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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, 1995
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
ATLANTA, GEORGIA 30313
(Address of principal executive offices) (Zip Code)
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
------------------- ------------------------
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 1, 1996 (BASED ON THE CLOSING SALE PRICE AS REPORTED ON THE
NEW YORK STOCK EXCHANGE ON SUCH DATE) WAS $87,135,188,213.
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF
MARCH 1, 1996 WAS 1,250,755,704.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE COMPANY'S ANNUAL REPORT TO SHARE OWNERS FOR THE YEAR ENDED
DECEMBER 31, 1995, 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 17, 1996, 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 soft
drink concentrates and syrups in the world. Finished soft drink
products bearing the Company's trademarks, sold in the United
States since 1886, are now sold in nearly 200 countries and
include the leading soft drink products in most of these
countries. The Company also is the world's largest marketer and
distributor of juice and juice-drink products.
The business of the Company's "beverages" business sector is
nonalcoholic beverages -- principally soft drinks but also
noncarbonated beverages -- excluding particular beverages
produced, marketed and distributed by the Company's Coca-Cola
Foods business sector. Coca-Cola Foods produces, markets and
distributes principally juice and juice-drink products, primarily
in the United States and Canada. As used in this report, the
term "soft drinks" refers to nonalcoholic carbonated beverages
usually containing flavorings and sweeteners.
Of the Company's consolidated net operating revenues and
operating income for each of the past three years, the percentage
represented by geographic area is as follows:
MIDDLE
AND FAR
GREATER LATIN EAST AND UNITED
AFRICA EUROPE AMERICA CANADA STATES
------ ------- ------- -------- ------
Net Operating
Revenues
1995 3% 34% 11% 23% 29%
1994 3% 31% 12% 22% 32%
1993 2% 32% 12% 21% 33%
Operating Income
1995 5% 28% 18% 31% 18%
1994 4% 29% 17% 29% 21%
1993 4% 29% 16% 29% 22%
BEVERAGES BUSINESS
GENERAL BUSINESS DESCRIPTION
The Company manufactures and sells soft drink and
noncarbonated beverage concentrates and syrups, including
fountain syrups, and some finished beverages. Syrups are
composed of sweetener, water and flavoring concentrate. The
concentrates and syrups for bottled and canned beverages are sold
by the Company to authorized bottling and canning operations.
The bottlers or canners of soft drink products either combine the
syrup with carbonated water or combine the concentrate with
sweetener, water and carbonated water to produce finished soft
drinks. The finished soft drinks are packaged in authorized
containers bearing the Company's trademarks -- cans, refillable
and non-refillable glass and plastic bottles -- for sale to
retailers or, in some cases, wholesalers. Finished beverages
manufactured by the Company are sold by it to authorized bottlers
or distributors, who in turn sell these products to retailers or,
in some cases, wholesalers. Fountain syrups are manufactured and
sold by the Company, principally in the United States, to
authorized fountain wholesalers and some fountain retailers.
(Outside the United States, fountain syrups typically are
manufactured by authorized bottlers from concentrates sold to
them by the Company.) Authorized fountain wholesalers (including
certain authorized bottlers) sell fountain syrups to fountain
retailers. The fountain retailers use dispensing equipment to
mix the syrup with carbonated or still water and then sell
finished soft drinks or noncarbonated beverages to consumers in
cups and glasses.
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The products of the Company's beverages business, 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 Coca-Cola light in many countries outside the
United States), caffeine free diet Coke, Cherry Coke, diet Cherry
Coke, Fanta brand soft drinks, Sprite, diet Sprite, Mr. PiBB,
Mello Yello, TAB, Fresca, Barq's root beer and other flavors,
POWERaDE, Fruitopia, Minute Maid flavors, Saryusaisai, Aquarius,
Bonaqa and other products developed for specific countries,
including Georgia brand ready-to-drink coffees. During 1995, the
Company acquired Barq's, Inc., the maker of the second largest-
selling root beer in the United States. Additionally, Coca-Cola
Nestle Refreshments, the Company's joint venture with Nestle
S.A., produces ready-to-drink teas and coffees in certain
countries.
Effective February 1, 1996, the operating management structure
for the Company's beverages business consists of five groups:
the Africa Group; the Greater Europe Group; the Latin America
Group; the Middle and Far East Group; and the North America
Group.
The Company's beverages business accounted for 91% of the
Company's net operating revenues in 1995, 89% in 1994 and 88% in
1993. The beverages business accounted for 100% of the Company's
operating income in 1995, and 97% in 1994 and 1993. In 1995,
concentrates and syrups for products bearing the trademark
"Coca-Cola" or including the trademark "Coke" accounted for
approximately 70% of the Company's total gallon shipments of
beverage concentrates and syrups. (For purposes of comparison,
physical units of concentrate have been converted in this report
to their equivalents in gallons of syrup.)
In 1995, approximately 30% of the Company's total gallon
shipments of beverage concentrates and syrups were in the United
States. In 1995, the Company's principal markets outside the
United States, based on gallon shipments of beverage concentrates
and syrups, were Mexico, Brazil, Japan and Germany, which
together accounted for approximately 27% of the Company's total
gallon shipments.
In the United States, in 1995 the Company made approximately
63% of its total United States gallon shipments of beverage
concentrates and syrups ("U.S. gallon shipments") to
approximately 116 authorized bottler ownership groups in
approximately 398 licensed territories. Those bottlers prepare
and sell finished beverage products bearing the Company's
trademarks for the food store and vending machine distribution
channels and for other distribution channels supplying home and
on-premise consumption. The remaining 37% of 1995 U.S. gallon
shipments was attributable to fountain syrups sold to fountain
retailers and to approximately 940 authorized fountain
wholesalers, some of whom are authorized bottlers. These
fountain wholesalers in turn sell the syrup to restaurants and
other fountain retailers. Coca-Cola Enterprises Inc. ("Coca-Cola
Enterprises") and its bottling subsidiaries and divisions
accounted for approximately 41% of the Company's U.S. gallon
shipments in 1995. As of February 16, 1996, the Company holds an
ownership interest of approximately 45% in Coca-Cola Enterprises,
which is the world's largest bottler of Company beverage
products.
In addition to conducting its own independent advertising and
marketing activities, the Company may choose to provide
promotional and marketing services and/or funds and consultation
to its bottlers and to fountain and bottle/can retailers. Also
on a discretionary basis, the Company may develop and introduce
new products, packages and equipment to assist its bottlers,
fountain syrup wholesalers and fountain beverage retailers.
The profitability of the Company's beverages business outside
the United States is subject to many factors, including
governmental trade regulations and monetary policies, economic
and political conditions in the countries in which such business
is conducted and the risk of changes in currency exchange rates
and regulations.
BOTTLERS' AGREEMENTS AND DISTRIBUTION AGREEMENTS
Bottling contracts between the Company and each of its bottlers
regarding beverages bearing the Company's trademarks ("Company
Trademark Beverages"), subject to specified terms and conditions
and minor variations, generally authorize the bottler to prepare
particular designated Company Trademark Beverages, to package
the same in particular authorized containers, and to distribute
and sell the same in (but generally only in) an identified
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territory. The bottler is obligated to purchase its entire
requirement of concentrates or syrups for the designated
Company Trademark Beverages from the Company or other authorized
suppliers. The Company typically agrees to refrain from selling
or distributing or from authorizing third parties to sell or
distribute the designated Company Trademark Beverages throughout
the identified territory in the particular authorized containers;
however, the Company typically reserves for itself or its designee
the right (i) to prepare and package such beverages in such
containers in the territory for sale outside the territory and
(ii) to prepare, package, distribute and sell such beverages in
the territory in any other manner or form.
The contractual arrangements between the Company and its
authorized bottlers in the United States differ in certain
respects from those in the nearly 200 other countries in which
Company Trademark Beverages are sold. As hereinafter discussed,
the principal differences involve the duration of the agreements;
the inclusion or exclusion of canned beverage production rights
and authorizations to manufacture and distribute fountain syrups;
in some cases, the degree of flexibility on the part of the
Company to determine the pricing of syrups and concentrates; and
the extent, if any, of the Company's obligation to provide
marketing support.
OUTSIDE THE UNITED STATES. The bottling contracts between the
Company and its authorized bottlers outside the United States
generally are of stated duration, subject in some cases to
possible extensions or renewals of the term of the contract.
Generally, these contracts are subject to termination by the
Company following the occurrence of certain designated events,
including defined events of default and certain changes in
ownership or control of the bottler.
In many parts of the world outside the United States, the
Company has not granted canned beverage production rights to the
bottlers. In such instances, the Company or its designee
typically sells canned Company Trademark Beverages to the
bottlers for sale throughout the designated territory under can
distribution agreements, often on a non-exclusive basis. A
majority of the bottling contracts in force between the Company
and bottlers outside the United States authorize the bottler to
manufacture and distribute fountain syrups, usually on a non-
exclusive basis.
The Company generally has complete flexibility to determine
the price and other terms of sale of concentrates and syrups to
bottlers outside the United States and, although it may determine
in its discretion to do so, the Company typically has no
obligation under such bottling contracts to provide marketing
support to the bottlers.
WITHIN THE UNITED STATES. In the United States, with certain
very limited exceptions, the Company's bottling contracts for
cola-flavored beverages have no stated expiration date and the
contracts for other flavors are of stated duration, subject to
bottler renewal rights. The bottling contracts in the United
States are subject to termination by the Company for
nonperformance or upon the occurrence of certain defined events
of default which may vary from contract to contract. The
hereinafter described "1987 Contract" is terminable by the
Company upon the occurrence of certain events including: (1) the
bottler's insolvency, dissolution, receivership or the like; (2)
any disposition by the bottler or any of its subsidiaries of any
voting securities of any bottler subsidiary without the consent
of the Company; (3) any material breach of any obligation of the
bottler under the 1987 Contract; or (4) except in the case of
certain bottlers, 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
without authorization by the Company.
Bottlers in the United States are authorized to manufacture
and distribute Company Trademark Beverages in bottles and cans,
but generally are not authorized to manufacture fountain syrups.
Rather, the Company manufactures and sells fountain syrups to
approximately 940 authorized wholesalers (including certain
authorized bottlers) and some fountain retailers. The
wholesalers in turn sell the syrups to restaurants and other
retailers. The wholesaler typically acts as such pursuant to a
non-exclusive annual letter of appointment which neither
restricts the pricing of fountain syrups by the Company nor the
territory in which the wholesaler may resell in the United
States.
In the United States, the newest form of bottling contract
for soft drinks (the "1987 Contract") gives the Company
complete flexibility to determine the price and other terms
of sale of soft drink concentrates and syrups for cola-flavored
Company Trademark Beverages ("Coca-Cola Trademark Beverages")
and other Company Trademark Beverages. Bottlers operating
under the 1987 Contract accounted for approximately 74% of the
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Company's total United States gallon shipments for bottled and
canned beverages ("U.S. bottle/can gallon shipments") in 1995.
Certain other forms of the U.S. bottling contract, entered into
prior to 1987, provide for soft drink concentrates or syrups for
certain Coca-Cola Trademark Beverages to be priced pursuant to
a stated formula. The oldest such form of contract, applicable
to bottlers accounting for approximately 1% of U.S. bottle/can
gallon shipments in 1995, provides for a fixed price for
Coca-Cola syrup used in bottles and cans, subject to quarterly
adjustments to reflect changes in the quoted price of sugar.
Bottlers accounting for the remaining approximately 25% of U.S.
bottle/can gallon shipments in 1995 have contracts for certain
Coca-Cola Trademark Beverages with pricing formulas generally
providing for a baseline price that may be adjusted periodically
by the Company, up to a maximum indexed ceiling price, and is
adjusted quarterly based upon changes in certain sugar or
sweetener prices, as applicable.
Standard contracts with bottlers in the United States for the
sale of concentrates and syrups for non-cola-flavored products in
bottles and cans permit flexible pricing by the Company.
Under the 1987 Contract, the Company has no obligation to
participate with bottlers in expenditures for advertising and
marketing, but may, at its discretion, contribute toward such
expenditures and undertake independent or cooperative advertising
and marketing activities. Some bottling contracts that pre-date
the 1987 Contract impose certain marketing obligations on the
Company with respect to certain Company Trademark Beverages.
SIGNIFICANT EQUITY INVESTMENTS AND COMPANY BOTTLING OPERATIONS
The Company is committed to continuing to strengthen its
already strong bottler system. Over the last decade, bottling
investments have represented a significant portion of the
Company's investment assets. 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, frequently as a minority share
owner. 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. For example, the joint venture known as
Coca-Cola Sabco (Proprietary) Limited ("Coca-Cola Sabco"), a new
multinational bottling holding company in Africa, was formed in
November 1995. The Company, through its subsidiary The Coca-Cola
Export Corporation, is a minority share owner, with Gutsche
Family Investments (Proprietary) Limited as a majority share
owner. During 1995 the Company also purchased additional shares
in Panamerican Beverages, Inc. ("Panamerican Beverages"), a
holding company with bottling subsidiaries in Colombia, Brazil,
Mexico and Costa Rica, thereby increasing its voting and economic
interests in Panamerican Beverages to 16% and 13%, respectively.
An investment agreement calls for further purchases by the Company
from time to time, if and when Panamerican Beverages acquires
additional bottling territories, until such time as the Company has
accumulated a 25% voting interest.
The Company designates certain bottling operations in which it
has invested as "anchor bottlers," due to their level of
responsibility and performance. Anchor bottlers, which include
Coca-Cola Amatil Limited ("Coca-Cola Amatil") and Coca-Cola
Enterprises, are considered to be strongly committed to the
strategic goals of the Company and to furthering the interests of
the Company's worldwide production, distribution and marketing
systems. They tend to be large and geographically diverse and
have strong financial and management resources.
In restructuring the bottling system, the Company occasionally
has held temporary majority ownership positions in certain
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.
In certain situations, owning a controlling interest in
bottling operations is considered advantageous, compensating for
limited local resources or facilitating improvements in customer
relationships. For example, during 1995 the Company acquired
seven bottling operations in northern Italy and six bottling
plants in Venezuela.
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In line with the Company's long-term bottling strategy, the
Company will consider options for reducing its ownership interest
in a consolidated bottler. One such option is to sell the
Company's interest in a consolidated bottling operation to one of
the Company's equity method investees. In transactions during
1995, Coca-Cola Amatil purchased the Company's wholly owned
bottling operations in Poland, its 85% interests in two bottling
operations in Romania and its 75% interest in a bottling
operation in Croatia, for total consideration aggregating
approximately U.S.$411 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 $6.4 billion in revenues in 1995. As
used in this report, the term "unit case" means a unit of
measurement equal to 192 U.S. fluid ounces of finished beverage
product (24 eight-ounce servings).
The Company also has substantial equity positions in
approximately 32 unconsolidated bottling, canning and
distribution operations for its products worldwide, including
bottlers representing approximately 43% of total U.S. unit case
volume in 1995. Unconsolidated cost and equity method investee
bottlers produced and distributed approximately 36% of the
Company's worldwide unit case volume in 1995. Of these,
significant equity method investee bottlers include those
hereinafter described.
COCA-COLA ENTERPRISES. The Company's ownership interest in
Coca-Cola Enterprises is approximately 45% as of February 16,
1996. Coca-Cola Enterprises is the world's largest bottler of
the Company's beverage products. Net sales of concentrates and
syrups by the Company to Coca-Cola Enterprises were $1.3 billion
in 1995. Coca-Cola Enterprises also purchases high fructose corn
syrup from the Company; however, related collections from
Coca-Cola Enterprises and payments to suppliers are not included
in the Company's consolidated statements of income. Coca-Cola
Enterprises estimates that the territories in which it markets
beverage 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.
In 1995, approximately 69% of the unit case volume of
Coca-Cola Enterprises (excluding products in post-mix (fountain)
form) was Coca-Cola Trademark Beverages, approximately 21% of its
unit case volume was other Company Trademark Beverages, and
approximately 10% of its unit case volume was beverage products
of other companies. Coca-Cola Enterprises' net sales of beverage
products were approximately $6.8 billion in 1995.
COCA-COLA AMATIL. In July 1995, Coca-Cola Amatil completed a
public offering in Australia of approximately 97 million shares
of common stock. In connection with the offering, the Company's
ownership interest in Coca-Cola Amatil was diluted from
approximately 49% to approximately 40%.
Coca-Cola Amatil is the largest bottler of the Company's
beverage 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, Poland, Switzerland, Romania and Croatia. Coca-Cola
Amatil estimates that the territories in which it markets
beverage products contain approximately 99% of the population of
Australia, 100% of the populations of New Zealand, Fiji, Hungary,
Croatia, the Czech and Slovak Republics, Belarus, Slovenia and
Ukraine, 81% of the population of Austria, 83% of the population
of Papua New Guinea, 97% of the population of Indonesia, 91% of
the population of Poland, 24% of the population of Switzerland
and 46% of the population of Romania. In 1995, Coca-Cola
Amatil's net sales of beverage products were approximately
U.S.$2.2 billion.
In 1995, approximately 56% of the unit case volume of
Coca-Cola Amatil was Coca-Cola Trademark Beverages, approximately
34% of its unit case volume was other Company Trademark
Beverages, approximately 7% of its unit case volume was beverage
products of Coca-Cola Amatil and approximately 3% of its unit
case volume was beverage products of other companies.
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COCA-COLA & SCHWEPPES BEVERAGES LTD. ("CC&SB"). The Company
owns a 49% interest in CC&SB, the leading marketer of beverage
products in Great Britain. CC&SB handles bottling and
distribution of beverage products of the Company and Cadbury
Schweppes PLC throughout Great Britain. In 1995, CC&SB's net
sales of beverage products were approximately U.S.$1.4 billion.
In 1995, approximately 55% of the unit case volume of CC&SB
was Coca-Cola Trademark Beverages, approximately 9% of its unit
case volume was other Company Trademark Beverages, approximately
32% of its unit case volume was beverage products of Cadbury
Schweppes PLC and approximately 4% of its unit case volume was
beverage products of other companies.
COCA-COLA FEMSA, S.A. DE C.V. ("COCA-COLA FEMSA"). In 1993,
the Company, through an indirect subsidiary, 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. The Company invested approximately
U.S.$195 million in exchange for a 30% economic interest in
Coca-Cola FEMSA, a Mexican holding company with bottling
subsidiaries in the Valley of Mexico, Mexico's southeastern
region and, since 1994, in Argentina. As a result of a
subsequent public offering, FEMSA now owns a 51% economic
interest in Coca-Cola FEMSA, the Company owns a 30% economic
interest and the remainder is owned by other investors.
Coca-Cola FEMSA estimates that the territories in which it
markets beverage products contain approximately 28% of the
population of Mexico and 26% of the population of Argentina. In
1995, Coca-Cola FEMSA's net sales of beverage products were
approximately U.S. $826 million. In 1995, approximately 79% of
the unit case volume of Coca-Cola FEMSA was Coca-Cola Trademark
Beverages, approximately 20% of its unit case volume was other
Company Trademark Beverages, and approximately 1% of its unit
case volume was beverage products of other companies.
COCA-COLA BOTTLERS PHILIPPINES, INC. ("CCBPI"). The Company
owns a 30% interest in CCBPI, the only bottler authorized to
manufacture and distribute beverage products of the Company in
the Philippines. In 1995, CCBPI's net sales of beverage products
were approximately U.S.$778 million.
In 1995, approximately 74% of the unit case volume of CCBPI was
Coca-Cola Trademark Beverages, approximately 17% of its unit case
volume was other Company Trademark Beverages, and approximately 9%
of its unit case volume was beverage products of other companies.
OTHER INTERESTS. Under the terms of the Coca-Cola Nestle
Refreshments ("CCNR") joint venture involving the Company, Nestle
S.A. and certain subsidiaries of Nestle S.A., the Company manages
CCNR's ready-to-drink tea business and Nestle S.A. manages CCNR's
ready-to-drink coffee business. The joint venture is applicable
to ready-to-drink tea and coffee beverages in the United States
and approximately 32 other countries.
SEASONALITY
Soft drink and noncarbonated beverage 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 beverages business may be affected by
weather conditions.
COMPETITION
The Company's beverages business competes in the nonalcoholic
beverages segment of the commercial beverages industry. That
segment is highly competitive, consisting of numerous firms.
These include firms that compete, like the Company, in multiple
geographical areas as well as firms that are primarily local in
operation. Competitive products include carbonates, packaged
water, juices and nectars, fruit drinks and dilutables (including
syrups and powdered drinks), sports and energy drinks, coffee and
tea, still drinks and other beverages. Nonalcoholic beverages
are sold to consumers in both ready-to-drink and not-ready-to-
drink form.
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Most of the Company's beverages business currently is in soft
drinks, as that term is defined in this report. The soft drink
business, which is part of the nonalcoholic beverages segment, is
itself highly competitive. The Company is the leading seller of
soft drink concentrates and syrups in the world. Numerous firms,
however, compete in that business. These consist of a range of
firms, from local to international, that compete against the
Company in numerous geographical areas.
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. Competitive factors include pricing,
advertising and sales promotion 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.
RAW MATERIALS
The principal raw material used by the Company's beverages
business in the United States is high fructose corn syrup, 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 Company's beverages business
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 high fructose corn syrup in syrup for Coca-Cola and
other Company Trademark Beverages for use in both fountain syrup
and product in bottles and cans.
Generally, raw materials utilized by the Company in its
beverages 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
low-calorie soft drink products, is currently purchased by the
Company primarily from The NutraSweet Company, a subsidiary of
Monsanto Company, and from Holland Sweetener. Acesulfame
potassium is currently purchased from Hoechst Aktiengesellschaft.
COCA-COLA FOODS
GENERAL BUSINESS DESCRIPTION
The Company's Coca-Cola Foods business sector, with operations
in the United States and Canada, is the world's largest marketer
and distributor of juice and juice-drink products. In North
America, Coca-Cola Foods produces, markets and distributes 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. In addition,
Coca-Cola Foods manufactures Fruitopia, POWERaDE and Minute Maid
Juices To Go products for the account of the Company's beverages
business, as well as certain ready-to-drink tea products of CCNR,
and also manages the production of such products by certain
bottlers acting as contract packers.
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.
7
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In 1995, Coca-Cola Foods unit volume declined 4% from the
prior year as the foods business implemented a strategy to reduce
short-term price promotions and increase long-term brand-building
and marketing investments. During the year, the foods business
invested heavily in new products and new packages to support its
Minute Maid, Hi-C and Five Alive businesses. Coca-Cola Foods
reported a modest operating loss of $14 million in 1995, due to a
decline in net revenues and to a nonrecurring provision for
increasing efficiencies. Minute Maid orange juice volume was
down 8.5% from the prior year while volume of other juice and
juice-drink products was up 0.6%.
During 1995, Coca-Cola Foods initiated a series of actions
intended to revitalize and build the equity of the Minute Maid
and Hi-C trademarks. Actions to support Minute Maid brand
products included the replacement of the 30-year-old black
packaging scheme with high quality full-color designs, the
addition of a screw-cap closure to 64-ounce cartons of Minute
Maid products and dedicated advertising in support of Minute Maid
orange juice, Minute Maid lemonade and Minute Maid Premium Choice
orange juice. Hi-C trademark activities included dedicated
advertising, new packaging graphics and the introduction of
7.7-ounce aluminum cans and a 10-pack for the aseptic drink box.
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 produced, 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.
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
(herein collectively 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.
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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,
transportation, sale, safety, advertising, labeling and
ingredients of such products.
A California law 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 beverage products presently offer
non-refillable containers in all areas of the United States and
Canada. Many such bottlers also offer refillable containers,
although overall U.S. sales in refillable containers are
relatively limited. Measures have been enacted in certain
localities and are currently in effect in nine states which
require that a deposit be charged for certain non-refillable
beverage containers. Similar proposals have been introduced in
other states and localities and in past sessions of Congress, and
it is anticipated that similar legislation will be introduced in
the current session of Congress.
All of the Company's facilities in the United States are
subject to federal, state and local environmental laws and
regulations. Compliance with these provisions has not had, and
the Company does not expect such compliance to have, any material
adverse effect upon the Company's capital expenditures, net
income or competitive position.
EMPLOYEES
As of December 31, 1995, the Company and its subsidiaries
employed approximately 32,000 persons, of whom approximately
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 67 and 68 of the Annual Report to
Share Owners for the year ended December 31, 1995, which are
incorporated herein by reference.
ITEM 2. PROPERTIES
The Company's worldwide headquarters is located on a 40-acre
office complex in Atlanta, Georgia. The complex includes the
approximately 480,000 square feet headquarters building, the
approximately 731,000 square feet Coca-Cola USA building and, in
addition, an approximately 232,000 square feet office building.
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 an indirect subsidiary of 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.
9
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The Company owns 40 principal beverage concentrate and/or
syrup manufacturing plants throughout the world, including one
plant currently under construction. The Company currently owns
or holds a majority interest in 32 operations with 47 principal
beverage bottling and canning plants located outside the United
States.
Coca-Cola Foods, whose business headquarters is located in
Houston, Texas, occupies its own office building, which contains
approximately 330,000 square feet. Coca-Cola Foods operates 11
production facilities throughout the United States and Canada and
utilizes a system of contract packers which produce and
distribute products in areas where Coca-Cola Foods does not have
its own manufacturing centers or during periods when it
experiences manufacturing overflow.
The Company directly or through wholly owned subsidiaries owns
or leases additional real estate throughout the world, including
a wholly owned office and retail 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 beverage and food products are suitable and adequate for the
business conducted therein, that they are being appropriately
utilized in line with past experience and that they have
sufficient production capacity for their present intended
purposes. The extent of utilization of such facilities varies
based upon the seasonal demand for product. While it is not
possible to measure with any degree of certainty or uniformity
the productive capacity and extent of utilization of these
facilities, management believes that additional production can be
obtained at the existing facilities by the addition of personnel
and capital equipment and, in some facilities, the addition of
shifts of personnel or expansion of such facilities. The Company
continuously reviews its anticipated requirements for facilities
and, on the basis of that review, may from time to time acquire
additional facilities and/or dispose of existing facilities.
ITEM 3. LEGAL PROCEEDINGS
In May 1993, the Company discovered that its Carolina, Puerto
Rico plant was unintentionally discharging, without a permit,
process wastewater to a stormwater sewer which ultimately
discharged to a surface waterbody. The Company immediately
remedied the unintentional discharge and reported it to
appropriate environmental agencies. The 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.
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 intentional tortious conduct to injure plaintiff,
(3) alleged disparagement of the plaintiff and its business, and
(4) alleged false and injurious statements harmful to plaintiff's
interests. The complaint also seeks an injunction prohibiting
future allegedly tortious conduct by the Company and seeks an
award of punitive damages in the amount of at least $500 million.
In 1993, the Company filed a counterclaim against The Seven-Up
Company in the matter alleging that The Seven-Up Company has
tortiously interfered with the Company's efforts to obtain
distribution of its lemon-lime soft drink, Sprite, through
bottlers of Coca-Cola.
10
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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 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 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.
Seven-Up appealed that ruling as well. The appeals in both
cases have been briefed and are awaiting decisions by the
United States Court of Appeals for the Fifth Circuit and the
Court of Appeals for the Fifth District of Texas, respectively.
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 beverages 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 beverages
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.
On April 4, 1995, the Court granted defendants' motion to
dismiss the complaint, ruling that the Federal Food and Drug
Administration has primary jurisdiction over the issue raised by
plaintiffs; and that, in any event, plaintiffs had failed to
state a cause of action under any of the various fraud,
misrepresentation and/or consumer protection counts of their
complaint. The Court also held that plaintiffs had no unjust
enrichment claim. Plaintiffs' cross motions for class action
certification and partial summary judgment were deemed moot in
light of the Court's other rulings and were not formally ruled
upon. Plaintiffs thereafter filed a notice of appeal and also
asked the Court to reconsider its earlier opinion. The latter
request was denied by the Court on October 31, 1995. The case is
now proceeding through the appellate stage in the Appellate
Division of the New York Supreme Court.
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.
11
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ITEM X. EXECUTIVE OFFICERS OF THE COMPANY
The following are the executive officers of the Company:
Roberto C. Goizueta, 64, 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, 48, 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.
James E. Chestnut, 45, 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, 42, is Senior Vice President of the Company
and President of the North America Group. 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, 58, is Senior Vice President of the
Company and President of the Latin America Group. 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, 52, is Senior Vice President of the
Company and President of the Greater Europe Group. 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. He was appointed to his present
position in January 1995.
Douglas N. Daft, 52, is Senior Vice President of the
Company and President of the Middle and Far East Group. 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 was appointed to his current position,
effective January 1995.
Carl Ware, 52, is Senior Vice President of the Company and
President of the Africa Group. 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
Director, Corporate External Affairs in 1986 and became Deputy
Group President of the Northeast Europe/Africa Group of the
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International Business Sector in July 1991, a position
he held until he was named to his current position, effective
January 1993.
Joseph R. Gladden, Jr., 53, 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, 50, 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., 59, is Senior Vice President of the
Company with responsibility for Corporate Affairs. Mr. Leonard
was elected to his current position in April 1983.
Anton Amon, 52, 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, 54, 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.
Ralph H. Cooper, 56, is Senior Vice President of the
Company and President and Chief Executive Officer of
Coca-Cola Foods. Mr. Cooper was appointed Senior Vice
President of the Europe and Africa Group in July 1984 and was
named Senior Vice President of Coca-Cola International and
President of the Northwest European Division in January 1989.
He was elected Senior Vice President of the Company and
President of the European Community Group of the
International Soft Drink Business Sector in August 1990. In
January 1995, he was named Executive Vice President of
Coca-Cola Foods and served in that capacity until he was
appointed President and Chief Executive Officer of Coca-Cola
Foods in July 1995.
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.
13
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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 41 through 47, "Selected Financial Data" for
the years 1994 and 1995 on page 48, "Stock Prices" on page 71 and
"Common Stock" and "Dividends," under the heading "Share-Owner
Information" on page 75 of the Company's Annual Report to Share
Owners for the year ended December 31, 1995, are incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1991 through 1995, on
pages 48 and 49 of the Company's Annual Report to Share Owners
for the year ended December 31, 1995, 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 41 through 47 of the Company's Annual Report
to Share Owners for the year ended December 31, 1995, 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, 1995, are
incorporated herein by reference:
Consolidated Balance Sheets -- December 31, 1995 and 1994.
Consolidated Statements of Income -- Years ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows -- Years ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Share-Owners' Equity -- Years
ended December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
"Quarterly Data (Unaudited)" on page 71 of the Company's Annual
Report to Share Owners for the year ended December 31, 1995, is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
14
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information on Directors 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 17, 1996,
is incorporated herein by reference. 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 8 and 9 and the section entitled
"Executive Compensation" on pages 10 through 17 of the Company's
Proxy Statement for the Annual Meeting of Share Owners to be held
April 17, 1996, 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 6 and 7
and "Principal Share Owners" on pages 7 and 8, and the section
under the heading "The Major Investee Companies" entitled
"Ownership of Securities in Coca-Cola Enterprises, Coca-Cola
Amatil and Coca-Cola Beverages" on page 24 of the Company's Proxy
Statement for the Annual Meeting of Share Owners to be held
April 17, 1996, 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 8 and 9 and "Certain Transactions" on
pages 9 and 10, the section under the heading "Executive
Compensation" entitled "Compensation Committee Interlocks and
Insider Participation" on page 23 and the section under the
heading "The Major Investee Companies" entitled "Certain
Transactions with Investee Companies" on pages 23 and 24 of the
Company's Proxy Statement for the Annual Meeting of Share Owners
to be held April 17, 1996, are incorporated herein by reference.
15
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE 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, 1995, are incorporated by reference
in Part II, Item 8:
Consolidated Balance Sheets -- December 31, 1995 and 1994.
Consolidated Statements of Income -- Years ended December
31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows -- Years ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Share-Owners' Equity -- Years
ended December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. The following consolidated financial statement schedule
of The Coca-Cola Company and subsidiaries is included in
Item 14(d):
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.*
10.2 The Key Executive Retirement Plan of the Registrant, as
amended.*
10.3 Supplemental Disability Plan of the Registrant, as amended
-- incorporated herein by reference to Exhibit 10.3 of
the Registrant's Form 10-K Annual Report for the year
ended December 31, 1991.*
10.4 Annual Performance Incentive Plan of the Registrant, as
amended.*
10.5 Agreement, dated February 28, 1983, between the Registrant
and Roberto C. Goizueta -- incorporated herein by
reference to Exhibit 10.5 of the Registrant's Form 10-K
Annual Report for the year ended December 31, 1994.*
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<PAGE>
EXHIBIT NO.
- -----------
10.6 Amendment, dated February 10, 1984, to the Agreement dated
February 28, 1983, between the Registrant and Roberto C.
Goizueta -- incorporated herein by reference to Exhibit
10.6 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1994.*
10.7 1983 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.8 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1991.*
10.8 1987 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.9 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1991.*
10.9 1991 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.9 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1994.*
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.*
10.13 Compensation Deferral & Investment Program, as amended,
including Amendment Number Four dated November 28, 1995.*
10.14 Restricted Stock Agreement, dated August 4, 1982, between
the Registrant and Roberto C. Goizueta, as amended.*
10.15 Incentive Unit Agreement, dated November 29, 1988, between
the Registrant and Roberto C. Goizueta, as amended.*
10.16 Special Medical Insurance Plan of the Registrant, as amended.*
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 --
incorporated herein by reference to Exhibit 10.22 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1994.*
17
<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, 1995, 1994, 1993, 1992 and 1991.
13.1 Portions of the Registrant's 1995 Annual Report to Share
Owners expressly incorporated by reference herein: Pages
41-69, 71, 74 (definitions of "Dividend Payout Ratio,"
"Economic Profit," "Net Debt and Net Capital," "Return on
Capital," "Return on Common Equity" and "Total Capital")
and 75.
21.1 List of subsidiaries of the Registrant as of December 31,
1995.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this
report.
27.1 Restated Financial Data Schedule for the year ended
December 31, 1994, submitted to the Securities and
Exchange Commission in electronic format.
27.2 Financial Data Schedule for the year ended December 31,
1995, 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) Exhibits -- The response to this portion of Item 14 is
submitted as a separate section of this report.
(d) Financial Statement Schedule -- The response to this
portion of Item 14 is submitted as a separate section of
this report.
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 14, 1996
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 14, 1996
(Principal Executive Officer)
March 14, 1996
/s/ JAMES E. CHESTNUT *
- -------------------------------- -----------------------------------
James E. Chestnut Warren E. Buffett
Senior Vice President and Chief Director
Financial Officer
(Principal Financial Officer) March 14, 1996
March 14, 1996
/s/ GARY P. FAYARD *
- -------------------------------- -----------------------------------
Gary P. Fayard Charles W. Duncan, Jr.
