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20FEB200902055832
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
፤ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
អTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-02217
(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:
Title of each class Name of each exchange on which registered
COMMON STOCK, $0.25 PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ፤No អ
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Exchange Act. Yes អNo ፤
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 ፤No អ
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
Yes ፤No អ
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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. អ
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer’’ and ‘‘smaller reporting
company’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ፤Accelerated filer អNon-accelerated filer អSmaller reporting company អ
(Do not check if a smaller reporting company)
Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes អNo ፤
The aggregate market value of the common equity 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 June 28, 2013, the last
business day of the Registrant’s most recently completed second fiscal quarter, was $176,841,594,528 (based on the closing sale
price of the Registrant’s Common Stock on that date as reported on the New York Stock Exchange).
The number of shares outstanding of the Registrant’s Common Stock as of February 24, 2014, was 4,405,893,150.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company’s Proxy Statement for the Annual Meeting of Shareowners to be held on April 23, 2014, are
incorporated by reference in Part III.

Table of contents

  • Page 1
    ... price of the Registrant's Common Stock on that date as reported on the New York Stock Exchange). The number of shares outstanding of the Registrant's Common Stock as of February 24, 2014, was 4,405,893,150. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company's Proxy Statement for the Annual...

  • Page 2
    ... . Quantitative and Qualitative Disclosures About Market Risk ...Financial Statements and Supplementary Data ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . Controls and Procedures ...Other Information ...26 29 29 71 73 143 143 143 Part III Item 10. Item 11...

  • Page 3
    ...and Exchange Commission. PART I ITEM 1. BUSINESS In this report, the terms ''The Coca-Cola Company,'' ''Company,'' ''we,'' ''us'' and ''our'' mean The Coca-Cola Company and all entities included in our consolidated financial statements. General The Coca-Cola Company is the world's largest beverage...

  • Page 4
    ... America business with the management of our existing foodservice business; Minute Maid and Odwalla juice businesses; North America supply chain operations; and Company-owned bottling operations in Philadelphia, Pennsylvania, into a unified bottling and customer service organization called Coca-Cola...

  • Page 5
    ... CCR. Our Company-owned or -controlled bottling, sales and distribution operations, other than CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating segment. Our finished product operations generate net operating revenues by selling sparkling...

  • Page 6
    ... sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product...

  • Page 7
    ... each day. We continue to expand our marketing presence in an effort to increase our unit case volume in developed, developing and emerging markets. Our strong and stable system helps us to capture growth by manufacturing, distributing and marketing existing, enhanced and new innovative products to...

  • Page 8
    ... or control of the bottler. In certain parts of the world outside the United States, we have not granted comprehensive beverage production rights to the bottlers. In such instances, we or our authorized suppliers sell Company Trademark Beverages to the bottlers for sale and distribution throughout...

  • Page 9
    ... promotional and marketing programs, was $6.9 billion in 2013. Investments in Bottling Operations Most of our branded beverage products outside of North America are manufactured, sold and distributed by independent bottling partners. However, from time to time we acquire or take control of bottling...

  • Page 10
    ... revenues and profits at the bottler level, which in turn generate increased concentrate sales for our Company's concentrate and syrup business. When this occurs, both we and our bottling partners benefit from long-term growth in volume, improved cash flows and increased shareowner value. In cases...

  • Page 11
    ...Pursuant to our Bottler's Agreements, we authorize our bottlers to use applicable Company trademarks in connection with their manufacture, sale and distribution of Company products. In addition, we grant licenses to third parties from time to time to use certain of our trademarks in conjunction with...

  • Page 12
    ..., labeling and sale of many of our Company's products and their ingredients are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; competition laws; federal, state and local workplace health and safety laws; various...

  • Page 13
    ...consumption of such products. Increasing public concern about obesity; possible new or increased taxes on sugar-sweetened beverages by government entities to reduce consumption or to raise revenue; additional governmental regulations concerning the marketing, labeling, packaging or sale of our sugar...

  • Page 14
    ... We and our bottling partners use a number of key ingredients that are derived from agricultural commodities such as sugarcane, corn, beets, citrus, coffee and tea in the manufacture and packaging of our beverage products. Increased demand for food products and decreased agricultural productivity in...

  • Page 15
    ...the impact of credit market conditions on our or our major bottlers' current or future financial performance and financial condition; or for any other reason, our cost of borrowing could increase. Additionally, if the credit ratings of certain bottlers in which we have equity method investments were...

  • Page 16
    ... our net operating revenues from sales of concentrates and syrups; could result in a decrease in our equity income; and could negatively affect the carrying values of our investments in bottling partners, resulting in asset write-offs. Increases in income tax rates, changes in income tax laws or...

  • Page 17
    ... and distribution facilities operated by CCR and our other Company-owned or -controlled bottlers. An increase in the price, disruption of supply or shortage of fuel and other energy sources in North America, in other countries in which we have concentrate plants, or in any of the major markets in...

