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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[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, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-2217
THE COCA-COLA COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 58-0628465
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE COCA-COLA PLAZA 30313
ATLANTA, GEORGIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 676-2121
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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COMMON STOCK, $.25 PAR VALUE NEW YORK STOCK EXCHANGE
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 3, 1995 (BASED ON THE CLOSING SALE PRICE AS REPORTED ON THE
NEW YORK STOCK EXCHANGE ON SUCH DATE) WAS $59,661,653,436.
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF
MARCH 3, 1995 WAS 1,272,442,061.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE COMPANY'S ANNUAL REPORT TO SHARE OWNERS FOR THE YEAR ENDED
DECEMBER 31, 1994, 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 19, 1995, 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 several years, the Company has gained entry into Romania as well
as re-entry into several countries including Vietnam, India and South
Africa. 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, and in
certain instances, finished beverages, which it sells to bottling and
canning operations, and manufactures fountain soft drink syrups, which it
sells to authorized fountain wholesalers and some fountain 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 wholesalers sell soft drink
syrups to fountain 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, OK soda, Fresca,
PowerAde, Fruitopia, Minute Maid flavors 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 in certain
countries.
The Company's soft drink products accounted for 89% of the Company's net
operating revenues in 1994, 88% in 1993 and 87% in 1992. Soft drink
products accounted for 97% of the Company's operating income in 1994, 1993
and 1992. In 1994, products bearing the trademark "Coca-Cola" accounted
for approximately 71% of the soft drink operations' gallon shipments
worldwide.
In 1994, sales of the Company's soft drink products in the United States
accounted for approximately 30% of the Company's soft drink gallon
shipments. In 1994, the Company's principal markets outside the United
States, in terms of gallon shipments, were Mexico, Japan, Germany and
Brazil, which together accounted for approximately 39% of the remaining 70%
of soft drink gallon shipments. Net operating revenues outside the United
States, including an immaterial amount from Coca-Cola Foods, were 68% of
total net operating revenues in 1994, and 67% in 1993 and 1992. Operating
income attributable to soft drink products outside the United States
amounted to 79% of total operating income from all geographic areas in
1994, 78% in 1993 and 79% in 1992.
In the United States, in 1994, the Company made approximately 64%
of its gallon shipments of soft drink concentrates and syrups to
bottlers in approximately 398 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
retailers and to approximately 1,000 authorized fountain wholesalers,
some of whom are bottlers, who in turn sold the syrup to restaurants
and other fountain retailers, including fast food restaurants.
Coca-Cola Enterprises Inc. ("Coca-Cola Enterprises") and its
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bottling subsidiaries and divisions account for approximately 39% of the
Company's total gallon shipments of soft drink concentrates and syrups
sold in the United States. The Company holds an approximate 44% 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 is sold to independently owned bottling and canning operations
and to Company-owned operations.
In the United States, approximately 78% of the Company's fountain syrups
are sold through national or regional retail chains. The remaining 22% of
the Company's fountain syrups are sold through local outlets, which account
for approximately 55% of the total number of retail fountain outlets that
sell the Company's fountain products.
In addition to conducting its own independent advertising and marketing
activities, the Company may provide promotional and marketing services
and/or funds and consultation to its bottlers and fountain retailers. It
may also develop and introduce new products, packages and equipment to
assist its bottlers, fountain wholesalers and fountain retailers.
The profitability of the Company's business outside the United States is
subject to many factors, including governmental trade regulations and
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 other 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, 1994, bottlers representing approxi-
mately 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 entered into amendments to their
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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, 1994, 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. Bottlers in the United States
representing approximately 97% of the Company's sugar-sweetened 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 approximately 1,000
fountain wholesalers pursuant to a non-exclusive annual letter of
appointment, which does not restrict the pricing of fountain 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 280 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.
Significant Equity Investments and Company Bottling Operations
The Company is committed to continuing to strengthen its existing strong
bottler system. 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. Through these investments, the Company is able
to help focus and improve sales and marketing programs, assist in the
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development of effective business and information systems and help
establish capital structures appropriate for these respective operations.
For example, the joint venture known as the Coca-Cola Bottling Companies of
Egypt was formed in the second quarter of 1994 following the privatization
of the Egyptian bottler, which was previously government-owned. The
Company is a minority shareholder, with MAC Investments of Egypt as a
majority shareholder.
In restructuring the bottling system, the Company occasionally 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
and/or operators. These investments are generally accounted for by the
equity method and relate primarily to temporary majority interests that
management intends to reduce below 50%. For example, the Company reduced
its voting interest to below 50% in Coca-Cola Amatil Limited in early 1995
and in The Coca-Cola Bottling Company of New York, Inc. in January 1994,
consistent with its stated intention of ending temporary control after
completing certain organizational changes.
In certain situations, owning a controlling interest in bottling
operations is advantageous, compensating for limited local resources or
facilitating improvements in customer relationships.
As the process of restructuring majority-owned bottlers is completed,
the Company will consider selling its majority interests to other companies
within the Company's bottling system or selling shares of such bottlers to
the public. In 1994, the Company sold a controlling 51% interest in the
previously wholly owned bottler in Argentina, Coca-Cola S.A. Industrial,
Comercial y Financiera, to Coca-Cola FEMSA, S.A. de C.V. ("Coca-Cola
FEMSA"), a Mexican holding company. Early in the first quarter of 1995 the
Company sold its wholly owned bottling operations in Poland to Coca-Cola
Amatil Limited for total consideration of approximately U.S. $238 million,
subject to adjustment.
The Company's consolidated bottling and fountain operations produced and
distributed approximately 16% of worldwide unit case volume and, together
with consolidated canning operations, generated approximately $5.6 billion
in revenues in 1994.
The Company also has substantial equity positions in bottlers that
represent approximately 43% of U.S. unit case volume. Cost and equity
investee bottlers, including entities in which the Company holds, or during
1994 held, a temporary majority interest, produced and distributed
approximately 36% of the Company's worldwide unit case volume in 1994.
Coca-Cola Enterprises. The Company's ownership interest in Coca-Cola
Enterprises is approximately 44%. 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 $1.2
billion in 1994. 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. These sweetener transactions with Coca-Cola
Enterprises amounted to $254 million in 1994. Coca-Cola Enterprises
estimates that the territories in which it markets 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 54% 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, Texas, Florida,
Georgia and Washington) with the largest gains in population from 1990 to
1994.
In 1994, approximately 70% of the equivalent unit case volume of
Coca-Cola Enterprises (excluding products in post-mix form) were Coca-Cola
Trademark Beverages, approximately 20% of its equivalent unit case volume
were other soft drink products of the Company, and approximately 10% of its
equivalent unit case volume were soft drink products of other companies.
Coca-Cola Enterprises' net sales of beverage products were approximately $6
billion in 1994. As used herein, the term "equivalent unit case volume"
refers to 192 U.S. ounces of finished beverage product (24 eight-ounce
servings).
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Coca-Cola Amatil Limited ("Coca-Cola Amatil"). In early 1995, the
Company reduced its ownership interest in Coca-Cola Amatil Limited to
approximately 49%. Accordingly, the investment continues to be accounted
for by the equity method of accounting.
Coca-Cola Amatil is the largest bottler of the Company's soft drink
products in Australia and also has bottling and distribution rights,
through direct ownership or joint ventures, in New Zealand, Fiji, Austria,
Hungary, Papua New Guinea, the Czech and Slovak Republics, Indonesia,
Belarus, Slovenia, Ukraine and Poland. Coca-Cola Amatil estimates that the
territories in which it markets soft drink products contain approximately
99% of the population of Australia, 100% of the population of New Zealand
and Fiji, 80% of the population of Austria, 100% of the population of
Hungary, 84% of the population of Papua New Guinea, 100% of the populations
of the Czech and Slovak Republics, 92% of the population of Indonesia,
100% of the population of Belarus, 100% of the populations of Slovenia and
of Ukraine, and 60% of the population in Poland. In 1994, Coca-Cola
Amatil's net sales of beverage products were approximately U.S. $1.67
billion.
In 1994, approximately 51% of the equivalent unit case volume of
Coca-Cola Amatil were Coca-Cola Trademark Beverages, approximately 35% of
its equivalent unit case volume were other soft drink products of the
Company, approximately 10% of its equivalent unit case volume were soft
drink products of Coca-Cola Amatil and approximately 4% of its equivalent
unit case volume were soft drink products of other companies.
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. 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 1994, or
approximately 94% of the Canadian population. In 1994, Coca-Cola
Beverages' net sales of beverage products were approximately U.S. $630
million.
In 1994, approximately 71% of the equivalent unit case volume of
Coca-Cola Beverages were Coca-Cola Trademark Beverages, approximately 16%
of its equivalent unit case volume were other soft drink products of the
Company and approximately 13% of its equivalent unit case volume were soft
drink products of other companies.
Coca-Cola & Schweppes Beverages Ltd. ("CC&SB"). The Company owns a 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 1994,
CC&SB's net sales of beverage products were approximately U.S. $1.23
billion.
In 1994, approximately 54% of the equivalent unit case volume of CC&SB
were Coca-Cola Trademark Beverages, approximately 9% of its equivalent unit
case volume were other soft drink products of the Company, approximately
34% of its equivalent unit case volume were soft drink products of Cadbury
Schweppes PLC and approximately 3% of its equivalent unit case volume were
soft drink products of other companies.
Coca-Cola FEMSA. In June 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, S.A. de C.V.
("Coca-Cola FEMSA"), a Mexican holding company with bottling subsidiaries
in the Valley of Mexico, Mexico's southeastern region and Argentina.
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
public offering represented a 19% equity interest in Coca-Cola FEMSA;
with FEMSA holding a 51% interest and the Company continuing to hold
its 30% interest. In 1994, Coca-Cola FEMSA purchased from the Company
a controlling 51% interest in Coca-Cola S.A. Industrial, Comercial y
Financiera, a bottler in Argentina.
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Coca-Cola FEMSA estimates that the territories in which it markets soft
drink products contain approximately 28% of the population of Mexico and
26% of the population of Argentina. In 1994, Coca-Cola FEMSA's net sales
of beverage products were approximately U.S. $803 million. In 1994,
approximately 80% of the equivalent unit case volume of Coca-Cola FEMSA
were Coca-Cola Trademark Beverages, approximately 18% of its equivalent
unit case volume were other soft drink products of the Company, and
approximately 2% of its equivalent unit case volume were soft drink
products of other companies.
CCNR. In 1994, the Company and Nestle S.A. ("Nestle") undertook to
restructure the operation of their joint venture, Coca-Cola Nestle
Refreshments ("CCNR"), to provide that the Company manage CCNR's ready-to-
drink tea business and that Nestle manage CCNR's ready-to-drink coffee
business. The restructuring is intended to make more effective use of the
expertise of each partner. The joint venture, as reconstituted, will cover
only ready-to-drink tea and coffee beverages in existing markets with
expansions to be mutually agreed upon.
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 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.
The Company beneficially owns a 31% economic interest and a 20% voting
interest in Coca-Cola Bottling Co. Consolidated ("Consolidated"). The
Company and Consolidated each hold a 50% interest in Piedmont Coca-Cola
Bottling Partnership, which has bottling operations in the Carolinas. The
Company holds shares which constitute a 10% voting interest and a 7% equity
interest in Panamerican Beverages, Inc., a holding company with bottling
subsidiaries in Colombia, Brazil and Mexico. In total, including the
bottling operations discussed herein, the Company holds ownership positions
in approximately 39 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 highly 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 business 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
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 syrup and
product in bottles and cans.
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 either saccharin or acesulfame potassium in the Company's
one-calorie soft drink products, is currently purchased by the Company
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primarily from The NutraSweet Company, a U.S. subsidiary of Monsanto
Company, and from Holland Sweetener. Acesulfame potassium is currently
purchased from Hoechst Aktiengesellschaft.
FOODS
General Business Description
The Company's Foods Business Sector is an operating unit which consists
of Coca-Cola Foods, with operations in the United States and Canada.
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 brand chilled ready-to-serve and frozen concentrated citrus and
variety juices, lemonades and fruit punches; Minute Maid brand shelf-stable
ready-to-serve juice and juice drink products in single and multi-serve
containers; Five Alive brand refreshment beverages; Bright & Early brand
breakfast beverages; Bacardi brand 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. Coca-Cola
Foods also distributes its products outside North America, and 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 1994, Coca-Cola Foods operating income grew 5% to $123 million. This
number reflects the reclassification of 1993 and 1994 results of Minute
Maid Juices To Go and Fruitopia to Coca-Cola USA. Volume increased 2%,
which was in line with category growth. Minute Maid orange juice volume
was even while volume of other juices and juice drink products was up
approximately 3%.
Product Line Development
During 1994, Coca-Cola Foods completed the national rollout of Minute
Maid Naturals, a line of shelf-stable juice and juice drink products
packaged in multi-serve PET bottles. Also during 1994, Coca-Cola Foods
introduced a line of shelf-stable lemonade products under the Minute Maid
and Fruitopia trademarks. Later in 1994, the Division transferred
management responsibility for Minute Maid Juices To Go and Fruitopia to the
United States and international soft drink business. The product lines
include shelf-stable single-serve juices and fruit drinks sold through the
Coca-Cola bottler system.
Seasonality
Overall 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 compete with a wide variety of beverages
in the highly competitive commercial beverages industry, which
includes 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.
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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.
The Company owns numerous trademarks which are very important to its
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
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, United States Food and Drug Administration (the
"FDA") published new labeling requirements for all food products. The
Company has complied with these regulations and does not believe that they
have had or will have any significant impact on its products nor does the
Company expect 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 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.
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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, 1994, the Company and its subsidiaries employed
nearly 33,000 persons, of whom nearly 10,000 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 63 and 64 of the Annual Report to Share Owners
for the year ended December 31, 1994, 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 one entire floor
and a portion of another. Also located in the complex are several other
buildings, including the technical and engineering facilities, learning
center and the Company's Reception Center. The Company leases
approximately 259,000 square feet of office space at Ten Peachtree Place,
Atlanta, Georgia, which is owned by a joint venture of which the Company
is a partner. The Company and its subsidiaries and divisions have
facilities for administrative operations, manufacturing, processing,
packaging, packing, storage and warehousing throughout the United States.
During 1994, Coca-Cola Enterprises moved the majority of its offices
outside of the Company's Atlanta office complex and is presently renting
approximately 27,900 square feet of office space, located in the Atlanta
office complex, from the Company pursuant to a lease agreement. In 1994,
Coca-Cola Enterprises incurred charges of approximately $1 million under
the lease.
The Company owns 41 principal soft drink concentrate and/or syrup
manufacturing plants throughout the world. The Company currently owns or
holds a majority interest in 25 operations with 42 principal soft drink
bottling and canning plants located in foreign countries.
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 nine
production facilities throughout the United States and Canada 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 1994, the Company sold its Puerto
Rico Branch facility and related assets located in Carolina, Puerto Rico.
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
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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 plant was sold in 1994; however,
the Company has agreed to retain any potential legal liability resulting
from the unintentional discharge. 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. In November 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 determined
that the complaint was legally adequate to permit plaintiff an opportunity
to prove the complaint allegations. 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 Nacogdoches, 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 inten-
tional 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
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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.
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 sought
injunctive relief, treble damages and attorneys' fees. In October of 1994,
the federal Lanham Act suit was tried and resulted in a jury verdict in
favor of Seven-Up on certain of its claims. The jury awarded Seven-Up a
total of $2.53 million in damages. In December of 1994, the federal court
entered an order setting aside that damage award and awarded judgment in
favor of the Company notwithstanding the verdict. Seven-Up appealed that
judgment.
Shortly after the federal court's ruling, the Company asked the state
court to dismiss all of the plaintiff's remaining claims in that case based
upon the judgment entered in the federal case. On February 14, 1995, the
state court granted that motion and dismissed all of Seven-Up's remaining
claims.
On April 22, 1994, Deborah A. Heller, et al., individually and as a
class representative, filed a class action lawsuit against the Company and
other sellers of diet soft drink products in the Supreme Court of the State
of New York, County of Kings, which alleged that the plaintiff and other
members of the purported class had been defrauded by the defendants by
reason of their failure to advise consumers that the sweetness level of
diet soft drinks sweetened with aspartame degrades over time. The initial
complaint, which asserted claims based upon common law fraud and violation
of New York state consumer protection statutes, did not indicate a specific
damage amount in its prayer for damages. On July 27, 1994, plaintiffs
filed an amended complaint adding several individually-named plaintiffs and
a claim for unjust enrichment. On September 23, 1994, the Company filed a
motion to dismiss plaintiffs' amended complaint in its entirety. On
November 7, 1994, the plaintiffs filed a motion for summary judgment
seeking from the Company damages of at least $1.187 billion based upon its
sales of such diet soft drinks during the period from April 1988 through
December 1993. The New York law upon which plaintiffs' claims are based
allows the Court, at its discretion, to increase up to three times any
damages it awards. The Company believes that the claims lack merit and
that it has substantial legal and factual defenses to the claims in this
matter.
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.
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ITEM X. EXECUTIVE OFFICERS OF THE COMPANY
The following are the executive officers of the Company:
Roberto C. Goizueta, 63, 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, 47, is President and Chief Operating Officer and
a Director of the Company. 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 appointed
President of the European Community Group of the International Business
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 April 1993 when
he was elected Executive Vice President of the Company and Principal
Operating Officer/North America. Mr. Ivester was elected to his
current positions in July 1994.
John Hunter, 57, 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 1993.