Vice President and Controller Director
(Principal Accounting Officer)
March 14, 1996
March 14, 1996
* *
- -------------------------------- -----------------------------------
Herbert A. Allen M. Douglas Ivester
Director Director
March 14, 1996 March 14, 1996
* *
- -------------------------------- -----------------------------------
Ronald W. Allen Susan B. King
Director Director
March 14, 1996 March 14, 1996
19
<PAGE>
* *
- -------------------------------- -----------------------------------
Donald F. McHenry William B. Turner
Director Director
March 14, 1996 March 14, 1996
* *
- -------------------------------- -----------------------------------
Paul F. Oreffice Peter V. Ueberroth
Director Director
March 14, 1996 March 14, 1996
* *
- -------------------------------- -----------------------------------
James D. Robinson III James B. Williams
Director Director
March 14, 1996 March 14, 1996
* By: /s/ CAROL C. HAYES
--------------------------
Carol C. Hayes
Attorney-in-fact
March 14, 1996
20
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 14(d)
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 1995
THE COCA-COLA COMPANY AND SUBSIDIARIES
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1995
(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 $ 15 $ - $ 14 $ 34
Miscellaneous investments
and other assets............. 79 5 - 29 55
Deferred tax assets........... 46 15 - 19 42
---- --- --- --- ----
$ 158 $ 35 $ - $ 62 $ 131
==== === === === ====
</TABLE>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts..... $ 13 $ 6 $ - $ 19
Foreign exchange adjustments............. (1) - - (1)
Other transactions....................... 2 23 19 44
--- --- --- ---
$ 14 $ 29 $ 19 $ 62
=== === === ===
</TABLE>
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>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts..... $ 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>
- -------------------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
TRADE MISCELLANEOUS DEFERRED
ACCOUNTS INVESTMENTS TAX
RECEIVABLE AND OTHER ASSETS ASSETS TOTAL
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts..... $ 17 $ - $ - $ 17
Foreign exchange adjustments............. 1 - - 1
Other transactions....................... - 7 - 7
--- --- --- ---
$ 18 $ 7 $ - $ 25
=== === === ===
</TABLE>
F-3
<PAGE>
EXHIBIT INDEX
DESCRIPTION
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.*
10.2 The Key Executive Retirement Plan of the Registrant, as
amended.*
10.3 Supplemental Disability Plan of the Registrant, as amended
-- incorporated herein by reference to Exhibit 10.3 of
the Registrant's Form 10-K Annual Report for the year
ended December 31, 1991.*
10.4 Annual Performance Incentive Plan of the Registrant, as
amended.*
10.5 Agreement, dated February 28, 1983, between the Registrant
and Roberto C. Goizueta -- incorporated herein by
reference to Exhibit 10.5 of the Registrant's Form 10-K
Annual Report for the year ended December 31, 1994.*
10.6 Amendment, dated February 10, 1984, to the Agreement dated
February 28, 1983, between the Registrant and Roberto C.
Goizueta -- incorporated herein by reference to Exhibit
10.6 of the Registrant's Form 10-K Annual Report for the
year ended December 31, 1994.*
10.7 1983 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.8 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1991.*
10.8 1987 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.9 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1991.*
10.9 1991 Stock Option Plan of the Registrant, as amended --
incorporated herein by reference to Exhibit 10.9 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1994.*
<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.*
10.13 Compensation Deferral & Investment Program, as amended,
including Amendment Number Four dated November 28, 1995.*
10.14 Restricted Stock Agreement, dated August 4, 1982, between
the Registrant and Roberto C. Goizueta, as amended.*
10.15 Incentive Unit Agreement, dated November 29, 1988, between
the Registrant and Roberto C. Goizueta, as amended.*
10.16 Special Medical Insurance Plan of the Registrant, as amended.*
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 --
incorporated herein by reference to Exhibit 10.22 of the
Registrant's Form 10-K Annual Report for the year ended
December 31, 1994.*
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, 1995, 1994, 1993, 1992 and 1991.
<PAGE>
EXHIBIT NO.
- -----------
13.1 Portions of the Registrant's 1995 Annual Report to Share
Owners expressly incorporated by reference herein: Pages
41-69, 71, 74 (definitions of "Dividend Payout Ratio,"
"Economic Profit," "Net Debt and Net Capital," "Return on
Capital," "Return on Common Equity" and "Total Capital")
and 75.
21.1 List of subsidiaries of the Registrant as of December 31,
1995.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this
report.
27.1 Restated Financial Data Schedule for the year ended
December 31, 1994, submitted to the Securities and
Exchange Commission in electronic format.
27.2 Financial Data Schedule for the year ended December 31,
1995, 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.
EXHIBIT 10.1
As amended 11/23/88
LONG TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
SECTION 1. PURPOSE
The purpose of the Long Term Performance Incentive Plan
of The Coca-Cola Company (the "Plan") is to advance the
interests of The Coca-Cola Company (the "Company") by
providing a competitive level of incentive for eligible
senior executives which will encourage them to more closely
identify with shareholder interests and to achieve financial
results consistent with the Company's long range business
plans. It will also provide a vehicle to attract and retain
key executives who are responsible for moving the business
forward.
SECTION 2. ADMINISTRATION
The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors of the
Company (the "Board") from among its members and shall be
comprised of not less than three (3) members of the Board.
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. Members of the Committee shall be
members of the Board who are not eligible to participate
under the Plan and who have not been eligible to participate
in the Plan for at least one year prior to the time at
which they become members of the Committee. The Committee
shall determine which of the eligible key employees of
the Company and its Affiliates (as hereinafter defined)
to whom, and the time or times at which, Long Term Incentive
Awards will be granted under the Plan, and the other
conditions of the grant of the Long Term Incentive Awards.
The provisions and conditions of the grants of Long Term
<PAGE>
Incentive Awards need not be the same with respect to each
grantee or with respect to each Long Term Incentive Award.
The Committee shall, subject to the provisions of the
Plan, establish such rules and regulations as it deems
necessary or advisable for the proper administration of the
Plan, and shall make determinations and shall take such other
action in connection with or in relation to accomplishing the
objectives of the Plan as it deems necessary or advisable.
Each determination or other action made or taken pursuant to
the Plan, including interpretation of the Plan and the
specific conditions and provisions of the Long Term Incentive
Awards granted hereunder by the Committee shall be final and
conclusive for all purposes and upon all persons including,
but without limitation, the Company, its Affiliates, the
Committee, the Board, officers and the affected employees of
the Company and/or its Affiliates and their respective
successors in interest.
SECTION 3. ELIGIBILITY
Each key Senior Vice President in charge of a major
functional group as defined by the Chief Executive Officer of
the Company, higher-level officers of the Company and such
other key employees of the Company and its Affiliates as may
be approved by the Chief Executive Officer of the Company
from time to time shall be eligible to participate in the
Plan. Long Term Incentive Awards may be granted to such
officers and key employees of the Company and its Affiliates
as determined in the sole discretion of the Committee. The
term "Affiliates" shall mean any corporation or business
organization in which the Company owns, directly or
indirectly, twenty-five percent or more of the voting stock
or capital during the time to which the granting of the Long
Term Incentive Award applies.
SECTION 4. GRANTS OF-LONG TERM INCENTIVE AWARDS
(a) ANNUAL SELECTION BY THE COMMITTEE OF PARTICIPANTS.
Annually, the Chief Executive Officer, following a selection
by the Committee, shall advise key employees that they are
2
<PAGE>
participants in the Plan for a Performance Period. Each
Performance Period will be of three years duration and shall
commence on the January first of the applicable year. A new
three year Performance Period shall commence each year.
(b) CALCULATION OF PERFORMANCE INCENTIVE BASE. At the
time the Chairman advises a participant of his or her
participation, the participant's Performance Incentive Base
shall be calculated. The Performance Incentive Base shall be
the participant's salary grade midpoint at the time of
notification, times a percentage predicated upon the
participant's relative responsibility level within the
Company. The percentage will be progressively higher for
correspondingly higher levels of responsibility within the
Company. Once the Performance Incentive Base (i.e., the
employee's salary grade midpoint and the applicable
percentage) is determined at the commencement of each
Performance Period, that Performance Incentive Base will not
change for that Performance Period.
SECTION 5. PERFORMANCE CRITERION
The measures of performance are objective and shall be
based on two criteria measured annually over the three year
Performance Period. The criteria are (i) the Company's
average annual "Return on Shareholders' Equity" over the
Performance Period and (ii) the "Compounded Annual Growth in
Income From Continuing Operations" over the Performance
Period.
(a) RETURN ON SHAREHOLDERS' EQUITY. The average "Return
on Shareholders' Equity" shall mean the average of the three
percentages for each of the three years derived by dividing
the amount of Shareholders' Equity as reported on the Company's
Consolidated Balance Sheet (for example, $2,920,756,000 as of
December 31, 1983, and $2,778,654,000 as of December 31, 1982)
into the amount of Income from Continuing Operations (after
income taxes) as reported on the Company's Consolidated Statement
of Income for the twelve months then ended (for example,
3
<PAGE>
$558,000,000 for the twelve months ended December 31, 1983
and $503,000,000 for the twelve months ended December 31,
1982) as reported in the Annual Report to Shareholders.
(b) COMPOUNDED ANNUAL GROWTH IN INCOME FROM CONTINUING
OPERATIONS. The "Compounded Annual Growth in Income from
Continuing Operations" shall be the compounded average annual
percentage change in Income from Continuing Operations (after
income taxes) for the three years of the Performance Period.
SECTION 6. AWARD DETERMINATION
Awards will be determined after the close of each
Performance Period from an award matrix, which matrix shall
be adopted by the Committee at the inception of each
Performance Period.
SECTION 7. PAYMENT OF AWARDS
(a) AWARDS. Awards shall be paid in cash.
(b) THE VESTED CASH AWARD. One half of the Award will
be paid in cash to each participant within sixty days after
the date on which the independent accountants of the Company
issue their report on the financial statements of the Company
for the third year of each Performance Period (the "Vested
Cash Award"). The second half of the Award is referred to
herein as the "Contingent Award", and it shall be paid to
each participant in the manner described in (d) below.
(c) DEFERRAL OF VESTED CASH AWARDS. All Vested Cash
Awards shall be paid in cash at the time prescribed in
subparagraph (b) above, unless the Committee has received and
approved, in its sole discretion prior to the grant of such
Award, a request to defer payment. If such request to defer
is approved by the Committee, the participant may elect to
receive deferred payments of the Vested Cash Award from among
the following options. Such election shall be made at the
time the request to defer is made.
4
<PAGE>
(i) Full cash payment at a date not less than one
year from the date of the Vested Cash Award, nor more
than one year after the date of retirement,
(ii) Equal annual installments over a period not to
exceed fifteen years, commencing not less than one year
from the date of the Vested Cash Award, or
(iii) Upon retirement.
Any amounts deferred shall bear interest from the date a
Vested Cash Award is granted to the date of payment, such
interest to be calculated pursuant to rules promulgated by
the Committee. Notwithstanding any election to defer an
Award as provided above, in the event of a participant's
death, all amounts elected to be deferred shall be paid in
full to the executor or administrator of a participant's
estate within a reasonable time after notice to the Committee
of such participant's death.
(d) PAYMENT AND FORFEITURE OF CONTINGENT AWARD. The
Contingent Award, plus interest in accordance with the above
formula thereon from the date of such Contingent Award as
determined by the Committee, shall be paid in cash to each
participant within thirty days after the expiration of the
second year following the end of the final year of the
related Performance Period, provided that such Contingent
Award has not been forfeited as set forth in the following
sentence. The Contingent Cash Award shall be forfeited to
the Company if, within two years from the date the Contingent
Cash Award is granted, the participant voluntarily terminates
his or her employment with the Company (for reasons other
than death, retirement or disability as such disability may
be determined by the Committee) or the participant's
employment is terminated for cause by the Company.
(e) RETIREMENT DEATH OR DISABILITY DURING FORFEITURE
PERIOD. If, within two years after the end of a Performance
Period for which a participant receives a Contingent Cash
Award, the recipient retires, dies or becomes disabled, such
recipient shall be paid the full Contingent Cash Award.
5
<PAGE>
(f) DEFERRAL OF CONTINGENT CASH AWARD. The participant
may elect to defer receipt of the Contingent Cash Award at
the same time and in the same manner as provided with respect
to the Vested Cash Award in subparagraph (c) above.
(g) WITHHOLDING FOR TAXES. The Company shall have the
right to deduct from all Long Term Incentive Award payments
any taxes required to be withheld with respect to such
payments.
(h) PAYMENTS TO ESTATES. Long Term Incentive Awards
and earnings thereon, if any, to the extent that they are due
to a participant pursuant to the provisions hereof and which
remain unpaid at the time of the participant's death, shall
be paid in full to the executor or administrator of the
participant's estate.
SECTION 8. TERMINATION OF EMPLOYMENT DURING ANY
PERFORMANCE PERIOD
(a) TERMINATION FOR REASONS OTHER THAN RETIREMENT,
DEATH OR DISABILITY. If the participant's employment by the
Company or an Affiliate terminates for any reason (other than
retirement, death or disability) during any Performance
Period, that participant shall not be entitled to any Long
Term Incentive Award for that Performance Period.
(b) DEATH, DISABILITY OR RETIREMENT DURING PERFORMANCE
PERIOD. If a participant retires, dies or becomes disabled
during any Performance Period, the amount of the Long Term
Incentive Award shall be calculated as provided in Sections
4, 5 and 6 as if the Performance Period ended on the last day
of the year in which the participant retired, died or became
disabled. Such Long Term Incentive Award will then be paid
all in cash within sixty days after the date on which the
independent public accountants of the Company issue their
report on the financial statements of the Company for the
last year of the Performance Period. The amount of the Long
Term Incentive Award will be prorated by a fraction, the
numerator of which shall be the number of whole calendar
months in the period commencing with the first month of the
Performance Period and ending with the whole calendar month
immediately preceding the date of retirement, death or
disability, and the denominator of which will be thirty-six.
6
<PAGE>
SECTION 9. AMENDMENTS, MODIFICATION AND TERMINATION OF
THE PLAN
The Board or the Committee may terminate the Plan, in
whole or in part, may suspend the Plan, in whole or in part
from time to time, and may amend the Plan from time to time,
including the adoption of amendments deemed necessary or
desirable to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or in any Long Term
Incentive Award granted thereunder. No amendment,
termination or modification of the Plan shall in any manner
affect Long Term Incentive Awards theretofore granted without
the consent of the employee unless the Committee has made a
determination that an amendment or modification is in the
best interest of all persons to whom Long Term Incentive
Awards have theretofore been granted.
SECTION 10. GOVERNING LAW
The Plan and all determinations made and actions taken
pursuant thereto shall be governed by the laws of the State
of Georgia and construed in accordance therewith.
SECTION 11. CHANGE IN CONTROL
If there is a Change in Control while the Plan remains
in effect, then
(a) each participant's Award accrued through the date
of such Change in Control for each Performance
Period then in effect automatically shall become
nonforfeitable on such date,
(b) the Committee immediately after the date of such
Change in Control shall determine each participant's
Award accrued through the end of the calendar month
which immediately precedes the date of such Change
in Control, and such determination shall be made
based on a formula established by the Committee which
computes such Award using (1) actual performance data
for each full Plan Year in each Performance Period
for which such data is available and (2) projected
7
<PAGE>
data for each other Plan Year, which projection
shall be based on a comparison (for the Plan Year
which includes the Change in Control) of the actual
performance versus budgeted performance for
compounded annual growth in income from continuing
operations for the full calendar months (in such
Plan Year) which immediately precede the Change in
Control and the actual performance versus budget
performance for the average return on shareholder
equity for such period multiplied by (3) a
fraction, the numerator of which shall be the
number of full calendar months in each such
Performance Period before the date of the Change in
Control and the denominator of which shall be 36,
(c) each participant's accrued Award (as determined
under Section 11(b) and his then unpaid Vested Cash
Award and Contingent Awards under Section 7
(computed with interest at the weighted prime rate
at Trust Company Bank, Atlanta, Georgia accrued on
such awards under Section 7 through the date of
such Change in Control) shall be paid to him in a
lump sum in cash promptly after the date of such
Change in Control in lieu of any other additional
payments under the Plan for the related Performance
Periods, and
(d) any federal golden parachute payment excise tax
paid or payable under Section 4999 of the Internal
Revenue Code of 1986, as amended, or any successor
to such section, by a participant for his taxable
year for which he reports the payment made under
Section 11(c) on his federal income tax return
shall be deemed attributable to such payment under
Section 11(c), and the Company promptly on written
demand from the participant (or, if he is dead,
from his estate) shall pay to him (or, if he is
dead, to his estate) an amount equal to such excise
tax.
A "Change in Control" for purposes of this Section 11 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
8
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14A promulgated under the Securities Exchange Act of 1934
(the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to
have occurred at such time as (i) any "person" (as that term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for
election of directors of the then outstanding securities of
the Company or any successor of the Company; (ii) during any
period of two consecutive years or less, individuals who at
the beginning of such period constituted the Board of
Directors of the Company cease, for any reason, to constitute
at least a majority of the Board of Directors, unless the
election or nomination for election of each new director was
approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
the period; (iii) the shareholders of the Company approve any
merger or consolidation as a 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 of earning power of the Company; or (iv)
the shareholders of the Company approve any merger or
consolidation to which the Company is a party as a result of
which the persons who were shareholders of the Company
immediately prior to the effective date of the merger or
consolidation shall have beneficial ownership of less than
50% of the combined voting power for election of directors of
the surviving corporation following the effective date of
such merger or consolidation; provided, however, that no
Change in Control shall be deemed to have occurred if, prior
to such time as a Change in Control would otherwise be deemed
to have occurred, the Board of Directors determines
otherwise.
9
EXHIBIT 10.2
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
<PAGE>
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
ARTICLE SECTION PAGE
I ESTABLISHMENT OF PLAN
1.1 Establishment 1
1.2 Purpose 1
1.3 Application of Plan 1
II DEFINITIONS
2.1 Definitions 2
2.2 Gender and Number 4
III PARTICIPATION
3.1 Eligibility for Participation 5
3.2 Date of Participation 5
3.3 Duration of Participation 5
IV BENEFITS
4.1 Normal Retirement Benefit 6
4.2 Early Retirement Benefit 7
4.3 Pre-Retirement Surviving Spouse Benefit 7
4.4 Post-Retirement Surviving Spouse Benefit 8
4.5 Protection of Accrued Benefit 9
4.6 Change in Control 9
V FORFEITABILITY
5.1 Forfeitability of Benefits 14
VI FINANCING
6.1 Financing 15
6.2 No Trust Created 15
6.3 Unsecured Interest 15
<PAGE>
VII ADMINISTRATION
7.1 Administration 16
7.2 Key Executive Retirement Plan Committee 16
7.3 Expenses 17
7.4 Indemnification 17
7.5 Amendment or Termination of the Plan 17
7.6 Applicable Law 18
7.7 Nonalienation 18
7.8 Limitation on Rights 18
7.9 Tax Withholding 19
<PAGE>
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
ARTICLE I. ESTABLISHMENT OF PLAN
1.1 ESTABLISHMENT. Effective as of January 1, 1984, THE
COCA-COLA COMPANY established as part of The Coca-Cola Company
Supplemental Retirement Plan an unfunded supplemental
retirement plan for eligible executives and their
beneficiaries as described herein, which, effective January 1,
1990, shall be known as "THE COCA-COLA COMPANY KEY EXECUTIVE
RETIREMENT PLAN" (hereinafter called the "Plan").
1.2 PURPOSE. The purpose of this Plan is to provide key
executives of the Employer a retirement benefit which reflects
their contributions to the Company and to supplement the
benefits payable from the Employer's Qualified Pension Plan.
1.3 APPLICATION OF PLAN. The terms of this Plan are
applicable only to eligible executives who are in the employ
of the Employer on or after January 1, 1984. Any executive
who retires or terminates his employment relationship prior to
such date shall not be covered under this plan.
<PAGE>
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the
following terms shall have the respective meanings set forth
below unless otherwise expressly provided herein, and when the
defined meaning is intended, the term is capitalized.
(a) "BENEFIT SERVICE" has the same meaning in this Plan
as is found in the Qualified Pension Plan.
(b) "CODE" means the Internal Revenue Code of 1986 as
amended from time to time.
(c) "COMMITTEE" means the administrative body designated
by the Chief Executive Officer of the Company to
administer the Plan as described in Article VII.
(d) "COMPANY" means The Coca-Cola Company.
(e) "COMPENSATION COMMITTEE" means the Compensation
Committee of the Board of Directors of The Coca-Cola
Company.
(f) "EARLY RETIREMENT AGE" means the first to occur of
(1) a Participant's age when he has both attained
his fifty-fifth birthday (but not his sixty-fifth)
and completed at least ten years of Vesting Service
or (2) age 60 with the approval of the Employer.
(g) "EFFECTIVE DATE" means January 1, 1984.
(h) "EMPLOYER" means the Company and any other
subsidiary corporation of the Company approved by
the Committee.
(i) "FINAL AVERAGE PAY" means the monthly average of a
Participant's Pay for the period of the five
consecutive calendar years during which he received
the largest total amount of Pay treating as a whole
calendar year the last calendar year in which he
earned any Pay.
(j) "NORMAL RETIREMENT AGE" means a Participant's sixty-
fifth birthday.
(k) "PARTICIPANT" means any executive of the Employer
who has met the eligibility requirements of the
Plan, as set forth in Article III hereof.
(l) "PAY" means the wage or salary paid to
the Participant for the Plan Year. Pay
will include (a) contributions made after
1983 to a qualified salary reduction
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plan or cafeteria plan, (b) earnings from any
subsidiary with whom the Company has executed a
reciprocal agreement to recognize earnings for
retirement plan purposes, for a period of work
during which the Participant earns Vesting Service
under the Qualified Pension Plan, and (c) severance
payments made after involuntary termination under a
formal severance pay policy in a form other than a
lump-sum payment incentive plan, and (d) performance
incentive plan awards, long-term incentive plan and
deferred compensation. Pay will exclude interest
accrued on long-term incentives.
(m) "PLAN" means the supplemental retirement plan
described in this instrument as the same may from
time to time be amended.
(n) "PLAN YEAR" means the calendar year.
(o) "QUALIFIED PENSION PLAN" means the Employee
Retirement Plan of The Coca-Cola Company and any
other defined benefit pension plan maintained by the
Employer.
(p) "VESTING SERVICE" has the same meaning in this Plan
as is found in the Qualified Pension Plan.
(q) "CHANGE IN CONTROL" means a change in control of a
nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of
1934 (the "Exchange Act") as in effect on
November 15, 1988, provided that such a change in
control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is
or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or
indirectly, of securities representing 20% or more
of the combined voting power for election of
directors of the then outstanding securities of the
Company or any successor of the Company; (ii) during
any period of two consecutive years or less,
individuals who at the beginning of such period
constituted the Board of Directors of the Company,
cease, for any reason, to constitute at least a
majority of the Board of Directors, unless the
election or nomination for election of each new
director was approved by a vote of at least two-thirds
of the directors then still in office who were
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<PAGE>
directors at the beginning of the period; (iii) the
shareholders 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
shareholders of the Company approve any merger or
consolidation to which the Company is a party as a
result of which the persons who were shareholders of
the Company immediately prior to the effective date
of the merger or consolidation shall have beneficial
ownership of less than 50% of the combined voting
power for election of directors of the surviving
corporation following the effective date of such
merger or consolidation; provided, however, that no
Change in Control shall be deemed to have occurred
if, prior to such time as a Change in Control would
otherwise be deemed to have occurred, the Board of
Directors determines otherwise.
2.2 GENDER AND NUMBER. Except when otherwise indicated
by the context, any masculine terminology herein shall also
include the feminine and neuter, and the definition of any
term herein in the singular may also include the plural.
4
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ARTICLE III. PARTICIPATION
3.1 ELIGIBILITY FOR PARTICIPATION. Each Key Senior Vice
President in charge of a major functional group as defined by
the Chief Executive Officer of the Company and higher-level
executives of the Company and each other executive of the
Employer approved by the Chief Executive Officer from time to
time shall be eligible to participate in this Plan.
Notwithstanding any other provisions to the contrary, all
decisions relating to participation are subject to the review
and approval of the Compensation Committee.
3.2 DATE OF PARTICIPATION. Each executive who is
eligible to become a Participant under Section 3.1 shall
become a Participant on the later to occur of (a) January 1,
1984, or (b) the date he meets the eligibility requirements.
3.3 DURATION OF PARTICIPATION. An executive who becomes
a Participant shall continue to be a Participant until his
termination of Employment with the Employer or the date he is
no longer entitled to benefits under this Plan.
5
<PAGE>
ARTICLE IV. BENEFITS
4.1 NORMAL RETIREMENT BENEFIT.
(a) ELIGIBILITY. A Participant whose employment with the
Employer terminates on or after he has attained his
Normal Retirement Age shall be eligible for a normal
retirement benefit under this Plan subject to Section
5.1.
(b) AMOUNT. A Participant who is eligible pursuant to (a)
above shall be entitled to a monthly normal retirement
benefit in an amount equal to the excess of the greater
of (1) or (2) below over (3) below:
(1) the sum of (A) and (B) below:
(A) 20 percent of his Final Average Pay; and
(B) One percent of his Final Average Pay multiplied
by his years of Benefit Service not in excess
of 35 years;
(2) the monthly normal retirement benefit payable as a
life annuity he would have been entitled to receive
at his Normal Retirement Age (or later retirement)
under the Qualified Pension Plan, but for the
provisions of Section 415 and Section (401)(a)(17)
of the Code;
(3) the monthly normal retirement benefit he would be
entitled to receive at his Normal Retirement Age (or
later retirement) under the Qualified Pension Plan,
under the payment form actually elected.
(c) COMMENCEMENT AND DURATION. Monthly normal retirement
benefit payments in the form of a life annuity shall
commence at the same time as the normal retirement
benefit payable from the Qualified Pension Plan. When
payments begin, they shall be paid monthly thereafter as
of the first day of each succeeding month during his
lifetime.
(d) BENEFIT ADJUSTMENT AFTER PAYMENTS BEGIN. Any benefit
payable pursuant to Section 4.1(b) of this Article shall
be adjusted in accordance with new limitations, if any,
established by the Internal Revenue Service on payments
that may be made from the Qualified Pension Plan. In
addition, benefits from this Plan shall be adjusted if
benefits payable from the Qualified Pension Plan are
increased because retirees are granted an improvement in
retirement income.
6
<PAGE>
4.2 EARLY RETIREMENT BENEFIT
(a) ELIGIBILITY. A Participant whose employment with the
Employer terminates on or after the date he has attained
his Early Retirement Age shall be eligible for an early
retirement benefit under this Plan subject to Section
5.1.
(b) AMOUNT. A Participant who is eligible pursuant to (a)
above shall be entitled to a monthly early retirement
benefit in an amount equal to the greater of the amount
computed under Section 4.1(b)(1) hereof or the amount
computed under Section 4.1(b)(2) hereof. Such amount
shall be reduced, using the same reduction factors as are
in use under the Qualified Pension Plan, for each month
by which the Participant's first payment under this Plan
precedes age 62. The resulting amount shall be reduced
by any monthly benefit amount actually received from the
Qualified Pension Plan.
(c) COMMENCEMENT AND DURATION. Monthly early retirement
benefit payments in the form of a life annuity shall
commence at the same time as the early retirement benefit
payable from the Employer's Qualified Pension Plan except
for Participants not eligible for early retirement under
the Qualified Pension Plan, in which case early
retirement benefit payments shall commence on the first
of the month following retirement. When payments begin,
they shall be paid monthly thereafter as of the first day
of each succeeding month during his lifetime. When the
benefit from the Qualified Pension Plan commences, the
benefit from this Plan shall be reduced by the amount of
the benefit paid from the Qualified Pension Plan.
4.3 PRE-RETIREMENT SURVIVING SPOUSE BENEFIT.
(a) ELIGIBILITY. The Surviving spouse of a Participant who
dies while employed by the Employer shall be eligible for
a surviving spouse benefit under this Plan as if the
Participant had elected pre-retirement death benefit
coverage in the form of a 100 percent joint and survivor
annuity under the Qualified Pension Plan.
(b) AMOUNT. A surviving spouse who is eligible pursuant to
(a) above shall be entitled to a monthly surviving
spouse benefit computed in the same manner as a normal
retirement benefit for the Participant under Section
4.1(b) hereof, provided that the amount determined under
Subsection 4.1(b)(3) shall be the benefit actually
received by the surviving spouse from the Qualified
Pension Plan, if any, and provided further,
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<PAGE>
that if payment of the benefit commences before a
Participant attains his Normal Retirement Age, the amount
of the benefit shall be actuarially reduced for each full
calendar month to occur between the later of (1) the date
the Participant would have attained age 55 or (2) the
date of his death and the month in which the Participant
would have attained age 62 by the amount of any actuarial
reduction applied in the Qualified Pension Plan relating
to early commencement of retirement benefits.
(c) COMMENCEMENT AND DURATION. Monthly surviving spouse
benefit payments shall commence on the first of the month
following the Participant's death. When payments begin,
they shall be paid monthly thereafter as of the first day
of each succeeding month until the first to occur of the
surviving spouse's death or remarriage, and shall be
subject to adjustment in accordance with the provision of
Section 4.1(d) of this article. In the event of
remarriage of the surviving spouse, benefits from this
Plan will cease, and benefits will be payable from the
Supplemental Retirement Plan beginning at the
Participant's earliest retirement age as defined in the
Employee Retirement Plan of The Coca-Cola Company.
4.4 POST-RETIREMENT SURVIVING SPOUSE BENEFIT.
(a) ELIGIBILITY. The surviving spouse of a retired
Participant who is receiving a benefit from the Qualified
Pension Plan in the form of a 100 percent joint and
surviving spouse payment and who dies while receiving, or
while entitled to in the future receive, a benefit under
Section 4.1 or 4.2 of this article, shall be eligible for
a surviving spouse benefit under this Plan.
(b) AMOUNT. A surviving spouse who is eligible pursuant to
(a) above shall be entitled to a monthly surviving spouse
benefit equal to the amount received or the amount that
could have been received by the Participant at his death.
(c) COMMENCEMENT AND DURATION. Monthly surviving spouse
benefit payments shall commence on the first of the month
following the Participant's death. When payments begin,
they shall be paid monthly thereafter as of the first day
of each succeeding month during her lifetime and shall be
subject to adjustment in accordance with the provisions
of Section 4.1(d).
8
<PAGE>
4.5 PROTECTION OF ACCRUED BENEFIT. In no event will the
accrued benefit of any participant at his retirement date on
or after January 1, 1989 be less than the benefit accrued at
the end of any earlier calendar year at which he was a
participant in this Plan.
4.6 CHANGE IN CONTROL.
(a) COVERAGE. If there is a Change in Control, each
Participant described in the first sentence of
Section 3.1 shall be covered by the special rules
set forth in this Section 4.6 and shall be referred
to as a "Covered Participant".
(b) FULL VESTING. If there is a Change in Control, each
Covered Participant's interest in his Accrued
Benefit shall immediately become fully vested and
nonforfeitable as of such date and as of any date
thereafter.
(c) ACCRUED BENEFIT. Each Covered Participant's Accrued
Benefit under this Section 4.6 as of any date such
benefit is calculated shall equal (1) the benefit
which would be payable to him under Section 4.1 if
he retired on such calculation date or, if he had
not reached his Normal Retirement Age by such date,
(2) the benefit which would be payable to him under
Section 4.2 if he retired early on such calculation
date or, if he had not reached his Early Retirement
Age by such date, (3) the benefit which would be
payable to him under Section 4.2 based on his actual
Final Average Pay and his actual Benefit Service on
such calculation date as if (i) he had continued to
work for the Employer until he reached his Early
Retirement Age and (ii) he had retired under Section
4.2 immediately after he reached such age.
(d) SPECIAL CHANGE IN CONTROL BENEFIT.
(1) TERMINATION OF EMPLOYMENT. If a Covered
Participant's employment with the Employer
terminates for any reason whatsoever before the end
of the two-consecutive-year period which begins on
the date there is a Change in Control, he shall be
paid the Change in Control benefit calculated in
accordance with the rules set forth in Section
4.6(d)(2) immediately after such termination of his
employment in cash in a lump sum in lieu of any
other benefit under the Plan.
(2) BENEFIT COMPUTATION RULES.
(A) BENEFIT SERVICE AND FINAL AVERAGE PAY. A Covered
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Participant's benefit under this Section 4.6(d)
shall be based on his actual Benefit Service on the
date his employment terminated for purposes of
Section 4.6(d)(1) and on his actual Final Average
Pay on such date unless he had not reached his Early
Retirement Age on or before such date. If he had
not reached his Early Retirement Age on or before
his employment terminated for purposes of Section
4.6(d)(1), his Final Average Pay shall be
recalculated [as the first calculation step under
this Section 4.6(d)] for the purposes of this
Section 4.6(d) on the assumption that (i) he had
continued to work for the Employer until he reached
his Early Retirement Age and (ii) his Pay for each
calendar year after the calendar year which
immediately preceded the date his employment
terminated for purposes of Section 4.6(d)(1) had
continued to increase until he reached his Early
Retirement Age at the rate of 8% per year (over his
Pay for the calendar year which immediately preceded
the date his employment so terminated).
(B) BENEFIT UNDER SECTION 4.1 OR SECTION 4.2.
As the second calculation step under this Section
4.6(d), a Covered Participant's Accrued Benefit
shall be recalculated as of the date of his
termination of employment for purposes of Section
4.6(d)(1) using (1) his Benefit Service and his
Final Average Pay as calculated under Section
4.6(d)(2)(A), (2) an assumption that he was
unmarried and would remain unmarried and (3) an
assumption that he was ineligible for any benefit
under any Qualified Pension Plan.
(C) ACTUARIAL EQUIVALENT. As the third
calculation step under this Section 4.6(d), a
Covered Participant's monthly life-only benefit as
calculated under Section 4.6(d)(2)(B) plus the
related monthly life-only survivor benefit which
would be payable under Section 4.4 to the person, if
any, who is his spouse on the date his employment
terminated for purposes of Section 4.6(d)(1) (if such
spouse survived him) shall be converted to an actuarial
equivalent lump sum benefit (1) using an 8% per annum
simple interest rate assumption, (2) using such other
factors and assumptions for making actuarial equivalent
lump sum cash-out calculations as in effect on the
date his employment terminated for purposes of
Section 4.6(d)(1) under the Employee Retirement
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Plan of The Coca-Cola Company or, if no such other
factors and assumptions are in effect on such date,
such other factors and assumptions for making such
calculations under such plan as in effect on the
date of the Change in Control and (3) assuming that
(A) he remains married to such spouse until his
death, (B) such spouse survives him and actually
receives a benefit from a Qualified Pension Plan in
the form of a 100 percent joint and surviving spouse
payment and (C) such spouse never remarries.
(D) PRESENT VALUE.
(1) POST-EARLY RETIREMENT AGE. If a Covered
Participant's employment actually
terminated for purposes of Section
4.6(d)(1) on or after his Early Retirement
Date, his benefit under this Section
4.6(d)(2)(D) shall be his actuarial
equivalent lump sum benefit as calculated
under Section 4.6(d)(2)(C) without any
further adjustments.
(2) PRE-EARLY RETIREMENT AGE. If a Covered
Participant's employment actually
terminated for purposes of Section
4.6(d)(1) before he reached his Early
Retirement Age, his benefit under this
Section 4.6(d)(2)(D) shall equal the
present value of his actuarial equivalent
lump sum benefit under Section
4.6(d)(2)(C) as calculated (as the fourth
calculation step in this Section 4.6(d))
using an 8% per annum interest rate
compounded annually.
(E) QUALIFIED PENSION PLAN BENEFIT. As the fifth
calculation step in this Section 4.6(d), the Covered
Participant's aggregate actual vested accrued Qualified
Pension Plan benefit, if any, on the date his
employment terminated for purposes of Section 4.6(d)(1)
shall be calculated as an actuarial equivalent lump sum
benefit payable as of such date using (1) an 8% per
annum simple interest rate assumption and (2) such other
factors and assumptions for making actuarial equivalent
lump sum cash-out calculations as in effect on the
date his employment terminated for purposes of
Section 4.6(d)(1) under the relevant Qualified Pension
Plan or, if no such other factors and assumptions
11
<PAGE>
are in effect on such date, such other factors and
assumptions for making such calculations under such
plan as in effect on the date of the Change in
Control.