  • Page 18
    ... comply with regulatory financial reporting, legal and tax requirements. In addition, we depend on information systems for digital marketing activities and electronic communications among our locations around the world and between Company personnel and our bottlers and other customers, suppliers and...

  • Page 19
    ...from sales of our products in international markets. In 2013, our operations outside the United States accounted for $27.0 billion, or 58 percent, of our total net operating revenues. Unfavorable economic conditions in our major international markets, the financial uncertainties in some countries in...

  • Page 20
    ... operations could increase our costs or reduce our net operating revenues. Our Company's business is subject to various laws and regulations in the numerous countries throughout the world in which we do business, including laws and regulations relating to competition, product safety, advertising and...

  • Page 21
    ...and the Coca-Cola system's profitability as well as our share of the income of bottling partners in which we have equity method investments. A decrease in availability of consumer credit resulting from unfavorable credit market conditions, as well as general unfavorable economic conditions, may also...

  • Page 22
    ... Avenue in New York, New York. These properties, except for the North America group's main offices, are included in the Corporate operating segment. We own or lease additional facilities, real estate and office space throughout the world which we use for administrative, manufacturing, processing...

  • Page 23
    In North America, as of December 31, 2013, we owned 67 beverage production facilities, 10 principal beverage concentrate and/or syrup manufacturing plants, one facility that manufactures juice concentrates for foodservice use, and two bottled water facilities; we leased one beverage production ...

  • Page 24
    ... Georgia Case remains subject to the stay agreed to in 2004. Environmental Matters The Company's Atlanta Syrup Plant (''ASP'') discharges wastewater to a City of Atlanta wastewater treatment works pursuant to a government-issued permit under the U.S. Clean Water Act and related state and local laws...

  • Page 25
    ...the North America Group from August 2006 through December 31, 2012. He was appointed Global Chief Customer Officer effective January 1, 2013, was elected Senior Vice President of the Company on February 21, 2013, and was appointed President of Coca-Cola North America effective January 1, 2014. Ceree...

  • Page 26
    ... to his current position effective January 1, 2014. Brian Smith, 58, is President of the Latin America Group. Mr. Smith joined the Company in 1997 as Latin America Group Manager for Mergers and Acquisitions, a role he held until July 2001. From 2001 to 2002, he worked as Executive Assistant...

  • Page 27
    ... in Jakarta. In 1999, Mr. Wollaert relocated to Atlanta, Georgia, where he held the position of Value Chain Account Manager for the Asia Pacific region. In late 2000, he joined Coca-Cola Tea Products Co. Ltd. (''CCTPC''), a Company subsidiary based in Tokyo. Mr. Wollaert became President of CCTPC in...

  • Page 28
    ... is listed and traded is the New York Stock Exchange. The following table sets forth, for the quarterly reporting periods indicated, the high and low market prices per share for the Company's common stock, as reported on the New York Stock Exchange composite tape, and dividend per share information...

  • Page 29
    ... the Exchange Act. Total Number of Shares Purchased as Part of Publicly Announced Plan2 Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan Period Total Number of Shares Purchased1 Average Price Paid Per Share September 28, 2013 through October 25, 2013 October...

  • Page 30
    ... Total Return Stock Price Plus Reinvested Dividends $250 $225 $200 $175 $150 $125 $100 $75 $50 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 Peer Group Index 12/31/13 The Coca-Cola Company S&P 500 Index 25FEB201402352205 December 31, 2008 2009 2010 2011 2012 2013 The Coca-Cola Company Peer Group...

  • Page 31
    ..., (In millions except per share data) 20131 2012 2011 20102 2009 SUMMARY OF OPERATIONS Net operating revenues Net income attributable to shareowners of The Coca-Cola Company PER SHARE DATA Basic net income Diluted net income Cash dividends BALANCE SHEET DATA Total assets Long-term debt 1 $ 46,854...

  • Page 32
    ... CCR. Our Company-owned or -controlled bottling, sales and distribution operations, other than CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating segment. Our finished product operations generate net operating revenues by selling sparkling...

  • Page 33
    ... beverage companies, are affected by a number of factors, including, but not limited to, cost to manufacture and distribute products, consumer spending, economic conditions, availability and quality of water, consumer preferences, inflation, political climate, local and national laws and regulations...

  • Page 34
    ...slower rate than gross profit growth. We are focused on affordability and ensuring we are communicating the appropriate message based on the current economic environment. Commercial Leadership The Coca-Cola system has millions of customers around the world who sell or serve our products directly to...

  • Page 35
    ...Company beverage products are manufactured, sold and distributed by independent bottling partners. However, we often acquire bottlers in underperforming markets where we believe we can use our resources and expertise to improve performance. Owning such a controlling interest enables us to compensate...

  • Page 36
    ... As the world's largest beverage company, we strive to meet the highest of standards in both product safety and product quality. We are aware that some consumers have concerns and negative viewpoints regarding certain ingredients used in our products. Our system works every day to share safe and...

