the coca-cola company 1984 annual report

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The Coca Cola Company Annual Report 1984

"To increase shareho lder valueover time is the o bjective

driving this enterprise" -, - .

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The Coca-Cola Company

Growth in annual earningsper share and increased retuton equity are still the name qthe game''

he Coca-Cola Company is the world's leading soi.

. drink company, one of the world's largest citrus

marketers, and a major producer and distributor of mo-

tion pictures and television programs. The Company's

products are sold in more than 155 countries and include

such widely known trademarks as Coca-Cola, diet Coke, TAB, Sprite, Fanta,Minute Maid, Five Alive and Hi-C. In 1984 the Company's entertainment

business released such films as "Ghostbusters" "The Karate Kid" "A Soldier's

Story" and "A Passage to India" produced "TJ. Hooker" and other television

series, and released for syndication programs such as "Hart to Hart'.'

Contents1 Financial Highlights

2 Letter to Shareholders7 Operations Review8 Soft Drink Business Sectors

18 Foods Business Sector24 Entertainment Business Sector31 Financial Information55 Directors and Officers56 Shareholder Information



nancial Highlightsmillions except pe r share data)

T he Coca-Cola Company an d Consolidated Subsidiaries

ar Ended December 31,

t operating revenueserating income

come from continuing operationsbefore income taxescome from continuing operations

come per share from co ntinuing operationsvidends per shareareholders' equity at year-endcome from continuing operationso net operating revenuescome from continuing operations toaverage shareholders' equity

1984

$7,364.0

$1,057.5

$1,068.0

$ 628.8

$ 4.76$ 2.76$2,778.1

8.5%

22.1%

1983

$6,829.0

$ 992.6

$1,000.3

$ 558.3

$ 4.10$ 2.68$2,920.8

8.2%

19.6%

% C hange

7.8 %6.5 %

6.8 %

12.6 %

16.1 %3.0 %

(4.9)%

Operating Revenuesllions)

7.5

Income FromContinuing Operations(S Millions)

Income Per Share FromCo ntinuing Operations ($ )

650 5.00

6.0 520 4.00

4.5 390 3.00

3.0 260 2.00

1.5 130 1.00

1974-1984 1974-1984 1974-1984



To Our Shareholders:

"W e are committed to a cultureof change... which will only serveto enhance the basic values o four business''

In the spring of 1981,the management ofyour Company set

a clear-cut strategy—toincrease the value ofyour investment in TheCoca-Cola Company.With the strongest gainin earnings per share in

eight years and a significant increase inreturn on average shareholders' equity to22.1 percent, 1984 was a year of progresstoward this primary corporate objective.

From April 1,1981, through year-end1984, the total return on your investment,stock price appreciation plus dividends,was 95 percent, compared with 42 percentfo r Standard and Poor's index of 500 stocks.This growth in value largely results fromour efforts to further strengthen the Com-pany by capitalizing on our considerableresources. These resources include theworld's best-known trademarks, unparal-leled distribution systems, marketing capa-bilities second to none, exceptionalfinancial strength, and a dedicated manage-ment and employee team.

For details of the Company's 1984performance, we direct your attention tothe financial section of this report and toth e pages that describe each business sec-tor's operations. Highlights for the yearincluded a 16.1-percent increase in incomeper share from continuing operations to$4.76, and a gain of 12.6 percent in incomefrom continuing operations to $629 mil-lion. Operating income of over $1 billion in1984 was the highest in the Company's his-tory, up 6.5 percent from 1983.

Our increased earnings per share befited from operating income gains from business sectors, combined with fewer ostanding shares and a reduced effective trate. Our strong 1984 per-share achieve-ment i s particularly gratifying because itcame in a year of significant marketing acapital investments for future growth.

In the soft drink business, our renewcompetitive thrust increased our worldwshare to over 35 percent, more than twicethat of our nearest competitor. We areintroducing new products, supporting oproducts with bolder, more aggressive maketing, and revitalizing our bottler systeThe success of diet Coke has given theCompany and our bottler system the leaing position, worldwide, in the burgeonilow-calorie market.

O ur soft drink unit volume rose 6 pcent worldwide in 1984,10 percent in theNorth America Soft Drink Business Sectoand 4 percent in the International SoftDrink Business Sector. Total soft drinkoperating income grew at a slower rate,up 2 percent, due to two factors — incremarketing investments in the United Statand the translation of local currency resuinto dollars at rates well below 1983 levelThe currency translation effects limitedresults in Europe a nd Africa. However,operating income in the Pacific and LatinAmerica increased more than 10 percentand 29 percent, respectively.



Rober to C. Golzueta (left),Chairman, Board of Direc-tors, a nd Chief ExecutiveOfficer, with Donald R .Keough, President andChief Operating Officer



L E T T E R T O S H A R E H O L D E R S

O u r more aggressive financialolicies enable us to take advan-age of high-return opportunitiesithin our existing lines o fusiness '

Diet Coke, a productonly two years old,accounted for 8 percentof our 1984 worldwidesoft drink volume. Thenumber one low-caloriesoft drink in the UnitedStates, diet Coke becamethis country's third largest-

selling soft drink of any kind in 1984. Itwas introduced in 10 major markets lastyear, with a number of additional introduc-tions planned for 1985. Diet Coke is cap-turing the developing low-calorie businessin 41 markets, selling at more than 15 per-cent of Coca-Cola sales in many of thosecountries.

W e demonstrated a more assertivemarketing stance in 1984 with strong com-petitive advertising for Coke, Sprite and o urcaffeine-free colas. And the ability of ourU . S . bottler system to implement market-ing strategies swiftly was evidenced by theDecember rollout of diet Coke with 100-percent aspartame, which was available vir-tually nationwide within one month.

We invested more than $100 millionlast year in strategically important bottlingoperations to ensure that our bottling sys-tem is both committed and positioned toachieve growth goals consistent with ours.One of the year's largest transactions wasthe Company's purchase of bottling opera-t ions fo r southern England, including th eimportant London market. In the United

States, we acquired The Akron Coca-ColaBottling Company and several other bot-tling operations contiguous to existingCompany-owned territories. Since 1981,we have facilitated bottler ownershipchanges valued at about $3 billion.

Our Foods Business Sector continuedits growth in 1984, posting a 14-percentincrease in operating income to $138 mil-lion. It further leveraged its distribution sys-tems with new products by expanding itsfrozen, chilled and aseptically packagedproduct lines during the year.

Minute Maid orange juice, the num-ber one product of any type in the super-market frozen foods section, posted anotheryear of category leadership and recordshare of more than 25 percent. Minute Maidchilled orange juice successfully respondedto intense competition with a share of ab18 percent.

Nine products were introduced inaseptic packaging last year, including arange of Minute Maid juices and flavorHi-C and Five Alive. Most of the sector's$40 million in 1984 capital investment wasused to increase aseptic production capac-ity, reflecting the growth potential of thisrapidly expanding packaging category.

The Entertainment Business Sectorincreased operating income 34 percent in1984 to $121 million. Television, whichcontributed more than half the sector'searnings, continued its excellent trendswith the syndication of "Hart to Hart" a"Benson? A successful program of film pduction and distribution, highlighted bythe record-breaking "Ghostbusters" generated significant growth in film earnings.



To maximize its film distributionapacity, Columbia Pictures is increasinge number of films it produces annually.entral to this strategy are equity andcensing agreements that reduce the finan-al risk of film production. By involvingvestment partners and by pre-licensingms to ancillary markets, we have nearlyoubled th e number of films distributedithout a dramatic increase in internaloduction expenditure risk.

Tri-Star Pictures released its first 17lms in 1984, earning Columbia significantstribution fees. Together, Columbia andri-Star released 30 films last year, up from2 distributed by Columbia in 1983. Posi-ve benefits from our strategy to increasem production should be realized in 1985d 1986.

The Company's more aggressive finan-al policies were a significant factor in the

ear's increased return on equity and earn-gs per share. We completed the repurchasef six million shares of our common stockuring the year, not only benefiting returns,ut indicating strong confidence in ourperations. The repurchase was completedan average cost of about $55 per share.

W e utilized more low-cost debt tound our investment programs by going toe European financial markets three timesith successful debt issues of $100 million

ach. We borrowed at lower rates than ratesn U.S. Treasury obligations of like matu-ty, an indication that The Coca-Colaompany is regarded as one of the mosttractive credits in the world.

At its February 21,1985, meeting, theBoard of Directors increased the quarterlydividend to 74 cents, equivalent to a full-year 1985 dividend of $2.96 per share and7-percent higher than 1984's dividend. Thisis the 23rd consecutive year your Board ofDirectors has approved dividend increases.In 1984 we improved the Company's Auto-matic Dividend Reinvestment Plan byoffering greater flexibility and cost savingsin acquiring additional shares of Companystock through reinvested cash dividendsand optional cash investments.

Last year Robert W . W oodruff, aftercompleting an unparalleled 61 years as afull-time member of our Board of Direc-tors, was elected the Company's first andonly Director Emeritus. Mr. Woodruffskeen instinct and perceptive insight over sixdecades have guided this Company duringth e best o f times and the worst of times,and today it stands as one of the strongestin world commerce.

C.H. Candler, Jr., also did not standfo r re-election to the Board in 1984. W e aregrateful for his more than 25 years of dedi-cated service and fo r the Candler legacyassociated with the Company.

W e were deeply saddened by the deathin July of Dr. E. Garland Herndon, Jr.,who had served with distinction as a direc-tor since 1974. His wise counsel is missed.



L E T T E R T O S H A R E H O L D E R S

*'B y capitalizing on the strengthsof our business, we are buildinghe foundation f o r even greateruccess... we are strongerhan ever '

In December t he Boardelected as a director Dr.James T. Laney, presidentof Atlanta's Emory Uni-versity since 1977 We arefortunate to have hisexpertise and wisdom aswe chart the future of thisCompany.

O ur primary objective will continue tobe the maximization o f shareholder value.W e will manage o ur businesses to generateearnings growth and improved returns. Weplan to reinvest a greater portion of ourresources in projects and investments thatstrategically augment and leverage ouroperations —investments where the long-term cash returns on invested capital exceedour overall cost of capital. In making suchinvestments, we have no plans to ventureoutside our three lines of business, as thereare significant growth opportunities inthese businesses.

A paramount objective is to increaseinternational per capita consumption o f softdrinks to rates well above their present, rel-atively low levels. B y investing in vendingand fountain equipment, helping to restruc-ture bottler systems, developing emergingcategories like low-calorie, and achievinggreater acceptability fo r soft drinks asall-occasion beverages, we expect to pro-gressively raise per capita consumption.

In our Foods Business Sector, we arestriving for greater utilization of our exist-ing distribution system by adding new

products in fast-growing frozen-food catgories. In Entertainment, we will continuto increase our participation in growingancillary markets through joint venturesand other arrangements. When the Company's resources exceed our investmentrequirements, we will again consider sharrepurchases.

While every year presents obstaclesoutside o ur control, such as the rising valof the U.S. dollar, the underlying health our business has never been stronger. Withthe solid strategic positioning we haveattained, w e are optimistic about havinganother good year in 1985.

All our associates at The Coca-ColaCompany join us at this time to thank youfo r your support and to express our prideof being employed in this great Company.

Roberto C. GoizuetaChairman, Board o f Directors,and Chief Executive Officer

Donald R. KeoughPresident an dChief Operating Officer

February 21, 1985



Operations Review

"All sectors o f our business

contributed to strong growth in 1984.

Momentum is a valuable asset''



Soft Drink Business Sectors

"Backed by a bold marketingtance and aggressive productupport, our market position

has never been stronger1.'

T he Coca-ColaCompany's softdrink business

enjoyed exceptionalgrowth in 1984 with a6-percent gain in com-bined unit volume and anincrease in worldwideshare to more than 35

percent. Operating income from the Com-

pany's two soft drink sectors totaled $880million in 1984, up 2 percent, and repre-sented 77 percent of total operating incomefrom the Company's four business sectors.

North America Soft Drink Business SectorIn the North America Soft Drink BusinessSector, soft drink unit volume increased 10percent, twice the combined growth of theU.S. and Canadian soft drink markets, sur-passing strategic goals for unit volume and

market share.Coca-Cola U S A — t h e sector's largest

division—maintained strong momentumin all market segments, led by large volumeincreases for diet Coke, Sprite anddiet Sprite. The division's overall volumegain of 10 percent, double the industry's5-percent growth rate, increased its share

Soft DrinksNet Operating Revenues($ Millions)

Operating Income($ Millions)

5,100

4,080

3,060

2,040

1,020

900

720

540

360

180

of domestic soft drink sales to 37 percent.Unit volume in both the bottle/can andfountain segments increased at rates in linwith the overall gain.

Major marketing opportunities in1984 included the Summer OlympicGames, product reformulations and newfountain business. These investmentsenhanced overall brand image and longer-term volume and profit potential, while

moderating growth in 1984 operatingincome. Nevertheless, net income fromthe domestic soft drink business increasedsignificantly in 1984, continuing thestrong net income growth of the previousthree years.

Coca-Cola USA increased unit salesand share in foodstores, attained strongunit sales gains in vending and all otherbottle/can segments, and achieved its highest volume and largest volume increase ever

in fountain unit sales. The foodstore busi-ness segment accounts for about 35 percenof the Company's U.S. volume, all otherbottle/can segments represent approxi-mately 32 percent, and fountain representsabout 33 percent.

In 1984 Coca-Cola USA furtherstrengthened its business leadership throughvigorous consumer marketing, continuedrestructuring of the bottler and wholesalersystems, technical innovation and increased

emphasis on human resources.To bolster consumer marketing,

Coca-Cola USA aggressively managed itsproduct line in 1984. Unit volume forCoca-Cola increased 4 percent, maintain-ing a sizable lead for the nation's numberone soft drink. The popular "Coke is it "advertising campaign was refined, and anumber of new commercials targeted tovarious consumer groups were released.

1982-1984 1982-1984



Diet Coke, the leading low-calorie soft drink In theUnited States and the

country's third best-selling

soft drink of any kind,capped another year ofrapid growth with a newsweetener formulation of100-percent aspartame.



- ..~

» »

"W e will remain the leader ofoft drink technology in pack-

aging, ingredients, distributioystems, and sales equipment'

Whether at home or on thego, Coca-Cola Is the largest-selling soft drink In theUnited States and the world.

Slice-of-life commercials for young and oldalike showed Coke as "the one you grow upwith'.1 Music-video style ads were aimed atyouth, and competitive spots with Bill Cosbyfocused on the less sweet taste of Coke.

