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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, 2014
OR
TRANSITION 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
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 No
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
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
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.
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 Non-accelerated filer Smaller reporting company
(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 No
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 27, 2014, the last
business day of the Registrant’s most recently completed second fiscal quarter, was $183,965,638,496 (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 23, 2015, was 4,366,243,616.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company’s Proxy Statement for the Annual Meeting of Shareowners to be held on April 29, 2015, 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 23, 2015, was 4,366,243,616. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company's Proxy Statement for the Annual...

  • Page 2
    ... and Related Transactions, and Director Independence ...Principal Accountant Fees and Services...Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition and...

  • Page 3
    ... financial statements. General The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks...

  • Page 4
    Acquisition of Coca-Cola Enterprises Inc.'s Former North America Business and Related Transactions On October 2, 2010, we acquired the former North America business of Coca-Cola Enterprises Inc. ("CCE"), one of our major bottlers, consisting of CCE's production, sales and distribution operations in ...

  • Page 5
    ... and line extensions, including Coca-Cola Light, caffeine free Diet Coke, Cherry Coke, etc.). Likewise, when we use the capitalized word "Trademark" together with the name of one of our other beverage products (such as "Trademark Fanta," "Trademark Sprite" or "Trademark Simply"), we mean beverages...

  • Page 6
    ...the Company in certain countries other than the United States. Simply is a juice and juice drink brand sold in North America. Ayataka is a green tea brand sold in Japan. Gold Peak is primarily a tea brand sold in North America. I LOHAS is a water brand sold in Japan. FUZE TEA is a brand sold outside...

  • Page 7
    ... 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 introductions and changes in product mix can impact...

  • Page 8
    ... we sell to our bottlers, as a practical matter, our Company's ability to exercise its contractual flexibility to determine the price and other terms of sale of its syrups, concentrates and finished beverages is subject, both outside and within the United States, to competitive market conditions. In...

  • Page 9
    ...as applicable. Bottlers that accounted for 0.3 percent of total unit case volume in the United States in 2014 operate under our oldest form of contract, which provides for a fixed price for Coca-Cola syrup used in bottles and cans. This price is subject to quarterly adjustments to reflect changes in...

  • Page 10
    ... Coca-Cola system's production, marketing, sales and distribution capabilities around the world. These investments are intended to result in increases in unit case volume, net revenues and profits at the bottler level, which in turn generate increased concentrate sales for our Company's concentrate...

  • Page 11
    ... and local companies and, in some markets, against retailers that have developed their own store or private label beverage brands. Competitive factors impacting our business include, but are not limited to, pricing, advertising, sales promotion programs, product innovation, increased efficiency in...

  • Page 12
    ...for orange juice and orange juice concentrate throughout the industry. In addition, greening disease is reducing the number of trees and increasing grower costs and prices. Our Company-owned or consolidated bottling and canning operations and our finished product business also purchase various other...

  • Page 13
    ... bottling partners. For more information about the North America refranchising transactions, refer to Note 2 of Notes to Consolidated Financial Statements set forth in Part II, "Item 8. Financial Statements and Supplementary Data" of this report. As of December 31, 2014 and 2013, our Company...

  • Page 14
    ...; and competitive product and pricing pressures. If we do not successfully anticipate these changing consumer preferences or fail to address them by timely developing new products or product extensions through innovation, our share of sales, volume growth and overall financial results could...

  • Page 15
    ... that our products will be accepted in any particular emerging or developing market. Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results. We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other...

  • Page 16
    ...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 17
    ... concentrate, syrup and juice production plants and the bottling plants 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...

  • Page 18
    ...revenues and profits. Changes in laws and regulations relating to beverage containers and packaging could increase our costs and reduce demand for our products. We and our bottlers currently offer nonrefillable recyclable containers in the United States and in various other markets around the world...