(F) SECTION 4.6(D)(1) BENEFIT. A Covered
Participant's benefit under Section 4.6(d)(1) shall
(as the final calculation step in this Section
4.6(d)) equal the excess, if any, of his benefit as
calculated under Section 4.6(d)(2)(D) over his
Qualified Pension Plan benefit as calculated under
Section 4.6(d)(2)(E).
(e) TERMINATION OF EMPLOYMENT. If a Covered
Participant's employment with the Employer
terminates when he no longer is eligible for a
benefit under Section 4.6(d) but before he otherwise
is eligible for a benefit under Section 4.2, no
payment shall be made to him under the Plan until
the date he would have reached his Early Retirement
Age if he had continued to be employed by the
Employer. When such a Covered Participant so
reaches his Early Retirement Age, he shall be
treated under Section 4.2 as if he had immediately
retired, and his benefit under Section 4.2 shall be
calculated and paid under Section 4.2 at that time
based on his Final Average Pay and his Benefit
Service at his termination of employment. A Covered
Participant shall be treated as employed by the
Employer under Section 4.3, Pre-Retirement Surviving
Spouse Benefit, at his death if he dies on or after
the date his employment terminates and before the
date he is treated under this Section 4.6(e) as
retiring early under Section 4.2.
(f) EXCISE TAX. Any federal golden parachute payment
excise tax paid or payable under Section 4999 of the
Internal Revenue Code of 1986, as amended, or any
successor to such Section, by a Participant for his
taxable year for which he reports the payment made
under Section 4.6(d)(1) on his federal income tax
return shall be deemed attributable to such payment
under Section 4.6(d)(1), and the Company promptly on
written demand from the Participant (or, if he is
dead, from his estate) shall pay to him (or, if he
is dead, to his estate) an amount equal to such
excise tax.
(g) NON-COMPETITION. Neither the payment made under
Section 4.6(d)(1) nor a Covered Participant who
receives such payment shall be subject to Article V
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of the Plan, and no Covered Participant who receives
such a payment shall have any obligations whatsoever
(exclusively as a result of the receipt of such
payment) to refrain from engaging in any activity
which competes directly or indirectly with the
Employer.
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ARTICLE V. FORFEITABILITY
5.1 FORFEITABILITY OF BENEFITS. Any benefits under this
Plan which a Participant is receiving shall cease, and all
rights under the Plan shall be extinguished, if a Participant
terminates employment with the Employer and without the
Employer's consent is subsequently (a) employed by or in any
manner provides services for any business organization that is
in direct competition with the Employer or (b) personally
engages in direct competition with the Employer. If a court
of competent jurisdiction finds that the restrictions provided
for in (a) and (b) are unenforceable, then such benefits shall
be forfeited if a participant competes either as an employee
or directly in the widest geographical area and for the
longest period of time that are legally enforceable. Further,
all rights under the Plan shall be extinguished and forfeited
if a Participant terminates employment with the Employer prior
to his Early Retirement Age for any reason other than death,
unless otherwise expressly provided in writing by the
Compensation Committee of the Board of Directors.
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ARTICLE VI. FINANCING
6.1 FINANCING. The benefits under this Plan shall be
paid out of the general assets of the Employer. The benefits
shall not be funded in advance of payment in any way.
6.2 NO TRUST CREATED. Nothing contained in this Plan,
and no action taken pursuant to the provisions of this Plan,
shall create or be construed to create a trust of any kind or
a fiduciary relationship between the Employer and any
Participant, his spouse, or any other person.
6.3 UNSECURED INTEREST. No Participant hereunder shall
have any interest whatsoever in any specific asset of the
Employer. To the extent that any person acquires a right to
receive payments under this Plan, such right shall be no
greater than the right of any unsecured general creditor of
the Employer.
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ARTICLE VII. ADMINISTRATION
7.1 ADMINISTRATION. The Company shall be the Plan
Administrator and shall have all of the powers and
responsibilities of that office as described in ERISA, which
powers and duties shall be delegated to the extent provided in
this Article VII.
7.2 KEY EXECUTIVE RETIREMENT PLAN COMMITTEE. The
Company's Chief Executive Officer (CEO) shall appoint a
Committee of at least five members, who may or may not be
officers or employees of the Company or a Subsidiary. Each
Committee member shall serve at the pleasure of the CEO. Any
member may resign by submitting a written resignation to the
CEO. The CEO shall appoint a successor member to fill each
vacancy on the Committee.
(a) ACTIONS. The CEO shall designate a Committee member as
the chairman to preside at each meeting. In the event of
the chairman's absence at any meeting, the members
present shall select one of their members to serve as
acting chairman. The Committee shall appoint a
secretary, who may or may not be a Committee member, to
keep minutes of meetings and to perform other duties
assigned by the Committee. The Committee may appoint
such other officers as it deems necessary, who may or may
not be Committee members. Each action of the Committee
shall be taken by a majority vote of all members then in
office, provided that the Committee may establish
procedures for taking written votes without a meeting.
The Committee may, by a properly executed resolution,
authorize any member or officer or any other person to
sign communication and to execute documents on its
behalf, and may delegate other duties and
responsibilities as it considers to be in the best
interest of the Plan.
(b) POWERS. The Committee shall have primary responsibility
for the administration of the Plan, and all powers
necessary to enable it to properly perform its duties,
including but not limited to the following powers and
duties:
(1) The Company may adopt rules and regulations
necessary for the performance of its duties under
the Plan.
(2) The Committee shall have the power to construe the
Plan and to decide all questions arising under the
Plan.
16
<PAGE>
(3) The Committee shall determine the eligibility of
Participants to receive benefits and the amount of
benefits to which any Participant may be entitled
under the Plan.
(4) The Committee shall direct the payment of benefits
from the Company's general treasury, and shall
specify the payee, the amount and the conditions of
each payment.
(5) The Committee shall prepare and distribute to the
Participants plan summaries, notices, and other
information about the Plan in such manner as it
deems proper and in compliance with applicable law.
(6) The Committee shall provide forms for use by
Participants in applying for benefits.
(7) The Committee shall appoint an enrolled actuary to
make periodic actuarial valuations of the Plan's
experience and liabilities and to prepare actuarial
statements.
(8) The Committee shall retain legal counsel,
accountants and such other agents as it deems
necessary to properly administer the Plan.
(9) The Committee shall cause to be filed all reports
under the Code.
7.3 EXPENSES. The Company shall pay all expenses
incurred by the Committee in administering the Plan, including
fees and charges of actuaries, attorneys, accountants, and
consultants.
7.4 INDEMNIFICATION. The Company shall indemnify and
hold harmless the Committee and each member and each person to
whom the Plan Administrator or the Committee has delegated
responsibility under this Article VII, from all joint or
several liability for their acts and omissions and for the
acts and omissions of their duly appointed agents in the
administration of the Plan, except for their own breach of
fiduciary duty and willful misconduct.
7.5 AMENDMENT OR TERMINATION OF THE PLAN. The Committee
shall have the right to amend or to terminate the Plan at any
time, provided
17
<PAGE>
(1) no such amendment or termination shall be effective
before the date the Committee properly acts to adopt
such amendment or to effect such termination if such
amendment or termination adversely affects any
Participant's right to a benefit which has vested
under the Plan before such date, and
(2) the Committee shall have no right whatsoever on or
after the date there is a Change in Control to amend
or to terminate the Plan if
(A) such amendment or termination is effective
as of any date before the end of the two-
consecutive-year period which begins on
the date that there is a Change in Control
and
(B) such amendment or termination affects in
any manner whatsoever the rights or
benefits of, or the provisions of the Plan
which directly or indirectly relate to, a
Covered Participant (as described in
Section 4.6(a)) unless
(C) all such Covered Participants
affirmatively consent in writing to such
amendment or termination.
Notice of any amendment or termination under this Section 7.5
shall be given in writing to each participant and to each
surviving spouse of a deceased Participant who has an interest
in the Plan.
7.6 APPLICABLE LAW. The Plan shall be construed in
accordance with the laws of the State of Georgia, except to
the extent such laws are preempted by the Code.
7.7 NONALIENATION. No benefits payable under the Plan
shall be subject to the claim or legal process of any creditor
of any Participant or Spouse, and no Participant or Spouse
shall alienate, transfer, anticipate, or assign any benefits
under the Plan.
7.8 LIMITATION ON RIGHTS. No person shall have any
right or interest in any portion of the Plan except as
specifically provided in the Plan.
7.9 TAX WITHHOLDING. The Employer may withhold,
or require the withholding of,
18
<PAGE>
from any payment which it is required to make, any federal,
state, or local taxes required by law to be withheld with
respect to such payment and such payment and such sum as the
Employer may reasonably estimate as necessary to cover any
taxes for which the Employer may be liable and which may be
assessed with regard to such payment. Upon discharge or
settlement of such tax liability, the Employer shall
distribute the balance of such sum, if any, to the Participant
from whose payment it was withheld, or if such Participant is
then deceased, to the beneficiary of such Participant. Prior
to making any payment hereunder, the Employer may require such
documents from any taxing authority, or may require such
indemnities or surety bond as the Employer shall reasonably
deem necessary for his protection.
* * * * * * * * * * *
IN WITNESS WHEREOF, THE COCA-COLA COMPANY has caused this
instrument to be signed, effective as of January 1, 1990, on
this 11th day of March, 1991.
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT
ATTEST: PLAN COMMITTEE
/s/ C. RON CHEELEY /s/ MICHAEL W. WALTERS
Secretary of the Committee Chairman
19
<PAGE>
AMENDMENT NUMBER 1
TO THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
Effective as of December 31, 1993, the Key Executive
Retirement Plan Committee of The Coca-Cola Company Key
Executive Retirement Plan (the "Plan") hereby amends the Plan
as follows:
1. The following new Section 4.2A hereby is added
immediately following Section 4.2 of the Plan:
"4.2A SPECIAL BENEFIT FOR CERTAIN PARTICIPANTS
TERMINATING BEFORE EARLY RETIREMENT AGE.
(a) ELIGIBILITY. An executive of the Employer
who is a Participant on December 31, 1993, and whose
employment with the Employer terminates before the
date he has attained Early Retirement Age shall be
eligible for a retirement benefit under this Section
4.2A, subject to Section 5.1.
(b) AMOUNT. A Participant who is eligible
pursuant to Subsection (a) above shall be entitled
to a monthly benefit in an amount equal to the
greater of the amount computed under Section
4.1(b)(1) or Section 4.1(b)(2) hereof, determined as
of December 31, 1993 based on his Final Average Pay
and years of Benefit Service as of such date. Such
amount shall be reduced, using the same reduction
factors as are in use under the Qualified Pension
Plan for a vested terminated participant, for each
month by which the Participant's first payment under
this Plan precedes the first day of the month on or
after the Participant attains age 65. The resulting
amount shall be reduced by the monthly benefit
amount actually received from the Qualified Pension
Plan (or the monthly benefit amount that would have
been payable commencing at Early Retirement Age if
the Participant had been vested in the Qualified
Pension Plan on his employment termination date).
(c) COMMENCEMENT AND DURATION. Monthly
benefit payments under this Section 4.2A in the form
of a life annuity shall commence at the same time as
the benefit payable from the Employer's Qualified
Pension Plan; provided, if no benefit is payable
from the Qualified Pension Plan, then payments shall
commence on the first day of the month following the
date the Participant attains Early Retirement Age.
When payments begin, they shall be paid monthly
thereafter as of the first day of each succeeding
month during his lifetime."
<PAGE>
2. Subsection (a) of Section 4.4 of the Plan is hereby
amended by deleting said subsection and substituting the
following in lieu thereof:
"(a) ELIGIBILITY. The surviving spouse
of a retired Participant who is receiving a benefit
from the Qualified Pension Plan in the form of a 100
percent joint and surviving spouse payment and who
dies while receiving, or while entitled to in the
future receive, a benefit under Section 4.1, 4.2 or
4.2A of this article, shall be eligible for a
surviving spouse benefit under this Plan."
3. Section 5.1 of the Plan is hereby amended by
deleting said section and substituting the following in
lieu thereof:
"5.1 FORFEITABILITY OF BENEFITS.
(a) NON-COMPETITION. Any benefits under this
Plan which a Participant is receiving shall cease,
and all rights under the Plan shall be extinguished,
if a Participant terminates employment with the
Employer and without the Employer's consent is
subsequently (i) employed by or in any manner
provides services for any business organization that
is in direct competition with the Employer; or (ii)
personally engages in direct competition with the
Employer. If a court of competent jurisdiction
finds that the restrictions provided for in (i) and
(ii) are unenforceable, then such benefits shall be
forfeited if a Participant competes either as an
employee or directly in the widest geographical area
and for the longest period of time that are legally
enforceable.
(b) EARLY RETIREMENT AGE.
Except as provided in Section 4.2A, all
rights to a benefit under the Plan shall be
extinguished and forfeited if a Participant
terminates employment with the Employer prior to his
Early Retirement Age for any reason other than
death, unless otherwise expressly provided in
writing by the Compensation Committee of the Board
of Directors."
<PAGE>
SECOND AMENDMENT TO
THE COCA-COLA COMPANY
KEY EXECUTIVE RETIREMENT PLAN
WHEREAS, pursuant to the power vested in the Key Executive
Retirement Plan Committee (the "Committee") under Section 7.5
of The Coca-Cola Company Key Executive Retirement Plan
effective January 1, 1990, which was amended by Amendment
Number 1 effective December 31, 1993 (the "Plan"), the
Committee may amend the Plan; and
WHEREAS, the Committee wishes to amend the Plan to provide
that spousal beneficiaries receiving benefits under the Plan
will continue to receive benefits if they remarry;
NOW THEREFORE, effective January 1, 1996, the Plan is hereby
amended as follows:
1.
Section 4.3(c) of the Plan shall be amended by deleting the
words "the first to occur of " and "or remarriage" as they
appear in the third line of the second sentence.
2.
Section 4.3(c) of the Plan shall be further amended by
deleting the last sentence thereof.
3.
Section 4.6(d)(2)(c) of the Plan shall be amended by deleting
the words "and (C) such spouse never remarries" as they appear
at the end of item (3) of such section and by inserting the
word "and" immediately before item (3)(B) of such section.
Except as specifically amended hereby, the Plan shall remain
in full force and effect as prior to this Second Amendment.
KEY EXECUTIVE
RETIREMENT PLAN
COMMITTEE
By: /s/ C. Ron Cheeley
Chairman
Date: 1/7/96
EXHIBIT 10.4
Amended November 1, 1983
and November 23, 1988
THE ANNUAL PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
I. PLAN OBJECTIVE
The Purpose of The Annual Performance Incentive Plan of The
Coca-Cola Company is to promote the interests of The Coca-Cola
Company (the "Company") by providing additional incentive for
participating officers and other key employees 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 Annual Performance Incentive Plan of
The Coca-Cola Company.
b. "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.
c. "Board of Directors" means the Board of Directors of the
Company.
d. "Compensation Committee" means the Compensation Committee
of the Board of Directors of the Company.
e. "Employee" means any person regularly employed on a full-
time basis by the Company.
<PAGE>
f. "Standard Award" means an amount awarded under the Plan
to a Participant (as defined in Section II(j) below)
based upon the Participant's base salary and as
calculated pursuant to Section VI of the Plan.
g. "Award" means a Standard 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. "Management Committee" means the committee appointed by
the Compensation Committee to administer the Plan.
j. "Participant" means an Employee who satisfies the
eligibility requirements set forth in Section IV of the
Plan.
III. ADMINISTRATION OF PLAN
The Management Committee will have full power and authority
to interpret and administer the Plan in accordance with rules and
determinations adopted by it and/or the Compensation Committee.
IV. ELIGIBILITY
Eligibility for participation in the Plan is limited to
those Employees who can make an appreciable contribution to the
attainment of overall business objectives of the operating unit
for which they work as determined in the sole discretion of the
Management Committee or the Compensation Committee.
An Employee is eligible to participate in the Plan if:
1. The Employee is compensated in an amount at least equal
to the minimum salary grade guideline established
annually by the Management Committee.
2
<PAGE>
2. During the Plan Year, the Employee is not participating
in any other Company cash incentive compensation
program of the Company (other than The Coca-Cola
Company Long-Term Incentive Compensation Plan).
3. The Employee is recommended for participation in the Plan
by his or her immediate superior and is approved for
such participation by the operating head of the
Employee's unit.
4. The Employee is approved as a Participant by the
Management Committee.
The fact that an Employee is eligible to participate in the
Plan in one Plan Year does not assure that the Employee will be
eligible to participate in any subsequent year. The fact that an
Employee is eligible to participate in the Plan for any Plan Year
does not mean that the Employee will receive an Award in any Plan
Year.
The Management Committee will determine an Employee's
eligibility for participation in the Plan from time to time prior
to or during each Plan Year.
V. PERFORMANCE GOALS
Each operating unit of the Company shall set performance
goals and objectives for each Plan Year which in the aggregate
form the Company's overall goals and objectives for that Plan
Year. Individual goals and objectives for each Participant will
be established within the context of the goals of that
Participant's operating unit. All goals shall be established by
the Management Committee.
VI. AWARDS
A Standard Award to a Participant will be based on a
percentage of the Participant's base salary and shall be
established by the Management Committee. Since salary grades are
indicative of levels of responsibility, the percentage of base
salary which constitutes a Standard Award will increase as salary
grade or level of responsibility increases.
3
<PAGE>
The Management Committee or the Compensation Committee
shall, in each of their respective sole discretion, adjust the
Standard Award for each Participant based upon that Participant's
over-achievement or under-achievement in terms of his or her
individual performance and the performance of the Participant's
operating unit during the Plan Year.
An Employee who is selected as a Participant after the
beginning of a Plan Year or a Participant who retires, is granted
a leave of absence or whose employment is otherwise terminated
prior to the end of such Plan Year will be eligible to receive a
pro rata share of an Award Based on the number of months of
participation during any portion of such Plan Year, if, in the
sole discretion of the Management Committee or the Compensation
Committee, such an award is merited.
VII. DETERMINATION AND TIMING OF AWARDS
All Awards to Participants who are officers or assistant
officers of the Company will be made by the Compensation
Committee in its sole discretion. Awards to all other
Participants shall be made by the Management Committee in its
sole discretion. Awards will be paid for a particular Plan Year
at such time following the end of the Plan Year as shall be
determined by the Compensation Committee or the Management
Committee.
VIII. METHOD OF PAYMENT OF AWARDS
All Awards shall be paid in cash at the time described in
Section VII above unless the Management Committee or the
Compensation 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.
4
<PAGE>
b. An option to receive the Award in equal annual
installments over a period, specified in the request,
of not more than fifteen years, commencing not less
than one year from the date of the Award.
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 VIII are paid to the date of payment.
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.
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 ninety (90) days from the date
of the Participant's death.
IX. 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
Employee 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 the laws of the country in which the Employee
resides.
X. DETERMINATIONS OF COMMITTEES
All Awards, rules and determinations by the Compensation
Committee and by the Management Committee shall be final,
conclusive and binding on all parties including the Company, the
Employees and the Participants.
5
<PAGE>
XI. AMENDMENT AND TERMINATION
The Compensation Committee may amend, modify, suspend,
reinstate or terminate this Plan in whole or in part at any time
or from time to time; provided, however, that no such action will
adversely affect any right or obligation with respect to any
Award theretofore made. The Compensation Committee and the
Management Committee may deviate from the provisions of this Plan
to the extent such Committee deems appropriate to conform to
local laws and practices.
XII. APPLICABLE LAW
The Plan and all rules and determinations made and taken
pursuant hereto shall be governed by the laws of Georgia and
construed accordingly.
XIII. CHANGE IN CONTROL
If there is a Change in Control (as defined in this
Section XIII) at any time during a Plan Year, (1) the
Management 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 performance goals
established under Section V had been met in full for such
Plan Year by multiplying his target percentage by his
annual salary as in effect on the date of such Change in
Control and (2) each such Participant's nonforfeitable
interest in his Award (as so determined by the Management
Committee) thereafter shall be determined by multiplying
such Award 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 is 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 XIII 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
6
<PAGE>
first. A "Change in Control" for purposes of this Section XIII
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 shareholders 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 shareholders of the Company approve any merger or
consolidation to which the Company is a party as a result of
which the persons who were shareholders of the Company
immediately prior to the effective date of the merger or
consolidation shall have beneficial ownership of less than 50% of
the combined voting power for election of directors of the
surviving corporation following the effective date of such merger
or consolidation; provided, however, that no Change in Control
shall be deemed to have occurred if, prior to such time as a
Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
7
EXHIBIT 10.12
PERFORMANCE UNIT AGREEMENT
This Agreement, dated as of December 19, 1985, as amended
and restated on October 20, 1988, November 29, 1988, and February
19, 1990, by and between The Coca-Cola Company, a Delaware
Corporation (the "Company") and Roberto C. Goizueta, an
individual resident of the State of Georgia (the "Officer").
WHEREAS, the Officer acted in 1985 with singular courage,
wisdom and commitment. After careful study and deliberation, he
made decisions which entailed considerable business risk, the net
result of which has been, and will continue to be, extremely
beneficial to the shareholders of The Coca-Cola Company. In
recognition of this courage and commitment, and positive long-
term impact of his actions, the Compensation Committee of the
Board of Directors of the Company (the "Committee") desires that
the Officer share financially in the benefits of his decisions.
NOW THEREFORE, the parties, intending each to be legally
bound hereby and in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as
follows:
1. AWARD OF PERFORMANCE UNITS. The Company hereby awards
to the Officer three hundred sixty thousand (360,000) Performance
Units, the terms and values of which are hereafter described,
subject to the conditions as hereinafter set forth. The Value of
each Performance Unit shall be a dollar amount which shall be the
difference between the Fair Market Value of a share of Common
Stock of the Company on the relevant Calculation Date (as defined
below) and the Base Price which shall be, subject to adjustment
as set forth in Section 5 hereof, $20.625, the price of a share
of Common Stock of the Company on January 2, 1985, adjusted to
reflect a three-for-one stock split in 1986 (such difference
hereinafter referred to as the "Value of the Performance Unit").
Fair Market Value shall mean the closing price of a share of
Common Stock of the Company on the Calculation Date (or the first
preceding trading day if the Calculation Date is not a trading
day) as reported on the New York Stock Exchange-Composite
Transactions listing for such day, or as otherwise determined by
the Committee.
2. CALCULATION DATES FOR THE VALUE OF PERFORMANCE UNIT
AMOUNTS.
(a) DURING THE FIVE YEARS COMMENCING IN 1991.
Annually, commencing in February, 1991, and ending in
February, 1995, the Committee in its sole discretion, may
elect to cause the Company to calculate and pay to the
<PAGE>
Officer the Value of up to 72,000 Performance Units and upon
such payment, the Performance Units with respect thereto shall
be canceled and terminated and the Officer shall have no further
rights with respect thereto. If the Committee elects to cause
such payment to be made, the Calculation Date therefor shall be
the third trading day after the public release by the Company of
its summary results of operations for the preceding calendar year.
(b) DEATH OR DISABILITY. If at any time after the
effective date hereof the Officer dies or becomes disabled (as
such disability shall be determined by the Committee), the
Officer, or, in the case of his death, the beneficiary designated
by the Officer in a letter to the Company, or, if such
beneficiary is deceased or if no beneficiary has been designated,
the executor or administrator of his estate, shall receive
payment for the Value of the Performance Units which have not
been terminated and canceled as a result of Section 2(a) above
and the Calculation Date therefor shall be as of such date of
death or disability.
(c) RETIREMENT. The Calculation Date for the Value
of all Performance Units which have not been terminated and
canceled as a result of Sections 2(a) and (b) above shall be the
Officer's Effective Retirement Date. "Effective Retirement Date"
is the date on which the Officer's employment terminates on a
date on which he is eligible for an immediately payable benefit
pursuant to the Company's Supplemental Retirement Plan as in
effect on the date hereof.
3. PAYMENT DATES. Payment for the Value of the
Performance Units will be made in cash promptly after the
respective Calculation Date or Dates, but in any event no later
than 60 days thereafter.
4. NON-TRANSFERABILITY OF PERFORMANCE UNITS. Performance
Units shall not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of at any time.
5. ADJUSTMENT IN THE NUMBER OF PERFORMANCE UNITS AWARDED.
In the event there is any change in the Common Stock of the
Company through the declaration of stock dividends, through stock
splits or through recapitalization or merger or consolidation or
combination of shares or otherwise, the Committee shall make such
adjustment, if any, as it may deem appropriate in the number of
Performance Units and the Base Price thereof.
6. ENTIRE AGREEMENT, AMENDMENT, ETC. This document
constitutes the entire agreement between the Officer and the
Company with respect to the Performance Units. This agreement
may not be modified or amended without the prior written consent
of both parties hereto.
<PAGE>
7. GOVERNING LAW. This Agreement and all determinations
made and actions taken pursuant hereto shall be governed by the
laws of the State of Georgia and construed in accordance
therewith.
ROBERTO C. GOIZUETA THE COCA-COLA COMPANY
/s/ Roberto C. Goizueta By: /s/ A. Garth Hamby
Title: Executive Vice President
EXHIBIT 10.13
THE COCA-COLA COMPANY
COMPENSATION DEFERRAL & INVESTMENT PROGRAM
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. PURPOSE 1
2. DEFINITIONS 1
2.1 Account 1
2.2 Beneficiary 1
2.3 Committee 1
2.4 Deferral Period 1
2.5 Election Form 2
2.6 Eligible Employee 2
2.7 Employee 2
2.8 Employer 2
2.9 Interest Credit Period 2
2.10 Participant 3
2.11 Program 3
2.12 Program Rate 3
2.13 Program Year 3
2.14 Retirement Date 3
2.15 Voluntary Severance Program 3
3 ELECTION RULES 4
4 INTEREST CREDITS 5
5 PAYMENTS 5
5.1 Retirement 5
(a) Form 5
(1) General rule 5
(2) Post-Retirement Installments 6
(3) Pre-Retirement Installments 6
(4) Voluntary Severance Program 7
(b) Interest Rate Credits 7
i
<PAGE>
SECTION PAGE
5.2 Pre-Retirement 7
(a) General Rule 7
(b) First Plan Year 8
(c) Committee Action 8
5.3 Death 8
(a) General Rules 8
(1) Pre-Retirement Date 8
(2) Post-Retirement Date 9
(b) Special Rules 9
(1) Continuation 9
(2) Estate 9
5.4 Source of Payments 9
6 MISCELLANEOUS 10
6.1 Committee 10
6.2 Beneficiary 10
6.3 No Assignment; Binding Effect 11
6.4 ERISA 11
6.5 Construction 11
6.6 Tax and Other Laws 12
6.7 Life Insurance Policy 12
6.8 Amendment and Termination 12
ii
<PAGE>
THE COCA-COLA COMPANY
COMPENSATION DEFERRAL & INVESTMENT PROGRAM
SECTION 1
PURPOSE
The primary purpose of this Program is to enhance a
Participant's retirement income by providing a mechanism under
which he or she can elect to defer a portion of his or her salary
and bonus for the fiscal year beginning May 1, 1986 and receive
interest credits on such deferrals at a rate which The Coca-Cola
Company anticipates will be very favorable for the Participant.
SECTION 2
DEFINITIONS
Each term set forth in this Section 2 shall have the meaning
set forth opposite such term for purpose of this Program.
2.1 ACCOUNT -- means the bookkeeping account
maintained as part of The Coca-Cola Company's books and records
to show each Participant's interest in this Program, which
interest shall consist of the excess of (a) the amounts actually
deferred under this Program under Section 3 and the interest
credits on such deferrals under Section 4 and Section 5 over (b)
the payments made under Section 5.
2.2 BENEFICIARY -- means the person or persons so
designated in accordance with Section 6.2.
2.3 COMMITTEE -- means the committee described in
Section 6.1 which shall operate and administer this Program.
2.4 DEFERRAL PERIOD -- means the 12 consecutive month
period which begins on May 1, 1986 and ends on April 30, 1987.
<PAGE>
2.5 ELECTION FORM -- means the form or forms provided
by the Committee for making the elections called for under this
Program.
2.6 ELIGIBLE EMPLOYEE -- means each employee of an
Employer whose base rate of salary equals or exceeds $50,000 a
year on April 1, l986 and who works primarily within the
continental United States, Alaska or Hawaii.
2.7 EMPLOYEE -- means an employee of The Coca-Cola
Company or any of its wholly-owned subsidiaries.
2.8 EMPLOYER -- means
(1) The Coca-Cola Company,
(2) The Atlanta Coca-Cola Bottling Company,
(3) The Louisiana Coca-Cola Bottling Co. Limited,
(4) the Coca-Cola Bottling Company of Michigan,
(5) the Coca-Cola Bottling Company of New England,
(6) the Coca-Cola Bottling Company of California,
(7) the Coca-Cola Bottling Company of Ohio,
(8) Ore-Cal Coca-Cola Bottling Company,
(9) The Akron Coca-Cola Bottling Company,
(10) The Zanesville Coca-Cola Bottling Company,
(11) the Coca-Cola Export Corporation,
(12) the Belmont Springs Water Company, Inc., and
(13) The Entertainment Business Sector, Inc.
2.9 INTEREST CREDIT PERIOD -- means the 12 consecutive
month period which begins on November 1, 1986 and each 12
consecutive month period which begins on each November 1
thereafter.
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2.10 PARTICIPANT -- means an Eligible Employee who
properly and timely makes the election to participate in this
Program under Section 3.
2.11 PROGRAM -- means The Coca-Cola Company
Compensation Deferral & Investment Program as set forth in this
document and any amendments to this document.
2.12 PROGRAM RATE -- means the interest credit rate in
effect for each Interest Credit Period, which rate shall equal
the greater of
(a) 16% per annum, or
(b) the annual rate determined by the Committee
based on the average interest rate reported by the
Moody's Investors Service as in effect on the first
business day of each calendar month for the corporate
investment grade level of bond issues selected by the
Committee for the 12 consecutive month period ending on
the April 30 which immediately precedes the beginning
of such Interest Credit Period plus 8 percentage
points.
2.13 PROGRAM YEAR -- means the 12 consecutive month
period which begins on May 1, 1986 and each 12 consecutive month
period which begins on each May 1 thereafter.
2.14 RETIREMENT DATE -- means for each Participant the
earlier of (a) the first date as of which he or she is eligible
to receive an early retirement benefit under The Employees'
Retirement Plan for The Coca-Cola Company or under any successor
to such plan or any comparable plan maintained by his or her
Employer or (b) the date he or she reaches age 65.
2.15 VOLUNTARY SEVERANCE PROGRAM -- means a formal,
written voluntary severance pay program which is adopted before
April 15, 1986 by The Coca-Cola Company, by any of its divisions
or by any other Employer and which the Committee elects to
include in this Program.
3
<PAGE>
SECTION 3
ELECTION RULES
An Eligible Employee who desires to participate in this
Program shall properly complete and deliver to the Committee (or
to the Committee's delegate) an Election Form on or before April
15, 1986, and the elections made on such form shall be
irrevocable after April 15, 1986. Each such election shall
include
(a) an election to defer in accordance with the terms
of this Program (1) a specific dollar amount of his or her
base salary as otherwise payable by his or her Employer each
payday in the Deferral period (if he or she desires to defer
any such salary), (2) a specific dollar amount which he or
she anticipates first will become payable by his or her
Employer as a bonus during the Deferral Period under his or
her Employer's standard practices and policies for the
payment of bonuses (if he or she desires to defer any such
bonus) or, in lieu of any deferral under Section 3(a)(1) or
Section 3(a)(2), (3) a specific dollar amount of the
payments to be made under any Voluntary Severance Program
during the Deferral Period (if he or she desires to defer
any such payments in lieu of the deferral of any salary or
bonuses), and
(b) an election on how his or her Account shall be
paid under Section 5.1; provided, however,
(c) no salary deferral election shall be effective to
the extent that the specific dollar amount exceeds 90% of a
Participant's salary as otherwise payable each payday, no
bonus deferral election shall be effective to the extent that
the specific dollar amount exceeds 90% of any bonus otherwise
payable and no Voluntary Severance Program deferral shall be
effective to the extent that the specific dollar amount exceeds
90% of each payment otherwise payable under such program,
4
<PAGE>
(d) the aggregate amount which an Eligible Employee
elects to defer shall be no less than $2000 and no more than
$50,000, and
(e) a deferral election shall be effective only while
an Eligible Employee is employed by an Employer. An
Eligible Employee who fails to deliver a properly completed
Election Form under this Section 3 to the Committee (or to
this Committee's delegate) on or before April 15, 1986 shall
be ineligible to participate in this Program.
SECTION 4
INTEREST CREDITS
The Committee shall establish an Account for each
Participant and shall credit to such Account the base salary and
bonuses or Voluntary Severance Program payments actually deferred
on his or her behalf under Section 3 for the Deferral Period.
The Committee for the first Interest Credit Period shall (subject
to Section 6.8) credit interest on such deferrals at the Program
Rate in effect for such period as if all such deferrals for a
Participant actually had been credited to his or her Account on
November 1, 1986. Subject to Section 5 and Section 6.8, interest
credits for each Interest Credit Period thereafter shall be made
for each Account as of the last day of each Interest Credit
Period at the Program Rate for such period based on the balance
credited to each such Account as of such date.
SECTION 5
PAYMENTS
5.1. RETIREMENT.
(a) FORM.
(1) GENERAL RULE. An Eligible Employee
as part of his or her election under Section 3 shall
elect that his or her Account be paid either (i) in
the form described in Section 5.1(a)(2) or (ii) in
the form described in Section 5.1(a)(3) and, if his or
5
<PAGE>
her Account has not been exhausted through such
payments, thereafter in the form described in
Section 5.1(a)(2). The elections made under this
Section 5.1 shall assume that a Participant's
employment as an Employee will terminate (other than by
reason of death) on or after his or her Retirement
Date, and such elections therefore shall be subject to
the rules set forth in Section 5.2 and Section 5.3.
(2) POST-RETIREMENT INSTALLMENTS. The
payment of a Participant's Account shall be made in
level monthly installments which (i) shall begin as of
the first day of the first calendar month which follows
the date his or her employment as an Employee
terminates and (ii) shall end on the first day of the
calendar month which immediately precedes the date he
or she reaches age 80; provided, a Participant's
employment as an Employee (solely for purposes of this
Section 5.1(a)(2)) automatically shall be deemed to
terminate on the date he or she reaches age 70 without
regard to whether his or her employment actually
terminates on such date.
(3) PRE-RETIREMENT INSTALLMENTS. An annual
payment, or more than one consecutive annual payment,
shall be made to a Participant from his or her Account,
and such annual payment shall be made, or such annual
payments shall begin, at the Participant's election
under Section 3
(i) as of November 1, 1993 or as of
November 1, 1994, in which event the Participant
can elect under Section 3 to receive up to three
consecutive annual payments, or
(ii) as of November 1, 1995 or as of any
anniversary of such date, in which event the
Participant can elect under Section 3 to receive
up to four consecutive annual payments.
6
<PAGE>
Each payment made under this Section 5.1(a)(3) shall
equal the amount which a Participant actually deferred
under Section 3 or, if less, the balance of his or her
Account, and each such payment shall be made as of the
first day of an Interest Credit Period. If a
Participant's employment as an Employee terminates for
any reason whatsoever before all payments elected under
this Section 5.1(a)(3) have been made, his or her
election to receive payments under this
Section 5.1(a)(3) automatically shall terminate and the
balance of his or her Account shall be paid under
Section 5.1(a)(2) or, if applicable, Section 5.2 or
Section 5.3.