Diet Coke, the number one low-caloriesoft drink in the United States, posted asecond year of unparalleled growth andachieved the number three ranking amongall U. S. soft drinks. Unit volume of diet Cokerose more than 60 percent, and its marginof market leadership widened in all seg-ments. In the fourth quarter, Coca-Cola USAlaunched diet Coke with a 100-percentaspartame sweetener formulation and a

new advertising campaign focusing on thbrand's superior taste and contemporarypositioning.

After only a year in the market, caffeifree diet Coke emerged as the nation's num-ber one low-calorie caffeine-free cola and tfastest-growing brand in its category.

Combined sales of diet Coke, caffeinfree diet Coke, TAB and caffeine-free TAgave Coca-Cola USA a pre-eminent shareof the low-calorie cola category—20 per-centage points ahead of their nearest com-petitor. Together these products accountedfor nearly half of 1984 foodstore sales oflow-calorie colas —the industry's fastest-growing segment.

10



S O F T D R I N K B U S IN E S S S E C T O R S

For TAB, a new sweetener formulationn d broader marketing positioning werenitiated. The crisp, distinctive taste of TAB

was improved by an aspartame-saccharinlend launched mid-year along with

bolder, brighter packaging. The currentTAB's Got Sass" ad campaign was intro-

duced to communicate the brand's uniqueaste, brand perception and heritage.

Coca-Cola USA increased its lemon-ime volume and share through aggressive

marketing of Sprite and diet Sprite. Alreadyhe leading lemon-lime soft drink in foun-ain sales, Sprite further advanced its posi-ion when it was authorized by McDonald'sor all its 6,500 U.S. restaurants. Total

volume for Sprite grew nearly 30 percent.Volume for diet Sprite increased more than50 percent, with further gains expected fol-owing a change to 100-percent aspartame.

Under the Company's bottler systemestructuring program, the Company par-icipates directly o r indirectly in changes inbottling company ownerships to ensure atrong, financially sound and responsive

distribution system. In 1984 the Companyacquired bottlers in Ohio, Michigan,Oregon and California to strengthen adja-ent Company-owned operations, while

major independent bottling companies inother areas changed ownership. Since 1980he Company has facilitated ownershipransfers of bottling companies accountingor 50 percent of U.S. volume.

In line with it s strategy to maintainechnological leadership, Coca-Cola USAook a number of steps during 1984 todevelop new distribution, vending, andpackaging systems.

After performing successfully at15,000 West Coast outlets, bag-in-boxnon-returnable fountain syrup packagingsystems were made available nationally.The disposable bag-in-box offers foodser-vice personnel the same convenience thatplastic bottles and aluminum cans offerconsumers — a one-way alternative to thereturnable container. Bag-in-box provideseasier handling, shipping and storing thanth e traditional stainless steel syrup contain-ers and represents significant savings in cap-ital investments for the Company.

A futuristic computerized vendingmachine, in final stages o f development,features a video display screen, voice simu-lation and coupon dispensing, and offersconsumers a choice o f products in severalsizes and prices.

Caffeine-free diet Cokeemerged as the num berone caffeine-free diet colaIn the United States lastyear, while the distinctivetaste of TAB was Improvedwith a new sweetenerblend of aspartame andsaccharin. Caffeine-freeCoke and caffeine-freeTAB provide consumersthe option of enjoyingtheir favorite soft drinkswithout caffeine.

11



S O F T D R IN K B U S IN E S S S E C T O R S

Among Coca-Cola USA'scitrus-flavored soft drinksis the popular Mello Yello.Diet Sprite and seven otherdomestic products wereoffered In convenient andeconomical three-literplastic bottles In 1984,while In Canada MinuteMaid Orange Soda wasintroduced successfully to40 percent of the country'sconsumers.

For the home market segment,Coca-Cola USA introduced three-liter plas-ti c bottles for its eight major products.Available in more than 40 percent of thecountry in January 1985, the new packagerates high with consumers in value andconvenience.

Following a 1983 agreement withPetainer S.A. o f Neuchatel, Switzerland, todevelop new concepts in plastic packaging,in-home testing of a can-shaped plasticcontainer began in November 1984. Initialmarket testing is scheduled fo r early 1985.

In sweetener formulation developments,Coca-Cola USA authorized an increase ofup to 100-percent high fructose corn syrup(HFCS -55) in Coca-Cola and caffeine-freeCoke. While assuring highest product qual-i ty, the move provides bottlers greater

flexibility in dealing with sweetener availability and cost.

While reaffirming its commitmentto multiple sweetener options includingsaccharin, the Company secured a supplyagreement for aspartame from G.D. Searle C Co. for use in low-calorie soft drinks.

The sector's Canadian operating unit,Coca-Cola Ltd., showed a slight 1984operating profit increase on a 6-percent unitvolume gain, double the Canadian softdrink industry's 3-percent growth rate. Inthe fourth quarter, strong marketing pro-grams brought a volume gain of 13 percent

To strengthen its leadership positionCanada, the division took a number ofaggressive steps, including the successfulthird-quarter launch of Minute MaidOrange Soda, which capitalizes on one ofthe best-known trademarks in food market-i n g . In markets covering 40 percent of theCanadian population, initial sales ofMinute Maid Orange Soda showed veryfavorable consumer acceptance. Plans fowider geographic distribution and expandedfountain sales of the new product remainedunder review at year-end.

Overall 1984 performance by theNorth America Soft Drink Business Sectorestablished high standards for 1985 andbeyond. The sector's 10-percent volumegain in 1984 was double its 10-year average

of 5 percent. With total industry soft drinkvolume expected to grow again in 1985 atits long-term rate of about 4 percent,Coca-Cola USA and Coca-Cola Ltd. arestrongly positioned fo r expanded volumeexcess of industry levels.

12



nternational Soft Drink Business Sectorn the International Soft Drink B usiness

Sector, unit volume grew 4 percent in 1984.Operating income increased only modestly,because the continued strengthening of theU.S. dollar penalized the translation ofocal currency results.

A long-term strategic objective for thesector is to achieve growth by increasing percapita soft drink consumption, which is only15 percent o f the U.S. level. To encouragemore consumers to drink more of its productsmore frequendy, the Company is focusingon greater product availability, productvariety, and improved product positioningagainst alternative beverages. Key growthcategories include low-calorie, lemon-limeand cola.

The low-calorie segment is the leastdeveloped international soft drink category,an d shifting demographics an d consumerattitudes indicate strong growth potential.The Company's international low-calorievolume has grown to represent 2 percent oftotal international unit volume, primarilydue to diet Coke.

In 1984 international unit volume fo rdiet Coke increased 105 percent. Diet Cokewas introduced in 10 major countries lastyear, bringing total availability to 41 mar-kets, and it will continue to be expandedaggressively in 1985.

By the end of 1984, dietCoke, called Coca-Colalight In some countries,

wa s available in 41 mar-kets. In Japan, the nation'sfirst sugar-free soft drinkgained swift consumeracceptance.

13



S O F T D R I N K B U S I N E S S S E C T O R S

"Our approach to interna-ional gro wth is simple: builder capita co nsumption on a

market-by-market basis''

In m ajor internationalmarkets where diet C okeis available, it is selling atan average of 8 percentof Coca-Cola sales.In Norway, D enmarkand S witzerland, dietCoke is selling at morethan 15 percent of Coke,

and in Ireland, Australia, So uth Africa andJapan, diet Coca-Cola o utsells the primarybrand of the Com pany's largest competitor.In Jap an, where it was introduced last Aprilas Coca-Cola light, the product has a 68-percent share of the low-calorie carbonatedsoft drin k segment, which grew more than200 percent in 1984.

In the lemo n-lime category, the Com-pany's international per capita consump-tion is 11 percent o f the U.S. level. W ith amodest 21-percent share of the segment,primarily w ith S prite, the category repre-sents a m ajo r growth opportunity.

Available in two-thirds o f the Com-pany's internatio nal markets, Sprite is beingexpa nded and m arketed aggressively. A newinternational advertising campaign —"So

Soft Drink Industry P er Capita Consumption*(A s a percentage o f U . S . rates—1984)

\\

100

80

60

40

20

1 2 3 4 5

1 United States2 Latin America3 Western Europe4 Pacific5 Africa

I

100

60

40

20

clear So right So Sprite "— was releasedin the second quarter, and marketingspending fo r Sprite was up significantly fothe year. Sprite case sales rose 7 percentin 1984.

Sprite volume increased mo re tha 30percent in Argentina due to strong marking support and increased 22 percent in thePhilippines. In Mexico, whe re av ailabiliwas expanded in 1984, Sprite volumeincreased 71 percent. Available in 1983only five bottling territories, Sprite warolled out last year in 16 add itiona l territories covering half the Mexican marketincluding Mexico City. By the end of 198Sprite will be available to the v ast m ajof consumers in Mexico, the Company'ssecond-largest m arket by vo lume afterUnited States.

For Coca-Cola, which accounts for 6percent of the Co mpany's internationum e, un it volume increased 4 percent lasyear. To increase per capita consum ptiothe C om pany is directing efforts towardincreasing use occasions and achievingwider availability through vending ma-chines and fo unta in outlets. AdvertisinCoke with food, offering larger packagesizes, and developing the caffeine-free colsegment are additio nal consumption-building steps.

Greater vending mach ine market petration can significantly expand consumtion, but with the exception of Japan, wheit already accounts fo r 44 percent of Cpany product sales, vending has not yetbeen a ma jor facto r internationally. Oobstacle has been the capital required bybottlers to expand investment in vendingmachines. Funds available from Co ca

1 United States2 Total Non-US.

"Excludes USSR,China, India

14



inancial Corporation, which began opera-on in 1984, should benefit vendingevelopment.

The Company's international foun-ain, or post-mix, business, still far froms potential at about 5 percent of interna-onal volume, posted 8-percent higher vol-me in 1984. Equipment investment i s alsomajor factor in developing this segment,

ombined with the rapid evolution of thenternational fast-food industry.

Bo th factors played key roles in som ef the largest fo untain vo lume gains lastear, particularly in Korea and Thailand

where fo untain unit vo lume increased 39ercent and 44 percent, respectively. Inaly, where 80 percent o f the Rome and

Milan fountain business is in bag-in-box,

extensive add itional equipm ent investmentsand effective merchandising and advertisingled to a 32-percent volum e gain.

The convenience and economy oflarger packages are factors in increasing con-sumer po pularity as well as higher per capitaconsum ption levels. In 1984 nearly 6 per-cent of the Com pany's internatio nal vol-ume was in packages larger than one liter,up from just over 1 percent in 1980. Lastyear Japan introduced the 1.5-liter plasticbottle fo r Coke light and S prite, whilesales of Coca-Cola and Mello Yello in thepackage doubled. In Belgium sales of C om-pany products in 1.5-liter and 2-liter bottles,

Sprite Is being aggre s-sively expande d and mar-keted to capitalize on theInternational growthopportunity In the lemon-lime category. In Mexico,the Com pany's second-largest market by volume,

Sprite availability wasextended to bottling te rri-tories covering half thenation's market.

15



W e are revitalizing ourystem to execute a strategy o fncreased availability, aware-

ness and consumption

The Company investedmore than $100 million InIts bottler system restruc-turing program last year,Including the purchase ofbottling operations forsouthern England and Itsimportant London market.

available since 1980, represented 23 per-cent of the country's 1984 sales, and inNew Zealand 1.25- and 2-liter packagesaccounted for 50 percent.

In addition to marketing factors, amajor element f or international growth isbuilding strong bottler management to

ensure full commitment to a strategy o fincreased product availability, productawareness, and per capita consumption.

In 1984 the Company sold bottlingfacilities in Japan and Australia to aggres-sive local operators. It purchased th e south-ern United Kingdom territory, whichincludes th e critically important Londonmarket. The Company installed new man-

agement and is looking for significantimprovements in per capita consumption,which was 20 percent of Western Europealevels. The Company also has played keyroles in recent years in bottler ownershipchanges in Germany, Greece, Venezuelaand the Philippines.

Looking at 1984 performance geo-graphically, strong volume and profit gainswere posted in Latin America and the PacIn Europe and Africa the currency transla-tion penalty of a strong dollar, as well aslower shipments to Nigeria, resulted in ona small gain in unit volume and a declineoperating income.

The continued increase in the dollarvalue against key European currencieseffected an 8-percent decline in operating

16



O F T D R I N K B U S IN E S S S E C T O R S

come for Europe and Africa. Volumecreased 1 percent, limited largely by 59-rcent lower volume in Nigeria, a countryth erratic shipment patterns due to gov-nmental import restrictions. Sluggish eco-mic conditions held volume gains at 3rcent o r less in Germany, South Africa

nd Spain, while Italy's volume grew 5 per-nt, benefiting from strong performancesmarketing, packaging and post-mix.

The Pacific continued to generatecellent results with an 8-percent increaseunit volume and 10-percent higher oper-ing income. Volume gains were led by 16rcent in the Philippines, where the Com-ny has recaptured market leadership andthree years has doubled volume, and 13rcent in Korea. Japan, the Company'srd-largest market with 6 percent of total

olume, posted volume growth of 5 per-nt. In Australia a strengthened economyntributed to a volume gain of 7 percent.

Improving operating environments iney Latin American markets contributed to6-percent increase in volume and 29-percentowth in operating income. Argentinaowed the largest volume gain, up 33 per-nt due to relatively low prices for Com-ny products from continued pricentrols. An improving economic environ-ent in Brazil contributed to a 17-percentolume gain. Unit volume increased 3 per-

nt in Mexico, where easing of price con-ols benefited margins and contributed toong profit growth.

In 1985 Coca-Cola will be availablethe Soviet Union, a market of 275 mil-

on people. As the result of agreementsnnounced in January, Coca-Cola firstcomes available through Western-currency

shops to tourists, the diplomatic corps andother foreign visitors. Later in 1985, Sovietconsumers will be able to purchase Coca-Colain Moscow and several other Soviet cities.Coca-Cola joins Fanta Orange as Companyproducts in the Soviet marketplace. Othernew markets fo r Coca-Cola include Sudan,Congo and the German DemocraticRepublic.

Historically, the Company hasachieved a 10-year average growth ratein international unit volume of 6 percent,compared to an industry average of 4 to 5percent. The International Soft Drink Busi-ness Sector's programs to build per capitaconsumption and strengthen its bottler net-work are designed to enable the Companyto exceed its historic growth rate and con-t inue to outperform the industry.

The Company and Its inter-national bottlers market avariety of products thatrespond to local consumerdemand, Including caffeine-free Coke In Germany,Thailand's Mello Yello,Fanta Peach In Colombia,Japan's Georgia Coffee andSpain's non-carbonatedFanta Orange in asepticpackaging.

17



Foods Business Sector

"W e are enhancing o ur growthotential with new products,ackages and businesses aimed

at specific consumer preferences.

