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    1 views221 pages

    10

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    Accounting

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    Morningstar® Document Research™ FORM 10-K COCA COLA CO-KO Filed: February 25, 2016 (period: December 31, 2015) Annual report with a comprehensive overview of the company The information contained herein may not be copied, adapted or distributed and is not warranted tobe accurate, complete or timely. The user ‘assumes all risks for any damages o losses arising from any use ofthis Information, except othe extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance Is no guarantee of future results. UNITED STATES SECURITIES AND EXCHANGE COMMISSION ‘Washington, D.C, 20849 FORM 10-K 1 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(6) OF THE SECURITIES EXCHANGE ACT OF 1934 or the ical yar ended December 31,2018 1D__TRANSITION REPORT PURSUANT TO SECTION 13 OR 18() OF THE SECURITIES EXCHANGE ACT OF 1934 For the trantition period from ‘Commission Fe No, 001.2217 The CxO Company (Gast name of Registat asp in its chats) DELAWARE 58-0628465 (State or other jurisdiction of ncomportion or onganizaton) (ORS Employer Identification No.) ‘One Coca-Cola Pla ‘Adanta, Georgia 30313 (Address of principal excoutve offices) ip Case) ‘Reglstran' telephone number, ining area code: (404) 676-2121 Secures registred pursuant to Seton 12(b) ofthe Ae: ideo cach ass ‘Name sach exchange on which ester ‘Common Stock, $0.25 Far Value "New York Stock Exchange ating ate Notes Due 2017 New York 1.128% Notes Due 2022 ew York. (0.75% Notes Dae 2028, New York 1.87504 Notes Due 2026 New York 1.128% Notes Due 2027 New York 1.425% Notes Due 2035 New York: Securities registered pursuant to Section 12(g) ofthe Act: None India by chakra ithe Resta isnot requked ole reports putsual Secon 13 of Seto I(d) otheHachaege Act. Yes] No Indicate by chsk marc whether she Regsrant (1b le al epors euited fo be fled by Sston 13 or 15) ofthe Serie Fashange Act of 1934 ding the preceding 12 montis nd (2) bas bee subj sch Eg tegen for he ast 90 days. Yes] NO) Indie by check mar whether the Regist hr white elon and posted on i compra Weh if ny, very Irie Daa Fe rege tbe mbm an poet Dotsnt Rule 0s of Repuaton S (9252408 of hischopte)Gurieg the preceding 12 months ot for sch shore prod Wat he Regist was reued ibm abd pot sh fics. Yew NoO) Indies by chek ma if ddomt of dlinget See pean sem 405 of Repulaton SX ( 229.40 ofthiscapt) nat conn erin, an wl ot econ, the ‘est ot Regavnts rowed, etinsive proxy or formation stencntncrpoated by rtrencen Pu Il of efor 1-K or any amendment his Fo 1-K, Cd ascclerted le," “acelerated filer aod "analler reporting company" in Rue 12-2 ofthe Exchange Act. (Check 906: Large scelertd fse Acileted ler Now-elted er Smale reporting company CL (Do no check ifs sale reporting company) Incite by check mar ithe Retrant ie shel company (asdf is Rae 128? fhe Fachange Ac) Yer No ‘Te aggregate markt vl of he common guy hel by nop-afiaes of e Regisrat (suming for hese purposes, bt wiBoul conceding that al execu fies nd Decors eine af he Regia fay, 2015, he lt Done ay of he Reparants ow ently competed econ fal uae, wae $i709 18198408 aed on he loss ‘Sle price of te Regia Common Sack nh ae reprtd othe New York Sock Exchange). DOCUMENTS INCORPORATED BY REFERENCE Powont of he Company Proxy Stren! for he Annas Metin af Sarco be el on Apri 27,2016, ate incorporate by reference Ps I Table of Contents Page Part tenia Risk facos u deni. ved Stat Comments a em. optics 2 hem Legal Proccedines 2 em Mine Safety Disclosures 2 em X. Exouutive Oficers of the Compan 2 Parti Market for Registrants Common Equity, Related Stockholder Mater nd lsuer Purchases of Faulty Securities ems 28 em Selected Financial Data au em ‘Management's Discussion and Analvss of Financial Condition and Results of Operations u lem 7A usnilative and Qualitative Disclosures About Market Risk BR dens. nancial Slatements and Supplementary Da 16 deme, gesin and Disagreement! ‘ Piselosum, as dena. ‘Contmolsand Procedures 1s dena. ‘Oiberinfomnation us Parti tem 10 Director, Excoutive Officers and Comporate Governance as em Exooutive Compensation as ‘Scourity Ownership of Certain Beneficial Owners and Management and ‘Related Stockholder Matic — as Centsin Relationships and Related Transactions, ené Ditector Independence 12 Principal Accountant Fess and Services we [Exhibits and Financial Statement Schedul ae Signatures 1s bit 10 Sever: CEA COLAC, ot 6 owes by beara Donen Fass FORWARD-LOOKING STATEMENTS. This report