an operating unit, his award shall be based
20% of the above calculation performed on the matrix for the Company's
consolidated results and 80% based on the matrix for the operating unit's
results.
b. Attainment of performance goals for a particular Plan Year
shall be certified by the Committee and Awards will be paid for such Plan Year
at such time following the end of the Plan Year as shall be determined by the
Committee.
VI. Limitation on Awards
No Award for any Plan Year to a Participant shall exceed $3,000,000.
VII. Method of Payment of Awards
All Awards shall be paid in cash within 60 days of the certification
of performance goals and the resulting determination of the Award unless the
Committee has, prior to the grant of an Award, received and approved, in its
sole discretion, a request by a Participant to defer receipt of any Award in
accordance with the following options:
a. An option to receive full cash payment at a date,
specified in the request, not less than one year from
the date of the Award nor more than one year after
the Participant's date of retirement; or
- 3 -
<PAGE> 4
b. An option to receive the Award in equal annual
installments over a period, specified in the request,
of not more than 15 years, such period commencing not
less than one year from the date of the Award nor
more than one year after the Participant's date of
retirement.
Any request to defer receipt of an Award shall specify the particular
option chosen. Any amount deferred in accordance with the above options shall
bear interest at the prime rate of Trust Company Bank as in effect from time to
time from the date on which Awards which have not been deferred in accordance
with this Section VII are paid to the date of payment, but interest shall in no
case constitute interest which is "above-market" as set forth in Item 402 of
Regulation S-K promulgated by the Securities and Exchange Commission.
The Company has the right to deduct from any payment, in whole or in
part, of an Award, any taxes required to be withheld with respect to such
payment.
An employee who is selected as a Participant after the beginning of a
Plan Year or a Participant who retires, is granted a leave of absence or whose
employment is otherwise terminated prior to the end of such Plan Year shall
have his Award pro-rated to reflect his actual term of service. The Committee,
in its sole discretion, may reduce or refuse to pay such pro-rated Award.
Awards and interest thereon, if any, which are due to a Participant
and which remain unpaid at the time of his or her death shall be paid in full
to the executor or administrator of such Participant's estate within 90 days
from the date of the Participant's death.
VIII. Effect on Benefit Plans
Awards will be included in the computation of benefits under the
Employees' Retirement Plan, Overseas Retirement Plan and other retirement plans
maintained by the Company under which the Participant may be covered and the
Thrift Plan, subject to all applicable laws and in accordance with the
provisions of those plans.
Awards shall not be included in the computation of benefits under any
Group Life Insurance Plan, Travel Accident Insurance Plan, Personal Accident
Insurance Plan or under Company policies such as severance pay and payment for
accrued vacation, unless required by applicable laws.
- 4 -
<PAGE> 5
IX. Determinations of the Committee
The Committee shall, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and shall make determinations and shall take such
other action in connection with or in relation to accomplishing the objectives
of the Plan as it deems necessary or advisable. Each determination or other
action made or taken pursuant to the Plan, including interpretation of the Plan
and the specific conditions and provisions of the Awards granted hereunder by
the Committee shall be final and conclusive for all purposes and upon all
persons including, but without limitation, the Participants, the Company, the
Committee, the Board of Directors, the officers, the affected employees of the
Company and their respective successors in interest. The Committee has full
discretion to reduce the amount of any Award or to refuse to pay any Award.
X. Amendment and Termination
The Board or the Committee may terminate the Plan, in whole or in
part, may suspend the Plan, in whole or in part from time to time, and may
amend the Plan from time to time, including the adoption of amendments deemed
necessary or desirable to correct any defect or supply an omission or reconcile
any inconsistency in the Plan or in any Award granted hereunder so long as
share owner approval has been obtained if required by Code Section 162(m). No
amendment, termination or modification of the Plan may in any manner affect
Awards theretofore granted without the consent of the Participant unless the
Committee has made a determination that an amendment or modification is in the
best interest of all persons to whom Awards have theretofore been granted, but
in no event may such amendment or modification result in an increase in the
amount of compensation payable pursuant to such Award.
XI. Applicable Law
The Plan and all rules and determinations made and taken pursuant
hereto shall be governed by the laws of the State of Georgia and construed
accordingly.
XII. Change in Control
Except as set forth herein, the Committee has no obligation to pay any
amounts under the Plan to a Participant who leaves the employ of the Company
for any reason. If there is a Change in Control (as defined in this Section
XII) at any time during a Plan Year, the Committee promptly shall determine the
Award which
- 5 -
<PAGE> 6
would have been payable to each Participant under the Plan for such Plan Year
if he had continued to work for the Company for such entire year and all goals
established under Section V had been met in full for such Plan Year, and such
Award multiplied by a fraction, the numerator of which shall be the number of
full calendar months he is an employee of the Company during such Plan Year and
the denominator of which shall be 12 or the number of full calendar months the
Plan is in effect during such Plan Year, whichever is less. The payment of a
Participant's nonforfeitable interest in his Award under this Section XII shall
be made in cash as soon as practicable after his employment by the Company
terminates or as soon as practicable after the end of such Plan Year, whichever
comes first.
A "Change in Control", for purposes of this Section XII, shall mean a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for election of directors
of the then outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or less, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease, for any reason, to constitute at least a majority of the Board
of Directors, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; (iii) the
share owners of the Company approve any merger or consolidation as a result of
which its stock shall be changed, converted or exchanged (other than a merger
with a wholly-owned subsidiary of the Company) or any liquidation of the
Company or any sale or other disposition of 50% or more of the assets or
earning power of the Company; or (iv) the share owners of the Company approve
any merger or consolidation to which the Company is a party as a result of
which the persons who were share owners of the Company immediately prior to the
effective date of the merger or consolidation shall have beneficial ownership
of less than 50% of the combined voting power for election of directors of the
surviving corporation following the effective date of such merger or
consolidation; provided, however, that no Change in Control shall be deemed to
have occurred if, prior to such time as a Change in Control would otherwise be
deemed to have occurred, the Board of Directors determines otherwise.
- 6 -
<PAGE> 1
EXHIBIT 12.1
THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(IN MILLIONS EXCEPT RATIOS)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1993 1992 1991 1990 1989
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations
before income taxes and changes
in accounting principles $ 3,185 $ 2,746 $ 2,383 $ 2,014 $ 1,764
Fixed charges 213 207 222 255 326
Less capitalized interest, net (16) (10) (8) (8) (7)
Equity income, net of dividends (35) (30) (16) (94) (55)
-----------------------------------------------------
Adjusted earnings $ 3,347 $ 2,913 $ 2,581 $ 2,167 $ 2,028
=====================================================
Fixed charges:
Gross interest incurred $ 184 $ 181 $ 200 $ 238 $ 315
Interest portion of rent expense 29 26 22 17 11
-----------------------------------------------------
Total fixed charges $ 213 $ 207 $ 222 $ 255 $ 326
=====================================================
Ratios of earnings to fixed charges 15.7 14.1 11.6 8.5 6.2
=====================================================
</TABLE>
The Company is contingently liable for guarantees of indebtedness of
independent bottling companies and others (approximately $140 million at
December 31, 1993). 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.
<PAGE> 1
EXHIBIT 13.1
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
Management's primary objective is to maximize share-owner value over time.
To accomplish this objective, The Coca-Cola Company and subsidiaries (the
Company) have developed a comprehensive business strategy that emphasizes
maximizing long-term cash flows. This strategy focuses on continuing aggressive
investment in the high-return soft drink business, increasing returns on
existing investments and optimizing the cost of capital through appropriate
financial policies. The success of this strategy is evidenced by the growth in
the Company's cash flows and earnings, its increased returns on total capital
and equity and the total return to its share owners over time.
INVESTMENTS
The Company has a global business system which distributes its products in
more than 195 countries. With this pervasive global business system in place,
the Company is well positioned to capitalize on new investment opportunities
as they arise. Within the last two years, the Company has gained entry
into several countries, such as Romania and India. The Company has also rapidly
expanded its system across relatively untapped markets such as China,
East Central Europe and Indonesia.
Management seeks investments that strategically enhance existing operations
and offer cash returns that exceed the Company's long-term after-tax
weighted average cost of capital, estimated by management to be approximately
11 percent as of January 1, 1994. The Company's soft drink business generates
inherent high returns on capital, providing an attractive area for continued
investment. With international per capita consumption of Company products at
only 11 percent of the U.S. level, attractive investment opportunities exist
in many international markets for the Company and its bottlers to expand
production and distribution systems. Even in countries such as the United
States, which have more developed soft drink markets, additional high-return
investments can be made to increase product choices and availability,
enhance marketing focus and improve overall efficiency. The Company has
already benefited from the continued consolidation of production
and distribution networks, plus investment in the latest technology and
information systems.
Capital expenditures on property, plant and equipment and the
percentage distribution by geographic area for 1993, 1992 and 1991 are
as follows (dollars in millions):
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital expenditures $800 $1,083 $792
- ------------------------------------------------------------------------------------------
United States 23% 22% 25%
Africa 1% 1% 1%
European Community 33% 41% 45%
Latin America 19% 20% 14%
Northeast Europe/Middle East 18% 13% 8%
Pacific & Canada 6% 3% 7%
==========================================================================================
</TABLE>
In addition to capital expenditures, the Company has made significant
investments in bottling operations over the last decade. The principal
objective of these investments is to ensure strong and efficient production,
distribution and marketing systems in order to maximize long-term growth in
volume, cash flows and share-owner value of both the bottler and the Company.
When considered appropriate, the Company makes equity investments in bottling
companies (typically between 20 percent and 50 percent). Through these
investments, the Company is able to help focus and improve sales and marketing
programs, assist in the development of effective business and information
systems
<PAGE> 2
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
and help establish capital structures appropriate for these respective
operations. In 1993, the Company purchased a 30 percent interest in Coca-Cola
FEMSA, S.A. de C.V. (Coca-Cola FEMSA) to assist in further strengthening
important bottling territories in Mexico. Also in 1993, the Company purchased
shares which constitute a 10 percent voting interest in Panamerican Beverages,
Inc., which owns operations in Mexico, Brazil and Colombia.
In certain situations, management believes it is advantageous to own a
controlling interest in bottling operations. In 1989, the Company purchased the
largest of the Coca-Cola bottling operations in France to improve the
distribution system and customer relationships in that country. To compensate
for limited local resources in eastern Germany, the Company invested directly
in a wholly owned bottling subsidiary that could quickly capitalize on soft
drink opportunities.
In restructuring the bottling system, the Company periodically takes
temporary majority ownership positions in bottlers. The length of ownership is
influenced by various factors, including operational changes, management
changes and the process of identifying appropriate new investors.
At December 31, 1993, the Company owned approximately 51 percent of Coca-Cola
Amatil Limited, an Australian-based bottler of Company products. The Company
intends to reduce its ownership interest to below 50 percent within the next
year. Accordingly, the investment has been accounted for by the equity method
of accounting.
At December 31, 1993, the Company had $69 million of investments that
represented majority interests in companies other than Coca-Cola Amatil that
were not consolidated. These investments were accounted for by the cost or
equity methods, depending on the circumstances. These investments relate
primarily to temporary majority interests that management expects to reduce to
below 50 percent. For example, the Company recently reduced its voting and
economic ownership interest in The Coca-Cola Bottling Company of New York, Inc.
to below 50 percent, consistent with its stated intention of ending temporary
control after completing certain organizational changes. Based on management's
estimates, the aggregate fair values of these majority-owned investments
exceeded their carrying values at December 31, 1993.
In 1993, the Company's consolidated bottling, canning and fountain/post-mix
operations produced and distributed approximately 16 percent of worldwide unit
case volume. Equity investee bottlers produced and distributed an additional 38
percent of worldwide unit case volume.
The following table illustrates the excess of the calculated fair values,
based on quoted closing prices of publicly traded shares, for selected bottling
investments over the Company's carrying values (in millions):
<TABLE>
<CAPTION>
Carrying Fair
December 31, Value Value Excess
===========================================================================================
1993
<S> <C> <C> <C>
Coca-Cola Amatil Limited $ 592 $1,202 $ 610
Coca-Cola Enterprises Inc. 498 859 361
Coca-Cola FEMSA, S.A. de C.V. 206 467 261
Coca-Cola Beverages Ltd. 18 98 80
Coca-Cola Bottling Co. Consolidated 86 101 15
- -------------------------------------------------------------------------------------------
Equity Method Investees $1,400 $2,727 $1,327
===========================================================================================
Selected Cost Method Investees
Grupo Continental, S.A. $ 3 $ 84 $ 81
Panamerican Beverages, Inc. 32 112 80
===========================================================================================
</TABLE>
<PAGE> 3
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
INCREASING RETURNS
The Company manages its concentrate and bottling operations to increase volume
and its share of soft drink sales, while at the same time optimizing profit
margins. The Company also provides expertise and resources to its equity
investees to strengthen their businesses and to build long-term volume, cash
flows and share-owner value.
Through cost control, efficient allocation of marketing resources and price
increases generally in line with local inflation, the Company was able to
maintain or improve margins in 1993 despite difficult economic climates in many
international markets.
Increases in per capita consumption of soft drinks in the industry and the
Company's share of industry sales drive the success of the Company's
investments. In emerging markets, the Company's primary emphasis is raising the
per capita consumption levels by expanding availability of the Company's
products. In these emerging markets, investments are made in the basic
infrastructure of the system: facilities, distribution networks and sales
equipment. These investments are made primarily through local bottlers,
matching their local expertise with the Company's focus and experience.
Point-of-sale merchandising and product sampling are used to establish consumer
awareness, building product acceptability. As demand expands, the Company
increases consumer awareness of its products to improve the Company's share of
industry sales. Advertising is used to expand the consumer's perception of
appropriate consumption occasions. New products and larger packages provide the
consumer with a wider array of choices.
Growth in volume and the Company's share of industry sales also depend, in
part, on continuous reinvestment in advertising. Advertising establishes and
builds affinity for the Company's trademarks in the minds of the consumers.
Advertising expenditures were $1.1 billion in 1993 and 1992 and $1.0 billion in
1991.
Volume and profits have benefited from the Company's ownership of and
investments in bottling operations. While the bottling business has relatively
lower margins on revenue compared to the concentrate business, aggressive
investment in soft drink infrastructure has resulted in growth in profits,
share of sales and unit case volume at the bottler level, which in turn
generates gallon shipment gains for the concentrate business.
Equity income, which primarily represents returns from the Company's
unconsolidated bottling investments, was $91 million in 1993. The Company's
joint ventures and investments in bottling entities include Coca-Cola
Enterprises Inc., Coca-Cola Amatil, Coca-Cola FEMSA and Coca-Cola & Schweppes
Beverages Ltd.
FINANCIAL POLICIES
Maximizing share-owner value necessitates optimizing the Company's cost of
capital through appropriate financial policies.
Debt Financing: The Company maintains debt levels considered prudent
based on the Company's cash flows, interest coverage and the percentage of debt
to the Company's total capital. The Company's overall cost of capital is
lowered by the use of debt financing, resulting in increased return to share
owners.
The Company's capital structure and financial policies have resulted in
long-term credit ratings of "AA" from Standard & Poor's and "Aa3" from Moody's,
as well as the highest credit ratings available for its commercial paper
programs. The Company's strong financial position and cash flows allow for
opportunistic access to financing in financial markets around the world.
Foreign Currency Management: With approximately 79 percent of operating
income in 1993 generated by operations outside the United States, foreign
currency management is a key element of the Company's financial policies. The
<PAGE> 4
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
Company benefits from operating in a number of different currencies, because
weakness in any particular currency is often offset by strengths in other
currencies. The Company closely monitors its exposure to fluctuations in
currencies and, where cost-justified, adopts strategies to reduce the impact of
these fluctuations on the Company's financial performance. These strategies
include engaging in various hedging activities to manage income and cash flows
denominated in foreign currencies, and using foreign currency borrowings when
appropriate to finance investments outside the United States.
Share Repurchases: In July 1992, the Board of Directors authorized a plan to
repurchase up to 100 million additional shares of the Company's common stock
through the year 2000. In 1993, the Company repurchased 13 million shares
approved under this plan and approximately 1 million additional shares to
complete its 1989 share repurchase plan of 80 million shares. The total cost of
these 1993 repurchases was approximately $586 million. From the inception of
share repurchase programs in 1984 to December 31, 1993, the Company has
repurchased 429 million shares at a total cost of approximately $5.8 billion.
This represents over 26 percent of the Company's common shares that were
outstanding at the beginning of 1984. In 1993, the Company purchased an
additional 3 million shares of common stock for treasury related to the
exercise of stock options by employees.
Dividend Policy: Strong earnings growth has enabled the Company to increase
the cash dividend per common share by an average annual compound growth rate of
12 percent since December 31, 1983. The annual common stock dividend was $.68
per share, $.56 per share and $.48 per share in 1993, 1992 and 1991,
respectively. At its February 1994 meeting, the Board of Directors increased
the quarterly dividend per common share to $.195, equivalent to a full-year
common dividend of $.78 in 1994. This is the 32nd consecutive year in which
the Board of Directors has approved common stock dividend increases.
With approval from the Board of Directors, management has maintained a common
stock dividend payout ratio of approximately 40 percent of net income.
The 1993 dividend payout ratio was 41 percent.
MEASURING PERFORMANCE
A significant portion of the increase in the rate of growth of the Company's
earnings, returns and cash flows can be attributed to the Company's actions to
increase its investments in the high-margin, high-return soft drink business;
increase share of sales and volume growth for its products; and manage its
existing asset base effectively and efficiently.
Economic Profit and Economic Value Added provide management a framework
to measure the impact of value-oriented actions. Economic Profit is defined as
net operating profit after taxes in excess of a computed capital charge for
average operating capital employed. Economic Value Added represents the growth
in Economic Profit from year to year.
Over the last 10 years, Economic Profit has increased at an average annual
compound rate of 27 percent, resulting in Economic Value Added to the Company
of $1.4 billion. Over the same period, the Company's stock price has increased
at an average rate of 26 percent. Management believes that, over the long term,
growth in Economic Profit, or Economic Value Added, will have a positive impact
on the growth in share-owner value.
TOTAL RETURN TO SHARE OWNERS
During the past decade, share owners of the Company have enjoyed an excellent
return on their investment. A $100 investment in the Company's common stock at
December 31, 1983, together with reinvested dividends, would be worth
<PAGE> 5
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
approximately $1,286 at December 31, 1993, an average annual compound return
of 29 percent.
<TABLE>
<CAPTION>
ECONOMIC PROFIT AND COMPANY STOCK PRICE
(GRAPHIC MATERIAL OMITTED)
Year Ended December 31, Compound
--------------------------- Growth
1983 1993 Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Economic Profit (In millions) $138 $1,495 27%
Stock Price $4.46 $44.63 26%
===============================================================================
</TABLE>
Over the last 10 years, economic profit has increased at an average rate of 27
percent, while the Company's stock has increased on average 26 percent.
MANAGEMENT'S DISCUSSION AND ANALYSIS
LINES OF BUSINESS
Soft Drinks: The Company is the largest manufacturer, marketer and distributor
of soft drink concentrates and syrups in the world. It manufactures soft drink
concentrates and syrups, which it sells to bottling and canning operations, and
manufactures fountain/post-mix soft drink syrups, which it sells to authorized
fountain wholesalers and some fountain retailers. The Company has substantial
equity investments in numerous soft drink bottling and canning operations, and
it owns and operates certain bottling and canning operations outside the United
States.
Foods: The foods business sector's principal business is processing and
marketing juice and juice-drink products. It is the largest marketer of juice
and juice-drink products in both the United States and the world.
VOLUME
Soft Drinks: The Company measures soft drink volume in two ways: gallon
shipments of concentrates and syrups, and equivalent unit cases of finished
product. Gallon shipments represent the primary business of the Company since
they measure concentrates and syrups sold by the Company to its bottling
system. Most of the Company's revenues are based on this measure of wholesale
activity. The Company also monitors unit case volume, a measure of finished
product sold by the bottling system to retail customers, who make sales to
consumers. Management believes unit case volume more accurately measures the
underlying strength of the global business system because it measures trends at
the retail level and is less impacted by inventory management practices at the
wholesale level. Fountain/post-mix syrups sold by the Company directly to
customers are included in both measures simultaneously.
For the years 1993 and 1992, the Company increased unit case and gallon
volume in its worldwide markets. The percentage increases over the prior year
by geographic group and in total are as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992
- ---------------------------------------------------------------------------------------------
Unit Unit
Cases Gallons Cases Gallons
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Worldwide 5% 4% 3% 3%
=============================================================================================
International Sector 6% 5% 4% 3%
Africa 4% 6% 7% 10%
European Community 1% 2% 5% 3%
Latin America 6% 6% 0% 0%
Northeast Europe/Middle East 19% 20% 21% 22%
Pacific 7% 3% 3% 2%
=============================================================================================
North America Sector (1) 5% 2% 2% 1%
United States 5% 2% 2% 2%
=============================================================================================
</TABLE>
(1) Consists of United States and Canada
<PAGE> 6
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
Worldwide soft drink unit case volume increased 5 percent in 1993 as the
Company expanded into new markets in East Central Europe, the Middle East and
the Pacific. Volume increases in these new markets more than offset weaker than
expected results in the more established markets of Europe and Japan, which
suffered from record-setting cold and rainy summer seasons as well as weak
economic environments. Each region experienced a volume increase over 1992
results, which were also negatively impacted by difficult economic environments
in a number of the Company's major markets, including the United States and
Brazil.
In 1993, unit case growth in the newly created Africa group was led by a 12
percent increase in Nigeria, resulting from increased product availability and
promotions.
A cool and wet summer season slowed unit case growth in the European
Community in 1993. Volume in Great Britain increased 6 percent in 1993 after
growing only 3 percent in 1992.