Coca-Cola Foods,the largest operat-ing unit within

the Foods Business Sec-tor, achieved record salesand profits in 1984. Netrevenues for the sectorgrew 14 percent to nearly$1.5 billion, while oper-

ating income grew 14 percent to nearly$138 million. Minute Maid frozen concen-trated orange juice remained t he marketleader with another record share of the cat-egory, while emerging products such asaseptically packaged juices and drinks grewsignificantly.

American consumers spent almost$6.5 billion on fruit juices an d drinks lastyear, and Coca-Cola Foods was the princi-pal supplier of these beverages with morethan 26 percent of the total U.S. juice andfruit drinks category.

Unit volume for the Company's citrusproducts declined slightly last year becauseof two major factors, a devastating freezeon Christmas Day 1983 and heavy marketspending by competitive brands. The freezedestroyed 40 percent of the Florida orangecrop, causing a severe shortage of oranges

FoodsNet Operating Revenues($ Millions)

1,500

1,200

900

600

300

19824984

Operating Income($ MiMans)

150

120

60

30

fo r processing and significantly increasingtheir cost. In the face of a number of severeFlorida freezes in recent years, Coca-ColaFoods has been strengthening its supplyoptions by working with Brazilian grow-ers who process fresh fruit according toMinute Maid specifications and then shipconcentrate to Coca-Cola Foods plants forblending and packaging.

At the same time, competitive brandsintroduced in 1983 were supported last yearby significant advertising and promotionalspending. Consequently, much of 1984 wspent in an intense battle f or market share,while the overall orange juice categorydeclined slighdy because of higher pricesand reduced availability. Nevertheless, theMinute Maid brand remained the industryleader, reaching a record 24 percent of theorange juice category by year-end.

Minute Maid frozen concentratedorange juice experienced a significantincrease in share despite a category decline.Part of this share growth is attributable toincreased sales of Minute Maid reducedacid orange juice and Minute Maid frozeconcentrated orange juice with more pulp.The two products increased in importancelast year to reach a combined total of 5percent o f the overall frozen orangejuice category.

In order to strengthen the position ofchilled Minute Maid orange juice fromconcentrate, Coca-Cola Foods successfully

1982-1984

18



At the end of 1984, nearlyone of every three glasses

of orange

Juice made from

frozen concentrate in theUnited States was MinuteMaid, by far the categoryleader.

19



F O O D S B U S IN E S S S E C T O R

Volume for the Company'scoffee business Increasedmore than 2 percent lastyear, and Minute Maidreduced acid orange juicecontributed to share gainsfor the Minute Maid brand.HI-C Hula Cooler andMinute Maid Pink Lemon-ade also contributed toshare gains fo r the sector.

tested a new 96-ounce Pure Pak containerwhich appeals to heavy orange juice drink-ers and a chilled form of the successful"with more pulp" product. The divisionalso expanded the Minute Maid brand byintroducing Minute Maid orange juice inshelf-stable aseptic packages.

In December Coca-Cola Foodsunveiled a strong new advertising campaignfor Minute Maid orange juice — "MinuteMaid knows how to get the best out of anorange'.' The campaign features RichardThomas and his family, including three-year-old identical triplet daughters. Thomas,known for his television role as John Boyin "The Waltons',' is the first spokespersonfo r Minute Maid since Bing Crosby.

Throughout 1984 Coca-Cola Foodsplaced considerable emphasis on the qual-ity of its flagship product, Minute Maidorange juice. Results of these efforts will b e

manifest in 1985 with the reintroduction oan improved "with more pulp" productcalled "Country Style —mo re juicy bits oforange" in both frozen and chilled forms.

The Minute Maid ades line grew sig-nificantly in 1984, earning a 37-percentshare. Growth was spurred in part by theintroduction o f Minute Maid frozen con-centrate fo r fruit punch, a complement tochilled Minute Maid fruit punch, whichhas been marketed since 1976. Followingthe success of the new, all-natural frozenpunch, Minute Maid fruit punch also wasintroduced in aseptic packaging in 1984.

Single-serving aseptic packages contin-ued to provide new business for Hi-C frudrinks, achieving a 30-percent volume gainas the "Drink Box" grew in popularityamong young consumers. Coca-Cola Foodsintroduced three new flavors of Hi-C in theDrink Box: Hi-C cherry-flavored drink,Hi-C peach-flavored drink, and Hi-Cwild berry drink. Hi-C has consistentlyexpanded it s share of the aseptic fruit drinksegment over the past three years, and in1984 the "Drink Box" posted an all-timehigh share of almost 28 percent.

In addition to its principal citrus prod-ucts, Coca-Cola Foods markets other juiand fruit drinks including Five Alive refresment beverages, Bright & Early breakfastbeverage and various Minute Maid varietyjuices. In keeping with its strategy to leveage its distribution system with new prod-ucts, Coca-Cola Foods expanded several

20



H R D D M R R T

The popularity of HI-Cin the Drink Box amongyoungsters has broughtsteady gains In the Com-pany's share of asepticfruit drink sales, whichreached a record 28percent last year.

21



Growth In the Minute Maidades line, a key contributor

to Coca-Cola Foods' 1984performance, was bolsteredby the introduction of theall-natural Minute Maidfrozen concentrate fo rfruit punch.

22



F O O D S B U S IN E S S S E C T O R

product lines during 1984. These includedthe introduction of Five Alive citrus bever-age and berry-citrus beverage in asepticpackages, and the national expansion ofBright & Early in chilled form in 64-ouncecartons. Minute Maid apple juice andgrape juice were introduced in asepticpackages, and chilled Minute Maid grape-fruit juice and apple juice were expandednationally.

In citrus foodservice, a new citrussales team, patterned after the successfulCoca-Cola U SA Fountain group, has in-creased foodservice volume by more than60 percent in the past two years. As aresult, Minute Maid orange juice is nowsold in such chains as Denny's, Carl's Jr.,Days Inn and Marriott.

The Coca-Cola Foods coffee busi-ness saw improvements in two areas. Newdecaffeinated roast-and-ground coffeesintroduced under both the Maryland Cluband Butter-Nut brands contributed to aretail business upturn, while increasedfocus on coffee foodservice business broughtvolume growth. Total unit volume fo r cof-fee was up more than 2 percent for 1984.

Belmont Springs Water Company,Inc., maintained i ts position in 1984 as theleading bottled water marketer in Boston,where the company is headquartered.Belmont Springs water is sold principallythrough home deliveries and to offices an dcommercial businesses. In 1984 the com-

pany's sales volume grew 25 percent.Presto Products Incorporated, based in

Appleton, Wisconsin, markets householdconsumer goods such as plastic wraps, dis-posable trash bags and health and beautyaids. Presto also supplies products such asplastic cutlery and drinking straws to com-mercial foodservice oudets and institutionalfacilities. During 1984, Presto's revenueswere up 14 percent.

Looking to the future, the Foods Busi-ness Sector expects to achieve continuedstrong growth through three principalmeans. First, it will expand sales of its pri-mary products—Minute Maid orange juiceand ades and Hi-C fruit drinks — fasterthan industry growth; it will expand i tsproducts to new channels of distribution;and it will broaden its operating basethrough product-line extensions and theaddition of new product categories.

Among Coca-Cola Foods'successful introductionslast year were Five Aliverefreshment beverages inpopular aseptic packagingand decaffeinated roast-and-ground coffees forboth the Maryland Cluband Butter-Nut brands.Chilled Bright & Early In 64-ounce cartons and chilledMinute Maid apple Juiceboth achieved nationalavailability in 1984.



Entertainment Business Sector

A key strategy is to leverageColumbia s distribution system

y significantly increasingntertainment product movinghrough it''

T he EntertainmentBusiness Sectorachieved a number

of strategic and financialobjectives in 1984. Thesector—whose majoroperations are ColumbiaPictures, Columbia Pic-tures Television Group,

and participation in Tri-Star Pictures—improved its performance substantially. Asa result, the sector earned $121 million inoperating profit, an increase of 34 percent.

The sector also strengthened its foun-dation for growth by pursuing the strategiesthat led to last year's excellent performance:increasing profitability without significandyincreasing capital risk; increasing produc-tion and maximizing the efficient use of dis-tribution systems; extending participationin ancillary markets; and increasing owner-ship of filmed entertainment product andinvolvement in new distribution methods.

In 1984 Columbia Pictures, the filmdivision, further enhanced it s position asa major motion picture studio through thedistribution of record-breaking and criti-cally acclaimed releases. "Ghostbusters"

Entertainment*Net Operating Revenues($ Millions)

900

720

540

360

180

Operating Income{$ Millions)

I

125

100

75

50

25

starring Bill Murray, D an Aykroyd,Sigourney Weaver, Harold Ramis and RicMoranis, became Columbia's number onefilm in domestic rentals. With a domesticbox-office gross of more than $220 millioth e Ivan Reitman film also has broken several industry records, becoming the numbone comedy ever and the most successfulfilm of the year. Additionally, it climbed tthe number six position on the all-timedomestic rentals list.

Columbia Pictures also releasedJohn Avildsen's The Karate Kid starringRalph Macchio and Noriyuki Pat Moritwhich has earned more than $90 million box-office receipts. Other major releasesincluded Against All Odds" "Moscow onthe Hudson" "A Soldier's Story;' "Starman""A Passage to India and "Micki & MaudeIn keeping with it s goal of increased prodution, Columbia plans to release 19 motiopictures domestically in 1985, compared 13 in 1984. Columbia Pictures currentlyhas more than 75 films in development orproduction to enable it to increase distribution levels in coming years.

Tri-Star Pictures released 17 films in1984. This extensive lineup included thefilms The Natural The Muppets TakeManhattan',' Places in the Heart" and"BirdyT Tri-Star is enabling the Entertain-ment Business Sector to fulfill its strategyfully utilizing an existing distribution sys-tem with increased production but withoa corresponding degree of financial risk. 1984 the new studio paid Columbia a substantial amount fo r its theatrical distribu-tion services.

1982-1984 1982-1984f'ln June 1982 the Company acquiredColumbia Pictures Industries, Inc.

24



Ghostbusters cap-tured the attention ofAmerican moviegoers lastyear, earning distinctionas the Industry's mostsuccessful comedy everand Columbia's highest-grossing film of all time.

25



E N T E R T A I N M E N T B U S IN E S S S E C T O R

Notable 1984 filmreleases Included (leftto right) Columbia Pic-tures' The Karate KidA Soldier's Story and

A Passage to India andTri-Star Pictures' criticallyacclaimed Birdy.

Columbia's 1984 films were honoredwith 19 Academy Award nominations, themost garnered by any studio. Tri-Star, in itsfirst full year of production, ranked thirdamong studios with 13 Oscar nominations.

Reflecting the sector's strategy of limit-ing risk, films produced by Columbia Picturesand Tri-Star Pictures are supported by mini-mum license fees and outside financing dur-ing the terms o f a number o f agreements.These include pay television licensing agree-ments with Time Inc.'s Home Box Office(HBO), network television licensing agree-ments with C BS Inc., and equity financingarrangements with HBO and certain publiclimited partnerships.

The sector's films generally arereleased on videocassette and videodisc

after their theatrical distribution, and thon pay television. These markets provideda substantially increased contribution tosector's income in 1984.

The domestic market for videocas-settes continued its phenomenal growthduring the year, and RCA/ColumbiaPictures Home Video captured an increashare of the business in the United Statesand Canada. The sector benefits from thijoint venture as an equity partner and alicensor of filmed entertainment. Amongth e 49 Columbia films licensed to the veture in 1984 were "Tootsie" and The B iChill both of which sold more than100,000 units, as did Tri-Star's film ThNatural'.' The venture also distributes avariety of other forms of entertainment,including music videos and children's programm ing. In all, the joint venture last yereleased 111 titles, more than in any pre-vious year. Columbia also participates ithe manufacture of videocassettes througthe joint venture Bell C Howell/ColumbiaPictures Video Services, which duplicatesvideocassettes for a number of distributo

D uring the term of its license agree-ments with Columbia and Tri-Star, HB Ohas rights — in many cases exclusive rightfo r pay television airing of the studios' fiin the United States.

Columbia Pictures Internationalsupervises the foreign distribution ofColumbia filmed entertainment throughal l th e various markets — theatrical, homvideo, pay television and free television.The strength of the U.S. dollar in 1984 an adverse effect on the translation of t

26



sector's foreign revenues into U.S. currency.The foreign release of "Ghostbusters',' amajor development for the division, cameat the end of the year. Initial engagementsindicate exceptionally strong results forthe film in overseas markets, which will

be reported in 1985. The promotion of"Ghostbusters" internationally includeda major joint program with bottlers ofCoca-Cola in more than 40 countries.

The sector is capitalizing on the fast-growing demand fo r videocassettes in for-eign markets through i ts international jointventure with RCA, which also distributesvideodiscs. Like its domestic counterpart,RCA/Columbia Pictures International

Video pays license fees for the use ofColumbia product and generates incomefo r the sector through it s distributionactivities.

The sector entered the emerging inter-national pay television business through the

formation of Premiere, a partnership createdto provide pay television programming ser-vices in foreign countries. Other partners inthe venture are HBO, Showtime/The MovieChannel, Thorn EMI Screen Entertainment,20th Century Fox and Warner Bros. Thepartnership ha s joined with a local companyto form a pay television cable programming

An extensive lineup of 17

films released in 1984 bythe Joint-venture studioTri-Star Pictures Includedthe critical and box-officesuccess, Places inthe Heart.

2



"W e will vigorously pursuepportunities to increaseroduction and acquisition

of programs for television''

Columbia Pictures Televi-sion Group was the largestcontributor to the Enter-tainment Business Sector'searnings for the secondconsecutive year. AmongColumbia's current prime-time series is Crazy Likea Fox, which consistentlyha s earned high ratingssince Its debut late last year.

service in the United Kingdom, and prelim-inary agreements have been signed concern-

ing the establishment of similar services inJapan and the German-speaking nations ofWestern Europe.

Columbia Pictures Television Groupis a producer o f primetime and daytimeseries, miniseries and made-for-televisionmovies and syndicates product to indepen-dent and network-affiliated stations. F orthe second consecutive year, the group

posted record profits and w as the largestcontributor to the sector's earnings.

At the end of the year, ColumbiaPictures Television Group had four hourlong primetime series on the air: "CrazyLike a Fox and Mickey Spillane's MikeHammer" on CBS and "Ripley's Believe Or Not and "TJ. Hooker" on ABC. Thgroup's continuing daytime series are Dof Our Lives on NBC for 19 years, and The Young and the Restless on C BS f11 years.