  • Page 37
    ...• Revenue Recognition • Income Taxes Management has discussed the development, selection and disclosure of critical accounting policies and estimates with the Audit Committee of the Company's Board of Directors. While our estimates and assumptions are based on our knowledge of current events and...

  • Page 38
    ... assets in various regions around the world. Investments in Equity and Debt Securities The carrying values of our investments in equity securities are determined using the equity method, the cost method or the fair value method. We account for investments in companies that we do not control...

  • Page 39
    ...Japanese bottling partners merged as Coca-Cola East Japan Bottling Company, Ltd. (''CCEJ''), a publicly traded entity, through a share exchange. The terms of the agreement included the issuance of new shares of one of the publicly traded bottlers in exchange for 100 percent of the outstanding shares...

  • Page 40
    ... closing prices of publicly traded shares, and our Company's cost basis in publicly traded bottlers accounted for as equity method investments (in millions): December 31, 2013 Fair Value Carrying Value Difference Coca-Cola FEMSA, S.A.B. de C.V. Coca-Cola Amatil Limited Coca-Cola HBC AG Coca-Cola...

  • Page 41
    ... definite-lived intangible assets may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume and the resulting gross profit and cash flows. These estimated future cash flows are consistent with those we use in our internal planning. If...

  • Page 42
    ... under the plans. As of December 31, 2013 and 2012, the weighted-average discount rate used to compute our benefit obligation was 4.75 percent and 4.00 percent, respectively. The expected long-term rate of return on plan assets is based upon the long-term outlook of our investment strategy as well...

  • Page 43
    ... and $5.8 billion in 2013, 2012 and 2011, respectively. In preparing the financial statements, management must make estimates related to the contractual terms, customer performance and sales volume to determine the total amounts recorded as deductions from revenue. Management also considers past...

  • Page 44
    ... tax rates used to determine deferred tax assets or liabilities are the enacted tax rates in effect for the year and manner in which the differences are expected to reverse. Based on the evaluation of all available information, the Company recognizes future tax benefits, such as net operating loss...

  • Page 45
    ...finished products manufactured from the concentrates or syrups to a customer does not impact the timing of recognizing the concentrate revenue or concentrate sales volume. When we account for the unconsolidated bottling partner as an equity method investment, we eliminate the intercompany profit and...

  • Page 46
    ... sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product...

  • Page 47
    ... uncertainty given the economic slowdown in the country. Effective January 1, 2014, the Mexican government implemented a new tax on sugar-sweetened beverages. We believe that this tax will have a negative impact on our 2014 volume. Unit case volume in North America was even reflecting overall...

  • Page 48
    ... in North America included 16 percent growth in teas, 12 percent growth in sports drinks, 9 percent growth in packaged water and 2 percent growth in juices and juice drinks. The group reported 11 percent growth in Trademark Powerade, reflecting the benefit of a strong 2012 Olympic Games activation...

  • Page 49
    ...sell concentrates, syrups, beverage bases or powders. Analysis of Consolidated Statements of Income Percent Change 2013 vs. 2012 2012 vs. 2011 Year Ended December 31, (In millions except percentages and per share data) 2013 2012 2011 NET OPERATING REVENUES Cost of goods sold GROSS PROFIT GROSS...

  • Page 50
    ... impact of key factors resulting in the increase (decrease) in net operating revenues for each of our operating segments: Percent Change 2013 vs. 2012 Structural Price, Product & Currency Changes Geographic Mix Fluctuations Volume1 Total Consolidated Eurasia & Africa Europe Latin America North...

  • Page 51
    ... impact of key factors resulting in the increase (decrease) in net operating revenues for each of our operating segments: Percent Change 2012 vs. 2011 Structural Price, Product & Currency Changes Geographic Mix Fluctuations Volume1 Total Consolidated Eurasia & Africa Europe Latin America North...

  • Page 52
    ... 31, 2013, 2012 and 2011, respectively, in the line item cost of goods sold in our consolidated statements of income. Refer to Note 5 of Notes to Consolidated Financial Statements. We do not currently expect changes in commodity costs to have a significant impact on our 2014 gross profit margin as...

  • Page 53
    ... the Company's continued investment in the health and strength of our brands and building market execution capabilities while simultaneously capturing incremental marketing efficiencies. The increase in bottling and distribution expenses includes the full year impact of the Company's acquisition of...

  • Page 54
    ... excellence; and data and information technology systems standardization. The second component of our productivity and reinvestment program involves beginning a new integration initiative in North America related to our acquisition of CCE's former North America business. The Company has identified...

  • Page 55
    ... Company incurred total costs of $496 million related to these productivity initiatives since they commenced during the first quarter of 2008. Refer to Note 18 of Notes to Consolidated Financial Statements. Integration of CCE's Former North America Business In 2010, we acquired CCE's former North...

  • Page 56
    ... had a favorable impact on our Europe, Latin America and Bottling Investments operating segments. Refer to the heading ''Liquidity, Capital Resources and Financial Position - Foreign Exchange'' below. Operating income for Eurasia and Africa for the years ended December 31, 2013 and 2012 was $1,087...