contains information that may constitute "forward-looking statements." Generally, the words "believe," “expec,” tend, * estimate,” “anticipate,” "projec." "will" and similar expressions identify forward looking statements, which generally are not historical in nature. However, the absence of these words oF similar expressions does not mean that a statements not forward-looking. All statements that address operating performance, ‘events or developments thar we expect or anticipate will occur in the future — including statements relating to volume growth, share of sales and earnings pershare growth, and statements expresing general views about future operating results — are forward-looking statements. Management believes that ‘hese forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward- ooking statements brcauce such statements speak only ax ofthe date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking Hatements, whether asa result of new information, future events or otherwise, except as required by law. In addition, forward looking laements are subject to certain risks and uncertainties that could cause actual resus odifer materially from our Companys historical experience and four present expectations or projections. These risks and uncertainties include, bt are no lined lo, hose desersbed in Part “em 14. Rusk Factors” and lsewhere in this report and thave described from time (0 time in our future reports ied with the Securities and Exchange Commission PARTI TEMA. BUSINESS In this por, the tems "The Coca-Cola Company,” "Company." "we," us" and “our” mean The Coca-C ‘oncolidated financial statements. ‘Company and all entities included in our General ‘The Coca-Cola Company is the word's lagest beverage company. We own or license and market more than S00 nonalcoholic beverage brands, primarily sparkling beverages bat also a variety of ill beverages such as waters, enhanced waters, juices and juice drinks, ready-o-drnk teas and coe, and energy and sports drinks, We own and market four ofthe world’s top five onsteobolie sparing beverage brands: Cova-Cola, Diet Coke, Fanta and Sprite, Finished ‘overage products bearing our wademasks, sold in the United States since 1886, are now old in more than 200 counties, ‘We make our branded beverage products availble to consumers throughout the world through our network of Company-owned or controlled bottling snd isribution operations as wel as independent bottling pariness, distributors, wholesalers and retailers — the word's largest beverage distribution system [Beverages bearing trademarks owned by or licensed t us account formore than 19 billion ofthe approximately 58 billion servings ofall heverages ‘consumed workdwide every da. ‘We believe oursuecess depends on our ability to connect with consumer by providing them with a wide variety of options to mest their desires, ness and lifestyles Our sucess further depends onthe ability of our people to execute elective, every day, ‘Our goal i to use our Companys assets — our brands, financial strength, unrivaled dstbution system, global reach, and the talent and strong commitment ‘ofourmanagement and asocistes—to become more competitive and to accelerate growth in 2 manner that ereates value for Our sheeowners We were incosported in September 1919 underthe ‘that hed been onganized in 1892, rs ofthe State of Delaware and succeeded tothe busines of Georgia corporation withthe same name Operating Segments ‘The Company/s operating stucture isthe basis for our intemal financial poring. As of December 31,2015, our operating structure included the following ‘operating segments, the fit sx of which are somtimes refemed to a5 “operating groups” oF"00ps + Europe + Latin America + Nomth America + Asia Pacitc + Botlng Investments + Corporate [Except tothe extent that differences among operating segments arc terial to an understanding of ourbusiness taken a¢a whole, the description of our business inthis epor is presented ona consolidated basis. iective Jemuary 1, 2016, we tunsleed Coca-Cola Refeshments ("CCR") botling and associated supply chain operations in the United States and Canada fom our North America segment to our Bolling Investments segment For financial infomation about our opemting segments and geographic aeas,referto Note 19 of Notes to Consolidated Financial Statements set forh in Par "tem 8, Financial Statements and Supplementary Data" of his epor, incorporated herein by reference. For certain nsks attendant to our non-US. ‘operations, refert "tem 1A. Risk Facto” below. Products and Brands ‘Asused in thi report + "concentrates" means favoring