  • Page 19
    ...from sales of our products in international markets. In 2014, our operations outside the United States accounted for $26.2 billion, or 57 percent, of our total net operating revenues. Unfavorable economic conditions in our major international markets, the financial uncertainties in some countries in...

  • Page 20
    ... water availability for the Coca-Cola system's bottling operations. Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. As a result, the effects of climate change could have a long-term...

  • Page 21
    ..., which could affect our 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...

  • Page 22
    ...the current environment remain challenging, as the Company must have competitive cost structures in each market while meeting the compensation and benefits needs of our associates. If we are unable to renew collective bargaining agreements on satisfactory terms, our labor costs could increase, which...

  • Page 23
    ... North America group's main offices are located. The complex also includes several other buildings, including our 264,000 square foot Coca-Cola Plaza building, technical and engineering facilities and a reception center. We also own an office and retail building at 711 Fifth Avenue in New York, New...

  • Page 24
    ...future costs for certain product liability and other claims. The Company sold Aqua-Chem to Lyonnaise American Holding, Inc., in 1981 under the terms of a stock sale agreement. The 1981 agreement, and a subsequent 1983 settlement agreement, outlined the parties' rights and obligations concerning past...

  • Page 25
    ... he served as Regional Manager, Coca-Cola Spain. In January 2000, he was appointed President of the Iberia Business Unit and served in that role until his appointment to the position of Chief Marketing Officer effective January 1, 2015. He also served as Vice President, Europe Group from May 2007 to...

  • Page 26
    ... Chief Strategy Officer for Coca-Cola Refreshments. In April 2012, he left the Company to join Bain Capital, a global private investment firm, where he was Executive Vice President in the Private Equity group until July 2013, when he returned to the Company and was appointed to his current position...

  • Page 27
    ... 2002 to 2008 and President of the Mexico business unit from 2008 through December 2012. Mr. Smith was appointed to his current position effective January 1, 2013. Clyde C. Tuggle, 52, is Senior Vice President and Chief Public Affairs and Communications Officer of the Company. Mr. Tuggle joined the...

  • Page 28
    ... OF EQUITY SECURITIES The principal United States market in which the Company's common stock 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...

  • Page 29
    ... stock issued to employees, totaling zero shares, 29,815 shares and 13,966 shares for the fiscal months of October, November and December 2014, respectively. On October 18, 2012, the Company publicly announced that our Board of Directors had authorized a plan (the "2012 Plan") for the Company...

  • Page 30
    Performance Graph Comparison of Five-Year Cumulative Total Return Among The Coca-Cola Company, the Peer Group Index and the S&P 500 Index Total Return Stock Price Plus Reinvested Dividends December 31, 2009 2010 2011 2012 2013 2014 The Coca-Cola Company Peer Group Index S&P 500 Index $ 100 ...

  • Page 31
    ..., (In millions except per share data) 2014 20131 2012 2011 20102 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 $ 45,998...

  • Page 32
    ... also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage...

  • Page 33
    ... conditions, availability and quality of water, consumer preferences, inflation, political climate, local and national laws and regulations, foreign currency exchange fluctuations, fuel prices and weather patterns. Our Objective Our objective is to use our formidable assets - our brands, financial...

  • Page 34
    ... developed markets, we continue to invest in brands and infrastructure programs, but generally at a slower rate than gross profit growth. Commercial Leadership The Coca-Cola system has millions of customers around the world who sell or serve our products directly to consumers. We focus on enhancing...

  • Page 35
    ... water risk management program. We are actively collaborating with other companies, governments, nongovernmental organizations and communities to advocate for needed water policy reforms and action to protect water availability and quality around the world. We are working with our global partners...

  • Page 36
    ... our entire supply chain. Food Security Increased demand for commodities and decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of key agricultural commodities, such as sugarcane, corn, sugar...

  • Page 37
    ... consolidated financial statements and accompanying notes. We believe our most critical accounting policies and estimates relate to the following: • Principles of Consolidation • Recoverability of Noncurrent Assets • Pension Plan Valuations • Revenue Recognition • Income Taxes Management...