(4) VOLUNTARY SEVERANCE PROGRAM. If a
Participant elected to defer payments under a Voluntary
Severance Program, his or her Account automatically
shall be paid under Section 5.1(a)(2), and such
payments shall begin under Section 5.1(a)(2) as of the
later of (i) his or her Retirement Date or (ii) May 1,
1992.
(b) INTEREST RATE CREDITS. An Account (or the
portion of an Account) which is distributed under
Section 5.1(a)(2) shall (subject to Section 6.8) receive
interest rate credits over the period for which such
payments are made under Section 5.1(a)(2) at the Program
Rate in effect on the date that such payments first begin,
and the level monthly payments under such section shall be
determined using such Program Rate.
5.2. PRE-RETIREMENT.
(a) GENERAL RULE. If a Participant's employment as
an Employee terminates for any reason (other than death) before
his Retirement Date, no payment shall (subject to Section
5.1(a)(4)) be made to him under Section 5.1(a) after the date
his or her employment so terminates, and his or her Account shall
(subject to Section 5.2(b) and Section 5.2(c)) be paid in a lump
sum as soon as practicable after such date. Such payment
7
<PAGE>
shall be made as of the first day of a calendar month, and
his or her Account shall (subject to Section 6.8) receive
interest credits through the last day of the immediately
preceding calendar month at the Program Rate in effect for
the Interest Credit Period in which payment is made.
(b) FIRST PLAN YEAR. If a Participant's
employment as an Employee terminates for any reason (other
than death) before April 30, 1987, the payment of his or her
Account shall be delayed and paid (subject to
Section 5.1(a)(4)) in a lump sum as soon as practicable
after such date. Such payment shall be made as of the first
day of a calendar month, and his or her Account (shall be
subject to Section 6.8) receive interest credits through the
last day of the immediately preceding calendar month at the
Program Rate in effect for the first Interest Credit Period.
(c) COMMITTEE ACTION. A Participant may request
that the Committee direct the payment of his or her Account
in accordance with the election the Participant made under
Section 3 in lieu of any payment under this Section 5.2 and,
if the Committee grants such request, payment shall be made
under Section 5.1 and (solely for purpose of Section 5.1)
the Participant's employment as an Employee shall be deemed
to terminate on the later of his or her Retirement Date or
on the date his or her employment actually terminates. Any
such request shall be made in writing and shall be delivered
to the Committee (or to the Committee's delegate) on or
before the date the Participant's employment as an Employee
terminates.
5.3. DEATH.
(a) GENERAL RULES.
(1) PRE-RETIREMENT DATE. If a Participant
dies before his or her Retirement Date, his or her
Account shall be paid to his or her Beneficiary
8
<PAGE>
under Section 5.1(a)(2) and, if applicable,
Section 5.1(a)(3) under the same rules which would
have been in effect for the Participant if he or
she had survived as an Employee until his or her
Retirement Date.
(2) POST-RETIREMENT DATE. If a Participant
dies on or after his or her Retirement Date, his
or her Account shall be paid to his or her
Beneficiary under Section 5.1(a)(2) using the date
the Participant died as the date he or she
terminated his or her employment as an Employee.
(b) SPECIAL RULES.
(1) CONTINUATION. If a Participant dies
after the payment of his or her Account has begun
under Section 5.1(a)(2) or Section 5.2 or if
payment is to be made under Section 5.1(a)(4),
payment shall be made to his or her Beneficiary
under the same terms and conditions as payment
would have been made to the Participant if he or
she had survived.
(2) ESTATE. If a Participant's Beneficiary
is his or her estate, the balance of the Account
payable at his or her death shall be paid to his
or her estate in a lump sum in accordance with the
rules set forth in Section 5.2(a). If a
Beneficiary dies after an Account becomes payable
to him or to her under this Program, the balance
of the Account otherwise payable to such
Beneficiary shall be paid to such Beneficiary's
estate in a lump sum in accordance with the rules
set forth in Section 5.2(a).
5.4 SOURCE OF PAYMENTS. All payments under this
Program shall be made by The Coca-Cola Company from its general
assets, and the status of each Participant's and each
Beneficiary's claim to his or her Account shall be the same as
the status of the claim against The Coca-Cola Company by any of
its general and unsecured creditors. No person whomsoever
9
<PAGE>
shall look to, or have any claim whatsoever against, any officer,
director, employee or agent of The Coca-Cola Company or any of
its subsidiaries in his or her individual capacity for the
payment of an Account or for the payment of any other amounts in
connection with an Account.
SECTION 6
MISCELLANEOUS
6.1. COMMITTEE. The Committee shall (except on a
temporary basis) consist of at least 3 individuals who shall be
appointed by and serve at the pleasure of the Chief Executive
Officer of The Coca-Cola Company. The Committee in the
administration and operation of this Program shall have the
power to take such equitable and other action as the Committee
acting in its absolute discretion deems necessary or appropriate
under the circumstances (including the power to delegate Committee
functions to others and to amend or terminate this Program under
Section 6.8). However, no member of the Committee shall act on
any request made by him or by her under this Program or on any
determination which relates to him or to her.
6.2. BENEFICIARY. Each Participant shall designate a
Beneficiary on an Election Form to receive his or her Account, if
any, in the event of his or her death and such designation shall be
effective when the Election Form is delivered to the Committee (or
to the Committee's delegate). However, if a Participant has a
lawful spouse on his or her date of death, such spouse automatically
shall be deemed to be his or her designated Beneficiary under this
Program unless such spouse consents in writing on an Election Form
to the Participant's designation of another person as his or her
Beneficiary under this Program. If no designated Beneficiary
survives the Participant or if no such designation is made, the
Participant's surviving spouse, if any, shall be deemed his or
her designated Beneficiary under this Program or, if there is no
such surviving spouse, the Participant's estate shall be deemed
his or her designated Beneficiary under this Plan. Finally,
10
<PAGE>
(a) if a Participant's Account is attributable to
the deferral of Voluntary Severance Program payments,
his or her Beneficiary under this Program automatically
shall be the person designated as his or her beneficiary
under such Voluntary Severance Program, and
(b) if a Beneficiary dies after an Account
becomes payable to him or to her under this Program,
such Account automatically shall be payable to such
Beneficiary's estate.
6.3. NO ASSIGNMENT; BINDING EFFECT. No Participant or
Beneficiary shall have the right to alienate, assign, commute or
otherwise encumber his or her benefits under this Program for any
purpose whatsoever, and any attempt to do so shall be disregarded
completely as null and void. The provision of this Program shall
be binding on each Participant (and on each person who claims a
benefit under such Participant) and on The Coca-Cola Company and
each other Employer.
6.4. ERISA. The Coca-Cola Company intends that this
Program come within the various exceptions and exemptions to the
Employee Retirement Income Security Act of 1974, as amended, for
an unfunded deferred compensation plan maintained primarily for a
select group of management or highly compensated employees. Any
ambiguities in this Program shall be construed to effect this
intent and, if a determination is made by any federal agency or
court that this Program for any reason fails to come within such
exceptions or exemptions, The Coca-Cola Company intends that the
Committee promptly terminate this Program.
6.5. CONSTRUCTION. This Program shall be construed in
accordance with the laws of the State of Georgia to the extent
that such laws have not been preempted by federal law. Headings
and subheadings have been added only for convenience of reference
and shall have no substantive effect under this Program. All
references to sections shall be to sections of this Program.
11
<PAGE>
6.6. TAX AND OTHER LAWS. The Coca-Cola Company shall
have the right to withhold on or deduct from any benefits paid
under this Program to the extent that The Coca-Cola Company deems
that such withholding or deduction is necessary or appropriate to
satisfy any federal, state or other applicable law which might
require The Coca-Cola Company to withhold on or deduct from such
benefits.
6.7. LIFE INSURANCE POLICY. Each Eligible Employee who
desires to participate in the Program shall be required as a
condition to such participation to authorize The Coca-Cola
Company (as part of his or her election under Section 3) to
purchase a life insurance policy on his or her life and to agree
to comply with the requirements, if any, for the issuance of any
such policy.
6.8 AMENDMENT AND TERMINATION. The Coca-Cola Company
acting through the Committee reserves the right to amend this
Program from time to time and to terminate this Plan at any time
and, further, reserves the right (a) to reduce or disregard any
interest credits made (or otherwise called for under this
Program) at any time to any Account if the Committee acting in
its absolute discretion determines that such action seems
necessary or appropriate or in the best interest of The Coca-Cola
Company and (b) to accelerate the payment of any Account or
Accounts, or all Accounts, if the Committee acting in its
absolute discretion determines that such action seems necessary
or appropriate or in the best interest of The Coca-Cola Company.
THE COCA-COLA COMPANY
By: /s/ Douglas A. Saarel
12
<PAGE>
COMPENSATION DEFERRAL AND INVESTMENT PROGRAM
AMENDMENT NUMBER 1
The Compensation Deferral and Investment Program is hereby
amended, effective May 1, 1986, as follows:
1. Section 2.8, "Employer," is amended effective May 1,
1986 by adding the phrase "as of May 1, 1986" after the
word "means" and by adding the phrase "and any
successor company or companies thereto by which any
Participant may become employed and of which The
Coca-Cola Company or any of its subsidiaries may own at
least 25% of the voting stock of such successor
company" at the end of the Section.
2. Section 2.15, "Voluntary Severance Program," is amended
by deleting the phrase "before April 15, 1986,"
effective May 1, 1986.
3. Section 3, "Election Rules," is hereby modified by
inserting a new second sentence in the first paragraph,
as follows:
"If an employee becomes an Eligible Employee because of
a retroactive salary increase on or after April 1,
1986, such Eligible Employee may elect to participate
by completing an Election Form before such time as the
Committee may establish for returning the Form."
4. Section 6.2, "Beneficiary," is amended by deleting
subparagraph (a) in its entirety and by restructuring
subparagraph (b) as a complete and undesignated
sentence beginning with the word "Finally."
<PAGE>
AMENDMENT NUMBER TWO
COMPENSATION DEFERRAL & INVESTMENT PROGRAM
Pursuant to the power vested in the Committee to amend
or terminate The Coca-Cola Company Compensation Deferral &
Investment Program, the Committee hereby amends Section 6.8,
AMENDMENT AND TERMINATION, to more accurately reflect the
understanding which Participants have respecting the rights of
The Coca-Cola Company to amend or terminate such program, and
Section 6.8 as effective as of the date of this amendment shall
read as follows:
"6.8 AMENDMENT AND TERMINATION. The Committee may
amend this Program from time to time, may accelerate the
payment of any Account or Accounts, or all Accounts, if the
Committee acting in its absolute discretion determines that
such action seems necessary or appropriate or in the best
interest of The Coca-Cola Company, and may terminate this
Program at any time; provided, however,
(1) no such amendment, acceleration or
termination shall reduce the balance credited or the
interest to be credited to any Participant's Account
for any Program Year which has ended before the date
the Committee acts to adopt such amendment or to effect
such acceleration or termination,
(2) no action taken by the Committee after the
beginning of an Interest Credit Period to amend the
Program shall be effective for such period if such
amendment has the effect of reducing, or expressly
reduces, the Program Rate for such Interest Credit
Period,
(3) no action taken by the committee after the
beginning of an Interest Credit Period to effect any
such acceleration or termination shall be effective for
such period unless each Account affected by such
acceleration or termination receives the full interest
credit which such Account would have received for such
Interest Credit Period absent such acceleration or
termination, and
(4) if the Program Rate is set for an Interest
Credit Period at an effective annual rate which is
less than 8% per annum, this Program immediately
<PAGE>
and automatically shall terminate and each Participant's
Account promptly thereafter (A) shall be credited with
the interest at the Program Rate which would have been
credited for such Interest Credit Period absent such
termination and (B) shall be paid in full to the
Participant."
<PAGE>
AMENDMENT NUMBER THREE
TO
THE COCA-COLA COMPANY COMPENSATION DEFERRAL &
INVESTMENT PROGRAM
Pursuant to the power vested in the Committee to amend or
terminate The Coca-Cola Company Compensation Deferral &
Investment Program, the Committee hereby amends Section 2.7,
Employee, and Section 2.8, Employer, effective as of the Plan's
effective date, as follows:
"2.7. Employee -- means an employee of an employer or
any of its wholly owned subsidiaries.
2.8. Employer -- means
(1) The Coca-Cola Company,
(2) The Atlanta Coca-Cola Bottling Company,
(3) The Louisiana Coca-Cola Bottling Co. Limited,
(4) the Coca-Cola Bottling Company of Michigan,
(5) the Coca-Cola Bottling Company of New England,
(6) the Coca-Cola Bottling Company of California,
(7) the Coca-Cola Bottling Company of Ohio,
(8) Ore-Cal Coca-Cola Bottling Company,
(9) The Akron Coca-Cola Bottling Company,
(10) The Zanesville Coca-Cola Bottling Company,
(11) the Coca-Cola Export Corporation,
(12) the Belmont Springs Water Company, Inc.,
(13) The Entertainment Business Sector, Inc.,
(14) Hickory Publishing Company, Inc.
<PAGE>
Any successor to an Employer which is expressly identified as
such in this Section 2.8 automatically shall be treated as an
Employer under this Plan."
The Compensation Deferral & Investment Program is hereby amended
as follows:
Add the following sentence as the 2nd sentence in
Section 5.1(a)(2):
"If a Participant's employment as an Employee terminates
(other than by reason of death) after the first date such
Participant is eligible to receive an early retirement
benefit under the Employee Retirement Plan of The Coca-Cola
Company or under any successor to such plan or any
comparable plan maintained by his or her Employer, but
before the date he or she attains age 65, he or she may
elect to defer the commencement of payments under this
Section 5.1(a)(2) until a date no later than the 1st day of
the first month on or after the earlier of (i) his or her
death or (ii) his or her 65th birthday. Such election is
irrevocable and must be received in writing by the Committee
not later than 365 days prior to a Participant's date of
termination."
<PAGE>
AMENDMENT NUMBER FOUR
TO
THE COCA-COLA COMPANY COMPENSATION DEFERRAL
&
INVESTMENT PROGRAM
Pursuant to the power vested in The Coca-Cola Company
Compensation Deferral & Investment Program Committee (the
"Committee") to amend or terminate The Coca-Cola Company
Compensation Deferral & Investment Program (the "Program"),
the Committee hereby amends the Program as follows:
1. Effective January 1, 1995, Section 2.8, " Employer" is
amended by placing a comma after the word "Inc." in item (14)
thereof and adding the following new item (15) immediately
thereafter:
"(15) any corporation or other business organization in
which The Coca-Cola Company owns, directly or
indirectly, 10% or more of the voting stock or
capital."
2. Effective May 1, 1986, Section 5.1(a)(1), "General
Rule," is amended by deleting the phrase "and Section 5.3" at the
end of such subsection and by substituting in lieu thereof the
phrase ", Section 5.3 and Section 5.5."
3. Effective May 1, 1986, Section 5.1 (a)(2), "Post-
Retirement Installments," is amended by inserting "Except as
provided in Section 5.5," at the beginning of the first sentence
of such subsection.
4. Effective October 1, 1995, Section 5.1(a)(2), "Post-
Retirement Installments," is amended by deleting clause (i) in
its entirety and by inserting a new clause (i) in lieu thereof as
follows:
<PAGE>
"(i) shall begin as of the later of (A) the
first day of the first calendar month following
the date his or her employment as an Employee
terminates (if his or her employment terminates
on or after his or her Retirement Date) or (B)
the first date as of which he or she could elect
to begin receiving payment of his or her benefit
under the Employee Retirement Plan of The Coca-Cola
Company or under any comparable retirement plan
maintained by his or her Employer, and".
5. Effective May 1, 1986, Section 5.1(a)(3), "Pre-
Retirement Installments," is amended by deleting the phrase "or
Section 5.3." at the end of such subsection and by substituting
in lieu thereof the phrase ",Section 5.3 or Section 5.5."
6. Effective May 1, 1986, Section 5.2(a), "General Rule,"
is amended by deleting the first sentence in its entirety and by
substituting a new sentence in lieu thereof as follows:
"Except as provided in Section 5.5, if a
Participant's employment as an Employee terminates
for any reason (other than death) before his or
her Retirement Date, no payment shall (subject to
Section 5.1(a)(4)) be made to the Participant
under Section 5.1(a) after the date the
Participant's employment so terminates, and the
Participant's Account shall (subject to Section
5.2(b)) be paid in a lump sum as soon as
practicable after such date."
7. Effective November 1, 1995, Section 5.2(a), "General
Rule," is amended by deleting the second sentence in its entirety
and by substituting the following in lieu thereof:
"Such payment shall be made as of the first day of
a calendar month, and his or her Account shall
(subject to Section 6.8) receive interest credits
for the period beginning on the date the
Participant's employment terminates and ending on
the last day of the calendar month preceding
payment based on a 2% per annum rate."
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<PAGE>
8. Effective May 1, 1986, Section 5.2(c) is amended for
the purpose of clarification by renaming said Section as new
Section 5.5 to immediately follow Section 5.4, and by restating
said Section to read as follows:
"5.5. Involuntary Termination. Notwithstanding any
other provision in the Program to the contrary, if a
Participant's employment as an Employee ceases as a
result of involuntary termination, as determined by the
Committee acting in its complete discretion (other than
by reason of death), and the Participant has not made
an effective deferral election under Section 5.1(a)(2),
then no payment shall be made to the Participant under
Section 5.1(a) after his or her employment so
terminates, and the balance of his or her Account shall
be paid in level monthly installments which (i) shall
begin as of the first day of the first calendar month
which coincides with or follows the date the
Participant reaches age 65 or such other date as the
Committee may approve, in its discretion, and
(ii) shall end on the first day of the calendar month
which immediately precedes the date the Participant
reaches age 80. An Account (or the portion of an
Account) which is distributed under this Section 5.5
shall (subject to Section 6.8) receive interest rate
credits over the period for which such payments are
made under this Section 5.5 at the Program Rate in
effect on the date that such payments first begin, and
the level monthly payments under this Section 5.5 shall
be determined using such Program Rate."
9. Effective May 1, 1986, Section 5.3, "Death", is amended
by deleting said section in its entirety and by substituting a
new Section 5.3 as follows:
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<PAGE>
"5.3. DEATH.
(a) GENERAL RULES.
(1) PRE-RETIREMENT DATE. Except as provided
in Section 5.3(b), if a Participant dies before
his or her Retirement Date, payment of the
Participant's Account shall be made to his or
her Beneficiary under Section 5.1(a)(2) and, if
applicable, Section 5.1(a)(3) under the same rules
which would (absent Section 5.5) have been in
effect for the Participant if the Participant had
survived as an Employee until his or her Retirement
Date.
(2) POST-RETIREMENT DATE. Except as provided in
Section 5.3(b), if a Participant dies on or after his
or her Retirement Date, the Participant's Account shall
be paid to his or her Beneficiary under Section
5.1(a)(2) as such Account would (absent any deferral
election under Section 5.1(a)(2) or any deferral under
Section 5.5) have been paid to the Participant, using
the date the Participant died as the date the
Participant terminated his or her employment as an
Employee.
(b) SPECIAL RULES.
(1) CONTINUATION. If a Participant dies after
the payment of his or her Account has begun under
Section 5.1(a)(2), Section 5.2 or Section 5.5, or if
payment is to be made under Section 5.1(a)(4) or to be
made under Section 5.2(a) as a result of the
Participant's termination of employment before death,
payment shall be made to the Participant's Beneficiary
under the same terms and conditions as payment would
have been made to the Participant if he or she had
survived.
4
<PAGE>
(2) ESTATE. Notwithstanding any other provisions
to the contrary:
(A) If a Participant's Beneficiary is his or
her estate, the balance of the Account payable at
the Participant's death shall be paid to the
Participant's estate in a lump sum in accordance
with the rules set forth in Section 5.2(a) as soon
as practicable after the Participant's date of
death; and
(B) If a Beneficiary dies after an Account
becomes payable to the Beneficiary under this
Program, the balance of the Account otherwise
payable to such Beneficiary shall be paid to such
Beneficiary's estate in a lump sum in accordance
with the rules set forth in Section 5.2(a) as soon
as practicable after the Beneficiary's date of death."
10. Effective October 1, 1995, Section 5.5 is amended to
read as follows:
"5.5. Involuntary Termination. Notwithstanding
any other provision in this Program to the
contrary, a Participant shall have the right under
this Section 5.5 to elect that, if his or her
employment as an Employee ceases as a result of
involuntary termination as determined by the
Committee acting in its complete discretion,
before the Participant's Retirement Date (other
than by reason of death or as a result of gross
misconduct, as determined by the Committee acting
in its complete discretion), the payment of his or
her Account be deferred and made in accordance
with the rules under Section 5.1 in lieu of any
payment under Section 5.2, as if the Participant's
employment as an Employee had actually terminated
on his or her Retirement Date. Any such election
shall be irrevocable and must be received in
writing by the Committee on or before November 30,
1995 and before the Participant's employment as an
Employee actually terminates."
5
<PAGE>
11. Notwithstanding the restatement of Section 5.5 in item
10 of this Amendment, Section 5.5 as in effect on September 30,
1995 shall remain in effect through November 30, 1995 for any
Participant who fails to satisfy Section 5.5 as restated
effective October 1, 1995 by item 10 of this Amendment.
12. Effective May 1, 1986, Section 6.8 is amended by
deleting said Section in its entirety and by substituting a new
Section 6.8 as follows:
"6.8 AMENDMENT AND TERMINATION. The Coca-Cola Company,
by action of the Committee, reserves the right to amend
this Program from time to time and to terminate this
Program at any time and, further, reserves the right
(a) to reduce or disregard any interest credits made
(or otherwise called for under this Program) at
any time to any Account if the Committee acting in its
absolute discretion determines that such action seems
necessary or appropriate or in the best interest of
The Coca-Cola Company and (b) to accelerate the payment
of any Account or Accounts, or all Accounts, if the
Committee acting in its absolute discretion determines
that such action seems necessary or appropriate or in
the best interest of The Coca-Cola Company."
6
<PAGE>
IN WITNESS WHEREOF, the Compensation Deferral & Investment
Program Committee has caused this Amendment to the Program to be
executed by a duly authorized member of the Committee this 28 day
of November, 1995.
THE COCA-COLA COMPANY COMPENSATION
DEFERRAL & INVESTMENT PROGRAM
COMMITTEE
BY: /s/ MICHAEL W. WALTERS
ATTEST:
/s/ C. RON CHEELEY
Secretary
7
EXHIBIT 10.14
RESTRICTED STOCK AGREEMENT
Agreement made this 4th day of August, 1982, as amended
and restated on November 1, l983, February 18, 1987, November 30,
1988, and February 19, 1990, by and between The Coca-Cola
Company, a Delaware corporation (the "Company"), and Roberto C.
Goizueta of Atlanta, Georgia (the "Executive"):
WHEREAS, Executive is Chairman of the Board and Chief
Executive Officer of the Company and has for many years held
executive positions with the Company or a subsidiary of the
Company; and
WHEREAS, the Company has determined that it is in the
best interests of the Company and its stockholders to ensure that
the Chief Executive Officer of the Company has a significant
ownership interest in the Company;
NOW, THEREFORE, in order to effectuate their mutual
desires, purposes and intentions, the Company and the Executive
agree as follows:
1. Subject to the provisions of this Agreement, the Company
will cause to be issued in the name of the Executive Eighteen
Thousand (18,000) shares of Common Stock, par value $1, ("Stock")
(54,000 as adjusted for the three for one stock split on June 16,
1986), of the Company (the "Restricted Shares").
2. The Restricted Shares shall be initially delivered to the
Company, and the Company shall thereafter deliver the Restricted
Shares to the Executive upon the terms and conditions hereinafter
set forth.
The Restricted Shares will be delivered to the Executive,
or, in the case of his death, the beneficiary designated by the
Executive in a letter to the Company, or, if such beneficiary
is deceased or if no beneficiary has been designated, the
executor or administrator of his estate, on the business day
(the "Delivery Date") following the date on which the Executive
"retires", as hereinafter defined, from employment with the
Company or a subsidiary of the Company or becomes permanently
disabled or dies or the date on which a "Change in Control"
occurs. "Retires" means the Executive's voluntarily leaving
the employ of the Company or a subsidiary of the Company on a
date on which he is eligible for an immediately payable benefit
pursuant to the Company's Supplemental Retirement Plan as in
effect on November 20, 1988. A "Change in Control" 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
<PAGE>
time as (i) any "person" (as that term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) directly
or indirectly, of securities representing 20% or more of the
combined voting power for election of directors of the then
outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or less,
individuals who at the beginning of such period constituted the
Board of Directors of the Company cease, for any reason, to
constitute at least a majority of the Board of Directors, unless
the election or nomination for election of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period; (iii) the shareholders of the Company approve any merger
or consolidation as a 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 time
as a Change in Control would otherwise be deemed to have
occurred, the Board of Directors determines otherwise.
3. The Restricted Shares shall only be delivered to the
Executive, or, in the case of his death, the beneficiary
designated by the Executive in a letter to the Company, or, if
such beneficiary is deceased or if no beneficiary has been
designated, the executor or administrator of his estate, on the
Delivery Date if the Executive, on the day on which he retires
from employment with the Company or a subsidiary of the Company
or becomes permanently disabled or dies, or upon a Change in
Control, is, and has continuously been since August 4, 1982,
employed by the Company or a subsidiary of the Company.
4. Until the Restricted Shares are delivered in accordance
with the terms hereof, such shares shall not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of. The
restrictions on disposition of such shares as set forth in
paragraphs 2, 3 and 4 are hereinafter referred to as the
"Restrictions."
5. Until the Restricted Shares are delivered in accordance
with the terms hereof, each certificate representing the
Restricted Shares shall have imprinted or stamped thereon an
appropriate legend describing the Restrictions contained in this
Agreement with respect to the Restricted Shares. The Executive
shall deposit with the Company stock powers or other instruments
<PAGE>
of transfer, appropriately endorsed in blank, corresponding to
each certificate for Restricted Shares.
6. Except for the Restrictions on the Restricted Shares,
from the date of this Agreement, the Executive shall, with
respect to all the Restricted Shares, have all the rights of a
stockholder of the Company, including the right to vote the
Restricted Shares and to receive all dividends and other
distributions paid with respect to such shares. In the event
that the Restricted Shares, as a result of a stock split or stock
dividend or combination of shares or any other change or exchange
for other securities, by reclassification, reorganization or
otherwise, are increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation, the
number of Restricted Shares shall be appropriately adjusted to
reflect such change. If any such adjustment shall result in a
fractional share, such fraction shall be disregarded.
7. Upon the death, disability or retirement of the
Executive, or upon a Change in Control, the Restrictions shall
lapse.
8. In the event that the Executive shall cease to be
employed by the Company for any reason other than death,
disability or retirement prior to a Change in Control or shall
attempt to dispose of any Restricted Shares in violation of the
provisions of paragraph 4, the Restricted Shares shall
immediately be transferred back to and become the property of the
Company.
9. On the business day following the Delivery Date, the
Company shall pay the Executive, or, in the case of his death,
the beneficiary designated by the Executive in a letter to the
Company, or, if such beneficiary is deceased or if no beneficiary
has been designated, the executor or administrator of his estate,
cash in an amount not in excess of the Federal, state and local
taxes arising as a result of the fair market value of such
Restricted Shares and the cash amount being included in income
for Federal, state and local income tax purposes. Any such
amount shall be reduced by any taxes required to be withheld with
respect to the Restricted Shares and such cash amount. The fair
market value of such Restricted Shares shall be the average of
the high and low trading prices for the Common Stock of the
Company on The New York Stock Exchange, as reported in the
consolidated transaction reporting system on the Delivery Date,
or, if such Common Stock was not traded on that date, the most
recent previous date on which such Common Stock was traded.
10. Nothing in this Agreement shall be construed to
constitute or be evidence of an agreement or understanding,
express or implied, on the part of the Company to employ or
retain the Executive for any specific period of time.
<PAGE>
11. If the Delivery Date falls on a weekend or a legal
holiday, the delivery of Restricted Shares pursuant to
paragraph 2 and the payment of cash pursuant to paragraph 9 shall
be made on the next succeeding business day.
IN WITNESS WHEREOF, the undersigned have each caused this
Agreement, as amended, to be executed on their respective
behalfs, as of the 19 day of February, 1990.
THE COCA-COLA COMPANY
By: /s/ A. Garth Hamby
A. Garth Hamby
Executive Vice President
/s/ Roberto C. Goizueta
Roberto C. Goizueta
EXHIBIT 10.15
INCENTIVE UNIT AGREEMENT
This Agreement, made this 29th day of November, 1988, as
amended and restated on February 19, 1990, by and between The
Coca-Cola Company, a Delaware corporation (the "Company") and
Roberto C. Goizueta, an individual resident of the State of
Georgia (the "Officer").
WHEREAS, the Officer is the Chairman of the Board and the
Chief Executive Officer of the Company and has rendered and is
rendering extremely valuable services to the Company;
WHEREAS, the Company wishes to compensate the Officer for
his innovative leadership which he has given the Company in
unsettled times;
WHEREAS, the Company wishes to provide the Officer with
financial security with regard to other benefits which the
Officer has already earned but which might prove, under certain
circumstances, difficult for the Officer to obtain;
NOW THEREFORE, the parties, intending to be legally bound
hereby and in consideration of the agreements set forth herein
and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, agree as follows:
1. AWARD OF INCENTIVE UNITS. The Company hereby awards
to the Officer two hundred thousand (200,000) Incentive Units,
the terms, values and vesting schedules of which are hereinafter
described, subject to the conditions as hereinafter set forth.
The Value of each Incentive Unit shall be a dollar amount which
shall be the Fair Market Value (as hereinafter defined) of a
share of the Company's common stock, $1 par value, ("Stock") on
the Calculation Date (as hereinafter defined). The Value of the
Incentive Units shall be paid in cash only. The Incentive Units
shall not provide the Officer with any interest in, or right to
acquire, Stock or any other equity security of the Company, and
the Officer shall not possess any voting or other rights
associated with beneficial ownership of the Company's Stock or
other equity securities by virtue of having been awarded the
Incentive Units. Fair Market Value shall mean the closing price
of a share of Stock on the Calculation Date (or the first
preceding trading day if the Calculation Date is not a trading
day) as reported on the New York Stock Exchange--Composite
Transactions listing for such day.
2. VESTING OF INCENTIVE UNITS. The Officer shall have
no interest in any Incentive Unit until such unit is vested and
such unvested units shall not be included in the Value of the
Incentive Units on the Calculation Date. The Incentive Units
shall vest in ninety-six equal monthly installments on the first
day of each of the ninety-six calendar months beginning on
<PAGE>
December 1, 1988, provided, however, that all remaining unvested
Incentive Units shall vest immediately upon the Officer's death,
disability, or upon a "Change in Control" as hereinafter defined.
Any Incentive Units that are unvested on the date of the
Officer's Retirement (as hereinafter defined) shall remain
unvested.
3. CALCULATION DATES FOR VALUE OF INCENTIVE UNITS. The
Calculation Date for the Value of the Incentive Units shall be
the date of the first to occur of the Officer's death, disability
(as such disability shall be determined by the Compensation
Committee), Retirement or the date of a Change in Control.
"Retirement", as used herein, shall mean the Officer's
termination of employment on a date which is on or after the
earliest date on which the Officer would be eligible for an
immediately payable benefit pursuant to the Company's
Supplemental Retirement Plan as in effect on the date hereof. A
"Change in Control" 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
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 time as a
Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
<PAGE>
4. CASH AWARD. On the Payment Date (as described
herein), the Company shall pay the Officer, or, in the case of
his death, the beneficiary designated by the Officer in a letter
to the Company or, if such beneficiary is deceased or if no
beneficiary has been designated, the executor or administrator of
his estate, cash in an amount equal to but not in excess of the
Federal, state and local income taxes arising as a result of the
receipt of the Value of the Incentive Units on the Calculation
Date.
5. PAYMENT DATES. Payment for the Value of the Incentive
Units will be made promptly after the Calculation Date, but in
any event no later than 20 days thereafter. Payment shall be
made to the Officer, or, in the case of his death, the
beneficiary designated by the Officer in a letter to the Company,
or, if such beneficiary is deceased or if no beneficiary has been
designated, the executor or administrator of his estate.
6. NONTRANSFERABILITY OF INCENTIVE UNITS. Incentive
Units shall not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of at any time.
7. ADJUSTMENT IN THE NUMBER OF INCENTIVE UNITS AWARDED.
In the event there is any change in the Stock of the Company
through the declaration of stock dividends, through stock splits
or through recapitalization or merger or consolidation or
combination of shares or otherwise, the number of Incentive Units
awarded hereunder shall be adjusted appropriately.
8. ENTIRE AGREEMENT, AMENDMENT, ETC. This document
constitutes the entire agreement between the Officer and the
Company with respect to the Incentive Units. This agreement may
not be modified or amended without the prior written consent of
the parties hereto.
9. GOVERNING LAW. This Agreement and all determinations
made and actions taken pursuant hereto shall be governed by the
laws of the State of Georgia and construed in accordance
therewith.
ROBERTO C. GOIZUETA THE COCA-COLA COMPANY
/s/ Roberto C. Goizueta By: /s/ A. Garth Hamby
Title: Executive Vice President
EXHIBIT 10.16
PLAN INSTRUMENT
THE COCA-COLA COMPANY
SPECIAL MEDICAL INSURANCE PLAN
By action of its Board of Directors on May 4, 1982, The
Coca-Cola Company (hereinafter referred to as the Company)
adopted The Coca-Cola Company Special Medical Insurance Plan
for the purpose of providing eligible employees and their
covered dependents with benefits for expenses related to
hospital, surgical, medical, dental and vision care.
Subsidiaries of the Company, whether directly or indirectly
owned, may become Participating Subsidiaries in said Plan
upon approval by Officers of the Company. The Company and
each Participating Subsidiary will be known as an Employer
under said Plan.
In accordance with the provisions of the Employee Retirement
Income Security Act of 1974 (hereinafter referred to as the
Act) the Company does hereby establish the Plan designated
above (hereinafter referred to as the Plan), identified as
Plan Number 549, with Employer Identification Number
58-0628465.
The Company shall be the Plan Administrator as referred to in
the Act.
The Company shall be the named fiduciary with full authority
to control and manage the operation and administration of the
Plan, and shall be the agent for service of legal process in
addition to the Insurance Company named in the Group Policy.
The Plan shall be administered directly by the Plan
Administrator. Benefits provided under the Plan shall be
provided through the purchase and maintenance of one or more
Group Policies which the Officers of the Company are
authorized to enter into with respect to this Plan. The
Officers of the Company may terminate or enter into Group
Policies or agreements with Insurance Companies, or otherwise
provide for payment of benefits under the Plan.
Plan requirements respecting eligibility for participation
and benefits shall be the requirements as to employees to be
insured as set forth in the Group Policy. The persons
entitled to benefits under the Plan are the employees insured
as set forth in the Group Policy and their Qualified
Dependents covered in accordance with the terms, provisions
and conditions of the Group Policy. The benefits under the
Plan are those provided by the Group Policy in accordance
with the terms, provisions and conditions of the Group
Policy. The Group Policy specifies the Employers whose
employees are covered by the Plan.
It is the intent of this Plan Instrument and it is the
funding policy of the that all Plan benefits are to
be provided under and in accordance with the provisions of
the Group Policy, which the Company shall purchase and
maintain on behalf of the Plan; provided, however that any
payments made to or credits to the Company in accordance with
the experience rating provisions, if any, of the Group Policy
shall be the separate property of the Company.
1
<PAGE>
Whether or not contributions are to be made by the employees
to the Employer for the benefits and the amount of any such
contribution is subject to change by the Company.