28



E N T E R T A I N M E N T B U S IN E S S S E C T O R

Th e group also is a leading supplier ofother types of television programs. Mini-series in 1984 included The Master ofBallantrae" The Last Days of Pompeiiand The First Olympics-Athens 1896 'Made-for-television movies were "A Touchof Scandal and "It Came Upon the Mid-night Clear ' Columbia Pictures TelevisionGroup is vigorously pursuing opportunitiesto increase production of programs for tele-

vision networks and independent stations.In 1984 the group's distribution arm

surpassed the previous year's strong per-formance in the syndication o f televisionproduct —both produced and acquiredprograms — to network-affiliated and inde-pendent stations across the nation. Themost successful of its 40 series available fo rsyndication in 1984 were "Hart to Hart"and "Benson?

As part o f the sector's efforts to

increase its ownership of filmed entertain-ment product, the group joined with twotelevision distributors to form The Tele-vision Program Source. This partnershiplicenses new programs to network-affiliatedand independent stations fo r first-run syn-dication. In 1984 it acquired distributionrights to the newly produced evening ver-sion of the highly successful The Price IsRight'.'

An emerging source o f profit is time

bartering with stations. To participate inthis business, Columbia became a partnerwith Lexington Broadcast Services in thecreation of Colex Enterprises. This ven-

ture provides syndicated product, such as"Gidget" and "Father Knows Best" to sta-tions in return fo r advertising time slots,which the venture then sells to advertisingagencies or directly to advertisers.

In line with the Entertainment BusinessSector's efforts to concentrate it s resourcesin areas where growth potential is highest,Mylstar Electronics, Inc., the amusementgame subsidiary, was closed in September.

The Entertainment Business Sectorapplied its strategies —limiting risk, increas-ing production, extending its participationin ancillary businesses and acquiring enter-tainment product—throughout it s busi-nesses in 1984. These strategies effectivelysupport one another and form the sector'scohesive plan fo r future growth.

RCA/Columbia PicturesHome Video sold morethan 100,000 cassettes of The Big Chill and TheNatural and marketedclassics from Colum-bia's film library such as It Happened One Night.Columbia Pictures Inter-national's release of Ghostbusters In Japanand other countries latein the year met outstand-ing success, while tele-vision programs such as Benson (bottom left) and Hart to Hart were themost popular of ColumbiaTelevision Group's syndi-cated series.



How a Feature Film Generates Revenues

In today's entertainment marketplace, theneighborhood movie theater is only the firstlink in a feature film's distribution chain.

Depending o n a film's success, it mightplay in theaters for a few weeks o r manymonths, but films generally co ntinu e gener-ating revenues for man y years as they movethrough additional distribution channels.The Company does not sell its films. It

rents, or licenses, them, for specific usestime periods while retaining ownershi othe underlying rights.

A typical distribution sequence isdescribed below. Actual release patterfo r Columbia Pictures and Tri-StarPictures films are individ ually tailored,and a film can be in more than one markat a t ime.

DomesticTheatrical

With few exceptions, films play first in movietheaters in the United States and Can ada. Tstrategy of when and where a film opens is indivually designed to maximize each film's theatricrentals...and i ts ultim ate earnings potential,success in the theatrical mark etplace stronglinfluences performance in subsequent market

InternationalTheatrical

Films generally are released next in internationtheaters. Openings are staggered from countrycountry, taking into account each film and locmarket conditions. In certa in cases, a film mayre-released in the theatrical m arket, either dtically or worldwide.

WorldwideHome Video

After theatrical release in a given country, a filmusually i s released fo r home entertainment onvideocassette and videodisc.

WorldwidePay Television

Ano ther hom e entertainm ent market is payvision, a n important market in the U nited Staand an emerging one internationally. Filmslicensed to p ay television services and distrto ho mes v ia cable or o ver-the-air transmis

Domestic

Television

Most films are licensed to television networks f

a specific num ber o f airin gs over a certain number of years. In the syndication market, films alicensed to independent and network-affiliatetelevision stations. A film may return to pavision after appearing on a network or insyndication.

InternationalTelevision

In the international marketplace, films are lto broadcast television following theatricalvideo, and, where available, pay television distbut ion . Films generally are licensed territo ry byterritory for a specific number o f airings over agiven time period.

30



Financial Report

32 Financial Review Incorporating Management'sDiscussion and Analysis

38 Selected Financial Data40 Consolidated Statements of Income41 Consolidated Balance Sheets42 Consolidated Statements of Shareholders' Equity43 Consolidated Statements of Changes

in Financial Position44 Notes to Consolidated Financial Statements50 Report of Independent Accountants51 Report of Management52 Supplemental Information on the Effects

of Changing Prices54 Quarterly Data55 Directors and Officers

56 Shareholder Information



Financial Review Incorporating Management'sDiscussion and Analysis

Rate of Growth in Earningsvs. Inflation ( % )

(% Change in Income Per Sharefrom Continuing Operations v s.% Change in Average ConsumerPrice Index-Urban)

inflation Earnings

17.5

14.0

10.5

7.0

3.5

1982-1984

BUSINESS OBJECTIVES AND STRATEGY

The core of the Company's strategy is a com-mitment to increase shareholder value overtime by achieving growth in earnings p ershare at a rate in excess of inflation and toincrease the return on equity in order to pro-vide shareholders an above average totalreturn o n their investment. This return is real-ized through share price appreciation andmaintaining o r increasing annual dividends.

To achieve this commitment, manage-ment focuses on the following areas:

Unit Volume and Film ProductDistribution: A principal goal for the SoftDrink Sectors and Foods Sector is to increaseunit volume at rates in excess of the respectiveindustry rates. In the soft drink marketwithin the United States, t he Company willseek to exceed industry volume performancethrough the Company's overall marketingstrength, excellent positioning in the rapidly

growing low-calorie segment and astrengthened bottler system. To accomplishthis goal fo r soft drinks sold outside t heUnited States, the Company will strive toincrease international per capita consump-tion to levels well above the relatively low lev-els that presently exist. International percapita consumption of Company soft drinkproducts during 1984 was 15% of the UnitedStates' rate. In 1984 unit growth of the Com-pany's worldwide soft drink operationsincreased 6%, well in excess of the world-wide industry rate of 2%. Following a strat-egy o f product and package segmentation,the Foods Sector will attempt to increase unitvolume by layering new products into i tsexisting distribution systems.

A key objective for the EntertainmentSector is to leverage its distribution systemincreasing product flow without a significaincrease in invested capital or risk. The riskmoderated through the use of equity and plicensing agreements with Home Box OffiInc., C BS Inc., and several limited equitypartnerships. Th e distribution system is utlized not only for the sector's theatricalreleases but also fo r the film products of Tr

Star Pictures, an equity investee, and othermotion picture companies. The success ofthis strategy contributed to earnings growthfor the Entertainment Sector in 1984.

Profit Margins: While increasing unitvolume in excess of industry rates is a keyobjective, the profit contribution per unit sis also important. It is the Company's objective to maintain or improve "real" profits punit (after adjusting for the effects ofinflation). This objective is accomplished bmaintaining tight controls over pricing poli-cies and operating expenses and seekingoperating efficiencies.

At December 31,1984, bottlers repre-senting over 91% of the Company's bottledCoca-Cola soft drink volume in the UnitedStates had agreed to an amended bottler cotract which gives the Company better pricinflexibility and requires additional marketinexpenditures by the Company. Excludingadjustments fo r sweetener prices, in 1984 1983 the Company raised prices an averagof 5% in the United States, principally tocover the effects of inflation.

In 1984 the Company instituted priceincreases in most major international mar-kets. These increases will help support theCompany's aggressive investment in adverting costs, which is an integral part of theCompany's formula for long-term unit vol-ume and earnings growth.

32



T he Coca-Cola Company and Consolidated Subsidiaries

In the United States, Coca-Cola is pri-marily sweetened with high fructose cornsyrup (HFCS), a form of sugar. In most of1984, this product was authorized at the100% level fo r Coca-Cola fountain syrupand at the 75% level fo r Coca-Cola sold inbottles and cans. In late 1984, the Companyauthorized the use of high fructose cornsyrup at up to the 100% level for Coca-Colasold in bottles and cans. Diet Coke productsin the United States were sweetened with ablend o f aspartame and saccharin duringmost of 1984. The Company authorized theuse of aspartame at the 100% level for dietCoke sold in bottles and cans in December1984, and for diet Sprite sold in bottles andcans in January 1985. The increased productcosts of using 100% aspartame are beingshared with the bottlers.

By carefully managing administrativeand general expenses, the Company canimprove its operating results. In 1984 the per-centage of administrative and generalexpenses to gross profits was 16.8% com-pared to 17.7% in 1983; this improvementrepresents an increase in operating income inexcess of $30 million for 1984. The Com-pany's success in controlling these costs hashelped provide additional resources for thelevel of advertising necessary to spur contin-ue d unit volume and earnings growth.

Management of Resources: A key ele-

ment of the Company's strategy is to concen-trate its resources in consumer marketsoffering a strategic fit, attractive returns andhigh growth potential. Management seekssolid investments that strategically enhanceexisting operations and that offer long-termcash flow returns which exceed the Com-pany's overall cost of capital. For investments

with risk characteristics similar to the softdrink industry, that cost of capital is esti-mated by management to be approximately14% after taxes.

In line with this strategy, since 1982 theCompany has sold two major operations,The Wine Spectrum in 1983 and Tenco Divi-sion in 1982. These dispositions have gener-ated more than $265 million which has beeninvested in other areas of the business. Inaddition, the Company carefully manages itsinvestment in the various components ofworking capital.

The Company's emphasis on profitablegrowth is reflected in the level o f investmentspending. In 1984 the Company's capitalreinvestment approximated $339 millionexcluding fixed assets of purchased com-panies. This reinvestment was allocated asfollows: Soft Drink Sectors — 72%; FoodsSector — 1 2% ; Entertainment Sec tor—9%;Corporate — 7 % . In addition, the Companyinvested over $100 million in 1984 in acquir-ing soft drink bottling territories and productlines. These acquisitions included bottlingoperations in Ohio, Michigan, Oregon,California and the United Kingdom. In the1985-1987 period the Company expects toinvest approximately $1 billion in the softdrink business. The Company's Foods Sectorha s made significant investments in Tetra Brikaseptic packaging equipment to support the

expected growth in this area. The Company'scapital investment in the Entertainment Sec-tor has exceeded $850 million, including theinitial acquisition cost of Columbia PicturesIndustries, Inc., ("Columbia").

In 1984 the Company repurchased 6.1million shares of its common stock at anaggregate cost of approximately $336 mil-lion. The repurchase program increasedreturn on equity by .7% and earnings pershare by 5 cents in 1984. This repurchase was

Return on Capital

(Income from ContinuingOperations to Total Capital)

17

14

10

1982-1984

Return onShareholders'Equity (% )

(Income from ContinuingOperations to AverageShareholders' Equity)

2

2

1

1982-1984



F IN A N C IA L R E V I E W IN C O R P O R AT IN G M A N A G E M E N T 'SD IS C U S S IO N A N D A N A LY S IS

Long-Term Debt toTotal Capital (% )

20

16

12

1982-1984

initiated after management determined thatfor the near term the Company's av ailablecash and debt capacity would exceed thefunds required to support the business andmake anticipated investments. Managementplans to consider future share repurchases asappropriate business and cash flow circum-stances arise.

Capital Structure: One of the Com-pany's financial goals is to maintain a strongfinancial position while utilizing prudentamounts of long-term debt. During 1984three $100 million long-term debt offeringswith stated interest rates of 12.75%, 11.75%and 11.375% were issued by the Company inthe European market. At the dates of issue,the comparable United States GovernmentTreasury yield rates were 13.61%, 12.69%and 11.45%, respectively. At December 31,1984, long-term debt represented 17.9% oftotal capital. In the future, the Company

envisions increasing the use of such debt inorder to fund attractive investment opportu-nities. This financing policy is aimed atincreasing the return on shareholders' equityand the total return to shareholders.

Dividends: With approval from theBoard of Directors, management plans toincrease the percentage of earnings reinvestedin th e business by raising dividends annuallyat a rate lower than the prior year's growth inearnings per share, thus decreasing over time

th e dividend payout ratio. The annual divi-dend was $2.76 per share, $2.68 per shareand $2.48 per share in 1984,1983 and 1982,respectively. At its February 1985 meeting,the Board of Directors increased the quarterlyper share dividend to 74 cents, equivalent toa full year dividend of $2.96 in 1985. Thisis the 23rd consecutive year the Board ofDirectors has approved dividend increases.

The above actions are illustrative of theCompany's efforts to achieve its goal ofenhancing the value of the shareholders'investment in The Coca-Cola Company.

MANAGEMENTS DISCUSSIONAN D ANALYSIS

Lines of BusinessThe Coca-Cola Company and consolidatedsubsidiaries (the "Company") operate threemajor lines of business:

The Soft Drink Business Sectors manu-facture and sell soft drink syrups and concentrates to independent bottling and canningoperations and approved wholesalers. TheCompany also owns some bottling and can-ning operations which represent approxi-mately 9% of worldwide volume of syrupand concentrate.

Citrus, Hi-C fruit drinks and coffee ar

reported as "Foods? Plastic products are notmaterial and are also included in the FoodsBusiness Sector.

The Entertainment Business Sector isengaged in the production and distribution oftheatrical motion pictures, television series,television features and other entertainmentrelated activities.

The Company has sold the followingoperations whose operating results have beereported as discontinued operations: 1983 —

The Wine Spectrum; 1982 — Tenco Division.Operating ResultsSoft Drinks: Revenues and operating incomefo r the Soft Drink Sectors increased in 1984and 1983 primarily because of unit volumeincreases of 6% and 3 %, respectively. Thevolume increases were due primarily to theincreased sales of diet Coke and Sprite. DietCoke is the fastest-growing soft drink sinceth e introduction of Coca-Cola.

34



T he Coca-Cola Company an d Consolidated Subsidiaries

Approximately 62% of soft drink salesvolume is generated outside the United States.In 1984 and 1983 soft drink revenues wereadversely affected by lower foreign exchangerates. As exchange rates decline, local cur-rency revenues translate into fewer U.S. dol-lars. In addition, in both years soft drinkrevenues were adversely affected by lowersweetener prices. The price of Coca-Colasyrup sold to bottlers in the United States isadjusted quarterly for changes in the marketprice of sugar and high fructose corn syrup.While impacting revenues, this practice mini-mizes the effects of sweetener prices on grossprofit per unit.

Lower foreign exchange rates alsoadversely affected operating income in 1984and 1983. Operating income in 1984 was fur-ther moderated by increased marketing expen-ditures, including programs focusing on the1984 Summer Olympics and other expenditures

incurred in connection with the conversionof McDonald's restaurants to Sprite.

Foods: Citrus is the dominant businessin the Foods Sector. The cost of citrus prod-ucts increased in 1984 due to a major freezein Florida in December of 1983. Strategicprice increases resulted in increased revenuesand operating income in 1984, despite a 4%volume decrease in orange juice sales. Reve-nues and operating income increased in theother divisions of the Foods Sector in relation

to general volume increases.Increases in 1983 revenues and operating

income compared to the prior year were dueprimarily to citrus products, which reportedvolume increases and modest price increases.

