Annual Report Questions Nike URGENT

10-K 1 a2015123110-k.htm 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2015

OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-02217

(Exact name of Registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or

organization) 58-0628465

(IRS Employer Identification No.)

One Coca-Cola Plaza

Atlanta, Georgia (Address of principal executive offices)

30313 (Zip Code)

Registrant's telephone number, including area code: (404) 676-2121

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Common Stock, $0.25 Par Value New York Stock Exchange

Floating Rate Notes Due 2017 New York Stock Exchange

Floating Rate Notes Due 2019 New York Stock Exchange

1.125% Notes Due 2022 New York Stock Exchange

0.75% Notes Due 2023 New York Stock Exchange

1.875% Notes Due 2026 New York Stock Exchange

1.125% Notes Due 2027 New York Stock Exchange

1.625% Notes Due 2035 New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

___________________________________________________

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes  No 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

Yes  No 

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, ever y Interactive

Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding

12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes  No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not

contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements

incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller

reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of

the Exchange Act. (Check one):

Large accelerated filer  Accelerated filer  Non-accelerated filer  Smaller reporting

company 

(Do not check if a smaller reporting company)

Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The aggregate market value of the common equity held by non-affiliates of the Registrant (assuming for these purposes, but without

conceding, that all executive officers and Directors are "affiliates" of the Registrant) as of July 3, 2015, the last business day of the

Registrant's most recently completed second fiscal quarter, was $170,318,198,405 (based on the closing sale price of the Registrant's

Common Stock on that date as reported on the New York Stock Exchange).

The number of shares outstanding of the Registrant's Common Stock as of February 22, 2016, was 4,329,497,778.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for the Annual Meeting of Shareowners to be held on April 27, 2016, are incorporated by

reference in Part III.

Table of Contents

Page

Forward-Looking Statements 1

Part I

Item 1. Business 1

Item 1A. Risk Factors 11

Item 1B. Unresolved Staff Comments 21

Item 2. Properties 22

Item 3. Legal Proceedings 22

Item 4. Mine Safety Disclosures 24

Item X. Executive Officers of the Company 24

Part II

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities 28

Item 6. Selected Financial Data 31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 72

Item 8. Financial Statements and Supplementary Data 74

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 148

Item 9A. Controls and Procedures 148

Item 9B. Other Information 148

Part III

Item 10. Directors, Executive Officers and Corporate Governance 148

Item 11. Executive Compensation 148

Item 12.

Security Ownership of Certain Beneficial Owners and Management and

Related Stockholder Matters 148

Item 13. Certain Relationships and Related Transactions, and Director Independence 149

Item 14. Principal Accountant Fees and Services 149

Part IV

Item 15. Exhibits and Financial Statement Schedules 149

Signatures 158

Exhibit Index 160

FORWARD-LOOKING STATEMENTS

This report contains information that may constitute "forward-looking statements." Generally, the words "believe,"

"expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking

statements, which generally are not historical in nature. However, the absence of these words or similar expressions

does not mean that a statement is not forward-looking. All statements that address operating performance, events or

developments that we expect or anticipate will occur in the future — including statements relating to volume growth,

share of sales and earnings per share growth, and statements expressing general views about future operating

results — are forward-looking statements. Management believes that these forward-looking statements are

reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-

looking statements because such statements speak only as of the date when made. Our Company undertakes no

obligation to publicly update or revise any forward-looking statements, whether as a result of new information,

future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain

risks and uncertainties that could cause actual results to differ materially from our Company's historical experience

and our present expectations or projections. These risks and uncertainties include, but are not limited to, those

described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and those described from time to time in

our future reports filed with the Securities and Exchange Commission.

PART I

ITEM 1. BUSINESS

In this report, the terms "The Coca-Cola Company," "Company," "we," "us" and "our" mean The Coca-Cola

Company and all entities included in our consolidated financial statements.

General

The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500

nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters,

enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and

market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.

Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than

200 countries.

We make our branded beverage products available to consumers throughout the world through our network of

Company-owned or -controlled bottling and distribution operations as well as independent bottling partners,

distributors, wholesalers and retailers — the world's largest beverage distribution system. Beverages bearing

trademarks owned by or licensed to us account for more than 1.9 billion of the approximately 58 billion servings of

all beverages consumed worldwide every day.

We believe our success depends on our ability to connect with consumers by providing them with a wide variety of

options to meet their desires, needs and lifestyles. Our success further depends on the ability of our people to

execute effectively, every day.

Our goal is to use our Company's assets — our brands, financial strength, unrivaled distribution system, global

reach, and the talent and strong commitment of our management and associates — to become more competitive and

to accelerate growth in a manner that creates value for our shareowners.

We were incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a

Georgia corporation with the same name that had been organized in 1892.

1

Operating Segments

The Company's operating structure is the basis for our internal financial reporting. As of December 31, 2015, our

operating structure included the following operating segments, the first six of which are sometimes referred to as

"operating groups" or "groups":

• Eurasia and Africa

• Europe

• Latin America

• North America

• Asia Pacific

• Bottling Investments

• Corporate

Except to the extent that differences among operating segments are material to an understanding of our business

taken as a whole, the description of our business in this report is presented on a consolidated basis. Effective January

1, 2016, we transferred Coca-Cola Refreshments' ("CCR") bottling and associated supply chain operations in the

United States and Canada from our North America segment to our Bottling Investments segment.

For financial information about our operating segments and geographic areas, refer to Note 19 of Notes to

Consolidated Financial Statements set forth in Part II, "Item 8. Financial Statements and Supplementary Data" of

this report, incorporated herein by reference. For certain risks attendant to our non-U.S. operations, refer to

"Item 1A. Risk Factors" below.

Products and Brands

As used in this report:

• "concentrates" means flavoring ingredients and, depending on the product, sweeteners used to prepare syrups

or finished beverages and includes powders for purified water products such as Dasani;

• "syrups" means beverage ingredients produced by combining concentrates and, depending on the product,

sweeteners and added water;

• "fountain syrups" means syrups that are sold to fountain retailers, such as restaurants and convenience stores,

which use dispensing equipment to mix the syrups with sparkling or still water at the time of purchase to

produce finished beverages that are served in cups or glasses for immediate consumption;

• "sparkling beverages" means nonalcoholic ready-to-drink beverages with carbonation, including carbonated

energy drinks and carbonated waters and flavored waters;

• "still beverages" means nonalcoholic beverages without carbonation, including noncarbonated waters,

flavored waters and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink

teas and coffees, and sports drinks;

• "Company Trademark Beverages" means beverages bearing our trademarks and certain other beverage

products bearing trademarks licensed to us by third parties for which we provide marketing support and from

the sale of which we derive economic benefit; and

• "Trademark Coca-Cola Beverages" or "Trademark Coca-Cola" means beverages bearing the trademark Coca-

Cola or any trademark that includes Coca-Cola or Coke (that is, Coca-Cola, Coca-Cola Life, Diet Coke and

Coca-Cola Zero and all their variations and any line extensions, including Coca-Cola Light, caffeine free Diet

Coke, Cherry Coke, etc.). Likewise, when we use the capitalized word "Trademark" together with the name

of one of our other beverage products (such as "Trademark Fanta," "Trademark Sprite" or "Trademark

Simply"), we mean beverages bearing the indicated trademark (that is, Fanta, Sprite or Simply, respectively)

and all its variations and line extensions (such that "Trademark Fanta" includes Fanta Orange, Fanta Zero

Orange, Fanta Apple, etc.; "Trademark Sprite" includes Sprite, Diet Sprite, Sprite Zero, Sprite Light, etc.; and

"Trademark Simply" includes Simply Orange, Simply Apple, Simply Grapefruit, etc.).

2

Our Company markets, manufactures and sells:

• beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we

refer to this part of our business as our "concentrate business" or "concentrate operations"); and

• finished sparkling and still beverages (we refer to this part of our business as our "finished product business"

or "finished product operations").

Generally, finished product operations generate higher net operating revenues but lower gross profit margins than

concentrate operations.

In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to

authorized bottling and canning operations (to which we typically refer as our "bottlers" or our "bottling partners").

Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or

sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages

are packaged in authorized containers — such as cans and refillable and nonrefillable glass and plastic bottles —

bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through

wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our

bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers

such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate

consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain

retailers.

Our finished product operations consist primarily of our Company-owned or -controlled bottling, sales and

distribution operations, including CCR. Our finished product operations generate net operating revenues by selling

sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-

to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners

who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to

fountain retailers, such as restaurants and convenience stores who use the fountain syrups to produce beverages for

immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to

fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through nonexclusive

appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor

restrict the territories in which the wholesalers may resell in the United States.

For information about net operating revenues and unit case volume related to our concentrate operations and

finished product operations, refer to the heading "Our Business — General" set forth in Part II, "Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" of this report, which is

incorporated herein by reference.

We own numerous valuable nonalcoholic beverage brands, including the following:

Coca-Cola Minute Maid Aquarius Bonaqua/Bonaqa

Diet Coke/Coca-Cola Light Georgia1 Minute Maid Pulpy4 Gold Peak6

Coca-Cola Zero Powerade Dasani FUZE TEA7

Fanta Del Valle2 Simply5 Glacéau Smartwater8

Sprite Schweppes3 Glacéau Vitaminwater Ice Dew9

1 Georgia is

primarily a

coffee brand

sold mainly in

Japan.

2 We manufacture, market and sell juices and juice drinks under the Del Valle trademark primarily in Mexico and Brazil through

joint ventures with our bottling partners.

3 Schweppes is owned by the Company in certain countries other than the United States.

4 Minute Maid Pulpy is a juice drink brand sold primarily in Asia Pacific.

5 Simply is a juice and juice drink brand sold in North America.

6 Gold Peak is primarily a tea brand sold in North America.

7 FUZE TEA is a brand sold outside of North America.

8 Glacéau Smartwater is a vapor-distilled water with added electrolytes which is sold mainly in North America and Great

Britain.

9 Ice Dew is a water brand sold in China.

3

In addition to the beverage brands we own, we also provide marketing support and otherwise participate in the sales

of other nonalcoholic beverage brands through licenses, joint ventures and strategic partnerships, including, but not

limited to, the following:

• We and certain of our bottlers distribute certain brands of Monster Beverage Corporation ("Monster"),

primarily Monster Energy, in designated territories in the United States, Canada and other international

territories pursuant to distribution coordination agreements between the Company and Monster and related

distribution agreements between Monster and Company-owned or -controlled bottling operations, including

CCR, and independent bottling and distribution partners.

• We produce and/or distribute certain other third-party brands, including brands owned by Dr Pepper

Snapple Group, Inc. ("DPSG"), which we produce and distribute in designated territories in the United

States and Canada pursuant to license agreements with DPSG.

• We have a strategic partnership with Aujan Industries Company J.S.C. ("Aujan"), one of the largest

independent beverage companies in the Middle East. We own 50 percent of the entity that holds the rights

in certain territories to brands produced and distributed by Aujan, including Rani, a juice brand, and

Barbican, a flavored malt beverage brand.

• We have a joint venture with Nestlé S.A. ("Nestlé") named Beverage Partners Worldwide ("BPW") which

markets and distributes Nestea products in Europe and Canada under agreements with our bottlers. The

Nestea trademark is owned by Société des Produits Nestlé S.A.

Consumer demand determines the optimal menu of Company product offerings. Consumer demand can vary from

one locale to another and can change over time within a single locale. Employing our business strategy, and with

special focus on core brands, our Company seeks to build its existing brands and, at the same time, to broaden its

historical family of brands, products and services in order to create and satisfy consumer demand locale by locale.

We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and

(2) concentrate sales. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces

of finished beverage (24 eight-ounce servings), and "unit case volume" means the number of unit cases (or unit case

equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners

("Coca-Cola system") to customers. Unit case volume primarily consists of beverage products bearing Company

trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and

brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale

of which we derive economic benefit. In addition, unit case volume includes sales by certain joint ventures in which

the Company has an equity interest. We believe unit case volume is one of the measures of the underlying strength

of the Coca-Cola system because it measures trends at the consumer level. The unit case volume numbers used in

this report are derived based on estimates received by the Company from its bottling partners and distributors.

Concentrate sales volume represents the amount of concentrates and syrups (in all instances expressed in equivalent

unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.

Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period.

Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new

product introductions and changes in product mix can impact unit case volume and concentrate sales volume and

can create differences between unit case volume and concentrate sales volume growth rates. In addition to the items

mentioned above, the impact of unit case volume from certain joint ventures in which the Company has an equity

interest but to which the Company does not sell concentrates or syrups may give rise to differences between unit

case volume and concentrate sales volume growth rates.

Distribution System and Bottler's Agreements

We make our branded beverage products available to consumers in more than 200 countries through our network of

Company-owned or -controlled bottling and distribution operations, independent bottling partners, distributors,

wholesalers and retailers — the world's largest beverage distribution system. Consumers enjoy finished beverage

products bearing trademarks owned by or licensed to us at a rate of more than 1.9 billion servings each day. We

continue to expand our marketing presence in an effort to increase our unit case volume and net operating revenues

in developed, developing and emerging markets. Our strong and stable system helps us to capture growth by

manufacturing, distributing and marketing existing, enhanced and new innovative products to our consumers

throughout the world.

4

The Coca-Cola system sold 29.2 billion, 28.6 billion and 28.2 billion unit cases of our products in 2015, 2014 and

2013, respectively. The unit case volume for 2015 and 2014 reflects the impact of the transfer of distribution rights

with respect to non-Company-owned brands that were previously licensed to us in North American refranchised

territories and the discontinuance of certain brands owned by our Russian juice company in connection with the

transition in 2014 of our Russian juice operations to an existing joint venture with an unconsolidated bottling partner

(for information about these structural changes, refer to the heading "Operations Review — Structural Changes,

Acquired Brands and Newly Licensed Brands" set forth in Part II, "Item 7. Management's Discussion and Analysis

of Financial Condition and Results of Operations" of this report). The Company eliminated the unit case volume

related to these structural changes from the base year, as applicable, when calculating 2015 versus 2014 and 2014

versus 2013 unit case volume growth rates. Sparkling beverages represented 73 percent, 73 percent and 74 percent

of our worldwide unit case volume for 2015, 2014 and 2013, respectively. Trademark Coca-Cola Beverages

accounted for 46 percent, 46 percent and 47 percent of our worldwide unit case volume for 2015, 2014 and 2013,

respectively.

In 2015, unit case volume in the United States ("U.S. unit case volume") represented 19 percent of the Company's

worldwide unit case volume. Of the U.S. unit case volume for 2015, 67 percent was attributable to sparkling

beverages and 33 percent to still beverages. Trademark Coca-Cola Beverages accounted for 44 percent of U.S. unit

case volume for 2015.

Unit case volume outside the United States represented 81 percent of the Company's worldwide unit case volume for

2015. The countries outside the United States in which our unit case volumes were the largest in 2015 were Mexico,

China, Brazil and Japan, which together accounted for 31 percent of our worldwide unit case volume. Of the non-

U.S. unit case volume for 2015, 74 percent was attributable to sparkling beverages and 26 percent to still beverages.