  • Page 38
    ...they do not change in isolation. Factors that management must estimate include, among others, the economic life of the asset, sales volume, pricing, cost of raw materials, delivery costs, inflation, cost of capital, marketing spending, foreign currency exchange rates, tax rates, capital spending and...

  • Page 39
    ... in market value. In 2013, four of the Company's 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...

  • Page 40
    ... invests in infrastructure programs with our bottlers that are directed at strengthening our bottling system and increasing unit case volume. Additionally, our Company advances payments to certain customers for distribution rights as well as to fund future marketing activities intended to generate...

  • 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, 2014 and 2013, the weighted-average discount rate used to compute our benefit obligation was 3.75 percent and 4.75 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
    ... benefit obligations when they become due. As a result, the Company periodically revises asset allocations, where appropriate, to improve returns and manage risk. The weighted-average expected long-term rate of return used to calculate our pension expense was 8.25 percent in 2014 and 2013. Effective...

  • Page 44
    ... groups" or "groups": Eurasia and Africa; Europe; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate. For further information regarding our operating segments, refer to Note 19 of Notes to Consolidated Financial Statements. Structural Changes, Acquired Brands and...

  • Page 45
    ... the unit case volume and associated concentrate sales from the base year when calculating 2014 versus 2013 volume growth rates on a consolidated basis as well as for our Eurasia and Africa and Bottling Investments segments related to certain brands owned by the Russian juice company that have...

  • Page 46
    ... 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 introductions and changes in product mix can impact...

  • Page 47
    Information about our volume growth by operating segment is as follows: Percent Change 2014 vs. 2013 Year Ended December 31, Unit Cases1,2 Concentrate Sales 2013 vs. 2012 Unit Cases1,2 Concentrate Sales Worldwide Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments ...

  • Page 48
    ...Coca-Cola. Still beverage growth in Russia included growth of 7 percent and 24 percent in our juice brands Dobriy and Rich, respectively. Unit case growth in Russia was favorably impacted by the Company's marketing activities related to the Sochi 2014 Winter Olympics and Olympic Torch Relay. Eurasia...

  • Page 49
    .... Analysis of Consolidated Statements of Income Percent Change Year Ended December 31, (In millions except percentages and per share data) 2014 2013 2012 2014 vs. 2013 2013 vs. 2012 NET OPERATING REVENUES Cost of goods sold GROSS PROFIT GROSS PROFIT MARGIN Selling, general and administrative...

  • Page 50
    ... increase (decrease) in net operating revenues for each of our operating segments: Percent Change 2014 vs. 2013 Volume1 Structural Changes Price, Product & Geographic Mix Currency Fluctuations Total Consolidated Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments...

  • Page 51
    ... increase (decrease) in net operating revenues for each of our operating segments: Percent Change 2013 vs. 2012 Volume1 Structural Changes Price, Product & Geographic Mix Currency Fluctuations Total Consolidated Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments...

  • Page 52
    ... 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 2015 gross profit margin as compared to 2014. Year Ended December 31, 2014...

  • Page 53
    ...used by the Company. As of December 31, 2014, we had $437 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under our plans. This cost is expected to be recognized over a weighted-average period of 2.2 years as stock-based compensation...

  • Page 54
    ...Operating Charges Other operating charges incurred by operating segment were as follows (in millions): Year Ended December 31, 2014 2013 2012 Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments Corporate Total $ 26 111 295 281 38 247 185 $ 2 57 - 277 47 194 318...

  • Page 55
    ... Financial Statements. Operating Income and Operating Margin Information about our operating income contribution by operating segment on a percentage basis is as follows: Year Ended December 31, 2014 2013 2012 Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments...

  • Page 56
    ... to Consolidated Financial Statements for additional information on the write-down of receivables. The impact of these items was partially offset by favorable price mix in all of the segment's business units. North America's operating income for the years ended December 31, 2014 and 2013 was $2,447...