James E. Chestnut, 44, is Senior Vice President and Chief Financial
Officer of the Company. Mr. Chestnut joined the Company in 1972 in
London. In 1984, he was named Finance Manager for the Philippine
Region in Manila and, in 1987, Manager of International Treasury
Services, Pacific Group, in Atlanta. He was named Finance Manager for
the North Pacific Division of the International Business Sector in 1989
before being elected Vice President and Controller of the Company in
1993. He was elected to his present position in July 1994.
Jack L. Stahl, 41, is Senior Vice President of the Company and
President of Coca-Cola USA. 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 Senior Vice President and Chief Financial Officer in June 1989.
He was appointed to his present position in July 1994.
Weldon H. Johnson, 57, 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, 51, is Senior Vice President of the Company and
President of the Greater Europe 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
effective in January 1989. Effective January 1993 he became President
of the Northeast Europe/Middle East Group of the International Business
Sector. In January 1995, he assumed additional responsibility for
countries in the European Union in his current position.
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Douglas N. Daft, 51, is Senior Vice President of the Company and
President of the Middle and Far East 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. Effective 1991 he was elected
Senior Vice President of the Company and named President of the Pacific
Group of the International Business Sector. He served in those
capacities until he was elected to his current position, effective
January 1995.
Carl Ware, 51, 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., 52, 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.
Sergio Zyman, 49, is Senior Vice President of the Company and Chief
Marketing Officer. Mr. Zyman first joined the Company in 1979 and
later served as Senior Vice President of Marketing for Coca-Cola USA
until 1986. 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., 58, is Senior Vice President of Corporate
Affairs of the Company. Mr. Leonard was elected to his current
position in April 1983.
Anton Amon, 51, 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 October 1989. He became Manager, Product
Integrity Division, in January 1992 and was elected to his current
position in July 1992.
George Gourlay, 53, 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, 48, 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
SHARE-OWNER MATTERS
"Financial Review Incorporating Management's Discussion and Analysis" on
pages 37 through 43, "Stock Prices" on page 67 and "Share-Owner
Information" on page 71 of the Company's Annual Report to Share Owners for
the year ended December 31, 1994, are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1990 through 1994, on pages 44
and 45 of the Company's Annual Report to Share Owners for the year ended
December 31, 1994, 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 37 through 43 of the Company's Annual Report to Share Owners for the
year ended December 31, 1994, 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, 1994, are incorporated herein by reference:
Consolidated Balance Sheets -- December 31, 1994 and 1993.
Consolidated Statements of Income -- Years ended December 31, 1994,
1993 and 1992.
Consolidated Statements of Cash Flows -- Years ended December 31,
1994, 1993 and 1992.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
"Quarterly Data", on page 67 of the Company's Annual Report to Share
Owners for the year ended December 31, 1994, 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 19, 1995, 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 19, 1995, are
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The sections under the heading "Election of Directors" entitled
"Ownership of Equity Securities in the Company" on pages 7 and 8 and
"Principal Share Owners" on pages 8 and 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 19, 1995, 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 pages 10 and 11,
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 Investee Companies" on pages 23 and 24 of the
Company's Proxy Statement for the Annual Meeting of Share Owners to be held
April 19, 1995, 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, 1994, are
incorporated by reference in Part II, Item 8:
Consolidated Balance Sheets -- December 31, 1994 and 1993.
Consolidated Statements of Income -- Years ended December 31,
1994, 1993 and 1992.
Consolidated Statements of Cash Flows -- Years ended December 31,
1994, 1993 and 1992.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. Financial Statement Schedules of The Coca-Cola Company and
subsidiaries:
Report of Independent Auditors.
Schedule II -- Valuation and Qualifying Accounts.
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
EXHIBIT NO.
3.1 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.
3.2 By-Laws of the Registrant, effective April 15, 1993 -- incorporated
herein by reference to Exhibit 3 of the Registrant's Form 10-Q
Quarterly Report for the quarter ended June 30, 1994.
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
November 23, 1988 -- 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 --
incorporated herein by reference to Exhibit 10.2 of the Registrant's
Form 10-K Annual Report for the year ended December 31, 1993.*
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.*
10.6 Amendment, dated February 10, 1984, to the Agreement dated February
28, 1983, between the Registrant and Roberto C. Goizueta.*
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EXHIBIT NO.
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.*
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 --
incorporated herein by reference to Exhibit 10.17 of the
Registrant's Form 10-K Annual Report for the year ended December
31, 1993.*
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 -- incorporated herein by reference to exhibit 10.20
of the Registrant's Form 10-K Annual Report for the year ended
December 31, 1993.*
10.21 Long Term Performance Incentive Plan of the Registrant, as amended
February 16, 1994 -- incorporated herein by reference to Exhibit
10.21 of the Registrant's Form 10-K Annual Report for the year
ended December 31, 1993.*
10.22 Executive Performance Incentive Plan, as amended.*
10.23 Letter Agreement, dated May 3, 1994, between the Registrant and
Sergio S. Zyman -- incorporated herein by reference to Exhibit 10
of the Registrant's Form 10-Q for the quarter ended March 31,
1994.*
12.1 Computation of Ratios of Earnings to Fixed Charges for the years
ended December 31, 1994, 1993, 1992, 1991 and 1990.
-17-
<PAGE>
EXHIBIT NO.
13.1 1994 Annual Report to Share Owners. (Pages 37-65, 67, 70
(definitions of "Dividend Payout Ratio," "Economic Profit," "Net
Debt and Net Capital," "Return on Capital," "Return on Common
Equity" and "Total Capital") and 71).
21.1 List of subsidiaries of the Registrant as of December 31, 1994.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this report.
27.1 Financial Data Schedule for the year ended December 31, 1994,
submitted to the Securities and Exchange Commission in electronic
format.
- -------------------
* 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 did not file any reports on Form 8-K during the last
quarter of the period covered by this report.
(c) See Item 14(a)3 above.
(d) See Item 14(a)2 above.
-18-
<PAGE>
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 13, 1995
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 Cathleen P. Black
Chairman, Board of Directors, Director
Chief Executive Officer and
a Director March 13, 1995
(Principal Executive Officer)
March 13, 1995
/s/ JAMES E. CHESTNUT *
- -------------------------------- -----------------------------------
James E. Chestnut Warren E. Buffett
Senior Vice President and Chief Director
Financial Officer
(Principal Financial Officer) March 13, 1995
March 13, 1995
*
/s/ GARY P. FAYARD -----------------------------------
- -------------------------------- Charles W. Duncan, Jr.
Gary P. Fayard Director
Vice President and Controller
(Principal Accounting Officer) March 13, 1995
March 13, 1995
* *
- -------------------------------- -----------------------------------
Herbert A. Allen M. Douglas Ivester
Director Director
March 13, 1995 March 13, 1995
* *
- -------------------------------- -----------------------------------
Ronald W. Allen Susan B. King
Director Director
March 13, 1995 March 13, 1995
-19-
<PAGE>
* *
- -------------------------------- -----------------------------------
Donald F. McHenry William B. Turner
Director Director
March 13, 1995 March 13, 1995
* *
- -------------------------------- -----------------------------------
Paul F. Oreffice Peter V. Ueberroth
Director Director
March 13, 1995 March 13, 1995
* *
- -------------------------------- -----------------------------------
James D. Robinson, III James B. Williams
Director Director
March 13, 1995 March 13, 1995
* By: /s/ CAROL C. HAYES
--------------------------
Carol C. Hayes
Attorney-in-fact
March 13, 1995
-20-
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)2
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1994
THE COCA-COLA COMPANY AND SUBSIDIARIES
<PAGE>
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)). 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, 1994 and
1993, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1994, 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.
ERNST & YOUNG LLP
Atlanta, Georgia
January 24, 1995
F-1
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -------------------------------------------------------------------------------------------------------
ADDITIONS
-----------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING OF COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION 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..... $ 39 $ 12 $ - $ 18 $ 33
Miscellaneous investments
and other assets............. 71 27 - 19 79
Deferred tax assets........... 75 - - 29 46
---- --- --- --- ----
$ 185 $ 39 $ - $ 66 $ 158
==== === === === ====
</TABLE>
<TABLE>
<CAPTION>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts..... $ 15 $ - $ - $ 15
Foreign exchange adjustments............. (1) - - (1)
Other transactions....................... 4 19 29 52
--- --- --- ---
$ 18 $ 19 $ 29 $ 66
=== === === ===
</TABLE>
F-2
<PAGE>
SCHEDULE II--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 OF COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION 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>
<TABLE>
<CAPTION>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
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-3
<PAGE>
SCHEDULE II--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 OF COSTS AND TO OTHER DEDUCTIONS AT END
DESCRIPTION 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>
<TABLE>
<CAPTION>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER 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-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
3.1 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.
3.2 By-Laws of the Registrant, effective April 15, 1993 --
incorporated herein by reference to Exhibit 3 of the
Registrant's Form 10-Q Quarterly Report for the quarter
ended June 30, 1994.
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 November 23, 1988 -- 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 -- incorporated herein by reference to Exhibit 10.2
of the Registrant's Form 10-K Annual Report for the year
ended December 31, 1993.*
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.*
10.6 Amendment, dated February 10, 1984, to the Agreement dated
February 28, 1983, between the Registrant and Roberto C.
Goizueta.*
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.*
<PAGE>
EXHIBIT NO.
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 --
incorporated herein by reference to Exhibit 10.17 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1993.*
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 -- incorporated herein by
reference to exhibit 10.20 of the Registrant's Form 10-K
Annual Report for the year ended December 31, 1993.*
10.21 Long Term Performance Incentive Plan of the Registrant,
amended February 16, 1994 -- incorporated herein by
reference to Exhibit 10.21 of the Registrant's Form 10-K
Annual Report for the year ended December 31, 1993.*
10.22 Executive Performance Incentive Plan, as amended.*
<PAGE>
EXHIBIT NO.
10.23 Letter Agreement, dated May 3, 1994, between the Registrant
and Sergio S. Zyman -- incorporated herein by reference
to Exhibit 10 of the Registrant's Form 10-Q for the
quarter ended March 31, 1994.*
12.1 Computation of Ratios of Earnings to Fixed Charges for the
years ended December 31, 1994, 1993, 1992, 1991 and 1990.
13.1 1994 Annual Report to Share Owners. (Pages 37-65, 67, 70
(definitions of "Dividend Payout Ratio," "Economic
Profit," "Net Debt and Net Capital," "Return on Capital,"
"Return on Common Equity" and "Total Capital") and 71).
21.1 List of subsidiaries of the Registrant as of December 31,
1994.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this
report.
27.1 Financial Data Schedule for the year ended December 31,
1994, submitted to the Securities and Exchange Commission
in electronic format.
EXHIBIT 10.5
THIS AGREEMENT, made and entered into this 28th day of
February, 1983, by and between The Coca-Cola Company, a Delaware
corporation (the "Company"), and Roberto C. Goizueta of Atlanta,
Georgia ("Mr. Goizueta"):
WHEREAS, for many years during which he held various
executive positions with the Company and its wholly-owned
subsidiary, The Coca-Cola Export Corporation, Mr. Goizueta,
Chairman of the Board and Chief Executive Officer of the Company,
demonstrated superior qualities of leadership and exceptional
talents for management; and
WHEREAS, it is deemed to be in the best interest of the
Company and of its stockholders, insofar as may be possible, to
provide for the uninterrupted availability of Mr. Goizueta as an
executive officer of the Company and, after his retirement, to
have the advantage of his services in a consulting and advisory
capacity; and
WHEREAS, the Company desires insofar as practicable to
insure the permanent association of Mr. Goizueta with the
Company, and Mr. Goizueta is agreeable to remaining affiliated
with the Company so long as he may be active in business; and
WHEREAS, the Company and Mr. Goizueta previously entered
into a deferred compensation agreement dated January 14, 1981
(the "1981 Agreement"); and
WHEREAS, the Company and Mr. Goizueta desire to amend and
clarify the 1981 Agreement; and
WHEREAS, the Company and Mr. Goizueta desire to enter into a
new deferred compensation agreement effective March 1, 1983;
NOW, THEREFORE, in order to effectuate their mutual desires,
purposes and intentions, the parties do hereby agree as follows:
1. 1981 Deferred Account. Effective March 1, 1983, the
Company will cease crediting Five Thousand Dollars ($5,000) per
month to a deferred account pursuant to the 1981 Agreement. The
total of all amounts credited as of March 1, 1983 to the deferred
account established pursuant to the 1981 Agreement is hereby
referred to as the "1981 Deferred Account." From and after
March 1, 1983, the 1981 Deferred Account will be subject to the
following terms and conditions:
<PAGE> -2-
(a) Beginning March 31, 1983 and at the end of every
calendar quarter thereafter (and, upon Mr. Goizueta's death or
disability, upon payment in accordance with subparagraph 1(b)
hereof) so long as there is a balance in the 1981 Deferred
Account, the Company will credit to the 1981 Deferred Account an
additional amount equal to (i) the average daily balance of the
1981 Deferred Account during such calendar quarter (or, in the
event of payment under subparagraph 1(b) hereof, the average
daily balance of the 1981 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 (ii) a percentage rate equal to the prime rate at the
beginning of the calendar quarter with respect to which the
calculation is being made as set by Trust Company Bank, Atlanta,
Georgia times (iii) 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 Mr. Goizueta's death or
disability (within the meaning of Section 105(d)(4) of the
Internal Revenue Code of 1954, as amended (the "Code"), the
entire amount of the 1981 Deferred Account, including additional
amounts credited thereto in accordance with subparagraph 1(a)
hereof, will be paid to Mr. Goizueta or to such other person or
persons as shall have been designated pursuant to paragraph 5 of
this Agreement.
2. 1983 Deferred Account. Effective the last day of March
1983 and on the last day of each succeeding month prior to
Mr. Goizueta's death or disability, within the meaning of
Section 105(d)(4) of the Code, or termination of his employment
with the Company or any of its subsidiaries, the Company will
credit Eight Thousand Three Hundred and Thirty-Three Dollars
($8,333) to a deferred account for Mr. Goizueta on the books of
the Company (the "1983 Deferred Account"). In addition and so
long as there is a balance in the 1983 Deferred Account, the
Company will, at the end of each calendar quarter (or, upon
Mr. Goizueta's death or disability, upon payment in accordance
with subparagraph 3(a) hereof), credit to the 1983 Deferred
Account an additional amount equal to (i) the average daily
balance of the 1983 Deferred Account during such calendar
quarter, (or, in the event of payment under subparagraph 3(a)
hereof, the average daily balance of the 1983 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 (ii) a percentage rate equal to the prime
rate at the beginning of the calendar quarter with respect to
which the calculation is being made as set by Trust Company Bank,
Atlanta, Georgia, times (iii) 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.
<PAGE> -3-
3. Payments
(a) Within sixty (60) days of Mr. Goizueta's death or
disability (within the meaning of Section 105(d)(4) of the Code,
the entire amount of the 1983 Deferred Account, including
additional amounts credited thereto in accordance with
subparagraph 2(a) hereof, will be paid to Mr. Goizueta or to such
other person or persons as shall have been designated pursuant to
paragraph 5 hereof.
(b) Unless otherwise payable or paid in accordance
with subparagraph 3(a) hereof, the entire balance of the 1983
Deferred Account as of December 31, 1985, including additional
amounts credited thereto through such date in accordance with
subparagraph 2(a) hereof, shall be paid to Mr. Goizueta on
January 2, 1986.
(c) In the event that the 1981 Deferred Account has
not previously been paid in accordance with subparagraph 1(b)
hereof, and in the event and to the extent that the 1983 Deferred
Account has not previously been paid in accordance with
subparagraphs 3(a) or 3(b) hereof, commencing on the first day of
the month following the month in which Mr. Goizueta's employment
with the Company or any of its subsidiaries terminates, and
annually thereafter, the Company will pay to Mr. Goizueta a
fraction of the balance in the 1981 Deferred Account and the 1983
Deferred Account as follows:
First Payment 1/10 of Deferred Account
Second Payment 1/9 of Deferred Account
Third Payment 1/8 of Deferred Account
Fourth Payment 1/7 of Deferred Account
Fifth Payment 1/6 of Deferred Account
Sixth Payment 1/5 of Deferred Account
Seventh Payment 1/4 of Deferred Account
Eighth Payment 1/3 of Deferred Account
Ninth Payment 1/2 of Deferred Account
Tenth Payment Balance of Deferred Account
(d) The payments under subparagraphs 1(b), 3(a), 3(b)
and 3(c) hereof shall be made or continued notwithstanding the
alleged or actual breach of this Agreement by Mr. Goizueta. It
is understood, however, that the Company does not waive its right
to damages and/or other relief for any breach of this Agreement
by Mr. Goizueta.
4. Advisory Services. Mr. Goizueta shall make himself
available to the Company and its subsidiaries and/or its or
<PAGE> -4-
their officers during the period he is receiving payments
pursuant to paragraph 3(c) hereof, on a reasonable basis as to
time, in an advisory and consultant capacity during his good
health.
5. Designation of Beneficiary. Any and all payments which
may fall due hereunder after the death of Mr. Goizueta shall be
paid to such person or persons as shall have been designated in
writing by Mr. Goizueta prior to the time of his death, provided
that such designation has been filed with the office of Secretary
of the Company. In the event Mr. Goizueta should fail to make
such designation, then any and all such payments shall be made to
the personal representative of Mr. Goizueta's estate. 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.
6. Assignment. The right of Mr. Goizueta 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 Mr. Goizueta
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.
7. Other Compensation. Any amounts payable under this
Agreement are in addition to, and not in lieu of, any other
compensation or employee benefit that Mr. Goizueta may receive
from the Company.