Volume in Latin America recovered in 1993, with Mexico reporting unit case
growth of 8 percent. Volume in 1992 was even with the prior year primarily
because of an 18 percent decrease in unit cases in Brazil, where severe
economic conditions eroded consumer purchasing power. This decline was offset
by unit case volume growth of 3 percent in Mexico and 30 percent in Argentina
in 1992.
Volume growth in Northeast Europe and the Middle East was driven by expansion
into new markets in Poland, Romania and the remaining countries of East Central
Europe and continued expansion of the Company's infrastructure in many existing
markets.
In the Pacific, unit case growth in 1993 was driven by a 38 percent increase
in China and a 22 percent increase in Australia. Unit case volume in Japan for
1993 was even with the prior year, reflecting the cold and wet summer. In 1992,
unit cases increased 2 percent in Japan and 29 percent in China, offsetting a 1
percent decrease in the Philippines, where natural disasters hampered
distribution.
In the United States, growth in the Company's fountain business drove unit
case volume growth of 5 percent in 1993. Slow economic recovery impacted volume
in 1992.
Foods
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992
- -------------------------------------------------------------------------------------
<S> <C> <C>
Total Volume 16% 0 %
Orange Juice 18% (7)%
Other Juice Drinks 14% 5 %
=====================================================================================
</TABLE>
Total unit volume in the foods business sector increased by 16 percent
in 1993, driven by aggressive pricing and marketing. Total unit volume in the
foods business sector was unchanged in 1992 following a 12 percent increase in
volume in the prior year.
<PAGE> 7
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
OPERATIONS
Net Operating Revenues and Gross Margin: In 1993, revenues for the Company's
soft drink business increased 7 percent, reflecting an increase in gallon
shipments and continued expansion of bottling and canning operations, partially
offset by the adverse effect of a stronger U.S. dollar versus most key foreign
currencies. Revenues for the foods business sector increased 5 percent in 1993,
as volume increases more than offset price reductions.
For the Company's soft drink business, revenues grew 15 percent in 1992,
primarily due to gallon shipment increases, favorable exchange movement,
price increases and continued expansion of bottling and canning operations.
Revenues for the foods business sector in 1992 increased 2 percent primarily
due to price increases.
On a consolidated basis, the Company's worldwide net revenues grew 7 percent
in 1993 while gross profit grew 10 percent. The Company's gross margin
expanded to 63 percent in 1993 from 61 percent in 1992 due to lower costs for
aspartame and orange solids. Gross profits grew 16 percent in 1992 on
consolidated revenue growth of 13 percent.
Selling, Administrative and General Expenses: Selling expenses were $4.4
billion in 1993, $4.0 billion in 1992 and $3.5 billion in 1991. The increase in
1993 was due primarily to increased promotional activity. The increase in 1992
was due primarily to higher marketing investments in line with expansion of the
business.
Administrative and general expenses were $1.3 billion in 1993, $1.2 billion
in 1992 and $1.1 billion in 1991. The increases for both years were due
primarily to expansion of the business, particularly newly formed,
Company-owned bottling operations. Also, administrative and general expenses in
1993 include provisions of $63 million related to increasing efficiencies in
European, domestic and corporate operations. Administrative and general
expenses, as a percentage of net operating revenues, were approximately 10
percent in 1993 and 1992 and 9 percent in 1991.
Operating Income and Operating Margin: Operating income grew 12 percent in
1993, after increasing 19 percent in 1992. Operating margins grew to 22 percent
in 1993 from 21 percent in 1992. The expansion in operating margins resulted
from gross margin expansion.
MARGIN ANALYSIS
(Graphic Material Omitted)
Year Ended December 31, 1991 1992 1993
- --------------------------------------------------------------------------------
Net Operating Revenues (In billions) $11.6 $13.1 $14.0
Gross Margin 60% 61% 63%
Operating Margin 20% 21% 22%
================================================================================
The Company's gross profit and operating income have increased due to both
growth in revenues and expansion of margins.
Interest Income and Interest Expense: In 1993, interest expense was
approximately even with the prior year while interest income decreased 12
percent. Interest income and interest expense declined in 1992, primarily due
to lower interest rates.
Equity Income: Equity income increased 40 percent in 1993 due primarily to
new bottling investments and improved results at Coca-Cola Amatil and Coca-Cola
Nestle Refreshments, offset by the results at the Company's Canadian affiliate,
Coca-Cola Beverages Ltd. In the fourth quarter, Coca-Cola Beverages recorded a
pretax restructuring charge of $126 million, which reduced the Company's
equity income by $42 million.
Equity income increased 63 percent, to $65 million, in 1992 due primarily to
one-time charges recorded by Coca-Cola Enterprises in 1991, partially offset by
increased start-up costs of Coca-Cola Nestle Refreshments in 1992.
Other Income (Deductions)-Net: In 1993, other income (deductions)-net increased
$86 million, primarily due to gains on sales of certain real estate and
<PAGE> 8
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
bottling investments. This includes a $50 million pretax gain recognized on
the sale of citrus groves in the United States and a $34 million pretax gain
recognized on the sale of property no longer required as a result of a
consolidation of manufacturing operations in Japan.
Other income (deductions)-net in 1992 was lower than 1991 due to nonrecurring
gains recorded in 1991.
Gain on Issuance of Stock by Coca-Cola Amatil: In the fourth quarter of
1993, Coca-Cola Amatil purchased a bottling operation in Indonesia by
issuing approximately 8 million shares of common stock, which resulted in
a noncash pretax gain of $12 million for the Company.
Income Taxes: The Company's effective tax rate was 31.3 percent in 1993, 31.4
percent in 1992 and 32.1 percent in 1991. The Company's effective tax rate
reflects the favorable U.S. tax treatment from manufacturing facilities in
Puerto Rico that operate under a negotiated exemption grant as well as the tax
benefit derived from significant operations outside the United States which are
taxed at rates lower than the U.S. statutory rate of 35 percent. Changes to
U.S. tax law enacted in 1993 will limit the utilization of the favorable tax
treatment from operations in Puerto Rico beginning in 1994, and will exert
upward pressure on the Company's effective tax rate.
Transition Effect of Changes in Accounting Principles: As of January 1, 1993,
the Company recognized an after-tax charge of $12 million resulting from the
adoption of Statement of Financial Accounting Standards No. 112, Employers'
Accounting for Postemployment Benefits (SFAS 112). The cumulative charge
consists primarily of health benefits for surviving spouses and disabled
employees.
As of January 1, 1992, the Company recognized an after-tax charge of $219
million resulting from the adoption of Statement of Financial Accounting
Standards No. 106, Employers' Accounting for Postretirement Benefits Other
Than Pensions (SFAS 106). The cumulative charge consists of postretirement
health care and life insurance benefit obligations to employees of the Company
and the Company's portion of postretirement benefit obligations of its equity
investees. The Company elected to absorb this charge immediately rather than
amortize the obligation over a period of up to 20 years.
Income Per Common Share: Accelerated by the Company's share repurchase
program, income per common share before changes in accounting principles grew
17 percent and 18 percent in 1993 and 1992, respectively. Net income per common
share grew 33 percent in 1993, reflecting the $.17 per share impact of the
adoption of SFAS 106 in 1992.
LIQUIDITY AND CAPITAL RESOURCES
One of the Company's financial strengths is its ability to generate cash from
operations in excess of requirements for capital reinvestment and dividends.
Free Cash Flow: Free Cash Flow is the cash from operations remaining after
the Company has satisfied its business reinvestment opportunities. Management
focuses on growing long-term Free Cash Flow to achieve management's primary
objective, maximizing share-owner value. The Company uses Free Cash Flow,
along with borrowings, to make share repurchases and dividend payments. The
consolidated statements of cash flows are summarized as follows (in millions):
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows provided by (used in):
Operations $ 2,508 $ 2,232 $ 2,084
Investment activities (885) (1,359) (1,124)
- -----------------------------------------------------------------------
Free Cash Flow 1,623 873 960
Cash flows provided by (used in):
Financing (1,540) (917) (1,331)
Exchange (41) (58) -
- -----------------------------------------------------------------------
Increase (decrease) in cash $ 42 $ (102) $ (371)
=======================================================================
</TABLE>
<PAGE> 9
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
Cash provided by operations continued to grow in 1993, reaching $2.5 billion,
resulting from growth in net income before the noncash charges for depreciation
and amortization. In 1992, cash from operations totaled $2.2 billion, a 7
percent increase over 1991. After extensive investment in eastern Europe and
other emerging markets during 1992, the Company's purchases of property, plant
and equipment declined $283 million in 1993. This decline, coupled with the
receipt of proceeds on the sales of real estate in Japan and the United States
and various bottling investments, resulted in a decrease in cash used in
investment activities in 1993. Cash used in investment activities increased in
1992 due primarily to purchases of property, plant and equipment, investments
and acquisitions of bottling operations, offset by the collection of certain
finance subsidiary receivables added in 1991.
The finance subsidiary made additional borrowings in 1993 to fund
increased receivables. The increase in marketable securities and other assets in
1993 and 1992 was primarily attributed to an increase in marketable
securities held in accordance with a negotiated income tax exemption grant for
the Company's manufacturing facilities in Puerto Rico. The balance also
increased due to additional deferred tax assets in 1993. Timing of tax payments,
including those attributable to the sales of real estate, resulted in an
increase in accrued taxes of 33 percent in 1993. In 1992, payments collected by
the finance subsidiary were used to reduce notes payable. The noncash charge for
the change in accounting for postretirement benefits other than pensions
resulted in an increase in other long-term liabilities and a decrease in
deferred tax liabilities in 1992.
Financing: Financing activities primarily represent the Company's net
borrowing activities, dividend payments and share repurchases. Cash used in
financing activities totaled $1.5 billion in 1993, $917 million in 1992 and
$1.3 billion in 1991. The change between years was due primarily to net
reductions of debt in 1993 and 1991 compared to net borrowings in 1992. Cash
used to purchase common stock for treasury decreased to $680 million in 1993,
from $1.3 billion in 1992.
The Company aggressively manages its mix of short-term versus long-term debt
to lower its overall cost of borrowing. This process, coupled with the share
repurchase program and investment activity, resulted in current liabilities
exceeding current assets at December 31, 1993.
The Company manages its debt levels based on the following financial
measurements and ratios:
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net debt (in billions) $ 1.6 $ 1.8 $ 1.0
Net debt to net capital 26% 32% 19%
Free cash flow to net debt 100% 48% 95%
Interest coverage 18x 16x 13x
Ratio of earnings to fixed charges 15.7x 14.1x 11.6x
===============================================================================================================
</TABLE>
Debt levels are measured excluding the debt of the Company's finance
subsidiary, and are net of cash, cash equivalents and marketable securities in
excess of operating requirements and net of temporary bottling investments.
At December 31, 1993, the Company had $1.4 billion in lines of credit and
other short-term credit facilities contractually available, under which $150
<PAGE> 10
FINANCIAL REVIEW INCORPORATING THE COCA-COLA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS AND SUBSIDIARIES
million was outstanding. Included were $1.0 billion in lines designated to
support commercial paper and other borrowings, under which no amounts were
outstanding at December 31, 1993.
Exchange: International operations are subject to certain opportunities and
risks, including currency fluctuations and government actions. The Company
closely monitors its methods of operating in each country and adopts strategies
responsive to changing economic and political environments.
The Company uses approximately 46 functional currencies. In 1993, 1992 and
1991, weighted average exchange rates for certain key foreign currencies that
are traded on exchange markets strengthened (weakened) against the U.S. dollar
as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Key market-traded currencies (3)% 5 % 1 %
Australian dollar (7)% (5)% 1 %
British pound (15)% 1 % (1)%
Canadian dollar (8)% (4)% 1 %
German mark (5)% 8 % (3)%
Japanese yen 15 % 6 % 8 %
==================================================================================================
</TABLE>
The change in the foreign currency translation adjustment in 1993 was due
primarily to the weakening of certain European currencies against the U.S.
dollar. Exchange losses recorded in other income (deductions)-net amounted to
$74 million in 1993, $25 million in 1992 and $22 million in 1991. Exchange
losses include the remeasurement of certain currencies into functional
currencies and costs of hedging certain transaction and balance sheet
exposures. Additional information concerning the Company's hedging activities
is presented on page 63.
IMPACT OF INFLATION AND CHANGING PRICES
Inflation is a factor in many markets around the world and consequently impacts
the way the Company operates. In general, management believes the Company is
able to increase prices to counteract the effects of increasing costs and
generate sufficient cash flows to maintain its productive capability.
ADDITIONAL INFORMATION
For additional information concerning the Company's operations, cash flows,
liquidity and capital resources, this analysis should be read in conjunction
with the information on pages 54 through 72 of this report. Additional
information concerning operations in different lines of business and geographic
areas is presented on pages 69 and 70.
<PAGE> 11
SELECTED FINANCIAL DATA THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Compound Growth Rates Year Ended December 31,
-------------------------- ------------------------------
(In millions except per share data, ratios and growth rates) 5 Years 10 Years 1993 (2) 1992 (3),(4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net operating revenues 11.6% 10.7% $13,957 $13,074
Cost of goods sold 8.5% 7.2% 5,160 5,055
- ----------------------------------------------------------------------------------------------------------------------------------
Gross profit 13.7% 13.5% 8,797 8,019
Selling, administrative and general expenses 13.4% 13.2% 5,695 5,249
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income 14.2% 14.1% 3,102 2,770
Interest income 144 164
Interest expense 168 171
Equity income 91 65
Other income (deductions)-net 4 (82)
Gain on issuance of stock by subsidiaries 12 -
- ------------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes
and changes in accounting principles 14.4% 13.8% 3,185 2,746
Income taxes 13.2% 10.3% 997 863
- ------------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before changes
in accounting principles 15.0% 15.8% $ 2,188 $ 1,883
====================================================================================================================================
Net income 15.8% 14.6% $ 2,176 $ 1,664
Preferred stock dividends - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net income available to common share owners 16.0% 14.6% $ 2,176 $ 1,664
====================================================================================================================================
Average common shares outstanding 1,302 1,317
PER COMMON SHARE DATA
Income from continuing operations before changes
in accounting principles 17.8% 18.4% $ 1.68 $ 1.43
Net income 18.7% 17.3% 1.67 1.26
Cash dividends 17.8% 11.9% .68 .56
Market price at December 31 31.9% 25.9% 44.63 41.88
BALANCE SHEET DATA
Cash, cash equivalents and current marketable securities $ 1,078 $ 1,063
Property, plant and equipment-net 3,729 3,526
Depreciation 333 310
Capital expenditures 800 1,083
Total assets 12,021 11,052
Long-term debt 1,428 1,120
Total debt 3,100 3,207
Share-owners' equity 4,584 3,888
Total capital (1) 7,684 7,095
OTHER KEY FINANCIAL MEASURES (1)
Total-debt-to-total-capital 40.3% 45.2%
Net-debt-to-net-capital 26.2% 31.9%
Return on common equity 51.7% 46.4%
Return on capital 31.2% 29.4%
Dividend payout ratio 40.6% 44.3%
Economic profit $ 1,495 $ 1,293
====================================================================================================================================
</TABLE>
(1) See Glossary on page 76.
Following are the above-referenced definitions extracted from page 76:
GLOSSARY OF TERMS
DIVIDEND PAYOUT RATIO: Calculated by dividing cash dividends on common
stock by net income available to common share owners.
ECONOMIC PROFIT: Represents net operating profit after taxes in excess
of a computed capital charge for average operating capital employed.
NET DEBT AND NET CAPITAL: Net of cash, cash equivalents and marketable
securities in excess of operating requirements and temporary bottling
investments. The net-debt-to-net-capital ratio excludes debt and excess
cash of the Company's finance subsidiary.
RETURN ON CAPITAL: Calculated by dividing income from continuing
operations before changes in accounting principles less tax-adjusted
interest expense by average total capital.
RETURN ON COMMON EQUITY: Calculated by dividing income from continuing
operations before changes in accounting principles less preferred stock
dividends by average common share-owners' equity.
TOTAL CAPITAL: Equals share-owners' equity plus interest-bearing debt.
(2) In 1993, the Company adopted SFAS No. 112, Employers' Accounting for
Postemployment Benefits.
(3) In 1992, the Company adopted SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions.
(4) The Company adopted SFAS No. 109, Accounting for Income Taxes, in 1992 by
restating financial statements beginning in 1989.
<PAGE> 12
SELECTED FINANCIAL DATA THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Year Ended December 31,
- ---------------------------------------------------------------------------------------------------------------------------------
1991 (4) 1990 (4) 1989 (4) 1988 1987 1986 1985 1984 1983
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 11,572 $ 10,236 $ 8,622 $ 8,065 $ 7,658 $ 6,977 $ 5,879 $ 5,442 $ 5,056
4,649 4,208 3,548 3,429 3,633 3,454 2,909 2,738 2,580
- ---------------------------------------------------------------------------------------------------------------------------------
6,923 6,028 5,074 4,636 4,025 3,523 2,970 2,704 2,476
4,604 4,076 3,348 3,038 2,701 2,626 2,163 1,855 1,648
- ---------------------------------------------------------------------------------------------------------------------------------
2,319 1,952 1,726 1,598 1,324 897 807 849 828
175 170 205 199 232 154 151 133 90
192 231 308 230 297 208 196 128 77
40 110 75 92 64 45 52 42 35
41 13 66 (33) - 35 69 13 2
- - - - 40 375 - - -
- ----------------------------------------------------------------------------------------------------------------------------------
2,383 2,014 1,764 1,626 1,363 1,298 883 909 878
765 632 553 537 496 471 314 360 374
- ----------------------------------------------------------------------------------------------------------------------------------
$ 1,618 $ 1,382 $ 1,211 $ 1,089 $ 867 $ 827 $ 569 $ 549 $ 504
===================================================================================================================================
$ 1,618 $ 1,382 $ 1,537 $ 1,045 $ 916 $ 934 $ 722 $ 629 $ 559
1 18 21 7 - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
$ 1,617 $ 1,364 $ 1,516 (5) $ 1,038 $ 916 $ 934 $ 722 $ 629 $ 559
===================================================================================================================================
1,333 1,337 1,384 1,458 1,509 1,547 1,573 1,587 1,635
$ 1.21 $ 1.02 $ .86 $ .74 $ .57 $ .53 $ .36 $ .35 $ .31
1.21 1.02 1.10 (5) .71 .61 .60 .46 .40 .34
.48 .40 .34 .30 .28 .26 .25 .23 .22
40.13 23.25 19.31 11.16 9.53 9.44 7.04 5.20 4.46
$ 1,117 $ 1,492 $ 1,182 $ 1,231 $ 1,489 $ 895 $ 843 $ 768 $ 559
2,890 2,386 2,021 1,759 1,602 1,538 1,483 1,284 1,247
254 236 181 167 152 151 130 119 111
792 593 462 387 304 346 412 300 324
10,189 9,245 8,249 7,451 8,606 7,675 6,341 5,241 4,540
985 536 549 761 909 996 801 631 428
2,288 2,537 1,980 2,124 2,995 1,848 1,280 1,310 520
4,239 3,662 3,299 3,345 3,187 3,479 2,948 2,751 2,912
6,527 6,199 5,279 5,469 6,182 5,327 4,228 4,061 3,432
35.1% 40.9% 37.5% 38.8% 48.4% 34.7% 30.3% 32.3% 15.2%
19.2% 23.7% 14.7% 18.9% 15.4% 10.9% 15.6% 19.7% 5.6%
41.3% 41.4% 39.4% 34.7% 26.0% 25.7% 20.0% 19.4% 17.7%
27.5% 26.8% 26.5% 21.3% 18.3% 20.1% 16.8% 16.7% 16.4%
39.5% 39.2% 31.0% (5) 42.1% 46.0% 43.1% 53.8% 57.9% 65.3%
$ 1,029 $ 878 $ 821 $ 748 $ 417 $ 311 $ 269 $ 268 $ 138
===================================================================================================================================
</TABLE>
(5) Net income available to common share owners in 1989 includes after-tax gains
of $604 million ($.44 per common share) from the sales of the Company's
equity interest in Columbia Pictures Entertainment, Inc. and the Company's
bottled water business and the transition effect of $265 million related to
the change in accounting for income taxes. Excluding these nonrecurring
items, the dividend payout ratio in 1989 was 39.9 percent.