  • Page 57
    ... investments related to the 2014 FIFA World Cupâ„¢. 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
    ... Statements for additional information related to the Company's hedging program. Refer to the heading "Liquidity, Capital Resources and Financial Position - Cash Flows from Financing Activities - Debt Financing" below for additional information related to the Company's long-term debt. Equity Income...

  • Page 59
    ... 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 60
    ... of the Company's per share investment; the loss recognized on the then 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 acquire an...

  • Page 61
    ... strategy. The Company reviews its optimal mix of short-term and long-term debt regularly and may replace certain amounts of commercial paper, short-term debt and current maturities of long-term debt with new issuances of long-term debt in the future. In addition to the Company's cash balances...

  • Page 62
    ... management of working capital. The increase was partially offset by an unfavorable impact of currency exchange rates during 2014. Cash flows from operating activities decreased $103 million, or 1 percent, in 2013 compared to 2012. This decrease primarily reflects the impact of foreign currency...

  • Page 63
    ... Review - Structural Changes, Acquired Brands and Newly Licensed Brands" and Note 2 of Notes to Consolidated Financial Statements for additional information related to our acquisitions during the years ended December 31, 2014, 2013 and 2012. Proceeds from Disposals of Businesses, Equity Method...

  • Page 64
    ... 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. Consolidated, Coca-Cola FEMSA...

  • Page 65
    ... Company. Our global presence and strong capital position give us access to key financial markets around the world, enabling us to raise funds at a low effective cost. This posture, coupled with active management of our mix of short-term and long-term debt and our mix of fixedrate and variable-rate...

  • Page 66
    ... stock on October 18, 2012 (the "2012 Plan"). The 2012 Plan allowed the Company to continue repurchasing shares following the completion of the prior program. The table below presents annual shares repurchased and average price per share: Year Ended December 31, 2014 2013 2012 Number of shares...

  • Page 67
    ... 31, 2014 rate for all years presented. We typically expect to settle such 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, 2014, the...

  • Page 68
    ... place in the second quarter of 2015, the Company will make a net cash payment of $2.15 billion to Monster. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on these agreements. In November 2014, Coca-Cola Amatil Limited ("Coca-Cola Amatil"), an equity method...

  • Page 69
    ... foreign currency exchange rates on our operating results. Our foreign currency management program is designed to mitigate, over time, a portion of the impact of exchange rate changes on our net income and earnings per share. The total currency impact on net operating revenues, including the effect...

  • Page 70
    ... statement of income. We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. In January 2014, the Venezuelan government enacted a new law which imposes limits on profit margins earned in the country, reducing the Company's cash flows for as long...

  • Page 71
    ... the Company's consolidated balance sheet (in millions): December 31, 2014 2013 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 72
    ...-average discount rate and unfavorable pension asset performance compared to our expected return during 2014, partially offset by current year contributions. Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company's pension plans. • Deferred income...

  • Page 73
    ... mix of short-term debt versus long-term debt. From time to time, we enter into interest rate swap agreements to manage our exposure to interest rate fluctuations. Based on the Company's variable-rate debt and derivative instruments outstanding as of December 31, 2014, a 1 percentage point increase...

  • Page 74
    ...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 75
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, (In millions except per share data) 2014 2013 2012 NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general and administrative expenses Other operating charges OPERATING INCOME Interest ...

  • Page 76
    ... Year Ended December 31, (In millions) 2014 2013 2012 CONSOLIDATED NET INCOME Other comprehensive income: Net foreign currency translation adjustment Net gain (loss) on derivatives Net unrealized gain (loss) on available-for-sale securities Net change in pension and other benefit liabilities TOTAL...

  • Page 77
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (In millions except par value) 2014 2013 ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Marketable securities Trade accounts receivable, ...

  • Page 78
    THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (In millions) 2014 2013 2012 OPERATING ACTIVITIES Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss - net of dividends...