8. Covenant. Mr. Goizueta will not, without the written
authorization of the Company, at any time, disclose to or use for
the benefit of any person, corporation or other entity, any
files, trade secrets, or other confidential information
concerning the business, clients, methods, operations, programs,
financing or services of the Company or in the possession of the
Company. Trade secrets and confidential information shall mean
information not generally known to the public that was or is
disclosed to Mr. Goizueta or known by him as a consequence of his
association with the Company, whether or not pursuant to this
Agreement. Mr. Goizueta agrees that, because of the likelihood
of irreparable injury to the Company in the event of breach by
Mr. Goizueta of this covenant, the Company shall be entitled to
injunctive relief in the event of any such breach or alleged
breach.
9. Segregation of Assets. The establishment of the
1983 Deferred Account on the books of the Company and the
maintenance of the 1981 Deferred Account and the 1983 Deferred
<PAGE> -5-
Account in accordance with the provisions of this Agreement shall
not require the Company to set aside or segregate any of its
assets, and Mr. Goizueta's position shall be that of a general
creditor.
10. 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.
11. 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.
12. 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 Mr. Goizueta 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: /s/ A. GARTH HAMBY
Title: Executive Vice President
Attest:
/s/ RICHARD D. FORD
Secretary
(Corporate Seal)
/s/ ROBERTO C. GOIZUETA(SEAL)
ROBERTO C. GOIZUETA
EXHIBIT 10.6
AMENDMENT TO DEFERRED COMPENSATION AGREEMENT
This Amendment, made and entered into this 10th day
of February, 1984, by and between The Coca-Cola Company,
a Delaware Corporation (the "Company") and Roberto C.
Goizueta of Atlanta, Georgia ("Mr. Goizueta"):
WHEREAS, the Company and Mr. Goizueta entered into a
deferred compensation agreement on January 14, 1981 (the
"1981 Agreement"); and
WHEREAS, the Company and Mr. Goizueta, desiring to
revise and clarify the 1981 Agreement, entered into a new
deferred compensation agreement dated February 28, 1983
(the "1983 Agreement"), pursuant to which the Company
agreed to pay Mr. Goizueta certain deferred compensation
in accordance with the terms set forth in the 1983
Agreement; and
WHEREAS, it is deemed in the best interest of the
Company and its shareholders that the Company maintain
its continuing association with Mr. Goizueta, and
Mr. Goizueta is agreeable to remaining affiliated with
the Company so long as he may be active in business, and
WHEREAS, the Company and Mr. Goizueta desire to
amend the 1983 Agreement by increasing the amount credited
to his "1983 Deferred Account", as that term is defined
in the 1983 Agreement, from $8,333 per month to $15,000
per month, beginning for the month of March 1984;
NOW THEREFORE, in order to effectuate their mutual
desires, purposes and intentions, the parties do hereby
agree as follows:
1. Paragraph 2 shall be amended in its entirety to
provide:
2. 1983 Deferred Account. Effective the last
day of March 1983 and on the last day of each
succeeding month thereafter through and including
February 1984, the Company will credit Eight
Thousand Three Hundred Thirty-Three Dollars ($8,333)
<PAGE> -2-
to a deferred account for Mr. Goizueta on the books
of the Company (the "1983 Deferred Account").
Effective the last day of March 1984 and on the last
day of each succeeding month prior to Mr. Goizueta's
death or disability, within the meaning of
Section 105(d)(4) of the Code, or termination of his
employment with the Company or any of its
subsidiaries, the Company will credit Fifteen
Thousand Dollars ($15,000.00) to the 1983 Deferred
Account. In addition and so long as there is a
balance in the 1983 Deferred Account, the Company
will, at the end of each calendar quarter (or, upon
Mr. Goizueta's death or disability, upon payment in
accordance with subparagraph 3(a) hereof), credit to
the 1983 Deferred Account an additional amount equal
to (i) the average daily balance of the 1983
Deferred Account during such calendar quarter, (or,
in the event of payment under subparagraph 3(a)
hereof, the average daily balance of the 1983
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 (ii) a percentage rate equal to the
prime rate at the beginning of the calendar quarter
with respect to which the calculation is being made
as set by Trust Company Bank, Atlanta, Georgia,
times (iii) 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.
2. All other terms and conditions of the 1983
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has hereunto caused
this Amendment to the 1983 Agreement to be executed and
sealed by its duly authorized officer, and Mr. Goizueta
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: /s/ A. GARTH HAMBY
Title: Executive Vice President
Attest:
/s/ DONALD R. GREENE
Secretary
(Corporate Seal)
/s/ ROBERTO C. GOIZUETA(SEAL)
ROBERTO C. GOIZUETA
EXHIBIT 10.9
THE COCA-COLA COMPANY
1991 STOCK OPTION PLAN
as amended on February 15, 1995
SECTION 1. PURPOSE
The purpose of the 1991 Stock Option Plan of The Coca-Cola Company (the
"Plan") is to advance the interest of The Coca-Cola Company (the "Company") and
its Affiliates (as defined in Section 4 hereof) by encouraging and enabling the
acquisition of a financial interest in the Company by officers and other key
employees of the Company or its Affiliates. In addition, the Plan is intended to
aid the Company and its Affiliates in attracting and retaining key employees, to
stimulate the efforts of such employees and to strengthen their desire to remain
in the employ of the Company and its Affiliates.
The Company may grant stock options which constitute "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), or stock options which do not constitute ISOs
("NSOs") (ISOs and NSOs being hereinafter collectively referred to as
"Options"). The Company may grant certain officers of the Company stock
appreciation rights ("Rights") for use in connection with Options or with other
stock options granted by the Company.
SECTION 2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") appointed
by the Board of Directors of the Company (the "Board") from among its members.
Unless and until its members are not qualified to serve on the Committee
pursuant to the provisions of the Plan, the Compensation Committee of the Board
shall function as the Committee. Eligibility requirements for members of the
Committee shall comply with Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or any successor rule or
regulation. No person, other than members of the Committee, shall have any
discretion concerning decisions regarding the Plan. The Committee shall
determine the key employees of the Company and its Affiliates (including
officers, whether or not they are directors) to whom, and the time or times at
which, Options and Rights will be granted, the number of shares to be subject to
each Option, the duration of each Option or Right, the time or times within
which the Option or Right may be exercised, the cancellation of the Option or
Right (with the consent of the holder thereof) and the other conditions of the
grant of the Option or Right at grant or while outstanding pursuant to the terms
of the Plan. The provisions and conditions of the Options and Rights need not be
the same with respect to each optionee or with respect to each Option or each
Right.
The Committee may, 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 may make determinations and may take such other
action in connection with or in relation to 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 Options and Rights 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. STOCK
The stock to be issued, transferred and/or sold under the Plan shall be
shares of Common Stock, $.25 par value, of the Company (the "Stock"). The Stock
shall be made available from authorized and unissued Common Stock of the Company
or from the Company's treasury shares. The total number of shares of Stock that
may be issued or transferred under the Plan pursuant to Options and Rights
granted thereunder may not exceed 38,470,628 shares (subject to adjustment as
described below) as of February 20, 1995. This number represents the number of
shares originally authorized in the Plan, adjusted for a 2-for-1 stock split
which occurred on May 1, 1992 in accordance with Section 10, less the number
of shares already issued or subject to outstanding Options or Rights issued
pursuant to the Plan as of February 20, 1995. Such number of shares shall be
subject to adjustment in accordance with Section 10 hereof and this Section
3. Stock subject to any unexercised portion of an Option or Right which
expires or is cancelled, surrendered or terminated for any reason may again
be subject to Options and/or Rights granted under the Plan. Upon surrender of
an Option or stock option granted under any other plan heretofore or hereafter
adopted by the Company and the exercise of a Right, the number of shares of
Stock subject to the surrendered Option or stock option shall be charged
against the maximum number of shares of Stock issuable or transferable
under the Plan or the stock option plan pursuant to which the surrendered
Option or stock option was granted, and such number of shares of Stock shall
not be issuable or transferable under such Plan or plan in the future. The
surrender of any stock option issued other than pursuant to a stock option
plan pursuant to the exercise of a Right shall not result in a charge against
the maximum number of shares issuable or transferable under the Plan or any
other stock option plan.
SECTION 4. ELIGIBILITY
Options and Rights may be granted to employees of the Company and its
Affiliates. The term "Affiliates" shall mean any corporation or other business
organization in which the Company owns, directly or indirectly, 25% or more of
the voting stock or capital at the time of the granting of such Option or Right;
provided, however, that no ISO may be granted to any employee of an Affiliate
which is not a corporation or to any employee of an Affiliate which is not at
least 50% owned, directly or indirectly, by the Company. Any ISOs held by an
optionee of an Affiliate which ceases to be 50% owned will become NSOs three (3)
months after the date that the Company's ownership of the Affiliate falls below
50%. If ownership falls below 25% an optionee will be considered terminated for
purposes of Section 8 on the date that the Company's ownership of the Affiliate
falls below 25%. No employee shall be granted the right to acquire pursuant to
Options granted under the Plan more than 15% of the aggregate number of shares
of Stock originally authorized under the Plan, as adjusted pursuant to Section
10 hereof.
SECTION 5. AWARDS OF OPTIONS
Except as otherwise specifically provided herein, Options granted pursuant
to the Plan shall be subject to the following terms and conditions:
<PAGE> -3-
(a) Option Price. The option price shall be 100% of the fair market
value of the Stock on the date of grant. The fair market value of a share
of Stock shall be the average of the high and low market prices at which a
share of Stock shall have been sold on the date of grant, or on the next
preceding trading day if such date was not a trading date, as reported on
the New York Stock Exchange Composite Transactions listing.
(b) Payment. The option price shall be paid in full at the time of
exercise. No shares shall be issued or transferred until full payment has
been received therefor. Payment may be in cash or, with the prior approval
of and upon conditions established by the Committee, by delivery of shares
of Stock owned by the optionee. The optionee, if a U.S. taxpayer, may elect
to satisfy Federal, state and local income tax liabilities due by reason of
the exercise by the withholding or tendering of shares of Stock. If payment
or satisfaction of such tax liabilities is made by the delivery of shares
of Stock, the value of the shares delivered (or withheld in the case of tax
withholding for U.S. taxpayers) shall be computed on the basis of the
average of the high and low market prices at which a share of Stock shall
have been sold on the date the optionee elects to deliver shares of Stock
upon exercise of an Option, or tenders shares of Stock or has shares of
Stock withheld in the case of tax withholding, or on the next preceding
trading day if such date was not a trading day, as reported on the New York
Stock Exchange Composite Transactions listing.
(c) Duration of Options. The duration of Options shall be determined
by the Committee, but in no event shall the duration of an Option exceed
ten (10) years from the date of its grant.
(d) Other Terms and Conditions. Options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the
Committee shall determine appropriate from time to time; provided,
however, that, except in the event of a "Change in Control", death
or disability of the optionee or "Retirement", as defined in Section
8, no Option shall be exercisable in whole or in part for a period of
twelve (12) months from the date on which the Option is granted, and,
subject to the provisions of Section 8 hereof, thereafter the ratio of
the number of shares for which any such Option is exercisable through
any given date may not exceed the ratio of the number of months between
the date on which the Option is granted and such given date to a period
of thirty-six (36) months (or such lesser period as may be then or later
determined by the Committee is its discretion). The grant of an Option
and/or Right to any employee shall not affect in any way the right of
the Company and any Affiliate to terminate the employment of the holder
thereof.
(e) ISOs. The Committee, with respect to each grant of an Option
to an optionee, shall determine whether such Option shall be an ISO,
and, upon determining that an Option shall be an ISO, shall designate
it as such in the written instrument evidencing such Option. If the
written instrument evidencing an Option does not contain a designation
that it is an ISO, it shall not be an ISO.
The aggregate fair market value (determined in each instance on the date on
which an ISO is granted) of the Stock with respect to which ISOs are first
exercisable by any optionee in any calendar year shall not exceed $100,000 for
such optionee. If any subsidiary or Affiliate of the Company shall adopt a stock
option plan under which options constituting incentive stock options (as defined
in Section 422(b) of the Code) may be granted, the fair market value of the
<PAGE> -4-
Stock on which any such incentive stock options are granted and the times at
which such incentive stock options will first become exercisable shall be taken
into account in determining the maximum amount of ISOs which may be granted to
the optionee in any calendar year.
SECTION 6. AWARDS OF RIGHTS
The Committee may, at any time and in its discretion, grant to any officer
of the Company who is awarded or who holds an outstanding Option or any other
outstanding stock option granted by the Company the right to surrender such
Option (to the extent any Option or such other stock option is otherwise
exercisable) and to receive from the Company an amount equal to the excess, if
any, of the fair market value of the Stock with respect to which such Option is
surrendered on the date of such surrender over the option price of the Option or
other stock option surrendered. No ISO may be surrendered in connection with the
exercise of a Right unless the fair market value of the Stock subject to the ISO
is greater than the option price for such Stock. Payment by the Company of the
amount receivable upon any exercise of a Right may be made by the delivery of
Stock or cash or any combination of Stock and cash, as determined in the sole
discretion of the Committee from time to time. No fractional shares shall be
used. The Committee may provide for the elimination of fractional shares of
Stock without adjustment or for the payment of the value of such fractional
shares in cash. Shares of Stock of the Company delivered to the optionee upon
the exercise of a Right and the surrender of the Option or stock option shall be
valued at the fair market value of a share of Stock on the date the right is
exercised and the Option or stock option is surrendered. The Committee may limit
the period or periods during which the Rights may be exercised and may provide
such other terms and conditions (which need not be the same with respect to each
optionee) under which a Right may be granted and/or exercised. A Right may be
exercised only as long as the related Option or stock option is exercisable;
provided, however, that no Right may be exercised and cash paid in partial or
complete satisfaction thereof during the first six (6) months following the date
of grant of the Right and related Option. In no event may a Right be exercised
more than ten (10) years after the date of the grant of the Right and the
related Option or stock option. The fair market value of a share of Stock shall
be the average of the high and low market prices at which a share of Stock shall
have been sold on the date the Option or the stock option is surrendered or on
the next preceding trading day, if such date is not a trading day, as reported
on the New York Stock Exchange Composite Transactions listing.
SECTION 7. NONTRANSFERABILITY OF OPTION AND RIGHT
No Option or Right granted pursuant to the Plan shall be transferable
otherwise than by will or by the laws of descent and distribution or pursuant to
a qualified domestic relations order as defined by the Code. During the
lifetime of an optionee, the Option and Right shall be exercisable only by
the optionee personally or by the optionee's legal representative.
SECTION 8. EFFECT OF TERMINATION OF EMPLOYMENT, DEATH, RETIREMENT OR A CHANGE
IN CONTROL
(a) Acceleration. If an optionee's employment with the Company and/or its
Affiliates shall be terminated by reason of death, disability or Retirement or
in the event of a Change in Control, all Options held by the optionee shall
become exercisable. Death or disability of the optionee occurring after
<PAGE> -5-
termination of employment with the Company and/or its Affiliates shall not cause
any Options to become exercisable. As used in the Plan, the term "disabled"
shall have the meaning set forth in the Company's Long Term Disability Income
Plan. "Retirement", as used herein, shall mean an employee's termination of
employment on a date which is on or after the earliest date on which such
employee would be eligible for an immediately payable benefit pursuant to (i)
for those employees eligible for participation in the Company's Supplemental
Retirement Plan, the terms of that Plan and (ii) for all other employees, the
terms of the Employees Retirement Plan (the "ERP") assuming such employee were
eligible to participate in the ERP. "Retire" shall mean to enter Retirement.
A "Change in Control" shall mean a change in control of a nature that would
be required to be reported in response to item (6e) of Schedule 14A of
Regulation 14A promulgated under the 1934 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 1934 Act), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the 1934 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 (2) 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 result of which the
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
times as a Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
(b) Exercise Period. If an optionee's employment with the Company and/or
its Affiliates shall be terminated for any reason, except death, disability or
Retirement to the extent the Option was exercisable by the optionee at the date
of such termination of employment, the optionee shall be entitled to exercise
the Option for the period of six (6) months from the date of such termination of
employment unless the Option by its terms expires prior thereto, except as
otherwise provided herein.
If an optionee shall become disabled while an employee of the Company or
any Affiliate or within six (6) months after the date of termination of
employment with the Company or any Affiliate but prior to the expiration of the
Option, or if an optionee shall Retire, the retired optionee, the transferee of
the Option pursuant to Section 7 or the disabled employee shall have the right
to exercise the Option, and the right to exercise the Option shall terminate as
provided by the terms of the Option. If an optionee shall die while an employee
of the Company or any Affiliate or within six (6) months from the date of
termination of employment with the Company or any Affiliate but prior to the
<PAGE> -6-
expiration of the Option, the executor or administrator of the optionee's estate
or a transferee of the Option pursuant to Section 7 shall have the right to
exercise the Option, and the right to exercise the Option shall terminate upon
the earliest of (i) the expiration of twelve (12) months from the date of such
termination of employment, (ii) the expiration of twelve(12) months from the
date of the optionee's death, or (iii) as otherwise provided by the terms of
the Option. The occurrence of a Change in Control shall have no effect on the
duration of the exercise period.
Whether military or other government or eleemosynary service or other leave
of absence will constitute termination of employment shall be determined in each
case by the Committee in its sole discretion.
Notwithstanding the foregoing termination provisions, the Committee may, in
its sole discretion, establish different terms and conditions pertaining to the
effect of an Optionee's termination on the expiration or exercisability of newly
granted options or (with the consent of the affected Optionee) outstanding
options. However, no Option or Right can have a term of more than ten years.
SECTION 9. NO RIGHTS AS A SHAREHOLDER
An optionee or a transferee of an optionee pursuant to Section 7 shall have
no right as a shareholder with respect to any Stock covered by an Option or
receivable upon the exercise of an Option or Right until the optionee or
transferee shall have become the holder of record of such Stock, and no
adjustments shall be made for dividends in cash or other property or other
distributions or rights in respect to such Stock for which the record date is
prior to the date on which the optionee or transferee shall have in fact become
the holder of record of the share of Stock acquired pursuant to the Option or
Right.