Entertainment: In 1984 the increases inrevenues and operating income for the Enter-tainment Sector were due principally to prof-itable motion picture releases and television

syndications and the licensing of variouslibrary programs in Germany. Successful mo-tion picture releases included "Ghostbusters"and "The Karate Kid? "Ghostbusters" hasbecome the highest grossing film in box officesales in the history o f Columbia. Televisionrevenues and operating profit benefited fromthe initial syndication of "Benson" and"Hart to Hart'.'

Entertainment revenues of $849.5million and operating income of $90.6 mil-lion in 1983 represent the first full year ofoperations. Major contributors to revenuesand operating income in 1983 were the boxoffice results of "Tootsie" "Gandhi" "BlueThunder" and "The Big Chill" and televisionoperations including the initial syndication of"Fantasy Island?

Selling, Administrative and General ExpensesSelling expenses, including media advertising,

were $1.75 billion in 1984, $1.52 billion in1983 and $1.37 billion in 1982. Expendituresfo r media advertising, excluding amountscapitalized as film production costs, were$536 million in 1984, $463 million in 1983and $392 million in 1982. An additional$108 million, $103 million and $69 millionof media spending were capitalized in 1984,1983 and 1982, respectively, in film costs inaccordance with film industry accountingstandards. The 1984 increase in media adver-tising expense was due to increased market-ing and promotional expenditures, some ofwhich related to the 1984 Summer Olympics.The 1983 increases resulted from aggressivemarketing, particularly in the introduction ofdiet Coke, th e inclusion of full year results fo rC olumbia and inflation.

Total Selling Expenses($ Millions)

• Selling Expenses OtherThan Media Adverti

• Media Advertising

1,

1,4

1,0

19824984



F IN A N C IA L R E V I E W IN C O R P O R AT IN G M A N A G E M E N T 'SD IS C U S S IO N A N D A N A LY S I S

Net Cash Providedby Operations(S Millions)

800

640

480

320

160

1982-1984

Administrative and general expensesincreased 4.5% and 16.2% in 1984 and1983, respectively, primarily because ofinflation and expansion of the business.Increases in 1983 are also attributable to thefirst full year o f operations fo r Columbia.Such expenses, as a percentage of net operat-ing revenues, remained relatively stable atabout 8% over the three years endedDecember 31,1984.

Interest Incom e and ExpenseInterest inco me increased by $46 million in1984 and decreased by $23 m illion in 1983.The increase in 1984 resulted from higheraverage invested balances. The decrease in1983 resulted from lower interest rates andlower average invested balances than in 1982.

An increase in interest expense of $51million in 1984 was due primarily to anincrease in average total debt. A decrease ininterest expense of $2 million in 1983 was

due primarily to lower interest rates thanin 1982.

Other Income and DeductionsThe increase in other income (n et) in 1984was due principally to gains from t he sales ofRonco Enterprises, Inc., and bottling opera-tions in Australia and Japan. This increasewas partially offset by losses resulting fromdeclines in foreign exchange rates. The 1983ot her incom e ( net) decrease is due primarilyto foreign exchange fluctuations.

Liquidity and Capital ResourcesAt December 31,1984, cash and marketasecurities totalled $782 million, an increasof $171 million over the prior year. The Cpany's principal source of cash continu es tobe funds provided by operations. Cash prvided by operations was $781 million in1984, $766 million in 1983 and $530 millin 1982. The prim ary uses of cash genefrom operations were dividends and ca

expenditures fo r each of the three years in period ended December 31,1984. Long-teinvestments were also a ma jo r use in 1

In 1984 the Co mpany issued more $300 million in long-term debt. The debt wissued primarily to finance the repurchase o6.1 million shares of the C ompany's stockand for general co rporate purposes. A ls in1984, loans and notes payable increased$400 million. The Com pany maintains and current m arketable securities subst

tially in excess of min imu m operating reqments. The ratio of total debt, net of cashand current m arketa ble securities in exof minim um operating needs, to total capwas as follows:

December 31,1984: 21.5% (net of an emated $600 m illion of cash and curmark etable securities in excess of mmum operating requirements)

December 31,1983: 7.0% (net of an esmated $400 million of cash and curr

marketable securities in excess o f minmum operating requirements)

The Company's total cash and mar-ketable securities was $611 million atDecember 31,1983, a $351 million increover 1982. Thi s increase was due princ ito the sale of the Company's wine busine

36



T he Coca-Cola Company and Consolidated Subsidiaries

At December 31,1984, investmentsamounted to $334 million, an increase of$92 million over 1983. This increase isdue primarily to equity contributions toCoca-Cola Financial Corporation and invest-ments in various bottling operations. Non-current receivables and other assets increased$167 million in 1984. This increase was gen-erated principally in the Entertainment Busi-ness Sector and relates to the television

syndication of "Benson" and "Hart to Hart'.'The Company maintains credit lines at

various financial institutions. At December 31,1984, the unused portion of the credit lineswas $353 million.

Capital expenditures in 1984,1983 and1982 were $391 million, $384million and $382million, respectively, and related principally tocapacity expansion, improved efficiency andfixed assets o f purchased companies.

International OperationsThe Company distributes its products in over155 countries and uses approximately 40functional currencies. The United States dol-lar is used as the functional currency in coun-tries considered to have hyp erinflation aryeconomies, such as Brazil and Mexico.

More than 50% of total operatingincome is generated outside the UnitedStates. Management estimates that theUnited States dollar strengthened againstselected key foreign hard currencies by an

average of 9% and 3%, respectively, in 1984and 1983. As the U.S. dollar strengthens, for-eign currency operating results are translatedinto fewer U.S. dollars.

Percentage increases (decreases) in aver-age exchange rates for several of the selectedforeign hard currencies are as follows:

1984 1983 1982

GermanyJapanSouth AfricaUnited KingdomAustralia

(11)% (5)% (6)%(1)% 4% (11)%

(23)% (2)% (19)%(12)% (13)% (13)%

(2)% (13)% (10)%

Exchange gains (losses), i.e., gains andlosses on foreign currency transactions andtranslation of balance sheet accounts inhyperinflationary countries, were $(18) mil-lion in 1984, $9 million in 1983 and $27 mil-lion in 1982. Such amounts are included inother income (net of other deductions) in theconsolidated statements of income.

In general, the Company does not enterinto forward exchange contracts to hedge itsnet investment in foreign operations. TheCompany does, however, engage in varioushedging activities to minimize potential losseson cash flows denominated in foreign currenciesand to offset foreign exchange movementson firm commitments and certain othertransactions where potential fo r loss exists.

Additional InformationFor additional information concerning theCompany's operations, cash flow, liquidityand capital sources, this analysis should beread in conjunction with th e Letter to Share-holders and the information on pages 40through 49 of this Annual Report. For infor-mation relating to the effects of inflation onthe operations of the Company see pages 52and 53, "Supplemental Information on theEffects of Changing Prices? Additional infor-mation concerning operations in differentindustries and different geographical areas ispresented on pages 48 and 49.



elected Financial Datamillions except per share data)

ar Ended D ecember 31,

ome from continuing operations

t income

1984 1983

$ 629 $ 558

$ 629 $ 559

1982(b)

$ 503

$ 512

1981

mmary of Operations (a)t operating revenuesst of goods and services

oss profitlling, administrative and general expenses

erating incomeerest incomeerest expenseher income (deductions)— net

ome from continuing operations before income taxesome taxes

$7,3643,993

3,3712,313

1,058129124

5

1,068439

$6,8293,7733,0562,063

9938373(3)

1,000442

$6,0213,311

2,7101,830

88010675

7

918415

$5,6993,188

2,5111,725

7867139(23)

795355

$ 440

$ 482

r Share Data (c)ome from continuing operationst incomevidends

ar-End Positionsh and marketable securities

operty, plant and equipment— nettal assetsng-term debttal debtareholders' equitytal capital (d)nancial Ratioscome from continuing operations to net operating revenuescome from continuing operationsto average shareholders' equityng-term debt to total capitaltal debt to total capitalvidend payouther Dataerage shares outstanding (c)pital expenditurespreciation

$ 4.764.762.76

$ 7821,6235,958

7401,3632,7784,141

8.5%

22.1%17.9%32.9%58.0%

132$ 391

166

$ 4.104.102.68

$ 6111,5615,228

513620

2,9213,541

8.2%

19.6%14.5%17.5%65.3%

136$ 384

154

$ 3.883.952.48

$ 2611,5394,923

462583

2,7793,362

8.4%

19.9%13.7%17.3%628%

130$ 382

144

$ 3.563.902.32

$ 3401,4093,565

137232

2,2712,503

7.7%

20.2%5.5%9.3%

59.5%

124$ 330

133

tes:) In June 1982 he Company acquired Columbia Pictures Industries,Inc., in a purchase transaction.

(b) In 1982 the Company adopted Statement of Financial AccountingStandards No. 52, "Foreign Currency Translation? See Note 10 tothe Consolidated Financial Statements.

1980

$ 404

$ 422

; 2 3 11,3413,406

133228

2,0752,303

7.4

1979

$ 394

$ 420

; 1491,2842,938

31139

1,9192,058

8.6%

Th e Coca-Co la Company an d Consolidated

1978 1977 1976

$ 357 $ 316 $ 282

$ 375 $ 331 $ 294

; 3211,0652,583

1569

1,7401,809

; 35 0887

2,2541557

1,5781,635

8.9% 9.5%

i 36 4738

2,0071152

1,4341,486

9.6%

1975

$ 237

$ 249

: 389647

1,8011642

1,3021,344

8.5%

5,4753,103

2,3721,635

7374035(9)

733329

4,5882,521

2,0671,378

68937

(3)

712318

4,0132,203

1,8101,167

64335

7(14)

657300

3,3281,836

1,492922

57029

6(9)

584268

2,9281,614

1,314806

50829

6(4)

527245

2,7731,633

1,140693

44722

6(8)

455218

$ 3.273.422.16

$ 3.183.401.96

$ 2.893.031.74

$ 2.562.681.54

$ 2.292.381.325

$ 1.932.021.15

20.2%5.8%9.9%

63.2%

124293127

21.5%1.5%6.8%

57.6%

124$ 381

106

21.6%.8%

3.8%57.4%

124$ 306

88

21.0%.9%

3.5%57.5%

123$ 264

77

20.6%.7%

3.5%55.7%

123$ 191

67

19.0%1.2%3.1%

56.9%

123$ 145

64

(c) Adjusted for a rwo-for-one stock split in 1977.(d) Includes shareholders' equity and total debt.(e) In 1974 the Company adopted the last-in, first-out (LIFO)

accounting method for certain major categories o f invThis accounting change caused a reduction in nemillion (25 cents per share) in 1974.

Net Operating Revenues($ Billions) 7.5

6.0

4.5

3.0

1.5

Operating Income(S Millions) 1,075

860

645

430

215

Net Income{$ Millions) 650

520

390

260

130

81974-1984 1974-1984 1974-1984

Income Per ShareFrom ContinuingOperations ($)

1974-1984

5.00

4.00

3.00

2.00

1.00

Return onShareholders* Equity (% )

Dividends Per Share (S )25

20

15

10

1974-1984 1974-1984



Consolidated Statements of Income(In thousands except per share data)

Year Ended December 31,

Income From Continuing OperationsIncome from discontinued operations

( n e t of applicable income taxes of$414 in 1983 and $4,683 in 1982)

The Coca-Cola Company and Consolidated Subsidi

1984 1983

628,818 558,260

527

1 9 8

Net Operating RevenuesCost of goods and services

Gross ProfitSelling, adm inistrative and general expenses

Operating IncomeInterest incomeInterest expenseOther income (deductions)— ne tIncome From Continuing Operations

Before Income TaxesIncome taxes

$7,363,9933,992,923

3,371,0702,313,562

1,057,508128,837123,750

5,438

1,068,033439,215

$6,828,9923,772,741

3,056,2512,063,626

992,62582,91272,677(2,528)

1,000,332442,072

$6,021,1353,310,847

2,710,2881,830,527

879,761106,172

74,5606,679

918,052415,076

502,976

9,256

Net Income $ 628,818 $ 558,787 $ 512,232

Per Share:Continuing operationsDiscontinued operations

4.76 4.10 3.;.07

Net income 4.76 4.10 3.95

Average Shares Outstanding 132 210 136,222 129,793

S e e Notes to Co nsolidated F i n a n c i a l S t a te m e n t s

40



Consolidated Balance Sheets In thousands except share data)

The Coca Cola Company and Consolidated Subsidiaries

ecember 31 ,

Assets

CurrentCashMarketable securities, at cost (approximates market)Trade accounts receivable, less allowances of

$20,670 in 1984 and $20,160 in 1983Inventories and u namo rtized film costsPrepaid expenses and other assetsTotal Current AssetsInvestments, Film Costs and Other AssetsInvestments {principally investments in affiliates)Unamortized film costsLong-term receivables and other assets

Property, Plant and EquipmentLand

Buildings and improvementsMachinery and equipmentContainers

Less allowances fo r depreciation

Goodwill and Other Intangible Assets

Liabilities and Shareholders' Equity

Current

Loans and notes payableCurrent maturities of long-term debtAccounts payable and accrued expensesParticipations and other entertainment obligationsAccrued taxes— including income taxesTotal Current Liabilities

Participations and Other Entertainment ObligationsLong-Term DebtDeferred Income TaxesShareholders' EquityCommon stock, no par value —

Authorized: 180,000,000 shares in 1984 and 1983;Issued: 137,263,936 shares in 1984

and 136,653,676 shares in 1983Capital surplusReinvested earningsForeign currency translation adjustment

Less treasury stock, at cost (6,438,873 sharesin 1984; 300,588 shares in 1983}

1984

$ 307,564474,575

872,332740,063241,326

2,635,860

334,220341,662408,324

1,084,206

130,883

645,1501,518,264337,993

2,632,2901,009,7151,622,575

615,428

$5,958,069

1984

$ 502,216120,3001,020,807

192,537186,942

2,022,802

175,234740,001241,966

69,009532,186

2,758,895(234,811)

3,125,279

347,2132,778,066

$5,958,069

1983

$ 319,385292,084

779,729744,107195,009

2,330,314

241,780252,612240,880

735,272

128,642

618,5861,412,697341,597

2,501,522940,716

1,560,806

601,430

$5,227,822

1983

$ 85,91320,783910,951154,213219,240

1,391,100226,129513,202

176,635

68,704500,031

2,494,215(130,640

2,932,310

11,554

2,920,756$5,227,822

See Notes to Consolidated Financial Statements.