  • Page 79
    ... per share data) 2014 2013 2012 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 issued to employees related to stock compensation plans Balance at end of year COMMON STOCK CAPITAL...

  • Page 80
    ... also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage...

  • Page 81
    Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different conditions occur, impairment charges may result. We use the equity method to account for investments in companies, if our investment provides us with the ability to exercise ...

  • Page 82
    ... 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 83
    ... line item selling, general and administrative expenses. Our customers do not pay us separately for shipping and handling costs related to finished goods. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding...

  • Page 84
    ... impact of certain market risks. The primary market risks managed by the Company through the use of derivative instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk. All derivatives are carried at fair value in our consolidated balance sheets in the line...

  • Page 85
    ...related to the asset, the historical performance of the asset, the Company's longterm 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...

  • Page 86
    ... 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 on...

  • Page 87
    ..., a component of AOCI. Refer to Note 15. Income statement accounts are translated using the monthly average exchange rates during the year. Monetary assets and liabilities denominated in a currency that is different from a reporting entity's functional currency must first be remeasured from the...

  • Page 88
    ... statement of income. We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. In January 2014, the Venezuelan government enacted a new law which imposes limits on profit margins earned in the country, reducing the Company's cash flows for as long...

  • Page 89
    ...received put options to sell their respective shares in Coca-Cola Erfrischungsgetränke AG ("CCEAG") back to the Company in January 2014. The Company paid $503 million to purchase these shares, which was included in the line item other financing activities in our consolidated statement of cash flows...

  • Page 90
    ... based on their future gross profit in these territories throughout the term of the CBA, including renewals, in exchange for the grant of the exclusive territory rights. Contemporaneously with the grant of these rights, the Company sold the distribution assets, certain working capital items, and the...

  • Page 91
    ...be called Coca-Cola Beverages Africa Limited. The Company will also acquire or license several brands in exchange for cash as a result of the transaction. As of December 31, 2014, our South African bottling operations and related equity method investments met the criteria to be held for sale, but we...

  • Page 92
    The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our consolidated balance sheet (in millions): December 31, 2014 Cash, cash equivalents and short-term investments Trade accounts receivable, less allowances ...

  • Page 93
    ... held-to-maturity securities. The Company's available-for-sale securities were included in the following line items in our consolidated balance sheets (in millions): December 31, 2014 2013 Cash and cash equivalents Marketable securities Other investments Other assets $ 43 3,350 3,512 974 $ 245...

  • Page 94
    ... as a risk management tool to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk. The Company uses various types of...

  • Page 95
    ... or cash flows of the related underlying exposures. Any ineffective portion of a financial instrument's change in fair value is immediately recognized into earnings. The Company determines the fair values of its derivatives based on quoted market prices or pricing models using current market rates...

  • Page 96
    ...factors, we consider the risk of counterparty default 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...

  • Page 97
    ... December 31, 2014 and 2013, respectively. Our Company monitors our mix of short-term debt and long-term debt regularly. From time to time, we manage our risk to interest rate fluctuations through the use of derivative financial instruments. The Company has entered into interest rate swap agreements...

  • Page 98
    ...impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the years ended December 31, 2014, 2013 and 2012 (in millions): Gain (Loss) Recognized in Other Comprehensive Income ("OCI'') Gain (Loss) Reclassified from AOCI into Income (Effective...

  • Page 99
    ... years ended December 31, 2014, 2013 and 2012 (in millions): Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income1 2014 Interest rate contracts Fixed-rate debt Net impact to interest expense Foreign currency contracts Available-for-sale...

  • Page 100
    ... with changes in foreign 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...

  • Page 101
    ... This difference is not amortized. A summary of financial information for our equity method investees in the aggregate is as follows (in millions): Year Ended December 31, 2014 2013 2012 Net operating revenues Cost of goods sold Gross profit Operating income Consolidated net income Less: Net income...