SECTION 10. ADJUSTMENT IN THE NUMBER OF SHARES AND IN OPTION PRICE
In the event there is any change in the shares of Stock through the
declaration of stock dividends, or stock splits or through recapitalization or
merger or consolidation or combination of shares or spin-offs or otherwise, the
Committee or the Board shall make such adjustment, if any, as it may deem
appropriate in the number of shares of Stock available for Options and Rights as
well as the number of shares of Stock subject to any outstanding Option or Right
and the option price thereof. Any such adjustment may provide for the
elimination of any fractional shares which might otherwise become subject to any
Option or Right without payment therefor.
SECTION 11. AMENDMENTS, MODIFICATIONS 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 qualify the Options and/or Rights under the laws of various
countries (including tax laws) and under rules and regulations promulgated by
the Securities and Exchange Commission with respect to employees who are subject
to the provisions of Section 16 of the 1934 Act, or to correct any defect or
supply an omission or reconcile any inconsistency in the Plan or in any Option
or Right granted thereunder, or for any other purpose or to any effect permitted
by applicable laws and regulations, without the approval of the shareholders of
<PAGE> -7-
the Company. However, in no event may additional shares of Stock be allocated to
the Plan or any outstanding option be repriced or replaced without shareholder
approval. Without limiting the foregoing, the Board of Directors or the
Committee may make amendments applicable or inapplicable only to participants
who are subject to Section 16 of the 1934 Act.
No amendment or termination or modification of the Plan shall in any manner
affect any Option or Right theretofore granted without the consent of the
optionee, except that the Committee may amend or modify the Plan in a manner
that does affect Options or Rights theretofore granted upon a finding by the
Committee that such amendment or modification is in the best interest of holders
of outstanding Options or Rights affected thereby. Grants may be made until
April 19, 2001. The Plan shall terminate when there are no longer Rights or
Options outstanding under the Plan unless earlier terminated by the Board or by
the Committee.
SECTION 12. 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.
EXHIBIT 10.22
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
(adopted by the Compensation Committee February 16, 1994)
(approved by the share owners of the Company April 20, 1994)
(as amended and restated effective January 1, 1995)
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.
i. "Participant" means an executive officer who is
selected for participation by the Committee.
<PAGE> -2-
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 as an executive officer relating to the Plan Year are
rendered. In the case of an employee who becomes an executive
officer after the commencement of the Plan Year, the Committee
will determine whether the employee will become a Participant for
the Plan Year during which he became an executive officer.
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.
<PAGE> -3-
In the event that a Participant is assigned an Opportunity
following the time at which Opportunities are normally
established for the Plan Year due to placement in an executive
position after the start of the Plan Year, the Committee will
adopt a matrix with respect to such Opportunity. Volume growth
and earnings per share gain under the matrix will be determined
by comparing (1) volume and earnings per share for the period
commencing on the first day of the calendar month in which the
Participant becomes an executive officer and ending on the last
day of the Plan Year, to (2) volume and earnings per share for
the same calendar months during the preceding Plan Year.
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 for the
appropriate period, 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 at the time of its
determination of Opportunities for the Plan Year) 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. Participants who change
executive positions during the Plan Year and who retain the
Opportunity initially set for them shall have their Award
determined by prorating the portion of the Award that would be
derived under each applicable matrix for the portion of the year
during which such matrix applies to the Participant. If a matrix
does not exist with respect to the Participant's new executive
position, the portion of his Award relating to the new position
shall be determined with reference to the matrix for the
Company's consolidated 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.
<PAGE> -4-
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
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.
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.
<PAGE> -5-
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.
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.
<PAGE> -6-
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
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.
EXHIBIT 12.1
<TABLE>
<CAPTION>
THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions except ratios)
Year Ended December 31,
-----------------------------------------------------------
1994 1993 1992 1991 1990
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EARNINGS:
Income from continuing operations
before income taxes and changes
in accounting principles $ 3,728 $ 3,185 $ 2,746 $ 2,383 $ 2,014
Fixed charges 236 213 207 222 255
Less capitalized interest, net (5) (16) (10) (8) (8)
Equity income, net of dividends (4) (35) (30) (16) (94)
-----------------------------------------------------------
Adjusted earnings $ 3,955 $ 3,347 $ 2,913 $ 2,581 $ 2,167
===========================================================
FIXED CHARGES:
Gross interest incurred $ 204 $ 184 $ 181 $ 200 $ 238
Interest portion of rent expense 32 29 26 22 17
-----------------------------------------------------------
Total fixed charges $ 236 $ 213 $ 207 $ 222 $ 255
===========================================================
Ratios of earnings to fixed charges 16.8 15.7 14.1 11.6 8.5
===========================================================
The Company is contingently liable for guarantees of indebtedness of independent bottling companies
and others (approximately $170 million at December 31, 1994). Fixed charges for these contingent
liabilities have not been included in the computations of the above ratios as the amounts are
immaterial and, in the opinion of Management, it is not probable that the Company will be required
to satisfy the guarantees.
</TABLE>
EXHIBIT 13.1
FINANCIAL REVIEW-THE COCA-COLA COMPANY AND SUBSIDIARIES
-------------------------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
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, consistently
improving Economic Profit and creating Economic Value Added. 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 growth in the
Company's volume, cash flows, earnings and economic profit, its
increased returns on total capital and equity, and the total return to
its share owners over time.
INVESTMENTS
With a pervasive global business system that distributes its products
in more than 195 countries, the Company is well positioned to
capitalize on new investment opportunities as they arise. Within the
last several years, the Company has gained entry into Romania, as well
as re-entry into several countries, including Vietnam, South Africa
and India. The Company also continues to expand its business system
rapidly across emerging 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. The Company's soft drink business
consistently generates 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. In highly developed soft drink markets,
additional high-return investments are made to increase product
selection and availability, enhance product appeal and improve overall
efficiency. The Company continues to benefit from the consolidation of
production and distribution networks and investment in the latest
technology and information systems.
Capital expenditures on property, plant and equipment and the
percentage distribution by geographic area for 1994, 1993 and 1992 are
as follows (dollars in millions):
Year Ended December 31, 1994 1993 1992
- ---------------------------------------------------------
Capital expenditures $878 $800 $1,083
- ---------------------------------------------------------
United States 32% 23% 22%
Africa 3% 1% 1%
European Community 26% 33% 41%
Latin America 16% 19% 20%
Northeast Europe/
Middle East 19% 18% 13%
Pacific & Canada 4% 6% 3%
=========================================================
In addition to capital expenditures, the Company has made
significant investments in bottling operations over the last decade,
ensuring strong and efficient production, distribution and marketing
systems and maximizing long-term growth in volume, cash flows and
share-owner value of the Company and the bottler system.
When appropriate, the Company makes equity investments in
bottling companies. 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. During 1994, a joint venture known as the Coca-Cola
Bottling Companies of Egypt was formed following the privatization of
the Egyptian public sector bottler. 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 strategic bottling territories in
Latin America. Also in 1993, the Company purchased shares constituting
a 10 percent voting interest in Panamerican Beverages, Inc., which
owns bottling operations in Mexico, Brazil and Colombia.
In restructuring the bottling system, the Company occasionally
purchases temporary majority interests in companies. The length of
ownership is influenced by various factors, including operational
changes, management changes and the process of identifying appropriate
new investors/operators. These investments are generally accounted for
by the equity method and relate primarily to temporary majority
interests that management intends to reduce to below 50 percent. For
example, the Company reduced its voting interest in Coca-Cola Amatil
Limited (Coca-Cola Amatil) in early 1995 and in The Coca-Cola Bottling
Company of New York, Inc. in January 1994 to below 50 percent,
consistent with its stated intention of ending temporary control after
completing certain organizational changes.
-37-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
In certain situations, owning a controlling interest in bottling
operations is advantageous, compensating for limited local resources
or facilitating improvements in customer relationships.
As the process of restructuring majority-owned bottlers is
completed, the Company will consider selling its majority interests to
other companies within the Company's bottling system or selling shares
of those bottlers to the public. In 1994, the Company sold a
controlling 51 percent interest in the previously wholly owned bottler
in Argentina, Coca-Cola S.A. Industrial, Comercial y Financiera, to
Coca-Cola FEMSA.
The following table illustrates the excess of the calculated fair
values, based on quoted closing prices of publicly traded shares, over
the Company's carrying values for selected equity method investees (in
millions):
Carrying Fair
December 31, Value Value Excess
- ---------------------------------------------------------------------
1994
Coca-Cola Amatil Limited $ 694 $ 1,230 $ 536
Coca-Cola Enterprises Inc. 524 1,014 490
Coca-Cola FEMSA, S.A. de C.V. 187 351 164
Coca-Cola Beverages Ltd. 10 60 50
Coca-Cola Bottling Co. Consolidated 85 73 (12)
- ---------------------------------------------------------------------
$ 1,228
- ---------------------------------------------------------------------
In 1994, consolidated bottling and fountain operations produced
and distributed approximately 16 percent of the Company's worldwide
unit case volume. Cost and equity investee bottlers produced and
distributed an additional 36 percent of the Company's worldwide unit
case volume.
INCREASING RETURNS
The Company manages its concentrate and bottling operations to
increase volume and its share of worldwide 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.
By controlling costs through more efficient purchasing,
manufacturing and distribution processes, allocating marketing
resources efficiently and implementing price increases generally in
line with local inflation, the Company was able to improve operating
margins in 1994.
Expanding the worldwide availability of Company products,
increasing per capita consumption of soft drinks and advancing the
Company's share of industry sales drive the success of the Company's
global investments. In new and emerging markets, the Company's primary
emphasis is on raising per capita consumption levels by expanding
availability of the Company's products. In these new and emerging
markets, major investments are made in the basic infrastructure of the
system: facilities, distribution networks and sales equipment. These
investments are made by acquiring or forming strategic business
alliances with local bottlers, matching local expertise with the
Company's focus and experience. Point-of-sale merchandising and
product sampling are used to establish consumer awareness and build
product acceptability. The Company increases consumer awareness and
the appeal of its products by using integrated marketing programs,
including advertising, to build consumer affinity for the Company's
trademarks. Advertising expenditures were $1,308 million in 1994,
$1,126 million in 1993 and $1,107 million in 1992.
In leading-edge markets, growth is driven, in part, by providing
the consumer with new products and additional serving sizes.
The Company's ownership of and investments in bottling operations
also help increase volume and profits. While the bottling business
generally provides lower margins on revenue compared to the
concentrate business, the Company's consolidated operations continue
to increase profits on a per-gallon basis. In addition, the Company's
aggressive investment in bottling infrastructure has resulted in
profit growth and enhanced sales and unit case volume at the bottler
level, which in turn generates increased gallon shipments for the
concentrate business.
Equity income, which primarily represents returns from the
Company's unconsolidated bottling investments, reached $134 million in
1994.
FINANCIAL POLICIES
To maximize share-owner value, the Company optimizes its cost of
capital through appropriate financial policies.
DEBT FINANCING
The Company maintains debt levels considered prudent based on its cash
flow, interest coverage and percentage of debt to total capital. The
Company lowers its overall cost of capital through the use of debt
financing which increases the return on share-owners' equity.
The Company's capital structure and financial policies have
earned long-term credit ratings of "AA" from Standard & Poor's and
"Aa3" from Moody's, as well as the highest credit ratings available
for the Company's commercial paper programs.
-38-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL RISK MANAGEMENT
The Company employs the use of derivative financial instruments for
the purpose of reducing exposure to financial risks.
With approximately 79 percent of operating income in 1994
generated by operations outside the United States, the Company
benefits from operating in a variety of currencies, as weakness in any
particular currency is often offset by strengths in other currencies.
Most foreign currency exposures are managed on a consolidated
basis, allowing the Company to net certain exposures and thus take
advantage of any natural offsets. Forward exchange contracts are used
to adjust the currency mix of recorded assets and liabilities, further
reducing the exposure from adverse fluctuations in exchange rates. The
Company also enters into forward exchange contracts and swaps and
purchases options to hedge both firmly committed and anticipated but
not yet firmly committed transactions, and net investments in certain
international operations.
The Company uses only liquid spot, forward, option and swap
contracts. It does not enter into leveraged, structured or illiquid
contracts. Additionally, the Company does not enter into derivative
financial instruments for trading purposes. As a matter of policy, all
derivative positions are used to hedge underlying economic exposures
by mitigating the risk of changes in currency, interest rate and other
market risks on a matched basis. Any gains or losses on hedging
transactions are generally offset by gains or losses on the underlying
exposures being hedged.
SHARE REPURCHASES
In July 1992, the Board of Directors authorized a plan to repurchase
up to 100 million shares of the Company's common stock through the
year 2000. In 1994, the Company repurchased 25 million shares under
this plan at a total cost of approximately $1.2 billion. From the
inception of share repurchase programs in 1984 to December 31, 1994,
the Company has repurchased 454 million shares at an average price per
share of $15.45.
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
13 percent since December 31, 1984. The annual common stock dividend
was $.78 per share, $.68 per share and $.56 per share in 1994, 1993
and 1992, respectively. At its February 1995 meeting, the Board of
Directors increased the quarterly dividend per common share to $.22,
equivalent to a full-year common dividend of $.88 in 1995, the 33rd
consecutive annual increase.
The Board of Directors has maintained a common stock dividend
payout ratio of approximately 40 percent of net income, including the
1994 dividend payout ratio.
MEASURING PERFORMANCE
Economic Profit and Economic Value Added provide a direct framework
for measuring 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.
Beginning in 1994, the Company expanded the use of Economic Value
Added as a performance measurement tool. Measured over a three year
time frame, long-term incentive bonuses for certain employees of the
Company are now determined, in part, by comparison against Economic
Profit target levels. This change in performance measures was made to
more closely align management's focus on the key drivers of the
business. Management believes that a clear focus on the components of
Economic Profit, and the resultant growth in Economic Value Added over
time, leads to the creation of share-owner wealth.
Over the last 13 years, the Company has increased its Economic
Profit at an average annual compound rate of 26 percent, resulting in
Economic Value Added to the Company of $1.9 billion. Over the same
period, the Company's stock price has increased at an average annual
compound rate of 25 percent.
TOTAL RETURN TO SHARE OWNERS
During the past decade, share owners of the Company have received an
excellent return on their investment. A $100 investment in the
Company's common stock at December 31, 1984, together with reinvested
dividends, would be worth approximately $1,237 at December 31, 1994,
an average annual compound return of 29 percent.
-39-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 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 the world. During 1994,
management responsibility for the Minute Maid Juices To Go and
Fruitopia product lines was transferred from the foods business sector
to the United States and international soft drinks business. Prior
years' net operating revenues and operating income have been
reclassified to conform to the current year presentation.
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 syrups sold by
the Company directly to customers are included in both measures
simultaneously.
OPERATIONS
NET OPERATING REVENUES AND GROSS MARGIN
Revenues for the Company's soft drink business increased 18 percent in
1994, primarily due to increased gallon shipments, selected price
increases, continued expansion of the Company's bottling and canning
operations and a weaker U.S. dollar versus key hard currencies.
Revenues for the foods business sector in 1994 increased 3 percent,
primarily due to price increases for orange juice products.
In 1993, revenues for the Company's soft drink business increased
8 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 hard
currencies. Revenues for the foods business sector were even in 1993,
as volume increases offset price reductions.
On a consolidated basis, the Company's worldwide net revenues
grew 16 percent in 1994, while gross profit grew 14 percent. The
Company's gross margin contracted to 62 percent in 1994 from 63
percent in 1993, primarily due to the acquisition of bottling and
canning operations, which typically have lower gross profit to net
revenue relationships, but offer strong cash flows.
On a consolidated basis, gross profits grew 10 percent in 1993 on
net revenue growth of 7 percent. The Company's gross margin expanded
to 63 percent in 1993 from 61 percent in 1992 due to lower costs for
materials such as aspartame and orange solids.
SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
Selling expenses were $4,931 million in 1994, $4,360 million in 1993
and $4,006 million in 1992. The increase in 1994 and 1993 was
primarily due to higher marketing investments in support of the
Company's volume growth.
Administrative and general expenses were $1,366 million in 1994,
$1,335 million in 1993 and $1,243 million in 1992. The increase in
1994 and 1993 was due primarily to expansion of the business,
particularly newly formed, Company-owned bottling operations. Also,
administrative and general expenses in 1993 included 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 8 percent in
1994 and 10 percent in 1993 and 1992.
OPERATING INCOME AND OPERATING MARGIN
Operating income grew 20 percent in 1994, after increasing 12 percent
in 1993. Operating margins grew to 23 percent in 1994 from 22 percent
in 1993. The expansion in operating margins is attributable to revenue
growth outpacing moderate growth in selling, administrative and
general expenses.
-40-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
MARGIN ANALYSIS
[bar chart]
Year Ended December 31, 1992 1993 1994
- -------------------------------------------------------------------------
Net Operating Revenues (In billions) $13.1 $14.0 $16.2
Gross Margin 61% 63% 62%
Operating Margin 21% 22% 23%
=========================================================================
The Company's gross profit and operating income have increased due to
growth in revenues and expansion of operating margins.
INTEREST INCOME AND INTEREST EXPENSE
Interest income increased 26 percent in 1994 due primarily to rising
interest rates and higher average investments in cash equivalents and
marketable securities. Interest expense increased 18 percent in 1994
as a result of rising interest rates.
In 1993, interest expense was approximately even with the prior
year while interest income decreased 12 percent.
EQUITY INCOME
Equity income increased 47 percent to $134 million in 1994 due
primarily to increased earnings from Coca-Cola Enterprises and
Coca-Cola & Schweppes Beverages Ltd. and improved results from
Coca-Cola Beverages Ltd.