Trademark Coca-Cola Beverages accounted for 46 percent of non-U.S. unit case volume for 2015.

Our five largest independent bottling partners based on unit case volume in 2015 were:

• Coca-Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), which has bottling and distribution operations

in a substantial portion of central Mexico, including Mexico City, and the southeast and northeast of

Mexico, including the Gulf region; Guatemala City and the surrounding areas in Guatemala; Nicaragua

(nationwide); Costa Rica (nationwide); Panama (nationwide); most of Colombia; Venezuela (nationwide);

a major part of the states of São Paulo and Minas Gerais, the states of Paraná and Mato Grosso do Sul and

part of the states of Rio de Janeiro and Goiás in Brazil; Buenos Aires and surrounding areas in Argentina;

and the Philippines (nationwide);

• Coca-Cola HBC AG ("Coca-Cola Hellenic"), which has bottling and distribution operations in Armenia,

Austria, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, the Former

Yugoslav Republic of Macedonia, Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Montenegro,

Nigeria, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia, Slovakia, Slovenia,

Switzerland and Ukraine;

• Arca Continental, S.A.B. de C.V., which has bottling and distribution operations in northern and western

Mexico, northern Argentina, Ecuador and Peru;

• Coca-Cola Enterprises, Inc. ("CCE"), which has bottling and distribution operations in Belgium,

continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden; and

• Coca-Cola İçecek A.Ş., which has bottling and distribution operations in Turkey, Pakistan, Kazakhstan,

Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq and Tajikistan and distribution operations in Syria.

In 2015, these five bottling partners combined represented 34 percent of our total unit case volume.

Being a bottler does not create a legal partnership or joint venture between us and our bottlers. Our bottlers are

independent contractors and are not our agents.

Bottler's Agreements

We have separate contracts ("Bottler's Agreements") with each of our bottling partners regarding the manufacture

and sale of Company products. Subject to specified terms and conditions and certain variations, the Bottler’s

Agreements generally authorize the bottlers to prepare specified Company Trademark Beverages, to package the

same in authorized containers, and to distribute and sell the same in (but, subject to applicable local law, generally

only in) an identified territory. The bottler is obligated to purchase its entire requirement of concentrates or syrups

for the designated Company Trademark Beverages from the Company or Company-authorized suppliers. We

typically agree to refrain from selling or distributing, or from authorizing third parties to sell or distribute, the

designated Company Trademark Beverages throughout the identified territory in the particular authorized

containers; however, we typically reserve for ourselves or our designee the right (1) to prepare and package such

Company Trademark Beverages in such containers in the territory for sale outside the territory, (2) to prepare,

package, distribute and sell such Company Trademark Beverages in the territory in any other manner or form

(territorial

5

restrictions on bottlers vary in some cases in accordance with local law), and (3) to handle certain key accounts

(accounts that cover multiple territories).

While under most of our Bottler's Agreements we generally have complete flexibility to determine the price and

other terms of sale of the concentrates and syrups we sell to our bottlers, as a practical matter, our Company's ability

to exercise its contractual flexibility to determine the price and other terms of sale of its syrups, concentrates and

finished beverages is subject, both outside and within the United States, to competitive market conditions. In

addition, in some instances we have agreed or may in the future agree with a bottler with respect to concentrate

pricing on a prospective basis for specified time periods. Also, in some markets, in an effort to allow our Company

and our bottling partners to grow together through shared value, aligned incentives and the flexibility necessary to

meet consumers' always changing needs and tastes, we worked with our bottling partners to develop and implement

an incidence-based pricing model for sparkling and still beverages. Under this model, the concentrate price we

charge is impacted by a number of factors, including, but not limited to, bottler pricing, the channels in which the

finished products are sold and package mix.

Under our Bottler's Agreements, in most cases, we have no obligation to provide marketing support to the bottlers.

Nevertheless, we may, at our discretion, contribute toward bottler expenditures for advertising and marketing. We

may also elect to undertake independent or cooperative advertising and marketing activities.

As further discussed below, our Bottler's Agreements for territories outside of the United States differ in some

respects from our Bottler's Agreements for territories within the United States.

Bottler's Agreements Outside the United States

The Bottler's Agreements between us and our authorized bottlers outside the United States generally are of stated

duration, subject in some cases to possible extensions or renewals of the term of the contract. Generally, these

contracts are subject to termination by the Company following the occurrence of certain designated events. These

events include defined events of default and certain changes in ownership or control of the bottler. Most of the

Bottler's Agreements in force between us and bottlers outside the United States authorize the bottlers to manufacture

and distribute fountain syrups, usually on a nonexclusive basis.

In certain parts of the world outside the United States, we have not granted comprehensive beverage production

rights to the bottlers. In such instances, we or our authorized suppliers sell Company Trademark Beverages to the

bottlers for sale and distribution throughout the designated territory, often on a nonexclusive basis.

Bottler's Agreements Within the United States

During the year ended December 31, 2015, our Company-owned operations manufactured, sold and distributed 82

percent of our U.S. unit case volume. The discussion below relates to Bottler's Agreements and other contracts for

territories in the United States that are not covered by Company-owned operations.

In the United States, certain Bottler's Agreements for Trademark Coca-Cola Beverages and other cola-flavored

beverages have no stated expiration date. Our standard contracts for other sparkling beverage flavors and for still

beverages are of stated duration, subject to bottler renewal rights. The Bottler's Agreements in the United States are

subject to termination by the Company for nonperformance or upon the occurrence of certain defined events of

default that may vary from contract to contract.

Under the terms of the Bottler's Agreements, bottlers in the United States generally are not authorized to

manufacture fountain syrups. Rather, in the United States, our Company manufactures and sells fountain syrups to

authorized fountain wholesalers (including certain authorized bottlers) and some fountain retailers. These

wholesalers in turn sell the syrups or deliver them on our behalf to restaurants and other retailers.

Certain Bottler's Agreements, entered into prior to 1987, provide for concentrates or syrups for certain Trademark

Coca-Cola Beverages and other cola-flavored Company Trademark Beverages to be priced pursuant to a stated

formula. Bottlers that accounted for 6.9 percent of U.S. unit case volume in 2015 have contracts for certain

Trademark Coca-Cola Beverages and other cola-flavored Company Trademark Beverages with pricing formulas that

generally provide for a baseline price. This baseline price may be adjusted periodically by the Company, up to a

maximum indexed ceiling price, and is adjusted quarterly based upon changes in certain sugar or sweetener prices,

as applicable. Bottlers that accounted for 0.3 percent of U.S. unit case volume in 2015 operate under our oldest form

of contract, which provides for a fixed price for Coca-Cola syrup used in bottles and cans. This price is subject to

quarterly adjustments to reflect changes in the quoted price of sugar.

6

In conjunction with implementing a new beverage partnership model in North America, the Company has entered

into comprehensive beverage agreements ("CBAs") with certain bottling partners pursuant to which we granted to

these bottlers certain exclusive territory rights for the distribution, promotion, marketing and sale of Company-

owned and licensed beverage products as defined by the CBA. In some cases, the Company has entered into, or

agreed to enter into, manufacturing agreements that authorize certain bottlers that have executed CBAs to

manufacture certain beverage products. If a bottler has not entered into a specific manufacturing agreement, then

under the CBA for the applicable territories, CCR retains the rights to produce these beverage products and the

bottlers will purchase from CCR (or other Company-authorized manufacturing bottlers) substantially all of the

related finished products needed in order to service the customers in these territories. Each CBA generally has a

term of 10 years and is renewable, in most cases by the bottler and in some cases by the Company, indefinitely for

successive additional terms of 10 years each. Under the CBA, each bottler will make ongoing quarterly payments to

CCR based on its gross profit in the refranchised territories throughout the term of the CBA, including renewals, in

exchange for the grant of the exclusive territory rights. For more information about the North America refranchising

transactions, refer to Note 2 of Notes to Consolidated Financial Statements set forth in Part II, "Item 8. Financial

Statements and Supplementary Data" of this report.

Promotions and Marketing Programs

In addition to conducting our own independent advertising and marketing activities, we may provide promotional

and marketing services and/or funds to our bottlers. In most cases, we do this on a discretionary basis under the

terms of commitment letters or agreements, even though we are not obligated to do so under the terms of the bottling

or distribution agreements between our Company and the bottlers. Also, on a discretionary basis in most cases, our

Company may develop and introduce new products, packages and equipment to assist the bottlers. Likewise, in

many instances, we provide promotional and marketing services and/or funds and/or dispensing equipment and

repair services to fountain and bottle/can retailers, typically pursuant to marketing agreements. The aggregate

amount of funds provided by our Company to bottlers, resellers or other customers of our Company's products,

principally for participation in promotional and marketing programs, was $6.8 billion in 2015.

Investments in Bottling Operations

Most of our branded beverage products are manufactured, sold and distributed by independent bottling partners.

However, from time to time we acquire or take control of bottling operations, often in underperforming markets

where we believe we can use our resources and expertise to improve performance. Owning such a controlling

interest enables us to compensate for limited local resources; help focus the bottler's sales and marketing programs;

assist in the development of the bottler's business and information systems; and establish an appropriate capital

structure for the bottler. In line with our long-term bottling strategy, we may periodically consider options for

divesting or reducing our ownership interest in a Company-owned or -controlled bottler, typically by selling our

interest in a particular bottling operation to an independent bottler to improve Coca-Cola system efficiency. When

we sell our interest in a bottling operation to one of our other bottling partners in which we have an equity method

investment, our Company continues to participate in the bottler's results of operations through our share of the

equity method investee's earnings or losses.

In addition, from time to time we make equity investments representing noncontrolling interests in selected bottling

operations with the intention of maximizing the strength and efficiency of the Coca-Cola system's production,

marketing, sales and distribution capabilities around the world by providing expertise and resources to strengthen

those businesses. These investments are intended to result in increases in unit case volume, net revenues and profits

at the bottler level, which in turn generate increased concentrate sales for our Company's concentrate and syrup

business. When this occurs, both we and our bottling partners benefit from long-term growth in volume and

improved cash flows. When our equity investment provides us with the ability to exercise significant influence over

the investee bottler's operating and financial policies, we account for the investment under the equity method, and

we sometimes refer to such a bottler as an "equity method investee bottler" or "equity method investee."

Our equity method investee bottlers include Coca-Cola FEMSA, in which as of December 31, 2015, we had an

equity ownership interest of 28 percent, Coca-Cola Hellenic, in which as of December 31, 2015, we had an equity

ownership interest of 24 percent, and Coca-Cola İçecek A.Ş., in which as of December 31, 2015, we had an equity

ownership interest of 20 percent.

7

Seasonality

Sales of our nonalcoholic ready-to-drink beverages are somewhat seasonal, with the second and third calendar

quarters accounting for the highest sales volumes. The volume of sales in the beverage business may be affected by

weather conditions.

Competition

The nonalcoholic beverage segment of the commercial beverage industry is highly competitive, consisting of

numerous companies ranging from small or emerging to very large and well established. These include companies

that, like our Company, compete in multiple geographic areas, as well as businesses that are primarily regional or

local in operation. Competitive products include numerous nonalcoholic sparkling beverages; various water

products, including packaged, flavored and enhanced waters; juices and nectars; fruit drinks and dilutables

(including syrups and powdered drinks); coffees and teas; energy and sports and other performance-enhancing

drinks; filtered milk and other dairy-based drinks; functional beverages, including vitamin-based products and

relaxation beverages; and various other nonalcoholic beverages. These competitive beverages are sold to consumers

in both ready-to-drink and other than ready-to-drink form. In many of the countries in which we do business,

including the United States, PepsiCo, Inc. ("PepsiCo"), is one of our primary competitors. Other significant

competitors include, but are not limited to, Nestlé, DPSG, Groupe Danone, Mondelēz International, Inc.

("Mondelēz"), Kraft Foods Group, Inc. ("Kraft"), Suntory Beverage & Food Limited ("Suntory") and Unilever. In

certain markets, our competition also includes beer companies. We also compete against numerous regional and

local companies and, in some markets, against retailers that have developed their own store or private label beverage

brands.

Competitive factors impacting our business include, but are not limited to, pricing, advertising, sales promotion

programs, product innovation, increased efficiency in production techniques, the introduction of new packaging,

new vending and dispensing equipment, and brand and trademark development and protection.

Our competitive strengths include leading brands with high levels of consumer acceptance; a worldwide network of

bottlers and distributors of Company products; sophisticated marketing capabilities; and a talented group of

dedicated associates. Our competitive challenges include strong competition in all geographic regions and, in many

countries, a concentrated retail sector with powerful buyers able to freely choose among Company products,

products of competitive beverage suppliers and individual retailers' own store or private label beverage brands.

Raw Materials

Water is a main ingredient in substantially all of our products. While historically we have not experienced

significant water supply difficulties, water is a limited natural resource in many parts of the world, and our Company

recognizes water availability, quality and sustainability, for both our operations and also the communities where we

operate, as one of the key challenges facing our business.

In addition to water, the principal raw materials used in our business are nutritive and non-nutritive sweeteners. In

the United States, the principal nutritive sweetener is high fructose corn syrup ("HFCS"), which is nutritionally

equivalent to sugar. HFCS is available from numerous domestic sources and has historically been subject to

fluctuations in its market price. The principal nutritive sweetener used by our business outside the United States is

sucrose, i.e., table sugar, which is also available from numerous sources and has historically been subject to

fluctuations in its market price. Our Company generally has not experienced any difficulties in obtaining its

requirements for nutritive sweeteners. In the United States, we purchase HFCS to meet our and our bottlers'

requirements with the assistance of Coca-Cola Bottlers' Sales & Services Company LLC ("CCBSS"). CCBSS is a

limited liability company that is owned by authorized Coca-Cola bottlers doing business in the United States.

Among other things, CCBSS provides procurement services to our Company for the purchase of various goods and

services in the United States, including HFCS.

The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium, saccharin,

cyclamate, sucralose and a sweetener derived from the stevia plant. Generally, these raw materials are readily

available from numerous sources. However, our Company purchases aspartame, an important non-nutritive

sweetener that is used alone or in combination with other important non-nutritive sweeteners such as saccharin or

acesulfame potassium in our low- and no-calorie sparkling beverage products, primarily from Ajinomoto Co., Inc.

and SinoSweet Co., Ltd., which we consider to be our primary sources for the supply of this product. Our Company

generally has not experienced difficulties in obtaining its requirements for non-nutritive sweeteners and we do not

anticipate such difficulties in the future. We work closely with Tate & Lyle PLC, our primary sucralose supplier, to

maintain continuity of supply.

8

Juice and juice concentrate from various fruits, particularly orange juice and orange juice concentrate, are the

principal raw materials for our juice and juice drink products. We source our orange juice and orange juice

concentrate primarily from Florida and the Southern Hemisphere (particularly Brazil). We work closely with Cutrale

Citrus Juices U.S.A., Inc., our primary supplier of orange juice from Florida and Brazil, to ensure an adequate

supply of orange juice and orange juice concentrate that meets our Company's standards. However, the citrus

industry is impacted by greening disease and the variability of weather conditions. In particular, freezing weather or

hurricanes in central Florida may result in shortages and higher prices for orange juice and orange juice concentrate

throughout the industry. In addition, greening disease is reducing the number of trees and increasing grower costs

and prices.