  • Page 57
    ... investments related to the 2014 FIFA World CupTM. North America's operating income for the years ended December 31, 2013 and 2012 was $2,432 million and $2,597 million, respectively. In both 2013 and 2012, operating income was minimally impacted by fluctuations in foreign currency exchange rates...

  • Page 58
    ... investments related to the 2014 FIFA World CupTM. North America's operating income for the years ended December 31, 2012 and 2011 was $2,597 million and $2,319 million, respectively. Operating income in 2012 was minimally impacted by fluctuations in foreign currency exchange rates and increased...

  • Page 59
    ..., Capital Resources and Financial Position - Cash Flows from Financing Activities - Debt Financing'' below for additional information related to the Company's long-term debt activity. Equity Income (Loss) - Net Year Ended December 31, 2013, versus Year Ended December 31, 2012 Equity income (loss...

  • Page 60
    ... bottling partner; a gain of $139 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at per share amounts greater than the carrying value of the Company's per share investment; and dividend income of $70 million. The favorable impact...

  • Page 61
    ...the carrying value of the Company's per share investment; the loss recognized on the pending sale of a majority ownership interest in our consolidated Philippine bottling operations to Coca-Cola FEMSA; and the expense recorded for the premium the Company paid over the publicly traded market price to...

  • Page 62
    ... recognized through income tax expense in 2013, 2012 and 2011, respectively. If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would also be a benefit to the Company's effective tax rate. Based on current tax laws, the Company's effective tax rate in 2014 is...

  • Page 63
    ... Statements for additional information on the pension funding and tax payments. Cash flows from operating activities increased $1,171 million, or 12 percent, in 2012 compared to 2011. This increase reflects higher receipts from customers, lower tax payments and the favorable impact of the Company...

  • Page 64
    ...Consolidated Financial Statements for additional information. Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities In 2013, the Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $353 million. These activities primarily...

  • Page 65
    ... Financial Statements for additional information on these transactions. The cash flow impact of these transactions in other investing activities represents the balance of cash and cash equivalents held by these entities being transferred to assets held for sale. In 2011, other investing activities...

  • Page 66
    ...maturity dates of our debt) and financial policies as well as the aggregated balance sheet and other financial information of the Company. In addition, some rating agencies also consider the financial information of certain bottlers, including New CCE, Coca-Cola Amatil Limited, Coca-Cola Bottling Co...

  • Page 67
    ... paid a premium of $208 million to exchange $1,022 million of existing long-term debt that was assumed in connection with our acquisition of CCE's former North America business in the fourth quarter of 2010. The remaining cash from the issuance was used to reduce the Company's outstanding commercial...

  • Page 68
    ... or liabilities at fair value in our consolidated balance sheets. Refer to Note 5 of Notes to Consolidated Financial Statements. As of December 31, 2013, the Company had $6,410 million in lines of credit for general corporate purposes. These backup lines of credit expire at various times from 2014...

  • Page 69
    ... interest payments with cash flows from operating activities and/or short-term borrowings. Refer to Note 14 of Notes to Consolidated Financial Statements for information regarding income taxes. As of December 31, 2013, the noncurrent portion of our income tax liability, including accrued interest...

  • Page 70
    ... in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result, scheduling deferred income tax liabilities as payments...

  • Page 71
    ... 31, 2013, intangible assets associated with products sold in Venezuela had a carrying value of $107 million. The Company will continue to manage its foreign currency exposure to mitigate, over time, a portion of the impact of exchange rate changes on net income and earnings per share. Impact of...

  • Page 72
    ... the Company's consolidated balance sheet (in millions): December 31, 2013 2012 Increase (Decrease) Percent Change Cash and cash equivalents Short-term investments Marketable securities Trade accounts receivable - net Inventories Prepaid expenses and other assets Assets held for sale Equity method...

  • Page 73
    ... the Company's issuance of long-term debt net of early retirements during 2013. Refer to the heading ''Cash Flows from Financing Activities'' above and Note 10 of Notes to Consolidated Financial Statements for additional information on our long-term debt balance. • Deferred income taxes increased...

  • Page 74
    ... that are used in our manufacturing and distribution business. We also use derivative financial instruments to manage our exposure to commodity risks at times. Certain of these derivatives do not qualify for hedge accounting, but they are effective economic hedges that help the Company mitigate the...

  • Page 75
    ...Income ...Consolidated Balance Sheets ...Consolidated Statements of Cash Flows ...Consolidated Statements of Shareowners' Equity ...Notes to Consolidated Financial Statements ...Report of Management ...Report of Independent Registered Public Accounting Firm ...Report of Independent Registered Public...

  • Page 76
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, (In millions except per share data) 2013 2012 2011 NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general and administrative expenses Other operating charges OPERATING INCOME Interest ...