Claims for benefits under the Plan are to be submitted to the
Insurance Company as provided in the Group Policy. Payment
of claims under the Plan will be made by the Insurance
Company as provided in the Group Policy. A claim which is
denied by the Insurance Company shall be reviewed by said
Insurance Company in accordance with the procedure as
provided in the Group Policy which is not inconsistent with
claims procedure regulations in the Act as then in effect,
and the decision of the Insurance Company on any claim shall
be final. With respect to the Act on claims procedure
regulations, the Insurance Company shall be the appropriate
named fiduciary of the Plan for the purpose of such review
and decision thereon. The Insurance Company's decision on
any claim shall be final.
The Plan years coincide with the policy years of the Group
Policy.
The Company, by action of its Officers, shall have the right
to terminate, suspend, withdraw, amend or modify the Plan in
whole or in part at any time, but no amendment to the benefit
or other provisions of the Group Policy may be made without
the approval of the Insurance Company. The Company shall
make any amendments to the Plan which may be needed for
compliance with the Act.
This Plan Instrument shall be effective as of July 1, 1982.
Dated at Atlanta, Georgia THE COCA-COLA COMPANY
This 1st day of August, 1989 By: /s/ D. A. Saarel
Official Title: Senior Vice President
Attest: /s/ G. T. Allan
2
<PAGE>
Amendment No. 1
SPECIAL MEDICAL INSURANCE PLAN
Effective January 1, 1989, the above captioned Plan is
amended as follows:
Delete the next to last paragraph in its entirety and insert
the following:
The Company, by action of its
Officers, shall have the right to
terminate, suspend, withdraw, amend
or modify the Plan in whole or in
part at any time, but no amendment to
the benefit or other provisions of
the Agreement may be made without the
approval of the Claims Services
Provider. However, the Company expects
to continue the Plan indefinitely.
The Company shall make any amendments to
the Plan which may be needed for
compliance with the Act.
The Assistant Vice President and Director Compensation and
Benefits or his designee is authorized to perform all
necessary acts to effectuate this amendment.
/s/ D. A. Saarel August 1, 1989
D. A. Saarel Date
Senior Vice President
Human Resources Division
3
<PAGE>
56019-08/31/83
Application is Hereby Made to
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
by THE COCA-COLA COMPANY
whose Main Office Address is ATLANTA, GEORGIA
for Group Policy No GO56019
Said Group Policy is hereby approved and the terms thereof
are hereby accepted.
This application is executed in duplicate, one counterpart
being attached to said Policy and the other being
returned to The Prudential Insurance Company of America.
It is agreed that this Application supersedes any previous
application for the said Group Policy.
THE COCA-COLA COMPANY
(Full or Corporate Name
of Applicant)
Dated at Atlanta, Georgia By Senior Vice President
(Signature and Title)
On ----------, 19--
Witness --------------------
To be signed by Resident Agent where required by law)
ORD 18054-A-ED 5-48 THIS COPY IS TO REMAIN ATTACHED TO THE POLICY
New Issue
Printed in U.S.A.
by Prudential Press
<PAGE>
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
GROUP POLICY SCHEDULE
POLICY DATE
July 1, 1982.
POLICY ANNIVERSARIES
July 1 of each year, beginning in 1987.
PREMIUM DUE DATES
The Policy Date, and thereafter the first day of each month
beginning with August, 1982.
GOVERNING JURISDICTION
State of Georgia
EMPLOYMENT WAITING PERIOD
The period of continuous service on a full-time basis with
the Employer as specified in the Coverage Schedule.
Policyholder
THE COCA-COLA COMPANY
Group Policy
GO-56019
PARTICIPATING SUBSIDIARIES
The Coca-Cola Export Corporation
Coca-Cola Interamerican Corporation Coca-Cola Enterprises Inc.
Caribbean Refrescos, Inc.
MINIMUM PARTICIPATION NUMBER
25
2
<PAGE>
INCLUDED EMPLOYERS PROVISIONS
The Policyholder and any Participating Subsidiary
are Employers included under the Group Policy.
"Participating Subsidiaries" means any subsidiary
owned directly or indirectly by the Policyholder
which has elected to be an included Employer in the
Group Policy with the approval of the Policyholder
and which is listed under "Participating
Subsidiaries", in the Group Policy Schedule.
Any individual employed by more than one included
Employer shall be considered as being employed only
by one Employer, and his service with the other
Employer or Employers shall be considered as
service with that one Employer.
If any Employer ceases to be an included Employer,
the Group Policy will be considered as terminating
on the date of such cessation with respect to all
Employees of that Employer, who on the next day are
not Employees of another included Employer within
the eligible classes under the Group Policy. The
Policyholder shall notify Prudential, in writing,
when a Participating Subsidiary ceases to be owned
directly or indirectly by the Policyholder.
3
<PAGE>
DEFINITIONS
ACTIVE WORK REQUIREMENT: A requirement that an Employee be
actively at work on a full-time basis at the business
establishment of the Employer or at other locations to which
the Employer's business requires the Employee to travel.
BENEFIT YEAR: Means a calendar year (January 1 through
December 31).
CLOSE RELATIVE: Means the Employee, his spouse, and a child,
brother, sister or parent of the Employee or his spouse.
COMPANY: When the term "the Company" is used it means The
Coca-Cola Company, One Coca-Cola Plaza, N.W., Atlanta,
Georgia 30313.
COVERAGE CLASSES UNDER A COVERAGE SCHEDULE: The Employees of
the Employer who comprise the classes to which the coverage
provided in that Schedule applies.
COVERED INDIVIDUAL UNDER A COVERAGE: An employee who is
covered for Employee Insurance; a Qualified Dependent with
respect to whom an Employee is insured for Dependents
Insurance.
DEPENDENTS INSURANCE: Insurance pertaining to the person of
a dependent. Under such insurance, a charge will be
considered actually made to an Employee if actually made to
his Qualified Dependent.
EMPLOYEE: When the term "Employee" is used, it means an
Executive of the Company as determined by the Policyholder.
EMPLOYEE INSURANCE: Insurance under a coverage pertaining to
the person of an Employee.
EMPLOYER: When the term "the Employer" is used, it means
collectively all Employers included under the Group Policy.
FULL MEDICARE COVERAGE: Means coverage for all the benefits
provided under Medicare including benefits provided under the
voluntary program established by Medicare.
GROUP POLICY: Means the Master Contract between the
Policyholder and Prudential as identified in the Group Policy
Schedules and is the legal instrument governing all benefits.
PARTICIPATING SUBSIDIARY: Any Subsidiary owned directly or
indirectly by the Policyholder which has elected to be an
included Employer in the Group Policy with approval of the
Policyholder and which is listed under "Participating
Subsidiaries" in the Group Policy Schedule.
4
<PAGE>
PHYSICIAN: Means a physician licensed to practice medicine
and perform surgery. Services which would be covered if
rendered by a physician, as defined herein, shall also be
covered when rendered by a duly licensed midwife practicing
within an acceptable Birthing Center as defined by the Plan,
doctor of dental surgery (D.D.S.), doctor of chiropractic, or
a duly licensed doctor of surgical chiropody or podiatry
(D.S.C.), within their specialty, or an acupuncturist who is
certified or licensed as required by the jurisdiction in
which he or she performs his or her practice. The definition
is further contingent upon and subject to standards
established by Prudential.
PLAN: When the term "the Plan" is used, it means the
Supplemental Medical Expense Plan of The Coca-Cola Company
and its Participating Subsidiaries.
POLICYHOLDER: The Coca-Cola Company, One Coca-Cola Plaza,
N.W., Atlanta, Georgia 30313.
PRUDENTIAL: The Prudential Insurance Company of America,
Southern Group Operations, 2849 Paces Ferry Road, Suite 400,
Atlanta, Georgia 30339.
QUALIFIED DEPENDENT: An Employee's spouse or unmarried
child, excluding in any case -
(1) a person after that person has ceased to be a
spouse of the Employee by reason of divorce or
annulment;
(2) a child nineteen or more years of age unless
(a) wholly dependent upon the Employee for support,
(b) a registered student in regular, full-time
attendance at an accredited secondary school,
college, university, or vocational or trade school,
(c) less than twenty-four years of age and
(d) enrolled by the Employer with the Employer
under the Plan as a student with the Employee
making any additional required contributions;
(3) a spouse or child on active duty in any military,
naval or air force of any country; and
(4) a spouse or child who is insured for Employee
Insurance under the Group Policy.
An Employee's children include step-children, legally adopted
children and foster children, provided they are dependent
upon the Employee for support and maintenance.
A child shall not be a qualified dependent of more than one
Employee. If more than one Employee would otherwise be
insured under the Group Policy with respect to a child as a
qualified dependent, the child will be considered to be the
qualified dependent only of that one of such Employees with
the lower case deductible under the Major Medical Expense
Insurance of the Plan according to the Policyholder's
records.
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Contract-Incontestability of Policy" of the General
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Contract-Incontestability of Policy" of the General
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Contract-Incontestability of Policy" of the General
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Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
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Contract-Incontestability of Policy" of the General
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SCHEDULE OF PREMIUM RATES
CLASSES OF EMPLOYEES
TO WHICH THIS SCHEDULE APPLIES:
Employees as specified in the Coverage Classes under the
Coverage Schedules.
APPLICABLE INSURANCE
Employee and Dependent Medical
MONTHLY RATES
EMPLOYEE INSURANCE DEPENDENT INSURANCE
$666.66 per Employee $333.34 per Employee with
one Dependent
$500.00 per Employee with
two or more Dependents
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ELIGIBILITY
Eligible Classes: All Employees of the Employer who are
within the Coverage Classes under the Coverage Schedules.
BECOMING INSURED FOR EMPLOYEE INSURANCE
This Section applies separately to the Employee Insurance
under each coverage.
The Employee shall be insured from the first day, on or after
his date of eligibility, on which he is included in a
Coverage Class for the insurance and the following
requirements are simultaneously satisfied:
(1) He has requested it of the Employer on a form
satisfactory to Prudential and has agreed to
make the required contributions.
(2) If any evidence of insurability requirement
applies, he has complied with that requirement.
He will be considered as having complied on the
first day of the month next following the month
in which Prudential determines the evidence is
satisfactory.
(3) He is complying with the Active Work Requirement
of the Definitions.
BECOMING INSURED FOR DEPENDENTS INSURANCE
This section (other than requirement (1) below) applies
separately to each Qualified Dependent an Employee has or
acquires.
The Employee shall be insured with respect to a Qualified
Dependent from the first day, on or after the Employee's date
of eligibility, as specified in the Coverage Schedule, on
which the following requirements are simultaneously
satisfied:
(1) The Employee has requested it of the Employer on
a form satisfactory to Prudential and has agreed
to make the required contributions.
(2) The Employee is included in the Coverage Classes.
(3) If any evidence of insurability requirement
applies with respect to the Qualified Dependent,
the Employee has complied with that requirement.
An Employee will be considered as having complied
on the first day of the month next following the
month in which Prudential determines the evidence
to be satisfactory.
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(4) The insurance with respect to the Qualified
Dependent is not being deferred in accordance
with the section Deferment of Effective Date
of Insurance.
EVIDENCE OF INSURABILITY REQUIREMENTS FOR EMPLOYEE INSURANCE
An Employee must furnish evidence of his insurability
satisfactory to Prudential in order to become insured for
Employee Insurance under a coverage, in any of the following
situations:
(1) LATE PARTICIPATION UNDER CONTRIBUTORY INSURANCE -
He does not satisfy the requirement (1) of Becoming
Insured For Employee Insurance before the end of the
month following his date of eligibility.
(2) FAILURE TO MAKE CONTRIBUTION - He requests the
insurance after previous termination of any
insurance under the Group Policy because of
failure to make a required contribution.
(3) PREVIOUS EVIDENCE REQUIREMENT - He has not
satisfied a previous requirement that evidence of
his insurability be furnished in order for him to
become insured under a coverage of the Group Policy
or any other Prudential group policy which provides
or provided insurance for Employees of the Employer.
EVIDENCE OF INSURABILITY REQUIREMENTS FOR DEPENDENTS
INSURANCE
An Employee must furnish evidence of insurability of a
Qualified Dependent satisfactory to Prudential in order to
become insured with respect to that Dependent, in any of the
situations listed below. These requirements shall not apply
to any Qualified Dependent acquired after the Employee
becomes insured for Dependents Insurance, provided the
Employee is making the required contributions for Dependents
Insurance.
(1) LATE PARTICIPATION - The Employee does not satisfy
requirement (1) of Becoming Insured for Dependents
Insurance before the end of the calendar month
immediately following the first day, on or after his
date of eligibility, on which he has a Qualified
Dependent.
(2) FAILURE TO MAKE CONTRIBUTION - The Employee
requests the insurance after previous termination of
any insurance under the Plan because of failure to
make a required contribution.
(3) PREVIOUS EVIDENCE REQUIREMENT - Neither the
Employee nor the Dependent has satisfied a previous
requirement that evidence of the Dependent's
insurability be furnished in order for the Dependent
to become insured, as a Dependent or Employee, under
a coverage of the Group Policy or any other
Prudential group policy which provides or provided
insurance for Employees of the Employer.
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NEWBORN CHILD PROVISIONS
These provisions modify the Group Policy's provisions for
insurance which provides benefits for expenses of a
dependent's medical care under a coverage, solely with
respect to a child who is born to an Employee while the
Employee is insured for Employee Insurance under a coverage
and while the child is not otherwise a covered individual
under the coverage in accordance with the terms of the Group
Policy other than these Newborn Child Provisions.
Such a child is a covered individual under the coverage from
the moment of birth. However, any coverage that a child has
solely by reason of these Newborn Child Provisions is hereby
modified to provide that no benefits will be payable
thereunder with respect to any charge incurred for a service
or supply furnished for the medical care of the child after
the end of the thirty-one day period immediately following
his birth.
The requirement of the Group Policy that the Employee must
furnish evidence of the insurability of a qualified dependent
satisfactory to the Prudential in order to become insured
with respect to that dependent shall not apply to a child who
becomes a covered individual from the moment of birth by
reason of these Newborn Child Provisions. Nor, shall such
requirement be a condition for any continuance of the child's
coverage beyond the thirty-one day period immediately
following the child's birth, if before the end of that
period, the Employee has requested such dependent's insurance
on a form satisfactory to Prudential and has agreed to make
the contributions required for such insurance. The
Employee's failure to make when due any contribution required
of him for dependents insurance shall in no event effect
termination of the newborn child's coverage under the Group
Policy prior to the end of that thirty-one day period.
CHANGES OF EMPLOYEE BENEFITS
The Employee Insurance benefits for which an Employee is
insured will be those for his classification under the
applicable Coverage Schedule unless otherwise determined in
accordance with this Section.
This Section applies unless the Coverage Schedule indicates
to the contrary.
When an Employee's classification changes or the benefits
applicable to his classification are changed by an amendment
to the Group Policy, the change will not result in an
adjustment of the Employee's benefits (including the amount)
until the first day, on or after the date of the change, on
which he is complying with the active work requirement of the
General Definitions. His benefits will be adjusted on that
day to those then applicable to his classification.
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CHANGES OF DEPENDENTS BENEFITS
The Dependents Insurance benefits for which an Employee is
insured will be those for his classification under the
applicable Coverage Schedule unless otherwise determined in
accordance with this Section.
This Section applies unless the Coverage Schedule indicated
to the contrary.
When an Employee's classification changes or the benefits
applicable to his classification are changed by an amendment
to the Group Policy, the change will not result in an
adjustment of the Employee's benefits with respect to a
Qualified Dependent (including the amount) until the first
day, on or after the date of the change, on which the
adjustment for that dependent is not being deferred in
accordance with the Section Deferment of Effective Date of
Insurance. Such benefits will be adjusted on that day to
those then applicable to the Employee's classification.
TERMINATION OF EMPLOYEE INSURANCE
The Employee Insurance of an Employee under a coverage will
automatically terminate at the end of the month when:
(1) he ceases to be a member of the Coverage Classes
for the insurance because of termination of
employment (described below) or for any other
reason, or
(2) his class is no longer included in the Coverage
Classes for the insurance, or
(3) the provisions of the Group Policy for the
insurance terminate.
(4) any contribution required of him for any insurance
under the Group Policy is not made when due
Termination of Employment - For insurance purposes, an
Employee's employment will be considered to terminate when he
no longer actively engaged in work on a full-time basis for
the Employer. However, if absence from such full-time work
is then of type set forth in the Coverage Schedule for the
insurance, the Employer may, without discrimination among
persons in like circumstances, consider the Employee as not
having terminated his employment for insurance purposes and,
while such absence is of any such type, as continuing to be a
member of the Coverage Classes for the insurance up to any
applicable time limit in the Coverage Schedule.
TERMINATION OF DEPENDENTS INSURANCE
An Employee's Dependents Coverage will terminate under the
circumstance described in the section "Termination of
Employee Coverage" as though that section's reference to
"Employee Coverage" were a reference to "Dependents
Coverage".
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Any provision which would continue coverage following the
Employee's death will be specified in the Coverage Schedule.
Payment of benefits under Dependents Coverage continued after
the Employee's death will be made to his spouse if living, to
such spouse's estate if the spouse survived the Employee's
children, and otherwise to the person or institution
appearing to the Employer to have assumed the principal
support of such children.
All of the Dependents Coverage with respect to a particular
Qualified Dependent will automatically terminate at the end
of the month, if that Dependent ceases to be a Qualified
Dependent, when the Employee ceases to be covered for
Employee Coverage, or when the Employee ceases to make the
Employer the payments required hereunder for such coverage.
Anything in these provision to the contrary notwithstanding,
the coverage applicable to any qualified Dependent included
in the Definitions may be continued after age twenty-four for
a period not exceeding the length of his period of service
performed prior to age twenty-four in the Armed Forces of the
United States of America provided he continues to meet the
other provisions as Qualified Dependent.
OPTION TO CONTINUE COVERAGE OF DEPENDENT CHILD INCAPACITATED
WHEN SPECIFIED AGE LIMIT FOR CHILDREN IS ATTAINED - if
dependent child is mentally or physically incapable of
earning of living on the date coverage under the Group Policy
with respect to such child would terminate due to attainment
of the specified age limit for children, and if within
thirty-one days of such date the Employer receives due proof
of such incapacity, then such specified age limit shall not
operate to terminate such coverage under the Plan with
respect to such child so long as such child remains in such
condition. This provision does not waive, alter or extend in
any respect, other than as stated above, any of the
provisions, conditions, limitations and exceptions of the
Plan.
MODIFICATIONS OF TERMINATION PROVISIONS TO
PROVIDE CONTINUATION OF INSURANCE AT THE
EMPLOYEE'S OR THE DEPENDENTS OPTION
INSURANCE TO WHICH THESE MODIFICATIONS APPLY: All health
care expense insurance under the Group Policy.
WHEN APPLICABLE: When such insurance otherwise would have
ended in accordance with "Termination of Employee Insurance"
and/or "Termination of Dependents Insurance" of the Group
Policy.
CONDITIONS FOR CONTINUING EMPLOYEE AND DEPENDENTS INSURANCE:
The Employee has the right to continue insurance if insurance
would have been ended because:
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(1) the Employee's employment ended for a reason
other than gross misconduct; or
(2) the Employee's work hours were reduced.
CONDITIONS FOR CONTINUING DEPENDENTS INSURANCE: A qualified
dependent has the right to continue insurance if insurance
for that dependent would have ended:
(1) because the Employee's employment ended for a
reason other than gross misconduct; or
(2) because the Employee's work hours were reduced; or
(3) at the Employee's death; or
(4) because the Employee became entitled to Medicare
benefits. "Medicare" means Title XVIII (Health
Insurance for the Aged) of the United States
Social Security Act, as amended from time to
time; or
(5) in the case of an Employee's spouse, when the
spouse ceased to be a qualified dependent as a
result of divorce or legal separation; or
(6) in the case of an Employee's qualified dependent
child, when the child ceased to be a qualified
dependent under the provisions of the Group Policy.
NOTICE: This applies if dependents insurance for a qualified
dependent would have ended due to an event shown in (5) or
(6) above. If a person wants to continue the insurance,
written notice of the event must be given to the Policyholder
within 60 days after the event shown in (5) or (6) above.
CONTINUATION: The Policyholder will give a written election
notice of the right to continue the insurance. Such notice
will state the amount of the payment, if any, required for
the continued insurance. If a person wants to continue the
insurance, the election notice must be completed and returned
to the Policyholder, along with any required first payment,
within 60 days of the later of: (1) the date the insurance
would otherwise have ended; or (2) the date of the notice
informing the person of the right to continue. But in no
event may election be made more than 90 days (150 days if the
insurance is being continued due to an event shown in (5) or
(6) above) after the date the insurance would otherwise have
ended. If this is done, the insurance will be continued from
the date it would have ended until the first of the following
occurs:
(1) If the insurance is being continued due to the
Employee's end of employment or a reduction of
the Employee's work hours, the day 18 months
from the date the insurance would have ended.
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(2) If the insurance is being continued due to:
(a) the Employee's death; or (b) the Employee's
entitlement to Medical benefits; or (c) the
Employee's divorce or legal separation from the
Employee's spouse; or (d) an Employee's qualified
dependent child ceasing to be eligible under the
provisions of the Group Policy, the day 36 months
from the date the insurance would have ended.
(3) The day the person becomes covered under any
other health plan for persons in a group, on an
insured or uninsured basis.
(4) If the next payment is not made when due, the
end of the last period for which any required
payment was made when due.
(5) The day the person becomes entitled to
Medicare benefits.
(6) The provisions of the Group Policy for such
insurance end.
While Employee Insurance is continued according to the above
modifications, all other terms of the Group Policy will
apply, except the "Changes of Employee Benefits" section of
the Insurance Plan Provision shall not apply.
While Dependents Insurance is continued according to the
above modifications, all other terms of the Group Policy will
apply, except that benefits under the health care expense
insurance will be paid to the person who elected the
continuation right. If the person who elected the
continuation right is not living, the following will apply:
(1) If the Employee elected the continuation right,
benefits will be paid to:
(a) the Employee's spouse, if living; or
(b) the estate of the Employee's spouse,
if the Employee's spouse is not living
but survived the qualified dependent
children; or
(c) the person or institution appearing
to Prudential to have assumed the main
support of the Employee's qualified
dependent children, if neither (a)
nor (b) applies.
(2) If the Employee's spouse elected the continuation
right, benefits will be paid to:
(a) estate of the Employee's spouse, if the
Employee's spouse survived the Employee's
qualified dependent children; or
(b) the person or institution appearing to
Prudential to have assumed the main
support of the Employee's qualified
dependent children, if (a) does not apply.
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(3) If an Employee's qualified dependent child elected
the continuation right, benefits will be paid to
that qualified dependent child's estate.
If an amount is so paid, Prudential will not have to pay that
part of the insurance again.
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Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
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Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
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Contract-Incontestability of Policy" of the General
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PROVISION FOR COORDINATION
OF BENEFITS UNDER THE PLAN WITH OTHER BENEFITS
A. BENEFITS SUBJECT TO THIS PROVISION - All of the benefits
provided under the Plan with respect to expenses incurred on
or after the effective date of the Plan. The portion of the
Plan which provides such benefits is herein call "this Plan."
B. PLAN - Any of the following providing benefits or
services for, or by reason of, medical or dental care or
treatment - (a) a governmental program or coverage required
or provided by statute, other than any coverage provided
under a motor vehicle insurance contract; (b) group insurance
or other arrangement of coverage for individuals in a group,
including prepayment coverage, group or individual practice
coverage; coverage for students sponsored by or provided
through an educational institution above the high school
level, except a blanket school accident policy and except
that this (b) shall not include any individually underwritten
and individually issued contract or plan of insurance which
provides exclusively for accident and sickness benefits and
for which 100% of the premiums have been paid by the insured
or a member of the insured's family.
"Plan" shall be construed separately with respect to -
(i) Each Policy, contract or other arrangement for
benefits or services.
(ii) That portion of any such policy, contract or other
arrangement which reserves the right to take the
benefits of other Plans into consideration in
determining its benefits and that portion which
does not.
C. ALLOWABLE EXPENSE - Any necessary, reasonable and
customary item of expense at least a portion of which is
covered under at least one of the Plans covering the person
for whom claim is made. If benefits are provided in the form
of services, the reasonable cash value of each service
rendered shall be considered both an Allowable Expense and a
benefit paid.
D. CLAIM DETERMINATION PERIOD - A Calendar Year (January 1
through December 31), but excluding, for any person, any
portion occurring prior to the first day he is covered under
this Plan.
E. EFFECT ON BENEFITS
(1) This Section E applies in determining the benefits
payable under this Plan as to a person for any
Claim Determination Period, when the total
Allowable Expenses incurred as to such person
during such period are less than the sum of
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(a) the benefits that would be payable for
such expenses under this Plan in the absence
of this Section E, and
(b) the benefits that would be payable for such
expenses under all other Plans in the absence
therein of provisions of similar purpose to
this provision. In such an instance, the
benefits described in (a) shall be reduced to
the extent necessary so that the sum of such
reduced benefits and all the benefits payable
for such Allowable Expenses under all other
Plans, except as provided in item (2) of this
Section E, shall not exceed such total
Allowable Expenses. Benefits payable under
another Plan include the benefits that would
have been payable had claim been duly made
therefor.
(2) The benefits of another Plan will not be included in
"all the benefits payable for such Allowable Expenses
under all other Plans" of the second sentence of item
(a) of the Section E if:
(a) such other Plan contains a provision coordinating
its benefits with those of this Plan and
(b) both the rules of such other Plan and the rules
set forth in item (3) of this Section E would
require this Plan to determine its benefits
before such other Plan.
(3) Rules establishing the order of benefit determination as
to a person on whose expenses claim is based (for the
purposes of item (2) of this Section E):
(a) The benefits of a Plan which covers him other
than as a dependent shall be determined before
the benefits of a Plan which covers him as a
dependent.
(b) Except as stated in subparagraph E.(3)(c) below,
when this Plan and another Plan cover the same
child as a dependent of both his parents:
(i) the benefits of the Plan of the parent
whose birthday falls earlier in a year
are determined before those of the Plan
of the parent whose birthday falls later
in that year; but
(ii) if both parents have the same birthday,
the benefits of the Plan which covered the
parent longer are determined before those
of the Plan which covered the other parent
for a shorter period of time.
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However, if the other Plan does not have the
rule described in (i), immediately above, and
if, as a result, the Plans do not agree on the
order of benefits, the rule in the other Plan
will determine the order of benefits.
(c) If two or more Plans cover a person who is a
dependent child of divorced or separated parents,
benefits for the child are determined in this order:
(i) first, the Plan of the parent with custody
of the child;
(ii) then, the Plan of the spouse of the parent
with custody of the child; and
(iii) finally, the Plan of the parent not having
custody of the child. However, if the
specific terms of a court decree state that
one of the parents is responsible for the
health care expenses of the child, and the
entity obligated to pay or provide the
benefits of the Plan of that parent has
actual knowledge of those terms, the
benefits of that Plan are determined first.
This paragraph does not apply when any
benefits are actually paid or provided
before the entity has that actual knowledge.
(d) The benefits of a Plan which covers a person as an
employee who is neither laid off nor retired, or as
that employee's dependent, are determined before
those of a Plan which covers that person as a
laid off or retired employee or as that employee's
dependent. If the other Plan does not have this
rule, and if, as a result, the Plans do not agree
on the order of benefits, this rule (d) is ignored.
(e) When rules (a), (b), (c) or (d) do not establish
an order of benefit determination, the benefits
of a Plan which has covered him the shorter
period of time.
(4) When this Section E operates to reduce the total amount
of benefits otherwise payable under this Plan as to a
person for any Claim Determination Period, each benefit
that would be payable in the absence of the Section E
shall be reduced proportionately, and such reduced
benefit shall be charged against any applicable benefit
limit of this Plan.
F. RIGHT TO RECEIVE AND RELEASE NECESSARY INFORMATION - For
the purposes of determining the applicability of and
implementing the terms of this provision of this Plan or any
provision of similar purpose of any other Plan, Prudential
may, without the consent of or notice to any person, release
to or obtain from any other insurance companies or other
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organization or person any information, with respect to any
person, which Prudential deems to be necessary for such
purposes. Any person claiming benefits under this Plan shall
furnish to Prudential such information as may be necessary to
implement this provision.
G. FACILITY OF PAYMENT - Whenever payments which should
have been made under this Plan in accordance with this
provision have been made under any other Plans, Prudential
shall have the right, exercisable alone and in its sole
discretion, to pay over to any organizations making such
other payments any amounts it shall determine to be warranted
in order to satisfy the intent of this provision. Amounts so
paid by Prudential shall be deemed to be benefits paid under
this Plan and to the extent of such payments, shall be fully
discharged from liability under this Plan.
H. RIGHT OF RECOVERY - Whenever payments have been made by
Prudential with respect to Allowable Expenses in a total
amount, at any time, in excess of the maximum amount of
payment necessary at that time to satisfy the intent of this
provision, Prudential shall have the right to recover such
payments, to the extent of such excess, from among one or
more of the following, as Prudential shall determine: any
persons to or for or with respect to whom such payments were
made, any other insurance companies, any other organizations.
GENERAL PROVISIONS
A. PAYMENT OF PREMIUMS -- GRACE PERIOD
Premiums under the Group Policy are payable by the
Policyholder to Prudential, at an office of Prudential or to
its authorized representative. There is a premium due and
payable on each premium due date specified in the Group
Policy Schedule. A grace period if thirty-one days, without
interest charge, is allowed for the payment of each premium
other than the first. The Policyholder is liable to
Prudential for the payment of premiums for the time the Group
Policy is in force.
B. PREMIUM COMPUTATION -- CHANGE OF PREMIUM RATES
The premium due on each premium due date is the sum of the
premium charges for the insurance then provided under the
coverages of the Group Policy, determined from the applicable
premium rates then in effect and the Employees insured at the
periodic intervals established by Prudential. Premiums may
be computed by any other method mutually agreeable to the
Policyholder and Prudential which produces approximately the
same total amount.
Prudential shall have the right to change premium rates as of
(1) any premium due date, (2) any date an Employer becomes or
ceases to be included under the Group Policy, and (3) for a
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coverage, any date the extent or nature of the risk under
that coverage, or under any other coverage considered in
determining the premium rate for that coverage, is changed by
amendment or termination or by reason of any provision of law
or any governmental program or regulation. However, the
premium rates for insurance under a coverage, or portion
separately rated, will not be changed under (1) above before
the first policy anniversary. The Policyholder will be
notified whenever a change in the premium rates is made.
C. DIVIDENDS
The portion, if any, of the divisible surplus of Prudential
allocable to the Group Policy at each policy anniversary will
be determined annually by Prudential's Board of Directors and
will be credited to the Group Policy as a dividend on such
anniversary, provided the Group Policy is continued in force
by the payment of all premiums to such anniversary.
Any such dividend will be (1) paid to the Policyholder in
cash, or at the Policyholder's option, (2) applied to the
reduction of the premium then due.
If the aggregate dividends under the Group Policy and any
other group policy or policies issued to the Policyholder
should be in excess of the aggregate contributions toward
their cost made by the Employer from its own funds, an amount
equal to such excess will be applied for the sole benefit of
insured persons. Payment of any dividend to the Policyholder
will completely discharge the liability of Prudential with
respect to that dividend.
D. TERMINATION OF GROUP POLICY OR OF INSURANCE PROVISIONS
By Failure to Pay Premium: If any premium is not paid within
its grace period (as provided in Section A of these General
Provisions), the Group Policy will terminate at the end of
the grace period. However, if the Policyholder makes written
request in advance for termination to take effect at the end
of the period for which premiums have been paid or at any
time during the grace period, the Group Policy will terminate
on the date requested.
By Failure to Maintain Insuring Conditions: Prudential may
terminate the provisions of the Group Policy for any
insurance under a coverage on any premium due date, if the
Employees insured total less than the Minimum Participation
Number or are contributing for such insurance and notice of
intention to terminate has been given to the Policyholder at
least thirty-one days in advance.
By Termination of Associated Protection: If the Coverage
Schedule for any insurance defines an Associated Protection,
the provisions for such insurance will terminate upon
termination of the Associated Protection.
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E. ASSIGNMENT LIMITATIONS
Insurance under a coverage is not assignable unless the
Coverage Schedule indicates that it is assignable. No
responsibility of the validity or sufficiency of any
assignment is assumed by Prudential. Prudential shall not be
considered to have knowledge of any assignment unless the
original or a duplicate is filed with Prudential through the
Employer.
F. EMPLOYEE'S CERTIFICATE
Prudential will issue to the Policyholder, for delivery to
each insured Employee, an individual certificate stating to
whom benefits are payable and the essential features of his
insurance protection, including any protection and rights
upon termination of his insurance and the rights and
requirements for establishment and payment of claim.
G. RECORDS -- INFORMATION TO BE FURNISHED
Either the Policyholder or Prudential, as mutually agreed,
shall keep a record of the insured Employees containing the
essential particulars of the insurance. The Policyholder
shall forward the information periodically required by
Prudential in connection with the administration of the Group
Policy and the determination of the premium rates. All
records of the Policyholder and of the Employer which have a
bearing on the insurance shall be open for inspection by
Prudential at any reasonable time.
Prudential shall not be liable for the fulfillment of any
obligation dependent upon such information prior to its
receipt in a form satisfactory to Prudential. Incorrect
information furnished may be corrected, if Prudential shall
not have acted to its prejudice by relying on it. An
Employee's insurance under a coverage shall in no event be
invalidated by failure of the Policyholder or the Employer,
due to clerical error, to record or report the Employee for
such insurance.
H. THE CONTRACT -- INCONTESTABILITY OF POLICY
The Group Policy, together with the Application of the
Policyholder, a copy of which is attached hereto and made a
part hereof and the individual applications, if any, of the
persons insured hereunder constitute the entire contract.
All statements made by the Policyholder shall be deemed
representations and not warranties, and no such statement
shall be used in any contest of the insurance hereunder
unless it is contained in the Policyholder's Application.
The validity of the Group Policy shall not be contested,
except for non-payment of premiums, after it has been in
force for one year from its date of issue.
The Group Policy may be amended at any time, without the
consent of the insured Employees or any other person
having a beneficial interest in it, upon written request
made by the Policyholder and agreed to by Prudential. Any
such amendment shall be without prejudice to any claim
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arising prior to the date of change. No agent or other
person, except the President, a Vice President, the
Secretary, an Actuary, an Associate Actuary, and Assistant
Secretary or an Assistant Actuary of Prudential has authority
to waive any conditions or restrictions of the Group Policy;
to extend the time for paying a premium; to make or modify a
contract; or to bind Prudential by making any promise or
representation or by giving or receiving any information. No
change to the Group Policy shall be valid unless evidenced by
an endorsement on it signed by one of the aforesaid officers
or by an amendment to it signed by the Policyholder and by
one of the aforesaid officers.
CLAIM PROVISIONS
These provisions apply to each coverage under the Group
Policy which contains a specific provision subjecting the
payment of benefits under the coverage to the Group Policy's
Claim Provisions.
Written proof of the loss under a coverage upon which claim
may be based must be furnished to Prudential within ninety
days after --
(1) the end of each month or lesser period for
which Prudential is liable under the coverage,
if the coverage provides for payment at such
periodic intervals,
(2) the end of each Calendar Year for which Prudential
is liable, if the coverage is one under which
payment is made for charges incurred during a
"Calendar Year" as defined in such coverage; and
(3) the date of the loss, in the case of any other
coverage.
Failure to furnish such proof within the required time shall
not invalidate nor reduce any claim if it was not reasonably
possible to give proof within such time, provided such proof
is furnished as soon as reasonably possible.