Our Company-owned or consolidated bottling and canning operations and our finished product business also

purchase various other raw materials including, but not limited to, polyethylene terephthalate ("PET") resin,

preforms and bottles; glass and aluminum bottles; aluminum and steel cans; plastic closures; aseptic fiber packaging;

labels; cartons; cases; postmix packaging; and carbon dioxide. We generally purchase these raw materials from

multiple suppliers and historically have not experienced significant shortages.

Patents, Copyrights, Trade Secrets and Trademarks

Our Company owns numerous patents, copyrights and trade secrets, as well as substantial know-how and

technology, which we collectively refer to in this report as "technology." This technology generally relates to our

Company's products and the processes for their production; the packages used for our products; the design and

operation of various processes and equipment used in our business; and certain quality assurance software. Some of

the technology is licensed to suppliers and other parties. Our sparkling beverage and other beverage formulae are

among the important trade secrets of our Company.

We own numerous trademarks that are very important to our business. Depending upon the jurisdiction, trademarks

are valid as long as they are in use and/or their registrations are properly maintained. Pursuant to our Bottler's

Agreements, we authorize our bottlers to use applicable Company trademarks in connection with their manufacture,

sale and distribution of Company products. In addition, we grant licenses to third parties from time to time to use

certain of our trademarks in conjunction with certain merchandise and food products.

Governmental Regulation

Our Company is required to comply, and it is our policy to comply, with all applicable laws in the numerous

countries throughout the world in which we do business. In many jurisdictions, compliance with competition laws is

of special importance to us, and our operations may come under special scrutiny by competition law authorities due

to our competitive position in those jurisdictions.

In the United States, the safety, production, transportation, distribution, advertising, labeling and sale of many of our

Company's products and their ingredients are subject to the Federal Food, Drug, and Cosmetic Act; the Federal

Trade Commission Act; the Lanham Act; state consumer protection laws; competition laws; federal, state and local

workplace health and safety laws; various federal, state and local environmental protection laws; and various other

federal, state and local statutes and regulations. Outside the United States, our business is subject to numerous

similar statutes and regulations, as well as other legal and regulatory requirements.

Under a California law known as Proposition 65, if the state has determined that a substance causes cancer or harms

human reproduction, a warning must appear on any product sold in the state that exposes consumers to that

substance. The state maintains lists of these substances and periodically adds other substances to them. Proposition

65 exposes all food and beverage producers to the possibility of having to provide warnings on their products in

California because it does not provide for any generally applicable quantitative threshold below which the presence

of a listed substance is exempt from the warning requirement. Consequently, the detection of even a trace amount of

a listed substance can subject an affected product to the requirement of a warning label. However, Proposition 65

does not require a warning if the manufacturer of a product can demonstrate that the use of that product exposes

consumers to a daily quantity of a listed substance that is:

• below a "safe harbor" threshold that may be established;

• naturally occurring;

• the result of necessary cooking; or

• subject to another applicable exemption.

9

One or more substances that are currently on the Proposition 65 lists, or that may be added in the future, can be

detected in certain Company products at low levels that are safe. With respect to substances that have not yet been

listed under Proposition 65, the Company takes the position that listing is not scientifically justified. With respect to

substances that are already listed, the Company takes the position that the presence of each such substance in

Company products is subject to an applicable exemption from the warning requirement. The state of California and

other parties, however, have in the past taken a contrary position and may do so in the future.

Bottlers of our beverage products presently offer and use nonrefillable recyclable containers in the United States and

various other markets around the world. Some of these bottlers also offer and use refillable containers, which are

also recyclable. Legal requirements apply in various jurisdictions in the United States and overseas requiring that

deposits or certain ecotaxes or fees be charged in connection with the sale, marketing and use of certain beverage

containers. The precise requirements imposed by these measures vary. Other types of statutes and regulations

relating to beverage container deposits, recycling, ecotaxes and/or product stewardship also apply in various

jurisdictions in the United States and overseas. We anticipate that additional such legal requirements may be

proposed or enacted in the future at local, state and federal levels, both in the United States and elsewhere.

All of our Company's facilities and other operations in the United States and elsewhere around the world are subject

to various environmental protection statutes and regulations, including those relating to the use of water resources

and the discharge of wastewater. Our policy is to comply with all such legal requirements. Compliance with these

provisions has not had, and we do not expect such compliance to have, any material adverse effect on our

Company's capital expenditures, net income or competitive position.

Employees

As of December 31, 2015 and 2014, our Company had approximately 123,200 and 129,200 employees, respectively,

of which approximately 3,300 and 3,800, respectively, were employed by consolidated variable interest entities

("VIEs"). The decrease in the total number of employees in 2015 was primarily due to the refranchising of certain

territories that were previously managed by CCR to certain of the Company's unconsolidated bottling partners. For

more information about the North America refranchising transactions, refer to Note 2 of Notes to Consolidated

Financial Statements set forth in Part II, "Item 8. Financial Statements and Supplementary Data" of this report. As of

December 31, 2015 and 2014, our Company had approximately 60,900 and 65,300 employees, respectively, located

in the United States, of which approximately 500 were employed by consolidated VIEs in both years.

Our Company, through its divisions and subsidiaries, is a party to numerous collective bargaining agreements. As of

December 31, 2015, approximately 17,500 employees, excluding seasonal hires, in North America were covered by

collective bargaining agreements. These agreements typically have terms of three years to five years. We currently

expect that we will be able to renegotiate such agreements on satisfactory terms when they expire.

The Company believes that its relations with its employees are generally satisfactory.

Securities Exchange Act Reports

The Company maintains a website at the following address: www.coca-colacompany.com. The information on the

Company's website is not incorporated by reference in this Annual Report on Form 10-K.

We make available on or through our website certain reports and amendments to those reports that we file with or

furnish to the Securities and Exchange Commission ("SEC") in accordance with the Securities Exchange Act of

1934, as amended ("Exchange Act"). These include our Annual Reports on Form 10-K, our Quarterly Reports on

Form 10-Q and our Current Reports on Form 8-K. We make this information available on our website free of charge

as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.

10

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following factors,

which could materially affect our business, financial condition or results of operations in future periods. The risks

described below are not the only risks facing our Company. Additional risks not currently known to us or that we

currently deem to be immaterial also may materially adversely affect our business, financial condition or results of

operations in future periods.

Obesity concerns may reduce demand for some of our products.

There is growing concern among consumers, public health professionals and government agencies about the health

problems associated with obesity. In addition, some researchers, health advocates and dietary guidelines are

suggesting that consumption of sugar-sweetened beverages, including those sweetened with HFCS or other nutritive

sweeteners, is a primary cause of increased obesity rates and are encouraging consumers to reduce or eliminate

consumption of such products. Increasing public concern about obesity; possible new or increased taxes on sugar-

sweetened beverages by government entities to reduce consumption or to raise revenue; additional governmental

regulations concerning the marketing, labeling, packaging or sale of our sugar-sweetened beverages; and negative

publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to

the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for or increase the cost of our

sugar-sweetened beverages, which could adversely affect our profitability.

Water scarcity and poor quality could negatively impact the Coca-Cola system's costs and capacity.

Water is a main ingredient in substantially all of our products, is vital to the production of the agricultural

ingredients on which our business relies and is needed in our manufacturing process. It also is critical to the

prosperity of the communities we serve. Water is a limited resource in many parts of the world, facing

unprecedented challenges from overexploitation, increasing demand for food and other consumer and industrial

products whose manufacturing processes require water, increasing pollution, poor management and the effects of

climate change. As the demand for water continues to increase around the world, and as water becomes scarcer and

the quality of available water deteriorates, the Coca-Cola system may incur higher costs or face capacity constraints

that could adversely affect our profitability or net operating revenues in the long run.

If we do not anticipate and address evolving consumer preferences, our business could suffer.

Consumer preferences are evolving rapidly as a result of, among other things, health and nutrition considerations,

especially the perceived undesirability of artificial ingredients and obesity concerns; shifting consumer

demographics, including aging populations; changes in consumer tastes and needs; changes in consumer lifestyles;

and competitive product and pricing pressures. If we do not successfully anticipate these changing consumer

preferences or fail to address them by timely developing new products or product extensions through innovation, our

share of sales, volume growth and overall financial results could be negatively affected.

Increased competition and capabilities in the marketplace could hurt our business.

The nonalcoholic beverage segment of the commercial beverage industry is highly competitive. We compete with

major international beverage companies that, like our Company, operate in multiple geographic areas, as well as

numerous companies that are primarily regional or local in operation. In many countries in which we do business,

including the United States, PepsiCo is a primary competitor. Other significant competitors include, but are not

limited to, Nestlé, DPSG, Groupe Danone, Mondelēz, Kraft, Suntory and Unilever. In certain markets, our

competition also includes major beer companies. Our beverage products also compete against private label brands

developed by retailers, some of which are Coca-Cola system customers. Our ability to gain or maintain share of

sales in the global market or in various local markets may be limited as a result of actions by competitors. If we do

not continue to strengthen our capabilities in marketing and innovation to maintain our brand loyalty and market

share while we selectively expand into other product categories in the nonalcoholic beverage segment of the

commercial beverage industry, our business could be negatively affected.

Product safety and quality concerns could negatively affect our business.

Our success depends in large part on our ability to maintain consumer confidence in the safety and quality of all of

our products. We have rigorous product safety and quality standards which we expect our operations as well as our

bottling partners to meet. However, we cannot assure you that despite our strong commitment to product safety and

quality we or all of our bottling partners will always meet these standards, particularly as we expand our product

offerings through innovation or acquisitions of products, such as value-added dairy products, that are beyond our

traditional range of beverage products. If we or our bottling partners fail to comply with applicable product safety

and quality standards and beverage products taken to the market are or become contaminated or adulterated, we may

be required to conduct costly product recalls and may become subject to product liability claims and negative

publicity, which could cause our business to suffer.

11

Public debate and concern about perceived negative health consequences of certain ingredients, such as non-

nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage

products or packaging materials, may reduce demand for our beverage products.

Public debate and concern about perceived negative health consequences of certain ingredients in our beverage

products, such as non-nutritive sweeteners and biotechnology-derived substances; substances that are present in our

beverage products naturally or that occur as a result of the manufacturing process, such as 4-methylimidazole, or 4-

MEI (a chemical compound that is formed during the manufacturing of certain types of caramel coloring used in

cola-type beverages); or substances used in packaging materials, such as bisphenol A, or BPA (an odorless, tasteless

food-grade chemical commonly used in the food and beverage industries as a component in the coating of the

interior of cans), may affect consumers' preferences and cause them to shift away from some of our beverage

products. In addition, increasing public concern about actual or perceived health consequences of the presence of

such ingredients or substances in our beverage products or in packaging materials, whether or not justified, could

result in additional governmental regulations concerning the marketing and labeling of our beverages, negative

publicity, or actual or threatened legal actions against us or other companies in our industry, all of which could

damage the reputation of, and may reduce demand for, our beverage products.

If we are not successful in our innovation activities, our results may be negatively affected.

Achieving our business growth objectives depends in part on our ability to successfully develop, introduce and

market new beverage products. The success of our innovation activities in turn depends on our ability to correctly

anticipate customer and consumer acceptance and trends, obtain, maintain and enforce necessary intellectual

property protections and avoid infringing on the intellectual property rights of others. If we are not successful in our

innovation activities, we may not be able to achieve our growth objectives, which may have a negative impact on

our financial results.

Increased demand for food products and decreased agricultural productivity may negatively affect our business.

We and our bottling partners use a number of key ingredients that are derived from agricultural commodities such as

sugarcane, corn, sugar beets, citrus, coffee and tea in the manufacture and packaging of our beverage products.

Increased demand for food products and decreased agricultural productivity in certain regions of the world as a

result of changing weather patterns may limit the availability or increase the cost of such agricultural commodities

and could impact the food security of communities around the world. If we are unable to implement programs

focused on economic opportunity and environmental sustainability to address these agricultural challenges and fail

to make a strategic impact on food security through joint efforts with bottlers, farmers, communities, suppliers and

key partners, as well as through our increased and continued investment in sustainable agriculture, the affordability

of our products and ultimately our business and results of operations could be negatively impacted.

Changes in the retail landscape or the loss of key retail or foodservice customers could adversely affect our

financial performance.

Our industry is being affected by the trend toward consolidation in the retail channel, particularly in Europe and the

United States. Larger retailers may seek lower prices from us and our bottling partners, may demand increased

marketing or promotional expenditures, and may be more likely to use their distribution networks to introduce and

develop private label brands, any of which could negatively affect the Coca-Cola system's profitability. In addition,

in developed markets, discounters and value stores, as well as the volume of transactions through e-commerce, are

growing at a rapid pace. The nonalcoholic beverage retail landscape is also very dynamic and constantly evolving in

emerging and developing markets, where modern trade is growing at a faster pace than traditional trade outlets. If

we are unable to successfully adapt to the rapidly changing environment and retail landscape, our share of sales,

volume growth and overall financial results could be negatively affected. In addition, our success depends in part on

our ability to maintain good relationships with key retail and foodservice customers. The loss of one or more of our

key retail or foodservice customers could have an adverse effect on our financial performance.

If we are unable to expand our operations in emerging and developing markets, our growth rate could be

negatively affected.

Our success depends in part on our ability to grow our business in emerging and developing markets, which in turn

depends on economic and political conditions in those markets and on our ability to acquire bottling operations in

those markets or to form strategic business alliances with local bottlers and to make necessary infrastructure

enhancements to production facilities, distribution networks, sales equipment and technology. Moreover, the supply

of our products in emerging and developing markets must match consumers’ demand for those products. Due to

product price, limited purchasing power and cultural differences, there can be no assurance that our products will be

accepted in any particular emerging or developing market.

12

Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S.

dollar, including the euro, the Japanese yen, the Brazilian real and the Mexican peso. In 2015, we used 71 functional

currencies in addition to the U.S. dollar and derived $23.9 billion of net operating revenues from operations outside

the United States. Because our consolidated financial statements are presented in U.S. dollars, we must translate

revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during

or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against other

currencies affect our net operating revenues, operating income and the value of balance sheet items denominated in

foreign currencies. Because of the geographic diversity of our operations, weaknesses in some currencies might be

offset by strengths in others over time. We also use derivative financial instruments to further reduce our net

exposure to foreign currency exchange rate fluctuations. However, we cannot assure you that fluctuations in foreign

currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies or the currencies

of large developing countries, would not materially affect our financial results.

If interest rates increase, our net income could be negatively affected.

We maintain levels of debt that we consider prudent based on our cash flows, interest coverage ratio and percentage

of debt to capital. We use debt financing to lower our cost of capital, which increases our return on shareowners'

equity. This exposes us to adverse changes in interest rates. When and to the extent appropriate, we use derivative

financial instruments to reduce our exposure to interest rate risks. We cannot assure you, however, that our financial

risk management program will be successful in reducing the risks inherent in exposures to interest rate fluctuations.