  • Page 77
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, (In millions) 2013 2012 2011 CONSOLIDATED NET INCOME Other comprehensive income: Net foreign currency translation adjustment Net gain (loss) on derivatives Net unrealized gain (loss) ...

  • Page 78
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (In millions except par value) 2013 2012 ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Marketable securities Trade accounts receivable,...

  • Page 79
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (In millions) 2013 2012 2011 OPERATING ACTIVITIES Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss - net of ...

  • Page 80
    ... CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY Year Ended December 31, (In millions except per share data) 2013 2012 2011 EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY NUMBER OF COMMON SHARES OUTSTANDING Balance at beginning of year Purchases of treasury stock Treasury stock...

  • Page 81
    ..., including Coca-Cola Refreshments (''CCR''). Our Company-owned or -controlled bottling, sales and distribution operations, other than CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating segment. Our finished product operations generate net...

  • Page 82
    ... our Company's proportionate share of the net income or loss of these companies. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making...

  • Page 83
    ... certain marketing activities intended to generate profitable volume and/or invest in infrastructure programs with our bottlers that are directed at strengthening our bottling system and increasing unit case volume. The Company also makes advance payments to certain customers for distribution rights...

  • Page 84
    ... handling costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line item selling, general and administrative expenses in our consolidated statements of income. During the years ended December 31, 2013, 2012 and 2011, the Company recorded...

  • Page 85
    ... price risk and interest rate risk. All derivatives are carried at fair value in our consolidated balance sheets in the line items prepaid expenses and other assets; other assets; or accounts payable and accrued expenses; and other liabilities, as applicable. The cash flow impact of the Company...

  • Page 86
    ... to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that...

  • Page 87
    ... date using a Black-Scholes-Merton option-pricing model. The Company recognizes compensation expense on a straight-line basis over the period the grant is earned by the employee, generally four years. The fair value of our restricted stock awards is the quoted market value of the Company's stock...

  • Page 88
    ... the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of AOCI. Refer to Note 15. Income statement accounts are translated using the monthly average exchange rates during the year. Monetary...

  • Page 89
    ..., these activities included immaterial cash payments for the finalization of working capital adjustments related to our acquisition of the former North America business of Coca-Cola Enterprises Inc. (''CCE''). The Company acquired Great Plains on December 30, 2011. The total purchase price for the...

  • Page 90
    ...and liabilities at the lower of carrying value or fair value less any costs to sell based on the agreed-upon purchase price. Accordingly, we recorded a total loss of $107 million, primarily during the fourth quarter of 2012, in the line item other income (loss) - net in our consolidated statement of...

  • Page 91
    ... equity investments are classified as either trading or available-for-sale with their cost basis determined by the specific identification method. Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive...

  • Page 92
    ... securities. The Company's available-for-sale securities were included in the following captions in our consolidated balance sheets (in millions): December 31, 2013 2012 Cash and cash equivalents Marketable securities Other investments, principally bottling companies Other assets $ 245 2,861...

  • Page 93
    ... at a predetermined rate or price during a period or at a time in the future. A collar is a strategy that uses a combination of options to limit the range of possible positive or negative returns on an underlying asset or liability to a specific range, or to protect expected future cash flows. To do...

  • Page 94
    ... Accounts payable and accrued expenses Other liabilities $ 84 40 1 - $ 125 $ All of the Company's derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed...

  • Page 95
    ... to be minimal. Cash Flow Hedging Strategy The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The changes in the fair values of...

  • Page 96
    ... in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the years ended December 31, 2013, 2012 and 2011 (in millions): Gain (Loss) Recognized in Other Comprehensive Income (''OCI'') Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Gain...

  • Page 97
    ... related to net investment hedges during the years ended December 31, 2013, 2012 and 2011. Economic (Non-Designated) Hedging Strategy In addition to derivative instruments that are designated and qualify for hedge accounting, the Company also uses certain derivatives as economic hedges of foreign...

  • Page 98
    ... currency exchange rates. The changes in fair value of economic hedges used to offset the variability in U.S. dollar net cash flows are recognized into earnings in the line items net operating revenues and cost of goods sold in our consolidated statements of income. The total notional values of...

  • Page 99
    ... million and $430 million in 2013, 2012 and 2011, respectively. If valued at the December 31, 2013, quoted closing prices of shares actively traded on stock markets, the value of our equity method investments in publicly traded bottlers would have exceeded our carrying value by $9,155 million. Net...

  • Page 100
    ... to distribute DPSG products in retail and foodservice accounts and vending machines. The license agreements have initial terms of 20 years, with automatic 20-year renewal periods unless otherwise terminated under the terms of the agreements. The Company anticipates using the assets indefinitely...

  • Page 101
    ...table summarizes information related to definite-lived intangible assets (in millions): December 31, 2013 Gross Carrying Accumulated Amount Amortization December 31, 2012 Gross Carrying Amount Accumulated Amortization Net Net Customer relationships Bottlers' franchise rights Trademarks Other Total...