<PAGE> 13
CONSOLIDATED BALANCE SHEETS THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
December 31, 1993 1992
- ----------------------------------------------------------------------------------------------------------------
(In millions except share data)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 998 $ 956
Marketable securities, at cost 80 107
- ----------------------------------------------------------------------------------------------------------------
1,078 1,063
Trade accounts receivable, less allowances of
$39 in 1993 and $33 in 1992 1,210 1,055
Finance subsidiary receivables 33 31
Inventories 1,049 1,019
Prepaid expenses and other assets 1,064 1,080
- ----------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 4,434 4,248
- ----------------------------------------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Investments
Coca-Cola Enterprises Inc. 498 518
Coca-Cola Amatil Limited 592 548
Other, principally bottling companies 1,125 1,097
Finance subsidiary receivables 226 95
Marketable securities and other assets 868 637
- ----------------------------------------------------------------------------------------------------------------
3,309 2,895
- ----------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land 197 203
Buildings and improvements 1,616 1,529
Machinery and equipment 3,380 3,137
Containers 403 374
- ----------------------------------------------------------------------------------------------------------------
5,596 5,243
Less allowances for depreciation 1,867 1,717
- ----------------------------------------------------------------------------------------------------------------
3,729 3,526
- ----------------------------------------------------------------------------------------------------------------
GOODWILL AND OTHER INTANGIBLE ASSETS 549 383
- ----------------------------------------------------------------------------------------------------------------
$ 12,021 $11,052
================================================================================================================
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses $ 2,217 $ 2,253
Loans and notes payable 1,409 1,967
Finance subsidiary notes payable 244 105
Current maturities of long-term debt 19 15
Accrued taxes 1,282 963
- ----------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 5,171 5,303
- ----------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT 1,428 1,120
- ----------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES 725 659
- ----------------------------------------------------------------------------------------------------------------
DEFERRED INCOME TAXES 113 82
- ----------------------------------------------------------------------------------------------------------------
SHARE-OWNERS' EQUITY
Common stock, $.25 par value-
Authorized: 2,800,000,000 shares
Issued: 1,703,526,299 shares in 1993; 1,696,202,840 shares in 1992 426 424
Capital surplus 1,086 871
Reinvested earnings 9,458 8,165
Unearned compensation related to
outstanding restricted stock (85) (100)
Foreign currency translation adjustment (420) (271)
- ----------------------------------------------------------------------------------------------------------------
10,465 9,089
Less treasury stock, at cost
(406,072,817 common shares in 1993; 389,431,622 common shares in 1992) 5,881 5,201
- ----------------------------------------------------------------------------------------------------------------
4,584 3,888
- ----------------------------------------------------------------------------------------------------------------
$ 12,021 $11,052
================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 14
CONSOLIDATED STATEMENTS OF INCOME THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------
(In millions except per share data)
<S> <C> <C> <C>
NET OPERATING REVENUES $ 13,957 $ 13,074 $ 11,572
Cost of goods sold 5,160 5,055 4,649
- ---------------------------------------------------------------------------------------------------------------
GROSS PROFIT 8,797 8,019 6,923
Selling, administrative and general expenses 5,695 5,249 4,604
- ---------------------------------------------------------------------------------------------------------------
OPERATING INCOME 3,102 2,770 2,319
Interest income 144 164 175
Interest expense 168 171 192
Equity income 91 65 40
Other income (deductions)-net 4 (82) 41
Gain on issuance of stock by Coca-Cola Amatil 12 - -
- ---------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
CHANGES IN ACCOUNTING PRINCIPLES 3,185 2,746 2,383
Income taxes 997 863 765
- ---------------------------------------------------------------------------------------------------------------
INCOME BEFORE CHANGES IN
ACCOUNTING PRINCIPLES 2,188 1,883 1,618
Transition effects of changes in
accounting principles
Postemployment benefits (12) - -
Postretirement benefits other than pensions
Consolidated operations - (146) -
Equity investments - (73) -
- ---------------------------------------------------------------------------------------------------------------
NET INCOME 2,176 1,664 1,618
Preferred stock dividends - - 1
- ---------------------------------------------------------------------------------------------------------------
NET INCOME AVAILABLE TO COMMON SHARE OWNERS $ 2,176 $ 1,664 $ 1,617
===============================================================================================================
INCOME PER COMMON SHARE
Before changes in accounting principles $ 1.68 $ 1.43 $ 1.21
Transition effects of changes in
accounting principles
Postemployment benefits ( .01) - -
Postretirement benefits other than pensions
Consolidated operations - ( .11) -
Equity investments - ( .06) -
- ---------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE $ 1.67 $ 1.26 $ 1.21
===============================================================================================================
AVERAGE COMMON SHARES OUTSTANDING 1,302 1,317 1,333
===============================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 15
CONSOLIDATED STATEMENTS OF CASH FLOWS THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
(In millions)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,176 $ 1,664 $ 1,618
Transition effects of changes
in accounting principles 12 219 -
Depreciation and amortization 360 322 261
Deferred income taxes (62) (27) (94)
Equity income, net of dividends (35) (30) (16)
Foreign currency adjustments 9 24 66
Gains on sales of assets (84) - (35)
Other noncash items 78 103 33
Net change in operating assets and liabilities 54 (43) 251
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,508 2,232 2,084
- -----------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Decrease (increase) in current
marketable securities 29 (52) 3
Additions to finance subsidiary receivables (177) (54) (210)
Collections of finance subsidiary receivables 44 254 52
Acquisitions and purchases of investments (816) (717) (399)
Proceeds from disposals of investments and
other assets 621 247 180
Purchases of property, plant and equipment (800) (1,083) (792)
Proceeds from disposals of property, plant
and equipment 312 47 44
All other investing activities (98) (1) (2)
- -----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (885) (1,359) (1,124)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operations
after reinvestment 1,623 873 960
- -----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuances of debt 445 1,381 990
Payments of debt (567) (432) (1,246)
Preferred stock redeemed - - (75)
Common stock issued 145 131 39
Purchases of common stock for treasury (680) (1,259) (399)
Dividends (common and preferred) (883) (738) (640)
- -----------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (1,540) (917) (1,331)
- -----------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (41) (58) -
- -----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year 42 (102) (371)
Balance at beginning of year 956 1,058 1,429
- -----------------------------------------------------------------------------------------------------------------
Balance at end of year $ 998 $ 956 $ 1,058
=================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 16
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY THE COCA-COLA COMPANY
AND SUBSIDIARIES
<TABLE>
<CAPTION>
Outstanding Foreign
Three Years Ended Preferred Common Capital Reinvested Restricted Currency Treasury
December 31, 1993 Stock Stock Surplus Earnings Stock Translation Stock
- ---------------------------------------------------------------------------------------------------------------------------------
(In millions except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1990 $ 75 $ 420 $ 513 $6,261 $ (68) $ 4 $ (3,543)
Sales of stock to employees exercising
stock options - 1 38 - - - (2)
Tax benefit from employees' stock
option and restricted stock plans - - 20 - - - -
Translation adjustments - - - - - (9) -
Stock issued under restricted stock plans,
less amortization of $22 - 1 69 - (47) - -
Purchases of common stock for treasury - - - - - - (397)
Redemption of preferred stock (75) - - - - - -
Net income - - - 1,618 - - -
Dividends
Preferred - - - (1) - - -
Common (per share-$.48) - - - (639) - - -
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1991 - 422 640 7,239 (115) (5) (3,942)
Sales of stock to employees exercising
stock options - 2 129 - - - (34)
Tax benefit from employees' stock
option and restricted stock plans - - 93 - - - -
Translation adjustments - - - - - (266) -
Stock issued under restricted stock plans,
less amortization of $25 - - 9 - 15 - -
Purchases of common stock for treasury - - - - - - (1,225)
Net income - - - 1,664 - - -
Common dividends (per share-$.56) - - - (738) - - -
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1992 - 424 871 8,165 (100) (271) (5,201)
Sales of stock to employees exercising
stock options - 2 143 - - - (94)
Tax benefit from employees' stock
option and restricted stock plans - - 66 - - - -
Translation adjustments - - - - - (149) -
Stock issued under restricted stock plans,
less amortization of $19 - - 6 - 15 - -
Purchases of common stock for treasury - - - - - - (586)
Net income - - - 2,176 - - -
Common dividends (per share-$.68) - - - (883) - - -
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1993 $ - $ 426 $1,086 $9,458 $ (85) $ (420) $ (5,881)
===================================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
1. ACCOUNTING POLICIES
The significant accounting policies and practices followed by The Coca-Cola
Company and subsidiaries (the Company) are as follows:
CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
all subsidiaries except where control is temporary or does not rest with the
Company. The Company's investments in companies in which it has the ability to
exercise significant influence over operating and financial policies, including
certain investments where there is a temporary majority interest, are accounted
for by the equity method. Accordingly, the Company's share of the net earnings
of these companies is included in consolidated net income. The Company's
investments in other companies are carried at cost. All significant
intercompany accounts and transactions are eliminated.
Certain amounts in the prior years' financial statements have been
reclassified to conform to the current-year presentation.
NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income less dividends
on preferred stock by the weighted average number of common shares outstanding.
CASH EQUIVALENTS
Marketable securities that are highly liquid and have maturities of three
months or less at the date of purchase are classified as cash equivalents.
INVENTORIES
Inventories are valued at the lower of cost or market. In general, cost is
determined on the basis of average cost or first-in, first-out methods.
However, for certain inventories, cost is determined on the last-in, first-out
(LIFO) method. The excess of current costs over LIFO stated values amounted to
approximately $9 million and $24 million at December 31, 1993 and 1992,
respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, less allowances for
depreciation. Property, plant and equipment are depreciated principally by the
straight-line method over the estimated useful lives of the assets.
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets are stated on the basis of cost and are
being amortized, principally on a straight-line basis, over the estimated
future periods to be benefited (not exceeding 40 years). Accumulated
amortization was approximately $50 million and $26 million at December 31, 1993
and 1992, respectively.
<PAGE> 18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
CHANGES IN ACCOUNTING PRINCIPLES
Statement of Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits (SFAS 112), was adopted 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. The Company recorded an
accumulated obligation of $12 million, which is net of deferred taxes of $8
million. The increase in annual pretax postemployment benefits expense in 1993
was immaterial to Company operations.
In 1993, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS 115). SFAS 115 requires that the carrying
value of certain investments be adjusted to their fair value. The Company's
required adoption date is January 1, 1994. The Company expects to record an
increase to share-owners' equity of approximately $65 million in 1994 from the
adoption of SFAS 115.
2. INVENTORIES
Inventories consist of the following (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Raw materials and supplies $ 689 $ 620
Work in process 4 23
Finished goods 356 376
- -----------------------------------------------------------------------------------------------------------------
$1,049 $1,019
=================================================================================================================
</TABLE>
3. BOTTLING INVESTMENTS
The Company invests in bottling companies to ensure the strongest and most
efficient production, distribution and marketing systems possible.
COCA-COLA ENTERPRISES INC.
Coca-Cola Enterprises is the largest bottler of Company products in the world.
The Company owns approximately 44 percent of the outstanding common stock of
Coca-Cola Enterprises, and, accordingly, accounts for its investment by the
equity method of accounting. A summary of financial information for Coca-Cola
Enterprises is as follows (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets $ 746 $ 701
Noncurrent assets 7,936 7,384
- --------------------------------------------------------------------------------------------------------
Total assets $8,682 $8,085
========================================================================================================
Current liabilities $1,007 $1,304
Noncurrent liabilities 6,415 5,527
- --------------------------------------------------------------------------------------------------------
Total liabilities $7,422 $6,831
========================================================================================================
Share-owners' equity $1,260 $1,254
========================================================================================================
Company equity investment $ 498 $ 518
========================================================================================================
</TABLE>
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Year Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
Net operating revenues $5,465 $5,127 $3,915
Cost of goods sold 3,372 3,219 2,420
- -----------------------------------------------------------------------------------------------------------------
Gross profit $2,093 $1,908 $1,495
=================================================================================================================
Operating income $ 385 $ 306 $ 120
=================================================================================================================
Operating cash flow(1) $ 804 $ 695 $ 538
=================================================================================================================
Loss before changes
in accounting principles $ (15) $ (15) $ (83)
=================================================================================================================
Net loss available
to common share owners $ (15) $ (186) $ (92)
=================================================================================================================
Company equity loss $ (6) $ (6) $ (40)
=================================================================================================================
</TABLE>
(1) Excludes nonrecurring charges.
The above 1992 net loss of Coca-Cola Enterprises includes $171 million of
noncash, after-tax charges resulting from the adoption of Statement of
Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions (SFAS 106) and Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS
109) as of January 1, 1992. The Company's financial statements reflect the
adoption of SFAS 109 by Coca-Cola Enterprises as if it occurred on January 1,
1989.
The 1991 results of Coca-Cola Enterprises include pretax restructuring
charges of $152 million and a pretax charge of $15 million to increase
insurance reserves.
In a 1991 merger, Coca-Cola Enterprises acquired Johnston Coca-Cola Bottling
Group, Inc. (Johnston) for approximately $196 million in cash and 13 million
shares of Coca-Cola Enterprises common stock. The Company exchanged its 22
percent ownership interest in Johnston for approximately $81 million in cash
and approximately 50,000 shares of Coca-Cola Enterprises common stock,
resulting in a pretax gain of $27 million to the Company. The Company's
ownership interest in Coca-Cola Enterprises was reduced from 49 percent to
approximately 44 percent as a result of this transaction.
If the Johnston acquisition had been completed on January 1, 1991, Coca-Cola
Enterprises' 1991 pro forma net loss available to common share owners would
have been approximately $137 million. Summarized financial information and net
concentrate/syrup sales related to Johnston prior to its acquisition by
Coca-Cola Enterprises have been combined with other equity investments below.
Net concentrate/syrup sales to Coca-Cola Enterprises were $961 million in
1993, $889 million in 1992 and $626 million in 1991. Coca-Cola Enterprises
purchases sweeteners through the Company under a pass-through arrangement, and,
accordingly, related collections from Coca-Cola Enterprises and payments to
suppliers are not included in the Company's consolidated statements of income.
These transactions amounted to $211 million in 1993, $225 million in 1992 and
$185 million in 1991. The Company also provides certain administrative and
other services to Coca-Cola Enterprises under negotiated fee arrangements.
The Company engages in a wide range of marketing programs, media advertising
and other similar arrangements to promote the sale of Company
<PAGE> 20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
products in territories in which Coca-Cola Enterprises operates. The Company's
direct support for certain Coca-Cola Enterprises' marketing activities and
participation with Coca-Cola Enterprises in cooperative advertising and other
marketing programs amounted to approximately $256 million in 1993, $253 million
in 1992 and $199 million in 1991.
In April 1993, the Company purchased majority ownership interests in two
bottling companies in Tennessee along with the rights to purchase the remaining
minority interests. Such ownership interests and a bottling operation in the
Netherlands were sold to Coca-Cola Enterprises in June 1993. The Company
received approximately $260 million in cash plus the assumption of indebtedness
and carrying costs resulting in an after-tax gain of $11 million or
approximately $.01 per share.
In 1992, the Company sold 100 percent of the common stock of the Erie,
Pennsylvania, Coca-Cola bottler to Coca-Cola Enterprises for approximately $11
million, which approximated the Company's original investment plus carrying
costs. In January 1994, the Company sold common stock representing a 9 percent
voting interest in The Coca-Cola Bottling Company of New York, Inc. (CCNY) to
Coca-Cola Enterprises for approximately $6 million, which approximated the
Company's investment.
If valued at the December 31, 1993, quoted closing price of the publicly
traded Coca-Cola Enterprises shares, the calculated value of the Company's
investment in Coca-Cola Enterprises would have exceeded its carrying value by
approximately $361 million.
OTHER EQUITY INVESTMENTS
The Company owns approximately 51 percent of Coca-Cola Amatil, an
Australian-based bottler of Company products. In the fourth quarter of 1993,
Coca-Cola Amatil issued approximately 8 million shares of stock to acquire the
Company's franchise bottler in Jakarta, Indonesia. This transaction resulted in
a pretax gain of approximately $12 million and diluted the Company's ownership
interest to the present level. The Company intends to reduce its ownership
interest in Coca-Cola Amatil to below 50 percent. Accordingly, the investment
has been accounted for by the equity method of accounting.
At December 31, 1993, the excess of the Company's investment over its equity
in the underlying net assets of Coca-Cola Amatil was approximately $191
million, which is being amortized over 40 years. The Company recorded equity
income from Coca-Cola Amatil of $40 million, $28 million and $15 million in
1993, 1992 and 1991, respectively. These amounts are net of the amortization
charges discussed above.
In January 1993, Coca-Cola Amatil sold its snack-food segment for
approximately $299 million, and recognized a gain of $169 million. The
Company's ownership interest in the sale proceeds received by Coca-Cola Amatil
approximated the carrying value of the Company's investment in the snack-food
segment.
In 1993, the Company acquired a 30 percent equity interest in Coca-Cola
FEMSA, S.A. de C.V., which operates bottling facilities in the Valley of Mexico
and Mexico's southeastern region, for $195 million. At December 31, 1993, the
excess of the Company's investment over its equity in the underlying net assets
of Coca-Cola FEMSA was approximately $130 million, which is being amortized
over 40 years.
Also in 1993, the Company entered into a joint venture with Coca-Cola
Bottling Co. Consolidated (Consolidated), establishing the Piedmont Coca-Cola
Bottling Partnership (Piedmont), which will operate certain bottling
territories in the United States acquired from each company. The Company has
made a cash contribution of $70 million to the partnership for a 50 percent
ownership
<PAGE> 21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
interest. Consolidated has contributed bottling assets valued at
approximately $48 million and approximately $22 million in cash for the
remaining 50 percent interest. Piedmont has purchased assets and stock of
certain bottling companies from the Company for approximately $163 million,
which approximated the Company's carrying cost, and certain bottling assets
from Consolidated for approximately $130 million. The Company beneficially owns
a 30 percent economic interest and a 23 percent voting interest in
Consolidated.
Operating results include the Company's proportionate share of income from
equity investments since the respective dates of investment. A summary of
financial information for the Company's equity investments, other than
Coca-Cola Enterprises, is as follows (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets $ 2,294 $ 1,945
Noncurrent assets 4,780 4,172
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 7,074 $ 6,117
===================================================================================================================
Current liabilities $ 1,926 $ 2,219
Noncurrent liabilities 2,366 1,720
- -------------------------------------------------------------------------------------------------------------------
Total liabilities $ 4,292 $ 3,939
===================================================================================================================
Share-owners' equity $ 2,782 $ 2,178
===================================================================================================================
Company equity investments $ 1,629 $ 1,387
===================================================================================================================
Year Ended December 31, 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
Net operating revenues $ 8,168 $ 7,027 $ 7,877
Cost of goods sold 5,385 4,740 5,244
- -------------------------------------------------------------------------------------------------------------------
Gross profit $ 2,783 $ 2,287 $ 2,633
===================================================================================================================
Operating income $ 673 $ 364 $ 560
===================================================================================================================
Operating cash flow $ 984 $ 923 $ 979
===================================================================================================================
Income before changes
in accounting principles $ 258 $ 199 $ 214
===================================================================================================================
Net income $ 258 $ 74 $ 214
===================================================================================================================
Company equity income $ 97 $ 71 $ 80
===================================================================================================================
Equity investments include certain non-bottling investees.
</TABLE>
Net income for the Company's equity investments in 1993 reflects an $86
million after-tax charge recorded by Coca-Cola Beverages Ltd., related to
restructuring its operations in Canada.
Net sales to equity investees, other than Coca-Cola Enterprises, were $1.2
billion in 1993 and $1.3 billion in 1992 and 1991. The Company participates in
various marketing, promotional and other activities with these investees, the
majority of which are located outside the United States.
If valued at the December 31, 1993, quoted closing prices of shares actively
traded on stock markets, the net calculated value of the Company's
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
equity investments in publicly traded bottlers, other than Coca-Cola
Enterprises, would have exceeded the Company's carrying value by approximately
$966 million.
The consolidated balance sheet caption Other, principally bottling
companies, also includes various investments that are accounted for by the cost
method.
4. FINANCE SUBSIDIARY
Coca-Cola Financial Corporation (CCFC) provides loans and other forms of
financing to Coca-Cola bottlers and customers for the acquisition of
sales-related equipment and for other business purposes. The approximate
contractual maturities of finance receivables for the five years succeeding
December 31, 1993, are as follows (in millions):
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 33 $ 32 $ 31 $ 16 $ 118
===========================================================================================
</TABLE>
These amounts do not reflect possible prepayments or renewals.
In 1993, CCFC provided a $100 million subordinated loan to CCNY and issued a
$50 million letter of credit on CCNY's behalf of which $18 million was
outstanding at December 31, 1993.
In connection with the 1991 acquisition of Sunbelt Coca-Cola Bottling
Company, Inc. by Consolidated, CCFC purchased 25,000 shares of Consolidated
preferred stock for $50 million, provided to Consolidated a $153 million bridge
loan and issued a $77 million letter of credit on Consolidated's behalf.
Consolidated redeemed the 25,000 shares of preferred stock for $50 million plus
accrued dividends in 1992. Consolidated also repaid all amounts due under the
bridge loan in 1992. In 1993, the letter of credit was withdrawn.
5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Accrued marketing $ 371 $ 374
Container deposits 122 117
Accrued compensation 119 99
Accounts payable and
other accrued expenses 1,605 1,663
- ------------------------------------------------------------------------------------------------------------------
$2,217 $2,253
==================================================================================================================
</TABLE>
6. SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS
Loans and notes payable consist primarily of commercial paper issued in the
United States. At December 31, 1993, the Company had $1.4 billion in lines of
credit and other short-term credit facilities contractually available, under
which $150 million was outstanding. Included were $1.0 billion in lines
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
designated to support commercial paper and other borrowings, under which no
amounts were outstanding at December 31, 1993. These facilities are subject to
normal banking terms and conditions. Some of the financial arrangements require
compensating balances, none of which are presently significant to the Company.
7. ACCRUED TAXES
Accrued taxes consist of the following (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income taxes $1,106 $820
Sales, payroll and other taxes 176 143
- --------------------------------------------------------------------------------------------------------------
$1,282 $963
==============================================================================================================
</TABLE>
8. LONG-TERM DEBT
Long-term debt consists of the following (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7 3/4% U.S. dollar notes due 1996 $ 250 $ 250
5 3/4% Japanese yen notes due 1996 270 241
5 3/4% German mark notes due 1998(1) 147 156
7 7/8% U.S. dollar notes due 1998 249 249
6 5/8% U.S. dollar notes due 2002 149 149
6% U.S. dollar notes due 2003 150 -
7 3/8% U.S. dollar notes due 2093 148 -
Other, due 1994 to 2013(2) 84 90
- -------------------------------------------------------------------------------------------------------------------
1,447 1,135
Less current portion 19 15
- -------------------------------------------------------------------------------------------------------------------
$1,428 $1,120
===================================================================================================================
</TABLE>
(1) Portions of these notes have been swapped for liabilities denominated in
other currencies.