Consolidated Statements of Shareholders' Equity In thousands except pe r share data)

Number of Shares

T he Coca Cola Company and Consolidated Subsidi

Amount

ForeignThree Years EndedDecember 31, 1984

Balance January 1, 1982

Sales to employeesexercising stock optionsand appreciation rights

Tax benefit from sale ofoption shares by employees

Purchase of Columbia PicturesIndustries, Inc.

Translation adjustments(net of income taxes of$11,188)

Treasury stock issued to officersNet income

Dividends (per share— $2.48)Balance December 31, 1982Sales to employees

exercising stock optionsand appreciation rights


Translation adjustm ents (netof income taxes of $ 13 ,346)

Treasury stock issued inconnection with anacquisition

Stock issued under RestrictedStock Award Plan

Net incomeDiv idends (per share — $2.68)

Balance December 31, 1983Sales to employees

exercising stock optionsand appreciation rights


Translation adjustm ents (net

of income taxes of $2,950)Stock issued under RestrictedStock Award Plan

Treasury stock purchasedNet incomeDividends ( per share — $2.76)

Balance December 31, 1984

Common Treasury Common CapitalStock Stock Stock Surplus

124,025 401 $62,389 $114,194

121 61 3,685

814

11,954 5,977 359,579

(42) 36

136,100 359 68,427 478,308

387 194 13,327

1,616

(58) (1,847)

167 83 8,627

136,654 301 68,704 500,031

316 158 10,931

7 ST7-. _J ^f /

294 - 147 18,667 6,138

137,264 6,439 $69,009 $532,186

ReinvestedEarnings

$2,109,542

—

512,232

(321,557)2,300,217

—

—

558,787(364,789)

2,494,215

—

628,818(364,138)

$2,758,895

Currency TreasuryTranslation Stock

$ (11,657)$ (15,353)

— —

(42,829)1,541

(54,486) (13,812)

(76,154)

2,258

— —

(130,640) (11,554)

(104,171)

(335,65

$(234,811) $(347,213)

See Notes to Consolidated Financial Statements.42



Consolidated Statements of Changesin Financial Position ( in thousands)

T h e Coca Cola Company and Co nsolidated Subsi


OperationsIncome from continuing operations

DepreciationAmortization:

Goodwill

Noncurrent film costsDeferred income taxesOther

Discontinued operations (provisions fordepreciation, amortization an d deferredincome taxes were $8,219 in 1983,and $7,504 in 1982)

Working capital provided by operationsDecrease (increase) in other current assets:

Trade acco unts receivableInventories and film costsPrepaid expenses and oth er assets

Increase (dec rease) in current liabilities:Accounts payable and accrued expensesParticipations and o ther entertainment obligationsAccrued taxes

Net additions to noncurrent film costsNet cash provided by operations

Decrease ( increase) in investmentsand other assets

Additions to property, plant and equipmentDisposals o f property, plant an d equipmentIncrease (decrease) in noncurrent participations an d

other entertainment o bligationsOther

Net cash invested in operations

Net cash available from operationsFinancing A ctivities

Co mm on stock issuedIncrease (decrease) n loans and notes pa yable and

current portion of long-term debtIncrease in long-term debtDecrease in long-term de bt (includes

reclassifications to short-term)Repurchase of comm on stock

Net cash provided by financin g activities

Acquisitions and Discontinued OperationsAcquisitions of purchased co mpanies:

Net working capital

Property, plant and equipment— netOther assets net of other liabilitiesGoodwill

Discontinued operations:Net wo rking capitalNet long-term assets (including property,

plant and equipment)

Net cash provided by (used fo r) acquisitionsand discontinued o perations

Dividends

Increase (Dec rease) in Cash and M arketable SecuritiesCash and Marketable Securities at Beginning of Year

Cash and Marketable Securities at End o f Year

1984

$ 628,818166,104

17,161

136,71484,93118,608

1,052,336

(72,127)18,070

(45,737)

47,47238,324

(31,506)(225,764)

781,068

(259,953)(338,929)

67,161

(50,895)(22,241)

(604,857)

176,211

32,460

510,260347,099

(120,300)(335,659)

433,860

32,070

(51,829)69

(55,573)

(75,263)

(364,138)

170,670611,469

$ 782,139

1983

$558,260153,655

16,468

57,16712,22025,460

8,746

831,976

(69,107)(57,776)55,663

143,957(590)

(39,512)(98,319)

766,292

(19,361)(376,197)

34,972

35,721(2,595)

(327,460)

438,832

22,000

(15,220)71,181

(20,783)

57,178

(1,847)

(7,439)583

(7,480)

145,530

89,990

219,337

(364,789)

350,558260,911

$611,469

19

$502,976143,549

10,101

43,448,724,11

16,7789,694

(276,1(90,9

(192,7

128,0154,803

19,4(1,8

530,14

21,8(325,0

44,4

(46,5

(305,2

224,8

370,1

25,9300,0

(50,6

645,5

(1,0

(56,7(89,6(516,115

34,3

1,8

(627,477

(321,5(78,6339,5

$260,911

See Notes to Consolidated Financial S tatements.



Notes to Consolidated Financial Statements

1. Accounting Policies. The major accounting policies andpractices followed by the Company and its consolidated sub-sidiaries are as follows:

Consolidation: The consolidated financial statementsinclude the accounts of the Company and its majority-owned

subsidiaries except for Coca-Cola Financial Corporation(CCFC) . A ll significant intercompany accounts and transac-tions are eliminated in consolidation. CCFC, a wholly ownedfinance subsidiary, initiated operations in 1984 and isaccounted for under the equity method. CCFC's operationsfo r 1984 were not significant to the consolidated financialstatements.

Consolidated statements of changes in financial positionfo r the years ended December 31,1983 and 1982, have beenrestated to a cash basis format.

Inventories and Unamortized Film Costs: Inventories a revalued at the lower of cost or market. The last-in, first-out

(LIFO) method of inventory valuation generally is used f orsugar and other sweeteners, except for aspartame, used inbeverages in the United States, for certain major citrus concen-trate products, fo r substantially al l inventories of United Statesbottling subsidiaries and for certain other operations. Allother inventories are valued on the basis of average cost orfirst-in, first-out {FIFO} methods. The excess of current costsover LIFO stated values amounted to approximately $54million and $59 million at December 31,1984 and 1983,respectively.

Unamortized film costs include film production, print, pre-release and other advertising costs expected to benefit futureperiods, accrued profit participations, and capitalized interest.The individual film forecast method is used to amortize thesecosts based on the revenues recognized in proportion to man-agement's estimate of ultimate revenues to be received. Basedon the Company's estimate of revenues as of December 31,1984, approximately 90% of unamortized film costs areexpected to be amortized over the next five years.

The costs o f feature and television films are classifiedas current assets to the extent such costs are expected to berecovered through the respective primary markets. Other costsrelating to film production are classified as noncurrent.

Revenues from theatrical exhibition o f feature films arerecognized on the dates o f exhibition. Revenues from televi-

sion licensing agreements are recognized when films are avail-able for telecasting. Motion picture revenues are derived fromthe following markets: domestic and foreign theater, homevideo, pay television and network and independent broadcasttelevision. The Company's average revenue recognition cyclefo r motion picture films i s approximately seven years.

Property, Plant and Equipment: Property, plant an dequipment is stated at cost, less allowance for depreciation,except that foreign subsidiaries carry bottles and shells in ser-vice at amounts (less than cost) which generally correspondwith deposit prices obtained from customers. Approximately92% of depreciation expense was determined by the straight-line method for the years ended December 31,1984,1983 a1982. The annual rates of depreciation are 2% to 10% forbuildings and improvements and 7% to 34% for machineryand equipment. Investment tax credits are accounted for bythe flow-through method.

Capitalized Interest: Interest capitalized as part of thecost of acquisition, construction or production of major assets(including film co sts) was $26 million, $18 million and$14 million in 1984,1983 and 1982, respectively.

Goo dwill and Other Intangible Assets: Goodwill an dother intangible assets are stated on the basis of cost and,

if acquired subsequent to October 31,1970, are beingamortized, principally on a straight-line basis, over the esti-mated future periods to be benefited (not exceeding 40 years).Accumulated amortization amounted to $57 million and $42million at December 31, 1984 and 1983, respectively.

2. Inventories and Unamortized Film Costs are comprised ofthe following ( in thousands):

December 31,

Finished goodsWork in processRaw materials and suppliesUnamortized film costs

(includes in process costsof $31,043 in 1984 and$60,669 in 1983)

1984

$284,71117,154

341,098

97,100

$740,063

1983

$217,32915,173

366,000

145,605$744,107

Noncurrent—Unamortized film costs:

CompletedIn process

$192,877148,785

$147,697104,915

$341,662 $252,61

3. Short-Term Borrowings and Credit Arrangements. Loansand notes payable include commercial paper and notes pay-able to banks and other financial institutions of $502 millionand $86 million at December 31,1984 and 1983, respectively.

Under line of credit arrangements for short-term debtwith various financial institutions, the Company, includingCoca-Cola Financial Corporation, may borrow up to $457million. These lines of credit are subject to normal bankingterms and conditions. At December 31, 1984, the unused por-tion of the credit lines was $353 million. Some of the financarrangements require compensating balances which are notmaterial.

44



The Coca-Cola Company and Consolidated Subs

4. Accounts Payable and Accrued Expenses are composed ofth e following amounts ( in thousands):

December 31,

Trade accounts payableDeposits on bottles and shellsOther

1984

$ 878,56447,84894,395

$1,020,807

1983

$768,91351,37190,667

$910,951

5. Accrued Taxes are composed of the following amounts(in thousands):

December 31,1984 1983

Income taxesSales, payroll and

miscellaneous taxes

$128,372

58,570

$166,228

53,012$186,942 $219,240

6. Long-Term Debt consists of the following amo unts(in tho usands):

December 31,1984 1983

9 7/s % notes due June 1,1985103/8% notes due June 1,1988113/s% notes due

November 28,1988

123/4% notes due August 1,1989H3/4% notes due October 1,1989

(redeemable afterSeptember 30,1986)

113/4% notes due October 16,1991(redeemable afterOctober 16,1988)

97/s % notes due August 1,1992(redeemable after July 31,1989)

Other

; 99,988 $ 99,95898,866 98,534

100,00099,771

98,279 97,916

99,757

98,345165,295

Less current portion860,301120,300

98,125139,452533,985

20,783$740,001 $513,202

The above notes, except for the 97A % notes due June 1,1985, were issued ou tside the United States and are redeem-able at the Company's option under certain limited conditionsrelated to U nited States and foreign tax laws.

The Il 3/s% notes were issued with detachable warrantswhich grant the holder the right to purchase additio nal notesbearing the same interest rate and maturing in 1991. The war-rants expire November 28,1988.

O ther long-term debt consists of various mortgages andnotes with maturity dates ranging fro m 1985 to 2010. Intereston a portion o f this debt v aries with the changes in the p rimerate, and the weighted average interest rate applicable to theremainder is approximately 12.3%.

Maturities o f long-term debt for the five years succDecember 31,1984, are as follows (in thousands):

1985 120,3001986 22,8831987 17,9411988 214,092

1989 210,847The above notes include various restrictions, none o

which are presently significant to the Com pany. The Copany is contingently liable for guarantees of indebtednessowed by its independent bottling companies, Coca-CoFinancial Corpo ration, and others in the approxim aamount o f $213 million a t December 31, 1984.

7. Pension Plans. The Company and its subsidiaries sponand /or contribute to various pension plans covering stially all United States employees and certain employees innon-U nited States locations. Pension expense for co noperations determined under various actuarial cost mprincipally the aggregate level cost method, amounted to approximately $36 million in 1984, $39 million in 1983 and$35 million in 1982. Pension costs are generally funded curr

Th e actuarial present value of accumulated benefestimated by consulting actuaries, and net assets availabbenefits of Company and subsidiary-sponsored plans inUnited S tates are presented below (in thousands):

January 1,1984

Actuarial present value ofaccumulated plan benefits:

VestedNonvested

Net assets available for benefits

$217,55817,527

$235,085

$334,357

$19315

$209

$280

Th e weighted average assumed rates o f return used termining the actuarial present value of accumulated plbenefits were approxim ately 9% for 1984 and 9.5% fo r This change in the assumed rate of return increasedarial present va lue of accumulated plan benefits by apprmately $9 million at January 1,1984.

The Company has various pension plans in locatiooutside the U nited States. These locations are not requirreport to United States governmental agencies and do not dtermine the actuarial present value of accumulated benefits or net assets available fo r benefits as calculated disclosed above. Fo r such plans, the value of the pefunds and ba lance sheet accruals exceeded the actuariacomputed value of vested benefits as of January 1, 1984 1983, as estimated by consulting actuaries.

The C om pany also has a plan whicb provides retirement health care and life insurance benefits to virtuemployees who retire with a minimum of five years of sethe aggregate cost of these benefits is not significant.



N O T E S T o C O N S O L ID AT E D F IN A N C IA L S TAT EM E N T S

8. Income Taxes. The components of income before incometaxes for both continuing and discontinued operations consistof the following (in thousands):


United StatesForeign

1984$ 457,260

610,773

$1,068,033

1983$ 409,613

591,660

$1,001,273

1982$357,063

574,928

$931,991

Income taxes for continuing and discontinued operationsconsist of the following amounts (in thousands):

Year EndedDecember 31,

1984Current

Deferred1983

CurrentDeferred

1982CurrentDeferred

UnitedStates

$ 45,411

67,891

$114,1954,493

$ 79,60533,281

State8t Local

$23,085

3,403

$25,6151,068

$22,6381,363

Foreign

$285,788

13,637

$287,8469,269

$266,70916,163

Total

$354,284

84,931

$427,65614,830

$368,95250,807

A reconciliation of the statutory U.S. federal rate andeffective rates is as follows:


Statutory rateState income taxes-net of

federal benefitEarnings i n jurisdictions

raxed at varying ratesInvestment t ax creditsOther-net

1984

46.0%

1.3

(3.0)(2.9)

(-3)

1983

46.0%

1.4

(1.9)(2.0)

.7

1982

46.0%

1.4

(2.2)(2.6)2.4

41.1% 44.2% 45.0%

Investment tax credits were approximately $34 million in1984, $20 million in 1983 and $24 million in 1982.

Deferred taxes are provided principally for depreciation,film costs and television and other licensing income which arerecognized in different years for financial statement andincome tax purposes.

In 1984 certain current tax amounts were reclassified todeferred. Also in 1984, the Company completed an organiza-tional restructuring in the Entertainment Business Sectorwhich resulted in an increase in the tax bases of certain assets.