ingredients and, depending onthe product, swecteners used to prepare syrups or finished beverages and includes powders for purified water products such as Dasani + "syrups" means beverage ingredients produced by combining concentmtes and, depending onthe product, sweeteners and added water; + "fountain syrups" means syrups that ae sold to fountain reales, such as estaurants and convenience stores, which use dispensing equipment to ix the syrups with sparkling or sill water atthe time of purchase to produce finished beverages that are served in eups or glasses for immediate consumption; parkling beverages" means nonalcoholic ready-o-drnk beverages with eatbonation, including eatbonated energy drinks and eaybonated water Mavored waters, il beverages” means nonalcoholic beverages without carbonation, including nonearbonated waters, Davored waters and enhanced waters, nonearbonated energy drink, juices and juice drinks, ready co-rink tes and coffees, and sports drinks; + "Company Trademark Beverages’ means beverages bearing our trademarks and certain other beverage products bearing trademarks licensed tous by third parties for which we provide marketing support and ffom the sale of which we derive economic benefit; and "Trademark Coca-Cola Beverages" or"iademark Coca-Cola" means beverages bearing the tudemark Coca-Cola or any trademark that includes Coca- Cola or Cake (that is, Coce-Cola, Coca-Cola Life, Diet Coke and Coca-Cola Zero and all their variations and any line extensions, including Coca-Cola Light, caffeine fee Diet Coke, Chemy Coke, etc) Likewise, when we use the capitalized word "Trademate" together withthe name of one of our ether beverage products uch as "Trademark Fanta” "Trademark Spite” or "Trademirk Simply", we mean beverages bearing the indieated trademark that fs, Fanta, Sprite o Simply, espectively) and alts variations and line extensions uch that "Trademark Fanta” includes Fanta Orange, Fanta Ze rademack Simply” includes Simply Orange, Fanta Apple, ete. "Trademack Sprite” includes Sprite, Diet Spite, Sprite Zero, Sprite Light ete: and Orange, Simply Apple, Simply Grapeta ete) ‘Our Company markets, manufactures and sells + beverage concentrates sometimes refered tous "beverage bases" and syrups, including fountain syrups (ve relat this part of eurbusiness a our ‘concentrate busines” of "concentrate operations"); an + finished sparkling and sill beverages (we reférto this par of our business at our"inished product busines General ‘or "inished product operations" finshed product operations generate higher net operating revenues but lower gross profit margins than concentate operations, In ourconcentate operations, we typically generate net operating revenues by selling concentrates and syrups to authorized bottling and canning operations Go which we typically eferas our “bottler” or our "botling partners", Our hotling partnem ether combine the concentrates with sweetener depending on ‘the peoduet), stl water and/or sparkling water or combine the syrups with spakling water to produce finished hevetages. The rished beverages are ‘packaged in authorized containers — such as cans and refillable and nonrefillabl glss and plastic bottles — bearing our tademurks or uademarks lisnsed {ous and are then sold to zetalesdicctly or in some easss, tough wholesales oF atherboter. Outside the United States, we alo sell concentats for fountain beverages to our boiling parners who are ypically authorized to manufacture fountain syrups, which tey sell to fountai retailers suchas ‘convenience stores which us the fountain syrups to produce beverages for immediate consumpiion, orto authorzed fountain wholesalers ‘who in tum sell and distnbute the fountain syrups to fountin retailers ‘Our finished product opeitions consist primaily of ur Company-owned or -contolled botling, sles and distbution operations, including CCR. Our finished product operations generate et operating revenues by selling spatkling beverages anda vatiety of ell beverages, suchas juices and juice drinks, ‘nergy and sponts drinks, eedy-so-drink teas and coffees, and certain water products to retailers oro distributors, wholesalers and Sotling paracrs who ‘isenbute chem to etilers In addition, inthe United States, we manufactore fountain syrups and sell them to fountain retailer, suchas restaurants and ‘convenience stores who use the fountain syrups to produce beverages for immediate consuimpiog, oro aulorized fountain wholeseler or bottling partner ‘who resell the fountain eyaps to fountain retailers In the Unite States, we authorize wholesalers to resell our fountin syrups