(2) The weighted average interest rate is approximately 7.8 percent.
Maturities of long-term debt for the five years succeeding December 31, 1993,
are as follows (in millions):
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$19 $43 $527 $5 $400
=========================================================================================
</TABLE>
The above notes include various restrictions, none of which are
presently significant to the Company.
Interest paid was approximately $158 million, $174 million and $160
million in 1993, 1992 and 1991, respectively.
<PAGE> 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
9. FINANCIAL INSTRUMENTS
The carrying amounts reflected in the consolidated balance sheets for cash,
cash equivalents, loans and notes payable approximate the respective fair
values due to the short maturities of these instruments. The fair values for
marketable debt and equity securities, investments, receivables, long-term debt
and hedging instruments are based primarily on quoted market prices for those
or similar instruments. A comparison of the carrying value and fair value of
these financial instruments is as follows (in millions):
<TABLE>
<CAPTION>
Carrying Fair
December 31, Value Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1993
Current marketable securities $ 80 $ 102
Investments (1) 88 259
Finance subsidiary receivables 259 265
Marketable securities and other assets 868 865
Long-term debt (1,447) (1,531)
Hedging instruments 31 (142)
===================================================================================================================
1992
Current marketable securities $ 107 $ 125
Investments(1) 258 300
Finance subsidiary receivables 126 135
Marketable securities and other assets 637 636
Long-term debt (1,135) (1,156)
Hedging instruments 102 99
==================================================================================================================
</TABLE>
(1) The consolidated balance sheet caption, Other, principally bottling
companies, also includes equity investments of $1.0 billion and $839
million at December 31, 1993 and 1992, respectively.
HEDGING TRANSACTIONS
The Company has entered into hedging transactions to reduce its exposure to
adverse fluctuations in interest and foreign exchange rates. While the hedging
instruments are subject to the risk of loss from changes in exchange rates,
these losses would generally be offset by gains on the exposures being hedged.
Realized and unrealized gains and losses on hedging instruments that are
designated and effective as hedges of firmly committed foreign currency
transactions are recognized in income in the same period as the hedged
transaction. Approximately $9 million of losses realized on settled contracts
entered into as hedges of firmly committed transactions in 1994, 1995 and 1996,
were deferred at December 31, 1993.
From time to time, the Company purchases foreign currency option contracts to
hedge anticipated transactions over the succeeding three years. Net unrealized
gains/losses from hedging anticipated transactions were not material at
December 31, 1993 or 1992.
At December 31, 1993 and 1992, the Company had forward exchange contracts,
swaps, options and other financial market instruments, principally to exchange
foreign currencies for U.S. dollars, of $4.6 billion and $4.9 billion,
respectively. These amounts are representative of amounts maintained throughout
1993. Maturities of financial market instruments held at December 31, 1993, are
as follows (in millions):
<TABLE>
<CAPTION>
1994 1995 1996 1997 through 2003
- -------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,266 $ 753 $ 666 $ 961
=========================================================================
</TABLE>
<PAGE> 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
Although pretax losses recognized on hedging transactions in 1993 amounted to
$29 million, such losses were fully offset by income recognized on the
exposures being hedged.
GUARANTEES
At December 31, 1993, the Company was contingently liable for guarantees of
indebtedness owed by third parties of $140 million, of which $39 million is
related to independent bottling licensees. In the opinion of management, it is
not probable that the Company will be required to satisfy these guarantees. The
fair value of these contingent liabilities is immaterial to the Company's
consolidated financial statements.
10. PREFERRED STOCK
The Company canceled the 3,000 issued shares of its $1 par value Cumulative
Money Market Preferred Stock (MMP) in 1993 and returned the shares to the
status of authorized but unissued shares. None of the MMP had been outstanding
since 1991, when the final 750 shares of the 3,000 shares originally issued
were redeemed.
11. COMMON STOCK
Common shares outstanding and related changes for the three years ended
December 31, 1993, are as follows (in millions):
<TABLE>
<CAPTION>
1993 1992 1991
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at January 1, 1,307 1,329 1,336
Issued to employees
exercising stock options 7 9 4
Issued under restricted
stock plans - - 3
Purchased for treasury
Share repurchase programs (14) (30) (14)
Stock option plan activity (3) (1) -
- ---------------------------------------------------------------------------------------------
Outstanding at December 31, 1,297 1,307 1,329
=============================================================================================
</TABLE>
12. RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS
The Company sponsors restricted stock award plans, stock option plans,
Incentive Unit Agreements and Performance Unit Agreements.
Under the amended 1989 Restricted Stock Award Plan and the amended 1983
Restricted Stock Award Plan (the Restricted Stock Plans), 20 million and 12
million shares of restricted common stock, respectively, may be granted to
certain officers and key employees of the Company.
At December 31, 1993, 17 million shares were available for grant under the
Restricted Stock Plans. The participant is entitled to vote and receive
dividends on the shares, and, under the 1983 Restricted Stock Award Plan, the
participant is reimbursed by the Company for income taxes imposed on the award,
but not for taxes generated by the reimbursement payment. The shares are
subject to certain transfer restrictions and may be forfeited if the
participant leaves the Company
<PAGE> 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
for reasons other than retirement, disability or death, absent a change
in control of the Company. On July 18, 1991, the Restricted Stock Plans were
amended to specify age 62 as the minimum retirement age. The 1983 Restricted
Stock Award Plan was further amended to conform to the terms of the 1989
Restricted Stock Award Plan by requiring a minimum of five years of service
between the date of the award and retirement. The amendments affect shares
granted after July 18, 1991.
Under the Company's 1991 Stock Option Plan (the Option Plan), a maximum of 60
million shares of the Company's common stock may be issued or transferred to
certain officers and employees pursuant to stock options and stock appreciation
rights granted under the Option Plan. The stock appreciation rights permit the
holder, upon surrendering all or part of the related stock option, to receive
cash, common stock or a combination thereof, in an amount up to 100 percent of
the difference between the market price and the option price. No stock
appreciation rights have been granted since 1990, and the Company presently
does not intend to grant additional stock appreciation rights in the future.
Options outstanding at December 31, 1993, also include various options granted
under previous plans. Further information relating to options is as follows (in
millions, except per share amounts):
<TABLE>
<CAPTION>
1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at January 1, 31 36 33
Granted 6 4 8
Exercised (7) (9) (4)
Canceled - - (1)
- -----------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 30 31 36
=================================================================================================================
Exercisable at December 31, 22 23 24
=================================================================================================================
Shares available at December 31,
for options that may be granted 45 51 55
=================================================================================================================
Prices per share
Exercised $4-$41 $4-$28 $3-$28
Unexercised at December 31, $5-$44 $4-$41 $4-$30
=================================================================================================================
</TABLE>
In 1988, the Company entered into Incentive Unit Agreements, whereby, subject
to certain conditions, certain officers were given the right to receive cash
awards based on the market value of 1.2 million shares of the Company's common
stock at the measurement dates. Under the Incentive Unit Agreements, the
employee is reimbursed by the Company for income taxes imposed when the value
of the units is paid, but not for taxes generated by the reimbursement payment.
As of December 31, 1993, 400,000 units had been paid and 800,000 units were
outstanding.
In 1985, the Company entered into Performance Unit Agreements, whereby
certain officers were given the right to receive cash awards based on the
difference in the market value of approximately 2.2 million shares of the
Company's common stock at the measurement dates and the base price of $5.16,
the market value as of January 2, 1985. As of December 31, 1993, 780,000 units
have been paid and approximately 1.4 million units were outstanding.
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
13. PENSION BENEFITS
The Company sponsors and/or contributes to pension plans covering substantially
all U.S. employees and certain employees in international locations. The
benefits are primarily based on years of service and the employees'
compensation for certain periods during the last years of employment. Pension
costs are generally funded currently, subject to regulatory funding
limitations. The Company also sponsors nonqualified, unfunded defined benefit
plans for certain officers and other employees. In addition, the Company and
its subsidiaries have various pension plans and other forms of postretirement
arrangements outside the United States.
Total pension expense for all benefit plans, including defined benefit plans,
amounted to approximately $57 million in 1993, $49 million in 1992 and $42
million in 1991. Net periodic pension cost for the Company's defined benefit
plans consists of the following (in millions):
<TABLE>
<CAPTION>
U.S. Plans International Plans
---------------------------- ----------------------------
Year Ended December 31, 1993 1992 1991 1993 1992 1991
- ------------------------------------------------------------------------------------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits earned during the period $ 17 $ 15 $ 13 $ 17 $ 18 $ 16
Interest cost on projected benefit obligation 53 50 46 22 20 18
Actual return on plan assets (77) (36) (113) (27) (19) (18)
Net amortization and deferral 31 (9) 71 13 3 1
- ------------------------------------------------------------------------------------------ ---------------------------
Net periodic pension cost $ 24 $ 20 $ 17 $ 25 $ 22 $ 17
========================================================================================== ===========================
</TABLE>
<PAGE> 28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
The funded status for the Company's defined benefit plans is as follows (in
millions):
<TABLE>
<CAPTION>
U.S. Plans
---------------------------------------
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
- --------------------------------------------------------------------------------- --------------------
December 31, 1993 1992 1993 1992
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------- --------------------
Actuarial present value of
benefit obligations
Vested benefit obligation $ 481 $401 $ 109 $ 82
================================================================================= ====================
Accumulated benefit obligation $ 523 $431 $ 111 $ 89
================================================================================= ====================
Projected benefit obligation $ 598 $520 $ 133 $ 101
Plan assets at fair value(1) 631 587 2 1
- --------------------------------------------------------------------------------- --------------------
Plan assets in excess of (less than) projected benefit
obligation 33 67 (131)(2) (100)(2)
Unrecognized net (asset) liability at transition (34) (37) 17 19
Unrecognized prior service cost 8 23 15 3
Unrecognized net (gain) loss (24) (61) 36 24
Adjustment required to recognize minimum liability - - (46) (33)
- --------------------------------------------------------------------------------- --------------------
Accrued pension asset (liability) included
in the consolidated balance sheet $ (17) $ (8) $(109) $ (87)
================================================================================= ====================
(1) Primarily listed stocks, bonds and government securities.
(2) Substantially all of this amount relates to nonqualified,
unfunded defined benefit plans.
<CAPTION>
International Plans
------------------------------------------------
Assets Exceed Accumulated
Accumulated Benefits
Benefit Exceed Assets
- ------------------------------------------------------------------------------- --------------------------
December 31, 1993 1992 1993 1992
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------- --------------------------
Actuarial present value of
benefit obligations
Vested benefit obligation $139 $119 $110 $ 90
=============================================================================== ==========================
Accumulated benefit obligation $151 $127 $126 $100
=============================================================================== ==========================
Projected benefit obligation $196 $167 $177 $148
Plan assets at fair value(1) 200 188 94 73
- ------------------------------------------------------------------------------- --------------------------
Plan assets in excess of (less than) projected benefit
obligation 4 21 (83) (75)
Unrecognized net (asset) liability at transition (16) (6) 34 33
Unrecognized prior service cost - - 9 8
Unrecognized net (gain) loss 28 2 (3) (3)
Adjustment required to recognize minimum liability - - (7) (3)
- ------------------------------------------------------------------------------- --------------------------
Accrued pension asset (liability) included
in the consolidated balance sheet $ 16 $ 17 $(50) $(40)
=============================================================================== ==========================
(1) Primarily listed stocks, bonds and government securities.
(2) Substantially all of this amount relates to nonqualified,
unfunded defined benefit plans.
The assumptions used in computing the preceding information are as follows:
International Plans
U.S. Plans (weighted average rates)
----------------------------- -------------------------
Year Ended December 31, 1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------- -------------------------
Discount rates 7 1/4% 8 1/2% 9% 6 1/2% 7% 7 1/2%
Rates of increase in compensation levels 4 3/4% 6% 6% 5% 5 1/2% 6%
Expected long-term rates of return on assets 9 1/2% 9 1/2% 9 1/2% 7% 7% 7 1/2%
================================================================================== =========================
</TABLE>
<PAGE> 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
14. OTHER POSTRETIREMENT BENEFITS
The Company has plans providing postretirement health care and life insurance
benefits to substantially all U.S. employees and certain employees in
international locations who retire with a minimum of five years of service. The
Company adopted SFAS 106 for all U.S. and international plans as of January 1,
1992. In 1992, the Company recorded an accumulated obligation for consolidated
operations of $146 million, which is net of $92 million in deferred tax
benefits. The Company also recorded an additional charge of $73 million, net of
$13 million of deferred tax benefits, representing the Company's proportionate
share of accumulated postretirement benefit obligations recognized by bottling
investees accounted for by the equity method.
Net periodic cost for the Company's postretirement health care and life
insurance benefits consists of the following (in millions):
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Service cost $ 10 $ 9
Interest cost 21 20
Other (1) -
- ----------------------------------------------------------------------------------------------------------------
$ 30 $ 29
================================================================================================================
</TABLE>
The Company contributes to a Voluntary Employees' Beneficiary Association
trust that will be used to partially fund health care benefits for future
retirees. The Company is funding benefits to the extent contributions are
tax-deductible, which under current legislation is limited. In general, retiree
health benefits are paid as covered expenses are incurred. The funded status
for the Company's postretirement health care and life insurance plans is as
follows (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement
benefit obligations:
Retirees $ 132 $ 111
Fully eligible active plan participants 35 34
Other active plan participants 131 113
- ----------------------------------------------------------------------------------------------------------------
Total benefit obligation 298 258
Plan assets at fair value (1) 42 24
- ----------------------------------------------------------------------------------------------------------------
Plan assets less than benefit obligation (256) (234)
Unrecognized net loss 23 -
- ----------------------------------------------------------------------------------------------------------------
Accrued postretirement benefit
liability included in the
consolidated balance sheet $(233) $(234)
================================================================================================================
</TABLE>
(1) Consists of corporate bonds, government securities and short-term
investments.
<PAGE> 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
The assumptions used in computing the preceding information are as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Discount Rate 7 1/4% 8 1/2%
Rate of increase in compensation levels 4 3/4% 6%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The rate of increase in the per capita costs of covered health care benefits
is assumed to be 11 percent in 1994, decreasing gradually to 5 1/2 percent by
the year 2005. Increasing the assumed health care cost trend rate by 1
percentage point would increase the accumulated postretirement benefit
obligation as of December 31, 1993, by approximately $35 million and increase
net periodic postretirement benefit cost by approximately $4 million in 1993.
15. INCOME TAXES
Income before income taxes and changes in accounting principles consists of the
following (in millions):
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $1,035 $ 762 $ 648
International 2,150 1,984 1,735
- ---------------------------------------------------------------------------------------------------------------
$3,185 $2,746 $2,383
===============================================================================================================
</TABLE>
Income tax expense (benefit) consists of the following (in millions):
<TABLE>
<CAPTION>
United State &
Year Ended December 31, States Local International Total
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993
Current $356 $34 $669 $1,059
Deferred(1) (64) 5 (3) (62)
1992
Current $278 $36 $576 $ 890
Deferred(1) (60) (1) 34 (27)
1991
Current $233 $31 $595 $ 859
Deferred (89) (5) - (94)
=========================================================================================================
</TABLE>
(1) Additional deferred tax benefits of $8 million in 1993 and $105 million
in 1992 have been included in the SFAS 112 and SFAS 106 transition effect
charges, respectively.
The Company made income tax payments of approximately $650 million, $856
million and $672 million in 1993, 1992 and 1991, respectively.
A reconciliation of the statutory U.S. federal rate and effective rates is
as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory U.S. federal rate 35.0% 34.0% 34.0%
State income taxes-net of
federal benefit 1.0 1.0 1.0
Earnings in jurisdictions taxed
at rates different from the
statutory U.S. federal rate (5.1) (3.8) (3.1)
Equity income (1.7) (1.0) (.6)
Other-net 2.1 1.2 .8
- --------------------------------------------------------------------------------------------------------
31.3% 31.4% 32.1%
========================================================================================================
</TABLE>
The tax effects of temporary differences and carryforwards that give rise to
significant portions of deferred tax assets and liabilities consist of the
following (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Benefit plans $ 298 $ 297
Liabilities and reserves 177 119
Net operating loss carryforwards 141 101
Other 120 84
- ---------------------------------------------------------------------------------------------------------------
Gross deferred tax assets 736 601
Valuation allowance (75) (63)
- ---------------------------------------------------------------------------------------------------------------
Total $ 661 $ 538
===============================================================================================================
Deferred tax liabilities:
Property, plant and equipment $ 342 $ 312
Equity investments 180 197
Intangible assets 52 68
Other 61 43
- ---------------------------------------------------------------------------------------------------------------
Total $ 635 $ 620
===============================================================================================================
Net deferred tax asset (liability)(1) $ 26 $ (82)
===============================================================================================================
</TABLE>
(1) Deferred tax assets of $139 million have been included in the consolidated
balance sheet caption marketable securities and other assets at December 31,
1993.
At December 31, 1993, the Company had $403 million of operating loss
carryforwards available to reduce future taxable income of certain
international subsidiaries. Loss carryforwards of $293 million must be utilized
<PAGE> 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
within the next five years, and $110 million can be utilized over an
indefinite period. A valuation allowance has been provided for a portion of the
deferred tax assets related to these loss carryforwards.
As the result of changes in U.S. tax law, the Company was required to record
charges for additional taxes and tax-related expenses that reduced net income
by approximately $51 million in 1993. The Company's effective tax rate reflects
the favorable U.S. tax treatment from manufacturing facilities in Puerto Rico
that operate under a negotiated exemption grant that expires December 31, 2009,
as well as the tax benefit derived from significant operations outside the
United States, which are taxed at rates lower than the U.S. statutory rate of
35 percent. Changes to U.S. tax law enacted in 1993 will limit the utilization
of the favorable tax treatment from operations in Puerto Rico beginning in
1994, and will exert upward pressure on the Company's effective tax rate.
Appropriate U.S. and international taxes have been provided for earnings of
subsidiary companies that are expected to be remitted to the parent company.
The cumulative amount of unremitted earnings of international subsidiaries that
are expected to be indefinitely reinvested, exclusive of amounts that, if
remitted, would result in little or no tax, is approximately $426 million at
December 31, 1993. The taxes that would be paid upon remittance of these
earnings are approximately $149 million.
16. NET CHANGE IN OPERATING ASSETS AND LIABILITIES
The changes in operating assets and liabilities, net of effects of acquisitions
and divestitures of businesses and unrealized exchange gains/losses, are as
follows (in millions):
<TABLE>
<CAPTION>
Year Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase in trade
accounts receivable $(151) $(147) $ (32)
Increase in inventories (41) (138) (3)
Increase in prepaid expenses
and other assets (76) (112) (326)
Increase (decrease) in
accounts payable
and accrued expenses (44) 405 267
Increase in accrued taxes 355 57 244
Increase (decrease) in
other liabilities 11 (108) 101
- ----------------------------------------------------------------------------------------------------------
$ 54 $ (43) $ 251
==========================================================================================================
</TABLE>
17. ACQUISITIONS AND INVESTMENTS
During 1993, the Company's acquisition and investment activity, which includes
investments in bottling operations in Mexico, Belgium and the United States,
totaled $816 million. During 1992 and 1991, the Company's acquisition and
investment activity totaled $717 million and $399 million, respectively. None
of the acquisitions in 1992 or 1991 were individually significant.
As discussed in Note 3, the Company purchased bottling operations in
Tennessee that were subsequently sold to Coca-Cola Enterprises along with a
bottling operation in the Netherlands. Note 3 also includes a discussion of the
Company's 1993 investments in bottling operations in Mexico and in the United
States.
The acquisitions have been accounted for by the purchase method of
accounting, and, accordingly, their results have been included in the
consolidated financial statements from their respective dates of acquisition.
Had the results of these businesses been included in operations commencing with
1991, the reported results would not have been materially affected.
18. NONRECURRING ITEMS
Upon a favorable court decision in 1993, the Company reversed the previously
recorded reserves for bottler litigation, resulting in a $13 million reduction
to selling, administrative and general expenses and a $10 million reduction to
interest expense. Selling, administrative and general expenses for 1993 also
include provisions of $63 million to increase efficiencies in European,
domestic and corporate operations. Also in 1993, equity income has been reduced
by $42 million related to restructuring charges recorded by Coca-Cola Beverages
Ltd.
<PAGE> 32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
Other income (deductions)-net includes a $50 million pretax gain recorded
by the foods business sector upon the sale of citrus groves in the United
States, and a $34 million pretax gain recognized on the sale of property no
longer required as a result of a consolidation of manufacturing operations in
Japan.
Other income (deductions)-net in 1991 includes a $69 million pretax gain on
the sale of property no longer required as a result of consolidating
manufacturing operations in Japan and a $27 million pretax gain on the sale of
the Company's 22 percent ownership interest in Johnston to Coca-Cola
Enterprises. Selling, administrative and general expenses and interest expense
in 1991 include the original charges of $13 million and $8 million,
respectively, for bottler litigation reversed in 1993. In addition, 1991 equity
income has been reduced by $44 million related to restructuring charges
recorded by Coca-Cola Enterprises.