  • Page 102
    ...-average interest rates for commercial paper outstanding were approximately 0.2 percent and 0.3 percent per year as of December 31, 2013 and 2012, respectively. In addition, we had $7,413 million in lines of credit and other short-term credit facilities as of December 31, 2013. The Company's total...

  • Page 103
    ...and paid a premium of $208 million to exchange $1,022 million of existing long-term debt that was assumed in connection with our acquisition of CCE's former North America business. The remaining cash from the issuance was used to reduce the Company's outstanding commercial paper balance and exchange...

  • Page 104
    ...actual interest paid to service the debt. Total interest paid was $498 million, $574 million and $573 million in 2013, 2012 and 2011, respectively. Maturities of long-term debt for the five years succeeding December 31, 2013, are as follows (in millions): Maturities of Long-Term Debt 2014 2015 2016...

  • Page 105
    ... the outcome of the coverage-in-place settlement litigation but taking into account the issues resolved to date, insurance coverage for substantially all defense and indemnity costs would be available for the next 10 to 15 years. Indemnifications At the time we acquire or divest our interest in an...

  • Page 106
    ... the Company. Total stock-based compensation expense was $227 million, $259 million and $354 million in 2013, 2012 and 2011, respectively, and was included as a component of selling, general and administrative expenses in our consolidated statements of income. The total income tax benefit recognized...

  • Page 107
    ...million stock option replacement awards in connection with our acquisition of CCE's former North America business in 2010. These options had a weighted-average exercise price of $18.02, and generally vest over 3 years and expire 10 years from the original date of grant. The total intrinsic value of...

  • Page 108
    ...-Cola Company 1989 Restricted Stock Award Plan require achievement of certain financial measures, primarily compound annual growth in earnings per share or economic profit. These financial measures are adjusted for certain items approved and certified by the Audit Committee of the Board of Directors...

  • Page 109
    ... in 2013 were 405,963 at the certified award level. In 2012 and 2011, the total restricted share units vested and released were 4,301,732 and 2,084,912, respectively. Replacement performance share unit awards issued by the Company in connection with our acquisition of CCE's former North America...

  • Page 110
    ...year1 Service cost Interest cost Foreign currency exchange rate changes Amendments Actuarial loss (gain) Benefits paid2 Settlements Curtailments Special termination benefits Other3 Benefit obligation at end of year1 Fair value of plan assets at beginning of year Actual return on plan assets Employer...

  • Page 111
    ... Pension Plan Assets The following table presents total assets for our U.S. and non-U.S. pension plans (in millions): U.S. Plans 2013 Non-U.S. Plans 2013 2012 December 31, 2012 Cash and cash equivalents Equity securities: U.S.-based companies International-based companies Fixed-income securities...

  • Page 112
    ... Company revised the asset allocation targets and restructured the investment manager composition to further diversify investment risk and reduce volatility while maintaining long-term return objectives. Our revised target allocation is a mix of 42 percent equity investments, 30 percent fixed-income...

  • Page 113
    ... 2012 2011 Other Benefits 2013 2012 2011 Year Ended December 31, Service cost Interest cost Expected return on plan assets1 Amortization of prior service cost (credit) Amortization of actuarial loss Net periodic benefit cost Settlement charge Curtailment charge Special termination benefits2 Total...

  • Page 114
    ... N/A Certain weighted-average assumptions used in computing net periodic benefit cost are as follows: Pension Benefits 2013 2012 2011 Other Benefits 2012 2011 Year Ended December 31, 2013 Discount rate Rate of increase in compensation levels Expected long-term rate of return on plan assets 4.00...

  • Page 115
    ... the countries. The rate of compensation increase assumption is determined by the Company based upon annual reviews. We review external data and our own historical trends for health care costs to determine the health care cost trend rate assumptions. Cash Flows Our estimated future benefit payments...

  • Page 116
    ... Coca-Cola Polar S.A. (''Polar''); a gain recognized as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at a per share amount greater than the carrying value of the Company's per share investment; the loss recognized on the pending sale...

  • Page 117
    ... Company and its subsidiaries are no longer subject to income tax audits for years before 2002. For U.S. federal and state tax purposes, the net operating losses and tax credit carryovers acquired in connection with our acquisition of CCE's former North America business that were generated between...

  • Page 118
    ... gross balance of unrecognized tax benefit amounts is as follows (in millions): Year Ended December 31, 2013 2012 2011 Beginning balance of unrecognized tax benefits Increases related to prior period tax positions Decreases related to prior period tax positions Increases related to current period...

  • Page 119
    ...31, 2013 2012 Deferred tax assets: Property, plant and equipment Trademarks and other intangible assets Equity method investments (including foreign currency translation adjustment) Derivative financial instruments Other liabilities Benefit plans Net operating/capital loss carryforwards Other Gross...

  • Page 120
    ... States upon execution of the share purchase agreement for the sale of a majority interest in our consolidated Philippine bottling operations. Refer to Note 1 for additional information on the Company's accounting policy related to assets and liabilities held for sale. Refer to Note 2 for additional...

