Coca Cola 2010 Annual Report Download - page 122

NOTE 9: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following (in millions):
December 31, 2010 2009
Accrued marketing $ 2,250 $ 1,912
Other accrued expenses 2,920 1,883
Trade accounts payable 1,887 1,410
Accrued compensation 1,068 720
Sales, payroll and other taxes 401 375
Container deposits 333 357
Accounts payable and accrued expenses $ 8,859 $ 6,657
NOTE 10: DEBT AND BORROWING ARRANGEMENTS
Short-Term Borrowings
Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2010
and 2009, we had $7,535 million and $6,322 million, respectively, in outstanding commercial paper borrowings. Our
weighted-average interest rates for commercial paper outstanding were approximately 0.3 percent and 0.2 percent per
year as of December 31, 2010 and 2009, respectively. The Company assumed $266 million of short-term borrowings in
connection with our acquisition of CCE’s North American business. Refer to Note 2.
In addition, we had $5,560 million in lines of credit and other short-term credit facilities as of December 31, 2010, of
which $565 million was outstanding. The outstanding amount was primarily related to our international operations.
Included in the credit facilities discussed above, the Company had $4,850 million in lines of credit for general corporate
purposes, including commercial paper backup. While no amounts have been borrowed against these lines of credit,
certain portions have been limited due to outstanding letters of credit. Accordingly, $4,597 million was available as of
December 31, 2010. These backup lines of credit expire at various times from 2011 through 2012. These credit facilities
are subject to normal banking terms and conditions. Some of the financial arrangements require compensating balances,
none of which is presently significant to our Company.
Long-Term Debt
In connection with the Company’s acquisition of CCE’s North American business, we assumed $7,602 million of
long-term debt, which had an estimated fair value of approximately $9,345 million as of the acquisition date. We
recorded the assumed debt at its fair value as of the acquisition date. Refer to Note 2.
On November 15, 2010, the Company issued $4,500 million of long-term notes and used some of the proceeds to
repurchase $2,910 million of long-term debt. The remaining cash from the issuance was used to reduce our outstanding
commercial paper balance. The repurchased debt consisted of $1,827 million of debt assumed in our acquisition of
CCE’s North American business and $1,083 million of the Company’s debt that was outstanding prior to the acquisition.
The Company recorded a charge of $342 million in interest expense related to the premiums paid to repurchase the
long-term debt and the costs associated with the settlement of treasury rate locks issued in connection with the debt
tender offer. The general terms of the notes issued on November 15, 2010, are as follows:
• $1,250 million total principal amount of notes due May 15, 2012, at a variable interest rate of 3 month LIBOR
plus 0.05 percent;
• $1,250 million total principal amount of notes due November 15, 2013, at a fixed interest rate of 0.75 percent;
• $1,000 million total principal amount of notes due November 15, 2015, at a fixed interest rate of 1.5 percent; and
• $1,000 million total principal amount of notes due November 15, 2020, at a fixed interest rate of 3.15 percent.
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