All benefits will be paid upon receipt of written proof
covering the occurrence, character and extent of the event
for which claim is made; except that if any coverage provides
for payment at monthly or at more frequent periodic
intervals, Prudential shall not be required to make payment
of benefits thereunder more often than so provided.
Prudential at its own expense shall have the right and
opportunity to examine the person whose sickness or injury is
the basis of claim when and so often as it may reasonably
require during pendency of claim.
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No action at law or in equity shall be brought to recover
under the Group Policy prior to the expiration of ninety days
after written proof of the loss upon which claim is based has
been furnished as required above. No such action shall be
brought more than three years after the expiration of the
time within which proof of such loss is required.
CLAIMS PROCESSING -- APPEALS FROM DENIED CLAIMS
1. Prudential will process all claims and shall determine,
in accordance with the provisions of the Group Policy,
the amount of benefits, if any, payable for each such
claim received.
2. Prudential will make its determination whether to pay
the claim within ninety days from the date the claim is
filed. If more time is required for a special case,
Prudential may take up to an additional ninety days, but
the Covered Individual or Beneficiary must be notified
of the special circumstances which require more time, as
well as the date by which a final decision is expected.
3. In the event a claim is denied, Prudential will provide
the Covered Individual or Beneficiary with a written
notice of the denial. The notice will provide the reason
for the denial; specify the Group Policy provisions on
which the denial is based; itemize any additional
information required by Prudential to pursue the claim
further; and outline the following claim appeal and
review procedures:
a. The Covered Individual or Beneficiary will have
the right to ask for a review if he feels that
the claim has not been handled properly. Or, if
he wishes to further pursue a denied claim, he
may send a written appeal through his Employee
Benefits Administrative Office to Prudential.
b. The appeal must be sent within sixty days of
receipt of the claim denial, and it must state
the reason for appealing the denied claim with
supporting evidence attached. The Covered
Individual or Beneficiary will then have the
right to have representation, to review
pertinent documents, and to submit issues and
comments in writing.
c. Within sixty days after receiving an appeal,
Prudential will review it and give the Covered
Individual or Beneficiary written notice of its
decision. If more time is required, Prudential
may take up to an additional sixty days but will
notify the Covered Individual or Beneficiary of
the delay and the special circumstances
requiring the delay.
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4. The Policyholder and Prudential agree that, with respect
to the Employee Retirement Income Security Act of 1974
(ERISA), Prudential shall be the "appropriate named
fiduciary" of the Plan for the purpose of such review and
decision thereon. Prudential's decision on any claim
shall be final.
INDIVIDUAL'S STATEMENTS AS TO COVERAGE SUBJECTED TO CLAIM
PROVISIONS
All statements with respect to the insurance under such
coverage which are made by a person insured therefor shall be
deemed representations and not warranties. With respect to
each amount of such insurance for which a person is insured,
no such statement made for the purpose of effecting such
insurance of the person shall be used in any contest to avoid
the insurance with respect to which such statement was made
or to reduce benefits thereunder after such insurance has
been in force prior to the contest for a period of two years
during his lifetime, nor unless such statement is contained
in a written instrument signed by him and a copy of that
instrument is or has been furnished to him.
SUPPLEMENTAL MEDICAL EXPENSE INSURANCE
(These benefits are in addition to the Uniform Health Benefit
Plan and Dental Assistance Plan provided under the
Administrative Services Agreement No. 59981 between The
Coca-Cola Company and The Prudential Insurance Company of
America.)
A. ELIGIBLE CHARGES
Subject to Section C (Charges Not Covered), these are the
charges actually made to the Employee for services and
supplies furnished for or in connection with the diagnosis,
cure, mitigation, treatment or prevention of disease of a
person who is a Covered Individual, for the purpose of
affecting any structure or function of the Covered
Individual's body, or for costs incurred for transportation
which is primarily for and essential to medical care. A
charge is considered to be incurred on the date of the
service or purchase for which the charge is made.
B. BENEFITS
PAYABLE FOR: the eligible charges described in Section A.
CONDITION FOR BENEFIT: The charges are incurred while the
person is a Covered Individual.
AMOUNT PAYABLE: The Supplemental Medical Benefit Percentage
(see Coverage Schedule) of the Eligible Charges up to the
Maximum Supplemental Medical Expense Benefit.
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C. CHARGES NOT COVERED
(1) Any charges incurred in connection with a bodily or
mental disorder due to war or any act of war while
the person is a Covered Individual ("war" means
declared or undeclared war and includes resistance
to armed aggression).
(2) Any charges for services and supplies furnished by
the Employee, the Employee's spouse, or a child,
brother, sister, or parent of the Employee or such
spouse.
(3) Government Plan Charge - any charge (a) for a
service or supply furnished by or on behalf of the
United States Government or any other government
unless payment of the charge is legally required,
or (b) for a service or supply to the extent to
which any benefit in connection with such a
service, supply or charge is provided by any law or
governmental program under which the individual is
or could be covered.
(4) Charges for Services or Supplies that are Not
Needed or Not Appropriately Provided: A charge for
a service or supply is not covered to the extent
that it is not needed or not appropriately
provided. Charges for services or supplies
furnished in connection with a service or supply
that is not needed or not appropriately provided
are also not covered.
For the purpose of this exclusion a service or
supply will be considered both "needed and
appropriately provided" if Prudential determines
that it meets each of these requirements:
(a) It is ordered by a Doctor for the diagnosis or
the treatment of a Sickness or Injury.
(b) The prevailing opinion within the appropriate
specialty of the United States medical
profession is that it is safe and effective
for its intended use, and that its omission
would adversely affect the person's medical
condition.
(c) It is furnished by a provider with appropriate
training, experience, staff and facilities to
furnish that particular service or supply.
Prudential will determine whether these
requirements have been met based on:
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-- Published reports in authoritative
medical literature;
-- Regulations, reports, publications, or
evaluations issued by government agencies
such as the Agency for Health Care Policy
and Research, the National Institutes of
Health, and the Food and Drug
Administration (FDA);
-- Listings in the following drug compendia:
The American Medical Association Drug
Evaluations, The American Hospital
Formulary Service Drug Information and
The United States Pharmacopeia Dispensing
Information; and
-- Other authoritative medical sources to
the extent that Prudential determines
them to be necessary.
(d) The provider's institutional review board
acknowledges that the use of the service or
supply is experimental or investigational and
subject to that board's approval.
(e) The provider's institutional review board
requires that the patient, parent or guardian
give an informed consent stating that the
service or supply is experimental or
investigational or part of a research project
or study; or federal law requires such a
consent.
(f) Research protocols indicate that the service
or supply is experimental or investigational.
This item (f) applies for protocols used by
the patient's provider as well as for
protocols used by other providers studying
substantially the same service or supply.
Charges for Educational Services or Supplies: A
charge for a service or supply is not covered to
the extent that it is determined by Prudential to
be educational. Charges for services or supplies
furnished in connection with a service or supply
that is educational are also not covered.
"Educational" means:
(a) That the primary purpose of the service or
supply is to provide the person with any of
the following: training in the activities of
daily living; instruction in scholastic skills
such as reading and writing; preparation for
an occupation; or treatment for learning
disabilities; or
(b) That the service or supply is being provided
to promote development beyond any level of
function previously demonstrated.
"Training in the activities of daily living" does
not include training directly related to treatment
of a Sickness or Injury that resulted in a loss of
a previously demonstrated ability to perform those
activities.
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In the case of a Hospital stay, the length of the
stay and Hospital services and supplies are not
covered to the extent that they are determined to
be allocable to the scholastic education or
vocational training of the patient.
(5) Charge in Excess of Usual and Prevailing Charge -
the portion of any charge for any service or supply
in excess of the usual and prevailing charge as
determined by Prudential. The usual and prevailing
charge for any service or supply is the usual
charge of the provider for the service or supply in
the absence of the insurance, but not more than the
prevailing charge in the area for a like service or
supply. A like service is of the same nature and
duration, requires the same skill, and is performed
by a provider of similar training and experience.
A like supply is one which is identical or
substantially equivalent. "Area" means the
municipality (or, in the case of a large city, the
subdivision thereof) in which the service or supply
is actually provided or such greater area as is
necessary to obtain a representative cross-section
of charges for a like service or supply.
(6) Any cost for coverage under (a) group insurance,
(b) individual insurance or (c) any other
arrangement on an insured or uninsured basis,
including pre-payment coverage, which provides
benefits or services for, or by reason of medical
or dental care or treatment.
(7) Charges incurred for services or supplies to the
extent benefits are provided under The Uniform
Health Benefit Plan and Dental Assistance Plan
provided under the Administrative Services
Agreement No. 59981 between The Coca-Cola Company
and The Prudential Insurance Company of America.
(8) Any reduction in benefit resulting from not using
the Pre-Admission and Concurrent Review Service
Program under The Uniform Health Benefit Plan.
(9) Any reduction in benefit resulting from not using
the Second Surgical Opinion Program under The
Uniform Health Benefit Plan.
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This page is intentionally blank. See the section "The
Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
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PRIVILEGE OF OBTAINING AN INDIVIDUAL INSURANCE
POLICY UNDER CERTAIN CONDITIONS
If an Employee's hospital or surgical expense insurance under
this Policy terminates by reason of termination of the
Employee's employment or of the Employee's transfer out of
the classes eligible for such insurance under this Policy,
the Employee may, subject to the conditions hereinafter
stated, obtain from Prudential, without furnishing evidence
of insurability, an individual insurance policy renewable at
the option of Prudential and affording coverage to the extent
stated below by making written application and the first
premium payment therefor to Prudential at any of its Home or
Head Offices not later than thirty-one days from the date of
such termination of insurance. The availability of the
individual insurance policy, the coverage thereunder, the
person or persons covered under the policy, the initial
premium payable under the policy, the form and all terms and
conditions thereof shall be such as provided by the rules of
Prudential pertaining to insurance obtainable under the
provisions of this section, determined on a basis precluding
individual selection, which are in effect at the time the
application for such individual insurance policy is made to
Prudential. The effective date of an individual insurance
policy issued pursuant to the foregoing provisions shall be
the later of (i) the day on which the application for such
individual insurance policy is received by Prudential at any
of its Home or Head Offices, and (ii) the day following the
termination of the Employee's hospital or surgical expense
insurance under this Policy.
If an Employee's hospital or surgical expense insurance under
this Policy terminates as a result of the Employee's death
and on the date of such termination such Employee is insured
under this Policy for hospital or surgical expense insurance
with respect to a spouse, the privilege of obtaining an
individual insurance policy under the conditions stated above
may be exercised by the Employee's surviving spouse.
If an Employee's hospital or surgical expense insurance under
this Policy terminates for any reason specified in the
preceding paragraphs and on the date of such termination such
Employee is insured for hospital or surgical expense
insurance under this Policy with respect to a child, such
child shall also have the privilege of obtaining an
individual insurance policy under the conditions stated
above, provided such Employee or spouse, if surviving,
exercises the privilege of obtaining an individual insurance
policy which is available to such person under the conditions
stated above.
In the event hospital or surgical expense insurance under
this Policy with respect to an Employee's child terminates
solely because such child marries or attains the limiting age
for Qualified Dependent children with respect to whom
insurance is provided under such hospital or surgical expense
insurance provisions, such child shall have the privilege of
obtaining an individual insurance policy under the same
conditions as would apply to the Employee were he then
terminating employment.
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<PAGE>
An Employee's spouse shall also have the privilege of
obtaining an individual insurance policy under the conditions
stated above upon termination of the hospital or surgical
expense insurance with respect to such spouse by reason of
ceasing to be a Qualified Dependent.
General Provisions of Obtaining an Individual Insurance
Policy:
1. No such individual policy shall be issued to any such
person who becomes eligible for insurance under the
Group Policy in a different status during such thirty-
one day period.
2. No such individual policy shall cover the Dependents of
any person except the Employee or former Employee, or
the wife or husband of a deceased Employee, and then
only if such Employee or deceased Employee, as the case
may be, was covered for Dependents Coverage under the
Group Policy at the time of termination of his insurance
thereunder.
3. If the benefits applicable to any person under the Group
Policy are less than the benefits provided under the
individual policy, issuance of such individual policy
shall be subject to the underwriting rules of Prudential
for the issue of individual policies.
4. If any other insurance (group or otherwise) for hospital
expenses or services is in force or has been requested
or applied for with respect to any person for whom
coverage under such individual policy is requested,
Prudential may (a) decline to issue such individual
policy if such other insurance was not in force prior to
the termination of the Employee's insurance under the
Group Policy, or (b) limit the benefits under such
individual policy if such other insurance was force
prior to the termination of the Employee's insurance
under the Group Policy.
5. The availability of individual insurance policies
referred to herein is subject to approval of forms by
state insurance departments.
6. No such individual policy shall be issued until the end
of the periods for which an individual was continuously
covered as described in Modifications of Termination
Provisions to provide Continuation of Insurance of the
Employee's or Dependents Option.
PROVISIONS FOR NON-DUPLICATION OF BENEFITS UNDER MEDICARE
(1) The aggregate benefits payable under the Plan for services,
treatments and supplies incurred as to a Subject Person, as
determined prior to the application of the Provision
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for Coordination of Benefits Under the Plan with Other
Benefits, will be the excess, if any, of
(a) Such aggregate benefits determined as if such
charges included Medical Charges with respect to
those treatments, services and supplies which are
within the scope of the Plan, over
(b) the aggregate benefits which, in accordance with
provision (2), are considered to be paid under
Medicare with respect to the same services,
treatments and supplies.
(2) For the purpose of these Provisions, the amount of
benefits considered to be paid under Medicare with
respect to those services, treatments and supplies
furnished a Subject Person as are within the scope of
full Medicare coverage shall be equal to the amount of
the Medical Charges for such services, treatments and
supplies, exclusive of coinsurance and other amounts
which are directly chargeable to that person in
accordance with Medicare or would be so chargeable if
that person had full Medicare coverage.
(3) Any provision of the Plan, other than these Provisions,
which excludes any charges for services, treatments or
supplies to the extent to which any benefits are
provided under a governmental plan or law shall not be
considered to refer to Medicare.
(4) The Provision for Coordination of Benefits Under the
Plan with Other Benefits is modified in the following
respects:
(a) The term "Plan" as used in said provision does not
include any coverage provided under Medicare.
(b) When the Allowable Expenses incurred as to a
Subject Person during any Claim Determination
Period include any expenses for services,
treatments and supplies which are covered in whole
or in part by that person's Medicare coverage, the
aggregate amount of Allowable Expenses shall be
reduced by an amount equal to the Medical Charges
for such services, treatments and supplies,
exclusive of coinsurance and other amounts which
are directly chargeable to that person in
accordance with Medicare.
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COVERAGE SCHEDULE
SUPPLEMENTAL MEDICAL EXPENSE PLAN
(These benefits are in addition to the Uniform Health Benefit
Plan and Dental Assistance Plan provided under the
Administrative Services Agreement No. 59981 between The
Coca-Cola Company and The Prudential Insurance Company of
America.)
COVERAGE CLASSES
Employees Eligible
All Executives as reported to Prudential by the Policyholder.
Determination of Coverage Class and Classification
The Employer shall determine each individual's coverage class
and classification. Such determinations shall be made on
those dates which are established by the practices of the
Employer. Any such determination shall be made without
discrimination among persons in like circumstance, and shall
be final and conclusive.
EFFECTIVE DATE OF INSURANCE
Employee Insurance
All Employee Insurance is effective on the day the Employee
becomes a full-time Employee, subject to the section Becoming
Insured for Employee Insurance.
An Employee is considered full-time if he works for the
Employer at least the number of hours in the normal work week
established by the Employer, but not less than twenty hours
per week.
Dependents Insurance
Dependents Insurance is effective at the time the Employee's
Insurance is effective, subject to the section Becoming
Insured for Dependents Insurance.
DEFERMENT OF EFFECTIVE DATE OF INSURANCE
Employee Insurance
If the Employee does not comply with the Active Work
Requirement when he would otherwise become covered for
Employee Insurance or when any adjustment in the benefits
under such insurance would take effect, the effective date of
such insurance or adjustment will be deferred until the first
day thereafter on which he does comply with that requirement.
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<PAGE>
Dependents Insurance
If any Qualified Dependent is confined for medical care or
treatment in a hospital or other institution on the date any
Dependents Insurance, or adjustment thereof, would otherwise
become effective with respect to that Dependent, such
insurance or adjustment will be deferred until the
termination of a period of thirty days during which such
Dependent shall not have been so confined, or Prudential is
furnished with evidence satisfactory to it that such
Dependent has completely recovered from all injuries and
sicknesses, whichever first occurs, and then only subject to
the further provisions of the Group Policy.
This Section will not operate to defer the effective date of
an Employee's Insurance with respect to a child who is born
to the Employee, and becomes a Qualified Dependent under the
insurance at birth, while the Employee is insured for
Dependents Insurance with respect to one or more other
Dependents.
INSURANCE PROVIDED
Employee Medical Insurance on the following basis-
Employee Insurance -- contributory
Dependents Insurance -- contributory
SUPPLEMENTAL MEDICAL EXPENSE INSURANCE -- Employees and
Dependents -- Insurance Assignable.
Maximum Supplemental Medical Benefit -- 100% of the covered
charges, but not more than $30,000 during a calendar year.
As defined in this section, covered charges means the charges
actually made to the Employee for Medical and Dental services
and supplies which are eligible as deductions for income tax
purposes.
CONTINUANCE IN COVERAGE CLASSES DURING ABSENCE FROM FULL-TIME
WORK:
The types of absences and time limits referred to in the
Termination of Employee Coverage section for considering an
Employee as continuing to be a member of the Coverage Classes
are:
(1) LEAVE OF ABSENCE FOR DISABILITY -- The Employee
Coverage will continue during a Leave of Absence
for Disability. The Employee may continue the
Dependent Coverage by making the contributions for
his or her share of this cost.
(2) PERSONAL LEAVE OF ABSENCE -- The Employee Coverage
will continue during a Personal Leave of Absence for
up to six months following the month in which the
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<PAGE>
Personal Leave of Absence begins. Dependent Coverage
may also continue during this time provided the
Employee continues his or her share of contributions.
(3) MILITARY LEAVE OF ABSENCE -- The Employee Coverage
will continue during a Military Leave of Absence
for up to six months following the month in which
the Military Leave of Absence begins. Dependent
Coverage may also continue during this time
provided the Employee continues his or her share of
contributions.
(4) LAY OFF -- The Employee coverages will continue
during a Lay off for up to twelve months following
the month in which the Lay off begins. Dependent
Coverage may also continue during this time
provided the Employee continues his or her share of
contributions.
(5) RETIREMENT -- The Employee and Dependent Coverage
will terminate at the end of the month following
termination of employment.
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This page is intentionally blank. See the section "The
Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
42
<PAGE>
This page is intentionally blank. See the section "The
Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
43
<PAGE>
This page is intentionally blank. See the section "The
Contract-Incontestability of Policy" of the General
Provisions of the Group Policy.
44
<PAGE>
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
A Mutual Life Insurance Company
RIDER TO BE ATTACHED TO AND MADE A PART OF
GROUP POLICY NO. GO-56019
The Policyholder and the Insurance Company hereby agree that,
effective July 1, 1982, the Policy is modified by the
addition of the following section:
ADDITIONAL PREMIUMS
Premiums under the Policy, exclusive of any additional
premiums required by the provisions of this Rider, are
referred to herein as regular premiums.
An additional premium for insurance under the Policy shall be
determined as hereinafter provided at the end of each policy
year following the effective date of this Rider and, should
the Policy terminate during a policy year, upon such
termination. Each such additional premium shall be payable
upon demand by the Insurance Company.
The additional premium for each policy year shall be equal to
the excess, if any, of (a) the sum of the benefit charges
under the Policy, as defined below, and the Basic Factor
Charge over (b) 100% of the regular premiums for such policy
year. In no event, however, shall such additional premium
for a policy year exceed the Maximum Factor Charge.
The factor charges to be used in computation of an additional
premium for a policy year shall be determined as follows:
The Basic Factor Charge shall be determined by applying
twenty-two percent to the regular premiums for such
policy year.
The Maximum Factor Charge shall be determined by
applying ninety-one and one-tenth percent to the regular
premiums for such policy year.
provided that on each policy anniversary and at such other
times as the regular premium rates for insurance under the
Policy may be changed, the Insurance Company may, by
notifying the Policyholder, change any or all of the above
percentages.
The "benefit charges" shall, with respect to any policy year,
be the sum of (1) the amount of claims paid during such
policy year, plus, as determined by the Insurance Company,
the estimated amount of claims unpaid but chargeable to the
experience of the Policy as of the end of such policy year,
less the estimated amount of unpaid claims, as previously
determined by the Insurance Company, chargeable to the
experience of the Policy at the end of the preceding policy
year, and (2) the amount of any other charges on account of
benefits, as determined by the Insurance Company, for such
policy year.
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<PAGE>
If any of the percentages in effect shall be changed during a
policy year by the Insurance Company, pursuant to the
foregoing provisions, on a date which is not a policy
anniversary, the additional premium for such policy year
shall be the sum of the amounts determined by applying, in a
manner consistent with the foregoing provisions, the factor
percentages in effect during each portion of such policy year
to the regular premiums for the portion of such policy year
during which such percentages were in effect. If any
additional premium is to be determined for a period less than
a policy year, either because the effective date of this
Rider is not a policy anniversary or because the Policy
terminates on a day other than the last day of the policy
year, such determination shall be made in accordance with the
principles of the foregoing provisions, taking the shorter
duration of the period into account.
The Insurance Company has caused this Rider to be executed
this 29th day of December, 1983.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Isabelle L. Kirchner
Secretary
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<PAGE>
Group Policy No. GO-56019
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
A Mutual Life Insurance Company
(Herein Called The Insurance Company)
Rider To Be Attached To and Made A Part Of Group Policy
No. GO-56019
The Insurance Company and the Policyholder agree that,
effective June 30, 1983, the Policy is amended by the
addition of the following provision:
SPECIAL RESERVE
The Insurance Company may maintain a special reserve to be
applied by it from time to time toward stabilizing experience
under the Policy. Such reserve shall be established from
premiums paid under the Policy, and the amount of such
reserve shall be determined by the Insurance Company from
time to time. Such reserve shall be credited with interest
at the end of each policy year, or in the event of
termination of the Policy, at the time of such termination.
The interest for the policy year or portion thereof, as the
case may be, shall be determined at the rate of not less than
5% per annum and on the average amount of the reserve during
the period with respect to which the interest is being
computed, except that after this Rider has been in effect for
a period extending from the effective date of this Rider to
the next policy anniversary and from time to time thereafter
the Insurance Company may change the rate to be used in the
computation of the interest on the reserve.
If at any time the Insurance Company shall determined that
the amount of the special reserve is then in excess of that
required, the Insurance Company shall pay such excess to the
Policyholder as a return of premium.
In the event of termination of the Policy, any balance
remaining in the special reserve after final application of
the reserve by the Insurance Company in accordance with the
above provisions shall be paid to the Policyholder as a
return of premium.
Any return to the Policyholder of the balance of the special
reserve, or any portion thereof, in accordance with the
provisions of this Rider, shall be applied by the
Policyholder solely for the benefit of retired employees or
active employees, or both.
The Insurance Company has caused this Rider to be executed
this first day of March, 1983.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Isabelle L. Kirchner
Secretary
47
EXHIBIT 12.1
<TABLE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(IN MILLIONS EXCEPT RATIOS)
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
1995 1994 1993 1992 1991
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations
before income taxes and changes
in accounting principles $ 4,328 $ 3,728 $ 3,185 $ 2,746 $ 2,383
Fixed charges 318 236 213 207 222
Less: Capitalized interest, net (9) (5) (16) (10) (8)
Equity income, net of dividends (25) (4) (35) (30) (16)
-----------------------------------------------------------
Adjusted earnings $ 4,612 $ 3,955 $ 3,347 $ 2,913 $ 2,581
===========================================================
Fixed charges:
Gross interest incurred $ 281 $ 204 $ 184 $ 181 $ 200
Interest portion of rent expense 37 32 29 26 22
-----------------------------------------------------------
Total fixed charges $ 318 $ 236 $ 213 $ 207 $ 222
===========================================================
Ratios of earnings to fixed charges 14.5 16.8 15.7 14.1 11.6
===========================================================
The Company is contingently liable for guarantees of indebtedness of independent bottling companies
and others (approximately $202 million at December 31, 1995). 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
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
We exist for one reason: to maximize share-owner value over time. To
accomplish this mission, The Coca-Cola Company and its subsidiaries
(our Company) have developed a comprehensive business strategy focused
on four key objectives: (1) increasing volume, (2) expanding share of
worldwide beverage sales, (3) maximizing long-term cash flows, and (4)
improving economic profit and creating economic value added. We
achieve these objectives by investing aggressively in the high-return
beverages business and by optimizing our cost of capital through
appropriate financial policies.
INVESTMENTS
With a global business system that operates in nearly 200 countries
and generates superior cash flows, our Company is uniquely positioned
to capitalize on profitable new investment opportunities. Our
criterion for investment is simple but strict: We seek to invest in
opportunities that strategically enhance our 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.
Because it consistently generates high returns on capital, our
beverages business is a particularly attractive area for investment.
In new and emerging markets, where increasing the penetration of our
products is our primary goal, the bulk of our investments is dedicated
to infrastructure enhancements: facilities, distribution networks,
sales equipment and technology. These investments are made by
acquiring or forming strategic business alliances with local bottlers,
and by matching local expertise with our Company's experience and
focus. In highly developed beverage markets, where our primary goals
include increasing consumer awareness and broadening the appeal of our
products, the bulk of our expenditures is dedicated to marketing
activities, such as creating new products and serving sizes, and
improving the efficiency of production and distribution.
Currently, 60 percent of the world's population live in markets
where the average person consumes less than 10 servings of our
products per year, offering high-potential growth opportunities for
our Company and its bottlers. In fact, the emerging markets of China,
India, Indonesia and Russia represent approximately 44 percent of the
world's population, but, on a combined basis, their average per capita
consumption of our products is approximately 1 percent of the United
States level. As a result, we will continue aggressively investing to
ensure that our products are pervasive, preferred and offer the best
price relative to value.
Our investment strategy focuses primarily on capital expenditures,
bottling operations and marketing activities.
CAPITAL EXPENDITURES
Capital expenditures on property, plant and equipment and the
percentage distribution by geographic area for 1995, 1994 and 1993 are
as follows (dollars in millions):
Year Ended December 31, 1995 1994 1993
- --------------------------------------------------------------------
Capital expenditures $ 937 $ 878 $ 800
- --------------------------------------------------------------------
United States 33% 32% 23%
Africa 2% 3% 1%
Greater Europe 45% 42% 51%
Latin America 10% 16% 19%
Middle & Far East
and Canada 10% 7% 6%
====================================================================
BOTTLING OPERATIONS
We invest heavily in bottling operations to maximize the strength and
efficiency of our production, distribution and marketing systems
around the world. These aggressive investments result in increases in
unit case volume, net revenues and profits at the bottler level, which
in turn generate increased gallon shipments for the Company's
concentrate business. As a result, both the Company and our bottlers
benefit from long-term growth in volume, cash flows and share-owner
value.
We designate certain bottling operations in which we have invested
as anchor bottlers due to their level of responsibility and
performance. Anchor bottlers, which include Coca-Cola Amatil Limited
(Coca-Cola Amatil) and Coca-Cola Enterprises Inc. (Coca-Cola
Enterprises), are strongly committed to the strategic goals of the
Company and to furthering the interests of our worldwide production,
distribution and marketing systems. They tend to be large and
geographically diverse, and have strong financial and management
resources.
In addition to our anchor bottlers, we will continue making
investments in bottling operations of new and emerging markets and in
existing bottling operations that require restructuring or rebuilding.
Our investments in a bottler can represent either a noncontrolling or
a controlling interest, depending on the bottler's capital structure
and its available resources at the time of our investment.
Through noncontrolling investments in bottling companies, we provide
expertise and resources to strengthen those businesses. Specifically, we help
improve sales and marketing programs, assist in the development of effective
business and information systems and help establish appropriate capital
41
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
structures. In 1995, we increased our economic interest in Panamerican
Beverages, Inc. (Panamerican Beverages) from 7 to 13 percent and
designated it as an anchor bottler. Panamerican Beverages owns
bottling operations in Mexico, Brazil, Colombia and Costa Rica. Also
in 1995, we contributed assets to a new joint venture, Coca-Cola Sabco
(Proprietary) Limited (Coca-Cola Sabco), also an anchor bottler, in
return for a 16 percent economic interest and notes receivable.
Coca-Cola Sabco will strengthen our distribution system in south and
east Africa. During 1994, we formed a joint venture known as the
Coca-Cola Bottling Companies of Egypt following the privatization of
the Egyptian public sector bottler. In 1993, our Company purchased a
30 percent economic interest in another anchor bottler, Coca-Cola
FEMSA, S.A. de C.V. (Coca-Cola FEMSA), to assist in further
strengthening strategic bottling territories in Latin America.
The following table illustrates the excess of the calculated fair
values, based on quoted closing prices of publicly traded shares, over
our Company's carrying values for selected equity method investees (in
millions):
Carrying Fair
December 31, Value Value Excess
- ----------------------------------------------------------------------
1995
Coca-Cola Amatil Limited $682 $1,579 $ 897
Coca-Cola Enterprises Inc. 556 1,513 957
Coca-Cola FEMSA, S.A. de C.V. 86 264 178
Coca-Cola Beverages Ltd. 11 123 112
Coca-Cola Bottling Co. Consolidated 84 97 13
- ----------------------------------------------------------------------
$2,157
======================================================================
Equity income, primarily from investments in unconsolidated
bottling investments, reached $169 million in 1995.
In certain situations, it is advantageous to acquire a controlling
interest in bottling operations. Although not our primary long-term
business strategy, owning a controlling interest allows us to
compensate for limited local resources or facilitate improvements in
customer relationships while building or restructuring the bottling
operations. While bottling businesses typically generate lower margins
on revenue than our concentrate business, they can increase revenues
and operating profits on a per-gallon basis. In 1995, we acquired
controlling interests in certain bottling operations in Italy and
Venezuela. By providing capital and marketing expertise to these newly
acquired bottlers, we intend to strengthen our bottling territories
and market positions in those countries.
In line with our long-term bottling strategy, we will consider
options for reducing our ownership interest in a consolidated bottler.
One such option is to sell our interest in a consolidated bottling
operation to one of our equity investee bottlers. In these situations,
we continue participating in the previously consolidated bottler's
earnings through our portion of the equity investee's income.
Currently, we are holding preliminary discussions to sell our
bottling and canning operations located in Belgium and France to
Coca-Cola Enterprises. During 1995, we sold our controlling interests
in certain bottling operations in Poland, Croatia and Romania to
Coca-Cola Amatil. In 1994, our 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.
In 1995, consolidated bottling and fountain operations produced
and distributed approximately 16 percent of our worldwide unit case
volume. Bottlers in which we own a noncontrolling interest produced
and distributed an additional 36 percent of our worldwide unit case
volume.
MARKETING ACTIVITIES
In addition to investments in bottling and distribution infrastructure,
we also make significant expenditures in support of our trademarks.
Through prudent expenditures on marketing activities, we enhance global
consumer awareness of our products. Enhancing consumer awareness builds
consumer preference for our products, which produces growth in volume,
per capita consumption of our products and our share of worldwide
beverage sales.
We build consumer awareness and product appeal for our trademarks
using integrated marketing programs. These programs include activities
such as advertising, point of sale merchandising and product sampling.
Each of these activities contributes to building consumer awareness
and product preference.
Through our bottling investments and strategic alliances with
other bottlers of Company products, we are able to develop and
implement integrated marketing programs on a global basis. In
developing a global strategy for a Company trademark, we perform
product and packaging research, establish brand positioning, develop
precise consumer communications and seek consumer feedback. Examples
of recent successes with our global brand strategies include the
Coca-Cola Classic theme, "Always," and, for Sprite, "Obey Your Thirst."
As part of our ongoing efforts to maximize the impact of our advertising
expenditures, we recently began assigning specific brands to individual
advertising agencies. This approach enables us to enhance each brand's global
42
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
positioning, increase accountability and use the Company's marketing
expenditures more efficiently and effectively.
During 1995, our Company's direct marketing expenses, which
include our expenditures on consumer marketing activities, increased
11 percent to reach $3,834 million.
FINANCIAL STRATEGIES
We use several strategies to optimize our cost of capital, which is a
key component of our ability to maximize share-owner value.
DEBT FINANCING
We maintain debt levels considered prudent based on our cash flow,
interest coverage and percentage of debt to total capital. We use debt
financing to lower our overall cost of capital, which increases our
return on share-owners' equity.
Our capital structure and financial policies have earned long-term
credit ratings of "AA" from Standard & Poor's and "Aa3" from Moody's,
and the highest credit ratings available for our commercial paper
programs.
FINANCIAL RISK MANAGEMENT
We use derivative financial instruments to reduce our exposure to
financial risks.
With approximately 82 percent of our 1995 operating income
generated outside the United States, weakness in one particular
currency is often offset by strengths in others.
Most of our foreign currency exposures are managed on a
consolidated basis, which allows us to net certain exposures and thus
take advantage of any natural offsets. We use forward exchange
contracts to adjust the currency mix of our recorded assets and
liabilities, which further reduces our exposure from adverse
fluctuations in exchange rates. In addition, we enter into forward
exchange and swap contracts and purchase options to hedge both firmly
committed and anticipated transactions, as appropriate, and net
investments in certain international operations.
We use primarily liquid spot, forward, option and swap contracts.
Our Company does not enter into leveraged or structured contracts.
Additionally, we do not enter into derivative financial instruments
for trading purposes. As a matter of policy, all of our derivative
positions are used to hedge underlying economic exposures by
mitigating certain risks such as changes in currency, interest rates
and other market factors on a matched basis. Gains or losses on
hedging transactions are offset by gains or losses on the underlying
exposures being hedged.
SHARE REPURCHASES
In July 1992, our Board of Directors authorized a plan to repurchase
up to 100 million shares of our Company's common stock through the
year 2000. In 1995, we repurchased 29 million shares under this plan
at a total cost of approximately $1.8 billion. As of December 31,
1995, we have repurchased 67 million shares under the July 1992 plan.
Since the inception of our initial share repurchase program in
1984 through our current program as of December 31, 1995, our Company
has repurchased 483 million shares, representing 30 percent of the
shares outstanding as of January 1, 1984, at an average price per
share of $18.21.
DIVIDEND POLICY
Because of our continually strong earnings growth, our Board of
Directors has increased the cash dividend per common share by an
average annual compound growth rate of 13 percent since December 31,
1985. Our annual common stock dividend was $.88 per share, $.78 per
share and $.68 per share in 1995, 1994 and 1993, respectively. At its
February 1996 meeting, our Board of Directors again increased our
quarterly dividend per share to $.25, equivalent to a full-year
dividend of $1.00 in 1996, the 34th consecutive annual increase.
Our 1995 dividend payout ratio was approximately 37 percent of our
net income. It is the intention of our Board of Directors to gradually
reduce our dividend payout ratio to 30 percent over time.
MEASURING PERFORMANCE
Economic profit and economic value added provide a framework for
measuring the impact of value-oriented actions. We define economic
profit 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.
Recently, we began expanding the use of economic value added as a
performance measurement tool. Both annual incentive awards and long-
term incentive awards for most eligible employees are now determined,
in part, by comparison against economic profit target levels. These
changes in performance measures were made to ensure that our
management team is clearly focused on the key drivers of our business.
We intend to continue expanding the use of economic profit and the
related concept of value creation in measuring performance. We believe
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.