Our interest expense may also be affected by our credit ratings. In assessing our credit strength, credit rating

agencies consider our capital structure and financial policies as well as the consolidated balance sheet and other

financial information of the Company. In addition, some credit rating agencies also consider financial information of

certain of our major bottlers. It is our expectation that the credit rating agencies will continue using this

methodology. If our credit ratings were to be downgraded as a result of changes in our capital structure; our major

bottlers' financial performance; changes in the credit rating agencies' methodology in assessing our credit strength;

the credit agencies' perception of the impact of credit market conditions on our or our major bottlers' current or

future financial performance and financial condition; or for any other reason, our cost of borrowing could increase.

Additionally, if the credit ratings of certain bottlers in which we have equity method investments were to be

downgraded, such bottlers' interest expense could increase, which would reduce our equity income.

We rely on our bottling partners for a significant portion of our business. If we are unable to maintain good

relationships with our bottling partners, our business could suffer.

We generate a significant portion of our net operating revenues by selling concentrates and syrups to independent

bottling partners. As independent companies, our bottling partners, some of which are publicly traded companies,

make their own business decisions that may not always align with our interests. In addition, many of our bottling

partners have the right to manufacture or distribute their own products or certain products of other beverage

companies. If we are unable to provide an appropriate mix of incentives to our bottling partners through a

combination of pricing and marketing and advertising support, or if our bottling partners are not satisfied with our

brand innovation and development efforts, they may take actions that, while maximizing their own short-term

profits, may be detrimental to our Company or our brands, or they may devote more of their energy and resources to

business opportunities or products other than those of the Company. Such actions could, in the long run, have an

adverse effect on our profitability.

If our bottling partners' financial condition deteriorates, our business and financial results could be affected.

We derive a significant portion of our net operating revenues from sales of concentrates and syrups to independent

bottling partners and, therefore, the success of our business depends on our bottling partners' financial strength and

profitability. While under our agreements with our bottling partners we generally have the right to unilaterally

change the prices we charge for our concentrates and syrups, our ability to do so may be materially limited by our

bottling partners' financial condition and their ability to pass price increases along to their customers. In addition, we

have investments in certain of our bottling partners, which we account for under the equity method, and our

operating results include our proportionate share of such bottling partners' income or loss. Our bottling partners'

financial condition is affected in large part by conditions and events that are beyond our and their control, including

competitive and general market conditions in the territories in which they operate; the availability of capital and

other financing resources on reasonable terms; loss of major customers; or disruptions of bottling operations that

may be caused by strikes, work stoppages, labor unrest or natural disasters. A deterioration of the financial condition

or results of operations of one or more of our major bottling partners could adversely affect our net operating

revenues from sales of concentrates and syrups; could result in a decrease in our equity income; and could

negatively affect the carrying values of our investments in bottling partners, resulting in asset write-offs.

13

Increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters could have a

material adverse impact on our financial results.

We are subject to income tax in the United States and in numerous other jurisdictions in which we generate net

operating revenues. Increases in income tax rates could reduce our after-tax income from affected jurisdictions. We

earn a substantial portion of our income in foreign countries. If our capital or financing needs in the United States

require us to repatriate earnings from foreign jurisdictions above our current levels, our effective tax rates for the

affected periods could be negatively impacted. In addition, there have been proposals to reform U.S. tax laws that

could significantly impact how U.S. multinational corporations are taxed on foreign earnings. Although we cannot

predict whether or in what form these proposals will pass, several of the proposals being considered, if enacted into

law, could have a material adverse impact on our income tax expense and cash flows.

Our annual tax rate is based on our income and the tax laws in the various jurisdictions in which we operate.

Significant judgment is required in determining our annual income tax expense and in evaluating our tax positions.

Although we believe our tax estimates are reasonable, the final determination of tax audits and any related disputes

could be materially different from our historical income tax provisions and accruals. The results of audits or related

disputes could have a material effect on our financial statements for the period or periods for which the applicable

final determinations are made and for periods for which the statute of limitations is open. For instance, the United

States Internal Revenue Service ("IRS") is seeking to increase our U.S. taxable income for tax years 2007 through

2009 by an amount that creates a potential additional U.S. federal income tax liability of approximately $3.3 billion

for the period, plus interest. The IRS may add a claim for penalties at a later time. The disputed amounts largely

relate to a transfer pricing matter involving the appropriate amount of taxable income the Company should report in

the United States in connection with its licensing of intangible property to certain related foreign licensees regarding

the manufacturing, distribution, sale, marketing and promotion of products in overseas markets. We are currently

contesting the IRS' claims in the U.S. Tax Court. If the IRS were to prevail on its assertions, it would likely also

seek transfer pricing adjustments of a similar nature for subsequent tax years. Consequently, if this dispute were to

be ultimately determined adversely to us, the additional tax, interest and any potential penalties could have a

material adverse impact on the Company's financial position, results of operations or cash flows.

Increased or new indirect taxes in the United States or in one or more of our other major markets could

negatively affect our business.

Our business operations are subject to numerous duties or taxes that are not based on income, sometimes referred to

as "indirect taxes," including import duties, excise taxes, sales or value-added taxes, taxes on sugar-sweetened

beverages, property taxes and payroll taxes, in many of the jurisdictions in which we operate, including indirect

taxes imposed by state and local governments. In addition, in the past, the United States Congress considered

imposing a federal excise tax on beverages sweetened with sugar, HFCS or other nutritive sweeteners and may

consider similar proposals in the future. As federal, state and local governments experience significant budget

deficits, some lawmakers have proposed singling out beverages among a plethora of revenue-raising items.

Increases in or the imposition of new indirect taxes on our business operations or products would increase the cost of

products or, to the extent levied directly on consumers, make our products less affordable, which may negatively

impact our net operating revenues and profitability.

Increase in the cost, disruption of supply or shortage of energy or fuels could affect our profitability.

CCR and our other Company-owned or -controlled bottlers operate a large fleet of trucks and other motor vehicles

to distribute and deliver beverage products to customers. In addition, we use a significant amount of electricity,

natural gas and other energy sources to operate our concentrate, syrup and juice production plants and the bottling

plants and distribution facilities operated by CCR and our other Company-owned or -controlled bottlers. An increase

in the price, disruption of supply or shortage of fuel and other energy sources in North America, in other countries in

which we have concentrate plants, or in any of the major markets in which CCR and our other Company-owned or -

controlled bottlers operate that may be caused by increasing demand or by events such as natural disasters, power

outages, or the like could increase our operating costs and negatively impact our profitability.

Our independent bottling partners also operate large fleets of trucks and other motor vehicles to distribute and

deliver beverage products to their own customers and use a significant amount of electricity, natural gas and other

energy sources to operate their own bottling plants and distribution facilities. Increases in the price, disruption of

supply or shortage of fuel and other energy sources in any of the major markets in which our independent bottling

partners operate would increase the affected independent bottling partners' operating costs and could indirectly

negatively impact our results of operations.

14

Increase in the cost, disruption of supply or shortage of ingredients, other raw materials or packaging materials

could harm our business.

We and our bottling partners use various ingredients in our business, including HFCS, sucrose, aspartame,

saccharin, acesulfame potassium, cyclamate, sucralose, a non-nutritive sweetener derived from the stevia plant,

ascorbic acid, citric acid, phosphoric acid, caffeine and caramel color; other raw materials such as orange and other

fruit juice and juice concentrates; and packaging materials such as PET for bottles and aluminum for cans. The

prices for these ingredients, other raw materials and packaging materials fluctuate depending on market conditions.

Substantial increases in the prices of our or our bottling partners' ingredients, other raw materials and packaging

materials, to the extent they cannot be recouped through increases in the prices of finished beverage products, would

increase our and the Coca-Cola system's operating costs and could reduce our profitability. Increases in the prices of

our finished products resulting from a higher cost of ingredients, other raw materials and packaging materials could

affect affordability in some markets and reduce Coca-Cola system sales. In addition, some of our ingredients, such

as aspartame, acesulfame potassium, sucralose, saccharin and ascorbic acid, as well as some of the packaging

containers, such as aluminum cans, are available from a limited number of suppliers, some of which are located in

countries experiencing political or other risks. We cannot assure you that we and our bottling partners will be able to

maintain favorable arrangements and relationships with these suppliers.

The citrus industry is subject to disease and the variability of weather conditions, which affect the supply of orange

juice and orange juice concentrate, which are important raw materials for our business. In particular, freezing

weather or hurricanes in central Florida may result in shortages and higher prices for orange juice and orange juice

concentrate throughout the industry. In addition, greening disease is reducing the number of trees and increasing

grower costs and prices. Adverse weather conditions may affect the supply of other agricultural commodities from

which key ingredients for our products are derived. For example, drought conditions in certain parts of the United

States may negatively affect the supply of corn, which in turn may result in shortages of and higher prices for HFCS.

An increase in the cost, a sustained interruption in the supply, or a shortage of some of these ingredients, other raw

materials, packaging materials or cans and other containers that may be caused by a deterioration of our or our

bottling partners' relationships with suppliers; by supplier quality and reliability issues; or by events such as natural

disasters, power outages, labor strikes, political uncertainties or governmental instability, or the like could

negatively impact our net operating revenues and profits.

Changes in laws and regulations relating to beverage containers and packaging could increase our costs and

reduce demand for our products.

We and our bottlers currently offer nonrefillable recyclable containers in the United States and in various other

markets around the world. Legal requirements have been enacted in various jurisdictions in the United States and

overseas requiring that deposits or certain ecotaxes or fees be charged in connection with the sale, marketing and use

of certain beverage containers. Other proposals relating to beverage container deposits, recycling, ecotax and/or

product stewardship have been introduced in various jurisdictions in the United States and overseas, and we

anticipate that similar legislation or regulations may be proposed in the future at local, state and federal levels, both

in the United States and elsewhere. Consumers' increased concerns and changing attitudes about solid waste streams

and environmental responsibility and the related publicity could result in the adoption of such legislation or

regulations. If these types of requirements are adopted and implemented on a large scale in any of the major markets

in which we operate, they could affect our costs or require changes in our distribution model, which could reduce

our net operating revenues and profitability.

Significant additional labeling or warning requirements or limitations on the marketing or sale of our products

may inhibit sales of affected products.

Various jurisdictions may seek to adopt significant additional product labeling or warning requirements or

limitations on the marketing or sale of our products as a result of what they contain or allegations that they cause

adverse health effects. If these types of requirements become applicable to one or more of our major products under

current or future environmental or health laws or regulations, they may inhibit sales of such products.

Under one such law in California, known as Proposition 65, if the state has determined that a substance causes

cancer or harms human reproduction, a warning must appear on any product sold in the state that exposes consumers

to that substance. The state maintains lists of these substances and periodically adds other substances to them.

Proposition 65 exposes all food and beverage producers to the possibility of having to provide warnings on their

products in California because it does not provide for any generally applicable quantitative threshold below which

the presence of a listed substance is exempt from the warning requirement. Consequently, the detection of even a

trace amount of a listed substance can subject an affected product to the requirement of a warning label. However,

Proposition 65 does not require a warning if the manufacturer of a product can demonstrate that the use of the

product in question exposes consumers to a daily quantity of a listed substance that is below a

15

"safe harbor" threshold that may be established, is naturally occurring, is the result of necessary cooking or is

subject to another applicable exception. One or more substances that are currently on the Proposition 65 lists, or that

may be added to the lists in the future, can be detected in certain Company products at low levels that are safe. With

respect to substances that have not yet been listed under Proposition 65, the Company takes the position that listing

is not scientifically justified. With respect to substances that are already listed, the Company takes the position that

the presence of each such substance in Company products is subject to an applicable exemption from the warning

requirement. The state of California and other parties, however, have in the past taken a contrary position and may

do so in the future. If we were required to add Proposition 65 warnings on the labels of one or more of our beverage

products produced for sale in California, the resulting consumer reaction to the warnings and possible adverse

publicity could negatively affect our sales both in California and in other markets.

If we are unable to protect our information systems against service interruption, misappropriation of data or

breaches of security, our operations could be disrupted and our reputation may be damaged.

We rely on networks and information systems and other technology ("information systems"), including the Internet

and third-party hosted services, to support a variety of business processes and activities, including procurement and

supply chain, manufacturing, distribution, invoicing and collection of payments, mergers and acquisitions and

research and development. We use information systems to process financial information and results of operations for

internal reporting purposes and to comply with regulatory financial reporting and legal and tax requirements. In

addition, we depend on information systems for digital marketing activities and electronic communications among

our locations around the world and between Company personnel and our bottlers and other customers, suppliers and

consumers. Because information systems are critical to many of the Company's operating activities, our business

may be impacted by system shutdowns, service disruptions or security breaches. These incidents may be caused by

failures during routine operations such as system upgrades or user errors, as well as network or hardware failures,

malicious or disruptive software, unintentional or malicious actions of employees or contractors, cyberattacks by

common hackers, criminal groups or nation-state organizations or social-activist (hacktivist) organizations,

geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic

events. In addition, such incidents could result in unauthorized disclosure of material confidential information. If our

information systems suffer severe damage, disruption or shutdown and our business continuity plans do not

effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, and

we may lose revenue and profits as a result of our inability to timely manufacture, distribute, invoice and collect

payments for concentrate or finished products. Misuse, leakage or falsification of information could result in

violations of data privacy laws and regulations, damage to the reputation and credibility of the Company, loss of

opportunities to acquire or divest of businesses or brands and loss of ability to commercialize products developed

through research and development efforts and, therefore, could have a negative impact on net operating revenues. In

addition, we may suffer financial and reputational damage because of lost or misappropriated confidential

information belonging to us, our current or former employees, or to our bottling partners, other customers, suppliers

or consumers, and may become subject to legal action and increased regulatory oversight. The Company could also

be required to spend significant financial and other resources to remedy the damage caused by a security breach or

to repair or replace networks and information systems.

Like most major corporations, the Company's information systems are a target of attacks. Although the incidents

that we have experienced to date have not had a material effect on our business, financial condition or results of

operations, there can be no assurance that such incidents will not have a material adverse effect on us in the future.

In order to address risks to our information systems, we continue to make investments in personnel, technologies,

cyber insurance and training of Company personnel. The Company maintains an information risk management

program which is supervised by information technology management and reviewed by a cross-functional committee.

As part of this program, reports that include analysis of emerging risks as well as the Company's plans and strategies

to address them are regularly prepared and presented to senior management and the Audit Committee of the Board

of Directors.

Unfavorable general economic conditions in the United States could negatively impact our financial

performance.

In 2015, our net operating revenues in the United States were $20.4 billion, or 46 percent, of our total net operating

revenues. Unfavorable general economic conditions, such as a recession or economic slowdown, in the United

States could negatively affect the affordability of, and consumer demand for, our beverages in our flagship market.

Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of

our products or by shifting away from our beverages to lower-priced products offered by other companies, including

private label brands. Softer consumer demand for our beverages in the United States could reduce our profitability

and could negatively affect our overall financial performance.