  • Page 121
    ... benefit liabilities. 2 3 OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees' OCI, for the years ended December 31, 2013, 2012 and 2011, is as follows (in millions): Before-Tax Amount Income Tax After-Tax Amount 2013...

  • Page 122
    ... for additional information related to the Company's pension and other postretirement benefit liabilities. Before-Tax Amount Income Tax After-Tax Amount 2 3 2011 Net foreign currency translation adjustment Derivatives: Unrealized gains (losses) arising during the year Reclassification adjustments...

  • Page 123
    ...Sale of securities Other income (loss) - net Income before income taxes Income taxes Consolidated net income Pension and other benefit liabilities: Insignificant items Amortization of net actuarial loss Amortization of prior service cost (credit) Other income (loss) - net * * Income before income...

  • Page 124
    ... Company's fair value hedging strategy. Investments in Trading and Available-for-Sale Securities The fair values of our investments in trading and available-for-sale securities using quoted market prices from daily exchange traded markets are based on the closing price as of the balance sheet date...

  • Page 125
    ...to Note 5 for additional information related to the composition of our derivative portfolio. 2 3 4 5 Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the years ended December 31, 2013 and 2012. The Company recognizes transfers between levels...

  • Page 126
    ... (Losses) 2013 2012 December 31, Exchange of investment in equity securities Valuation of shares in equity method investee Intangible assets Assets held for sale Cost method investments Total 1 $ (114)1 1392 (195)3 - - $ (170) $ 1854 105 - (108)6 (16)7 $ 71 The Company recognized a net loss of...

  • Page 127
    ... Mutual, Pooled and Commingled Funds Real Estate Equity Securities Other Total 2012 Balance at beginning of year Actual return on plan assets: Related to assets still held at the reporting date Related to assets sold during the year Purchases, sales and settlements - net Transfers in or out...

  • Page 128
    ... these financial instruments. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk...

  • Page 129
    .... Effective July 1, 2013, four of the Company's Japanese bottling partners merged as CCEJ, a publicly traded entity, through a share exchange. The terms of the agreement included the issuance of new shares of one of the publicly traded bottlers in exchange for 100 percent of the outstanding shares...

  • Page 130
    ...for which we paid a premium over the publicly traded market price. Although the Company paid this premium to obtain specific rights that have an economic and strategic value to the Company, they do not qualify as an asset and were recorded as expense on the acquisition date. This charge impacted the...

  • Page 131
    ... productivity and reinvestment initiatives and the changes in the accrued amounts since the commencement of the plan (in millions): Severance Pay and Benefits Outside Services Other Direct Costs Total 2012 Costs incurred Payments Noncash and exchange Accrued balance as of December 31 2013 Costs...

  • Page 132
    ...we acquired CCE's former North America business and began an integration initiative to develop, design and implement our operating framework. In 2011, we completed this program. The Company reversed charges of $1 million and $6 million, respectively, during the years ended December 31, 2013 and 2012...

  • Page 133
    ... or consolidated bottling operations outside of North America, regardless of the geographic location of the bottler, and equity income from the majority of our equity method investments. Company-owned or consolidated bottling operations derive the majority of their revenues from the sale of finished...

  • Page 134
    Information about our Company's operations by operating segment for the years ended December 31, 2013, 2012 and 2011, is as follows (in millions): Eurasia & Africa 2013 Net operating revenues: Third party Intersegment Total net revenues Operating income (loss) Interest income Interest expense ...

  • Page 135
    ... for North America due to changes in the Company's ready-to-drink tea strategy as a result of our U.S. license agreement with Nestl´ e that terminated at the end of 2012. Refer to Note 17. • Equity income (loss) - net and income (loss) before income taxes were increased by $8 million for Bottling...

  • Page 136
    ... over the publicly traded market price. This premium was expensed on the acquisition date. Refer to Note 16 and Note 17. • Income (loss) before income taxes was reduced by $16 million for Corporate due to other-than-temporary declines in the fair values of certain cost method investments. Refer to...

  • Page 137
    ..., 2013 2012 2011 (Increase) decrease (Increase) decrease (Increase) decrease Increase (decrease) Increase (decrease) Increase (decrease) in in in in in in trade accounts receivable inventories prepaid expenses and other assets accounts payable and accrued expenses accrued taxes other liabilities...

  • Page 138
    ... public accounting firm, are appointed by the Audit Committee of the Company's Board of Directors, subject to ratification by our Company's shareowners. Ernst & Young LLP has audited and reported on the consolidated financial statements of The Coca-Cola Company and subsidiaries and the Company...

  • Page 139
    ...Committee. Our Audit Committee's Report can be found in the Company's 2014 Proxy Statement. 25FEB200913564291 Muhtar Kent Chairman of the Board of Directors, Chief Executive Officer and President February 27, 2014 22FEB201023414934 Kathy N. Waller Vice President, Finance and Controller February 27...