43
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
Over the last 10 years, we have increased our economic profit at
an average annual compound rate of 23 percent, resulting in economic
value added to the Company of $1.9 billion. Over the same period, our
Company's stock price has increased at an average annual compound rate
of 27 percent.
TOTAL RETURN TO SHARE OWNERS
Share owners of our Company have received an excellent return on their
investment over the past decade. A $100 investment in our Company's
common stock on December 31, 1985, together with reinvested dividends,
was worth approximately $1,287 on December 31, 1995, an average annual
compound return of 29 percent.
MANAGEMENT'S DISCUSSION AND ANALYSIS
LINES OF BUSINESS
BEVERAGES
Our beverages business is the largest manufacturer, marketer and
distributor of soft drink and noncarbonated beverage concentrates and
syrups in the world. We manufacture beverage concentrates and syrups,
and in certain instances, finished beverages, which we sell to
bottling and canning operations, authorized fountain wholesalers and
some fountain retailers. In addition, we have substantial ownership
interests in numerous bottling and canning operations.
FOODS
Our foods business produces, markets and distributes principally juice
and juice-drink products. It is the largest marketer of juice and
juice-drink products in the world.
VOLUME
BEVERAGES
We measure beverage volume in two ways: (1) gallon shipments of
concentrates and syrups and (2) equivalent unit cases of finished
product. Gallon shipments represent our primary business, since they
measure the volume of concentrates and syrups we sell to our bottling
system. Most of our revenues are based on this measure of "wholesale"
activity. We also measure volume in unit cases, which represent the
amount of finished product our bottling system sells to retail
customers. We believe unit case volume more accurately measures the
underlying strength of our 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 directly to
our customers are included in both measures simultaneously.
OPERATIONS
NET OPERATING REVENUES AND GROSS MARGIN
In 1995, revenues from our beverages business increased 13 percent,
reflecting an increase in gallon shipments, selective price increases
and continued expansion of our bottling and canning operations.
Revenues from our foods business decreased 7 percent in 1995,
resulting from implementation of a strategy to reduce short-term price
promotions and increase long-term brand-building and marketing
investments.
In 1994, revenues from our beverages business increased 18
percent, primarily due to increased gallon shipments, selective price
increases, continued expansion of our bottling and canning operations
and a weaker U.S. dollar versus key currencies. Revenues for our foods
business increased 3 percent in 1994 as a result of price increases
for orange juice products.
On a consolidated basis, our net revenues grew 11 percent and our
gross profit grew 11 percent in 1995. Our gross margin declined to 61
percent in 1995 from 62 percent in 1994, primarily due to higher costs
for materials such as sweeteners and packaging.
On a consolidated basis, our worldwide net revenues grew 16
percent in 1994, while gross profit grew 14 percent. Our 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.
SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
Selling expenses were $5,399 million in 1995, $4,931 million in 1994
and $4,360 million in 1993. The increases in 1995 and 1994 were
primarily due to higher marketing investments in support of our
Company's volume growth.
Administrative and general expenses were $1,587 million in 1995,
$1,366 million in 1994 and $1,335 million in 1993. The increase in
1995 reflects higher expenses related to stock-based employee benefits
and a nonrecurring provision of $86 million to increase efficiencies
in the Company's operations in the United States and Europe. The
increase in 1994 was due primarily to expansion of our business,
particularly newly formed Company-owned bottling operations.
Administrative and general expenses, as a percentage of net operating
revenues, were approximately 9 percent in 1995, 8 percent in 1994 and
10 percent in 1993.
44
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
OPERATING INCOME AND OPERATING MARGIN
On a consolidated basis, our operating income grew 10 percent in 1995,
on top of a 20 percent increase in 1994. During 1995, operating income
for our beverages business rose approximately 14 percent primarily as
a result of increased revenues. Our foods business reported a modest
loss of $14 million in 1995, due to its decline in net revenues and a
nonrecurring provision for increasing efficiencies. Our consolidated
operating margin was 23 percent in 1995 and 1994.
MARGIN ANALYSIS
[bar chart]
Year ended December 31, 1993 1994 1995
- ----------------------------------------------------------------------
Net operating revenues
(in billions) $14.0 $16.2 $18.0
Gross margin 63% 62% 61%
Operating margin 22% 23% 23%
======================================================================
Our Company's gross profit and operating income growth are a
result of increasing revenues.
INTEREST INCOME AND INTEREST EXPENSE
In 1995, our interest income increased 35 percent as a result of
higher average interest rates outside of the United States. Interest
expense increased 37 percent in 1995, reflecting higher commercial
paper balances.
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.
EQUITY INCOME
Equity income increased 26 percent to $169 million in 1995, due
primarily to improved results at Coca-Cola FEMSA, Coca-Cola Nestle
Refreshments, Coca-Cola Bottlers Philippines, Inc. and Coca-Cola
Beverages Ltd.
Equity income increased 47 percent to $134 million in 1994,
resulting from increased earnings from Coca-Cola Enterprises and
Coca-Cola & Schweppes Beverages Ltd. and improved results from
Coca-Cola Beverages Ltd.
OTHER INCOME (DEDUCTIONS)-NET
In 1995, other income (deductions)-net increased $124 million, and
includes gains recorded on the sale of bottling operations in Poland,
Croatia and Romania.
In 1994, other income (deductions)-net decreased $102 million,
primarily due to recognition in 1993 of approximately $84 million of
pretax gains on sales of real estate and bottling investments. These
1993 gains include 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. No transactions
resulting in significant gains occurred in 1994.
GAIN ON ISSUANCE OF STOCK BY COCA-COLA AMATIL
In July 1995, Coca-Cola Amatil completed a public offering in
Australia of approximately 97 million shares of common stock. In
connection with the offering, our ownership in Coca-Cola Amatil was
reduced to approximately 40 percent. We recognized a non-cash pretax
gain of approximately $74 million as a result of this transaction.
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 non-cash pretax gain of $12
million for our Company.
INCOME TAXES
Our effective tax rates of 31.0 percent in 1995, 31.5 percent in 1994
and 31.3 percent in 1993 reflect the tax benefit we derive 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
In 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of" (SFAS 121). We will adopt the provisions of SFAS 121 on
January 1, 1996. SFAS 121 standardizes the accounting practices for
the recognition and measurement of impairment losses on certain long-
lived assets. We do not expect the adoption of SFAS 121 to have a
material impact on our results of operations or financial position.
However, the provisions of SFAS 121 will require certain charges
historically recorded by our Company in other income (deductions)-net
to be included in operating income.
45
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
We 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 changed our method of accounting for certain debt and
marketable equity securities from a historical cost basis to a fair
value approach.
INCOME PER SHARE
Accelerated by our Company's share repurchase program, our net income
per share grew 20 percent and 19 percent in 1995 and 1994, respectively.
Income per share before changes in accounting principles grew 18 percent
in 1994.
LIQUIDITY AND CAPITAL RESOURCES
Our ability to generate cash from operations in excess of our capital
reinvestment and dividend requirements is one of our chief financial
strengths. We anticipate that our operating activities in 1996 will
continue to provide us with sufficient cash flows to capitalize on
opportunities for business expansion and to meet all of our financial
commitments.
FREE CASH FLOW
Free cash flow is the cash remaining from operations after we have
satisfied our business reinvestment opportunities. We focus on
increasing free cash flow to achieve our primary objective, maximizing
share-owner value over time. We use free cash flow, along with
borrowings, to pay dividends and make share repurchases. The
consolidated statements of our cash flows are summarized as follows
(in millions):
Year Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------------
Cash flows provided by
(used in):
Operations $3,115 $3,183 $2,508
Investment activities (1,013) (1,037) (885)
- ----------------------------------------------------------------------
FREE CASH FLOW 2,102 2,146 1,623
Cash flows provided by
(used in):
Financing
Share repurchases (1,796) (1,192) (680)
Other financing activities (482) (600) (860)
Exchange (43) 34 (41)
- ----------------------------------------------------------------------
Increase (decrease) in cash $ (219) $ 388 $ 42
======================================================================
Cash provided by operations amounted to $3.1 billion, a 2 percent
decrease from 1994. This 1995 decrease primarily resulted from
increases in accounts receivable and inventories related to the
increase in our net revenues, and an increase in prepaid expenses and
other assets. In 1994, cash from operations totaled $3.2 billion, a 27
percent increase over 1993, resulting primarily from growth in our net
income before non-cash charges for depreciation and amortization and
increased dividends from equity method investments.
As compared to 1994, net cash used in investment activities
decreased in 1995, primarily attributable to an increase in proceeds
from disposals of investments and other assets. Specifically, during
1995, we sold our interests in the bottling operations of Poland,
Croatia and Romania.
While cash used for acquisitions and investments, principally
bottling companies, declined in 1994, that decline was more than
offset by a reduction in proceeds from disposals of property, plant
and equipment and investments and other assets, resulting in a net
increase in cash used in investment activities in 1994.
The 1995 increase in cost method investments includes an increased
investment in Panamerican Beverages. In 1995, goodwill and other
intangible assets increased in association with our acquisitions
during the year, such as Barq's, Inc. and certain fountain syrup
manufacturing operations. The increase in 1994 in marketable
securities and the carrying value of cost method investments was due,
in part, to our Company's adoption of SFAS 115, which reflects a non-
cash adjustment to fair value. A portion of the 1994 increase 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.
FINANCING ACTIVITIES
Our financing activities include net borrowings, dividend payments and
share repurchases. Net cash used in financing activities totaled $2.3
billion in 1995, $1.8 billion in 1994 and $1.5 billion in 1993. The
change between years was due, in part, to net borrowings of debt in
1995 and 1994, compared to net reductions of debt in 1993. Cash used
to purchase common stock for treasury increased to $1.8 billion in
1995, from $1.2 billion in 1994.
Our global presence and strong capital position afford us easy
access to key financial markets around the world, enabling us to raise
funds with a low effective cost. This posture, coupled with the
aggressive management of our mix of short-term and long-term debt,
results in a lower overall cost of borrowing. Our debt management
policies, in conjunction with our share repurchase program and
investment activity, typically result in current liabilities exceeding
current assets.
46
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
FINANCIAL REVIEW INCORPORATING
MANAGEMENT'S DISCUSSION AND ANALYSIS
We manage our debt levels based on the following financial
measurements and ratios:
Year Ended December 31, 1995 1994 1993
- ------------------------------------------------------------------
Net debt (in billions) $2.2 $1.5 $1.6
Net debt-to-net capital 29% 23% 26%
Free cash flow to net debt 96% 141% 100%
Interest coverage 16x 19x 18x
Ratio of earnings to
fixed charges 14.5x 16.8x 15.7x
==================================================================
Net debt excludes the debt entered into on behalf of the Company's
finance subsidiary, and is net of cash, cash equivalents and
marketable securities in excess of operating requirements and net of
temporary bottling investments.
Commercial paper is our primary source of short-term financing. On
December 31, 1995, we had $3.3 billion in lines of credit and other
short-term credit facilities available, under which $2.4 billion was
outstanding. Included was $2.2 billion outstanding in commercial paper
borrowings. The 1995 and 1994 increases in loans and notes payable
were primarily attributable to additional commercial paper borrowings
resulting from the management of our short-term and long-term debt mix.
EXCHANGE
Our international operations are subject to certain opportunities and
risks, including currency fluctuations and government actions. We
monitor our operations in each country closely so that we can respond
to changing economic and political environments quickly and decisively,
and take full advantage of changing foreign currencies and interest rates.
We use approximately 48 functional currencies. In 1995, we
expanded the calculation of the impact of weighted average exchange
rates versus the U.S. dollar to include the Mexican and Philippine
pesos and the South African rand. The 1994 and 1993 calculation for
key currencies now reflects this change. In 1995, 1994 and 1993, the
weighted average exchange rates for certain key foreign currencies
strengthened (weakened) against the U.S. dollar as follows:
Year Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------------
Key currencies Even 2 % (3)%
- ----------------------------------------------------------------------
Australian dollar 1 % 9 % (7)%
British pound 3 % 2 % (15)%
Canadian dollar Even (5)% (8)%
French franc 13 % (1)% (3)%
German mark 13 % 2 % (5)%
Japanese yen 9 % 9 % 15 %
Mexican peso (46)% (8)% (1)%
======================================================================
The change in our foreign currency translation adjustment in 1995
was due primarily to the revaluation of net assets located in
countries where the local currency significantly weakened versus the
U.S. dollar. Exchange losses amounting to $21 million in 1995, $25
million in 1994 and $74 million in 1993 were recorded in other income
(deductions)-net. 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 our hedging activities is
presented on pages 60 through 61.
IMPACT OF INFLATION AND CHANGING PRICES
Inflation is a factor that impacts the way we operate in many markets
around the world. In general, we are able to increase prices to
counteract the effects of increasing costs and generate sufficient
cash flows to maintain our productive capability.
OUTLOOK
As a global business that generates the majority of its operating
income outside the United States, our Company is uniquely positioned
to benefit from operating in a variety of currencies, as downturns in
any one region are often offset by strengths in others. Additionally,
we have various operational initiatives available to offset the
unfavorable impact of such events.
While we cannot predict future economic events, we believe
continued expansion into the developing population centers of the
world presents further opportunity for growth. The strength of our
brands, our broad global presence and our strong financial condition
allow our Company the flexibility to take advantage of growth
opportunities and to continue increasing share-owner value.
ADDITIONAL INFORMATION
For additional information about our operations, cash flows, liquidity
and capital resources, please refer to the information on pages 50
through 70 of this report. Additional information concerning our
operations in different lines of business and geographic areas is
presented on pages 67 and 68.
47
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Compound
(In millions except per Growth Rates Year Ended December 31,
share data, ratios and ----------------- -------------------------------------------------------
growth rates) 5 Years 10 Years 1995 1994{2} 1993{3} 1992{4,5} 1991{5}
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net operating revenues 12.0% 11.9% $18,018 $16,181 $13,963 $13,074 $11,572
Cost of goods sold 10.5% 9.1% 6,940 6,168 5,160 5,055 4,649
- ------------------------------------------------------------------------------------------------------
Gross profit 12.9% 14.1% 11,078 10,013 8,803 8,019 6,923
Selling, administrative
and general expenses 11.4% 12.4% 6,986 6,297 5,695 5,249 4,604
- ------------------------------------------------------------------------------------------------------
Operating income 16.0% 17.6% 4,092 3,716 3,108 2,770 2,319
Interest income 245 181 144 164 175
Interest expense 272 199 168 171 192
Equity income 169 134 91 65 40
Other income (deductions)-net 20 (104) (2) (82) 41
Gain on issuance of stock by
equity investees 74 -- 12 -- --
- ------------------------------------------------------------------------------------------------------
Income from continuing
operations before income
taxes and changes in
accounting principles 16.5% 17.2% 4,328 3,728 3,185 2,746 2,383
Income taxes 16.3% 15.6% 1,342 1,174 997 863 765
- ------------------------------------------------------------------------------------------------------
Income from continuing
operations before changes
in accounting principles 16.7% 18.0% $ 2,986 $ 2,554 $ 2,188 $ 1,883 $ 1,618
======================================================================================================
Net income 16.7% 15.3% $ 2,986 $ 2,554 $ 2,176 $ 1,664 $ 1,618
Preferred stock dividends -- -- -- -- 1
- ------------------------------------------------------------------------------------------------------
Net income available to
common share owners 17.0% 15.3% $ 2,986 $ 2,554 $ 2,176 $ 1,664 $ 1,617
======================================================================================================
Average common shares
outstanding 1,262 1,290 1,302 1,317 1,333
PER COMMON SHARE DATA
Income from continuing
operations before changes
in accounting principles 18.4% 20.7% $ 2.37 $ 1.98 $ 1.68 $ 1.43 $ 1.21
Net income 18.4% 17.8% 2.37 1.98 1.67 1.26 1.21
Cash dividends 17.1% 13.4% .88 .78 .68 .56 .48
Market price on December 31 26.1% 26.6% 74.25 51.50 44.63 41.88 40.13
TOTAL MARKET VALUE OF
COMMON STOCK 24.5% 23.9% $92,983 $65,711 $57,905 $54,728 $53,325
BALANCE SHEET DATA
Cash, cash equivalents
and current marketable
securities $ 1,315 $ 1,531 $ 1,078 $ 1,063 $ 1,117
Property, plant and
equipment-net 4,336 4,080 3,729 3,526 2,890
Depreciation 421 382 333 310 254
Capital expenditures 937 878 800 1,083 792
Total assets 15,041 13,873 12,021 11,052 10,189
Long-term debt 1,141 1,426 1,428 1,120 985
Total debt 4,064 3,509 3,100 3,207 2,288
Share-owners' equity 5,392 5,235 4,584 3,888 4,239
Total capital{1} 9,456 8,744 7,684 7,095 6,527
OTHER KEY FINANCIAL
MEASURES{1}
Total debt-to-total capital 43.0% 40.1% 40.3% 45.2% 35.1%
Net debt-to-net capital 28.8% 22.6% 26.2% 31.9% 19.2%
Return on common equity 56.2% 52.0% 51.7% 46.4% 41.3%
Return on capital 34.9% 32.7% 31.2% 29.4% 27.5%
Dividend payout ratio 37.2% 39.4% 40.6% 44.3% 39.5%
Economic profit{6} $ 2,172 $ 1,881 $ 1,488 $ 1,300 $ 1,038
======================================================================================================
{1} See Glossary on page 74.
{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.
{6} The calculation of economic profit has been simplified and amounts prior to 1995 have been
restated.
</TABLE>
48
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(In millions except per Year Ended December 31,
share data, ratios and -------------------------------------------------------------------
growth rates) 1990{5} 1989{5} 1988 1987 1986 1985
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net operating revenues $10,236 $ 8,622 $ 8,065 $ 7,658 $ 6,977 $ 5,879
Cost of goods sold 4,208 3,548 3,429 3,633 3,454 2,909
- --------------------------------------------------------------------------------------------------
Gross profit 6,028 5,074 4,636 4,025 3,523 2,970
Selling, administrative
and general expenses 4,076 3,348 3,038 2,701 2,626 2,163
- --------------------------------------------------------------------------------------------------
Operating income 1,952 1,726 1,598 1,324 897 807
Interest income 170 205 199 232 154 151
Interest expense 231 308 230 297 208 196
Equity income 110 75 92 64 45 52
Other income (deductions)-net 13 66 (33) -- 35 69
Gain on issuance of stock by
equity investees -- -- -- 40 375 --
- --------------------------------------------------------------------------------------------------
Income from continuing
operations before income
taxes and changes in
accounting principles 2,014 1,764 1,626 1,363 1,298 883
Income taxes 632 553 537 496 471 314
- --------------------------------------------------------------------------------------------------
Income from continuing
operations before changes
in accounting principles $ 1,382 $ 1,211 $ 1,089 $ 867 $ 827 $ 569
==================================================================================================
Net income $ 1,382 $ 1,537 $ 1,045 $ 916 $ 934 $ 722
Preferred stock dividends 18 21 7 -- -- --
- --------------------------------------------------------------------------------------------------
Net income available to
common share owners $ 1,364 $ 1,516{7} $ 1,038 $ 916 $ 934 $ 722
==================================================================================================
Average common shares
outstanding 1,337 1,384 1,458 1,509 1,547 1,573
PER COMMON SHARE DATA
Income from continuing
operations before changes
in accounting principles $ 1.02 $ .86 $ .74 $ .57 $ .53 $ .36
Net income 1.02 1.10{7} .71 .61 .60 .46
Cash dividends .40 .34 .30 .28 .26 .25
Market price on December 31 23.25 19.31 11.16 9.53 9.44 7.04
TOTAL MARKET VALUE OF
COMMON STOCK $31,073 $26,034 $15,834 $14,198 $14,534 $10,872
BALANCE SHEET DATA
Cash, cash equivalents
and current marketable
securities $ 1,492 $ 1,182 $ 1,231 $ 1,489 $ 895 $ 843
Property, plant and
equipment-net 2,386 2,021 1,759 1,602 1,538 1,483
Depreciation 236 181 167 152 151 130
Capital expenditures 593 462 387 304 346 412
Total assets 9,245 8,249 7,451 8,606 7,675 6,341
Long-term debt 536 549 761 909 996 801
Total debt 2,537 1,980 2,124 2,995 1,848 1,280
Share-owners' equity 3,662 3,299 3,345 3,187 3,479 2,948
Total capital{1} 6,199 5,279 5,469 6,182 5,327 4,228
OTHER KEY FINANCIAL
MEASURES{1}
Total debt-to-total capital 40.9% 37.5% 38.8% 48.4% 34.7% 30.3%
Net debt-to-net capital 23.7% 14.7% 18.9% 15.4% 10.9% 15.6%
Return on common equity 41.4% 39.4% 34.7% 26.0% 25.7% 20.0%
Return on capital 26.8% 26.5% 21.3% 18.3% 20.1% 16.8%
Dividend payout ratio 39.2% 31.0%{7} 42.1% 46.0% 43.1% 53.8%
Economic profit{6} $ 918 $ 817 $ 717 $ 490 $ 331 $ 266
==================================================================================================
{7} Net income available to common share owners in 1989 included 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>
49
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1995 1994
- --------------------------------------------------------------------------
(In millions except share data)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 1,167 $ 1,386
Marketable securities 148 145
- --------------------------------------------------------------------------
1,315 1,531
Trade accounts receivable, less allowances
of $34 in 1995 and $33 in 1994 1,695 1,470
Finance subsidiary receivables 55 55
Inventories 1,117 1,047
Prepaid expenses and other assets 1,268 1,102
- --------------------------------------------------------------------------
TOTAL CURRENT ASSETS 5,450 5,205
- --------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Equity method investments
Coca-Cola Enterprises Inc. 556 524
Coca-Cola Amatil Limited 682 694
Other, principally bottling companies 1,157 1,114
Cost method investments, principally
bottling companies 319 178
Finance subsidiary receivables and investments 351 255
Marketable securities and other assets 1,246 1,163
- --------------------------------------------------------------------------
4,311 3,928
- --------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land 233 221
Buildings and improvements 1,944 1,814
Machinery and equipment 4,135 3,776
Containers 345 346
- --------------------------------------------------------------------------
6,657 6,157
Less allowances for depreciation 2,321 2,077
- --------------------------------------------------------------------------
4,336 4,080
- --------------------------------------------------------------------------
GOODWILL AND OTHER INTANGIBLE ASSETS 944 660
- --------------------------------------------------------------------------
$15,041 $13,873
==========================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
50
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1995 1994
- --------------------------------------------------------------------------
(In millions except share data)
<S> <C> <C>
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses $ 2,894 $ 2,564
Loans and notes payable 2,371 2,048
Current maturities of long-term debt 552 35
Accrued taxes 1,531 1,530
- --------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 7,348 6,177
- --------------------------------------------------------------------------
LONG-TERM DEBT 1,141 1,426
- --------------------------------------------------------------------------
OTHER LIABILITIES 966 855
- --------------------------------------------------------------------------
DEFERRED INCOME TAXES 194 180
- --------------------------------------------------------------------------
SHARE-OWNERS' EQUITY
Common stock, $.25 par value
Authorized: 2,800,000,000 shares
Issued: 1,711,839,497 shares in 1995;
1,707,627,955 shares in 1994 428 427
Capital surplus 1,291 1,173
Reinvested earnings 12,882 11,006
Unearned compensation related to
outstanding restricted stock (68) (74)
Foreign currency translation adjustment (424) (272)
Unrealized gain on securities available for sale 82 48
- --------------------------------------------------------------------------
14,191 12,308
Less treasury stock, at cost
(459,540,663 shares in 1995;
431,694,661 shares in 1994) 8,799 7,073
- --------------------------------------------------------------------------
5,392 5,235
- --------------------------------------------------------------------------
$15,041 $13,873
==========================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
51
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31, 1995 1994 1993
- -----------------------------------------------------------------------------
(In millions except per share data)
<S> <C> <C> <C>
NET OPERATING REVENUES $18,018 $16,181 $13,963
Cost of goods sold 6,940 6,168 5,160
- -----------------------------------------------------------------------------
GROSS PROFIT 11,078 10,013 8,803
Selling, administrative and general expenses 6,986 6,297 5,695
- -----------------------------------------------------------------------------
OPERATING INCOME 4,092 3,716 3,108
Interest income 245 181 144
Interest expense 272 199 168
Equity income 169 134 91
Other income (deductions)-net 20 (104) (2)
Gain on issuance of stock by Coca-Cola Amatil 74 -- 12
- -----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
CHANGE IN ACCOUNTING PRINCIPLE 4,328 3,728 3,185
Income taxes 1,342 1,174 997
- -----------------------------------------------------------------------------
INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE 2,986 2,554 2,188
Transition effect of change in accounting for
postemployment benefits -- -- (12)
- -----------------------------------------------------------------------------
NET INCOME $ 2,986 $ 2,554 $ 2,176
=============================================================================
INCOME PER SHARE
Before change in accounting principle $ 2.37 $ 1.98 $ 1.68
Transition effect of change in
accounting for postemployment benefits -- -- (.01)
- -----------------------------------------------------------------------------
NET INCOME PER SHARE $ 2.37 $ 1.98 $ 1.67
=============================================================================
AVERAGE SHARES OUTSTANDING 1,262 1,290 1,302
=============================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
52
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31, 1995 1994 1993
- -------------------------------------------------------------------------------------
(In millions)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $2,986 $2,554 $2,176
Transition effect of change in accounting principle -- -- 12
Depreciation and amortization 454 411 360
Deferred income taxes 157 58 (62)
Equity income, net of dividends (25) (4) (35)
Foreign currency adjustments (23) (6) 9
Gains on sales of assets -- -- (84)
Other noncash items (29) 41 78
Net change in operating assets and liabilities (405) 129 54
- -------------------------------------------------------------------------------------
Net cash provided by operating activities 3,115 3,183 2,508
- -------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to finance subsidiary receivables (144) (94) (177)
Collections of finance subsidiary receivables 46 50 44
Acquisitions and investments, principally
bottling companies (338) (311) (611)
Purchases of securities (190) (201) (245)
Proceeds from disposals of investments and other assets 580 299 690
Purchases of property, plant and equipment (937) (878) (800)
Proceeds from disposals of property, plant and equipment 44 109 312
Other investing activities (74) (11) (98)
- -------------------------------------------------------------------------------------
Net cash used in investing activities (1,013) (1,037) (885)
- -------------------------------------------------------------------------------------
Net cash provided by operations after reinvestment 2,102 2,146 1,623
- -------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuances of debt 754 491 445
Payments of debt (212) (154) (567)
Issuances of stock 86 69 145
Purchases of stock for treasury (1,796) (1,192) (680)
Dividends (1,110) (1,006) (883)
- -------------------------------------------------------------------------------------
Net cash used in financing activities (2,278) (1,792) (1,540)
- -------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (43) 34 (41)
- -------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year (219) 388 42
Balance at beginning of year 1,386 998 956
- -------------------------------------------------------------------------------------
Balance at end of year $1,167 $1,386 $ 998
=====================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
53
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY
<TABLE>
<CAPTION>
Number of
Common Outstanding Foreign Unrealized
Three Years Ended Shares Common Capital Reinvested Restricted Currency Gain on Treasury
December 31, 1995 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, 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)
Stock issued to employees |
exercising stock options 4 | 1 85 -- -- -- -- --
Tax benefit from employees' |
stock option and |
restricted stock plans -- | -- 26 -- -- -- -- --
Stock issued under |
restricted stock plans, |
less amortization of $12 -- | -- 7 -- 6 -- -- --
Translation adjustments -- | -- -- -- -- (152) -- --
Net change in unrealized |
gain on securities, |
net of deferred taxes -- | -- -- -- -- -- 34 --
Purchases of stock for |
treasury (29){1}| -- -- -- -- -- -- (1,796)
Treasury stock issued |
in connection with |
an acquisition 1 | -- -- -- -- -- -- 70
Net income -- | -- -- 2,986 -- -- -- --
Dividends (per share-$.88) -- | -- -- (1,110) -- -- -- --
- -----------------------------------------|-----------------------------------------------------------------------------
BALANCE DECEMBER 31, 1995 1,252 | $428 $1,291 $12,882 $ (68) $(424) $82 $(8,799)
======================================================================================================================
{1} Common stock purchased from employees exercising stock options amounted to 280 thousand, 208
thousand and 2.7 million shares for the years ending December 31, 1995, 1994 and 1993, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
54
<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:
ORGANIZATION
The Company is predominantly a manufacturer, marketer and distributor
of soft drink and noncarbonated beverage concentrates and syrups.
Operating in nearly 200 countries worldwide, the Company primarily
sells its concentrates and syrups to bottling and canning operations,
fountain wholesalers and fountain retailers. The Company has
significant markets for its products in all of the world's geographic
regions.
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 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, as
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.
ADVERTISING COSTS
The Company generally expenses production costs of print, radio and
television advertisements as of the first date the advertisements take
place. Advertising expenses included in selling, administrative and
general expenses were $1,333 million in 1995, $1,142 million in 1994
and $1,002 million in 1993. As of December 31, 1995 and 1994, advertising
costs of approximately $299 million and $259 million, respectively, were
recorded primarily in prepaid expenses and other assets in the accompanying
balance sheets.
NET INCOME PER SHARE
Net income per share is computed by dividing net income by the
weighted average number of shares outstanding.
On December 21, 1995, the Board of Directors authorized a two-for-
one stock split. The stock split is subject to share-owner approval in
April 1996. If approved, the stock split will be payable to share
owners of record on May 1, 1996. These financial statements have not
been restated to reflect the proposed stock split.
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.
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).
Goodwill and other intangible assets are periodically reviewed for
impairment based on an assessment of future operations to ensure that
they are appropriately valued. Accumulated amortization was
approximately $117 million and $77 million on December 31, 1995 and
1994, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although these estimates are based
on management's knowledge of current events and actions it may
undertake in the future, they may ultimately differ from actual
results.
CHANGES IN ACCOUNTING PRINCIPLES
In 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of" (SFAS 121). The Company's required adoption date is
January 1, 1996. SFAS 121 standardizes the accounting practices for
the recognition and measurement of impairment losses on certain long-
lived assets. The Company anticipates the adoption of SFAS 121 will
not have a material impact on its results of operations or financial
position. However, the provisions of SFAS 121 will require certain
charges historically recorded by the Company in other income
(deductions)-net to be included in operating income.
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.
55
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 income 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 income taxes of $8
million.
STOCK-BASED COMPENSATION
The Company currently accounts for its stock-based compensation plans
using the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25).
In 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123). Under the provisions of SFAS 123, companies can elect to account
for stock-based compensation plans using a fair-value-based method or
continue measuring compensation expense for those plans using the
intrinsic value method prescribed in APB 25. SFAS 123 requires that
companies electing to continue using the intrinsic value method must
make pro forma disclosures of net income and earnings per share as if
the fair-value-based method of accounting had been applied. The
adoption of SFAS 123 will be reflected in the Company's 1996
consolidated financial statements.
As the Company anticipates continuing to account for stock-based
compensation using the intrinsic value method, SFAS 123 will not have
an impact on the Company's results of operations or financial
position.
2. INVENTORIES
Inventories consist of the following (in millions):
December 31, 1995 1994
- ---------------------------------------------------------
Raw materials and supplies $ 784 $ 728
Work in process 7 4
Finished goods 326 315
- ---------------------------------------------------------
$1,117 $1,047
=========================================================
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, 1995 1994
- -----------------------------------------------------------
Current assets $ 982 $ 809
Noncurrent assets 8,082 7,928
- -----------------------------------------------------------
Total assets $9,064 $8,737
===========================================================
Current liabilities $ 859 $1,088
Noncurrent liabilities 6,770 6,310
- -----------------------------------------------------------
Total liabilities $7,629 $7,398
===========================================================
Share-owners' equity $1,435 $1,339
===========================================================
Company equity investment $ 556 $ 524
===========================================================
Year Ended December 31, 1995 1994 1993
- -----------------------------------------------------------
Net operating revenues $6,773 $6,011 $5,465
Cost of goods sold 4,267 3,703 3,372
- -----------------------------------------------------------
Gross profit $2,506 $2,308 $2,093
===========================================================
Operating income $ 468 $ 440 $ 385
===========================================================
Operating cash flow $ 997 $ 901 $ 804
===========================================================
Net income (loss) $ 82 $ 69 $ (15)
===========================================================
Net income (loss) available
to common share owners $ 80 $ 67 $ (15)
===========================================================
Company equity income (loss) $ 35 $ 30 $ (6)
===========================================================
The Company's net concentrate/syrup sales to Coca-Cola Enterprises
were $1.3 billion in 1995, $1.2 billion in 1994 and $961 million in
1993. 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 $242 million in 1995, $254 million in 1994 and $211
million in 1993. The Company also provides certain administrative and
other services to Coca-Cola Enterprises under negotiated fee
arrangements.
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 $343 million in 1995, $319 million in 1994 and $256
million in 1993. Additionally, in 1995 and 1994, the Company
56
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
committed to provide approximately $55 million and $34 million,
respectively, to Coca-Cola Enterprises under a Company program which
encourages bottlers to invest in building and supporting beverage
infrastructure.
If valued at the December 31, 1995, 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 $957 million.
OTHER EQUITY INVESTMENTS
On December 31, 1995, the Company owned approximately 40 percent of
Coca-Cola Amatil Limited (Coca-Cola Amatil), an Australian-based
bottler of Company products that operates in 16 countries.
Accordingly, the Company accounts for its investment in Coca-Cola
Amatil by the equity method.
In July 1995, Coca-Cola Amatil completed a public offering in
Australia of approximately 97 million shares of common stock. This
transaction resulted in a non-cash pretax gain of approximately $74
million for the Company.
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.
On December 31, 1995, the excess of the Company's investment over
its equity in the underlying net assets of Coca-Cola Amatil was
approximately $91 million, which is being amortized on a straight-line
basis over 40 years.
During 1995, the Company's finance subsidiary invested $160
million in The Coca-Cola Bottling Company of New York, Inc. (CCNY), in
return for redeemable preferred stock. As of December 31, 1995, the
Company held a 49 percent voting and economic interest in CCNY.
Accordingly, the Company accounts for its investment in CCNY by the
equity method.
In 1993, the Company acquired a 30 percent equity interest in
Coca-Cola FEMSA, S.A. de C.V. (Coca-Cola FEMSA), which operates
bottling facilities in Mexico and Argentina, for $195 million.
On December 31, 1995, the excess of the Company's investment over
its equity in the underlying net assets of Coca-Cola FEMSA was
approximately $31 million, which is being amortized over 40 years.
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, 1995 1994
- -----------------------------------------------------------
Current assets $2,954 $2,747
Noncurrent assets 6,637 5,316
- -----------------------------------------------------------
Total assets $9,591 $8,063
===========================================================
Current liabilities $2,944 $2,382
Noncurrent liabilities 2,849 2,669
- -----------------------------------------------------------
Total liabilities $5,793 $5,051
===========================================================
Share-owners' equity $3,798 $3,012
===========================================================
Company equity investment $1,839 $1,808
===========================================================
Year Ended December 31, 1995 1994 1993
- -----------------------------------------------------------
Net operating revenues $11,563 $9,668 $8,168
Cost of goods sold 7,646 6,397 5,385
- -----------------------------------------------------------
Gross profit $ 3,917 $3,271 $2,783
===========================================================
Operating income $ 846 $ 783 $ 673
===========================================================
Operating cash flow $ 1,403 $1,076 $ 984
===========================================================
Net income $ 355 $ 323 $ 258
===========================================================
Company equity income $ 134 $ 104 $ 97
===========================================================
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 the restructuring of its operations in Canada.