  • Page 102
    ... purchase accounting related to the Company's consolidation of innocent in 2013. Refer to Note 2 for additional information. The decrease in 2014 was primarily related to North America refranchising. Refer to Note 2 for additional information. The Company has agreements with Dr Pepper Snapple Group...

  • Page 103
    The following table provides information related to the carrying value of our goodwill by operating segment (in millions): Eurasia & Africa Europe Latin America North America Asia Pacific Bottling Investments Total 2013 Balance as of January 1 Effect of foreign currency translation Acquisitions1 ...

  • Page 104
    ... times from 2015 through 2019. There were no borrowings under these backup lines of credit during 2014. 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...

  • Page 105
    ... of the Company's long-term debt included fair value adjustments related to the debt assumed from Coca-Cola Enterprises Inc. ("CCE") of $464 million and $514 million as of December 31, 2014 and 2013, respectively. These fair value adjustments are being amortized over the number of years remaining...

  • Page 106
    .... Refer to Note 14. Risk Management Programs The Company has numerous global insurance programs in place to help protect the Company from the risk of loss. In general, we are self-insured for large portions of many different types of claims; however, we do use commercial insurance above our self...

  • Page 107
    ... a weighted-average period of 2.2 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards. The Coca-Cola Company 2014 Equity Plan (the "2014 Equity Plan") was approved by shareowners in April 2014. Under the 2014 Equity...

  • Page 108
    ... Award Plan previously sponsored by CCE have approximately 1.4 million shares outstanding after conversion of CCE common stock into our common stock. The Company has not granted any equity awards from the assumed plans since the acquisition, and as of December 31, 2014, no shares remain available...

  • Page 109
    ...Performance share units under The Coca-Cola Company 1989 Restricted Stock Award Plan require achievement of certain performance criteria, which are predefined by the Compensation Committee of the Board of Directors at the time of grant. The primary performance criteria used is compound annual growth...

  • Page 110
    ... with our acquisition of CCE's former North America business are not included in the tables or discussions above and were originally granted under the Coca-Cola Enterprises Inc. 2007 Incentive Award Plan. These awards were converted into equivalent share units of the Company's common stock on the...

  • Page 111
    ...consolidated financial statements. In 2010, the Company issued time-based restricted stock replacement awards, including restricted stock units, in connection with our acquisition of CCE's former North America business. These awards were converted into equivalent shares of the Company's common stock...

  • Page 112
    ... value of plan assets for our benefit plans (in millions): Pension Benefits 2014 2013 Other Benefits 2014 2013 Benefit obligation at beginning of year Service cost Interest cost Foreign currency exchange rate changes Amendments Actuarial loss (gain) Benefits paid2 Business combinations Settlements...

  • Page 113
    ... of investment managers to actively manage the assets of our U.S. pension plans. We have established asset allocation targets and investment guidelines with each investment manager. Our asset allocation targets promote optimal expected return and volatility characteristics given the long-term time...

  • Page 114
    ... invested in liquid assets due to the level and timing of expected future benefit payments. The following table presents total assets for our other postretirement benefit plans (in millions): December 31, 2014 2013 Cash and cash equivalents Equity securities: U.S.-based companies International...

  • Page 115
    ...information related to our productivity, restructuring and integration initiatives. 2 The following table sets forth the changes in AOCI for our benefit plans (in millions, pretax): Pension Benefits 2014 2013 Other Benefits 2014 2013 Beginning balance in AOCI Recognized prior service cost (credit...

  • Page 116
    ...% N/A Certain weighted-average assumptions used in computing net periodic benefit cost are as follows: Pension Benefits Year Ended December 31, 2014 2013 2012 Other Benefits 2014 2013 2012 Discount rate Rate of increase in compensation levels Expected long-term rate of return on plan assets 4.75...