Equity income increased 40 percent to $91 million 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 Coca-Cola Beverages Ltd.
OTHER INCOME (DEDUCTIONS)-NET
In 1994, other income (deductions)-net decreased $100 million,
primarily due to recognition in 1993 of approximately $84 million of
pretax gains on sales of real estate and bottling investments
(described below). No transactions resulting in significant gains
occurred in 1994.
In 1993, other income (deductions)-net increased $86 million,
primarily due to gains on sales of certain real estate and 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.
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, resulting in a noncash pretax gain of $12 million for
the Company.
INCOME TAXES
The Company's effective tax rates of 31.5 percent in 1994, 31.3
percent in 1993 and 31.4 percent in 1992 reflect the tax benefit
derived from having significant operations outside the United States
that are taxed at rates lower than the U.S. statutory rate of 35
percent.
TRANSITION EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES
The Company adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115) as of January 1, 1994, resulting in an after-
tax increase to share-owners' equity of $60 million, with no effect on
net income. SFAS 115 changes the method of accounting for certain debt
and marketable equity securities from a historical cost basis to a
fair value approach.
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 SHARE
Accelerated by the Company's share repurchase program, income per
share before changes in accounting principles grew 18 percent and 17
percent in 1994 and 1993, respectively. Net income per share grew 19
percent in 1994.
-41-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
The ability to generate cash from operations in excess of requirements
for capital reinvestment and dividends remains one of the Company's
significant financial strengths. The Company anticipates that its
operating activities in 1995 will continue to provide sufficient cash
flows to meet all financial commitments and to capitalize on
opportunities for business expansion.
FREE CASH FLOW
Free Cash Flow, which represents the cash remaining from operations
after the Company has satisfied its business reinvestment
opportunities, increased by 32 percent to $2.1 billion in 1994.
Management focuses on growing Free Cash Flow to achieve the Company's
primary objective, maximizing share-owner value. The Company uses Free
Cash Flow, along with borrowings, to pay dividends and make share
repurchases. The consolidated statements of cash flows are summarized
as follows (in millions):
Year Ended December 31, 1994 1993 1992
- ----------------------------------------------------------
Cash flows provided by
(used in):
Operations $ 3,183 $ 2,508 $ 2,232
Investment activities (1,037) (885) (1,359)
- ----------------------------------------------------------
Free Cash Flow 2,146 1,623 873
Cash flows provided by
(used in):
Financing (1,792) (1,540) (917)
Exchange 34 (41) (58)
- ----------------------------------------------------------
Increase (decrease) in cash $ 388 $ 42 $ (102)
==========================================================
Cash provided by operations continued to grow in 1994, reaching
$3.2 billion, resulting from growth in net income before noncash
charges for depreciation and amortization and increased dividends from
equity method investments. In 1993, cash from operations totaled $2.5
billion, a 12 percent increase over 1992, resulting primarily from
growth in net income.
The Company continued to invest extensively in Eastern Europe,
the Middle East and Southeast Asia in 1994. Continued investment,
principally in bottling companies, along with equity income, net of
dividends received, contributed to an overall increase in the carrying
value of the Company's equity method investments in 1994 and 1993.
Cash used for acquisitions and investments, principally in bottling
companies, declined by $300 million in 1994. However, this decline was
more than offset by a reduction in proceeds from disposals of
property, plant and equipment and investments and other assets,
resulting in an overall increase in net cash used in investing
activities of 17 percent.
A decline in purchases of securities and property, plant and
equipment, 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 net decrease in cash used in investment
activities in 1993.
The Company's finance subsidiary made additional borrowings in
1994 and 1993 to fund increased receivables. The increase in 1994 in
marketable securities and the carrying value of cost method
investments is due in part to the Company's adoption of SFAS 115,
which reflects a noncash adjustment to fair value. A portion of the
increase in marketable securities and other assets in 1994, as well as
the majority of the increase in 1993, was attributable to an increase
in 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 deferred tax assets generated
in 1994 and 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.
FINANCING ACTIVITIES
Financing activities primarily represent the Company's net borrowing
activities, dividend payments and share repurchases. Net cash used in
financing activities totaled $1.8 billion in 1994, $1.5 billion in
1993 and $917 million in 1992. The change between years was due, in
part, to net borrowings of debt in 1994 and 1992, compared to net
reductions of debt in 1993. Cash used to purchase common stock for
treasury increased to $1.2 billion in 1994, from $680 million in 1993.
The Company's reputation, global presence and strong capital
position afford it access to key financial markets around the world,
enabling the Company to raise funds with a low effective cost. This
posture, coupled with the Company's aggressive management of its mix
of short-term versus long-term debt, results in a lower overall cost
of borrowing. The Company's debt management policies, in association
with the share repurchase program and investment activity, typically
result in current liabilities exceeding current assets.
The Company manages its debt levels based on the following
financial measurements and ratios:
Year Ended December 31, 1994 1993 1992
- -----------------------------------------------------------
Net debt (in billions) $ 1.5 $ 1.6 $ 1.8
Net debt to net capital 23% 26% 32%
Free cash flow to net debt 141% 100% 48%
Interest coverage 19x 18x 16x
Ratio of earnings to
fixed charges 16.8x 15.7x 14.1x
===========================================================
-42-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
Commercial paper is the Company's primary source of short-term
financing. At December 31, 1994, the Company had $2.8 billion in lines
of credit and other short-term credit facilities available, under
which $2.0 billion was outstanding. Included was $1.8 billion
outstanding in commercial paper borrowings. The 1994 increase in loans
and notes payable is primarily attributable to additional commercial
paper borrowings resulting from the Company's management of its mix of
short and long-term debt.
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, providing flexibility to take advantage of changing
foreign currencies and interest rates.
The Company uses approximately 49 functional currencies. In 1994,
1993 and 1992, the weighted average exchange rates for certain key
foreign currencies that are traded on exchange markets strengthened
(weakened) against the U.S. dollar as follows:
Year Ended December 31, 1994 1993 1992
- --------------------------------------------------------
Key market-traded currencies 3 % (3)% 5 %
Australian dollar 9 % (7)% (5)%
British pound 2 % (15)% 1 %
Canadian dollar (5)% (8)% (4)%
French franc (1)% (3)% 9 %
German mark 2 % (5)% 8 %
Japanese yen 9 % 15 % 6 %
========================================================
The change in the foreign currency translation adjustment in 1994
was due primarily to the weakening of the U.S. dollar against certain
key currencies. Exchange losses recorded in other income (deductions)-
net amounted to $25 million in 1994, $74 million in 1993 and $25
million in 1992. Exchange losses include the remeasurement of certain
currencies into functional currencies and the costs of hedging certain
transaction and balance sheet exposures.
Additional information concerning the Company's hedging
activities is presented on pages 55 through 57.
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, the
Company is able to increase prices to counteract the effects of
increasing costs and generate sufficient cash flows to maintain its
productive capability.
OUTLOOK
By operating in a global business environment whereby the majority of
the Company's operating income is generated by operations outside the
United States, the Company benefits from operating in a variety of
currencies, as currency devaluations and economic weakness in any
particular region are often offset by strengths in other currencies
and regional economies. Additionally, management of the Company has
various operational initiatives available to offset the unfavorable
impact of such events.
Although future economic events cannot be predicted with accuracy
and recessionary conditions in certain markets may present
uncertainties, management believes continued expansion into the
developing population centers of the world presents further
opportunity for growth. The strength of the Company's brands, its
broad global presence in both developed and developing markets, and
its strong financial condition, allow the Company the flexibility to
take advantage of growth opportunities and to continue to increase
share-owner value.
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 46 through 66 of this
report. Additional information concerning operations in different lines
of business and geographic areas is presented on pages 63 and 64.
-43-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Compound Growth Rates Year Ended December 31,
----------------------- ------------------------
(In millions except per share data, ratios and growth rates) 5 Years 10 Years 1994(2) 1993(3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net operating revenues 13.4% 11.5% $ 16,172 $ 13,957
Cost of goods sold 11.7% 8.5% 6,167 5,160
- ----------------------------------------------------------------------------------------------------------------
Gross profit 14.5% 14.0% 10,005 8,797
Selling, administrative and general expenses 13.5% 13.0% 6,297 5,695
- ----------------------------------------------------------------------------------------------------------------
Operating income 16.5% 15.9% 3,708 3,102
Interest income 181 144
Interest expense 199 168
Equity income 134 91
Other income (deductions)-net (96) 4
Gain on issuance of stock by equity investees -- 12
- ----------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes
and changes in accounting principles 16.1% 15.2% 3,728 3,185
Income taxes 16.2% 12.5% 1,174 997
- ----------------------------------------------------------------------------------------------------------------
Income from continuing operations before changes
in accounting principles 16.1% 16.6% $ 2,554 $ 2,188
================================================================================================================
Net income 10.7%(6) 15.0% $ 2,554 $ 2,176
Preferred stock dividends -- --
- ----------------------------------------------------------------------------------------------------------------
Net income available to common share owners 11.0%(6) 15.0% $ 2,554 $ 2,176
================================================================================================================
Average common shares outstanding 1,290 1,302
PER COMMON SHARE DATA
Income from continuing operations before changes
in accounting principles 18.1% 18.9% $ 1.98 $ 1.68
Net income 12.5% 17.3% 1.98 1.67
Cash dividends 18.1% 13.0% .78 .68
Market price at December 31 21.7% 25.8% 51.50 44.63
BALANCE SHEET DATA
Cash, cash equivalents and current marketable securities $ 1,531 $ 1,078
Property, plant and equipment-net 4,080 3,729
Depreciation 382 333
Capital expenditures 878 800
Total assets 13,873 12,021
Long-term debt 1,426 1,428
Total debt 3,509 3,100
Share-owners' equity 5,235 4,584
Total capital(1) 8,744 7,684
OTHER KEY FINANCIAL MEASURES(1)
Total-debt-to-total-capital 40.1% 40.3%
Net-debt-to-net-capital 22.6% 26.2%
Return on common equity 52.0% 51.7%
Return on capital 32.7% 31.2%
Dividend payout ratio 39.4% 40.6%
Economic profit $ 2,012 $ 1,495
================================================================================================================
(1)See Glossary on page 70.
Following are the above-referenced definitions extracted from page 70:
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: Debt and capital in excess of cash, cash equivalents and marketable securities
not required for operations 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 1994, the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
(3)In 1993, the Company adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
(4)In 1992, the Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
(5)The Company adopted SFAS No. 109, "Accounting for Income Taxes," in 1992 by restating financial statements
beginning in 1989.
</TABLE>
-44-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
1992(4,5) 1991(5) 1990(5) 1989(5) 1988 1987 1986 1985 1984
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 13,074 $ 11,572 $ 10,236 $ 8,622 $ 8,065 $ 7,658 $ 6,977 $ 5,879 $ 5,442
5,055 4,649 4,208 3,548 3,429 3,633 3,454 2,909 2,738
- ---------------------------------------------------------------------------------------------------------
8,019 6,923 6,028 5,074 4,636 4,025 3,523 2,970 2,704
5,249 4,604 4,076 3,348 3,038 2,701 2,626 2,163 1,855
- ---------------------------------------------------------------------------------------------------------
2,770 2,319 1,952 1,726 1,598 1,324 897 807 849
164 175 170 205 199 232 154 151 133
171 192 231 308 230 297 208 196 128
65 40 110 75 92 64 45 52 42
(82) 41 13 66 (33) -- 35 69 13
-- -- -- -- -- 40 375 -- --
- ---------------------------------------------------------------------------------------------------------
2,746 2,383 2,014 1,764 1,626 1,363 1,298 883 909
863 765 632 553 537 496 471 314 360
- ---------------------------------------------------------------------------------------------------------
$ 1,883 $ 1,618 $ 1,382 $ 1,211 $ 1,089 $ 867 $ 827 $ 569 $ 549
=========================================================================================================
$ 1,664 $ 1,618 $ 1,382 $ 1,537 $ 1,045 $ 916 $ 934 $ 722 $ 629
-- 1 18 21 7 -- -- -- --
- ---------------------------------------------------------------------------------------------------------
$ 1,664 $ 1,617 $ 1,364 $ 1,516(6) $ 1,038 $ 916 $ 934 $ 722 $ 629
=========================================================================================================
1,317 1,333 1,337 1,384 1,458 1,509 1,547 1,573 1,587
$ 1.43 $ 1.21 $ 1.02 $ .86 $ .74 $ .57 $ .53 $ .36 $ .35
1.26 1.21 1.02 1.10(6) .71 .61 .60 .46 .40
.56 .48 .40 .34 .30 .28 .26 .25 .23
41.88 40.13 23.25 19.31 11.16 9.53 9.44 7.04 5.20
$ 1,063 $ 1,117 $ 1,492 $ 1,182 $ 1,231 $ 1,489 $ 895 $ 843 $ 768
3,526 2,890 2,386 2,021 1,759 1,602 1,538 1,483 1,284
310 254 236 181 167 152 151 130 119
1,083 792 593 462 387 304 346 412 300
11,052 10,189 9,245 8,249 7,451 8,606 7,675 6,341 5,241
1,120 985 536 549 761 909 996 801 631
3,207 2,288 2,537 1,980 2,124 2,995 1,848 1,280 1,310
3,888 4,239 3,662 3,299 3,345 3,187 3,479 2,948 2,751
7,095 6,527 6,199 5,279 5,469 6,182 5,327 4,228 4,061
45.2% 35.1% 40.9% 37.5% 38.8% 48.4% 34.7% 30.3% 32.3%
31.9% 19.2% 23.7% 14.7% 18.9% 15.4% 10.9% 15.6% 19.7%
46.4% 41.3% 41.4% 39.4% 34.7% 26.0% 25.7% 20.0% 19.4%
29.4% 27.5% 26.8% 26.5% 21.3% 18.3% 20.1% 16.8% 16.7%
44.3% 39.5% 39.2% 31.0%(6) 42.1% 46.0% 43.1% 53.8% 57.9%
$ 1,293 $ 1,029 $ 878 $ 821 $ 748 $ 417 $ 311 $ 269 $ 268
=========================================================================================================
(6)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.