16

Unfavorable economic and political conditions in international markets could hurt our business.

We derive a significant portion of our net operating revenues from sales of our products in international markets. In

2015, our operations outside the United States accounted for $23.9 billion, or 54 percent, of our total net operating

revenues. Unfavorable economic conditions and financial uncertainties in our major international markets and

unstable political conditions, including civil unrest and governmental changes, in certain of our other international

markets could undermine global consumer confidence and reduce consumers' purchasing power, thereby reducing

demand for our products. Product boycotts resulting from political activism could reduce demand for our products,

while restrictions on our ability to transfer earnings or capital across borders, price controls, limitation on profits,

import authorization requirements and other restrictions on business activities which have been or may be imposed

or expanded as a result of political and economic instability or otherwise could impact our profitability. In addition,

U.S. trade sanctions against countries designated by the U.S. government as state sponsors of terrorism and/or

financial institutions accepting transactions for commerce within such countries could increase significantly, which

could make it impossible for us to continue to make sales to bottlers in such countries, while the imposition of

sanctions against U.S. multinational corporations by countries in which our products are manufactured, distributed

or sold could negatively affect our business in such markets.

Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.

We are party to various litigation claims and legal proceedings. We evaluate these litigation claims and legal

proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential

losses. Based on these assessments and estimates, we establish reserves and/or disclose the relevant litigation claims

or legal proceedings, as appropriate. These assessments and estimates are based on the information available to

management at the time and involve a significant amount of management judgment. We caution you that actual

outcomes or losses may differ materially from those envisioned by our current assessments and estimates. In

addition, we have bottling and other business operations in markets with high-risk legal compliance environments.

Our policies and procedures require strict compliance by our associates and agents with all United States and local

laws and regulations and consent orders applicable to our business operations, including those prohibiting improper

payments to government officials. Nonetheless, we cannot assure you that our policies, procedures and related

training programs will always ensure full compliance by our associates and agents with all applicable legal

requirements. Improper conduct by our associates or agents could damage our reputation in the United States and

internationally or lead to litigation or legal proceedings that could result in civil or criminal penalties, including

substantial monetary fines as well as disgorgement of profits.

Failure to adequately protect, or disputes relating to, trademarks, formulae and other intellectual property rights

could harm our business.

Our trademarks, formulae and other intellectual property rights (refer to the heading "Patents, Copyrights, Trade

Secrets and Trademarks" in "Item 1. Business" above) are essential to the success of our business. We cannot be

certain that the legal steps we are taking around the world are sufficient to protect our intellectual property rights or

that, notwithstanding legal protection, others do not or will not infringe or misappropriate our intellectual property

rights. If we fail to adequately protect our intellectual property rights, or if changes in laws diminish or remove the

current legal protections available to them, the competitiveness of our products may be eroded and our business

could suffer. In addition, we could come into conflict with third parties over intellectual property rights, which could

result in disruptive and expensive litigation. Any of the foregoing could harm our business.

Adverse weather conditions could reduce the demand for our products.

The sales of our products are influenced to some extent by weather conditions in the markets in which we operate.

Unusually cold or rainy weather during the summer months may have a temporary effect on the demand for our

products and contribute to lower sales, which could have an adverse effect on our results of operations for such

periods.

Climate change may have a long-term adverse impact on our business and results of operations.

There is increasing concern that a gradual increase in global average temperatures due to increased concentration of

carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns

around the globe and an increase in the frequency and severity of natural disasters. Decreased agricultural

productivity in certain regions of the world as a result of changing weather patterns may limit the availability or

increase the cost of key agricultural commodities, such as sugarcane, corn, sugar beets, citrus, coffee and tea, which

are important sources of ingredients for our products, and could impact the food security of communities around the

world. Climate change may also exacerbate water scarcity and cause a further deterioration of water quality in

affected regions, which could limit water availability for the Coca-Cola system's bottling operations. Increased

frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply

chain or impact demand for our products. As a result, the effects of climate change could have a long-term adverse

impact on our business and results of operations.

17

If negative publicity, even if unwarranted, related to product safety or quality, human and workplace rights,

obesity or other issues damages our brand image and corporate reputation, our business may suffer.

Our success depends in large part on our ability to maintain the brand image of our existing products, build up brand

image for new products and brand extensions and maintain our corporate reputation. We cannot assure you,

however, that our continuing investment in advertising and marketing and our strong commitment to product safety

and quality and human rights will have the desired impact on our products' brand image and on consumer

preferences. Product safety or quality issues, actual or perceived, or allegations of product contamination, even when

false or unfounded, could tarnish the image of the affected brands and may cause consumers to choose other

products. In some emerging markets, the production and sale of counterfeit or "spurious" products, which we and

our bottling partners may not be able to fully combat, may damage the image and reputation of our products. In

addition, from time to time, we and our executives engage in public policy endeavors that are either directly related

to our products and packaging or to our business operations and the general economic climate affecting the

Company. These engagements in public policy debates can occasionally be the subject of backlash from advocacy

groups that have a differing point of view and could result in adverse media and consumer reaction, including

product boycotts. Similarly, our sponsorship relationships could subject us to negative publicity as a result of actual

or alleged misconduct by individuals or entities associated with organizations we sponsor or support financially or

through in-kind contributions. Likewise, campaigns by activists connecting us, or our bottling system or supply

chain, with human and workplace rights issues could adversely impact our corporate image and reputation.

Furthermore, in June 2011, the United Nations Human Rights Council endorsed the Guiding Principles on Business

and Human Rights, which outlines how businesses should implement the corporate responsibility to respect human

rights principles included in the United Nations "Protect, Respect and Remedy" framework on human rights.

Through our Human Rights Policy, Code of Business Conduct and Supplier Guiding Principles, and our

participation in the United Nations Global Compact, as well as our active participation in the Global Business

Initiative on Human Rights and the Global Business Coalition Against Human Trafficking, we made a number of

commitments to respect all human rights. Allegations, even if untrue, that we are not respecting one or more of the

30 human rights found in the United Nations Universal Declaration of Human Rights; actual or perceived failure by

our suppliers or other business partners to comply with applicable labor and workplace rights laws, including child

labor laws, or their actual or perceived abuse or misuse of migrant workers; and adverse publicity surrounding

obesity and health concerns related to our products, water usage, environmental impact, labor relations or the like

could negatively affect our Company's overall reputation and brand image, which in turn could have a negative

impact on our products’ acceptance by consumers.

Changes in, or failure to comply with, the laws and regulations applicable to our products or our business

operations could increase our costs or reduce our net operating revenues.

Our Company's business is subject to various laws and regulations in the numerous countries throughout the world

in which we do business, including laws and regulations relating to competition, product safety, advertising and

labeling, container deposits, recycling and product stewardship, the protection of the environment, and employment

and labor practices. In the United States, the production, distribution, marketing and sale of many of our products

are subject to, among others, the Federal Food, Drug, and Cosmetic Act, the Federal Trade Commission Act, the

Lanham Act, state consumer protection laws, the Occupational Safety and Health Act, and various environmental

statutes, as well as various state and local statutes and regulations. Outside the United States, the production,

distribution and sale of many of our products are also subject to various laws and regulations. Changes in applicable

laws or regulations or evolving interpretations thereof, including increased government regulations to limit carbon

dioxide and other greenhouse gas emissions as a result of concern over climate change, or regulations to limit or

eliminate the use of bisphenol A, or BPA (an odorless, tasteless food-grade chemical commonly used in the food

and beverage industries as a component in can liners and other packaging materials), or regulations to limit or

impose additional costs on commercial water use due to local water scarcity concerns, may result in increased

compliance costs, capital expenditures and other financial obligations for us and our bottling partners, which could

affect our profitability, or may impede the production, distribution, marketing and sale of our products, which could

affect our net operating revenues. In addition, failure to comply with environmental, health or safety requirements,

U.S. trade sanctions, the U.S. Foreign Corrupt Practices Act and other applicable laws or regulations could result in

the assessment of damages, the imposition of penalties, suspension of production or distribution, costly changes to

equipment or processes due to required corrective action, or a cessation or interruption of operations at our or our

bottling partners' facilities, as well as damage to our and the Coca-Cola system's image and reputation, all of which

could harm our and the Coca-Cola system's profitability.

18

Changes in accounting standards could affect our reported financial results.

New accounting standards or pronouncements that may become applicable to our Company from time to time, or

changes in the interpretation of existing standards and pronouncements, could have a significant effect on our

reported financial results for the affected periods.

If we are not able to achieve our overall long-term growth objectives, the value of an investment in our Company

could be negatively affected.

We have established and publicly announced certain long-term growth objectives. These objectives were based on,

among other things, our evaluation of our growth prospects, which are generally driven by the sales potential of

many product types, some of which are more profitable than others, and on an assessment of the potential price and

product mix. There can be no assurance that we will realize the sales potential and the price and product mix

necessary to achieve our long-term growth objectives.

If global credit market conditions deteriorate, our financial performance could be adversely affected.

The cost and availability of credit vary by market and are subject to changes in the global or regional economic

environment. If conditions in major credit markets deteriorate, our and our bottling partners' ability to obtain debt

financing on favorable terms may be negatively affected, which could affect our and the Coca-Cola system's

profitability as well as our share of the income of bottling partners in which we have equity method investments. A

decrease in availability of consumer credit resulting from unfavorable credit market conditions, as well as general

unfavorable economic conditions, may also cause consumers to reduce their discretionary spending, which could

reduce the demand for our beverages and negatively affect our net operating revenues and the Coca-Cola system's

profitability.

Default by or failure of one or more of our counterparty financial institutions could cause us to incur significant

losses.

As part of our hedging activities, we enter into transactions involving derivative financial instruments, including

forward contracts, commodity futures contracts, option contracts, collars and swaps, with various financial

institutions. In addition, we have significant amounts of cash, cash equivalents and other investments on deposit or

in accounts with banks or other financial institutions in the United States and abroad. As a result, we are exposed to

the risk of default by or failure of counterparty financial institutions. The risk of counterparty default or failure may

be heightened during economic downturns and periods of uncertainty in the financial markets. If one of our

counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of

default or to retrieve our assets that are deposited or held in accounts with such counterparty may be limited by the

counterparty's liquidity or the applicable laws governing the insolvency or bankruptcy proceedings. In the event of

default by or failure of one or more of our counterparties, we could incur significant losses, which could negatively

impact our results of operations and financial condition.

If we are unable to timely implement our previously announced actions to reinvigorate growth, or we do not

realize the economic benefits we anticipate from these actions, our results of operations for future periods could

be negatively affected.

In October 2014, we announced that we were taking actions to reinvigorate growth, including streamlining and

simplifying our operating model to speed decision making and enhance local market focus; expanding our

productivity and reinvestment program by targeting additional productivity; refocusing on our core business model;

strategically targeting brand and growth investments that leverage our global strengths; and driving revenue and

profit growth with clear portfolio roles across our markets while providing local operations with a clear line of sight

and aligned compensation targets. We have begun implementing these actions and have incurred, and we expect will

continue to incur, significant costs and expenses with the associated programs, initiatives and activities. If we are

unable to implement some or all of these actions fully or in the envisioned timeframe, or otherwise we do not timely

capture the efficiencies, cost savings and revenue growth opportunities we anticipate from these actions, our results

of operations for future periods could be negatively affected.

If we fail to realize a significant portion of the anticipated benefits of our strategic relationship with Monster, our

financial performance could be adversely affected.

In August 2014, we entered into definitive agreements with Monster for a long-term strategic relationship in the

global energy drink category, and upon the closing of the transactions contemplated by the agreements in June 2015

we purchased newly issued shares representing approximately 17 percent of Monster’s issued and outstanding

shares of common stock (after giving effect to the issuance). (For more information regarding our agreements with

Monster and related transactions, refer to Note 2 of Notes to Consolidated Financial Statements set forth in Part II,

"Item 8. Financial Statements and Supplementary Data" of this report.) If we are unable to successfully manage our

complex relationship with Monster, or if for any other reason we fail to realize all or a significant part of the benefits

we expect from this strategic relationship and the related investment, our financial performance could be adversely

affected.

19

If we are unable to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners

experience strikes, work stoppages or labor unrest, our business could suffer.

Many of our associates at our key manufacturing locations and bottling plants are covered by collective bargaining

agreements. While we generally have been able to renegotiate collective bargaining agreements on satisfactory

terms when they expire and regard our relations with associates and their representatives as generally satisfactory,

negotiations in the current environment remain challenging, as the Company must have competitive cost structures

in each market while meeting the compensation and benefits needs of our associates. If we are unable to renew

collective bargaining agreements on satisfactory terms, our labor costs could increase, which could affect our profit

margins. In addition, many of our bottling partners' employees are represented by labor unions. Strikes, work

stoppages or other forms of labor unrest at any of our major manufacturing facilities or at our bottling operations' or

our major bottlers' plants could impair our ability to supply concentrates and syrups to our bottling partners or our

bottlers' ability to supply finished beverages to customers, which could reduce our net operating revenues and could

expose us to customer claims. Furthermore, from time to time we and our bottling partners restructure

manufacturing and other operations to improve productivity. Restructuring activities and the announcement of plans

for future restructuring activities may result in a general increase in insecurity among some Company associates and

some employees in other parts of the Coca-Cola system, which may have negative implications on employee

morale, work performance, escalation of grievances and successful negotiation of collective bargaining agreements.

If these labor relations are not effectively managed at the local level, they could escalate in the form of corporate

campaigns supported by the labor organizations and could negatively affect our Company's overall reputation and

brand image, which in turn could have a negative impact on our products' acceptance by consumers.

We may be required to recognize impairment charges that could materially affect our financial results.

We assess our goodwill, trademarks and other intangible assets as well as our other long-lived assets as and when

required by accounting principles generally accepted in the United States to determine whether they are impaired

and, if they are, we record appropriate impairment charges. Our equity method investees also perform impairment

tests, and we record our proportionate share of impairment charges recorded by them adjusted, as appropriate, for

the impact of items such as basis differences, deferred taxes and deferred gains. It is possible that we may be

required to record significant impairment charges or our proportionate share of significant impairment charges

recorded by equity method investees in the future and, if we do so, our operating or equity income could be

materially adversely affected.

We may incur multi-employer plan withdrawal liabilities in the future, which could negatively impact our

financial performance.

We participate in certain multi-employer pension plans in the United States. Our U.S. multi-employer pension plan

expense totaled $40 million in 2015. The U.S. multi-employer pension plans in which we currently participate have

contractual arrangements that extend into 2020. If, in the future, we choose to withdraw from any of the multi-

employer pension plans in which we currently participate, we would need to record the appropriate withdrawal

liabilities at that time, which could negatively impact our financial performance in the applicable periods.

If we do not successfully integrate and manage our Company-owned or -controlled bottling operations or other

acquired businesses or brands, our results could suffer.