  • Page 117
    ... United States. Company costs associated with those plans were $36 million, $32 million and $29 million in 2014, 2013 and 2012, respectively. Multi-Employer Plans As a result of our acquisition of CCE's former North America business during the fourth quarter of 2010, the Company now participates in...

  • Page 118
    ... of the Company's per share investment; the loss recognized on the then 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 acquire an...

  • Page 119
    ... impacted our income tax expense by $265 million, $279 million and $280 million for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method...

  • Page 120
    ... 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 deferred tax assets Valuation allowances Total deferred tax...

  • Page 121
    ... related valuation allowance on certain equity method investments and increases in net operating losses during the normal course of business operations. NOTE 15: OTHER COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented on our consolidated balance...

  • Page 122
    ... available-for-sale securities. Refer to Note 13 for additional information related to the Company's pension and other postretirement 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...

  • Page 123
    ... available-for-sale securities. Refer to Note 3 for additional information related to these divestitures. Refer to Note 13 for additional information related to the Company's pension and other postretirement benefit liabilities. Before-Tax Amount Income Tax After-Tax Amount 2 3 2012 Net foreign...

  • Page 124
    ... year ended December 31, 2014 (in millions): Description of AOCI Component Financial Statement Line Item Amount Reclassified from AOCI into Income Derivatives: Foreign currency contracts Foreign currency and commodity contracts Foreign currency contracts Net operating revenues Cost of goods sold...

  • Page 125
    ... carrying value of certain long-term debt as a result of the 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...

  • Page 126
    ... line item other liabilities. Refer 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, 2014 and 2013. The Company...

  • Page 127
    ... option to acquire from us a 10 percent interest in the entity's outstanding shares. The exercise price was lower than our carrying value. This loss was determined using Level 3 inputs. In 2013, the Company recognized a gain of $139 million as a result of Coca-Cola FEMSA, an equity method investee...

  • Page 128
    ...Other Total 2013 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 of Level 3 - net Foreign currency translation Balance at end of year 2014...

  • Page 129
    ... 216 $ 20 $ 10 $ 246 $ 207 6 $ 243 Level 3 assets are not a significant portion of other postretirement benefit plan assets. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents; short-term investments; receivables; accounts payable and accrued expenses; and loans and...

  • Page 130
    ... investment in the newly combined Brazilian bottling operations under the equity method of accounting. The owners of the majority interest received the option to acquire from us up to 24 percent of the new entity's outstanding shares at any time for a period of six years beginning December 31, 2013...

  • Page 131
    ... supply chain, including manufacturing in North America; implementing zero-based budgeting across the organization; streamlining and simplifying the Company's operating model; and further driving increased discipline and efficiency in direct marketing investments. The Company has incurred total...

  • Page 132
    ... expenses related to these 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...

  • Page 133
    ...December 31, 2014 1 2013 2012 Concentrate operations Finished product operations2 Net operating revenues 1 38% 62 100% 38% 62 100% 38% 62 100% Includes concentrates sold by the Company to authorized bottling partners for the manufacture of fountain syrups. The bottlers then typically sell the...

  • Page 134
    Information about our Company's operations by operating segment for the years ended December 31, 2014, 2013 and 2012, is as follows (in millions): Eurasia & Africa 2014 Net operating revenues: Third party Intersegment Total net revenues Operating income (loss) Interest income Interest expense ...

  • Page 135
    ... equity method investments prior to their merger into CCEJ. Refer to Note 2 and Note 17. • Income (loss) before income taxes was increased by $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 year...

  • Page 136
    ... began purchasing additional supplies of Florida orange juice at a higher cost than Brazilian orange juice. Refer to Note 17. • Operating income (loss) and income (loss) before income taxes were reduced by $20 million for North America due to changes in the Company's ready-to-drink tea strategy as...

  • Page 137
    ... 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's internal control over financial reporting. The reports of the independent auditors are contained in this annual report. 135

  • Page 138
    ... New York Stock Exchange listing standards, the Exchange Act, and the Company's Corporate Governance Guidelines, meets with the independent auditors, management and internal auditors periodically to discuss internal controls and auditing and financial reporting matters. The Audit Committee reviews...