NET OPERATING REVENUES BY LINE OF BUSINESS
(Graphic Material Omitted)
Year Ended December 31, 1991 1992 1993
- --------------------------------------------------------------------------
Net Operating Revenues (in millions) $11,572 $13,074 $13,957
- --------------------------------------------------------------------------
Foods 14% 13% 13%
Soft Drinks - International 63% 65% 66%
Soft Drinks - United States 23% 22% 21%
==========================================================================
OPERATING INCOME BY LINE OF BUSINESS
(Graphic Material Omitted)
Year Ended December 31, 1991 1992 1993
- --------------------------------------------------------------------------
Operating Income (in millions) $2,319 $2,770 $3,102
- --------------------------------------------------------------------------
Foods 4% 4% 4%
Soft Drinks - International 79% 80% 79%
Soft Drinks - United States 17% 16% 17%
==========================================================================
<PAGE> 33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
19. LINES OF BUSINESS
The Company operates in two major lines of business: soft drinks and foods
(principally juice and juice-drink products). Information concerning operations
in these businesses is as follows (in millions):
<TABLE>
<CAPTION>
Soft Drinks
------------------------------
United States International Foods Corporate Consolidated
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993
Net operating revenues $2,966 $9,205 $1,766 $ 20 $13,957
Operating income 618(1) 2,753 (1) 127 (396)(1) 3,102
Identifiable operating assets 1,956 5,809 761 1,280 (3) 9,806
Equity income 91 (1) 91
Investments (principally bottling companies) 2,215 2,215
Capital expenditures 136 557 30 77 800
Depreciation and amortization 91 172 38 59 360
===============================================================================================================================
1992
Net operating revenues $2,813 $8,551 $1,675 $ 35 $13,074
Operating income 510 2,521 112 (373) 2,770
Identifiable operating assets 1,812 5,251 791 1,035 (3) 8,889
Equity income 65 65
Investments (principally bottling companies) 2,163 2,163
Capital expenditures 169 736 38 140 1,083
Depreciation and amortization 87 157 35 43 322
===============================================================================================================================
1991
Net operating revenues $2,645 $7,245 $1,636 $ 46 $11,572
Operating income 469 2,141 104 (395) 2,319
Identifiable operating assets 1,447 4,742 755 1,124 (3) 8,068
Equity income 40 (2) 40
Investments (principally bottling companies) 2,121 2,121
Capital expenditures 131 547 57 57 792
Depreciation and amortization 82 112 30 37 261
===============================================================================================================================
</TABLE>
Intercompany transfers between sectors are not material.
(1) Operating income for soft drink operations in the United States,
International operations and Corporate were reduced by $13 million, $33
million and $17 million, respectively, for provisions to increase
efficiencies. Equity income was reduced by $42 million related to
restructuring charges recorded by Coca-Cola Beverages Ltd.
(2) Reduced by $44 million related to restructuring charges recorded by
Coca-Cola Enterprises.
(3) Corporate identifiable operating assets are composed principally of
marketable securities and fixed assets.
<TABLE>
<CAPTION>
Soft Drinks
Compound Growth Rates ------------------------------
Ending 1993 United States International Foods Consolidated
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net operating revenues
5 years 8% 15% 3% 12%
10 years 7% 14% 5% 11%
===================================================================================================================
Operating income
5 years 12% 16% 7% 14%
10 years 10% 17% 1% 14%
===================================================================================================================
</TABLE>
<PAGE> 34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE COCA-COLA COMPANY
AND SUBSIDIARIES
20. OPERATIONS IN GEOGRAPHIC AREAS
Information about the Company's operations in different geographic areas is as
follows (in millions):
<TABLE>
<CAPTION>
Northeast
United European Latin Europe/ Pacific &
States Africa Community America Middle East Canada Corporate Consolidated
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993
Net operating revenues $4,586 $ 255 $3,834 $1,683 $ 677 $2,902 $ 20 $13,957
Operating income 730(1) 152 872(1) 582 152 1,010 (396)(1) 3,102
Identifiable operating assets 2,682 153 2,777 1,220 604 1,090 1,280 (3) 9,806
Equity income 91 (1) 91
Investments
(principally bottling companies) 2,215 2,215
Capital expenditures 165 6 239 141 129 43 77 800
Depreciation and amortization 127 3 99 33 22 17 59 360
===================================================================================================================================
1992 (4)
Net operating revenues $4,339 $ 242 $3,984 $1,383 $ 546 $2,545 $ 35 $13,074
Operating income 608 129 889 502 108 907 (373) 2,770
Identifiable operating assets 2,563 139 2,587 1,185 435 945 1,035 (3) 8,889
Equity income 65 65
Investments
(principally bottling companies) 2,163 2,163
Capital expenditures 204 12 386 188 120 33 140 1,083
Depreciation and amortization 121 3 99 27 14 15 43 322
===================================================================================================================================
1991 (4)
Net operating revenues $4,125 $ 206 $3,338 $1,103 $ 408 $2,346 $ 46 $11,572
Operating income 560 105 768 405 99 777 (395) 2,319
Identifiable operating assets 2,161 126 2,558 815 297 987 1,124 (3) 8,068
Equity income 40 (2) 40
Investments
(principally bottling companies) 2,121 2,121
Capital expenditures 185 6 331 106 55 52 57 792
Depreciation and amortization 111 2 66 23 7 15 37 261
===================================================================================================================================
</TABLE>
Intercompany transfers between geographic areas are not material.
Identifiable liabilities of operations outside the United States amounted to
approximately $1.9 billion at December 31, 1993 and 1992, and $1.8 billion at
December 31, 1991.
(1) Operating income for the United States, European Community and Corporate
were reduced by $13 million, $33 million and $17 million, respectively, for
provisions to increase efficiencies. Equity income was reduced by $42
million related to restructuring charges recorded by Coca-Cola Beverages
Ltd.
(2) Reduced by $44 million related to restructuring charges recorded by
Coca-Cola Enterprises.
(3) Corporate identifiable operating assets are composed principally of
marketable securities and fixed assets.
(4) In 1993, the Company divided its Northeast Europe/Africa group into the
Northeast Europe/Middle East and Africa groups. Accordingly, previous
years' results have been reclassified to reflect this change.
<TABLE>
<CAPTION>
Northeast
Compound Growth Rates United European Latin Europe/ Pacific &
Ending 1993 States Africa Community America Middle East Canada Consolidated
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net operating revenues
5 years 6% 11 % 19% 24% 24% 7% 12%
10 years 6% (4)% 18% 15% 21% 13% 11%
===================================================================================================================================
Operating income
5 years 11% 20 % 13% 27% 17% 12% 14%
10 years 8% 2 % 19% 24% 22% 18% 14%
===================================================================================================================================
</TABLE>
<PAGE> 35
NET OPERATING REVENUES BY GEOGRAPHIC AREA
(Graphic Material Omitted)
Year Ended December 31, 1991 1992 1993
- --------------------------------------------------------------------------
Net Operating Revenues (in millions) $11,572 $13,074 $13,957
- --------------------------------------------------------------------------
Pacific & Canada 20% 19% 21%
Northeast Europe/Middle East 3% 4% 5%
Latin America 10% 11% 12%
European Community 29% 31% 27%
Africa 2% 2% 2%
United States 36% 33% 33%
==========================================================================
OPERATING INCOME BY GEOGRAPHIC AREA
(Graphic Material Omitted)
Year Ended December 31, 1991 1992 1993
- --------------------------------------------------------------------------
Operating Income (in millions) $2,319 $2,770 $3,102
- --------------------------------------------------------------------------
Pacific & Canada 28% 29% 29%
Northeast Europe/Middle East 4% 4% 4%
Latin America 15% 16% 17%
European Community 28% 28% 25%
Africa 4% 4% 4%
United States 21% 19% 21%
==========================================================================
REPORT OF INDEPENDENT AUDITORS THE COCA-COLA COMPANY AND SUBSIDIARIES
BOARD OF DIRECTORS AND SHARE OWNERS
THE COCA-COLA COMPANY
We have audited the accompanying consolidated balance sheets of The Coca-Cola
Company and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, share-owners' equity and cash flows for each
of the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Coca-Cola
Company and subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the consolidated financial statements, in 1993 the
Company changed its method of accounting for postemployment benefits. As
discussed in Note 14 to the consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement benefits other than
pensions.
/s/ Ernst & Young
Atlanta, Georgia
January 25, 1994
<PAGE> 36
<TABLE>
<CAPTION>
QUARTERLY DATA (UNAUDITED) THE COCA-COLA COMPANY AND SUBSIDIARIES
For the years ended December 31, 1993 and 1992
(In millions except per share data)
First Second Third Fourth Full
1993 Quarter Quarter Quarter Quarter Year
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net operating revenues $3,056 $3,899 $3,629 $3,373 $13,957
Gross profit 1,963 2,435 2,286 2,113 8,797
Income before change in accounting principle 454 678 590 466 2,188
Net income 442 678 590 466 2,176
Income per share before change in
accounting principle .35 .52 .45 .36 1.68
Net income per share .34 .52 .45 .36 1.67
===============================================================================================================
First Second Third Fourth Full
1992 Quarter Quarter Quarter Quarter Year
- ---------------------------------------------------------------------------------------------------------------
Net operating revenues $2,772 $3,550 $3,508 $3,244 $13,074
Gross profit 1,740 2,177 2,122 1,980 8,019
Income before change in accounting principle 386 565 540 392 1,883
Net income 167 565 540 392 1,664
Income per share before change in
accounting principle .29 .43 .41 .30 1.43
Net income per share .13 .43 .41 .30 1.26
===============================================================================================================
The Company filed a Form 8-K with the Securities and Exchange Commission in January 1994 restating the 1993 quarterly reports
for the adoption of a change in accounting for postemployment benefits. The after-tax transition charge related to the restatement
reduced first quarter net income by $12 million ($.01 per share).
The third quarter of 1993 includes an after-tax impact of $47 million due to changes in U.S. tax law which reduced full year
after-tax income by $51 million ($.04 per share) and the reversal of previously recorded reserves for bottler litigation of $23
million ($.01 per share after income taxes).
The fourth quarter of 1993 includes provisions to increase efficiencies of $63 million ($.03 per share after income taxes), a
reduction of $42 million ($.02 per share after income taxes) related to restructuring charges by an equity investee, a
gain from the sale of real estate in Japan ($34 million, or $.02 per share after income taxes), a gain from the sale of citrus
groves in the United States ($50 million, or $.02 per share after income taxes) and a gain recognized on the issuance of stock by an
equity investee of $12 million ($.01 per share after income taxes).
The first quarter of 1992 includes the after-tax transition charge of $219 million related to the change in accounting for
postretirement benefits other than pensions. This charge decreased net income per share by $.16 for the quarter and $.17 for the
year. The sum of net income per share for the four quarters was $.01 higher than the reported full year amount due to rounding.
</TABLE>
STOCK PRICES
Below are the New York Stock Exchange high, low and closing prices of The
Coca-Cola Company stock for each quarter of 1993 and 1992.
<TABLE>
<CAPTION>
First Second Third Fourth
1993 Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High $ 44.13 $ 43.63 $ 44.75 $ 45.13
Low 40.00 37.50 41.75 40.00
Close 42.63 43.00 42.25 44.63
===========================================================================================================
First Second Third Fourth
1992 Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------
High $ 41.69 $ 45.13 $ 45.38 $ 44.50
Low 35.56 38.88 39.75 36.50
Close 40.88 40.00 40.50 41.88
===========================================================================================================
</TABLE>
<PAGE> 37
SHARE-OWNER INFORMATION
COMMON STOCK
Ticker symbol: KO
The Coca-Cola Company is one of 30 companies in the Dow Jones Industrial
Average.
Common stock of The Coca-Cola Company is listed and traded on the New York
Stock Exchange, which is the principal market for the common stock, and also is
traded on the Boston, Cincinnati, Midwest, Pacific and Philadelphia stock
exchanges. Outside the United States, the Company's common stock is listed and
traded on the German exchange in Frankfurt and on Swiss exchanges in Zurich,
Geneva, Bern, Basel and Lausanne.
Share owners of record at year-end: 179,165
Shares outstanding at year-end: 1.3 billion
DIVIDENDS
At its February 1994 meeting, the Company's Board of Directors increased the
quarterly dividend to 19.5 cents per share, equivalent to an annual dividend of
78 cents per share. The Company has increased dividends each of the last 32
years.
The Coca-Cola Company normally pays dividends four times a year, usually on
April 1, July 1, October 1 and December 15. The Company has paid 291
consecutive quarterly dividends beginning in 1920.
DIVIDEND AND CASH INVESTMENT PLAN
All share owners of record are invited to participate in the Dividend and Cash
Investment Plan. The Plan provides a convenient, economical and systematic
method of acquiring additional shares of the Company's common stock. The Plan
permits share owners of record to reinvest dividends from Company stock in
shares of The Coca-Cola Company. Share owners also may purchase Company stock
through voluntary cash investments of up to $60,000 per year.
All costs and commissions associated with joining and participating in the
plan are paid by the Company.
The Plan's administrator, First Chicago Trust Company of New York, purchases
stock for voluntary cash investments on or about the first of each month, and
for dividend reinvestment on April 1, July 1, October 1 and December 15.
At year-end, 48 percent of share owners of record were participants in the
Plan. In 1993, share owners invested $21.6 million in dividends and $27.5
million in cash in the Plan.
ANNUAL MEETING OF SHARE OWNERS
April 20, 1994, at 9 a.m. local time
Hotel du Pont
11th and Market Streets
Wilmington, Delaware
PUBLICATIONS
THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND QUARTERLY REPORT ON FORM 10-Q ARE
AVAILABLE FREE OF CHARGE FROM THE OFFICE OF THE SECRETARY, THE COCA-COLA
COMPANY, P.O. DRAWER 1734, ATLANTA, GEORGIA 30301.
A Notice of Annual Meeting of Share Owners and Proxy Statement are furnished
to share owners in advance of the annual meeting. Progress Reports, containing
financial results and other information, are distributed quarterly to share
owners.
Also available from the Office of the Secretary are Coca-Cola, A Business
System Toward 2000: Our Mission in the 1990s and The Chronicle of Coca-Cola
Since 1886.
CORPORATE OFFICES
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313
(404) 676-2121
MAILING ADDRESS
The Coca-Cola Company
P.O. Drawer 1734
Atlanta, Georgia 30301
SHARE-OWNER ACCOUNT ASSISTANCE
For address changes, dividend checks, direct deposit of dividends, account
consolidation, registration changes, lost stock certificates, stock holdings
and the Dividend and Cash Investment Plan:
Registrar and Transfer Agent
First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, NJ 07303-2500
(800) 446-2617
or
(201) 324-0498
or
Office of the Secretary
The Coca-Cola Company
(404) 676-2777
INSTITUTIONAL INVESTOR INQUIRIES
(404) 676-5766
ANNUAL REPORT REQUESTS
(800) 438-2653
<PAGE> 38
GRAPHICS APPENDIX LIST
FORM 10-K ANNUAL REPORT OF THE COCA-COLA COMPANY
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
EDGAR VERSION (Exhibit 13.1) TYPESET (PAPER) VERSION
<S> <C>
Financial Review Incorporating Management's Page 47 -- bar chart depicting Economic Profit and
Discussion and Analysis; Economic Profit and Company Company Stock Price (the text and data points used in
Stock Price -- bar chart omitted this chart appear in the text of the EDGAR version).
Financial Review Incorporating Management's Page 49 -- bar chart depicting Margin Analysis (Net
Discussion and Analysis; Management's Discussion and Operating Revenues, Gross Margin and Operating
Analysis; Margin Analysis -- bar chart omitted Margin) (the text and data points used in this chart
appear in the text of the Edgar version).
Notes to Consolidated Financial Statements; Net Page 68 -- bar charts depicting Net Operating
Operating Revenues by Line of Business and Operating Revenues by Line of Business and Operating Income by
Income by Line of Business (following Note 18. Line of Business (the text and data points used in
Nonrecurring Items) -- bar charts omitted these charts appear in the text of the EDGAR
version).
Notes to Consolidated Financial Statements; Net Page 71 -- bar charts depicting Net Operating
Operating Revenues by Geographic Area and Operating Revenues by Geographic Area and Operating Income by
Income by Geographic Area (following Note 20. Geographic Area (the text and data points used in
Operations in Geographic Areas) -- bar charts these charts appear in the text of the EDGAR
omitted version).
</TABLE>
<PAGE> 1
EXHIBIT 21.1
Subsidiaries of The Coca-Cola Company
As of December 31, 1993
<TABLE>
<CAPTION>
Organized Percentages
Under of Voting
Law of: Power
<S> <C> <C>
The Coca-Cola Company Delaware
Subsidiaries consolidated, except as noted:
Bottling Investments Corporation Delaware 100
ACCBC Holding Company Georgia 100
CRI Holdings, Inc. Delaware 100
Caribbean Refrescos, Inc. Delaware 100
Coca-Cola Financial Corporation Delaware 100
Coca-Cola Interamerican Corporation Delaware 100
Montevideo Refrescos, S.A. Uruguay 55.53
INTI S.A. Industrial y Comercial Argentina 71.93
Coca-Cola Overseas Parent Limited Delaware 100
Coca-Cola Holdings (Overseas) Delaware and 100
Limited Australia
Coca-Cola Amatil Limited * Australia 50.85
CC Amatil Betriebsorganizations
Ges.m.b.H. Austria 100
Amatil (Asia) Ltd. Hong Kong 100
Coca-Cola Amatil Finance Pty Ltd. Australia 100
Amatil Investments (Singapore)
Pte. Ltd. Singapore 100
Amatil Beverages (NZ) Ltd. New Zealand 100
Coca-Cola Bottlers (Wellington)
Ltd. New Zealand 100
Indonesia Bottlers Ltd NV Indonesia 100
PT Djaya Bev. Bottling Co. Indonesia 41(A)
PT Enam Sekewan Indonesia 100
Island Bottlers of Fiji Ltd. Fiji 100
CC Amatil Holdings B.V. Netherlands 100
Associated Nominees Pty Ltd. Australia 100
Ecks (NSW) Pty Ltd. Australia 100
CC Amatil Europe B.V. Netherlands 100
CC Amatil Investments C.V. Netherlands 28.1(B)
CCA Beverages (Hungary) Kft Hungary 100
CCA Investments (Hungary) Ltd Hungary 100
CCA Praha Spol SRO Czechoslovakia 100
CCA Slovakia Spol Sro Slovak Republic 100
Matila Insurance Pte Ltd. Singapore 100
Matila Nominees Pty Ltd. Australia 100
CCA Beverages (Brisbane) Ltd. Australia 100
CCA Beverages (Sydney) Pty Ltd. Australia 100
F & E Thomas Pty Ltd. Australia 100
CCA Beverages (NQ) Pty Ltd. Australia 100
</TABLE>
*Temporary controlling interest, carried on equity method.
<PAGE> 2
Subsidiaries of The Coca-Cola Company
As of December 31, 1993
continued from page 1
<TABLE>
<CAPTION>
Organized Percentages
Under of Voting
Law of: Power
<S> <C> <C>
Coca-Cola Amatil Limited (Continued)
Amatil Getraenke (Wien) Ges.m.b.H. Austria 100
Amatil Getraenke (Dornbirn)
Ges.m.b.H. Austria 100
Getraenk. Ges.m.b.H. & Co. KG Austria 3.28(C)
Amatil Getraenke (Klagenfurt)
Ges.m.b.H. Austria 100
Amatil Getraenke (Graz)
Ges.m.b.H. Austria 100
Associated Products & Distribution Australia 88.95(D)
Pty
Apand Pty Ltd. Australia 100
CCA Beverages Pty Ltd. Australia 100
CCA (PNG) Pty Ltd Papua New Guinea 100
C-C Bottlers Ltd. Australia 100
CCA Beverages (Adelaide) Ltd. Australia 100
Geo Hall & Sons Ltd. Australia 100
Linlithgow Products (NZ) Ltd. New Zealand 100
Olympus Industries, Inc. USA 85
Coca-Cola Holdings NZ Ltd. New Zealand 100
Oasis Enterprises Limited New Zealand 50(E)
CCA Beverages NZ Ltd. New Zealand 100
P.T. Coca-Cola Tirtalina Bottling Indonesia 49
Company
P.T. Coca-Cola Banyu Argo Indonesia 80
P.T. Eka Ticma Manunggal Indonesia 65
Bottling Company
P.T. Coca-Cola Pan Java
Bottling Company Indonesia 49
P.T. Coca-Cola Kendali Sodo Indonesia 80
</TABLE>
A) Amatil Investments Pte. Ltd. holds an additional 49%.
B) CC Amatil Europe BV holds 21.9% and Amatil Getraenke (Wein) Ges.m.b.H.
(50%).
C) Amatil Getraenke (Wien) Ges.m.b.H. holds an additional 16.98%.
D) Ecks (NSW) Pty Ltd. holds an additional 11.05%.
E) Linlithgow Products (NZ) Ltd. holds the remaining 50%.