From time to time we acquire or take control of bottling operations, often in underperforming markets where we

believe we can use our resources and expertise to improve performance. In addition, we routinely evaluate

opportunities to acquire other businesses or brands to expand our beverage portfolio and capabilities. We may incur

unforeseen liabilities and obligations in connection with acquiring, taking control of or managing acquired bottling

operations, other businesses or brands and may encounter unexpected difficulties and costs in restructuring and

integrating them into our Company's operating and internal control structures. We may also experience delays in

extending our Company's internal control over financial reporting to newly acquired or controlled bottling

operations or other businesses, which may increase the risk of failure to prevent misstatements in their financial

records and in our consolidated financial statements. Our financial performance depends in large part on how well

we can manage and improve the performance of Company-owned or -controlled bottling operations and other

acquired businesses or brands. We cannot assure you, however, that we will be able to achieve our strategic and

financial objectives for such bottling operations or other acquisitions. If we are unable to achieve such objectives,

our consolidated results could be negatively affected.

20

If we do not successfully manage our refranchising activities, our business and results of operations could be

adversely affected.

As part of our strategic initiative to refocus on our core business of building brands and leading our system of

bottling partners, we are accelerating our refranchising activities in North America and have expanded our

refranchising efforts to Company-owned or -controlled bottling operations in Europe, Africa and China. Our

refranchising activities require significant attention and effort on the part of, and therefore may become a distraction

for, senior management. In addition, in connection with refranchising transactions in North America, we recorded,

and we expect will continue to record, noncash losses related to the derecognition of intangible assets transferred or

that will be transferred to bottling partners. There is no assurance that we will be able to complete refranchising

transactions on our expected timetable and on terms and conditions favorable to us; that our refranchising bottling or

joint venture partners will be efficient and aligned with our long-term vision for the Coca-Cola system; or that we

will be able to maintain good relationships with the refranchised bottling operations. If we are unable to complete

contemplated refranchising transactions timely, on favorable terms and with partners who share our long-term vision

for the Coca-Cola system, our business and results of operations could be adversely affected.

If we are unable to successfully manage the possible negative consequences of our productivity initiatives, our

business operations could be adversely affected.

We believe that improved productivity is essential to achieving our long-term growth objectives and, therefore, a

leading priority of our Company is to design and implement the most effective and efficient business model

possible. For information regarding our productivity initiatives, refer to the heading "Operations Review — Other

Operating Charges — Productivity and Reinvestment Program" set forth in Part II, "Item 7. Management's

Discussion and Analysis of Financial Condition and Results of Operations" of this report. Some of the actions we

are taking in furtherance of our productivity initiatives may become a distraction for our managers and employees

and may disrupt our ongoing business operations; cause deterioration in employee morale which may make it more

difficult for us to retain or attract qualified managers and employees; disrupt or weaken the internal control

structures of the affected business operations; and give rise to negative publicity which could affect our corporate

reputation. If we are unable to successfully manage the possible negative consequences of these actions, our

business operations could be adversely affected.

If we are unable to attract or retain a highly skilled workforce, our business could be negatively affected.

The success of our business depends on our ability to attract, train, develop and retain a highly skilled workforce.

We may not be able to successfully compete for and attract the high-quality and diverse employee talent we want

and our future business needs may require. In addition, unexpected loss of experienced and highly skilled associates

due to insecurity resulting from our ongoing productivity initiatives, refranchising transactions and organizational

changes could deplete our institutional knowledge base and erode our competitiveness. Any of the foregoing could

have a negative impact on our business.

Global or regional catastrophic events could impact our operations and financial results.

Because of our global presence and worldwide operations, our business can be affected by large-scale terrorist acts,

especially those directed against the United States or other major industrialized countries; the outbreak or escalation

of armed hostilities; major natural disasters; or widespread outbreaks of infectious diseases. Such events could

impair our ability to manage our business around the world, could disrupt our supply of raw materials and

ingredients, and could impact production, transportation and delivery of concentrates, syrups and finished products.

In addition, such events could cause disruption of regional or global economic activity, which can affect consumers'

purchasing power in the affected areas and, therefore, reduce demand for our products.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

21

ITEM 2. PROPERTIES

Our worldwide headquarters is located on a 35-acre office complex in Atlanta, Georgia. The complex includes our

621,000 square foot headquarters building and an 870,000 square foot building in which our North America group’s

main offices are located. The complex also includes several other buildings, including our 264,000 square foot

Coca-Cola Plaza building, technical and engineering facilities and a reception center. We also own an office and

retail building at 711 Fifth Avenue in New York, New York. These properties, except for the North America group’s

main offices, are included in the Corporate operating segment.

We own or lease additional facilities, real estate and office space throughout the world which we use for

administrative, manufacturing, processing, packaging, storage, warehousing, distribution and retail operations.

These properties are generally included in the geographic operating segment in which they are located.

In the North America operating segment's geographic area, as of December 31, 2015, we owned 63 beverage

production facilities, 10 principal beverage concentrate and/or syrup manufacturing plants, one facility that

manufactures juice concentrates for foodservice use, two bottled water facilities, and one container manufacturing

facility; we leased one beverage production facility, one bottled water facility and four container manufacturing

facilities; and we operated 224 principal beverage distribution warehouses, of which 80 were leased and the rest

were owned. Also included in the North America operating segment is a portion of the Atlanta office complex

consisting of the North America group’s main offices.

Outside of the North America operating segment's geographic area, as of December 31, 2015, our Company owned

and operated 18 principal beverage concentrate manufacturing plants, of which three are included in the Eurasia and

Africa operating segment, three are included in the Europe operating segment, five are included in the Latin

America operating segment, and seven are included in the Asia Pacific operating segment.

We own or hold a majority interest in or otherwise consolidate under applicable accounting rules bottling operations

that, as of December 31, 2015, owned 76 principal beverage bottling and canning plants located throughout the

world. These plants are included in the Bottling Investments operating segment.

Management believes that our Company's facilities for the production of our products are suitable and adequate, that

they are being appropriately utilized in line with past experience, and that they have sufficient production capacity

for their present intended purposes. The extent of utilization of such facilities varies based upon seasonal demand for

our products. However, management believes that additional production can be obtained at the existing facilities by

adding personnel and capital equipment and, at some facilities, by adding shifts of personnel or expanding the

facilities. We continuously review our anticipated requirements for facilities and, on the basis of that review, may

from time to time acquire additional facilities and/or dispose of existing facilities.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in various legal proceedings, including the proceedings specifically discussed below.

Management believes that the total liabilities to the Company that may arise as a result of currently pending legal

proceedings will not have a material adverse effect on the Company taken as a whole.

Aqua-Chem Litigation

On December 20, 2002, the Company filed a lawsuit (The Coca-Cola Company v. Aqua-Chem, Inc., Civil Action

No. 2002CV631-50) in the Superior Court of Fulton County, Georgia ("Georgia Case"), seeking a declaratory

judgment that the Company has no obligation to its former subsidiary, Aqua-Chem, Inc., now known as Cleaver-

Brooks, Inc. ("Aqua-Chem"), for any past, present or future liabilities or expenses in connection with any claims or

lawsuits against Aqua-Chem. Subsequent to the Company's filing but on the same day, Aqua-Chem filed a lawsuit

(Aqua-Chem, Inc. v. The Coca-Cola Company, Civil Action No. 02CV012179) in the Circuit Court, Civil Division of

Milwaukee County, Wisconsin ("Wisconsin Case"). In the Wisconsin Case, Aqua-Chem sought a declaratory

judgment that the Company is responsible for all liabilities and expenses not covered by insurance in connection

with certain of Aqua-Chem's general and product liability claims arising from occurrences prior to the Company's

sale of Aqua-Chem in 1981, and a judgment for breach of contract in an amount exceeding $9 million for costs

incurred by Aqua-Chem to date in connection with such claims. The Wisconsin Case initially was stayed, pending

final resolution of the Georgia Case, and later was voluntarily dismissed without prejudice by Aqua-Chem.

22

The Company owned Aqua-Chem from 1970 to 1981. During that time, the Company purchased over $400 million

of insurance coverage, which also insures Aqua-Chem for some of its prior and future costs for certain product

liability and other claims. The Company sold Aqua-Chem to Lyonnaise American Holding, Inc., in 1981 under the

terms of a stock sale agreement. The 1981 agreement, and a subsequent 1983 settlement agreement, outlined the

parties' rights and obligations concerning past and future claims and lawsuits involving Aqua-Chem. Cleaver-

Brooks, a division of Aqua-Chem, manufactured boilers, some of which contained asbestos gaskets. Aqua-Chem

was first named as a defendant in asbestos lawsuits in or around 1985 and currently has approximately 40,000 active

claims pending against it.

The parties agreed in 2004 to stay the Georgia Case pending the outcome of insurance coverage litigation filed by

certain Aqua-Chem insurers on March 26, 2004. In the coverage action, five plaintiff insurance companies filed suit

(Century Indemnity Company, et al. v. Aqua-Chem, Inc., The Coca-Cola Company, et al., Case No. 04CV002852) in

the Circuit Court, Civil Division of Milwaukee County, Wisconsin, against the Company, Aqua-Chem and 16

insurance companies. Several of the policies that were the subject of the coverage action had been issued to the

Company during the period (1970 to 1981) when the Company owned Aqua-Chem. The complaint sought a

determination of the respective rights and obligations under the insurance policies issued with regard to asbestos-

related claims against Aqua-Chem. The action also sought a monetary judgment reimbursing any amounts paid by

the plaintiffs in excess of their obligations. Two of the insurers, one with a $15 million policy limit and one with a

$25 million policy limit, asserted cross-claims against the Company, alleging that the Company and/or its insurers

are responsible for Aqua-Chem's asbestos liabilities before any obligation is triggered on the part of the cross-

claimant insurers to pay for such costs under their policies.

Aqua-Chem and the Company filed and obtained a partial summary judgment determination in the coverage action

that the insurers for Aqua-Chem and the Company were jointly and severally liable for coverage amounts, but

reserving judgment on other defenses that might apply. During the course of the Wisconsin insurance coverage

litigation, Aqua-Chem and the Company reached settlements with several of the insurers, including plaintiffs, who

have paid or will pay funds into an escrow account for payment of costs arising from the asbestos claims against

Aqua-Chem. On July 24, 2007, the Wisconsin trial court entered a final declaratory judgment regarding the rights

and obligations of the parties under the insurance policies issued by the remaining defendant insurers, which

judgment was not appealed. The judgment directs, among other things, that each insurer whose policy is triggered is

jointly and severally liable for 100 percent of Aqua-Chem's losses up to policy limits. The court's judgment

concluded the Wisconsin insurance coverage litigation.

The Company and Aqua-Chem continued to pursue and obtain coverage agreements for the asbestos-related claims

against Aqua-Chem with those insurance companies that did not settle in the Wisconsin insurance coverage

litigation. The Company anticipated that a final settlement with three of those insurers ("Chartis insurers") would be

finalized in May 2011, but the Chartis insurers repudiated their settlement commitments and, as a result, Aqua-

Chem and the Company filed suit against them in Wisconsin state court to enforce the coverage-in-place settlement

or, in the alternative, to obtain a declaratory judgment validating Aqua-Chem and the Company's interpretation of

the court's judgment in the Wisconsin insurance coverage litigation.

In February 2012, the parties filed and argued a number of cross-motions for summary judgment related to the issues

of the enforceability of the settlement agreement and the exhaustion of policies underlying those of the Chartis

insurers. The court granted defendants' motions for summary judgment that the 2011 Settlement Agreement and

2010 Term Sheet were not binding contracts, but denied their similar motions related to plaintiffs' claims for

promissory and/or equitable estoppel. On or about May 15, 2012, the parties entered into a mutually agreeable

settlement/stipulation resolving two major issues: exhaustion of underlying coverage and control of defense. On or

about January 10, 2013, the parties reached a settlement of the estoppel claims and all of the remaining coverage

issues, with the exception of one disputed issue relating to the scope of the Chartis insurers' defense obligations in

two policy years. The trial court granted summary judgment in favor of the Company and Aqua-Chem on that one

open issue and entered a final appealable judgment to that effect following the parties' settlement. On January 23,

2013, the Chartis insurers filed a notice of appeal of the trial court's summary judgment ruling. On October 29,

2013, the Wisconsin Court of Appeals affirmed the grant of summary judgment in favor of the Company and Aqua-

Chem. On November 27, 2013, the Chartis insurers filed a petition for review in the Supreme Court of Wisconsin,

and on December 11, 2013, the Company filed its opposition to that petition. On April 16, 2014, the Supreme Court

of Wisconsin denied the Chartis insurers' petition for review.

The Georgia Case remains subject to the stay agreed to in 2004.

23

U.S. Federal Income Tax Dispute

On September 17, 2015, the Company received a Statutory Notice of Deficiency ("Notice") from the IRS for the tax

years 2007 through 2009, after a five-year audit. In the Notice, the IRS claims that the Company's United States

taxable income should be increased by an amount that creates a potential additional federal income tax liability of

approximately $3.3 billion for the period, plus interest. No penalties were asserted in the Notice; however, the IRS

has since taken the position that it is not precluded from asserting penalties and notified the Company that it may do

so. The disputed amounts largely relate to a transfer pricing matter involving the appropriate amount of taxable

income the Company should report in the United States in connection with its licensing of intangible property to

certain related foreign licensees for use in connection with the manufacturing, distribution, sale, marketing and

promotion of products in overseas markets.

The Company has followed the same transfer pricing methodology for these licenses since the methodology was

agreed with the IRS in a 1996 closing agreement that applied back to 1987. The closing agreement provides

prospective penalty protection as long as the Company follows the prescribed methodology and material facts and

circumstances and relevant Federal tax law have not changed. On February 11, 2016, the IRS notified the Company,

without further explanation, that the IRS has determined that material facts and circumstances and relevant Federal

tax law have changed and that it may assert penalties. The Company does not agree with this determination. The

Company's compliance with the closing agreement was audited and confirmed by the IRS in five successive audit

cycles covering the subsequent 11 years through 2006, with the last audit concluding as recently as 2009.

The Notice represents a repudiation of the methodology previously adopted in the 1996 closing agreement. The IRS

designated the matter for litigation on October 15, 2015. Therefore, the Company will be prevented from pursuing

any administrative settlement at IRS Appeals or under the IRS Advance Pricing and Mutual Agreement Program.

The Company firmly believes that the IRS' claims are without merit and plans to pursue all available administrative

and judicial remedies necessary to resolve this matter. To that end, the Company filed a petition in the U.S. Tax

Court on December 14, 2015. The Company intends to vigorously defend its position and is confident in its ability

to prevail on the merits.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM X. EXECUTIVE OFFICERS OF THE COMPANY

The following are the executive officers of our Company as of February 25, 2016:

Alexander B. Cummings, Jr., 59, is Executive Vice President and Chief Administrative Officer of the Company. Mr.

Cummings joined the Company in 1997 as Deputy Region Manager, Nigeria. In 1998, Mr. Cummings was named

Managing Director/Region Manager, Nigeria, and in 2000, he became President of the North West Africa Division

based in Morocco. In 2001, Mr. Cummings became President of the Africa Group and served in this capacity until

June 2008. Mr. Cummings was appointed Chief Administrative Officer of the Company effective July 1, 2008, and

was elected Executive Vice President of the Company effective October 15, 2008. Mr. Cummings will be retiring

from the Company on March 31, 2016.