</TABLE>
-45-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1994 1993
- ------------------------------------------------------------------------------------
(In millions except share data)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 1,386 $ 998
Marketable securities 145 80
- ------------------------------------------------------------------------------------
1,531 1,078
Trade accounts receivable, less allowances of
$33 in 1994 and $39 in 1993 1,470 1,210
Finance subsidiary receivables 55 33
Inventories 1,047 1,049
Prepaid expenses and other assets 1,102 1,064
- ------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 5,205 4,434
- ------------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Equity method investments
Coca-Cola Enterprises Inc. 524 498
Coca-Cola Amatil Limited 694 592
Other, principally bottling companies 1,114 1,037
Cost method investments, principally bottling companies 178 88
Finance subsidiary receivables 255 226
Marketable securities and other assets 1,163 868
- ------------------------------------------------------------------------------------
3,928 3,309
- ------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land 221 197
Buildings and improvements 1,814 1,616
Machinery and equipment 3,776 3,380
Containers 346 403
- ------------------------------------------------------------------------------------
6,157 5,596
Less allowances for depreciation 2,077 1,867
- ------------------------------------------------------------------------------------
4,080 3,729
- ------------------------------------------------------------------------------------
GOODWILL AND OTHER INTANGIBLE ASSETS 660 549
- ------------------------------------------------------------------------------------
$ 13,873 $ 12,021
====================================================================================
</TABLE>
-46-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
<TABLE>
<CAPTION>
December 31, 1994 1993
- -----------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses $ 2,564 $ 2,217
Loans and notes payable 1,757 1,409
Finance subsidiary notes payable 291 244
Current maturities of long-term debt 35 19
Accrued taxes 1,530 1,282
- ------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 6,177 5,171
- ------------------------------------------------------------------------------------
LONG-TERM DEBT 1,426 1,428
- ------------------------------------------------------------------------------------
OTHER LIABILITIES 855 725
- ------------------------------------------------------------------------------------
DEFERRED INCOME TAXES 180 113
- ------------------------------------------------------------------------------------
SHARE-OWNERS' EQUITY
Common stock, $.25 par value
Authorized: 2,800,000,000 shares
Issued: 1,707,627,955 shares in 1994;
1,703,526,299 shares in 1993 427 426
Capital surplus 1,173 1,086
Reinvested earnings 11,006 9,458
Unearned compensation related to outstanding
restricted stock (74) (85)
Foreign currency translation adjustment (272) (420)
Unrealized gain on securities available-for-sale 48 --
- ------------------------------------------------------------------------------------
12,308 10,465
Less treasury stock, at cost (431,694,661
shares in 1994; 406,072,817 shares in 1993) 7,073 5,881
- ------------------------------------------------------------------------------------
5,235 4,584
- ------------------------------------------------------------------------------------
$ 13,873 $ 12,021
====================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
-47-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31, 1994 1993 1992
- ---------------------------------------------------------------------------------------------
(In millions except per share data)
<S> <C> <C> <C>
NET OPERATING REVENUES $ 16,172 $ 13,957 $ 13,074
Cost of goods sold 6,167 5,160 5,055
- ---------------------------------------------------------------------------------------------
GROSS PROFIT 10,005 8,797 8,019
Selling, administrative and general expenses 6,297 5,695 5,249
- ---------------------------------------------------------------------------------------------
OPERATING INCOME 3,708 3,102 2,770
Interest income 181 144 164
Interest expense 199 168 171
Equity income 134 91 65
Other income (deductions)-net (96) 4 (82)
Gain on issuance of stock by Coca-Cola Amatil -- 12 --
- ---------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
CHANGES IN ACCOUNTING PRINCIPLES 3,728 3,185 2,746
Income taxes 1,174 997 863
- ---------------------------------------------------------------------------------------------
INCOME BEFORE CHANGES IN ACCOUNTING PRINCIPLES 2,554 2,188 1,883
Transition effects of changes in accounting principles
Postemployment benefits -- (12) --
Postretirement benefits other than pensions
Consolidated operations -- -- (146)
Equity investments -- -- (73)
- ---------------------------------------------------------------------------------------------
NET INCOME $ 2,554 $ 2,176 $ 1,664
=============================================================================================
INCOME PER SHARE
Before changes in accounting principles $ 1.98 $ 1.68 $ 1.43
Transition effects of changes in accounting principles
Postemployment benefits -- (.01) --
Postretirement benefits other than pensions
Consolidated operations -- -- (.11)
Equity investments -- -- (.06)
- ---------------------------------------------------------------------------------------------
NET INCOME PER SHARE $ 1.98 $ 1.67 $ 1.26
=============================================================================================
AVERAGE SHARES OUTSTANDING 1,290 1,302 1,317
=============================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
-48-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, 1994 1993 1992
- ---------------------------------------------------------------------------------------------
(In millions)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,554 $ 2,176 $ 1,664
Transition effects of changes in accounting principles -- 12 219
Depreciation and amortization 411 360 322
Deferred income taxes 58 (62) (27)
Equity income, net of dividends (4) (35) (30)
Foreign currency adjustments (6) 9 24
Gains on sales of assets -- (84) --
Other noncash items 41 78 103
Net change in operating assets and liabilities 129 54 (43)
- ---------------------------------------------------------------------------------------------
Net cash provided by operating activities 3,183 2,508 2,232
- ---------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to finance subsidiary receivables (94) (177) (54)
Collections of finance subsidiary receivables 50 44 254
Acquisitions and investments, principally
bottling companies (311) (611) (388)
Purchases of securities (758) (621) (656)
Proceeds from disposals of investments and other assets 856 1,066 522
Purchases of property, plant and equipment (878) (800) (1,083)
Proceeds from disposals of property, plant and equipment 109 312 47
Other investing activities (11) (98) (1)
- --------------------------------------------------------------------------------------------
Net cash used in investing activities (1,037) (885) (1,359)
- --------------------------------------------------------------------------------------------
Net cash provided by operations after reinvestment 2,146 1,623 873
- --------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuances of debt 491 445 1,381
Payments of debt (154) (567) (432)
Issuances of stock 69 145 131
Purchases of stock for treasury (1,192) (680) (1,259)
Dividends (1,006) (883) (738)
- --------------------------------------------------------------------------------------------
Net cash used in financing activities (1,792) (1,540) (917)
- --------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 34 (41) (58)
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year 388 42 (102)
Balance at beginning of year 998 956 1,058
- --------------------------------------------------------------------------------------------
Balance at end of year $ 1,386 $ 998 $ 956
============================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
-49-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY
Number of
Common Outstanding Foreign Unrealized
Three Years Ended Shares Common Capital Reinvested Restricted Currency Gain on Treasury
December 31, 1994 Outstanding Stock Surplus Earnings Stock Translation Securities Stock
- ------------------------------------------------------------------------------------------------------------------------
(In millions except |
per share data) |
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1991 1,329 | $ 422 $ 640 $ 7,239 $ (115) $ (5) $ -- $ (3,942)
Stock issued to employees |
exercising stock options 9 | 2 129 -- -- -- -- --
Tax benefit from employees' |
stock option and restricted |
stock plans -- | -- 93 -- -- -- -- --
Stock issued under restricted |
stock plans, less |
amortization of $25 -- | -- 9 -- 15 -- -- --
Translation adjustments -- | -- -- -- -- (266) -- --
Purchases of stock for treasury (31)(1) | -- -- -- -- -- -- (1,259)
Net income -- | -- -- 1,664 -- -- -- --
Dividends (per share-$.56) -- | -- -- (738) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1992 1,307 | 424 871 8,165 (100) (271) -- (5,201)
Stock issued to employees |
exercising stock options 7 | 2 143 -- -- -- -- --
Tax benefit from employees' |
stock option and restricted |
stock plans -- | -- 66 -- -- -- -- --
Stock issued under restricted |
stock plans, less |
amortization of $19 -- | -- 6 -- 15 -- -- --
Translation adjustments -- | -- -- -- -- (149) -- --
Purchases of stock for |
treasury (17)(1) | -- -- -- -- -- -- (680)
Net income -- | -- -- 2,176 -- -- -- --
Dividends (per share-$.68) -- | -- -- (883) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1993 1,297 | 426 1,086 9,458 (85) (420) -- (5,881)
Transition effect of change |
in accounting for certain |
debt and marketable |
equity securities, net of |
deferred taxes -- | -- -- -- -- -- 60 --
Stock issued to employees |
exercising stock options 4 | 1 68 -- -- -- -- --
Tax benefit from employees' |
stock option and |
restricted stock plans -- | -- 17 -- -- -- -- --
Stock issued under restricted |
stock plans, less |
amortization of $13 -- | -- 2 -- 11 -- -- --
Translation adjustments -- | -- -- -- -- 148 -- --
Net change in unrealized gain |
on securities, net of |
deferred taxes -- | -- -- -- -- -- (12) --
Purchases of stock for treasury (25)(1) | -- -- -- -- -- -- (1,192)
Net income -- | -- -- 2,554 -- -- -- --
Dividends (per share-$.78) -- | -- -- (1,006) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1994 1,276 | $ 427 $ 1,173 $ 11,006 $ (74) $ (272) $ 48 $ (7,073)
==========================================================================================================================
(1)Common stock purchased from employees exercising stock options amounted to 208 thousand, 2.7 million
and 1.3 million shares for the years ending December 31, 1994, 1993 and 1992, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
-50-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 or fair value,
where appropriate. 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 SHARE
Net income per share is computed by dividing net income by the
weighted average number of 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 $15 million and $9
million at December 31, 1994 and 1993, respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost and 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 amortized, principally on a straight-line basis, over the
estimated future periods to be benefited (not exceeding 40 years).
Accumulated amortization was approximately $77 million and $50 million
at December 31, 1994 and 1993, respectively.
CHANGES IN ACCOUNTING PRINCIPLES
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS 115), was
adopted as of January 1, 1994. SFAS 115 requires that the carrying
value of certain investments be adjusted to their fair value. Upon
adoption of SFAS 115, the Company recorded an increase to share-
owners' equity of $60 million, which is net of deferred taxes of $44
million.
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. Upon adoption, the Company recorded an accumulated
obligation of $12 million, which is net of deferred taxes of $8 million.
2. INVENTORIES
Inventories consist of the following (in millions):
December 31, 1994 1993
- ------------------------------------------------------------
Raw materials and supplies $ 728 $ 689
Work in process 4 4
Finished goods 315 356
- ------------------------------------------------------------
$ 1,047 $ 1,049
============================================================
-51-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. BOTTLING INVESTMENTS
COCA-COLA ENTERPRISES INC.
Coca-Cola Enterprises is the largest soft drink bottler 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):
December 31, 1994 1993
- --------------------------------------------------------------------
Current assets $ 809 $ 746
Noncurrent assets 7,928 7,936
- --------------------------------------------------------------------
Total assets $ 8,737 $ 8,682
====================================================================
Current liabilities $ 1,088 $ 1,007
Noncurrent liabilities 6,310 6,415
- --------------------------------------------------------------------
Total liabilities $ 7,398 $ 7,422
====================================================================
Share-owners' equity $ 1,339 $ 1,260
====================================================================
Company equity investment $ 524 $ 498
====================================================================
Year Ended December 31, 1994 1993 1992
- --------------------------------------------------------------------
Net operating revenues $ 6,011 $ 5,465 $ 5,127
Cost of goods sold 3,703 3,372 3,219
- --------------------------------------------------------------------
Gross profit $ 2,308 $ 2,093 $ 1,908
====================================================================
Operating income $ 440 $ 385 $ 306
====================================================================
Operating cash flow(1) $ 901 $ 804 $ 695
====================================================================
Income (loss) before changes
in accounting principles $ 69 $ (15) $ (15)
====================================================================
Net income (loss) available
to common share owners $ 67 $ (15) $ (186)
====================================================================
Company equity income (loss) $ 30 $ (6) $ (6)
====================================================================
(1)Excludes nonrecurring charges.
The 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 Company's net concentrate/syrup sales to Coca-Cola
Enterprises were $1.2 billion in 1994, $961 million in 1993 and $889
million in 1992. 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 $254 million in 1994, $211 million in 1993
and $225 million in 1992. 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 products in territories in which Coca-Cola Enterprises
operates. The Company's direct support for certain marketing
activities of Coca-Cola Enterprises and participation with Coca-Cola
Enterprises in cooperative advertising and other marketing programs
amounted to approximately $319 million in 1994, $256 million in 1993
and $253 million in 1992. In addition, in 1994 the Company committed
to provide approximately $34 million to Coca-Cola Enterprises under a
Company program which encourages bottlers to invest in building and
supporting soft drink infrastructure.
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, thereby reducing the Company's
ownership in CCNY below 50 percent.
If valued at the December 31, 1994, quoted closing price of
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 $490 million.
OTHER EQUITY INVESTMENTS
At December 31, 1994, the Company owned approximately 50 percent of
Coca-Cola Amatil, an Australian-based bottler of Company products that
operates in 12 countries. In early 1995, the Company reduced its
ownership in Coca-Cola Amatil to approximately 49 percent and,
accordingly, the investment has been accounted for by the equity
method.
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 for the Company of approximately $12 million.
At December 31, 1994, 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.
In 1993, the Company acquired a 30 percent equity interest in
Coca-Cola FEMSA, which operates bottling facilities in Mexico and
Argentina, for $195 million. At December 31, 1994, the excess of the
Company's investment over its equity in the underlying net assets of
Coca-Cola FEMSA was approximately $108 million, which is being
amortized over 40 years.
-52-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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):
December 31, 1994 1993
- ------------------------------------------------------------------
Current assets $ 2,747 $ 2,294
Noncurrent assets 5,316 4,780
- ------------------------------------------------------------------
Total assets $ 8,063 $ 7,074
==================================================================
Current liabilities $ 2,382 $ 1,926
Noncurrent liabilities 2,669 2,366
- ------------------------------------------------------------------
Total liabilities $ 5,051 $ 4,292
==================================================================
Share-owners' equity $ 3,012 $ 2,782
==================================================================
Company equity investment $ 1,808 $ 1,629
==================================================================
Year Ended December 31, 1994 1993 1992
- ------------------------------------------------------------------
Net operating revenues $ 9,668 $ 8,168 $ 7,027
Cost of goods sold 6,397 5,385 4,740
- ------------------------------------------------------------------
Gross profit $ 3,271 $ 2,783 $ 2,287
==================================================================
Operating income $ 987 $ 673 $ 364
==================================================================
Operating cash flow $ 1,280 $ 984 $ 923
==================================================================
Income before changes
in accounting principles $ 323 $ 258 $ 199
==================================================================
Net income $ 323 $ 258 $ 74
==================================================================
Company equity income $ 104 $ 97 $ 71
==================================================================
Equity investments include certain non-bottling investees.
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 1994 and 1993 and $1.3 billion in 1992. The
Company also 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, 1994, quoted closing prices of
shares actively traded on stock markets, the calculated value of the
Company's equity investments in publicly traded bottlers other than
Coca-Cola Enterprises would have exceeded the Company's carrying value
by approximately $738 million.
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, 1994, are as follows (in millions):
1995 1996 1997 1998 1999
- ---------------------------------------------------------
$ 55 $ 41 $ 30 $ 129 $ 17
=========================================================
These amounts do not reflect possible prepayments or renewals.
CCFC has provided $100 million in subordinated loans to CCNY and
has agreed to issue up to $50 million in letters of credit on CCNY's
behalf, of which $26 million was committed at December 31, 1994.
5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following (in
millions):
December 31, 1994 1993
- ---------------------------------------------------------------
Accrued marketing $ 425 $ 371
Container deposits 112 122
Accrued compensation 189 169
Accounts payable
and other accrued expenses 1,838 1,555
- ---------------------------------------------------------------
$ 2,564 $ 2,217
===============================================================
6. SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS
Loans and notes payable consist primarily of commercial paper issued
in the United States. At December 31, 1994, the Company had $2.8
billion in lines of credit and other short-term credit facilities
available, under which $2.0 billion was outstanding. Included was $1.8
billion outstanding in commercial paper borrowings. The Company's
weighted average interest rates for notes payable to financial
institutions and commercial paper, respectively, were approximately
10.7 and 5.8 percent at December 31, 1994, and 9.7 and 3.3 percent at
December 31, 1993. The weighted average interest rate for notes
payable to financial institutions reflects the impact of borrowing in
certain high inflation countries.
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.
-53-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. ACCRUED TAXES
Accrued taxes consist of the following (in millions):
December 31, 1994 1993
- ------------------------------------------------------------------
Income taxes $ 1,312 $ 1,106
Sales, payroll and other taxes 218 176
- ------------------------------------------------------------------
$ 1,530 $ 1,282
==================================================================
8. LONG-TERM DEBT
Long-term debt consists of the following (in millions):
December 31, 1994 1993
- -------------------------------------------------------------------
7 3/4% U.S. dollar notes due 1996 $ 250 $ 250
5 3/4% Japanese yen notes due 1996 301 270
5 3/4% German mark notes due 1998(1) 161 147
7 7/8% U.S. dollar notes due 1998 250 249
6 5/8% U.S. dollar notes due 2002 149 149
6% U.S. dollar notes due 2003 150 150
7 3/8% U.S. dollar notes due 2093 116 148
Other, due 1995 to 2013(2) 84 84
- -------------------------------------------------------------------
1,461 1,447
Less current portion 35 19
- -------------------------------------------------------------------
$ 1,426 $ 1,428
===================================================================
(1)Portions of these notes have been swapped for liabilities
denominated in other currencies.
(2)The weighted average interest rate is approximately 9.4 percent.
After giving effect to interest rate management instruments (see
Note 10), the principal amount of the Company's long-term debt that
had fixed and variable interest rates, respectively, was $849 million
and $612 million at December 31, 1994, and $1,297 million and $150
million at December 31, 1993. The weighted average interest rate on
the Company's long-term debt was 6.6 and 6.0 percent at December 31,
1994 and 1993, respectively.
Maturities of long-term debt for the five years succeeding
December 31, 1994, are as follows (in millions):
1995 1996 1997 1998 1999
- ---------------------------------------------------------
$ 35 $ 574 $ 7 $ 418 $ 4
=========================================================
The above notes include various restrictions, none of which are
presently significant to the Company.
Interest paid was approximately $197 million, $158 million and
$174 million in 1994, 1993 and 1992, respectively.
9. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reflected in the consolidated balance sheets for
cash, cash equivalents, loans and notes payable approximate their
respective fair values due to the short maturities of these
instruments. The fair values for debt and marketable 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):
Carrying Fair
December 31, Value Value
- -------------------------------------------------------------------
1994
Current marketable securities $ 145 $ 145
Finance subsidiary receivables 310 315
Cost method investments,
principally bottling companies 178 236
Marketable securities and other assets 1,163 1,156
Long-term debt (1,461) (1,416)
Hedging instruments 64 (293)
====================================================================
1993
Current marketable securities $ 80 $ 102
Finance subsidiary receivables 259 265
Cost method investments,
principally bottling companies 88 259
Marketable securities and other assets 868 865
Long-term debt (1,447) (1,531)
Hedging instruments 31 (142)
===================================================================
CERTAIN DEBT AND MARKETABLE EQUITY SECURITIES
As discussed in Note 1, the Company adopted SFAS 115 at January 1,
1994, changing the method of accounting for certain debt and
marketable equity security investments from a historical cost basis to
a fair value approach. Under SFAS 115, investments in debt and
marketable equity securities, other than investments accounted for by
the equity method, are categorized as either trading, available-for-
sale or held-to-maturity. At January 1 and December 31, 1994, the
Company had no trading securities. Securities categorized as available-
for-sale are stated at fair value, with unrealized gains and losses,
net of deferred taxes, reported in share-owners' equity. Debt
securities categorized as held-to-maturity are stated at amortized
cost.
-54-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Available-for-sale and held-to-maturity securities consist of the
following (in millions):
Gross Gross Estimated
Unrealized Unrealized Fair
December 31, Cost Gains Losses Value
- --------------------------------------------------------------------------
1994
Available-for-sale
securities
Equity securities $ 48 $ 76 $ (4) $ 120
Collateralized
mortgage
obligations 150 -- (11) 139
Other debt
securities 32 -- -- 32
- --------------------------------------------------------------------------
$ 230 $ 76 $ (15) $ 291
==========================================================================
Held-to-maturity
securities
Bank and
corporate debt $ 1,388 $ -- $ -- $ 1,388
Other debt
securities 68 -- -- 68
- --------------------------------------------------------------------------
$ 1,456 $ -- $ -- $ 1,456
==========================================================================
These investments were included in the following captions on the
consolidated balance sheet (in millions):
Available-for-Sale Held-to-Maturity
December 31, Securities Securities
- --------------------------------------------------------------------------
1994
Cash and cash equivalents $ -- $ 1,041
Current marketable securities 87 58
Cost method investments,
principally bottling companies 58 --
Marketable securities
and other assets 146 357
- --------------------------------------------------------------------------
$ 291 $ 1,456
==========================================================================
The contractual maturities of these investments as of December 31,
1994, were as follows (in millions):
Available-for-Sale Held-to-Maturity
Securities Securities
- --------------------------------------------------------------------------
Fair Amortized Fair
Cost Value Cost Value
- --------------------------------------------------------------------------
1995 $ 27 $ 27 $ 1,099 $ 1,099
1996-1999 5 5 315 315
After 1999 -- -- 42 42
Collateralized
mortgage obligations 150 139 -- --
Equity securities 48 120 -- --
- --------------------------------------------------------------------------
$ 230 $ 291 $ 1,456 $ 1,456
==========================================================================
Gross realized gains on sales of available-for-sale securities
totaled $1 million for the year ended December 31, 1994. Gross
realized losses for the same period were not material. The cost of
securities sold is based on the specific identification method.
10. HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS
The Company employs the use of derivative financial instruments for
the purpose of reducing its exposure to adverse fluctuations in
interest and foreign exchange rates. While these hedging instruments
are subject to fluctuations in value, such fluctuations are generally
offset by the value of the underlying exposures being hedged. The
Company effectively monitors the use of these derivative financial
instruments through the use of objective measurement systems, well-
defined market and credit risk limits and timely reports to senior
management according to prescribed guidelines.
INTEREST RATE MANAGEMENT
Management of the Company has developed and implemented a policy to
maintain the percentage of fixed and variable rate debt within certain
parameters. The Company enters into interest rate swap agreements
which maintain the fixed/variable mix within these defined parameters.
In these swaps, the Company agrees to exchange, at specified
intervals, the difference between fixed and variable interest amounts
calculated by reference to an agreed-upon notional principal amount.
These contracts had maturities ranging from 1 to 10 years at December
31, 1994. Variable rates are predominately linked to the LIBOR (London
Interbank Offered Rate). Any differences paid or received on interest
rate swap agreements are recognized as adjustments to interest expense
over the life of each swap, thereby adjusting the effective interest
rate on the underlying obligation.
Additionally, the Company enters into interest rate cap
agreements that entitle the Company to receive from a financial
institution the amount, if any, by which the Company's interest
payments on its variable rate debt exceed pre-specified interest rates
through 1997. Premiums paid for interest rate cap agreements are
included in prepaid expenses and other assets and are amortized to
interest expense over the terms of the respective agreements. Payments
received pursuant to the interest rate cap agreements, if any, are
recognized as an adjustment of the interest expense on the underlying
debt instruments.
-55-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOREIGN CURRENCY MANAGEMENT
The purpose of the Company's foreign currency hedging activities is to
reduce the risk that the eventual dollar net cash inflows resulting
from sales to foreign customers will be adversely affected by changes
in exchange rates.
The Company enters into forward exchange contracts and purchases
currency options to hedge certain firm sale commitments denominated in
foreign currencies (principally European currencies and Japanese yen).
The Company also purchases currency options to hedge certain
anticipated but not yet firmly committed sales, as well as anticipated
foreign currency remittances from certain international operations
above contractual minimums. These are expected to be denominated
primarily in European currencies and Japanese yen. Premiums paid as
well as net deferred realized gains and losses are included in prepaid
expenses and other assets and are recognized in income, along with
unrealized gains and losses, in the same period as the hedged
transaction. Approximately $10 million and $9 million of net losses
realized on settled contracts entered into as hedges of firmly
committed transactions which have not yet occurred were deferred at
December 31, 1994 and 1993, respectively. Net deferred gains/losses
from hedging anticipated but not yet firmly committed transactions
were not material at December 31, 1994 or 1993.
Gains and losses on derivative financial instruments that are
designated and effective as hedges of net investments in international
operations are included in share-owners' equity as a foreign currency
translation adjustment.
The estimated fair values of derivatives used to hedge or modify
the Company's risks will fluctuate over time. These fair value amounts
should not be viewed in isolation, but rather in relation to the fair
values of the underlying hedged transactions and investments and the
overall reduction in the Company's exposure to adverse fluctuations in
interest and foreign exchange rates.
The notional amounts of the derivative financial instruments do
not necessarily represent amounts exchanged by the parties and,
therefore, are not a direct measure of the exposure of the Company
through its use of derivatives. The amounts exchanged are calculated
on the basis of the notional amounts and the other terms of the
derivatives, which relate to interest rates, exchange rates or other
financial indices.
The following table presents the aggregate notional principal
amounts, carrying values, fair values and maturities of the Company's
derivative financial instruments outstanding at December 31, 1994 and
1993 (in millions):
Notional
Principal Carrying Fair
December 31, Amounts Values Values Maturity
- -----------------------------------------------------------------------
1994
Interest rate
management
Swap agreements
Assets $ 626 $ 3 $ (30) 1995-2003
Liabilities 225 (1) 1 1995-2005
Interest rate caps
Assets 400 3 5 1995-1997
Foreign currency
management
Forward contracts
Assets 1,887 24 33 1995-1996
Liabilities 666 (10) (9) 1995
Swap agreements
Assets 399 23 22 1995-2000
Liabilities 2,104 (44) (356) 1995-2002
Purchased options
Assets 3,485 66 41 1995-1996
=======================================================================
$ 9,792 $ 64 $ (293)
=======================================================================
1993
Interest rate
management
Swap agreements
Assets $ 28 $ -- $ 3 1995
Liabilities 345 (7) (4) 1995-2003
Foreign currency
management
Forward contracts
Assets 436 11 11 1994
Liabilities 590 (9) (9) 1994-1996
Swap agreements
Assets 848 14 14 1994-1998
Liabilities 1,147 -- (182) 1994-2002
Purchased options
Assets 1,252 22 25 1994-1996
=======================================================================
$ 4,646 $ 31 $ (142)
=======================================================================
Virtually all of the Company's derivatives are "over-the-counter"
instruments.
-56-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maturities of derivative financial instruments held at December 31,
1994, are as follows (in millions):
1995 1996 1997 1998 THROUGH 2005
- ------------------------------------------------------------
$ 6,441 $ 1,100 $ 990 $ 1,261
============================================================
The Company has established strict counterparty credit guidelines
and only enters into transactions with financial institutions of
investment grade or better. Counterparty exposures are monitored daily
and any downgrade in credit rating receives immediate review. If a
downgrade in the credit rating of a counterparty were to occur, the
Company has provisions to require collateral in the form of U.S.
government securities for transactions with maturities in excess of
three years. To mitigate pre-settlement risk, minimum credit standards
become more stringent as the duration of the derivative financial
instrument increases. To minimize the concentration of credit risk,
the Company enters into derivative transactions with a portfolio of
financial institutions. As a result, the Company considers the risk of
counterparty default to be minimal.
11. COMMITMENTS AND CONTINGENCIES
At December 31, 1994, the Company was contingently liable for
guarantees of indebtedness owed by third parties of $170 million, of
which $44 million is related to independent bottling licensees.
At December 31, 1994, the Company, through its finance
subsidiary, has committed to provide $100 million in the form of
subordinated loans to an equity investee bottler to fund certain
transactions over the next five years.
The Mitsubishi Bank Limited has provided a yen denominated
guarantee for the equivalent of $261 million in support of a
suspension of enforcement of a tax assessment levied by the Japanese
tax authorities. The Company has agreed to indemnify Mitsubishi if
amounts are paid pursuant to the guarantee. This matter is being
reviewed by the tax authorities of the United States and Japan under
the tax treaty signed by the two nations to prevent double taxation.
Any additional tax payable to Japan should be offset by tax credits in
the United States and would not adversely affect earnings.
In the opinion of management, it is not probable that the Company
will be required to satisfy these guarantees or indemnification
agreements. The fair value of these contingent liabilities is
immaterial to the Company's consolidated financial statements.
It is also the opinion of management that the Company's exposure
to concentrations of credit risk is limited, due to the diverse
geographic areas covered by the Company's operations.
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, 1994, 17 million shares were available for grant
under the Restricted Stock Plans. Participants are entitled to vote
and receive dividends on the shares, and under the 1983 Restricted
Stock Award Plan, participants are 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 a participant leaves the Company
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,
1994, also include various options granted under previous plans.
-57-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Further information relating to options is as follows (in millions,
except per share amounts):
1994 1993 1992
- ----------------------------------------------------------------------
Outstanding at January 1, 30 31 36
Granted 7 6 4
Exercised (4) (7) (9)
- ----------------------------------------------------------------------
Outstanding at December 31, 33 30 31
======================================================================
Exercisable at December 31, 22 22 23
======================================================================
Shares available at December 31,
for options that may be granted 38 45 51
Prices per share
Exercised $5-$44 $4-$41 $4-$28
Unexercised at December 31, $6-$51 $5-$44 $4-$41
======================================================================
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. In 1993,
400,000 units were paid, leaving 800,000 units outstanding at December
31, 1993. No units were paid in 1994, leaving the number of units
outstanding unchanged at December 31, 1994.
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.
In 1993, 780,000 units were paid, leaving approximately 1.4 million
units outstanding at December 31, 1993. No units were paid in 1994,
leaving the number of units outstanding unchanged at December 31,
1994.
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.
-58-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Total pension expense for all benefit plans, including defined benefit
plans, amounted to approximately $73 million in 1994, $57 million in
1993 and $49 million in 1992. 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, 1994 1993 1992 1994 1993 1992
- --------------------------------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits earned during the period $ 22 $ 17 $ 15 $ 24 $ 17 $ 18
Interest cost on projected benefit obligation 53 53 50 25 22 20
Actual return on plan assets (4) (77) (36) (21) (27) (19)
Net amortization and deferral (44) 31 (9) 5 13 3
- --------------------------------------------------------------------- ---------------------
Net periodic pension cost $ 27 $ 24 $ 20 $ 33 $ 25 $22
===================================================================== =====================
</TABLE>
For certain U.S. plans, the Company has authorized a cost of living
adjustment for retirees effective April 1, 1995. The funded status of
the plans at December 31, 1994, reflects this adjustment. The funded
status for the Company's defined benefit plans is as follows (in
millions):
<TABLE>
<CAPTION>
U.S. Plans International Plans
-------------------------------------------- ----------------------------------------------
Assets Exceed Accumulated Benefits Assets Exceed Accumulated Benefits
Accumulated Benefits Exceed Assets Accumulated Benefits Exceed Assets
December 31, 1994 1993 1994 1993 1994 1993 1994 1993
- ------------------------------------------------------ --------------------- ----------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Actuarial present value of
benefit obligations
Vested benefit obligation $ 479 $ 481 $ 101 $ 109 $ 156 $ 139 $ 147 $ 110
====================================================== ==================== ======================== ====================
Accumulated benefit obligation $ 521 $ 523 $ 104 $ 111 $ 157 $ 151 $ 175 $ 126
====================================================== ===================== ======================= ====================
Projected benefit obligation $ 599 $ 598 $ 125 $ 133 $ 199 $ 196 $ 237 $ 177
Plan assets at fair value(1) 597 631 2 2 235 200 110 94
- ------------------------------------------------------ --------------------- ----------------------- --------------------
Plan assets in excess of
(less than) projected
benefit obligation (2) 33 (123)(2) (131)(2) 36 4 (127) (83)
Unrecognized net (asset)
liability at transition (30) (34) 15 17 (18) (16) 36 34
Unrecognized prior service cost 37 8 15 15 4 -- 13 9
Unrecognized net (gain) loss (30) (24) 18 36 (1) 28 16 (3)
Adjustment required to recognize
minimum liability -- -- (28) (46) -- -- (9) (7)
- ------------------------------------------------------ --------------------- ----------------------- --------------------
Accrued pension asset (liability)
included in the consolidated
balance sheet $ (25) $ (17) $ (103) $ (109) $ 21 $ 16 $ (71) $ (50)
====================================================== ===================== ======================= ====================
(1)Primarily listed stocks, bonds and government securities.
(2)Substantially all of this amount relates to nonqualified, unfunded defined benefit plans.
</TABLE>
The assumptions used in computing the preceding information are as follows:
<TABLE>
<CAPTION>
International Plans
U.S. Plans (weighted average rates)
----------------------------- ------------------------------
Year Ended December 31, 1994 1993 1992 1994 1993 1992
- ------------------------------------------------------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Discount rates 8 1/4% 7 1/4% 8 1/2% 6% 6 1/2% 7%
Rates of increase in compensation levels 5 1/4% 4 3/4% 6% 4 1/2% 5% 5 1/2%
Expected long-term rates of return on assets 9 1/2% 9 1/2% 9 1/2% 6% 7% 7%
============================================================================== ===============================
</TABLE>
-59-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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):
Year Ended December 31, 1994 1993 1992
- -------------------------------------------------------------------
Service cost $ 12 $ 10 $ 9
Interest cost 21 21 20
Other (1) (1) --
- -------------------------------------------------------------------
$ 32 $ 30 $ 29
===================================================================
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):
December 31, 1994 1993
- ------------------------------------------------------------------
Accumulated postretirement
benefit obligations:
Retirees $ 128 $ 132
Fully eligible active
plan participants 35 35
Other active plan participants 120 131
- ------------------------------------------------------------------
Total benefit obligation 283 298
Plan assets at fair value(1) 41 42
- ------------------------------------------------------------------
Plan assets less than benefit obligation (242) (256)
Unrecognized prior service cost (3) --
Unrecognized net (gain) loss (7) 23
- ------------------------------------------------------------------
Accrued postretirement benefit
liability included in the
consolidated balance sheet $ (252) $ (233)
==================================================================
(1)Consists of corporate bonds, government securities and short-term
investments.
The assumptions used in computing the preceding information are as
follows:
Year Ended December 31, 1994 1993 1992
- ---------------------------------------------------------------------------
Discount rate 8 1/4% 7 1/4% 8 1/2%
Rate of increase in compensation levels 5 1/4% 4 3/4% 6%
- ---------------------------------------------------------------------------
The rate of increase in the per capita costs of covered health
care benefits is assumed to be 10 1/2 percent in 1995, decreasing
gradually to 5 3/4 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, 1994,
by approximately $32 million and increase net periodic postretirement
benefit cost by approximately $5 million in 1994.
15. INCOME TAXES
Income before income taxes and changes in accounting principles
consists of the following (in millions):
Year Ended December 31, 1994 1993 1992
- --------------------------------------------------------------------------
United States $ 1,214 $ 1,035 $ 762
International 2,514 2,150 1,984
- --------------------------------------------------------------------------
$ 3,728 $ 3,185 $ 2,746
==========================================================================
Income tax expense (benefit) consists of the following
(in millions):
Year Ended United State &
December 31, States Local International Total
- ------------------------------------------------------------------------
1994
Current $ 299 $ 38 $ 779 $ 1,116
Deferred 24 5 29 58
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)
========================================================================
(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 $785
million, $650 million and $856 million in 1994, 1993 and 1992,
respectively.
-60-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the statutory U.S. federal rate and effective
rates is as follows:
Year Ended December 31, 1994 1993 1992
- ------------------------------------------------------------------------
Statutory U.S. federal rate 35.0% 35.0% 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 (4.3) (5.1) (3.8)
Equity income (1.1) (1.7) (1.0)
Other-net .9 2.1 1.2
- ------------------------------------------------------------------------
31.5% 31.3% 31.4%
========================================================================
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.
Changes to U.S. tax law enacted in 1993 limited the utilization of the
favorable tax treatment from operations in Puerto Rico in 1994. The
Company's effective tax rate also reflects the tax benefit derived
from having significant operations outside the United States, which
are taxed at rates lower than the U.S. statutory rate of 35 percent.
As a 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.
Appropriate U.S. and international taxes have been provided for
earnings of subsidiary companies that are expected to be remitted to
the parent company. Exclusive of amounts that would result in little
or no tax if remitted, the cumulative amount of unremitted earnings
from international subsidiaries that are expected to be indefinitely
reinvested is approximately $328 million at December 31, 1994. The
taxes that would be paid upon remittance of these earnings are
approximately $115 million.
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):
December 31, 1994 1993
- ------------------------------------------------------------
Deferred tax assets:
Benefit plans $ 324 $ 298
Liabilities and reserves 169 177
Net operating loss carryforwards 108 141
Other 128 120
- ------------------------------------------------------------
Gross deferred tax assets 729 736
Valuation allowance (46) (75)
- ------------------------------------------------------------
$ 683 $ 661
============================================================
Deferred tax liabilities:
Property, plant and equipment $ 362 $ 342
Equity investments 188 180
Intangible assets 34 52
Other 72 61
- ------------------------------------------------------------
$ 656 $ 635
============================================================
Net deferred tax asset(1) $ 27 $ 26
============================================================
(1)Deferred tax assets of $207 and $139 million have been included
in the consolidated balance sheet caption "marketable securities
and other assets" at December 31, 1994 and 1993, respectively.
At December 31, 1994, the Company had $387 million of operating
loss carryforwards available to reduce future taxable income of
certain international subsidiaries. Loss carryforwards of $187 million
must be utilized within the next five years, and $200 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.
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):
Year Ended December 31, 1994 1993 1992
- -----------------------------------------------------------------------
Increase in trade
accounts receivable $ (169) $ (151) $ (147)
(Increase) decrease in inventories 43 (41) (138)
Increase in prepaid expenses
and other assets (273) (76) (112)
Increase (decrease) in accounts
payable and accrued expenses 197 (44) 405
Increase in accrued taxes 200 355 57
Increase (decrease) in
other liabilities 131 11 (108)
- -----------------------------------------------------------------------
$ 129 $ 54 $ (43)
=======================================================================
-61-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. ACQUISITIONS AND INVESTMENTS
During 1994, the Company's acquisition and investment activity, which
included investments in bottling operations, totaled $311 million.
During 1993 and 1992, the Company's acquisition and investment
activity totaled $611 and $388 million, respectively.
These 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 1992, the reported results would not have
been materially affected.
During 1994, the Company invested approximately $120 million in a
joint venture known as the Coca-Cola Bottling Companies of Egypt. This
joint venture was formed following the privatization of the Egyptian
public sector bottler. In 1993, the Company acquired a 30 percent
interest in Coca-Cola FEMSA, which operates bottling facilities in
Mexico and Argentina, for $195 million. None of the acquisitions in
1992 were individually significant.