2
<PAGE> 3
Subsidiaries of The Coca-Cola Company
As of December 31, 1993
continued from page 2
<TABLE>
<CAPTION>
Organized Percentages
Under of Voting
Law of: Power
<S> <C> <C>
The Coca-Cola Company (continued)
CTI Holdings, Inc. Delaware 100
3300 Riverside Drive Corporation Delaware 100
55th & 5th Avenue Corporation New York 100
The Coca-Cola Export Corporation Delaware 100
Barlan, Inc. Delaware 100
Coca-Cola Production S.A. France 100
Varoise de Concentres S.A. France 100
Coca-Cola Beverages S.A. France 100
Refreshment Product Services, Inc. Delaware 100
Coca-Cola Italia S.r.l. Italy 100
Societa' Bevande Meridionale -
SOBEM S.r.l. Italy 100
Coca-Cola Holdings (Nederland) B.V. Netherlands 100
Coca-Cola Holdings (U.K.) Limited United Kingdom 100
Beverage Products Limited Delaware 100
S.A. Coca-Cola Beverages (1991) N.V. Belgium 100
The Inmex Corporation Florida 100
Coca-Cola S.A. Industrial, Comercial
y Financiera Argentina 100
Coca-Cola Industrias Limitada Brazil 100
Recofarma Industria Do Amazonas, Ltda. Brazil 100
Coca-Cola Ltd. Canada 100
Coca-Cola Foods Canada, Inc. Canada 100
Atlantic Industries Limited Cayman Islands 100
Maksan Manisa Mesrubat
Kutulama Sanayi A.S. Turkey 100
Conco Limited Cayman Islands 100
Coca-Cola de Colombia, S.A. Colombia 100
Coca-Cola G.m.b.H. Germany 100
Coca-Cola Erfrischungsgetranke
G.m.b.H. Germany 100
Coca-Cola Rhein-Ruhr G.m.b.H. Germany 100
International Beverages Ireland 100
Coca-Cola (Japan) Company, Limited Japan 100
Coca-Cola Korea Company, LTD. Korea 100
Coca-Cola Nigeria Limited Nigeria 100
Coca-Cola Poland, LTD. Poland 100
Minute.Maid SA Switzerland 100
</TABLE>
Other subsidiaries whose combined size is not significant:
Fifteen domestic wholly-owned subsidiaries consolidated
Eighty-eight foreign wholly-owned subsidiaries consolidated
Ten foreign majority-owned subsidiaries consolidated
3
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration
statements of The Coca-Cola Company listed below of our reports with respect to
the consolidated financial statements and schedules of The Coca-Cola Company
dated January 25, 1994 and Coca-Cola Enterprises Inc. dated January 31, 1994
included or incorporated by reference in the Annual Report on Form 10-K for the
year ended December 31, 1993:
1. Registration Statement Number 2-58584 on Form S-8
2. Registration Statement Number 2-79973 on Form S-3
3. Registration Statement Number 2-88085 on Form S-8
4. Registration Statement Number 2-98787 on Form S-3
5. Registration Statement Number 33-21529 on Form S-8
6. Registration Statement Number 33-21530 on Form S-3
7. Registration Statement Number 33-26251 on Form S-8
8. Registration Statement Number 33-39840 on Form S-8
9. Registration Statement Number 33-45763 on Form S-3
10. Registration Statement Number 33-50743 on Form S-3
/S/ ERNST & YOUNG
Atlanta, Georgia
March 10, 1994
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, ROBERTO C. GOIZUETA, Chairman of
the Board, Chief Executive Officer and a Director of The Coca-Cola Company (the
"Company"), do hereby appoint JACK L. STAHL, Senior Vice President and Chief
Financial Officer of the Company, JOSEPH R. GLADDEN, JR., Senior Vice President
and General Counsel of the Company, SUSAN E. SHAW, Secretary of the Company,
and CAROL C. HAYES, Assistant Secretary of the Company, or any one of them, my
true and lawful attorney for me and in my name for the purpose of executing on
my behalf in any and all capacities the Company's Annual Report for the year
ended December 31, 1993 on Form 10-K, or any amendment or supplement thereto,
and causing such Annual Report or any such amendment or supplement to be filed
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/s/ ROBERTO C. GOIZUETA
Chairman of the Board,
Chief Executive Officer and
Director
The Coca-Cola Company
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, JACK L. STAHL, Senior Vice
President and Chief Financial Officer of The Coca-Cola Company (the "Company"),
do hereby appoint ROBERTO C. GOIZUETA, Chairman of the Board, Chief Executive
Officer and a Director of the Company, JOSEPH R. GLADDEN, JR., Senior Vice
President and General Counsel of the Company, SUSAN E. SHAW, Secretary of the
Company, and CAROL C. HAYES, Assistant Secretary of the Company, or any one of
them, my true and lawful attorney for me and in my name for the purpose of
executing on my behalf in any and all capacities the Company's Annual Report
for the year ended December 31, 1993 on Form 10-K, or any amendment or
supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ JACK L. STAHL
Senior Vice President
and Chief Financial Officer
The Coca-Cola Company
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, JAMES E. CHESTNUT, Vice President
and Controller of The Coca-Cola Company (the "Company"), do hereby appoint
ROBERTO C. GOIZUETA, Chairman of the Board, Chief Executive Officer and a
Director of the Company, JACK L. STAHL, Senior Vice President and Chief
Financial Officer of the Company, JOSEPH R. GLADDEN, JR., Senior Vice President
and General Counsel of the Company, SUSAN E. SHAW, Secretary of the Company,
and CAROL C. HAYES, Assistant Secretary of the Company, or any one of them, my
true and lawful attorney for me and in my name for the purpose of executing on
my behalf in any and all capacities the Company's Annual Report for the year
ended December 31, 1993 on Form 10-K, or any amendment or supplement thereto,
and causing such Annual Report or any such amendment or supplement to be filed
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ JAMES E. CHESTNUT
Vice President and Controller
The Coca-Cola Company
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, HERBERT A. ALLEN, a Director of The
Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ HERBERT A. ALLEN
Director
The Coca-Cola Company
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, RONALD W. ALLEN, a Director of The
Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ RONALD W. ALLEN
Director
The Coca-Cola Company
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, CATHLEEN P. BLACK, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ CATHLEEN P. BLACK
Director
The Coca-Cola Company
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, WARREN E. BUFFETT, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ WARREN E. BUFFETT
Director
The Coca-Cola Company
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, CHARLES W. DUNCAN, JR., a Director
of The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C.
GOIZUETA, Chairman of the Board, Chief Executive Officer and a Director of the
Company, JACK L. STAHL, Senior Vice President and Chief Financial Officer of
the Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel
of the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ CHARLES W. DUNCAN, JR.
Director
The Coca-Cola Company
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, SUSAN B. KING, a Director of The
Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ SUSAN B. KING
Director
The Coca-Cola Company
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, DONALD F. MCHENRY, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ DONALD F. MCHENRY
Director
The Coca-Cola Company
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, PAUL F. OREFFICE, a Director of The
Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ PAUL F. OREFFICE
Director
The Coca-Cola Company
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, JAMES D. ROBINSON, III, a Director
of The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C.
GOIZUETA, Chairman of the Board, Chief Executive Officer and a Director of the
Company, JACK L. STAHL, Senior Vice President and Chief Financial Officer of
the Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel
of the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of
February 1994.
/S/ JAMES D. ROBINSON, III
Director
The Coca-Cola Company
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, WILLIAM B. TURNER, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ WILLIAM B. TURNER
Director
The Coca-Cola Company
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, PETER V. UEBERROTH, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ PETER V. UEBERROTH
Director
The Coca-Cola Company
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, JAMES B. WILLIAMS, a Director of
The Coca-Cola Company (the "Company"), do hereby appoint ROBERTO C. GOIZUETA,
Chairman of the Board, Chief Executive Officer and a Director of the Company,
JACK L. STAHL, Senior Vice President and Chief Financial Officer of the
Company, JOSEPH R. GLADDEN, JR., Senior Vice President and General Counsel of
the Company, SUSAN E. SHAW, Secretary of the Company, and CAROL C. HAYES,
Assistant Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf in any
and all capacities the Company's Annual Report for the year ended December 31,
1993 on Form 10-K, or any amendment or supplement thereto, and causing such
Annual Report or any such amendment or supplement to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
February 1994.
/S/ JAMES B. WILLIAMS
Director
The Coca-Cola Company
<PAGE> 1
EXHIBIT 99.1
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
(In millions except per share data) 1993 1992 1991
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
NET OPERATING REVENUES $5,465 $5,127 $3,915
Cost of sales (includes purchases from The Coca-Cola Company of
approximately $1,392, $1,308 and $949) 3,372 3,219 2,420
- ---------------------------------------------------------------------------------------------
GROSS PROFIT 2,093 1,908 1,495
Selling, general and administrative expenses 1,708 1,602 1,223
Provision for restructuring -- -- 152
- ---------------------------------------------------------------------------------------------
OPERATING INCOME 385 306 120
Interest expense, net 328 312 210
Other nonoperating deductions, net 2 6 2
- ---------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGES 55 (12) (92)
Income taxes:
Expense (benefit) excluding rate change 30 3 (9)
Rate change -- federal 40 -- --
- ---------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES (15) (15) (83)
Cumulative effect of accounting changes:
Postretirement benefits (net of income taxes of $91) -- (148) --
Income taxes -- (23) --
- ---------------------------------------------------------------------------------------------
NET INCOME (LOSS) (15) (186) (83)
Preferred stock dividend requirements -- -- 9
- ---------------------------------------------------------------------------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON SHARE OWNERS $ (15) $ (186) $ (92)
- ---------------------------------------------------------------------------------------------
AVERAGE COMMON SHARES OUTSTANDING 129 129 116
- ---------------------------------------------------------------------------------------------
PER SHARE DATA:
Income (loss) before cumulative effect of accounting changes $(0.11) $(0.11) $(0.71)
Cumulative effect of accounting changes:
Postretirement benefits -- (1.15) --
Income taxes -- (0.18) --
Preferred stock dividends -- -- (0.08)
Net income (loss) applicable to common share owners (0.11) (1.45) (0.79)
- ---------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE> 2
COCA-COLA ENTERPRISES INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
DECEMBER 31,
-------------------
(In millions except share data) 1993 1992
<S> <C> <C>
- --------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash and cash equivalents, at cost (approximates market) $ 11 $ 6
Amounts due from The Coca-Cola Company 13 12
Trade accounts receivable, less allowances of $33 and $31, respectively 442 391
Inventories 200 212
Prepaid expenses and other assets 80 80
- --------------------------------------------------------------------------------------------
Total Current Assets 746 701
PROPERTY, PLANT AND EQUIPMENT
Land 163 179
Buildings and improvements 622 594
Machinery and equipment 2,132 1,851
- --------------------------------------------------------------------------------------------
2,917 2,624
Less allowances for depreciation 1,121 973
- --------------------------------------------------------------------------------------------
1,796 1,651
Construction in progress 94 82
- --------------------------------------------------------------------------------------------
1,890 1,733
FRANCHISE AND OTHER NONCURRENT ASSETS 6,046 5,651
- --------------------------------------------------------------------------------------------
$8,682 $8,085
- --------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these balance sheets.
<PAGE> 3
COCA-COLA ENTERPRISES INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
DECEMBER 31,
-------------------
1993 1992
<S> <C> <C>
- --------------------------------------------------------------------------------------------
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses $ 699 $ 682
Current maturities of long-term debt 308 622
- --------------------------------------------------------------------------------------------
Total Current Liabilities 1,007 1,304
LONG-TERM DEBT 4,083 3,509
DEFERRED INCOME TAXES 1,831 1,567
OTHER LONG-TERM OBLIGATIONS 501 451
SHARE-OWNERS' EQUITY
Preferred stock, $35 stated value -- Authorized - 1,000,000 shares;
Issued - 1,000,000 shares in 1993 29 --
Common stock, $1 par value -- Authorized - 500,000,000 shares;
Issued - 142,182,183 shares and 141,569,162 shares, respectively 142 142
Paid-in capital 1,280 1,267
Reinvested earnings 9 32
Cumulative translation adjustment (3) --
Common stock in treasury, at cost (13,004,598 shares and
12,228,298 shares, respectively) (197) (187)
- --------------------------------------------------------------------------------------------
1,260 1,254
- --------------------------------------------------------------------------------------------
$8,682 $8,085
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
CUMULATIVE SHARE-
THREE YEARS ENDED DECEMBER 31, 1993 PREFERRED COMMON PAID-IN REINVESTED TRANSLATION TREASURY OWNERS'
(In millions except per share data) STOCK STOCK CAPITAL EARNINGS ADJUSTMENT STOCK EQUITY
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 28, 1990 $ 250 $141 $ 1,263 $ 382 $-- $ (409) $ 1,627
Issuance of shares to effect merger -- -- (2) (59) -- 222 161
Redemption of preferred stock (250) -- -- -- -- -- (250)
Exercise of employee stock options -- -- 2 -- -- -- 2
Issuance of shares under stock award
plan -- -- 2 -- -- -- 2
Unamortized cost of restricted
shares issued -- -- (1) -- -- -- (1)
Dividends on preferred stock
(per share -- $3,983.49) -- -- -- (10) -- -- (10)
Dividends on common stock
(per share -- $0.05) -- -- -- (6) -- -- (6)
Net loss -- -- -- (83) -- -- (83)
- ---------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1991 -- 141 1,264 224 -- (187) 1,442
Issuance of shares under stock award
plan -- 1 11 -- -- -- 12
Unamortized cost of restricted
shares issued -- -- (12) -- -- -- (12)
Amortization of restricted shares
cost -- -- 4 -- -- -- 4
Dividends on common stock
(per share -- $0.05) -- -- -- (6) -- -- (6)
Net loss -- -- -- (186) -- -- (186)
- ---------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1992 -- 142 1,267 32 -- (187) 1,254
Issuance of shares under stock award
plan -- -- 6 -- -- -- 6
Unamortized cost of restricted
shares issued -- -- (6) -- -- -- (6)
Amortization of restricted shares
cost -- -- 2 -- -- -- 2
Conversion of executive deferred
compensation to equity -- -- 9 -- -- -- 9
Purchase of common stock for
treasury -- -- -- -- -- (17) (17)
Issuance of preferred stock to
effect acquisition 29 -- -- -- -- -- 29
Issuance of treasury stock to effect
acquisition -- -- -- (2) -- 7 5
Exercise of employee stock options -- -- 2 -- -- -- 2
Translation adjustments -- -- -- -- (3) -- (3)
Dividends on common stock
(per share -- $0.05) -- -- -- (6) -- -- (6)
Net loss -- -- -- (15) -- -- (15)
- ---------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1993 $ 29 $142 $ 1,280 $ 9 $(3) $ (197) $ 1,260
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE> 5
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
(In millions) 1993 1992 1991
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (15) $ (186) $ (83)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Cumulative effect of accounting changes -- 171 --
Depreciation 254 227 160
Amortization 165 162 91
Deferred income taxes 60 (21) (16)
Changes in current assets and current liabilities 22 (116) 72
Other nonoperating cash flows 7 42 37
- --------------------------------------------------------------------------------------------
Net cash provided by operating activities 493 279 261
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (353) (291) (238)
Proceeds from the sale of property, plant and equipment 19 20 16
Acquisitions of companies, net of cash acquired (amounts paid to
The Coca-Cola Company were $260, $11 and $81) (287) (27) (222)
- --------------------------------------------------------------------------------------------
Net cash used in investing activities (621) (298) (444)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of debt 822 2,218 1,091
Payments on debt (668) (2,251) (580)
Redemption of preferred stock -- -- (250)
Purchase of treasury stock (17) -- --
Dividends on common and preferred stock (6) (6) (16)
Proceeds from issuance of common stock 2 -- 2
- --------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 133 (39) 247
- --------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
DURING THE YEAR 5 (58) 64
Cash and cash equivalents at beginning of year 6 64 --
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 11 $ 6 $ 64
- --------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE> 6
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BUSINESS AND OWNERSHIP
The Company operates in a single industry segment, which encompasses the
manufacture, distribution and marketing of liquid nonalcoholic refreshments
under rights to acquired franchise territories. The Coca-Cola Company owns
approximately 44% of the Company's outstanding common shares.
PRINCIPAL ACCOUNTING POLICIES
Significant accounting policies and practices of the Company follow:
Basis of Presentation: The consolidated financial statements include the
accounts of the Company and its majority-owned subsidiaries. All significant
intercompany accounts and transactions are eliminated in consolidation.
The fiscal years presented are the fiscal periods ended December 31, 1993,
1992 and 1991. Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.
Net Income (Loss) Per Common Share: Net income (loss) per common share is
computed by dividing net income (loss) less dividends on preferred stock by the
weighted average number of common shares outstanding.
Cash Equivalents: Cash equivalents include all highly liquid debt
instruments purchased with original maturities of less than three months.
Concentrations of Credit Risk: The Company sells products to chain store
and other customers and extends credit based on an evaluation of the customer's
financial condition, generally without requiring collateral. Exposure to losses
on receivables varies by customer principally due to the financial condition of
each customer. The Company monitors exposure to credit losses and maintains
allowances for anticipated losses.
Inventories: Inventories are valued at the lower of cost or market. Cost
is computed principally on the last-in, first-out (LIFO) method.
Property, Plant and Equipment: Property, plant and equipment is stated at
cost, less allowances for depreciation. Depreciation expense is determined
principally by the straight-line method. The annual rates of depreciation are 3%
to 5% for buildings and improvements and 7% to 34% for machinery and equipment.
The Company capitalizes, as land improvements, certain environmental remediation
costs which improve the condition of the property as compared to the condition
when constructed or acquired.
Franchise Assets: The Company operates under franchise agreements with The
Coca-Cola Company and certain other licensors of beverage products. These
agreements establish performance obligations as to production, distribution and
marketing arrangements. The majority of such agreements are perpetual in nature
and reflect a long and ongoing relationship with The Coca-Cola Company and other
franchisors. The Company has one nonperpetual franchise agreement with The
Coca-Cola Company covering our Netherlands operations. This is a result of the
fact that The Coca-Cola Company's franchises outside of the United States are
not perpetual.
Given the Company's historical relationship with The Coca-Cola Company and
The Coca-Cola Company's equity ownership of approximately 44% in the Company,
management of the Company believes this agreement will continue to be renewed
upon expiration and that the economic period of benefit is ongoing. Franchise
assets, stated at cost, are amortized on a straight-line basis over the
<PAGE> 7
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
maximum allowed estimated periods to be benefitted (principally 40 years).
Accumulated amortization amounted to $738 million and $577 million at December
31, 1993 and 1992, respectively.
Impairment of Long-Lived Assets: In the event facts and circumstances
suggest that the cost of franchise assets or other assets may be impaired, an
assessment of recoverability would be performed. If the estimated future cash
flows associated with an asset were less than the carrying amount of the asset,
an impairment write-down to a market value or discounted cash flow value would
be required.
Foreign Currency: The Company uses the local currency of Dutch florins as
the functional currency of its Netherlands operations. Accordingly, assets and
liabilities of the Netherlands subsidiary are translated into dollars at the
rate of exchange in effect at the balance sheet date. Income and expense items
are translated at the monthly average exchange rates prevailing during the year.
The cumulative translation adjustment is included in a separate component of
share-owners' equity.
Hedging Instruments: The Company is party to a variety of interest rate
swaps, short positions in interest rate futures and foreign currency option
contracts in the management of interest rate and foreign currency exposures. The
interest differential related to interest rate swap agreements is recognized as
an adjustment of interest expense. Foreign currency options were not significant
at December 31, 1993. Realized and unrealized gains and losses on all financial
instruments designated and effective as hedges of interest rate exposure are
deferred and recognized as increases or decreases to interest expense over the
periods the hedged liabilities are outstanding.
Marketing Costs: The Company participates in various advertising and
marketing programs, some with The Coca-Cola Company. Certain costs incurred in
connection with these programs are reimbursed by The Coca-Cola Company. All
unreimbursed costs related to marketing and advertising the Company's products
are expensed in the period incurred.
Postretirement Benefits Other Than Pensions: In 1992, the Company adopted
Statement of Financial Accounting Standards No. 106 ("FAS 106"), a method of
accounting for postretirement benefits by accrual of the costs of such benefits
during the periods employees provide service to the Company. The Company
previously accounted for such costs as expense when incurred. The effect on
years prior to 1992, representing that portion of future retiree benefit costs
related to past service of both active and retired employees at the date of
adoption, has been reported as the cumulative effect of an accounting change and
such prior periods have not been restated.
Income Taxes: In 1992, the Company changed its method of accounting for
income taxes from the deferred method under Accounting Principles Board
Statement No. 11 to the liability method by adopting Statement of Financial
Accounting Standards No. 109 ("FAS 109"). Financial statements for periods prior
to 1992 have not been restated for the effects of adopting FAS 109. The effect
on prior years of adopting FAS 109 has been reported as the cumulative effect of
an accounting change. FAS 109 requires that deferred tax liabilities and assets
be established based on the difference between the financial statement and
income tax bases of assets and liabilities using existing tax rates.
ACQUISITIONS AND DIVESTITURES
The Company has the right to produce, distribute and market the soft drink
products of The Coca-Cola Company and/or other soft drink products in the
territories of acquired operations. Under the purchase method of accounting, the
results of operations of acquired companies are included in the consolidated
statements of operations of the Company as of their acquisition date. The assets
and liabilities of acquired companies are included in the Company's consolidated
<PAGE> 8
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
balance sheet at their estimated fair values on date of purchase based on a
preliminary allocation of the purchase price.
On June 30, 1993, the Company acquired, from The Coca-Cola Company, the
stock of (i) Coca-Cola Beverages Nederland B.V. in the Netherlands ("CCBN");
(ii) Roddy Coca-Cola Bottling Company, Inc. ("Roddy") in Knoxville, Tennessee;
and (iii) Coca-Cola Bottling Company of Johnson City ("JC"), in Johnson City,
Tennessee for an aggregate purchase price of approximately $366 million in cash
and assumed debt. The transaction was accounted for under the purchase method.
In December 1991, the Company acquired the Johnston Coca-Cola Bottling
Group, Inc. ("Johnston"), the second largest bottler of soft drink products of
The Coca-Cola Company in the United States. Johnston's territories, with a
population estimated at approximately 28 million or 11% of the U.S. population,
were located principally in the Midwestern United States. All of the outstanding
Johnston common stock was acquired in exchange for the issuance from treasury of
13.438 million shares of the Company's common stock and the payment of
approximately $196 million in cash in a transaction accounted for under the
purchase method.