9. Restricted Stock Award Plan and Stock Options. Theamended 1983 Restricted Stock Award Plan provides that1,000,000 shares of restricted common stock may be grantedto certain officers and key employees of the Company. Theshares are subject to fo rfeiture if the employee leaves the Co

pany for reasons other than death, disability or retirement may not be transferred by the employee prior to death, dis-ability or retirement. The employee receives dividends on theshares and may vote the shares. The market value of theshares at the date of grant is charged to operations over thoseperiods. Shares granted were 294,500 shares and 166,500shares in 1984 and 1983, respectively. At December 31,1984539,000 shares were available to be granted under this Plan.

The Company's 1983 Stock Option Plan covers2,000,000 shares of the Company's common stock. The Plprovides for the granting of stock appreciation rights andstock options to certain officers and employees. Stock appreci-ation rights permit the holder, upon surrendering all or partthe related stock option, to receive cash, common stock, orcombination thereof, in an amount up to 100% of thedifference between the market price and the option price.Included in options outstanding at December 31,1984, wervarious options granted under previous plans and otheroptions granted not as a part of an option plan.

Further information relating to options is as follows:

December 31,

1984 1983 198

Options outstandingat January 1

Options grantedin the year

Options exercisedin the year

Options cancelledin the year

1,713,222 1,507,162 1,406,360

454,650 487,900 288,300

(264,845) (203,361) (120,791)

(36,582) (78,479) (66,707

Options outstandingat December 31 1,866,445 1,713,222 1,507,162

Options exercisableat D ecember 31 868,596 750,026 781,906

Shares available atDecember 31 for

options whichmay be granted 1,131,950 1,577,858 25,261

Option prices pershare

Exercised inth e year

Unexercisedat year-end

25- 52 25- 50 22- 44

31- 64 25- 52 25- 68

46



The Coca-Cola Com pany and Consolidated Subsid

Not reflected above are options assumed in connectionwith the acquisition of Columbia Pictures Industries, Inc.,covering 27,400 shares of the Company's common stock atDecember 31,1984. The average option price for theseoptions is $37. During 1984 options for 50,680 such shares

were exercised, and options for 16,001 shares were cancelled.

10. Foreign Operations Currency Translation. In 1982the Company adopted Statement of Financial AccountingStandards No. 52, "Foreign Currency Translation" (SFAS 52)fo r translating the financial statements of its foreign opera-tions. An equity adjustment ($11.7 million} was recorded as ofJanuary 1,1982, for the cumulative effect of SFAS 52 on prioryears. Net exchange gains (losses) included in income, i.e.,gains and losses on foreign currency transactions and transla-tion of balance sheet accounts of operations in hyperinfla-tionary economies, were $(18) million for 1984, $9 million

fo r 1983 and $27 million for 1982.Appropriate United States and foreign income taxes have

been provided for earnings of subsidiary companies which areexpected to be remitted to the parent company in the nearfuture. Accumulated unremitted earnings of foreign subsidi-aries which are expected to be required for use in the foreignoperations were approximately $62 million at December 31,1984, exclusive of amounts which if remitted would result inlittle or no tax.

11. Acquisitions. In 1984,1983 and 1982 the Company pur-chased various bottling companies to operate. The operating

results for these companies have been included in the consoli-dated statement of income from the dates of acquisition anddo not have a significant effect on operating results for thoserespective years.

In addition, in 1984 the Company purchased a substan-tial equity interest in The Mid-Atlantic Coca-Cola BottlingCompany, Inc., at a cost of more than $60 million. This oper-ation was purchased with the intent of selling it to other pur-chasers as part of the bottler restructuring efforts. Accordingly,the acquisition has been accounted for as a temporaryinvestment under the cost method of accounting.

Included in current marketable securities at December 31,1984, is $148.8 million on deposit with an escrow agent.Such amount will be used to acquire Louisiana Coca-ColaBottling Co. ("Louisiana") or released to the Company,depending upon resolution of current differences between theCompany and principal owners of Louisiana.

In June 1982 the Company acquired all of the outstaning capital stock of Columbia Pictures Industries, Inc.,("Columbia") in a purchase transaction. The purchase price,consisting of cash and common stock of the Company, wavalued at approximately $692 million. The values assignedassets acquired and liabilities assumed are based on studiesconducted to determine their fair values. The excess cost onet fair value is being amortized over 40 years using thestraight-line method.

The pro forma consolidated results of continuing opetions of the Company, as if Columbia had been acquired asof January 1,1982, are as follows for the year endedDecember 31,1982 (in millions except per share data):

Net operating revenuesIncome from continuing operationsIncome from continuing operations pe r share

$6,374

3.

The pro forma results include adjustments to reflectinterest expense on $333 million of the purchase priceassumed to be financed with debt bearing interest at anannual rate of 11 %, the amortization of the unallocatedexcess cost over net assets of Columbia, the income tax eof pro forma adjustments and the issuance of 12.2 millionshares of the Company's common stock.

12. Divestitures and Discontinued Operations. In 1984 theCompany sold Ronco Enterprises, Inc., a manufacturer anddistributor of pasta products, for cash. This transaction hano significant effect on consolidated operating results.

In conjunction with its continuing bottler restructuringefforts, the Company sold bottling interests in Australia anJapan and provided for possible losses in Guatemala, wherean independent bottler ceased operations. Such effortsresulted in net pretax gains of approximately $18 million.

In November 1983 the Company sold its wine businessfo r book value plus advances, amounting to approximately$230 million. In February 1982 the Company sold its TencDivision, which manufactured and distributed private labelinstant coffees and teas, for approximately book value. Netrevenues of discontinued operations were $162 million and

$229 million in 1983 and 1982, respectively.



N O T E S T o C O N S O L ID A T E D F IN A N C I A L STAT EM E N T S

13. Lines of Business. The Company operates principally inthe soft drink industry. Citrus, Hi-C fruit drinks, coffee andother products are included in the Foods Business Sector. Plas-tic products are not material and are also included in theFoods Business Sector. In June 1982 the Company acquired

Columbia Pictures Industries, Inc., which operates in theentertainment industry. Intercompany transfers between sec-tors are not material. Information concerning operations indifferent lines of business is as follows ( in millions):


Net operating revenues:Soft drinksFoodsEntertainment

Consolidated net operating revenues

Operating income:Soft drinksFoodsEntertainmentGeneral expenses

Consolidated operating incomeIdentifiable assets at year-end:

Soft drinksFoodsEntertainmentCorporate assets (principally marketable

securities, investments and fixed assets}Discontinued operations

Consolidated assets

Capital expenditures (including fixed assetsof purchased companies):

Soft drinksFoods

EntertainmentCorporate

Consolidated capital expenditures

Depreciation and amortization of goodwill:Soft drinksFoodsEntertainmentCorporate

Consolidated depreciation andamortization of goodwill

1984

$5,014.91,464.4

884.7$7,364.0

$ 879.6137.7121.1(80.9)

$1,057.5

$3,009.6460.0

1,615.4

873.1—

$5,958.1

$ 294.639.931.225.1

$ 390.8

$ 127.027.417.611.3

$ 183.3

1983

$4,694.61,284.9

849.5

$6,829.0

$ 858.6121.3

90.6(77.9)

$ 992.6

$2,670.6431.9

1,394.0

731.3—

$5,227.8

$ 237.645.172.928.0

$ 383.6

$ 120.425.215.7

8.8

$ 170.1

198

$4,413.81,150.0

457.3$6,021.1

$ 800.0117.9

35.(73.

$ 879.8

$2,521.4380.4

1,309.8

476.2235.5

$4,923.3

$ 249.553.753.924.

$ 381.7

$ 117.620.

7.67.6

$ 153.6

Net Operating Revenues($ Millions)

Entertainment 88.5

foods 1,464

Soft Drinks 5.015

Operating Income(SMillions)

Entertainment 121

Foods

Soft Drinks

138

880

48



The Coca-Cola Company and Consolidated Subsidiaries

14. Operations in Geographic Areas. Information about theCompany's operations in different geographic areas is pre-

sented below (in m illions). Intercompany transfers betweengeographic areas are not material.

Year Ended December 31,Net operating revenues:

United StatesLatin AmericaEurope and AfricaPacific and Canada

Consolidated net operating revenues

Operating income:United StatesLatin AmericaEurope and AfricaPacific and CanadaGeneral expenses

Consolidated operating income

Identifiable assets at year-end:United StatesLatin AmericaEurope and AfricaPacific and CanadaCorporate assets (principally marketable

securities, investments and fixed assets)Discontinued operations

Consolidated assets

Identifiable liabilities of operations outsidethe United States

1984

$4,566.4429.6

1,183.81,184.2

$7,364.0

$ 550.289.6

272.5226.1(80.9)

$1,057.5

$3,575.5409.8636.4463.3

873.1—

$5,958.1

$ 714.5

1983

$4,071.4401.3

1,225-61,130.7

$6,829.0

$ 498.769.4

295.4207.0(77.9)

$ 992.6

$2,996.5420.9606.5472.6

731.3 $5,227.8

$ 652.0

198

$3,351516.

1,155.6997.

$6,021.1

$ 403.2123.2249177.8(73.

$ 879.8

$2,773.2435582.420.5

476235.5

$4,923.3

$ 627.0

Net Operating Revenues(S Millions)

Latin America 430

Europe and Africa 1,184

Pacific and Canada 1 184

United States 4.566

Operating Income(S Millions)

Latin America

United States

90

Europe an d Africa 273

Pacific an d Canada 22 6

550



Report of Independent Accountants The C o c a - C o la C o m p a Consolidated Subsidiaries

Board of Directors and ShareholdersThe Coca-Cola CompanyAtlanta, Georgia

We have examined the consolidated balance sheets of The Coca-Cola Company and con-solidated subsidiaries as of December 31,1984 and 1983, and the related consolidatedstatements o f income, shareholders' equity and changes in financial position fo r each othe three years in the period ended December 31,1984. Our examinations were made inaccordance with generally accepted auditing standards and, accordingly, included suchtests of the accounting records and such other auditing procedures as we considered neces-sary in the circumstances.

In our opinion, the financial statements referred to above present fairly the consoli-dated financial position of The Coca-Cola Company and consolidated subsidiaries atDecember 31,1984 and 1983, and the consolidated results of their operations andchanges in their financial position for each of the three years in the period ended Decem-

ber 31,1984, in conformity with generally accepted accounting principles applied on aconsistent basis.

Atlanta, GeorgiaFebruary 1,1985

50



Report of Management he Coca-Cola Company and

Conso lidated Subsidiaries

Management is responsible for the preparation and integrity of the consolidated financialstatements appearing in this Annual Report. The financial statements were prepared inconformity with generally accepted accounting principles appropriate in the circum-stances and, accordingly, include some amounts based on management's best judgmentsand estimates. Financial information in this Annual Report is consistent with that in thefinancial statements.

Management is responsible for maintaining a system of internal accounting controlsand procedures to provide reasonable assurance, at an appropriate cost/benefit relation-ship, that assets are safeguarded and that transactions are authorized, recorded andreported properly. The internal accounting control system is augmented by a program ofinternal audits and appropriate reviews by management, written policies and guidelines,careful selection and training of qualified personnel and a written Code of Business Con-duct adopted by the Board of Directors, applicable to all employees of the Company andits subsidiaries. Management believes that the Company's internal accounting controlsprovide reasonable assurance that assets are safeguarded against material loss from unau-thorized use or disposition and that the financial records are reliable for preparing finan-cial statements and other data and maintaining accountability for assets.

The Audit Committee of the Board of Directors, composed solely of Directors whoare not officers of the Company, meets with the independent accountants, managementand internal auditors periodically to discuss internal accounting controls, auditing andfinancial reporting matters. The Committee reviews with the independent accountants thescope and results of the audit effort. The Committee also meets with the independentaccountants without management present to ensure that the independent accountantshave free access to the Committee.

The independent accountants, Ernst & Whinney, are recommended by the AuditCommittee of the Board of Directors, selected by the Board of Directors and ratified bythe shareholders. Ernst & Whinney is engaged to examine the consolidated financialstatements of The Coca-Cola Company and consolidated subsidiaries and conduct suchtests and related procedures as they deem necessary in conformity with generally acceptedauditing standards. The opinion of the independent accountants, based upon their exami-nation of the consolidated financial statements, is contained in this Annual Report.

^^^^roberto C. Goizueta M. Douglas IvesterChairman, Board of Directors, Senior Vice Presidentand Chief Executive Officer and Chief Financial Officer

February 1,1985



Supplemental Information on the Effectsof Changing Prices (Unaudited)

General. The following unaudited disclosures were preparedin accordance with standards issued by the Financial Account-ing Standards Board and are intended to quantify the impactof inflation on earnings and production facilities. Theinflation-adjusted data is presented under the specific price

changes method (current cost). Only those items mostaffected by inflation have been adjusted; i.e., inventories,property, plant and equipment, the related costs of goods andservices sold and depreciation and amortization expense.Although the resulting measurements cannot be used as pre-cise indicators of the effects of inflation, they do provide anindication of the effect of increases in specific prices of theCompany's inventories and properties.

The adjustments for specific price changes involve asubstantial number of judgments as well as the use o f variousestimating techniques employed to control the cost of accu-mulating the data. The data reported should not be thoughtof as precise measurements of the assets and expensesinvolved, or of the amount at which the assets could be sold.Rather, they represent reasonable approximations of the pricechanges that have occurred in the business environment inwhich the Company operates.

A brief explanation of the current cost method is pre-sented below.

The current cost method attempts to measure the effectof increases in the specific prices of the Company's inventoriesand properties. It is intended to estimate what it would cost in

1984 dollars to replace the Company's inventories and exist-ing properties.Under this method, cost of goods sold valued on the

average method is adjusted to reflect the current cost of inven-tories at the date of sale. That portion of cost of goods soldvalued on the UFO method approximates the current cost ofinventory at the date of sale and generally remains unchangedfrom the amounts presented in the primary financial statements.

Current cost depreciation expense is based on the averagecurrent cost of properties in the year. The depreciation meth-ods, salvage values and useful lives are the same as those usedin the primary statements.

The current cost of finished products inventory wasapproximated by adjusting historical amounts to reflect cur-rent costs for material, labor and overhead expenses as well ascurrent cost depreciation, where applicable. The current cost

Statement of Income Adjusted for Changing Prices(I n millions except per share data )

Year Ended December 31, 1984

Net operating revenues

Cost of goods and services (excluding depreciation)Depreciation and amortizationOther operating expensesNet of other (income) and deductions

Income from continuing operations before income taxesIncome taxes

Income from continuing operations

Income per share from continuing operations

Effective income tax rate

Purchasing power gain from holding netmonetary liabilities in the year

Increase in specific prices of inventoriesand property, plant and equipment held in the year

Less effect o f increase in general price levelIncrease in specific prices over increase

in the general price level

Estimated translation adjustment

Inventory and film costsProperty, plant and equipment— net

As Reportedin the

PrimaryStatements

$7,364.0

3,924.4169.5

2,214.2(12.1)

1,068.0439.2

$ 628.8

$ 4.76

41.1%

$1,081.7$1,622.6

Adjusted fo rChanges in

Specific Prices(Current Costs)

$7,364.0

3,938.9227.4

2,214.2(3.6)

987.1439.2

$ 547.9

$ 4.15

44.5%

$ 26.1

$ 44.7184.5

$ (139.8)

$ (110.0)

$1,127.0$2,215.2

A significant part o f the Company's operations is measured in func-t ional currencies other than the United States dollar. Adjustments to

reflect th e effects of general inflation were determined on the translate-restate method using the U.S. CPI(U).