18. NONRECURRING ITEMS
Upon a favorable court decision in 1993, the Company reversed
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 was reduced by $42
million related to restructuring charges recorded by Coca-Cola
Beverages Ltd. Other income (deductions)-net included 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.
19. SUBSEQUENT EVENTS
In early 1995, the Company sold 100 percent of the capital stock of
Coca-Cola Poland Ltd. and Coca-Cola West Poland Ltd. to Coca-Cola
Amatil for total consideration of approximately $238 million, subject
to certain contingent adjustments.
In early 1995, the Company reduced its voting and economic
ownership in Coca-Cola Amatil to approximately 49 percent, consistent
with its stated intention of ending temporary control.
NET OPERATING REVENUES BY LINE OF BUSINESS
[bar chart]
Year Ended December 31, 1992 1993 1994
- ----------------------------------------------------------------------
Foods 13% 12% 11%
Soft Drinks-International 65% 66% 67%
Soft Drinks-United States 22% 22% 22%
OPERATING INCOME BY LINE OF BUSINESS
[bar chart]
Year Ended December 31, 1992 1993 1994
- ----------------------------------------------------------------------
Foods 3% 3% 3%
Soft Drinks-International 79% 78% 79%
Soft Drinks-United States 18% 19% 18%
-62-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. 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>
1994
Net operating revenues $ 3,506 $ 10,906 $ 1,728 $ 32 $ 16,172
Operating income 761 3,261 123 (437) 3,708
Identifiable operating assets 2,301 6,875 731 1,456(1) 11,363
Equity income 134 134
Investments (principally
bottling companies) 2,510 2,510
Capital expenditures 214 536 39 89 878
Depreciation and amortization 92 221 38 60 411
====================================================================================================================
1993
Net operating revenues $ 3,052 $ 9,205 $ 1,680 $ 20 $ 13,957
Operating income 680(2) 2,753(2) 117 (448)(2) 3,102
Identifiable operating assets 1,956 5,809 761 1,280(1) 9,806
Equity income 91(2) 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 560 2,521 112 (423) 2,770
Identifiable operating assets 1,812 5,251 791 1,035(1) 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
====================================================================================================================
Intercompany transfers between sectors are not material.
Certain prior year amounts related to net operating revenues and operating income have been
reclassified to conform to the current year presentation.
(1)Corporate identifiable operating assets are composed principally of marketable securities,
finance subsidiary receivables and fixed assets.
(2)Operating income for soft drink operations in the United States, International operations and
Corporate was 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.
</TABLE>
<TABLE>
<CAPTION>
Soft Drinks
Compound Growth Rates -------------------------------
Ending 1994 United States International Foods Consolidated
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net operating revenues
5 years 10% 18% 2% 13%
10 years 8% 16% 3% 12%
========================================================================================================
Operating income
5 years 14% 17% 7% 17%
10 years 12% 19% 0% 16%
========================================================================================================
</TABLE>
-63-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
21. OPERATIONS IN GEOGRAPHIC AREAS
Information about the Company's operations by geographic area 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>
1994
Net operating revenues $ 5,092 $ 522 $ 4,255 $ 1,928 $ 880 $ 3,463 $ 32 $ 16,172
Operating income 869 182 984 713 184 1,213 (437) 3,708
Identifiable operating assets 2,991 357 3,295 1,164 771 1,329 1,456(1) 11,363
Equity income 134 134
Investments
(principally bottling
companies) 2,510 2,510
Capital expenditures 252 27 201 129 149 31 89 878
Depreciation and amortization 128 6 130 36 32 19 60 411
==============================================================================================================================
1993
Net operating revenues $ 4,586 $ 255 $ 3,834 $ 1,683 $ 677 $ 2,902 $ 20 $ 13,957
Operating income 782(2) 152 872(2) 582 152 1,010 (448)(2) 3,102
Identifiable operating assets 2,682 153 2,777 1,220 604 1,090 1,280(1) 9,806
Equity income 91(2) 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
Net operating revenues $ 4,339 $ 242 $ 3,984 $ 1,383 $ 546 $ 2,545 $ 35 $ 13,074
Operating income 658 129 889 502 108 907 (423) 2,770
Identifiable operating assets 2,563 139 2,587 1,185 435 945 1,035(1) 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
==============================================================================================================================
Intercompany transfers between geographic areas are not material.
Certain prior year amounts related to operating income have been reclassified to conform
to the current year presentation.
Identifiable liabilities of operations outside the United States amounted to
approximately $2.5 billion at December 31, 1994, and $1.9 billion at December 31, 1993
and 1992.
(1)Corporate identifiable operating assets are composed principally of marketable
securities, finance subsidiary receivables and fixed assets.
(2)Operating income for the United States, European Community and Corporate was 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.
</TABLE>
<TABLE>
<CAPTION>
Northeast
Compounded Growth Rates United European Latin Europe/ Pacific &
Ending 1994 States Africa Community America Middle East Canada Consolidated
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net operating revenues
5 years 7% 27% 18% 24% 27% 12% 13%
10 years 6% 6% 18% 16% 24% 14% 12%
==============================================================================================================================
Operating income
5 years 13% 18% 13% 26% 23% 15% 17%
10 years 9% 7% 20% 23% 21% 19% 16%
==============================================================================================================================
</TABLE>
-64-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
NET OPERATING REVENUE BY GEOGRAPHIC AREA
[bar chart]
Year Ended December 31, 1992 1993 1994
- ----------------------------------------------------------------------
Pacific & Canada 19% 21% 22%
Northeast Europe/Middle East 4% 5% 5%
Latin America 11% 12% 12%
European Community 31% 27% 26%
Africa 2% 2% 3%
United States 33% 33% 32%
OPERATING INCOME BY GEOGRAPHIC AREA
[bar chart]
Year Ended December 31, 1992 1993 1994
- ----------------------------------------------------------------------
Pacific & Canada 28% 29% 29%
Northeast Europe/Middle East 3% 4% 5%
Latin America 16% 16% 17%
European Community 28% 25% 24%
Africa 4% 4% 4%
United States 21% 22% 21%
REPORT OF INDEPENDENT AUDITORS
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, 1994 and 1993,
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, 1994. 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,
1994 and 1993, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1994, 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.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 24, 1995
-65-
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
--------------------------------------
QUARTERLY DATA (UNAUDITED)
(In millions except per share data)
<TABLE>
<CAPTION>
First Second Third Fourth Full
Year Ended December 31, Quarter Quarter Quarter Quarter Year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994
Net operating revenues $ 3,352 $ 4,342 $ 4,461 $ 4,017 $ 16,172
Gross profit 2,110 2,675 2,701 2,519 10,005
Net income 521 758 708 567 2,554
Net income per share .40 .59 .55 .44 1.98
=====================================================================================
1993(1)
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
=====================================================================================
(1)The first quarter of 1993 included an after-tax transition charge of $12 million
($.01 per share) related to the change in accounting for postemployment benefits.
The third quarter of 1993 included 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 included 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 recorded 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).
</TABLE>
STOCK PRICES
Below are the New York Stock Exchange high, low and closing prices of
The Coca-Cola Company's stock for each quarter of 1994 and 1993.
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
High $44.75 $42.38 $50.00 $53.50
Low 40.13 38.88 41.00 48.00
Close 40.63 40.63 48.63 51.50
==========================================================================
1993
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
==========================================================================
</TABLE>
-67-
<PAGE>
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: 195,036
Shares outstanding at year-end: 1.276 billion
DIVIDENDS
At its February 1995 meeting, the Company's Board of Directors increased
the quarterly dividend to 22 cents per share, equivalent to an annual
dividend of 88 cents per share. The Company has increased dividends each
of the last 33 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 295 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, 52 percent of share owners of record were participants
in the Plan. In 1994, share owners invested $24.6 million in dividends
and $32.3 million in cash in the Plan.
ANNUAL MEETING OF SHARE OWNERS
April 19, 1995, 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 REPORTS 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. Interim
reports, containing financial results and other information, are also
distributed to share owners.
Also available from the Office of the Secretary are "Our Mission
and Our Commitment" 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
For hearing impaired: (201) 222-4955
E-mail: [email protected]
or
Office of the Secretary
The Coca-Cola Company
(404) 676-2777
INSTITUTIONAL INVESTOR INQUIRIES
(404) 676-5766
ANNUAL REPORT REQUESTS
(800) 438-2653
-71-
EXHIBIT 21.1
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE COCA-COLA COMPANY
AS OF DECEMBER 31, 1994
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
Carolina Coca-Cola Bottling Investments 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 71.98
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
Societa Imbottigliamento Bevande
Roma-Siber-S.P.A. Italy 100
Refreshment Product Services, Inc. Delaware 100
Azienda Bevande di Gagliancio-ABEG-S.r.l. Italy 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 (United Kingdom)
Limited England 100
Beverage Products Limited Delaware 100
S.A. Coca-Cola Beverages Belgium N.V. Belgium 100
The Inmex Corporation Florida 100
Servicios Integrados de Aministracion Mexico 100
y Alta Gerencia, S.A. de C.V.
Coca-Cola de Argentina, S.A. Argentina 100
Cican S.A. Argentina 100
Coca-Cola Industrias Ltda. 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 Ges.m.b.H. Austria 100
Coca-Cola G.m.b.H. Germany 100
Coca-Cola Erfrischungsgetraenke 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, Limited Korea 100
Coca-Cola Nigeria Limited Nigeria 100
Coca-Cola Poland, Ltd. Poland 100
Minute Maid SA Switzerland 100
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE COCA-COLA COMPANY
AS OF DECEMBER 31, 1994
continued from page 1
- --------------------- Organized Percentages
Under of Voting
Law of: Power
--------- -----------
The Coca-Cola Company (continued)
<S> <C> <C>
CTI Holdings, Inc. Delaware 100
3300 Riverside Drive Corporation Delaware 100
55th & 5th Avenue Corporation New York 100
Coca-Cola Overseas Parent Limited Delaware 100
Coca-Cola Holdings (Overseas) Limited Delaware and 100
Australia
Coca-Cola Amatil Limited * Australia 50.13(A)
CCA Superannuation Pty Ltd. Australia 50
Associated Nominees Pty Ltd. Australia 50
Ecks (NSW) Pty Ltd. Australia 100
Matila Nominees Pty Ltd. Australia 100
Coca-Cola Amatil (QLD) Ltd. Australia 100
Coca-Cola Amatil (NQ) Pty Ltd. Australia 100
Coca-Cola Amatil (NSW) Pty Ltd. Australia 100
Associated Products & Distribution Pty Australia 88.95(B)
Apand Pty Ltd. Australia 100
Coca-Cola Amatil (Holdings) Pty Ltd. Australia 100
Coca-Cola Amatil (PNG) Pty Ltd. Papua New
Guinea 100
C-C Bottlers Ltd. Australia 100
Coca-Cola Amatil (SA) Limited Australia 100
Geo Hall & Sons Ltd. Australia 100
Linlithgow Products (NZ) Ltd. New Zealand 100
Coca-Cola Amatil Europe Holding
Ges.m.b.H. Austria 100
Coca-Cola Amatil Oesterreich Ges.m.b.H. Austria 100
Amatil Getraenke (Dornbirn)
Ges.m.b.H. Austria 100
Amatil Getraenke (Klagenfurt)
Ges.m.b.H. Austria 100
Amatil Getraenke (Graz) Ges.m.b.H. Austria 100
Getraenkeproduktionsgemeinschaft
Ges.m.b.H. & Co. KG Austria 3.28(C)
Coca-Cola Amatil Belorussiya Belorussiya 95
Amatil (Asia) Ltd. Hong Kong 100
</TABLE>
*Temporary controlling interest, carried on equity method.
A) In early 1995 the Company reduced its ownership interest in Coca-Cola
Amatil Limited to approximately 49%.
B) Ecks (NSW) Pty Ltd. holds an additional 11.05%.
C) Coca-Cola Amatil Oesterreich Ges.m.b.H. holds an additional 16.98%.
-2-
<PAGE>
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE COCA-COLA COMPANY
AS OF DECEMBER 31, 1994
continued from page 2
- --------------------- Organized Percentages
Under of Voting
Law of: Power
--------- -----------
<S> <C> <C>
Coca-Cola Amatil Limited (continued)
CC Amatil Europe B.V. Netherlands 100
CC Amatil Investments C.V. Netherlands 29.4(D)
Coca-Cola Amatil (Hungary) Ltd. Hungary 100
CCA Investments (Hungary) Ltd. Hungary 100
Coca-Cola Amatil Ceska Republika Czech
spol s r.o. Republic 100
Coca-Cola Amatil Slovakia, Slovak
spol s r.o. Republic 100
Coca-Cola Amatil Ukraine Limited Ukraine 100
Coca-Cola Amatil Slovenija, d.d. Slovenia 50
Coca-Cola Holdings NZ Ltd. New Zealand 100
Oasis Enterprises Limited New Zealand 50(E)
Coca-Cola Amatil (NZ) Ltd. New Zealand 100
Amatil Investments (Singapore) Pte Ltd. Singapore 100
P.T. Coca-Cola Tirtalina
Bottling Company Indonesia 49
P.T. Coca-Cola Banyu Argo Indonesia 80
P.T. Eka Ticma Manunggal
Bottling Company Indonesia 65
P.T. Pan Java Bottling Company Indonesia 49
P.T. Coca-Cola Kendali Sodo Indonesia 80
Amatil Beverages (NZ) Ltd. New Zealand 100
Coca-Cola Bottlers
(Wellington) Ltd. New Zealand 100
Indonesia Bottlers Ltd. NV Indonesia 100
P.T. Djaya Beverages Bottling Co. Indonesia 41(F)
P.T. Enam Sekawan Indonesia 100
Coca-Cola Amatil (Fiji) Ltd. Fiji 100
Matila Insurance Pte Ltd. Singapore 100
</TABLE>
D) CC Amatil Europe B.V. holds an additional 20.6% and Coca-Cola Amatil
Oesterreich Ges.m.b.H. holds an additional 50%.
E) Linlithgow Products (NZ) Ltd. holds the remaining 50%.
F) Amatil Investments (Singapore) Pte Ltd. holds an additional 49%.
Other subsidiaries whose combined size is not significant:
Seventeen domestic wholly owned subsidiaries consolidated
Ninety-one foreign wholly owned subsidiaries consolidated
Twelve foreign majority-owned subsidiaries consolidated
-3-
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 dated January 24, 1995 with respect to the
consolidated financial statements and schedules of The Coca-Cola
Company, included or incorporated by reference in this Annual
Report on Form 10-K for the year ended December 31, 1994:
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
ERNST & YOUNG LLP
Atlanta, Georgia
March 10, 1995
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
M. DOUGLAS IVESTER, President, Chief Operating Officer and a
Director of the Company, JAMES E. CHESTNUT, 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 attorneys-in-
fact 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, 1994 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 1995.
/s/ Roberto C. Goizueta
Chairman of the Board,
Chief Executive Officer and Director
The Coca-Cola Company
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, JAMES E. CHESTNUT,
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, M. DOUGLAS IVESTER,
President, Chief Operating 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 attorneys-in-
fact 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, 1994 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 1995.
/s/ James E. Chestnut
Senior Vice President
and Chief Financial Officer
The Coca-Cola Company
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, GARY P. FAYARD, 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, M. DOUGLAS IVESTER, President, Chief Operating
Officer and a Director of the Company, JAMES E. CHESTNUT,
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 attorneys-in-
fact 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, 1994 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
14th day of February 1995.
/s/ Gary P. Fayard
Vice President and Controller
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Herbert A. Allen
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Ronald W. Allen
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Cathleen P. Black
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Warren E. Buffett
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS IVESTER, President, Chief Operating
Officer and a Director of the Company, JAMES E. CHESTNUT,
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 attorneys-in-
fact 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, 1994 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 1995.
/s/ Charles W. Duncan, Jr.
Director
The Coca-Cola Company
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS THAT I, M. DOUGLAS IVESTER,
President, Chief Operating Officer and 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, JAMES E. CHESTNUT, 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 attorneys-in-
fact 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, 1994 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 1995.
/s/ M. Douglas Ivester
President, Chief Operating Officer
and Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Susan B. King
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Donald F. McHenry
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Paul F. Oreffice
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS IVESTER, President, Chief Operating
Officer and a Director of the Company, JAMES E. CHESTNUT,
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 attorneys-in-
fact 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, 1994 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 1995.
/s/ James D. Robinson, III
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ William B. Turner
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ Peter V. Ueberroth
Director
The Coca-Cola Company
<PAGE>
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, M. DOUGLAS
IVESTER, President, Chief Operating Officer and a Director of
the Company, JAMES E. CHESTNUT, 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 attorneys-in-fact 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, 1994 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 1995.
/s/ James B. Williams
Director
The Coca-Cola Company
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THE COCA-COLA COMPANY FOR THE YEAR ENDED DECEMBER 31,
1994, AS SET FORTH IN ITS FORM 10-K FOR SUCH YEAR, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,386
<SECURITIES> 145
<RECEIVABLES> 1,470
<ALLOWANCES> 33
<INVENTORY> 1,047
<CURRENT-ASSETS> 5,205
<PP&E> 6,157
<DEPRECIATION> 2,077
<TOTAL-ASSETS> 13,873
<CURRENT-LIABILITIES> 6,177
<BONDS> 1,426
<COMMON> 427
0
0
<OTHER-SE> 4,808
<TOTAL-LIABILITY-AND-EQUITY> 13,873
<SALES> 16,172
<TOTAL-REVENUES> 16,172
<CGS> 6,167
<TOTAL-COSTS> 6,167
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199
<INCOME-PRETAX> 3,728
<INCOME-TAX> 1,174
<INCOME-CONTINUING> 2,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,554
<EPS-PRIMARY> 1.98
<EPS-DILUTED> 1.98
</TABLE>