Assuming the Johnston bottling operations had been acquired as of January
1, 1991, and the CCBN/Roddy/JC acquisition occurred as of January 1, 1992,
unaudited pro forma results of operations are as follows (in millions except per
share amounts):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
NET OPERATING REVENUES $5,667 $5,538 $5,027
Cost of Sales 3,535 3,547 3,170
- -------------------------------------------------------------------------------------------------------
GROSS PROFIT 2,132 1,991 1,857
Selling, general and administrative expenses 1,741 1,670 1,535
Provision for restructuring -- -- 152
- -------------------------------------------------------------------------------------------------------
OPERATING INCOME 391 321 170
Interest expense, net 334 325 312
Other nonoperating deductions, net 2 7 3
- -------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGES 55 (11) (145)
Income taxes:
Expense (benefit) excluding rate change 30 4 (17)
Rate change -- federal 40 -- --
- -------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES (15) (15) (128)
Cumulative effect of accounting changes -- (171) --
- -------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (15) (186) (128)
Preferred stock dividend requirements -- -- 9
- -------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON SHARE OWNERS $ (15) $ (186) $ (137)
- -------------------------------------------------------------------------------------------------------
Income (Loss) Before Cumulative Effect of Accounting Changes
Per Common Share $(0.11) $(0.11) $(0.99)
Net Income (Loss) Applicable to Common Share Owners Per Share (0.11) (1.45) (1.06)
- -------------------------------------------------------------------------------------------------------
Depreciation $ 266 $ 248 $ 205
Amortization 172 175 125
- -------------------------------------------------------------------------------------------------------
</TABLE>
The foregoing summary pro forma financial information reflects adjustments
for the CCBN/Roddy/JC acquisition to give effect to (i) interest expense on
acquisition financing through issuance of commercial paper at an annual interest
rate of 3.8% for 1992 and 3.1% for the
<PAGE> 9
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
preacquisition period of 1993; (ii) repayment of assumed debt; (iii)
amortization of the franchise assets acquired in the acquisition; and (iv) the
income tax effect of such pro forma adjustments.
The foregoing also reflects adjustments for the Johnston acquisition to
give effect to (i) interest expense on acquisition financing at an estimated
annual interest rate of 8.4%; (ii) issuance from treasury of 13.438 million
shares of the Company's common stock; (iii) amortization of the franchise asset;
(iv) the effect of adjusting debt assumed from Johnston for terms anticipated
for such debt to remain outstanding and to an effective annual interest rate of
approximately 7.8%; (v) elimination of the gain recognized by the Company from
the sale of its Ohio operations to Johnston in June 1990; and (vi) the income
tax effect of such pro forma adjustments.
Also in separate transactions in 1993, the Company acquired bottling
operations in Arkansas and an architectural design and facility engineering
company. The aggregate purchase price for these acquisitions, accounted for
under the purchase method, approximated $60 million in common stock, preferred
stock and debt.
In separate transactions in 1992, the Company acquired bottling operations
in Quincy, Illinois; Manchester, Georgia; Erie, Pennsylvania; and Laredo, Texas.
The aggregate purchase price of these acquisitions, accounted for under the
purchase method, approximated $40 million in cash and debt.
In separate transactions in 1991, the Company acquired bottling operations
in Ukiah, California; Jasper, Texas; Westminster, Annapolis and Cambridge,
Maryland; and Dover, Delaware. The aggregate purchase price of these
acquisitions, accounted for under the purchase method, approximated $55 million
in cash and debt. Also in 1991, the Company sold its right to produce,
distribute and market Dr Pepper and Barq's soft drinks in Jackson, Tennessee for
approximately $3 million, resulting in a pretax gain of approximately $1
million.
INVENTORIES
Inventories are comprised of the following (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
DECEMBER 31,
---------------
1993 1992
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Finished goods $134 $127
Raw materials 48 74
Other 20 21
- --------------------------------------------------------------------------------------------
202 222
Less LIFO reserve 2 10
- --------------------------------------------------------------------------------------------
$200 $212
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses are comprised of the following (in
millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
DECEMBER 31,
-------------
1993 1992
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Trade accounts payable $185 $263
Deposits on containers and shells 53 21
Accrued advertising payable 98 78
Accrued compensation payable 78 71
Accrued insurance payable 62 68
Accrued interest payable 98 95
Other accrued expenses 125 86
- --------------------------------------------------------------------------------------------
$699 $682
- --------------------------------------------------------------------------------------------
</TABLE>
LONG-TERM DEBT
Long-term debt including current maturities consists of the following (in
millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
DECEMBER 31,
---------------
1993 1992
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper $ 522 $ 197
8.00% and 8.20% Notes, due 1993 -- 500
8.20% Notes, due 1994 243 243
8.35% Notes, due 1995 250 250
6.50% and 7.875% Notes, due 1997 550 550
7.00% Notes, due 1999 200 200
7.875% Notes, due 2002 500 500
8.00% Notes, due 2005 250 --
8.50% Debentures, due 2012 250 250
8.75% Debentures, due 2017 154 154
8.00% and 8.50% Debentures, due 2022 1,000 1,000
6.75% Debentures, due 2023 250 --
Other long-term obligations 222 287
- --------------------------------------------------------------------------------------------
$4,391 $4,131
- --------------------------------------------------------------------------------------------
</TABLE>
Maturities of long-term debt for the five fiscal years subsequent to
December 31, 1993, are as follows (in millions): 1994 -- $308; 1995 -- $263;
1996 -- $558; 1997 -- $555; and 1998 -- $10.
The Company's commercial paper program is supported by a $1 billion
revolving bank credit agreement maturing in April 1996 and two short-term credit
facilities. There are no borrowings outstanding under these agreements; however,
under the commercial paper program supported by these agreements, an aggregate
$522 million was outstanding at December 31, 1993. The weighted average interest
rates of borrowings under the commercial paper program were approximately 3.2%
and 3.8% for 1993 and 1992, respectively.
Terms of the revolving bank credit agreement and/or the outstanding notes
and debentures include various provisions which, among other things, require the
Company to (i) maintain a defined leverage ratio and (ii) limit the incurrence
of certain liens or encumbrances in excess of defined amounts. None of these
restrictions are presently significant to the Company.
<PAGE> 11
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company has outstanding certain interest rate swap agreements with
financial institutions. At December 31, 1993, these interest rate swap
agreements change (i) $150 million of the floating rate exposure on commercial
paper to fixed rate exposure and (ii) $500 million of the fixed rate exposure on
the $250 million 8% debentures due 2022 and $250 million of the $750 million
8.5% debentures due 2022 to floating rate exposure. All of the above interest
rate swap agreements were in force at the beginning of 1993 except for the swap
agreement related to the $250 million outstanding on the 8% debentures due 2022.
These swap agreements expire in varying periods from 1994 through 1996, but may
extend through 2023 depending upon interest rates at the initial expiration
date.
In addition, the Company has certain Eurodollar futures contracts with
financial institutions which hedge its floating rate exposure on the interest
rate swap agreements. At December 31, 1993, the Eurodollar futures cover the
following periods: (i) $250 million from December 1993 through September 1994
and (ii) $250 million from March 1994 through June 1996. The adjustment to
market of these Eurodollar futures contracts aggregate unrecognized losses of $5
million as of December 31, 1993. These unrecognized amounts will be decreased or
increased, as appropriate, to the final settlement date of each contract, at
which time amounts will be amortized over the ensuing contract period.
Activities under interest rate swap agreements and Eurodollar futures
contracts have resulted in a decrease in interest expense for 1993 of
approximately $7 million. The Company is exposed to credit losses for periodic
settlements of amounts due under interest rate swaps; however, amounts due under
these agreements were not significant at December 31, 1993.
LEASES
The Company leases office and warehouse space, computer hardware, and
machinery and equipment under lease agreements which expire at various dates
through 2019. At December 31, 1993, future minimum lease payments under
noncancellable operating leases aggregate approximately $44 million. Rent
expense was approximately $25 million, $25 million and $24 million during 1993,
1992 and 1991, respectively.
PREFERRED STOCK
In connection with the 1993 acquisition of the Coca-Cola Bottling Company
of Northeast Arkansas, Inc., the Company issued 1,000,000 shares of nonvoting
convertible preferred stock with a stated value of $35 per share. Each share is
convertible into one share of common stock at any time at the option of the
holder. The preferred stock may be called by the Company at any time for cash
equal to its stated value plus accrued dividends. The preferred stock pays
cumulative cash dividends of 3% per annum for the first five years, 4.29% per
annum for the following five years, adjusting to an annual rate equal to LIBOR
plus 1% thereafter. Adjustment of the stated value of the preferred stock to its
estimated fair value of approximately $29 million results in an annual dividend
cost of approximately 6%.
During 1991, the Company redeemed all of its then existing nonvoting
variable dividend rate preferred stock at book value.
SHARE REPURCHASE
During 1993, the Company repurchased 1,153,900 shares of its common stock
on the open market for an aggregate cost of approximately $17 million. The
repurchased shares represent
<PAGE> 12
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
additions to treasury stock and are intended, among other things, to replenish
an aggregate 400,000 treasury shares issued to effect an acquisition during
1993.
STOCK OPTIONS AND OTHER STOCK PLANS
The Company's 1992 Restricted Stock Award Plan ("the 1992 Plan") provides
for awards to certain officers and other key employees of the Company of up to
an aggregate 1.5 million shares of the Company's common stock. The 1986
Restricted Stock Award Plan ("the 1986 Plan") provides for awards to certain
officers and other key employees of the Company of up to an aggregate 1 million
shares of the Company's common stock. Awards under both plans vest (i) when a
participant dies, retires or becomes disabled; (ii) when the Compensation
Committee of the Board of Directors elects, in its sole discretion, to remove
certain restrictions; or, with regard to the 1992 Plan, (iii) based on the
attainment of certain market price levels of the Company's stock. Such awards
also entitle the participant to full dividend and voting rights. Shares awarded
under both plans are restricted as to disposition and subject to forfeiture
under certain circumstances. The market value of the shares at the date of grant
is charged to operations ratably over the vesting periods.
In 1992, the Board of Directors of the Company terminated the 1986 Plan,
canceling the remaining 476,000 shares under this plan available for grant.
Restricted shares issued under the 1992 Plan, totalling 22,400 shares were
forfeited in 1993 and returned to treasury. Further information relating to
restricted stock awards follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Awards available for grant -- beginning of year 648,900 476,000
New awards authorized -- 1,500,000
Available shares terminated -- (476,000)
Shares issued (463,100) (851,100)
- --------------------------------------------------------------------------------------------
Awards available for grant -- end of year 185,800 648,900
- --------------------------------------------------------------------------------------------
</TABLE>
The Company's 1991 Stock Option Plan (the "Stock Option Plan"), provides
for the granting of nonqualified stock options to officers and certain key
employees. The Stock Option Plan provides that options for 3 million shares of
the Company's common stock may be granted prior to the plan's expiration in
1996. The Company's 1990 Management Stock Option Plan (the "Management Option
Plan") provides for the granting of nonqualified stock options to certain key
employees. The Management Option Plan provides that options for 2 million shares
of the Company's common stock may be granted. Options awarded under the Stock
Option Plan and the Management Option Plan (i) are generally granted at prices
which equate to or are above fair market value on the date of grant; (ii) become
exercisable over either a three or four year period; and (iii) expire ten years
subsequent to award.
<PAGE> 13
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Included in options outstanding at December 31, 1993 were various options
granted under previous plans with similar terms. Further information relating to
options follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at beginning of year 5,680,333 4,128,067
Options granted 1,109,900 1,885,800
Options exercised (149,921) --
Options canceled (598,545) (333,534)
- ---------------------------------------------------------------------------------------------
Options outstanding at end of year 6,041,767 5,680,333
- ---------------------------------------------------------------------------------------------
Options exercisable at end of year
(Option price -- $13.125 to $18.50 per share) 3,034,534 3,230,828
- ---------------------------------------------------------------------------------------------
Shares available for future grant 286,500 1,396,400
- ---------------------------------------------------------------------------------------------
</TABLE>
On initial offering of stock to the public, each of the seven directors who
was not an officer of the Company or The Coca-Cola Company was awarded options
to acquire up to 1,500 shares of common stock and certain officers of the
Company were granted options to purchase 245,000 shares of the Company's common
stock at $16.50 per share (the initial public offering price). Since that time,
new directors, upon election, who were not an officer of the Company or The
Coca-Cola Company were awarded options to acquire up to 1,500 shares of common
stock at $16.50 per share. Options to purchase 198,000 shares under this plan
have subsequently been canceled, and 15,000 options have been exercised.
Currently exercisable options with rights totaling 45,500 shares remain
outstanding and will expire in November 1996.
In 1991, the Company adopted the Stock Appreciation Rights Plan (the "SAR
Plan") which provides for the award of an aggregate 1 million stock appreciation
rights ("units") to qualified participants prior to the SAR Plan's expiration in
1996. Each unit entitles the holder to receive cash based on the difference
between the market value of a share of the Company's common stock on the date of
award and the fair market value of such stock on the date of exercise. Included
in stock appreciation rights outstanding at December 31, 1993 are various units
awarded under a prior plan with similar terms. In 1992, units available for
future grants under all stock appreciation rights plans were terminated.
Further information relating to stock appreciation rights follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Units outstanding at beginning of year 1,070,572 1,076,580
Units granted -- --
Units exercised (58,027) --
Units canceled (134,168) (6,008)
- ---------------------------------------------------------------------------------------------
Units outstanding at end of year
(Base value -- $14.50 to $17.50 per unit) 878,377 1,070,572
- ---------------------------------------------------------------------------------------------
</TABLE>
PENSION AND CERTAIN BENEFIT PLANS
The Company sponsors various pension plans and participates in certain
multiemployer pension plans covering substantially all U.S. employees. The
benefits related to company-sponsored plans are based on years of service and
compensation earned during years of employment. The Company's funding policy is
to contribute amounts to the plans sufficient to meet the minimum funding
requirements set forth in the Employee Retirement Income Security Act of 1974,
plus such
<PAGE> 14
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
additional amounts as management may determine to be appropriate but within
applicable legal limits. These qualified defined benefit plans sponsored by the
Company are insured by the Pension Benefit Guaranty Corporation ("PBGC"). The
Company also sponsors several unfunded nonqualified defined benefit plans
covering certain officers and other employees.
Total pension expense amounted to approximately $19 million (including $6
million for multiemployer plans) in 1993 and 1992, and $14 million (including $5
million for multiemployer plans) in 1991.
Net periodic pension cost for company-sponsored defined benefit plans
included the following (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits earned during the period $ 19 $ 14 $ 10
Interest cost on projected benefit obligation 29 29 23
Actual return on assets (61) (36) (61)
Net amortization and deferral 26 6 37
- --------------------------------------------------------------------------------------------
Net periodic pension cost $ 13 $ 13 $ 9
- --------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth the funded status of domestic
company-sponsored plans and amounts recognized by the Company, segregated by
(i) plans whose assets exceed the accumulated benefit obligation ("ABO") and
(ii) plans whose ABO exceeds assets (in millions):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PBGC INSURED PLANS OTHER PLANS
----------------------------------- -----------------
1993 1992 1993 1992
---------------- ---------------- ------- -------
ASSETS ABO ASSETS ABO ABO ABO
EXCEED EXCEEDS EXCEED EXCEEDS EXCEEDS EXCEEDS
ABO ASSETS ABO ASSETS ASSETS ASSETS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $(303) $ (22) $(212) $ (50) $ (13) $ (12)
- ------------------------------------------------------------------------------------------
Accumulated benefit obligation $(325) $ (25) $(248) $ (54) $ (13) $ (14)
- ------------------------------------------------------------------------------------------
Projected benefit obligation $(367) $ (25) $(311) $ (64) $ (14) $ (19)
Plan assets at fair value,
primarily listed stocks, bonds
and government securities 402 18 321 46 -- --
- ------------------------------------------------------------------------------------------
Plan assets in excess of (less
than) projected benefit
obligation 35 (7) 10 (18) (14) (19)
Unrecognized net (gain) loss (14) 3 20 3 4 4
Unrecognized prior service cost (12) 2 1 2 (9) --
Unrecognized net transition
(asset) liability and other (12) -- (13) 1 2 2
- ------------------------------------------------------------------------------------------
Prepaid (accrued) pension cost
included in the balance sheet $ (3) $ (2) $ 18 $ (12) $ (17) $ (13)
- ------------------------------------------------------------------------------------------
</TABLE>
The weighted average discount rate utilized in determining the actuarial
present value of the projected benefit obligation as of the respective valuation
dates was 7.5% and 8.25% in 1993 and 1992, respectively. The weighted average
rate of increase in future compensation was 5.5% and 6%
<PAGE> 15
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
in 1993 and 1992, respectively. The expected long-term rate of return on plan
assets was 8.5%, 9.5% and 9% in 1993, 1992 and 1991, respectively.
CCBN participates in a multiemployer pension plan covering a majority of
its employees. CCBN also sponsors a supplemental defined benefit plan for
certain employees. At December 31, 1993, the accumulated benefit obligation for
the supplemental plan was $9 million, the projected benefit obligation was $17
million and plan assets were $17 million. CCBN also sponsors an unfunded
voluntary early retirement plan for certain employees allowing early retirement
at age 60. At December 31, 1993, the accumulated benefit obligation, which has
been fully accrued, was $5 million and the projected benefit obligation was $6
million.
In addition to the defined benefit plans described above, the Company also
sponsors a qualified defined contribution plan covering all full-time nonunion
employees in the United States. The Company matches 50% of a participant's
voluntary contributions up to a maximum of 6% of a participant's compensation.
The Company's contribution expense was approximately $10 million in 1993 and
1992, and $9 million in 1991.
POSTRETIREMENT BENEFIT PLANS
The Company sponsors various unfunded defined benefit postretirement plans
that provide health care and life insurance benefits to substantially all
nonunion and certain union retirees who retire with a minimum period of service.
Adoption of FAS 106 during 1992 changed the Company's method of accounting for
such postretirement benefits as an expense when claims were incurred to accrual
of the costs of such benefits during the periods employees provide service to
the Company.
The Company immediately recognized the transition obligation of adopting
FAS 106. The effect on years prior to 1992 of adopting FAS 106, representing
that portion of unrecognized future retiree benefit costs related to past
service of both active and retired employees as of the date of adoption, has
been reported as the cumulative effect of an accounting change and prior periods
have not been restated. The cumulative effect of adopting FAS 106 as of January
1, 1992 decreased net income by approximately $148 million (net of income taxes
of $91 million) or $1.15 per common share.
In the first quarter of 1993, the Company completed the redesign and
consolidation of its postretirement benefit plans by amending the plans then in
effect. The effect of plan amendments was to decrease the accumulated
postretirement benefit obligation at January 1, 1993 from approximately $312
million to $164 million, resulting in $148 million of excess prior service cost,
and to reduce the full-year 1993 postretirement benefits expense by
approximately $31 million. The excess prior service cost is being amortized over
the average service life of plan participants, approximately 17 years.
<PAGE> 16
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table presents the plan's funded status reconciled with
amounts recognized in the Company's balance sheets at December 31, 1993 and 1992
(in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees $105 $108
Fully eligible active plan participants 11 32
Other active plan participants 63 172
- --------------------------------------------------------------------------------------------
179 312
Unamortized excess prior service cost asset 140 --
Unrecognized net loss (2) --
- --------------------------------------------------------------------------------------------
Accrued postretirement benefit obligation $317 $312
- --------------------------------------------------------------------------------------------
</TABLE>
Net periodic postretirement benefit cost for 1993 and 1992 includes the
following components (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Service cost attributed to service during the year $ 6 $14
Interest cost on accumulated postretirement benefit obligation 14 24
Amortization of unrecognized excess prior service cost (9) --
- --------------------------------------------------------------------------------------------
Net periodic postretirement benefit cost $11 $38
- --------------------------------------------------------------------------------------------
</TABLE>
Actuarial assumptions used in determining the postretirement benefit cost
and the accumulated postretirement benefit obligation include a discount rate of
7.5% and 8.5% and an average rate of increase in future compensation of 5.5% and
6%, in 1993 and 1992, respectively. The assumed weighted average annual rate of
increase in the per capita cost of covered benefits (the health care cost trend
rate) was 15% pre-Medicare and 11% post-Medicare for 1993 and 1992, decreasing
to 6% by the year 2052 and remaining at that level thereafter. However, the
postretirement benefit plan, as amended effective January 1, 1993, is a "defined
dollar benefit plan" which limits the effect of medical inflation to a maximum
of 4% per year after 1996. Because the amended postretirement medical plan has
established dollar limits for determining company contributions, the effect of a
1% increase in the assumed health care cost trend rates is not significant.
PROVISION FOR RESTRUCTURING
The Company recognized in the fourth quarter of 1991 a $152 million ($0.86
per common share) provision for restructuring related primarily to the
standardization of information systems, reconfiguration of sales and
distribution centers, and severance and relocation costs associated with
decentralizing the Company's organizational structure and eliminating redundant
staff and operating positions.
INCOME TAXES
On August 10, 1993, the Omnibus Budget Reconciliation Act was signed into
law. The Company was affected principally by the increase in the corporate
marginal income tax rate from 34% to 35%. Under FAS 109, the Company's deferred
income taxes were adjusted to reflect the effect of the new rate. This
adjustment resulted in a one-time charge of approximately $40 million ($0.31 per
common share) to increase the Company's deferred tax liability existing at the
date of enactment for the effect of the rate change. Additionally, the Company's
annual estimated effective tax rate was
<PAGE> 17
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
increased by an amount approximating the 1% marginal rate increase. Other
components of the new law are not expected to have a material impact on the
financial position or results of operations of the Company.
Application of FAS 109 decreases pretax income and decreases income tax
expense in both 1992 and 1993 by approximately $38 million as a result of
amortization of the increased franchise asset. This increased amortization
results from the requirement to report assets acquired in prior business
combinations at their pretax amounts, eliminating the impact of nondeductible
amortization from the computation of income tax expense under the new accounting
standard.