52



The Coca-Cola Company and Consolidated Subsidiarie

r inventories other than finished products was determinedn the basis of price lists or appropriate supplier quotationsd by other managerial estimates consistent with established

urchasing and production procedures.Since motion picture films are the result of a unique

ending of the artistic talents of many individuals and areoduced under widely varying circumstances, it is notasible to develop the current cost of film inventories, par-cularly since the Company would rarely, if ever, attempt to

uplicate an existing film property. In view of these consider-ions and as permitted by Statement of Financial Accountingandards No. 46, film inventories have been valued on the

asis of constant dollar equivalents. Direct supplier quota-ons, published price lists, engineering estimates, construc-on quotations, appraisals and published and internallyveloped indexes were the methods used to determine the

urrent cost of property, plant and equipment.

Under current cost accounting, increases in specific pricesurrent cost) of inventories and properties held during thear are not included in income from continuing operations.

Income Taxes. Taxes on income included in the supple-mentary statement of income are the same as reported in theprimary financial statements, hi most countries present taxlaws do not allow deductions for the effects of inflation.

Purchasing Power Gain. During periods of inflation,

monetary assets, such as cash, marketable securities andaccounts receivable, lose purchasing power since they will buyfewer goods when the general price level increases. The hold-ing of monetary liabilities, such as accounts payable, accrualsand debt, results in a gain of purchasing power becausecheaper dollars will be used to repay the obligations. TheCompany has benefited from a net monetary liability positionin recent years, resulting in a net gain in purchasing power.This gain does not represent an increase in funds available fordistribution to shareholders and does not necessarily implythat incurring more debt would be beneficial to the Company.

Increase in Specific Prices. Shown separately are the totalchanges in current costs for inventories and properties, thatcomponent of the total change due to general inflation andthat component of the change attributable to fluctuations inexchange rates.

ive-Year Comparison of Selected Supplemental Financial Datadjusted fo r Effects of Changing Prices (I n Average 1984 Dollars)n millions except pe r share data)

ear Ended December 31, 1984 1983 1982 1981 1980

et operating revenuesurrent cost information:Income from continuing operationsIncome per share from continuing

operationsIncrease in specific prices over

(under) increase n the generalprice level, including translationadjustments

Net assets at year-endurchasing power gain on net monetaryitems

ash dividends declared per share:As reportedAdjusted for general inflation

Market price per common share atyear-end:

Historical amountAdjusted fo r general inflation

Average Consumer Price Index — UrbanCPI(U}(1967 = 100)

$7,364.0

547.9

4.15

(249.8)3,424.3

26.1

2.762.76

62.37562.375

311.1

$7,119.6

505.9

3.72

(240.0)3,757.3

29.0

2.682.79

53.5055.78

298.4

$6,479.2

426.4

3.28

(199.1)3,891.8

19.0

2.482.67

52.0055.96

289.1

$6,508.6

392.3

3.16

(236.3)3,581.7

27.9

2.322.65

34.7539.69

272.4

$6,901.4

331.2

2.67

27.84,010.4

54.3

2.162.72

33.37542.07

246.8

53



Unaudited Quarterly Data(For the years ended December 31,1984 an d 1983)

The Coca-Cola Company and Consolidated Subsidi

Quarterly Results of Operations(I n millions except per share data} Net Operating Revenues Gross Profit

First quarter

Second quarterThird quarterFourth quarter

1984

$1,579.9

1,926.32,074.11,783.7

$7,364.0

1983

$1,483.5

1,780.01,832.61,732.9

$6,829.0

Income From ContinuingOperations

First quarterSecond quarterThird quarterFourth quarter

1984

$ 138.0185.0175.3130.5

$ 628.8

1983

$ 123.5162.1152.3120.4

$ 558.3

Income Per Share FromContinuing Operations

First quarterSecond quarterThird quarterFourth quarter

1984

$ 1.021.401.341.00

1983

$ .911.191.12

.88

1984

$ 720.6 $

906.9937.4806.2

$3,371.1 $3,

Net Income1984

$ 138.0 $185.0175.3130.5

$ 628.8 $

Net Income Per Share

1984

$ 1.02 $1.401.341.00

198

664.2

808.4827.4756.3056.3

198

122.160.5151.6124.6558.8

198

.91.181.11

.9$ 4.76 $ 4.10 4.76 $ 4.1

54



Board of Directors Corporate Officers

Herbert A. AllenNew York, N.Y.President and C hief

Executive Officer,Allen & Company

IncorporatedAnne Cox ChambersAtlanta, G a.Chairman,Atlanta Newspapers

George S . CraftAtlanta, G a.Retired

Charles W. Duncan, Jr.Houston, Tex.Private Investor

Richard J. Flamson IIILo s Angeles, C alif.C hairman, Board of

Directors, and ChiefExecutive Officer,

Security Pacific Corporationand Security PacificNational Bank

Roberto C. GoizuetaAtlanta, Ga.Chairman, Board of

Directors, and ChiefExecutive O fficer,

The Coca-Cola Company

Joseph W. JonesAtlanta, Ga.Senior Vice President and

Assistant Treasurer,The Coca-Cola Co mpany

Donald R. KeoughAtlanta, Ga.President and

Chief Operating Officer,The Coca-Cola Company

James T. LaneyAtlanta, G a.President,Emo ry University

Donald F. McHenryW ashington, D.C.University Research

Professor of D iplomacyand International Affairs,

Georgetown U niversityJames D. Robinson IIINew Yo rk, N.Y.Chairman, Board of

Directors, and C hiefExecutive Officer,

American Express Co mpany

James M. SibleyAtlanta, Ga.Partner in the law firm o f

King & Sp aiding

W illiam B. Turner

Columbus, Ga.Chairman, Board ofDirectors, and ChiefExecutive Officer,

W.C. Bradley Co. andC hairman of the Board,CB&T Bancshares, Inc.

James B. WilliamsAtlanta, Ga.President,Trust Co mpany of Georgia

George W . Wo odruffAtlanta, Ga.

Retired

R.W. Wo odruffAtlanta, G a.Director Emeritus,The Coca-Cola Co mpany

Roberto C. GoizuetaChairman, Board of

Directors, and ChiefExecutive Officer

Donald R. KeoughPresident a nd

Chief Operating Officer

Sr. E xecutive Vice President

Claus M. Halle

Executive Vice Presidents

A. Garth HambyIra C. Herbert

Senior Vice Presidents

Eugene V. Amo roso

H.T. CircuitBrian G. DysonJohn W . GeorgasM.A. GianturcoM. Douglas IvesterJoseph W. JonesRobert A. KellerEarl T. Leonard, Jr.Klaus PutterDouglas A. SaarelFrancis T. Vincent, Jr.R. V. Waltemeyer

Vice Presidents

W illiam W . AllisonHerbert A. ArnoldWilliam R. BuehlerRobert L. Callahan, Jr.Philip J. Carswell, Jr.Lawrence R. CowartSergio Dolf iMurray D. FriedmanJohnJ. GillinRobert D.GuyW. Glenn KernelGloria E. LemosS. W . Magruder

Alex MalaspinaMaury C. RoeCarl Ware

M. Douglas IvesterChief F inancial O fficer

Robert A. KellerGeneral Counsel

Murray D. FriedmanTreasurer

Philip J. C arswell, Jr.Controller

Donald R. GreeneSecretary

Executive Officers—Operating Units

North A mericaSoft DrinkBusiness Sector

Brian G. DysonPresident

InternationalSoft DrinkBusiness Sector

Claus M. HallePresident

FoodsBusiness Sector

Eugene V. AmorosoPresident

EntertainmentBusiness Sector

Francis T. Vincent, Jr.President

55



Shareholder Information

Common StockTicker Symbol: KO

Common stock of The Coca-Cola Company, exceeding130 million shares outstanding, is listed and traded on

the New York Stock Exchange and also is traded on theBoston, Cincinnati, Midwest, Pacific, and PhiladelphiaStock Exchanges. Outside the United States, the Com-pany's common stock is listed and traded on the Germanexchange in Frankfurt and on Swiss exchanges in Zurich,Geneva, Bern, Basel, and Lausanne. There were 75,862shareholders of record on December 31,1984.

Cash DividendsDividends normally are paid on a quarterly basis, usuallyon the first day of April, July and October and on thefifteenth day of December. Management has recommended

to the Board of Directors that they, as a matter of policy,increase the percentage of earnings reinvested in the busi-ness by raising dividends annually at a rate lower than theprior year's growth in earnings per share, thus decreasingover time the dividend payout ratio. This policy is funda-mental in the Company's efforts to achieve its goal ofenhancing its long-term growth prospects.

Annual MeetingThe Annual Meeting of Shareholders will be at 9:00 a .m.(local time), April 17,1985, at the Corporation Trust Center,1209 Orange Street, Wilmington, Delaware. Shareholders

are cordially invited to attend.

Additional Company Information SourcesThe Annual Report is only one of the sources of informa-tion available to Company shareholders, the investmentcommunity and the general public. The Company regu-larly distributes the following:

Progress Reports, issued periodically during the year,which contain quarterly financial results and other newsabout the Company.

Notice of Annual Meeting an d Proxy Statement,furnished to each shareholder in advance of the AnnualMeeting.

A copy of the Company's Annual Report on Form10-K and Quarterly Reports on Form 10-Q filed with theSecurities and Exchange Commission may be obtainedwithout charge upon written request from the ShareholderCommunications Department. There may be a small pho-tocopying charge for any exhibits to those documentsrequested by a shareholder. Also available from the Share-holder Communications Department is the brochure,Strategy for the 1980s, a seven-point statement outliningthe Company's business objectives for this decade andbeyond. Additionally, a variety of informat ional bookletsabout the Company and its products are available onrequest, at no charge.

Corporate OfficesThe international headquarters offices of The Coca-ColaCompany are located at 310 North Avenue NW, Atlanta,Georgia 30313, (404) 676-2121.

Automatic Dividend Reinvestmen t PlanAll shareholders of record are eligible to participate in theAutomatic Dividend Reinvestment Plan which offers a covenient, economical and systematic method of acquiringadditional shares of the Company's common stock. Twomajor improvements recently were added to the Plan.Shareholders may now make optional cash payments of uto $60,000 per year as compared to the previous $3,000per quarter limitation. This change provides shareholdersadditional opportunity for cash investment in the Com-pany and offers increased flexibility with respect to the timing of such investments. Shareholders also have the optionof including less than the full number of their shares in thePlan by designating a specific number of shares they wishto have included. Dividends from shares not included inthe Plan are forwarded directly to shareholders who wishto maintain dividend income.

Stock Market Inform ation

The NYSE high, low and last trade (or closing) prices of each quarter for the past three years are as follows:

1984 1983 1982

First QuarterSecond QuarterThird QuarterFourth Quarter

High

$55.7559.87564.37566.00

Low

$49.0053.12557.0059.75

Close

$54.87557.62562.62562.375

High

$54.7557.37553.62557.50

Low

$45.5049.37545.62550.75

Close

$53.5049.87550.87553.50

High

$36.87536.0044.2553.625

Low

$29.7531.87533.37540.375

Clo

$3233.40.52.

56



The Company pays all service charges and brokerageommissions associated with participation in the Plan.ince fractional shares are credited to your account, your

nvestment dollar is fully utilized. Also, the Plan offers th epportuni ty to invest on a regular basis with the benefits

ssociated with dollar cost averaging. Purchases of theompany's common stock are made quarterly with divi-ends and monthly with optional cash payments by thelan Administrator, Trust Company Bank. A schedule of

h e timing fo r these purchases is included in the Plan bro-hure, which is available upon request.

The chart below illustrates the 10-year growth inalue of common stock of The Coca-Cola Company withividends reinvested. One hundred dollars invested inompany stock on December 31,1974, with dividendseinvested would have grown to over $373 by December 31,984, an average compound return of 14 percent. Over

ne-third of this increase in value comes from th e increasen the number o f shares owned as a result o f dividendeinvestment.

Investment Growth ThroughDividend Reinvestment

(Assumes no commissionsand n o income taxes.Historic r eturns are notnecessarily indicative o ffuture returns.)

$400

$300

$200

1974-3984

Complete information about the Plan may beobtained by writing to the Shareholder CommunicationsDepartment.

Inquiries and AssistanceInquiries and requests fo r assistance should bedirected to the departments listed below:

Shareholder Assistance

Shareholder Communications DepartmentThe Coca-Cola CompanyPost Office Drawer 1734Atlanta , Georgia 30301(404) 676-2777

Security Analysts AssistanceInvestor Relations DepartmentThe Coca-Cola CompanyPost Office Drawer 1734Atlanta, Georgia 30301(404) 676-5766

Change of Address or CorrectionsPlease direct address changes and all inquiriesconcerning the way your account i s listed to :

Trust Company BankCorporate Trust DepartmentPost Office Box 4625Atlanta, Georgia 30302

Transfer Agents & RegistrarsTrust Company Bank

Post Office Box 4625Atlanta, Georgia 30302

Morgan Guaranty Trust Company of New York30 West BroadwayNew York, New York 10015

Dividend Disbursing AgentTrust Company BankPost Office Box 4625Atlanta, Georgia 30302

Equal Opportunity Policy

The Coca-Cola Company reaffirms its long-standing com-mitment to equal opportunity and affirmative action. Thisommitment is an integral part of our corporate environ-

ment. The Company strives to create a working environ-ment free of discrimination and harassment with respect toace, sex, color, national origin, religion, age, handicap, or

being a veteran of the Vietnam era, as well as to make rea-onable accommodations in the employment o f qualifiedndividuals with disabilities.

The Company is pleased to report that as a result ofit s ongoing equal opportunity efforts, minority a nd femalerepresentation has continued to increase. Employment,training and advancement efforts made during 1984 andprior years have resulted in a multicultural work forcewhich reflects the outside labor market.

In addition, the Company actively seeks to providefair marketing opportunities to all suppliers of goods an dservices and has instituted special programs to increasetransactions with firms in the United States that are ownedand operated by minorities and women.

the coca-cola company 1984 annual report

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