Marcos de Quinto, 57, is Executive Vice President and Chief Marketing Officer of the Company. Mr. De Quinto

first joined the Company in 1982 in the marketing department of Coca-Cola Spain, where he held positions

including District Manager and Merchandising Manager. In 1988, he left the Company to be Regional Manager for

Southern Publicity Agencies ALAS BATES/BSB Advertising before rejoining Coca-Cola Spain in 1990 as

Marketing Services Manager. From September 1992 to September 1994, Mr. De Quinto served as Senior Vice

President, Marketing Operations Manager, Coca-Cola Southeast and West Asia, and from September 1994 to

February 1995, he served as Regional Manager for Singapore and Malaysia. From February 1995 to October 1996,

Mr. De Quinto served as Marketing Manager, Central Europe Division, and from October 1996 to January 2000, he

served as Regional Manager, Coca-Cola Spain. In January 2000, he was appointed President of the Iberia Business

Unit and served in that role until his appointment to the position of Chief Marketing Officer effective January 1,

2015. He also served as Vice President, Europe Group from May 2007 to December 2012. Mr. De Quinto was

elected Executive Vice President of the Company effective February 19, 2015.

24

J. Alexander M. Douglas, Jr., 54, is Executive Vice President and President of Coca-Cola North America.

Mr. Douglas joined the Company in January 1988 as a District Sales Manager for the Foodservice Division of Coca-

Cola USA. In May 1994, he was named Vice President of Coca-Cola USA, initially assuming leadership of the CCE

Sales and Marketing Group and eventually assuming leadership of the entire North American Field Sales and

Marketing Groups. In 2000, Mr. Douglas was appointed President of the North American Retail Division within the

North America Group. He served as Senior Vice President and Chief Customer Officer of the Company from 2003

until 2006 and continued serving as Senior Vice President until April 2007. Mr. Douglas was President of the North

America Group from August 2006 through December 2012. He served as Global Chief Customer Officer of the

Company from January 2013 through March 2015 and as Senior Vice President of the Company from February

2013 until his election as Executive Vice President of the Company effective April 30, 2015. Mr. Douglas was

appointed President of Coca-Cola North America effective January 1, 2014.

Ceree Eberly, 53, is Senior Vice President and Chief People Officer of the Company, with responsibility for leading

the Company's global People Function. Ms. Eberly joined the Company in 1990, serving in staffing, compensation

and other roles supporting the Company's divisions around the world. From 1998 until 2003, she served as Human

Resources Director for the Latin Center Division. From 2003 until 2007, Ms. Eberly served as Vice President of the

McDonald's Division. She was appointed Group Human Resources Director for Europe in July 2007 and served in

that capacity until she was appointed Chief People Officer effective December 1, 2009. Ms. Eberly was elected

Senior Vice President of the Company effective April 1, 2010.

Irial Finan, 58, is Executive Vice President and President, Bottling Investments and Supply Chain. Mr. Finan joined

the Company and was named President, Bottling Investments in 2004. Mr. Finan joined the Coca-Cola system in

1981 with Coca-Cola Bottlers Ireland, Ltd., where for several years he held a variety of accounting positions. From

1987 until 1990, Mr. Finan served as Finance Director of Coca-Cola Bottlers Ireland, Ltd. From 1991 to 1993, he

served as Managing Director of Coca-Cola Bottlers Ulster, Ltd. He was Managing Director of Coca-Cola bottlers in

Romania and Bulgaria until late 1994. From 1995 to 1999, he served as Managing Director of Molino Beverages,

with responsibility for expanding markets, including the Republic of Ireland, Northern Ireland, Romania, Moldova,

Russia and Nigeria. Mr. Finan served from 2001 until 2003 as Chief Executive Officer of Coca-Cola Hellenic. He

was elected Executive Vice President of the Company in October 2004.

Bernhard Goepelt, 53, is Senior Vice President, General Counsel and Chief Legal Counsel of the Company. Mr.

Goepelt joined the Company in 1992 as Legal Counsel for the German Division. In 1997, he was appointed Legal

Counsel for the Middle and Far East Group and in 1999 was appointed Division Counsel, Southeast and West Asia

Division, based in Thailand. In 2003, Mr. Goepelt was appointed Group Counsel for the Central Europe, Eurasia and

Middle East Group. In 2005, he assumed the position of General Counsel for Japan and China, and in 2007, Mr.

Goepelt was appointed General Counsel, Pacific Group. In April 2010, he moved to Atlanta, Georgia, to become

Associate General Counsel, Global Marketing, Commercial Leadership & Strategy. In September 2010, Mr. Goepelt

took on the additional responsibility of General Counsel for the Pacific Group. In addition to his functional

responsibilities, he also managed the administration of the Legal Division. Mr. Goepelt was elected Senior Vice

President, General Counsel and Chief Legal Counsel of the Company in December 2011.

Julie Hamilton, 50, is Senior Vice President and Chief Customer and Commercial Leadership Officer of the

Company. Ms. Hamilton joined the Company in 1996 as Brand Development Manager of Still Beverages with

Coca-Cola USA. From January 1998 to April 1999, she served as Franchise Manager of Independent Bottlers with

Coca-Cola USA, and from April 1999 to October 2000, she served as Group Manager for the Worldwide Marketing

Partnership with Blockbuster. From October 2000 to January 2003, Ms. Hamilton served as Director of Franchise

Sales & Marketing-Northwest U.S. Region. From January 2003 to October 2005, she served as Group Director for

Global On-Premise Customers, and from October 2005 to June 2007, she served as Vice President, Global Customer

Development. She served as Group Vice President, North America Wal-Mart Team from June 2007 to January

2009, and as President of the Global Wal-Mart Group from January 2009 to March 2011. She was appointed

Executive Assistant to Muhtar Kent, the Chairman and Chief Executive Officer of the Company, in March 2011 and

served in that capacity until she was appointed Chief Customer and Commercial Leadership Officer effective April

1, 2015. Ms. Hamilton was elected Vice President of the Company in April 2015 and Senior Vice President effective

February 18, 2016.

Brent Hastie, 42, is Senior Vice President, Strategy and Planning for the Company. Mr. Hastie first joined the

Company in 2006 as Vice President, Strategy and Planning for Coca-Cola North America. From March 2009 to July

2009, he served as Vice President, Commercial Leadership, Still Beverages. From August 2009 to December 2010,

he served as President and General Manager, Active Lifestyles Brands. From January 2011 to April 2012, he served

as Chief Strategy Officer for CCR. In April 2012, he left the Company to join Bain Capital, a global private

investment firm, where he was Executive Vice President in the Private Equity group until July 2013, when he

returned to the Company as Vice President, Strategy and Planning. Mr. Hastie was elected Senior Vice President of

the Company effective February 18, 2016.

25

Ed Hays, PhD, 57, is Senior Vice President and Chief Technical Officer of the Company. Dr. Hays joined the

Company in 1985 as a scientist in Corporate Research and Development. He served as Director of Product

Development in Corporate Research and Development from 1992 to 1995 and as Director, Research and

Development for the Middle East and Far East Group from August 1995 to January 1998. He served as Director of

Corporate Research and Development from July 1998 to December 1999. He was named Vice President, Global

Science, Regulatory and Formula Governance in December 2000 and served in that role until his appointment as

Chief Technical Officer of the Company effective March 1, 2015. He continued to serve as Vice President until his

election as Senior Vice President of the Company effective April 30, 2015.

Nathan Kalumbu, 51, is President of the Eurasia and Africa Group. Mr. Kalumbu joined the Company in 1990 as the

Central Africa region's External Affairs Manager and served in numerous roles in marketing operations and country

management in Zimbabwe, Zambia and Malawi from 1992 to 1996. He held the role of Executive Assistant to the

South Africa Division President from 1997 to 1998 and Region Manager for Central Africa from 1998 to 2000 and

for Nigeria from 2000 to 2004. In 2004, Mr. Kalumbu was appointed Business Planning Director and Executive

Assistant to the Retail Division President, North America. He returned to the Africa Group as Director of Business

Strategy and Planning for the East and Central Africa Division in 2006. In 2007, he was named President of the

Central, East and West Africa (CEWA) business unit and served in that role until his appointment to his current

position effective January 1, 2013.

Muhtar Kent, 63, is Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. Kent

joined the Company in 1978 and held a variety of marketing and operations roles throughout his career with the

Company. In 1985, he was appointed General Manager of Coca-Cola Turkey and Central Asia. From 1989 to 1995,

Mr. Kent served as President of the East Central Europe Division and Senior Vice President of Coca-Cola

International. Between 1995 and 1998, he served as Managing Director of Coca-Cola Amatil-Europe, covering

bottling operations in 12 countries, and from 1999 until 2005, he served as President and Chief Executive Officer of

Efes Beverage Group, a diversified beverage company with Coca-Cola and beer operations across Southeast Europe,

Turkey and Central Asia. Mr. Kent rejoined the Company in May 2005 as President and Chief Operating Officer,

North Asia, Eurasia and Middle East Group, an organization serving a broad and diverse region that included China,

Japan and Russia. He was appointed President, Coca-Cola International in January 2006 and was elected Executive

Vice President of the Company in February 2006. He was elected President and Chief Operating Officer of the

Company in December 2006 and was elected to the Board of Directors in April 2008. Mr. Kent was elected Chief

Executive Officer of the Company effective July 1, 2008, and was elected Chairman of the Board of Directors of the

Company in April 2009. He served as President of the Company until August 2015.

James Quincey, 51, is President and Chief Operating Officer of the Company. Mr. Quincey joined the Company in

1996 as Director, Learning Strategy for the Latin America Group. He moved to Mexico as Deputy to the Division

President in 1999, became Region Manager for Argentina and Uruguay in 2000, and then served as General

Manager of the South Cone region (Argentina, Chile, Uruguay and Paraguay) in 2003. Mr. Quincey was appointed

President of the South Latin Division in December 2003 and President of the Mexico Division in December 2005. In

October 2008, he was named President of the Northwest Europe and Nordics business unit and served in that role

until he was appointed President of the Europe Group in January 2013. He was elected to his current positions in

August 2015.

Atul Singh, 56, is President of the Asia Pacific Group. Mr. Singh joined the Company in 1998 as Vice President,

Operations of the India Division. In 2001, he moved to the China Division and served as Region Manager of East

China from 2001 to 2002, Vice President of Operations from 2002 to 2003, Deputy Division President of the China

Division from 2003 to 2004 and President of the East, Central and South China Division from January to August

2005. From September 2005 to June 2013, he served as President of the India and South West Asia business unit.

Mr. Singh served as Deputy President, Pacific Group, from July 2013 to December 2013 and served as Group

President, Asia, which is part of the Asia Pacific Group, from January 2014 to August 2014. Mr. Singh was

appointed to his current position in September 2014.

Brian Smith, 60, is President of the Latin America Group. Mr. Smith joined the Company in 1997 as Latin America

Group Manager for Mergers and Acquisitions, a role he held until July 2001. From 2001 to 2002, he worked as

Executive Assistant to Brian Dyson, then Chief Operating Officer and Vice Chairman of the Company. Mr. Smith

served as President of the Brazil Division from 2002 to 2008 and President of the Mexico business unit from 2008

through December 2012. Mr. Smith was appointed to his current position effective January 1, 2013.

26

Ed Steinike, 58, is Senior Vice President and Chief Information Officer of the Company. He joined the Company in

2002 as Chief Technology Officer. From May 2004 to November 2007, Mr. Steinike served as Chief Development

Officer and Chief Information Officer for Coca-Cola North America. From February 2007 to November 2007, he

served as Vice President of the Company. From November 2007 to April 2010, he served as Executive Vice

President and Chief Information Officer at ING Insurance, part of ING Groep N.V. He rejoined the Company in

April 2010 as Chief Information Officer and was elected Vice President in July 2010. He was elected Senior Vice

President in December 2013.

Clyde C. Tuggle, 53, is Senior Vice President and Chief Public Affairs and Communications Officer of the

Company. Mr. Tuggle joined the Company in 1989 in the Corporate Issues Communications Department. In 1992,

he was named Executive Assistant to Roberto C. Goizueta, then Chairman and Chief Executive Officer of the

Company, where he managed external affairs and communications for the Office of the Chairman. In 1998, Mr.

Tuggle transferred to the Company's Central European Division Office in Vienna, where he held a variety of

positions, including Director of Operations Development, Deputy to the Division President and Region Manager for

Austria. In 2000, Mr. Tuggle returned to Atlanta, Georgia, as Executive Assistant to then Chairman and Chief

Executive Officer Douglas N. Daft and was elected Vice President of the Company. In February 2003, he was

elected Senior Vice President of the Company and appointed Director of Worldwide Public Affairs and

Communications. From 2005 until September 2008, Mr. Tuggle served as President of the Russia, Ukraine and

Belarus Division. In September 2008, he returned to Atlanta, Georgia, to lead the Company's productivity efforts

and oversee the Company's Public Affairs and Communications and Strategic Security and Aviation functions. Mr.

Tuggle was elected Senior Vice President in October 2008 and in May 2009 was named to his current position.

Kathy N. Waller, 57, is Executive Vice President and Chief Financial Officer of the Company. Ms. Waller joined the

Company in 1987 as a senior accountant in the Accounting Research Department and has served in a number of

accounting and finance roles of increasing responsibility. From July 2004 to August 2009, Ms. Waller served as

Chief of Internal Audit. In December 2005, she was elected Vice President of the Company, and in August 2009,

she was elected Controller. In August 2013, she became Vice President, Finance and Controller, assuming additional

responsibilities for corporate treasury, corporate tax and finance capabilities, and served in that position until April

23, 2014, when she was appointed Chief Financial Officer and elected Executive Vice President.

All executive officers serve at the pleasure of the Board of Directors. There is no family relationship between any of

the Directors or executive officers of the Company.

27

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS

AND ISSUER PURCHASES OF EQUITY SECURITIES

The principal United States market in which the Company's common stock is listed and traded is the New York

Stock Exchange.

The following table sets forth, for the quarterly reporting periods indicated, the high and low market prices per share

for the Company's common stock, as reported on the New York Stock Exchange composite tape, and dividend per

share information:

Common Stock

Market Prices

High Low Dividends Declared

2015

Fourth quarter $ 43.91 $ 40.43 $ 0.330

Third quarter 42.25 36.56 0.330

Second quarter 41.69 39.12 0.330

First quarter 43.83 39.61 0.330

2014

Fourth quarter $ 45.00 $ 39.80 $ 0.305

Third quarter 42.57 39.06 0.305

Second quarter 42.29 38.04 0.305

First quarter 41.23 36.89 0.305

While we have historically paid dividends to holders of our common stock on a quarterly basis, the declaration and

payment of future dividends will depend on many factors, including, but not limited to, our earnings, financial

condition, business development needs and regulatory considerations, and are at the discretion of our Board of

Directors.

As of February 22, 2016, there were 224,780 shareowner accounts of record. This figure does not include a

substantially greater number of "street name" holders or beneficial holders of our common stock, whose shares are

held of record by banks, brokers and other financial institutions.