During 1987, the Company filed elections under Section 338 of the Internal
Revenue Code, relating to various bottling companies acquired in 1986. Tax
operating loss carryforwards aggregating approximately $943 million have arisen
principally from the additional tax deductions resulting from such elections.
These carryforwards are available to offset future federal taxable income
through their expiration in varying amounts aggregating $5 million in 1996
through 1998; $279 million in 1999 through 2003; and $659 million in 2004
through 2008.
A deferred tax asset is recognized for the tax benefit of deductible
temporary differences and net operating loss and tax credit carryforwards. A
valuation allowance is recognized if it is "more likely than not" that some or
all of the deferred tax asset will not be realized. Management believes that the
future reversal of existing taxable temporary differences provides evidence that
the majority of deferred tax assets will be realized. A valuation allowance of
$105 million, $86 million and $77 million as of December 31, 1993, 1992 and
January 1, 1992, respectively, was established for the remaining deferred tax
assets. Upon realization, the tax benefit for net operating loss carryforwards
of acquired companies for which a valuation allowance has been established will
be applied to reduce recorded franchise values. Net operating loss carryforwards
of acquired companies were approximately $59 million at December 31, 1993.
Deferred income taxes reflect the tax effects of differences between the
carrying amounts of assets and liabilities for financial reporting and income
tax purposes. Significant components of the Company's deferred tax liabilities
and assets as of December 31, 1993 and 1992 are as follows (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax liabilities:
Franchise assets $2,210 $1,894
Property, plant and equipment 180 164
- --------------------------------------------------------------------------------------------
Total deferred tax liabilities 2,390 2,058
- --------------------------------------------------------------------------------------------
Deferred tax assets:
Net operating loss carryforwards (378) (335)
Employee and retiree benefit accruals (186) (166)
Restructuring reserves (31) (35)
Long-term debt (4) (11)
Other, net (65) (30)
- --------------------------------------------------------------------------------------------
Total deferred tax assets (664) (577)
Valuation allowance for deferred tax assets 105 86
- --------------------------------------------------------------------------------------------
Net deferred tax liabilities $1,831 $1,567
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 18
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Significant components of the provision for income taxes attributable to
continuing operations, excluding the cumulative effect of accounting changes,
are as follows (in millions):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Current:
United States
Federal $-- $ 6 $ 2
State and local 9 18 5
Foreign 1 -- --
- ---------------------------------------------------------------------------------------------
Total current provision 10 24 7
- ---------------------------------------------------------------------------------------------
Deferred:
United States
Federal 20 (9) (17)
State and local 2 (12) 1
Rate change -- federal 40 -- --
Foreign (2) -- --
- ---------------------------------------------------------------------------------------------
Total deferred provision 60 (21) (16)
- ---------------------------------------------------------------------------------------------
Total provision for income taxes $70 $ 3 $ (9)
- ---------------------------------------------------------------------------------------------
</TABLE>
The current tax provision for 1993 and 1992 represents the amount of income
taxes paid or payable for the year. The deferred tax provision for 1993 and 1992
represents the change in the deferred tax liabilities and assets and, for
business combinations, the change since date of acquisition.
The components of the provision for deferred income taxes for 1991,
computed using the deferred method, are as follows (in millions):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1991
<S> <C>
- -------------------------------------------------------------------------------------------
Depreciation $ 13
Amortization 67
Tax net operating losses (42)
Installment gain election for sale of Ohio operations (12)
Accrual to cash adjustments (50)
Alternative minimum tax (1)
Other, net 9
- -------------------------------------------------------------------------------------------
$(16)
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 19
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A reconciliation of the expected income tax expense (benefit) at the
statutory federal rate to the Company's actual income tax provision follows (in
millions):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Statutory expense (benefit) $19 $(4) $(31)
State income taxes -- net of federal benefit 7 4 4
Nondeductible items 2 1 1
Rate change -- federal 40 -- --
Amortization of franchise assets -- -- 13
Acquisition adjustments -- -- 1
Other, net 2 2 3
- ----------------------------------------------------------------------------------------------
$70 $ 3 $ (9)
- ----------------------------------------------------------------------------------------------
</TABLE>
FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating fair values for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance
sheets for cash and cash equivalents approximates fair value.
Long-term debt: The carrying amounts of commercial paper, variable rate
debt and other short-term borrowings approximate their fair values. The fair
values of the Company's long-term debt are estimated using discounted cash flow
analyses, based on the Company's current incremental borrowing rates for similar
types of borrowing arrangements.
Hedging instruments and warrants: The fair values of the Company's futures
contracts are estimated based on quoted market prices of comparable contracts or
current settlement values. The fair values of the Company's interest rate swaps
and warrants are estimated based on independent valuations from major investment
banks.
The carrying amounts and fair values of the Company's financial instruments
at December 31, 1993 are as follows (in millions):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CARRYING AMOUNT FAIR VALUE
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Cash and cash equivalents $ 11 $ 11
Long-term debt 4,391 4,783
Futures contracts 5 5
Interest rate swaps -- 5
Warrants -- 58
- -------------------------------------------------------------------------------------------------
</TABLE>
The Company does not anticipate any significant refunding activities which
would settle long-term debt at fair value.
RELATED PARTY TRANSACTIONS
The Company and The Coca-Cola Company have entered into various
transactions and agreements related to their respective businesses. Various
significant transactions and agreements entered into between the Company and The
Coca-Cola Company are disclosed in other sections of
<PAGE> 20
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the accompanying financial statements and related notes. The following items
represent other transactions between the Company and The Coca-Cola Company, and
its affiliates:
Acquisition: The Coca-Cola Company had an approximate 20% ownership
interest in Johnston. As a result of the acquisition in 1991, The Coca-Cola
Company received 49,892 shares of the Company's common stock and $81 million in
cash, reducing The Coca-Cola Company's ownership in the outstanding common stock
of the Company from approximately 49% to approximately 44%.
Fountain Syrup and Package Product Sales: Certain of the Company's
operations sell fountain syrup to The Coca-Cola Company and deliver this syrup
on behalf of The Coca-Cola Company to certain major or national accounts of The
Coca-Cola Company. In addition, the Company sells bottle/can products to The
Coca-Cola Company at prices that equate to amounts charged by the Company to its
major customers. During 1993, 1992 and 1991, The Coca-Cola Company paid the
Company approximately $220 million, $193 million and $138 million, respectively,
for fountain syrups, bottle/can products and delivery and billing services.
Antitrust Indemnity Agreement: During 1991, The Coca-Cola Company paid the
Company approximately $1 million, pursuant to an agreement which indemnifies the
Company for certain costs, settlements and fines arising out of alleged
antitrust violations which occurred prior to the acquisition of certain bottlers
by the Company. The indemnity period expired January 1, 1993.
Marketing Support Arrangements: The Coca-Cola Company engages in a variety
of marketing programs, local media advertising and other similar arrangements to
promote the sale of products of The Coca-Cola Company in territories operated by
the Company. For 1993, 1992 and 1991, total direct marketing support provided to
the Company or on behalf of the Company by The Coca-Cola Company was
approximately $256 million, $253 million and $199 million, respectively. In
addition, the Company paid an additional $65 million, $63 million and $45
million in 1993, 1992 and 1991, respectively, for local media and marketing
program expense pursuant to a cooperative advertising arrangement with The
Coca-Cola Company.
COMMITMENTS AND CONTINGENCIES
The Company is contingently liable for guarantees of the indebtedness owed
primarily by manufacturing cooperatives of approximately $43 million at December
31, 1993.
Under the Company's insurance programs, coverage is obtained for
catastrophic exposures as well as those risks required to be insured by law or
contract. Generally, the Company is self-insured for certain expected losses
related primarily to workers' compensation, physical loss to property, business
interruption resulting from such loss and comprehensive general, product and
vehicle liability. Provisions for losses expected under these programs are
recorded based upon the Company's estimates of the aggregate liability for
claims incurred. Such estimates utilize certain actuarial assumptions followed
in the insurance industry. The Company has provided letters of credit
aggregating approximately $104 million in connection with self-insurance
programs.
The Company has purchase agreements with various suppliers extending beyond
one year. Subject to the supplier's quality and performance, the purchases
covered by these agreements aggregate approximately $527 million in 1994, $529
million in 1995, $502 million in 1996, $508 million in 1997 and $103 million in
1998.
Federal, state and local laws govern the Company's operation of underground
fuel storage tanks and the required removal, replacement or modification of such
tanks to satisfy regulations which go into effect in varying stages through
1998. Expenditures aggregating $9 million, $8 million
<PAGE> 21
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
and $25 million were made in 1993, 1992 and 1991, respectively, in a structured
program designed to enhance compliance with such regulations including
regulations governing the environmental discharge of materials. The Company has
completed a majority of its multiyear program for remediation of environmental
contamination. Completion of the Company's remediation program is not expected
to have a material adverse effect on the financial position or results of
operations of the Company.
The Company has been named as a potentially responsible party ("PRP") for
the costs of remediation of hazardous waste at six federal "Superfund" sites in
Arkansas, California, Florida, Minnesota, New Hampshire and Ohio. Under current
law, the Company's liability for clean up of such sites may be joint and several
with other PRP's, regardless of the extent of the Company's use in relation to
other users. In each case, the Company has determined that to the extent that it
has any responsibility for hazardous waste deposited at any site, the amounts of
such deposits are minimal compared to those of other financially responsible
PRP's, and as a result, we believe the Company's ultimate liability will not
have a material effect on its financial position or results of operations.
In 1991, a Complaint was filed against the Company, each of the directors
of the Company and Johnston seeking, among other things, to enjoin the Johnston
acquisition. The Complaint alleges that The Coca-Cola Company, as the holder of
approximately 49% (prior to the Johnston acquisition) of the outstanding common
stock of the Company, owes fiduciary duties of loyalty, care and candor to the
Company and the Company's public share owners and that The Coca-Cola Company
breached its fiduciary duties by exerting influence over the Company in
connection with the acquisition in order to maximize its financial interests at
the expense of the Company and the Company's public share owners. The Complaint
also alleges that the directors of the Company breached their fiduciary duties
to the Company and its public share owners. Management believes that the
Complaint is without merit and its ultimate disposition will not have a material
adverse effect on the financial condition or results of operations of the
Company.
The Company is also involved in various other claims and legal proceedings,
the resolution of which management believes will not have a material adverse
effect on the financial position or results of operations of the Company.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Changes in assets and liabilities, net of effects from acquisitions of
companies, were as follows (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trade accounts and other receivables $ 1 $ (30) $ 26
Inventories 28 (16) (14)
Prepaid expenses and other assets 6 (13) 6
Accounts payable and accrued expenses (13) (57) 54
- --------------------------------------------------------------------------------------------
Decrease (Increase) $ 22 $(116) $ 72
- --------------------------------------------------------------------------------------------
</TABLE>
Cash payments during the year were as follows (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest $330 $255 $212
Income taxes 10 36 8
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In conjunction with the acquisitions of bottling companies, liabilities were
assumed as follows (in millions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fair value of assets acquired $ 774 $ 48 $1,674
Cash paid (287) (27) (222)
Equity issued (34) -- (161)
Debt issued (1) (15) --
- --------------------------------------------------------------------------------------------
Liabilities assumed $ 452 $ 6 $1,291
- --------------------------------------------------------------------------------------------
</TABLE>
QUARTERLY FINANCIAL DATA
(Unaudited; in millions except per share data)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
FISCAL
1993 FIRST SECOND THIRD FOURTH YEAR
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Operating Revenues $1,208 $1,448 $1,487 $1,322 $5,465
Gross Profit 477 556 541 519 2,093
Net Income (Loss) (5) 16 (30) 4 (15)
Net Income (Loss) Per Common Share (0.04) 0.13 (0.23) 0.03 (0.11)
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
FISCAL
1992 FIRST SECOND THIRD FOURTH YEAR
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Operating Revenues $1,112 $1,385 $1,351 $1,279 $5,127
Gross Profit 424 519 491 474 1,908
- -----------------------------------------------------------------------------------------------
Income (Loss) Before Cumulative Effect of
Accounting Changes $ 25 $ (26) $ 17 $ (31) $ (15)
Cumulative Effect of Accounting Changes (171) -- -- -- (171)
- -----------------------------------------------------------------------------------------------
Net Income (Loss) $ (146) $ (26) $ 17 $ (31) $ (186)
- -----------------------------------------------------------------------------------------------
Per Common Share Data:
Income (Loss) Before Cumulative Effect of
Accounting Changes $ 0.20 $(0.20) $ 0.13 $(0.24) $(0.11)
Cumulative Effect of Accounting Changes (1.33) -- -- -- (1.33)
Net Income (Loss) (1.14) (0.20) 0.13 (0.24) (1.45)
- -----------------------------------------------------------------------------------------------
</TABLE>
Each quarter presented includes ninety-one days, except the first quarter
of 1992 (eighty-seven days), the fourth quarter of 1992 (ninety-seven days) and
the first quarter of 1993 (ninety-two days).
Due to the method used in calculating per share data as prescribed by
Accounting Principles Board Opinion No. 15 and the timing of share repurchases
by the Company, the per share data does not sum in certain instances to the per
share data as computed for the quarter and the year.
The third quarter of 1993 includes a one-time charge of approximately $40
million ($0.31 per common share) to increase the Company's deferred tax
liability as a result of a 1% increase in the corporate marginal income tax
rate.
The fourth quarter of 1993 included a favorable year-end inventory (LIFO)
adjustment of approximately $7 million of which approximately $5 million ($0.03
per common share) applied to previous quarters.
<PAGE> 23
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the accompanying consolidated balance sheets of Coca-Cola
Enterprises Inc. and the related consolidated statements of operations,
share-owners' equity, and cash flows for each of the three years in the period
ended December 31, 1993. Our audits also included the financial statement
schedules listed in the Index at Item 14(a)(2). These financial statements and
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Coca-Cola Enterprises Inc. at December 31, 1993 and 1992, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
As discussed in the notes to consolidated financial statements, in 1992 the
Company changed its methods of accounting for income taxes and postretirement
benefits other than pensions.
/s/ ERNST & YOUNG
Atlanta, Georgia
January 31, 1994
<PAGE> 24
INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
Schedule V -- Property, Plant and Equipment for the fiscal years ended
December 31, 1993, 1992 and 1991...................................... F-2
Schedule VI -- Accumulated Depreciation and Amortization of Property,
Plant and Equipment for the fiscal years ended
December 31, 1993, 1992 and 1991...................................... F-3
Schedule VIII -- Valuation and Qualifying Accounts for the fiscal years ended
December 31, 1993, 1992 and 1991...................................... F-4
Schedule IX -- Short-Term Borrowings for the fiscal years ended
December 31, 1993, 1992 and 1991...................................... F-5
Schedule X -- Supplementary Income Statement Information for the fiscal
years ended December 31, 1993, 1992 and 1991.......................... F-6
</TABLE>
<PAGE> 25
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
COCA-COLA ENTERPRISES INC.
(In millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ---------------------------------------------------------------------------------------------------------
BALANCE AT OTHER CHANGES- BALANCE AT
BEGINNING ADDITIONS RETIREMENTS ADD (DEDUCT)- END
CLASSIFICATION OF PERIOD AT COST (a) DESCRIBE(b) OF PERIOD
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FISCAL YEAR ENDED:
DECEMBER 31, 1993
Land $ 179 $ -- $ 22 $ 6 $ 163
Buildings and improvements 594 25 9 12 622
Machinery and equipment 1,851 307 116 90 2,132
- ---------------------------------------------------------------------------------------------------------
2,624 332 147 108 2,917
Construction in progress(c) 82 6 8 14 94
- ---------------------------------------------------------------------------------------------------------
TOTAL $2,706 $ 338 $ 155 $ 122 $3,011
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, 1992
Land $ 172 $ 17 $ 10 $ -- $ 179
Buildings and improvements 577 27 9 (1) 594
Machinery and equipment 1,673 245 63 (4) 1,851
- ---------------------------------------------------------------------------------------------------------
2,422 289 82 (5) 2,624
Construction in progress(c) 83 5 6 -- 82
- ---------------------------------------------------------------------------------------------------------
TOTAL $2,505 $ 294 $ 88 $ (5) $2,706
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, 1991
Land $ 157 $ 9 $ 6 $ 12 $ 172
Buildings and improvements 453 50 13 87 577
Machinery and equipment 1,340 243 89 179 1,673
- ---------------------------------------------------------------------------------------------------------
1,950 302 108 278 2,422
Construction in progress(c) 146 (63) -- -- 83
- ---------------------------------------------------------------------------------------------------------
TOTAL $2,096 $ 239 $ 108 $ 278 $2,505
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) The amounts shown in Column D include amounts transferred to other assets
applicable to assets identified as idle during the year.
(b) The amounts shown in Column E include amounts applicable to acquired
companies at date of acquisition net of (i) the effect of the restructuring
reserve in 1991 and (ii) the effect of FAS 109 in 1992.
(c) Additions for construction in progress are net of amounts transferred to
productive asset categories for assets placed in service during the year.
<PAGE> 26
SCHEDULE VI -- ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
COCA-COLA ENTERPRISES INC.
(In millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ---------------------------------------------------------------------------------------------
ADDITIONS
BALANCE CHARGED BALANCE
AT TO COSTS OTHER CHANGES- AT END
BEGINNING AND RETIREMENTS ADD (DEDUCT)- OF
DESCRIPTION OF PERIOD EXPENSES (a) DESCRIBE PERIOD
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FISCAL YEAR ENDED:
DECEMBER 31, 1993
Buildings and
improvements $ 125 $ 26 $ 3 $ -- $ 148
Machinery and equipment 848 228 103 -- 973
- ---------------------------------------------------------------------------------------------
TOTAL $ 973 $ 254 $106 $ -- $1,121
- ---------------------------------------------------------------------------------------------
DECEMBER 31, 1992
Buildings and
improvements $ 108 $ 21 $ 4 $ -- $ 125
Machinery and equipment 691 206 49 -- 848
- ---------------------------------------------------------------------------------------------
TOTAL $ 799 $ 227 $ 53 $ -- $ 973
- ---------------------------------------------------------------------------------------------
DECEMBER 31, 1991
Buildings and
improvements $ 103 $ 11 $ 6 $ -- $ 108
Machinery and equipment 621 149 79 -- 691
- ---------------------------------------------------------------------------------------------
TOTAL $ 724 $ 160 $ 85 $ -- $ 799
- ---------------------------------------------------------------------------------------------
</TABLE>
(a) Includes amounts transferred to other assets applicable to assets identified
as idle during the year.
<PAGE> 27
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
COCA-COLA ENTERPRISES INC.
(In millions)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- --------------------------------------------------------------------------------------------------------
ADDITIONS
------------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND CHARGED TO OTHER DEDUCTIONS- AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS-DESCRIBE DESCRIBE OF PERIOD
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDED:
DECEMBER 31, 1993
Allowance for losses on
trade accounts $ 31 $ 13 $ 5(a) $16(b) $ 33
Valuation allowance for
deferred tax assets 86 19 -- -- 105
DECEMBER 31, 1992
Allowance for losses on
trade accounts $ 22 $ 13 $ 4(a) $ 8(b) $ 31
Valuation allowance for
deferred tax assets -- 9 77(c) -- 86
DECEMBER 31, 1991
Allowance for losses on
trade accounts $ 19 $ 1 $ 6(a) $ 4(b) $ 22
- --------------------------------------------------------------------------------------------------------
</TABLE>
(a) Principally represents allowances for losses on trade accounts of acquired
companies at date of acquisition and recoveries of amounts previously
charged off.
(b) Charge off of uncollectible accounts.
(c) Adoption of FAS 109 as of January 1, 1992.
<PAGE> 28
SCHEDULE IX -- SHORT-TERM BORROWINGS
COCA-COLA ENTERPRISES INC.
(In millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ---------------------------------------------------------------------------------------------------------
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
BALANCE AT AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
END OF INTEREST DURING THE DURING THE DURING THE
CATEGORY PERIOD RATE PERIOD PERIOD(a) PERIOD(b)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDED:
DECEMBER 31, 1993
Notes payable to banking
institutions $ 22 6.7% $ 27 $ 12 7.3%
Commercial paper 522 3.4% 694 409 3.2%
DECEMBER 31, 1992
Public medium-term notes $ -- -- $ 484 $ 169 4.4%
Commercial paper 197 3.3% 779 523 3.8%
DECEMBER 31, 1991
Notes payable to banking
institutions $ -- -- $ 250 $ 63 7.9%
Public medium-term notes 484 4.4% 484 338 5.5%
Commercial paper 778 4.8% 778 546 6.0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(a) The average amount outstanding during the period was computed by dividing
the total of month-end outstanding principal balances by the number of
months in the period.
(b) The weighted average interest rate during the period was computed by
dividing the actual interest expense by average short-term debt outstanding.
<PAGE> 29
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
COCA-COLA ENTERPRISES INC.
(In millions)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
COLUMN A COLUMN B
- -------------------------------------------------------------------------------------------------
CHARGED TO COSTS AND EXPENSES
(b)
--------------------------------
FISCAL YEAR
--------------------------------
ITEM 1993 1992 1991
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maintenance and repairs $ 76 $ 70 $ 48
Media advertising costs(a) 39 44 35
Amortization of franchise and other assets 165 162 91
- -------------------------------------------------------------------------------------------------
</TABLE>
(a) Media advertising costs as shown above do not include administrative
expenses, as it is not practical to determine that portion applicable to
media advertising. In addition, the amounts shown are net of cooperative
advertising credits received from soft drink licensors of $41 million in
1993, $39 million in 1992 and $32 million in 1991.
(b) Royalties and taxes other than payroll and income taxes do not exceed one
percent of net operating revenues and, accordingly, are not presented in the
schedule.
