Coca Cola 2010 Annual Report Download - page 82

Aggregate Contractual Obligations
As of December 31, 2010, the Company’s contractual obligations, including payments due by period, were as follows (in
millions):
Payments Due by Period
2016 and
Total 2011 2012–2013 2014–2015 Thereafter
Short-term loans and notes payable1:
Commercial paper borrowings $ 7,535 $ 7,535 $ — $ — $ —
Lines of credit and other short-term borrowings 565 565 — — —
Current maturities of long-term debt21,266 1,266 — — —
Long-term debt, net of current maturities213,076 — 3,800 3,392 5,884
Estimated interest payments37,686 696 1,282 1,027 4,681
Accrued income taxes4273 273 — — —
Purchase obligations512,463 7,615 2,628 1,053 1,167
Marketing obligations64,557 1,652 1,691 468 746
Lease obligations 1,155 238 386 218 313
Total contractual obligations4$ 48,576 $ 19,840 $ 9,787 $ 6,158 $ 12,791
1Refer to Note 10 of Notes to Consolidated Financial Statements for information regarding short-term loans and notes payable.
Upon payment of outstanding commercial paper, we typically issue new commercial paper. Lines of credit and other short-term
borrowings are expected to fluctuate depending upon current liquidity needs, especially at international subsidiaries.
2Refer to Note 10 of Notes to Consolidated Financial Statements for information regarding long-term debt. We will consider several
alternatives to settle this long-term debt, including the use of cash flows from operating activities, issuance of commercial paper or
issuance of other long-term debt.
3We calculated estimated interest payments for our long-term fixed-rate debt based on the applicable rates and payment dates. We
typically expect to settle such interest payments with cash flows from operating activities and/or short-term borrowings.
4Refer to Note 14 of Notes to Consolidated Financial Statements for information regarding income taxes. As of December 31, 2010,
the noncurrent portion of our income tax liability, including accrued interest and penalties related to unrecognized tax benefits, was
approximately $474 million, which was not included in the total above. At this time, the settlement period for the noncurrent
portion of our income tax liability cannot be determined. In addition, any payments related to unrecognized tax benefits would be
partially offset by reductions in payments in other jurisdictions.
5Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all
significant terms, including long-term contractual obligations, open purchase orders, accounts payable and certain accrued liabilities.
We expect to fund these obligations with cash flows from operating activities.
6We expect to fund these marketing obligations with cash flows from operating activities.
The total accrued benefit liability for pension and other postretirement benefit plans recognized as of December 31,
2010, was approximately $2,563 million. Refer to Note 13 of Notes to Consolidated Financial Statements. This amount
is impacted by, among other items, pension expense, funding levels, plan amendments, changes in plan demographics
and assumptions, and the investment return on plan assets. Because the accrued liability does not represent expected
liquidity needs, we did not include this amount in the contractual obligations table.
The Pension Protection Act of 2006 (‘‘PPA’’) was enacted in August 2006 and established, among other things, new
standards for funding of U.S. defined benefit pension plans. During 2008, the funded status of the Company’s primary
U.S. defined benefit pension plan declined as a result of the overall stock market decline. In early 2009, the Company
contributed approximately $175 million to this plan. Subsequent to this contribution, the plan is sufficiently funded to
maintain maximum flexibility as outlined in the PPA. We generally expect to fund all future contributions with cash
flows from operating activities. Our international pension plans are generally funded in accordance with local laws and
income tax regulations. In 2011, we expect to contribute approximately $800 million to various plans, of which
approximately $750 million was contributed in the first quarter of 2011. Approximately half of the expected 2011
contributions will be allocated to our primary U.S. pension plans. Refer to Note 13 of Notes to Consolidated Financial
Statements. We did not include our estimated contributions to our various plans in the table above.
As of December 31, 2010, the projected benefit obligation of the U.S. qualified pension plans was $4,837 million, and
the fair value of plan assets was approximately $4,118 million. The majority of this underfunding was due to the
negative impact that the recent credit crisis and financial system instability had on the value of our pension plan assets.
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