  • Page 139
    ... balance sheets of The Coca-Cola Company and subsidiaries as of December 31, 2014 and 2013, 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, 2014. These financial statements...

  • Page 140
    ... sheets of The Coca-Cola Company and subsidiaries as of December 31, 2014 and 2013, 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, 2014, and our report dated February 25, 2015...

  • Page 141
    ... per share data) Second Quarter Third Quarter Fourth Quarter Full Year 2014 Net operating revenues Gross profit Net income attributable to shareowners of The Coca-Cola Company Basic net income per share Diluted net income per share 2013 Net operating revenues Gross profit Net income attributable...

  • Page 142
    ... Net tax benefit of $29 million related to prior year audit settlements and amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. Refer to Note 14. The Company's fourth quarter 2014 results were impacted by one additional shipping day compared...

  • Page 143
    ... of certain long-term debt. Refer to Note 10. In the third quarter of 2013, the Company recorded the following transactions which impacted results: • Charges of $1 million for Europe, $53 million for North America, $2 million for Asia Pacific, $45 million for Bottling Investments and $41...

  • Page 144
    ... principal heading "Compensation" in the Company's 2015 Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information under the subheading "Equity Compensation Plan Information" under the...

  • Page 145
    ... 31, 2014 and 2013. Consolidated Statements of Cash Flows - Years ended December 31, 2014, 2013 and 2012. Consolidated Statements of Shareowners' Equity - Years ended December 31, 2014, 2013 and 2012. Notes to Consolidated Financial Statements. Report of Independent Registered Public Accounting Firm...

  • Page 146
    ... the 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 147
    ... 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 (the "2008 Stock Option Plan") - incorporated herein by reference to Exhibit 10.2 to...

  • Page 148
    ...to the Company's Current Report on Form 8-K filed on February 19, 2014.* The Coca-Cola Company 2014 Equity Plan - incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 23, 2014.* The Coca-Cola Company Compensation Deferral & Investment Program of...

  • Page 149
    ....* The Coca-Cola Export Corporation Employee Share Plan, effective as of March 13, 2002 - incorporated herein by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2002.* The Coca-Cola Company Benefits Plan for Members of the Board of Directors, as...

  • Page 150
    ... by reference to Exhibit 10.34.2 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 Overseas Retirement Plan, as Amended and Restated, Effective October 1, 2007, dated November 14, 2011 - incorporated herein...

  • Page 151
    ... to Exhibit 10.46.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011.* Amendment to certain Coca-Cola Refreshments USA, Inc.'s (formerly known as Coca-Cola Enterprises Inc.) Employee Benefit Plans and Equity Plans, effective December 6, 2010 - incorporated herein by...

  • Page 152
    ... to the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2013.* Coca-Cola Refreshments Severance Pay Plan for Exempt Employees, effective as of January 1, 2012 - incorporated herein by reference to Exhibit 10.60.1 to the Company's Annual Report on Form 10-K for the year ended...

  • Page 153
    ... 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, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income for the years ended December 31, 2014, 2013 and 2012...

  • Page 154
    ..., 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 25, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by...

  • Page 155
    ... Director February 25, 2015 David B. Weinberg Director February 25, 2015 Peter V. Ueberroth Director February 25, 2015 James D. Robinson III Director February 25, 2015 Sam Nunn Director February 25, 2015 * * * * *By: /s/ GLORIA K. BOWDEN Gloria K. Bowden Attorney-in-fact February 25, 2015...

  • Page 156
    ... 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 omit to state...

  • Page 157
    ... Kathy N. Waller, 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 to state...

  • Page 158
    ... Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ MUHTAR KENT Muhtar Kent Chairman of the Board of Directors, Chief Executive Officer and President February 25, 2015...

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