  • Page 140
    ... balance sheets of The Coca-Cola Company and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, shareowners' equity, and cash flows for each of the three years in the period ended December 31, 2013. These financial statements...

  • Page 141
    ...consolidated balance sheets of The Coca-Cola Company and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, shareowners' equity, and cash flows for each of the three years in the period ended December 31, 2013, and our report dated...

  • Page 142
    ... bottling partners. Refer to Note 17. • Benefit of $139 million for Corporate due to a gain the Company recognized as a result of Coca-Cola FEMSA issuing additional shares of its own stock during the period at a per share amount greater than the carrying value of the Company's per share investment...

  • Page 143
    ... e in the ready-to-drink tea category. Refer to Note 17. • Net benefit of $44 million for Bottling Investments due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 17. • Net tax benefit of $8 million associated...

  • Page 144
    ... which we paid a premium over the publicly traded market price. This premium was expensed on the acquisition date. Refer to Note 17. • Net charge of $25 million for Bottling Investments due to the Company's proportionate share of unusual or infrequent items recorded by certain of our equity method...

  • Page 145
    ... the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of December 31, 2013. Report of Management on Internal Control Over Financial Reporting and Attestation Report of Independent Registered Public Accounting Firm The report of management on...

  • Page 146
    ... and 2011. Consolidated Balance Sheets - December 31, 2013 and 2012. Consolidated Statements of Cash Flows - Years ended December 31, 2013, 2012 and 2011. Consolidated Statements of Shareowners' Equity - Years ended December 31, 2013, 2012 and 2011. Notes to Consolidated Financial Statements. Report...

  • Page 147
    ... list of exhibits below, the Company's Current, Quarterly and Annual Reports are filed with the Securities and Exchange Commission (the ''SEC'') under File No. 001-02217; and Coca-Cola Refreshments USA, Inc.'s (formerly known as Coca-Cola Enterprises Inc.) Current, Quarterly and Annual Reports are...

  • Page 148
    ... in connection with the 2002 Stock Option Plan, as adopted February 18, 2009 - incorporated herein by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K filed on February 18, 2009.* The Coca-Cola Company 2008 Stock Option Plan, as amended and restated, effective February 20, 2013...

  • Page 149
    ... Unit Agreement in connection with the 1989 Restricted Stock Award Plan, as adopted February 20, 2013 - incorporated herein by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K filed on February 20, 2013.* The Coca-Cola Company Compensation Deferral & Investment Program of the...

  • Page 150
    ... Supplemental Cash Balance Plan, dated December 6, 2012 - incorporated herein by reference to Exhibit 10.12.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012.* The Coca-Cola Company Directors' Plan, amended and restated on December 13, 2012, effective January 1, 2013...

  • Page 151
    ... 10.35.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011.* Amendment Number Two to The Coca-Cola Export Corporation International Thrift Plan, as Amended and Restated, Effective January 1, 2011, dated September 27, 2012 - incorporated herein by reference to Exhibit...

  • Page 152
    ... Matched Employee Savings and Investment Plan, effective December 31, 2011, dated December 14, 2011 - incorporated herein by reference to Exhibit 10.45.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011.* Coca-Cola Refreshments Executive Pension Plan, dated December...

  • Page 153
    ..., Non-Competition and Non-Solicitation, dated January 13, 2014.* Computation of Ratios of Earnings to Fixed Charges for the years ended December 31, 2013, 2012, 2011, 2010 and 2009. List of subsidiaries of the Company as of December 31, 2013. Consent of Independent Registered Public Accounting Firm...

  • Page 154
    ... Vice President and Chief Financial Officer of The Coca-Cola Company. The following financial information from The Coca-Cola Company's Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income...

  • Page 155
    ..., thereunto duly authorized. THE COCA-COLA COMPANY (Registrant) By: /s/ MUHTAR KENT Muhtar Kent Chairman of the Board of Directors, Chief Executive Officer and President Date: February 27, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by...

  • Page 156
    ...Kotick Director February 27, 2014 * Maria Elena Lagomasino Director February 27, 2014 * Donald F. McHenry Director February 27, 2014 * Sam Nunn Director February 27, 2014 Jacob Wallenberg Director February 27, 2014 Peter V. Ueberroth Director February 27, 2014 James D. Robinson III Director February...

  • Page 157
    ... Kent, Chairman of the Board of Directors, Chief Executive Officer and President of The Coca-Cola Company, certify that: 1. 2. I have reviewed this annual report on Form 10-K of The Coca-Cola Company; Based on my knowledge, this report does not contain any untrue statement of a material fact or...

  • Page 158
    ... I, Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company, certify that: 1. 2. I have reviewed this annual report on Form 10-K of The Coca-Cola Company; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit...

  • Page 159
    ... annual report of The Coca-Cola Company (the ''Company'') on Form 10-K for the period ended December 31, 2013 (the ''Report''), I, Muhtar Kent, Chairman of the Board of Directors, Chief Executive Officer and President of the Company and I, Gary P. Fayard, Executive Vice President and Chief Financial...

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