Net sales to equity investees other than Coca-Cola Enterprises
were $1.4 billion in 1995 and $1.2 billion in 1994 and 1993. 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, 1995, 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 $1.2 billion.
57
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 1995, are as follows (in millions):
1996 1997 1998 1999 2000
- --------------------------------------------------------
$55 $39 $39 $33 $58
========================================================
These amounts do not reflect possible prepayments or renewals.
CCFC has agreed to issue up to $50 million in letters of credit on
CCNY's behalf, of which $24 million was committed on December 31,
1995.
5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following (in
millions):
December 31, 1995 1994
- ---------------------------------------------------
Accrued marketing $ 492 $ 425
Container deposits 130 112
Accrued compensation 198 189
Accounts payable and
other accrued expenses 2,074 1,838
- ---------------------------------------------------
$2,894 $2,564
===================================================
6. SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS
Loans and notes payable consist primarily of commercial paper issued
in the United States. On December 31, 1995, the Company had $3.3
billion in lines of credit and other short-term credit facilities
available, under which $2.4 billion was outstanding. Included was $2.2
billion outstanding in commercial paper borrowings. The Company's
weighted average interest rates for commercial paper were
approximately 5.7 and 5.8 percent on December 31, 1995 and 1994,
respectively.
These facilities are subject to normal banking terms and
conditions. Some of the financial arrangements require compensating
balances, none of which are presently significant to the Company.
7. ACCRUED TAXES
Accrued taxes consist of the following (in millions):
December 31, 1995 1994
- --------------------------------------------------------------
Income taxes $1,322 $1,312
Sales, payroll and other taxes 209 218
- --------------------------------------------------------------
$1,531 $1,530
==============================================================
8. LONG-TERM DEBT
Long-term debt consists of the following (in millions):
December 31, 1995 1994
- -----------------------------------------------------------------
7 3/4% U.S. dollar notes due 1996 $ 250 $ 250
5 3/4% Japanese yen notes due 1996 292 301
5 3/4% German mark notes due 1998{1} 175 161
7 7/8% U.S. dollar notes due 1998 250 250
6% U.S. dollar notes due 2000 252 --
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 116 116
Other, due 1996 to 2013 59 84
- -----------------------------------------------------------------
1,693 1,461
Less current portion 552 35
- -----------------------------------------------------------------
$1,141 $1,426
=================================================================
{1} Portions of these notes have been swapped for liabilities
denominated in other currencies.
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 $1,017
million and $676 million on December 31, 1995 and $849 million and
$612 million on December 31, 1994. The weighted average interest rate
on the Company's long-term debt was 6.5 and 6.6 percent on December
31, 1995 and 1994, respectively.
Maturities of long-term debt for the five years succeeding
December 31, 1995, are as follows (in millions):
1996 1997 1998 1999 2000
- ----------------------------------------------------------
$552 $10 $435 $8 $255
==========================================================
The above notes include various restrictions, none of which are
presently significant to the Company.
Interest paid was approximately $275 million, $197 million and
$158 million in 1995, 1994 and 1993, respectively.
58
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 marketable equity securities,
investments, receivables, long-term debt and hedging instruments are
based primarily on quoted 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
- -------------------------------------------------------------------
1995
Current marketable securities $ 148 $ 148
Finance subsidiary receivables
and investments 406 410
Cost method investments,
principally bottling companies 319 319
Marketable securities and other assets 1,246 1,245
Long-term debt (1,693) (1,737)
Hedging instruments (see Note 10) 54 (107)
===================================================================
1994
Current marketable securities $ 145 $ 145
Finance subsidiary receivables
and investments 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 (see Note 10) 64 (293)
===================================================================
CERTAIN DEBT AND MARKETABLE EQUITY SECURITIES
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. On December
31, 1995 and 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 income taxes, reported
in share-owners' equity. Debt securities categorized as held to
maturity are stated at amortized cost.
On December 31, 1995 and 1994, available-for-sale and held-to-
maturity securities consisted of the following (in millions):
<TABLE>
<CAPTION>
Gross Gross Estimated
Unrealized Unrealized Fair
December 31, Cost Gains Losses Value
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Available-for-sale
securities
Equity securities $ 128 $151 $ (2) $ 277
Collateralized
mortgage
obligations 147 -- (5) 142
Other debt
securities 26 -- -- 26
- ----------------------------------------------------------------------
$ 301 $151 $ (7) $ 445
======================================================================
Held-to-maturity
securities
Bank and
corporate debt $1,333 $ -- $ -- $1,333
Other debt
securities 40 -- -- 40
- ----------------------------------------------------------------------
$1,373 $ -- $ -- $1,373
======================================================================
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
======================================================================
</TABLE>
59
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On December 31, 1995 and 1994, these investments were included in the
following captions on the consolidated balance sheets (in millions):
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
December 31, Securities Securities
- ----------------------------------------------------------------------
<S> <C> <C>
1995
Cash and cash equivalents $ -- $ 900
Current marketable securities 74 74
Cost method investments,
principally bottling companies 222 --
Marketable securities and
other assets 149 399
- ----------------------------------------------------------------------
$445 $1,373
======================================================================
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
======================================================================
</TABLE>
The contractual maturities of these investments as of December 31,
1995, were as follows (in millions):
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
Securities Securities
- ----------------------------------------------------------------------
Fair Amortized Fair
Cost Value Cost Value
- ----------------------------------------------------------------------
<C> <C> <C> <C> <C>
1996 $ 22 $ 22 $ 974 $ 974
1997-2000 4 4 379 379
After 2000 -- -- 20 20
Collateralized
mortgage obligations 147 142 -- --
Equity securities 128 277 -- --
- ----------------------------------------------------------------------
$301 $445 $1,373 $1,373
======================================================================
</TABLE>
For the years ended December 31, 1995 and 1994, gross realized
gains and losses on sales of available-for-sale securities 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 derivative financial instruments primarily to
reduce its exposure to adverse fluctuations in interest and
foreign exchange rates. These financial instruments, when entered
into, are designated as hedges of underlying exposures. Because
of the high correlation between the hedging instrument and the
underlying exposure being hedged, fluctuations in the value of
the instruments are generally offset by changes in the value of
the underlying exposures. 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. Virtually all of the Company's derivatives
are "over-the-counter" instruments.
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 by reference to the notional amounts and by the other
terms of the derivatives, such as interest rates, exchange rates
or other financial indices.
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.
INTEREST RATE MANAGEMENT
Management of the Company has implemented a policy to maintain
the percentage of fixed and variable rate debt within certain
parameters. The Company enters into interest rate swap
agreements that maintain the fixed/variable mix within these
defined parameters. These contracts had maturities ranging from
2 to 8 years on December 31, 1995. Variable rates are
predominantly 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
60
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 outside the U.S. will be adversely affected by changes in
exchange rates.
The Company enters into forward exchange contracts and purchases
currency options (principally European currencies and Japanese yen) to
hedge firm sale commitments denominated in foreign currencies. The
Company also purchases currency options (principally European
currencies and Japanese yen) to hedge certain anticipated sales.
Premiums paid and realized gains and losses, including those on
terminated contracts, if any, are included in prepaid expenses and
other assets. These are recognized in income along with unrealized
gains and losses, in the same period the hedged transactions are
realized. Approximately $27 million and $10 million of realized losses
on settled contracts entered into as hedges of firmly committed
transactions which have not yet occurred were deferred on December 31,
1995 and 1994, respectively. Deferred gains/losses from hedging
anticipated transactions were not material on December 31, 1995 or
1994. In the unlikely event that the underlying transaction terminates
or becomes improbable, the deferred gains or losses on the associated
derivative will be recorded in the income statement.
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 following table presents the aggregate notional principal
amounts, carrying values, fair values and maturities of the Company's
derivative financial instruments outstanding on December 31, 1995 and
1994 (in millions):
<TABLE>
<CAPTION>
Notional
Principal Carrying Fair
December 31, Amounts Values Values Maturity
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Interest rate
management
Swap agreements
Assets $ 705 $ 4 $ 30 1997-2003
Liabilities 62 -- (2) 2000-2002
Interest rate caps
Assets 400 2 -- 1997
Foreign currency
management
Forward contracts
Assets 1,927 25 36 1996
Liabilities 554 (17) (15) 1996-1997
Swap agreements
Assets 390 17 11 1996-2000
Liabilities 1,686 (46) (262) 1996-2002
Purchased options
Assets 1,823 62 90 1996
Other
Assets 327 7 5 1996
- ----------------------------------------------------------------------
$7,874 $54 $(107)
======================================================================
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)
======================================================================
Maturities of derivative financial instruments held on December
31, 1995, are as follows (in millions):
1996 1997 1998 1999 through 2003
- ----------------------------------------------------------
$5,343 $1,025 $534 $972
==========================================================
</TABLE>
61
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. COMMITMENTS AND CONTINGENCIES
On December 31, 1995, the Company was contingently liable for
guarantees of indebtedness owed by third parties in the amount of $202
million, of which $48 million is related to independent bottling
licensees.
The Mitsubishi Bank Limited has provided a yen denominated
guarantee for the equivalent of $253 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 this 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.
Additionally, the Company has committed, under certain
circumstances, to make future investments in bottling companies.
However, none of these commitments is considered by management to be
individually significant.
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.
On December 31, 1995, 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 was
approved to 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.
Options outstanding on December 31, 1995, also include various options
granted under previous plans. Further information relating to options
is as follows (in millions, except per share amounts):
1995 1994 1993
- -------------------------------------------------------------------
Outstanding on January 1, 33 30 31
Granted 9 7 6
Exercised (4) (4) (7)
Canceled (1) -- --
- -------------------------------------------------------------------
Outstanding on December 31, 37 33 30
===================================================================
Exercisable on December 31, 23 22 22
===================================================================
Shares available on December 31,
for options that may be granted 30 38 45
Prices per share
Exercised $6-$51 $5-$44 $4-$41
Unexercised on December 31, $7-$76 $6-$51 $5-$44
===================================================================
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 on December
31, 1993. No units were paid in 1994 or 1995, leaving the number of
units outstanding unchanged on December 31, 1995.
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
62
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 on December 31, 1993. No
units were paid in 1994 or 1995, leaving the number of units
outstanding unchanged on December 31, 1995.
13. PENSION BENEFITS
The Company sponsors and/or contributes to pension plans covering
substantially all U.S. employees and certain employees in
international locations. The benefits are primarily based on years of
service and the employees' compensation for certain periods during the
last years of employment. Pension costs are generally funded
currently, subject to regulatory funding limitations. The Company also
sponsors nonqualified, unfunded defined benefit plans for certain
officers and other employees. In addition, the Company and its
subsidiaries have various pension plans and other forms of
postretirement arrangements outside the United States.
Total pension expense for all benefit plans, including defined
benefit plans, amounted to approximately $81 million in 1995, $73
million in 1994 and $57 million in 1993. Net periodic pension cost for
the Company's defined benefit plans consists of the following (in
millions):
Year Ended December 31, 1995 1994 1993
- ---------------------------------------------------------------------
U.S. Plans
Service cost-benefits earned
during the period $ 20 $22 $17
Interest cost on projected
benefit obligation 62 53 53
Actual return on plan assets (184) (4) (77)
Net amortization and deferral 136 (44) 31
- ---------------------------------------------------------------------
Net periodic pension cost $ 34 $27 $24
=====================================================================
International Plans
Service cost-benefits earned
during the period $ 23 $24 $17
Interest cost on projected
benefit obligation 27 25 22
Actual return on plan assets (27) (21) (27)
Net amortization and deferral 9 5 13
- ---------------------------------------------------------------------
Net periodic pension cost $ 32 $33 $25
=====================================================================
The funded status for the Company's defined benefit plans is as
follows (in millions):
<TABLE>
<CAPTION>
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
-------------------- --------------------
December 31, 1995 1994 1995 1994
- --------------------------------------------------------------- --------------------
<S> <C> <C> <C> <C>
U.S. Plans
Actuarial present value of
benefit obligations
Vested benefit
obligation $562 $479 $ 137 $101
=============================================================== ====================
Accumulated benefit
obligation $613 $521 $ 144 $104
=============================================================== ====================
Projected benefit
obligation $705 $599 $ 169 $125
Plan assets at fair value{1} 785 597 3 2
- --------------------------------------------------------------- --------------------
Plan assets in excess of (less than)
projected benefit obligation 80 (2) (166){2} (123){2}
Unrecognized net (asset) liability
at transition (26) (30) 13 15
Unrecognized prior service cost 35 37 14 15
Unrecognized net (gain) loss (81) (30) 53 18
Adjustment required to recognize
minimum liability -- -- (54) (28)
- --------------------------------------------------------------- --------------------
Accrued pension asset (liability)
included in the consolidated
balance sheet $ 8 $(25) $(140) $(103)
=============================================================== ====================
International Plans
Actuarial present value of
benefit obligations
Vested benefit
obligation $169 $156 $ 149 $ 147
=============================================================== ====================
Accumulated benefit
obligation $177 $157 $ 172 $ 175
=============================================================== ====================
Projected benefit
obligation $214 $199 $ 225 $ 237
Plan assets at fair value{1} 259 235 109 110
- --------------------------------------------------------------- --------------------
Plan assets in excess of (less than)
projected benefit obligation 45 36 (116) (127)
Unrecognized net (asset) liability
at transition (18) (18) 28 36
Unrecognized prior service cost 3 4 11 13
Unrecognized net (gain) loss (3) (1) 1 16
Adjustment required to recognize
minimum liability -- -- (6) (9)
- --------------------------------------------------------------- --------------------
Accrued pension asset (liability)
included in the consolidated
balance sheet $ 27 $ 21 $ (82) $ (71)
=============================================================== ====================
{1} Primarily listed stocks, bonds and government securities.
{2} Substantially all of this amount relates to nonqualified, unfunded defined
benefit plans.
</TABLE>
63
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The assumptions used in computing the preceding information are as
follows:
Year Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------------
U.S. Plans
Discount rates 7 1/4% 8 1/4% 7 1/4%
Rates of increase in
compensation levels 4 3/4% 5 1/4% 4 3/4%
Expected long-term rates
of return on assets 9 1/2% 9 1/2% 9 1/2%
======================================================================
International Plans (weighted
average rates)
Discount rates 6 1/4% 6% 6 1/2%
Rates of increase in
compensation levels 4 1/2% 4 1/2% 5%
Expected long-term rates
of return on assets 6% 6% 7%
======================================================================
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.
Net periodic cost for the Company's postretirement health care and
life insurance benefits consists of the following (in millions):
Year Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------
Service cost $ 12 $ 12 $ 10
Interest cost 23 21 21
Other (2) (1) (1)
- ----------------------------------------------------------------
$ 33 $ 32 $ 30
================================================================
The Company contributes to a Voluntary Employees' Beneficiary
Association trust that will be used to partially fund health care
benefits for future retirees. Generally, the Company funds 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 of the Company's postretirement health care and
life insurance plans is as follows (in millions):
December 31, 1995 1994
- -------------------------------------------------------------------
Accumulated postretirement
benefit obligations:
Retirees $ 122 $ 128
Fully eligible active plan participants 40 35
Other active plan participants 141 120
- -------------------------------------------------------------------
Total benefit obligation 303 283
Plan assets at fair value{1} 42 41
- -------------------------------------------------------------------
Plan assets less than benefit obligation (261) (242)
Unrecognized prior service cost (3) (3)
Unrecognized net gain (9) (7)
- -------------------------------------------------------------------
Accrued postretirement benefit
liability included in the
consolidated balance sheet $(273) $(252)
===================================================================
{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, 1995 1994 1993
- ---------------------------------------------------------------------
Discount rate 7 1/4% 8 1/4% 7 1/4%
Rate of increase in compensation
levels 4 3/4% 5 1/4% 4 3/4%
=====================================================================
The rate of increase in the per capita costs of covered health
care benefits is assumed to be 8 1/4 percent in 1996, decreasing
gradually to 5 percent by the year 2003. Increasing the assumed health
care cost trend rate by 1 percentage point would increase the
accumulated postretirement benefit obligation as of December 31, 1995,
by approximately $39 million and increase the net periodic
postretirement benefit cost by approximately $5 million in 1995.
15. INCOME TAXES
Income before income taxes and change in accounting principle consists
of the following (in millions):
Year Ended December 31, 1995 1994 1993
- --------------------------------------------------------------------
United States $1,270 $1,214 $1,035
International 3,058 2,514 2,150
- --------------------------------------------------------------------
$4,328 $3,728 $3,185
====================================================================
64
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income tax expense (benefit) consists of the following (in
millions):
Year Ended United State &
December 31, States Local International Total
- ----------------------------------------------------------------
1995
CURRENT $204 $41 $940 $1,185
DEFERRED 80 10 67 157
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)
================================================================
{1} An additional deferred tax benefit of $8 million in 1993 has been
included in the SFAS 112 transition effect charge.
The Company made income tax payments of approximately $1,000
million, $785 million and $650 million in 1995, 1994 and 1993,
respectively.
A reconciliation of the statutory U.S. federal rate and effective
rates is as follows:
Year Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------------
Statutory U.S. federal rate 35.0% 35.0% 35.0%
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 (3.9) (4.3) (5.1)
Equity income (1.7) (1.1) (1.7)
Other-net .6 .9 2.1
- ----------------------------------------------------------------------
31.0% 31.5% 31.3%
======================================================================
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 limit the utilization of the
favorable tax treatment from operations in Puerto Rico. The Company's
effective tax rate also reflects 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. 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 $577 million on December 31, 1995. The
taxes that would be paid upon remittance of these indefinitely
reinvested earnings are approximately $202 million based on current
tax laws.
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, 1995 1994
- ----------------------------------------------------------------------
Deferred tax assets:
Benefit plans $ 369 $324
Liabilities and reserves 178 169
Net operating loss carryforwards 97 108
Other 151 128
- ----------------------------------------------------------------------
Gross deferred tax assets 795 729
Valuation allowance (42) (46)
- ----------------------------------------------------------------------
$ 753 $683
======================================================================
Deferred tax liabilities:
Property, plant and equipment $ 414 $362
Equity investments 170 188
Intangible assets 89 34
Other 205 72
- ----------------------------------------------------------------------
$ 878 $656
======================================================================
Net deferred tax asset (liability){1} $(125) $ 27
======================================================================
{1} Deferred tax assets of $69 million and $207 million have been
included in the consolidated balance sheet caption "marketable
securities and other assets" at December 31, 1995 and 1994,
respectively.
On December 31, 1995, the Company had $265 million of operating
loss carryforwards available to reduce future taxable income of
certain international subsidiaries. Loss carryforwards of $107 million
must be utilized within the next 5 years, and $158 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.
65
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 1995 1994 1993
- ----------------------------------------------------------------------
Increase in trade accounts
receivable $(255) $(169) $(151)
(Increase) decrease in inventories (80) 43 (41)
Increase in prepaid expenses
and other assets (373) (273) (76)
Increase (decrease) in accounts
payable and accrued expenses 214 197 (44)
Increase in accrued taxes 26 200 355
Increase in other liabilities 63 131 11
- ----------------------------------------------------------------------
$(405) $ 129 $ 54
======================================================================
17. NONRECURRING ITEMS
During 1995, selling, administrative and general expenses include
provisions of $86 million to increase efficiencies in the Company's
operations in the United States and Europe.
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 the Company's operations in
the United States and Europe, and Corporate. Also in 1993, equity
income was reduced by $42 million related to restructuring charges
recorded by Coca-Cola Beverages Ltd. Other income (deductions)-net for
1993 included a $50 million pretax gain recorded by the foods business
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.
NET OPERATING REVENUES BY LINE OF BUSINESS
[bar chart]
Year Ended December 31, 1993 1994 1995
- -------------------------------------------------------------------
Foods 12% 11% 9%
Beverages 88% 89% 91%
OPERATING INCOME BY LINE OF BUSINESS
[bar chart]
Year Ended December 31, 1993 1994 1995
- -------------------------------------------------------------------
Foods 3% 3% 0%
Beverages 97% 97% 100%
66
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. LINES OF BUSINESS
The Company operates in two major lines of business: beverages and
foods. Information concerning operations in these businesses is as
follows (in millions):
<TABLE>
<CAPTION>
Beverages Foods Corporate Consolidated
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Net operating revenues $16,350 $1,613 $ 55 $18,018
Operating income 4,594{2} (14){2} (488) 4,092
Identifiable operating assets 10,177 689 1,461{1} 12,327
Equity income 169 169
Investments (principally bottling companies) 2,714 2,714
Capital expenditures 795 65 77 937
Depreciation and amortization 350 38 66 454
======================================================================================================
1994
Net operating revenues $14,412 $1,728 $ 41 $16,181
Operating income 4,022 123 (429) 3,716
Identifiable operating assets 9,176 731 1,456{1} 11,363
Equity income 134 134
Investments (principally bottling companies) 2,510 2,510
Capital expenditures 750 39 89 878
Depreciation and amortization 313 38 60 411
======================================================================================================
1993
Net operating revenues $12,257 $1,680 $ 26 $13,963
Operating income 3,433{3} 117 (442){3} 3,108
Identifiable operating assets 7,765 761 1,280 {1} 9,806
Equity income 91 {3} 91
Investments (principally bottling companies) 2,215 2,215
Capital expenditures 693 30 77 800
Depreciation and amortization 263 38 59 360
======================================================================================================
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 the beverages and foods businesses was
reduced by $49 million and $37 million, respectively, for provisions
to increase efficiencies.
{3} Operating income for the beverages business and Corporate was
reduced by $46 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.
Compound Growth Rates
Ending 1995 Beverages Foods Consolidated
- ------------------------------------------------------------------------------------------------------
Net operating revenues
5 years 14% --% 12%
10 years 14% 2% 12%
======================================================================================================
Operating income
5 years 16% --% 16%
10 years 19% --% 18%
======================================================================================================
</TABLE>
67
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. OPERATIONS IN GEOGRAPHIC AREAS
Effective February 1, 1996, the Company's operating management
structure will consist of five geographic groups and Coca-Cola Foods,
and the International and North America Business Sectors will cease to
exist. Information about the Company's operations by geographic area
is as follows (in millions):
<TABLE>
<CAPTION>
Middle &
United Greater Latin Far East
States Africa Europe America & Canada Corporate Consolidated
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995
Net operating revenues $5,261 $595 $6,025 $1,920 $4,162 $ 55 $18,018
Operating income 840{2} 206 1,300{2} 797 1,437 (488) 4,092
Identifiable operating assets 3,384 348 4,301 1,294 1,539 1,461{1} 12,327
Equity income 169 169
Investments (principally bottling companies) 2,714 2,714
Capital expenditures 285 19 383 88 85 77 937
Depreciation and amortization 146 8 180 31 23 66 454
=====================================================================================================================
1994
Net operating revenues $5,092 $522 $5,047 $1,928 $3,551 $ 41 $16,181
Operating income 869 182 1,173 713 1,208 (429) 3,716
Identifiable operating assets 2,991 357 3,958 1,164 1,437 1,456{1} 11,363
Equity income 134 134
Investments (principally bottling companies) 2,510 2,510
Capital expenditures 252 27 330 129 51 89 878
Depreciation and amortization 128 6 160 36 21 60 411
=====================================================================================================================
1993
Net operating revenues $4,586 $255 $4,456 $1,683 $2,957 $ 26 $13,963
Operating income 782{3} 152 1,029{3} 582 1,005 (442){3} 3,108
Identifiable operating assets 2,682 153 3,287 1,220 1,184 1,280 {1} 9,806
Equity income 91 {3} 91
Investments (principally bottling companies) 2,215 2,215
Capital expenditures 165 6 366 141 45 77 800
Depreciation and amortization 127 3 120 33 18 59 360
=====================================================================================================================
Intercompany transfers between geographic areas 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.
Identifiable liabilities of operations outside the United States amounted to approximately $2.7 billion on
December 31, 1995, $2.5 billion on December 31, 1994, and $1.9 billion on December 31, 1993.
{1} Corporate identifiable operating assets are composed principally of marketable
securities, finance subsidiary receivables and fixed assets.
{2} Operating income for the United States and Greater Europe was reduced by $61 million
and $25 million, respectively, for provisions to increase efficiencies.
{3} Operating income for the United States, Greater Europe 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>
Middle &
Compound Growth Rates United Greater Latin Far East
Ending 1995 States Africa Europe America & Canada Consolidated
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net operating revenues
5 years 6% 24% 14% 19% 15% 12%
10 years 5% 9% 20% 16% 15% 12%
=====================================================================================================================
Operating income
5 years 14% 16% 12% 22% 17% 16%
10 years 10% 9% 20% 24% 20% 18%
=====================================================================================================================
</TABLE>
68
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
NET OPERATING REVENUES BY GEOGRAPHIC AREA
[bar chart]
Year Ended December 31, 1993 1994 1995
- ---------------------------------------------------------------
Middle & Far East and Canada 21% 22% 23%
Latin America 12% 12% 11%
Greater Europe 32% 31% 34%
Africa 2% 3% 3%
United States 33% 32% 29%
OPERATING INCOME BY GEOGRAPHIC AREA
[bar chart]
Year Ended December 31, 1993 1994 1995
- ---------------------------------------------------------------
Middle & Far East and Canada 29% 29% 31%
Latin America 16% 17% 18%
Greater Europe 29% 29% 28%
Africa 4% 4% 5%
United States 22% 21% 18%
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, 1995 and 1994,
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, 1995. 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, 1995 and
1994, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Atlanta, Georgia
January 23, 1996
69
<PAGE>
THE COCA-COLA COMPANY AND SUBSIDIARIES
<TABLE>
QUARTERLY DATA (UNAUDITED)
(In millions except per share data)
<CAPTION>
First Second Third Fourth Full
Year Ended December 31, Quarter Quarter Quarter Quarter Year
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995
Net operating revenues $3,854 $4,936 $4,895 $4,333 $18,018
Gross profit 2,409 3,060 2,946 2,663 11,078
Net income 638 898 802 648 2,986
Net income per share .50 .71 .64 .52 2.37
===========================================================================
1994
Net operating revenues $3,352 $4,342 $4,461 $4,026 $16,181
Gross profit 2,110 2,675 2,701 2,527 10,013
Net income 521 758 708 567 2,554
Net income per share .40 .59 .55 .44 1.98
===========================================================================
</TABLE>
The third quarter of 1995 includes provisions to increase efficiencies
of $86 million ($.04 per share after income taxes) and a non-cash
gain recognized on the issuance of stock by Coca-Cola Amatil of $74
million ($.04 per share after income taxes).
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 1995 and 1994.
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
High $59.38 $66.00 $70.63 $80.38
Low 48.75 56.13 62.63 68.38
Close 56.38 63.75 69.00 74.25
============================================================================
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
============================================================================
</TABLE>
71
<PAGE>
[Following are certain definitions extracted from page 74:]
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, adjusted for
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.
74
<PAGE>
<PAGE>
SHARE-OWNER INFORMATION
COMMON STOCK
Ticker symbol: KO
The Coca-Cola Company is one of 30 companies in the Dow Jones
Industrial Average.
Share owners of record at year-end: 225,904
Shares outstanding at year-end: 1.252 billion
STOCK EXCHANGES
INSIDE THE UNITED STATES:
Common stock listed and traded: New York Stock Exchange, the principal
market for our common stock.
Common stock traded: Boston, Cincinnati, Chicago, Pacific and
Philadelphia stock exchanges.
OUTSIDE THE UNITED STATES:
Common stock listed and traded: The German exchange in Frankfurt; Swiss
exchanges in Zurich, Geneva, Bern, Basel and Lausanne.
DIVIDENDS
At its February 1996 meeting, our Board increased our quarterly
dividend to 25 cents per share, equivalent to an annual dividend of
$1.00 per share. The Company has increased dividends each of the last
34 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 299 consecutive quarterly dividends, beginning in 1920.
DIVIDEND AND CASH INVESTMENT PLAN
The Dividend and Cash Investment Plan permits share owners of record
to reinvest dividends from Company stock in shares of The Coca-Cola
Company. The Plan provides a convenient, economical and systematic
method of acquiring additional shares of our common stock. All share
owners of record are eligible to participate. 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, 59 percent of share owners of record were participants
in the Plan. In 1995, share owners invested $28.6 million in dividends
and $65.9 million in cash in the Plan.
ANNUAL MEETING OF SHARE OWNERS
April 17, 1996, at 9 a.m. local time
Hotel du Pont
11th and Market Streets
Wilmington, Delaware
INSTITUTIONAL INVESTOR INQUIRIES
(404)676-5766
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) 519-3111 or (201) 324-1225
For hearing impaired: (201) 222-4955
E-mail: [email protected]
Internet: http://www.fctc.com
or
Office of the Secretary
The Coca-Cola Company
(404) 676-2777
CORPORATE OFFICES
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313
(404) 676-2121
INFORMATION RESOURCES
PUBLICATIONS
THE COMPANY'S ANNUAL REPORT, PROXY STATEMENT, FORM 10-K AND 10-Q
REPORTS AND MID-YEAR REPORT ARE AVAILABLE FREE OF CHARGE FROM INDUSTRY
& CONSUMER AFFAIRS AT THE ABOVE ADDRESS. Also available are "Our
Mission and Our Commitment," "The Coca-Cola Company and the
Environment" and "The Chronicle of Coca-Cola Since 1886."
INTERNET SITE
Our expanded site, "http://www.cocacola.com", offers information about
our Company and stock, as well as features on topics such as our
Olympics partnership.
HOTLINE
The Company's hotline for share owners, 1-800-INVST-KO (1-800-468-7856),
offers taped highlights from the most recent quarter and may be used to
request the most recent quarterly results news release. The hotline is
accessible from within the U.S.
AUDIO ANNUAL REPORT
An audio cassette version of this report is available without charge as
a service to the visually impaired. To receive a copy, please contact
the Office of the Secretary.
DUPLICATE MAILINGS
If you are receiving duplicate or unwanted copies of our publications,
please contact the Office of the Secretary.
[75]
EXHIBIT 21.1
<TABLE>
SUBSIDIARIES OF THE COCA-COLA COMPANY
AS OF DECEMBER 31, 1995
<CAPTION>
Organized Percentages
Under of Voting
Laws of: Power
---------- -----------
<S> <C> <C>
The Coca-Cola Company Delaware
Subsidiaries consolidated, except as noted:
Barq's, Inc. Mississippi 100
Bottling Investments Corporation Delaware 100
ACCBC Holding Company Georgia 100
Caribbean International Sales Corporation, Inc. Nevada 100
Caribbean Refrescos, Inc. Delaware 100
Carolina Coca-Cola Bottling Investments, Inc. Delaware 100
Coca-Cola Financial Corporation Delaware 100
Coca-Cola Interamerican Corporation Delaware 100
Montevideo Refrescos, S.A. Uruguay 55.53
INTI S.A. Industrial y Comercial Argentina 78.70
Coca-Cola Overseas Parent Limited Delaware 100
Coca-Cola Holdings (Overseas) Limited Delaware and 100
Australia
Coca-Cola South Asia Holdings, Inc. Delaware 100
CTI Holdings, Inc. Delaware 100
55th & 5th Avenue Corporation New York 100
The Coca-Cola Export Corporation Delaware 100
Atlantic Industries Limited Cayman Islands 100
Coca-Cola Bevande Italia S.r.l. Italy 100
Azienda Bevande di Gaglianico-ABEG-S.r.l. Italy 100
Societa Bevande Meridionale-SOBEM S.r.l. Italy 100
Maksan Manisa Mesrubat Kutulama Sanayi A.S. Turkey 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
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
Societa Imbottigliamento Bevande Roma-Siber-S.P.A. Italy 100
Beverage Products, Ltd. Delaware 100
S.A. Coca-Cola Beverages Belgium N.V. Belgium 100
Coca-Cola de Argentina S.A. Argentina 100
Cican S.A. Argentina 100
Complejo Industrial PET S.A. Argentina 100
Coca-Cola Ges.m.b.H. Austria 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
Coca-Cola (Japan) Company, Limited Japan 100
Coca-Cola Korea Company, Limited Korea 100
Coca-Cola Nigeria Limited Nigeria 100
Coca-Cola Refrescos Holding C.A. Venezuela 100
Conco Limited Cayman Islands 100
</TABLE>
-1-
<PAGE>
<TABLE>
SUBSIDIARIES OF THE COCA-COLA COMPANY
AS OF DECEMBER 31, 1995
continued from page 1
<CAPTION>
Organized Percentages
Under of Voting
Laws of: Power
---------- -----------
<S> <C> <C>
International Beverages Ireland 100
Coca-Cola Refreshments Moscow Russia 100
Minute Maid SA Switzerland 100
Refreshment Product Services, Inc. Delaware 100
Coca-Cola de Colombia, S.A. Colombia 100
Coca-Cola Holdings (Nederland) B.V. Netherlands 100
Coca-Cola Holdings (United Kingdom) Limited England 100
The Inmex Corporation Florida 100
Servicios Integrados de Administracion Mexico 100
y Alta Gerencia, S.A. de C.V.
</TABLE>
Other subsidiaries whose combined size is not significant:
Thirteen domestic wholly owned subsidiaries consolidated
Ninety-two foreign wholly owned subsidiaries consolidated
Ten foreign majority-owned subsidiaries consolidated
-2-
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual
Report on Form 10-K of The Coca-Cola Company of our report dated
January 23, 1996, included in the 1995 Annual Report to Share
Owners of The Coca-Cola Company.
Our audits also included the financial statement schedule of
The Coca-Cola Company listed in Item 14(a). This schedule is the
responsibility of The Coca-Cola Company's management. Our
responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements
taken as a whole, presents fairly in all material respects the
information set forth therein.
We also consent to the incorporation by reference in the
registration statements and related prospectuses of The Coca-Cola
Company listed below of our report dated January 23, 1996 with
respect to the consolidated financial statements of The Coca-Cola
Company incorporated herein by reference, and our report included
in the preceding paragraph with respect to the financial statement
schedule included in this Annual Report on Form 10-K for the year
ended December 31, 1995:
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
11. Registration Statement Number 33-61531 on Form S-3
ERNST & YOUNG LLP
Atlanta, Georgia
March 11, 1996
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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/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, 1995 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 15th
day of February 1996.
/s/James B. Williams
Director
The Coca-Cola Company
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA 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 FOR THE
YEAR ENDED DECEMBER 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994<F1>
<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
0
0
<COMMON> 427
<OTHER-SE> 4,808
<TOTAL-LIABILITY-AND-EQUITY> 13,873
<SALES> 16,181
<TOTAL-REVENUES> 16,181
<CGS> 6,168
<TOTAL-COSTS> 6,168
<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
<FN>
<F1>RESTATEMENT REFLECTED HEREIN IS THE RESULT OF RECLASSIFICATIONS TO PRIOR
YEAR'S FINANCIAL STATEMENTS TO CONFORM TO THE CURRENT YEAR PRESENTATION.
</FN>
</TABLE>
<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,
1995, 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-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,167
<SECURITIES> 148
<RECEIVABLES> 1,695
<ALLOWANCES> 34
<INVENTORY> 1,117
<CURRENT-ASSETS> 5,450
<PP&E> 6,657
<DEPRECIATION> 2,321
<TOTAL-ASSETS> 15,041
<CURRENT-LIABILITIES> 7,348
<BONDS> 1,141
0
0
<COMMON> 428
<OTHER-SE> 4,964
<TOTAL-LIABILITY-AND-EQUITY> 15,041
<SALES> 18,018
<TOTAL-REVENUES> 18,018
<CGS> 6,940
<TOTAL-COSTS> 6,940
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 272
<INCOME-PRETAX> 4,328
<INCOME-TAX> 1,342
<INCOME-CONTINUING> 2,986
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,986
<EPS-PRIMARY> 2.37
<EPS-DILUTED> 2.37
</TABLE>