through nonexclusive Appointments that nether etic us in setting the prices at wich we sll fountain syrups tothe wholesslers nor restrict the temtores i which te ‘wholesalers may resell inthe United Sates. Forinformation about net operating revenies and unit case volume related to our concentrate operations and finshed product operations, referto the heading “Our Business — General” et for in Pat I, "her 7. Managements Discussion and Analysis of Financial Condition and Results of Operations” ofthis report which is incorporated herein by reference ‘We own numerous valuable nonalcoholic beverage brands, including the following: Tonto ‘Minute Mand Aquatias BonaquaBonaga Diet Coke/CocaCola Light Georgia! Minute Maid Pulpy* Gold Peak* Coca-Cola Ze Powerade Dasani FULETEA’ Fanta Del Valle Simply* Giacéau Smarwater? Sprite Schweppes! Glacéau Vitaminwa lee Dew" ” Geog s primarily ecalee ran sai aay i apa 2 We mance, mrt nd sel ues nd ju rinks dere Del Valle tendon pinay in Mexico and rail rough int vectra wit ur bthing partes, » Schweppes sown by the Company in eran counties ther ha he United Snes, * Minute Maid Pupy ia juice dak brand sold primary in Asia Pasi * Simpy ajc and juice dak brand sold North Amen. * Gl Pek primary te brand aod in North Ames, » PUZE TEA is rand sold ouside of North America. * Glasian Sars a vapors water Wi al aclyes which 8 Sold mainly a North Amie and Great Bri, In addition tothe beverage brands we own, we also provide marketing support and otherwise participate i the sales of ther nonaleahole beverage brands ‘through licenses, joint ventures and svateyie partnerships including, but aot iid to, the allowing We and cern of our bottler distbute certain brands of Monster Beverage Comportion ("Monster primarily Monster Energy, in designated lemtores in the United States, Canada and other intemationaltetores pursuant to disisbution coordination agreements between the Company ‘and Monster and related distribution agreements between Monster and Company-owned or-contolled bottling operations including CCR, and Independent bottling and distibution partner. We produce and/or distribute certain ther third-party brands, including brands owned by De Pepper Snapple Group, Inc. (‘DPSG"), which we produce and distribute designated tertoies nthe United States and Canada pursvant to license agreements with DPS. + Wehovea stmtegic partnership with AujanIndusties Company J. (*Aujan") one ofthe largest independent beverage companies inthe Middle East, We own S0 percent ofthe entity that holds the rights in cerain teitoreso brands produced and distnbuted by Aujan including Rani juice brand, and Barbican,» favored malt beverage brand, + Wehavea joint venture with Nestlé S.A. Nestlé") named Beverage Partners Worldwide ("BPW") which markets and disibutes Nestea products in Europe and Canada under agreements with our oles. The Nestea tradematk is owned by Soviet des Produits Nestlé SA, ‘Consumer demand detemines the optimal menu of Company product offerings, Consumer demand can var fiom one locale to another and can change over time within single locale. Employing our business suategy, and with special focus on core brands, our Company seeks to build its existing brands and, at ‘the same time, to broaden its historical family of brands, products and service in order to csate and satisfy consumer demand locale by locale. We measure the volume of Company beverage products sold in two ways: 1) unit eases of finished products and (2) concentrate sales. As used inthis report, “unit eae” means a unit of measurement equal to 192 US fluid ounces offiished beverage 24 eight-ounce sivings, and "unit ase volume” means the ‘number of unit eases (or unit case equivalents) of Company beverage products diucetly or indirectly sold by the Company and is bottling partners Cocs- Cola system) o customers. Unit ease volume primarily consiss of beverage products bearing Company trademarks. Also included in unit ease volume are ‘erin products licenced fo, or distnibuted by, our Company, and brands ovned by Coca-Cola system bottlers for which our Company provides marketing “support and for the sale of which we derive evonomie benefit. n addition, unit cae volume includes sales by certain joint ventures im which the Company zor an equity interest, We Believe unit cate volume is one of the measures ofthe under'ying strength ofthe Coca-Cola system becans measures tend the consumer level. The unit ase volume numbers used inthis repot ae derived based on estimotes received by the Company fom its bottling partners and

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