The information under the heading "EQUITY COMPENSATION PLAN INFORMATION" in the Company's

definitive Proxy Statement for the Annual Meeting of Shareowners to be held on April 27, 2016, to be filed with the

Securities and Exchange Commission ("Company's 2016 Proxy Statement"), is incorporated herein by reference.

During the fiscal year ended December 31, 2015, no equity securities of the Company were sold by the Company

that were not registered under the Securities Act of 1933, as amended.

28

The following table presents information with respect to purchases of common stock of the Company made during

the three months ended December 31, 2015, by the Company or any "affiliated purchaser" of the Company as

defined in Rule 10b-18(a)(3) under the Exchange Act.

Period

Total Number of

Shares

Purchased1

Average

Price Paid

Per Share

Total Number of Shares Purchased

as Part of Publicly

Announced Plan2

Maximum Number

of

Shares That May Yet Be Purchased

Under the Publicly

Announced Plan

October 3, 2015 through October 30, 2015 6,247,561 $ 42.50 6,024,200 268,168,951

October 31, 2015 through November 27, 2015 22,030,953 42.28 22,027,278 246,141,673

November 28, 2015 through December 31, 2015 8,210,439 42.95 8,209,731 237,931,942

Total 36,488,953 $ 42.47 36,261,209

1 The total number of shares purchased includes: (i) shares purchased

pursuant to the 2012 Plan described in footnote 2 below, and (ii) shares

surrendered to the Company to pay the exercise price and/or to satisfy

tax withholding obligations in connection with so-called stock swap

exercises of employee stock options and/or the vesting of restricted

stock issued to employees, totaling 223,361 shares, 3,675 shares and 708

shares for the fiscal months of October, November and December 2015,

respectively.

2 On October 18, 2012, the Company publicly announced that our Board of Directors had authorized a plan ("2012 Plan") for the

Company to purchase up to 500 million shares of our Company's common stock. This column discloses the number of shares

purchased pursuant to the 2012 Plan during the indicated time periods (including shares purchased pursuant to the terms of

preset trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act).

29

Performance Graph

Comparison of Five-Year Cumulative Total Return Among

The Coca-Cola Company, the Peer Group Index and the S&P 500 Index

Total Return

Stock Price Plus Reinvested Dividends

December 31, 2010 2011 2012 2013 2014 2015

The Coca-Cola Company $ 100 $ 109 $ 117 $ 137 $ 144 $ 151

Peer Group Index 100 119 131 166 191 218

S&P 500 Index 100 102 118 157 178 181

The total return assumes that dividends were reinvested daily and is based on a $100 investment on December 31,

2010.

The Peer Group Index is a self-constructed peer group of companies that are included in the Dow Jones Food and

Beverage Group and the Dow Jones Tobacco Group of companies, from which the Company has been excluded.

The Peer Group Index consists of the following companies: Altria Group, Inc., Archer Daniels Midland Company,

B&G Foods, Inc., Brown-Forman Corporation, Bunge Limited, Campbell Soup Company, Coca-Cola

Enterprises, Inc., ConAgra Foods, Inc., Constellation Brands, Inc., Darling Ingredients Inc., Dean Foods Company,

Dr Pepper Snapple Group, Inc., Flowers Foods, Inc., General Mills, Inc., The Hain Celestial Group, Inc.,

Herbalife Ltd., The Hershey Company, Hormel Foods Corporation, Ingredion Incorporated, The J.M. Smucker

Company, Kellogg Company, Keurig Green Mountain, Inc., The Kraft Heinz Company, Lancaster Colony

Corporation, Leucadia National Corporation, McCormick & Company, Inc., Mead Johnson Nutrition Company,

Molson Coors Brewing Company, Mondelēz International, Inc., Monster Beverage Corporation, PepsiCo, Inc.,

Philip Morris International Inc., Pinnacle Foods Inc., Post Holdings, Inc., Reynolds American Inc., TreeHouse

Foods, Inc., Tyson Foods, Inc., and The WhiteWave Foods Company.

Companies included in the Dow Jones Food and Beverage Group and the Dow Jones Tobacco Group change

periodically. This year, the groups include Pinnacle Foods Inc., which was not included in the groups last year.

Additionally, the groups do not include Lorillard, Inc., which was included in the groups last year.

30

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with "Item 7. Management's Discussion and

Analysis of Financial Condition and Results of Operations" and consolidated financial statements and notes thereto

contained in "Item 8. Financial Statements and Supplementary Data" of this report.

Year Ended December 31, 2015 2014 2013 2012 2011

(In millions except per share data)

SUMMARY OF OPERATIONS

Net operating revenues $ 44,294 $ 45,998 $ 46,854 $ 48,017 $ 46,542

Net income attributable to shareowners of

The Coca-Cola Company 7,351 7,098 8,584 9,019 8,584

PER SHARE DATA

Basic net income $ 1.69 $ 1.62 $ 1.94 $ 2.00 $ 1.88

Diluted net income 1.67 1.60 1.90 1.97 1.85

Cash dividends 1.32 1.22 1.12 1.02 0.94

BALANCE SHEET DATA

Total assets $ 90,093 $ 92,023 $ 90,055 $ 86,174 $ 79,974

Long-term debt 28,407 19,063 19,154 14,736 13,656

The Company's results are impacted by acquisitions and divestitures. Refer to "Item 7. Management's Discussion

and Analysis of Financial Condition and Results of Operations" for additional information.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Overview

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

is intended to help the reader understand The Coca-Cola Company, our operations and our present business

environment. MD&A is provided as a supplement to — and should be read in conjunction with — our consolidated

financial statements and the accompanying notes thereto contained in "Item 8. Financial Statements and

Supplementary Data" of this report. This overview summarizes the MD&A, which includes the following sections:

• Our Business — a general description of our business and the nonalcoholic beverage segment of the

commercial beverage industry; our objective; our strategic priorities; our core capabilities; and challenges and

risks of our business.

• Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical

judgments and estimates.

• Operations Review — an analysis of our Company's consolidated results of operations for the three years

presented in our consolidated financial statements. Except to the extent that differences among our operating

segments are material to an understanding of our business as a whole, we present the discussion on a

consolidated basis.

• Liquidity, Capital Resources and Financial Position — an analysis of cash flows; off-balance sheet

arrangements and aggregate contractual obligations; foreign exchange; the impact of inflation and changing

prices; and an overview of financial position.

31

Our Business

General

The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500

nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters,

enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and

market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.

Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than

200 countries.

We make our branded beverage products available to consumers throughout the world through our network of

Company-owned or -controlled bottling and distribution operations, bottling partners, distributors, wholesalers and

retailers — the world's largest beverage distribution system. Beverages bearing trademarks owned by or licensed to

us account for more than 1.9 billion of the approximately 58 billion servings of all beverages consumed worldwide

every day.

We believe our success depends on our ability to connect with consumers by providing them with a wide variety of

choices to meet their desires, needs and lifestyle choices. Our success further depends on the ability of our people to

execute effectively, every day.

Our goal is to use our Company's assets — our brands, financial strength, unrivaled distribution system, global

reach, and the talent and strong commitment of our management and associates — to become more competitive and

to accelerate growth in a manner that creates value for our shareowners.

Our Company markets, manufactures and sells:

• beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we

refer to this part of our business as our "concentrate business" or "concentrate operations"); and

• finished sparkling and still beverages (we refer to this part of our business as our "finished product business"

or "finished product operations").

Generally, finished product operations generate higher net operating revenues but lower gross profit margins than

concentrate operations.

In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to

authorized bottling and canning operations (to which we typically refer as our "bottlers" or our "bottling partners").

Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or

sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages

are packaged in authorized containers — such as cans and refillable and nonrefillable glass and plastic bottles —

bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through

wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our

bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers

such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate

consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain

retailers.

Our finished product operations consist primarily of Company-owned or -controlled bottling, sales and distribution

operations, including CCR. Until December 31, 2015, our Company-owned or -controlled bottling, sales and

distribution operations, other than CCR, were included in our Bottling Investments operating segment; and CCR was

included in our North America operating segment. Effective January 1, 2016, we transferred CCR's bottling and

associated supply chain operations in the United States and Canada from our North America segment to our Bottling

Investments segment. Our finished product operations generate net operating revenues by selling sparkling

beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink

teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners who

distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to

fountain retailers such as restaurants and convenience stores who use the fountain syrups to produce beverages for

immediate consumption or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to

fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through nonexclusive

appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor

restrict the territories in which the wholesalers may resell in the United States.

32

The following table sets forth the percentage of total net operating revenues related to concentrate operations and

finished product operations:

Year Ended December 31, 2015 2014 2013

Concentrate operations1 37 % 38 % 38 %

Finished product operations2 63 62 62

Total 100 % 100 % 100 %

1 Includes concentrates sold by the Company to

authorized bottling partners for the manufacture of

fountain syrups. The bottlers then typically sell the

fountain syrups to wholesalers or directly to

fountain retailers.

2 Includes fountain syrups manufactured by the Company, including consolidated bottling operations, and sold to fountain

retailers or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers.

The following table sets forth the percentage of total worldwide unit case volume related to concentrate operations

and finished product operations:

Year Ended December 31, 2015 2014 2013

Concentrate operations1 73 % 73 % 72 %

Finished product operations2 27 27 28

Total 100 % 100 % 100 %

1 Includes unit case volume related to concentrates

sold by the Company to authorized bottling

partners for the manufacture of fountain syrups.

The bottlers then typically sell the fountain syrups

to wholesalers or directly to fountain retailers.

2 Includes unit case volume related to fountain syrups manufactured by the Company, including consolidated bottling

operations, and sold to fountain retailers or to authorized fountain wholesalers or bottling partners who resell the fountain

syrups to fountain retailers.

The Nonalcoholic Beverage Segment of the Commercial Beverage Industry

We operate in the highly competitive nonalcoholic beverage segment of the commercial beverage industry. We face

strong competition from numerous other general and specialty beverage companies. We, along with other beverage

companies, are affected by a number of factors, including, but not limited to, cost to manufacture and distribute

products, consumer spending, economic conditions, availability and quality of water, consumer preferences,

inflation, political climate, local and national laws and regulations, foreign currency fluctuations, fuel prices and

weather patterns.

Our Objective

Our objective is to use our formidable assets — our brands, financial strength, unrivaled distribution system, global

reach, and the talent and strong commitment of our management and associates — to achieve long-term sustainable

growth. Our vision for sustainable growth includes the following:

• People: Being a great place to work where people are inspired to be the best they can be.

• Portfolio: Bringing to the world a portfolio of beverage brands that anticipates and satisfies people's desires

and needs.

• Partners: Nurturing a winning network of partners and building mutual loyalty.

• Planet: Being a responsible global citizen that makes a difference.

• Profit: Maximizing return to shareowners while being mindful of our overall responsibilities.

• Productivity: Managing our people, time and money for greatest effectiveness.

To enable us to achieve our objective, we must further enhance our core capabilities of consumer marketing;

commercial leadership; franchise leadership; and bottling and distribution operations.

33

Core Capabilities

Consumer Marketing

Marketing investments are designed to enhance consumer awareness of, and increase consumer preference for, our

brands. Successful marketing investments produce long-term growth in unit case volume, per capita consumption

and our share of worldwide nonalcoholic beverage sales. Through our relationships with our bottling partners and

those who sell our products in the marketplace, we create and implement integrated marketing programs, both

globally and locally, that are designed to heighten consumer awareness of and product appeal for our brands. In

developing a strategy for a Company brand, we conduct product and packaging research, establish brand

positioning, develop precise consumer communications and solicit consumer feedback. Our integrated marketing

activities include, but are not limited to, advertising, point-of-sale merchandising and sales promotions.

We are focusing on marketing strategies to drive volume growth in emerging markets, increasing our brand value in

developing markets and growing profit in our developed markets. In emerging markets, we are investing in

infrastructure programs that drive volume through increased access to consumers. In developing markets, where

consumer access has largely been established, our focus is on differentiating our brands. In our developed markets,

we continue to invest in brands and infrastructure programs but generally at a slower rate than gross profit growth.

Commercial Leadership

The Coca-Cola system has millions of customers around the world who sell or serve our products directly to

consumers. We focus on enhancing value for our customers and providing solutions to grow their beverage

businesses. Our approach includes understanding each customer's business and needs — whether that customer is a

sophisticated retailer in a developed market or a kiosk owner in an emerging market. We focus on ensuring that our

customers have the right product and package offerings and the right promotional tools to deliver enhanced value to

themselves and the Company. We are constantly looking to build new beverage consumption occasions in our

customers' outlets through unique and innovative consumer experiences, product availability and delivery systems,

and beverage merchandising and displays. We participate in joint brand-building initiatives with our customers in

order to drive consumer preference for our brands. Through our commercial leadership initiatives, we embed

ourselves further into our retail customers' businesses while developing strategies for better execution at the point of

sale.

Franchise Leadership

We must continue to improve our franchise leadership capabilities to give our Company and our bottling partners

the ability to grow together through shared values, aligned incentives and a sense of urgency and flexibility that

supports consumers' always changing needs and tastes. The financial health and success of our bottling partners are

critical components of the Company's success. We work with our bottling partners to identify processes that enable

us to quickly achieve scale and efficiencies, and we share best practices throughout the bottling system. With our

bottling partners, we work to produce differentiated beverages and packages that are appropriate for the right

channels and consumers. We also design business models for sparkling and still beverages in specific markets to

ensure that we appropriately share the value created by these beverages with our bottling partners. We will continue

to build a supply chain network that leverages the size and scale of the Coca-Cola system to gain a competitive

advantage.

Bottling and Distribution Operations

Most of our Company beverage products are manufactured, sold and distributed by independent bottling partners.

However, from time to time we acquire or take control of bottling operations, often in underperforming markets

where we believe we can use our resources and expertise to improve performance. Owning such a controlling

interest enables us to compensate for limited local resources; help focus the bottler's sales and marketing programs;

assist in the development of the bottler's business and information systems; and establish an appropriate capital

structure for the bottler.

Our Company has a long history of providing world-class customer service, demonstrating leadership in the

marketplace and leveraging the talent of our global workforce. In addition, we have an experienced bottler

management team. All of these factors are critical to build upon as we manage our bottling and distribution

operations.

The Company has a deep commitment to continuously improving our business. This includes our efforts to develop

innovative packaging and merchandising solutions which help drive demand for our beverages and meet the

evolving preferences of our consumers. As we further transform the way we go to market, the Company continues to

seek out ways to be more efficient.

34

Challenges and Risks

Being global provides unique opportunities for our Company. Challenges and risks accompany those opportunities.

Our management has identified certain challenges and risks that demand the attention of the nonalcoholic beverage

segment of the commercial beverage industry and our Company. Of these, six key challenges and risks are discussed

below.

Obesity

The rates of obesity affecting communities, cultures and countries worldwide continue to be too high. There is

growing concern among consumers, public health professionals and government agencies about the health problems

associated with obesity, which results from poor diets that are too high in calories combined with inactive lifestyles.

This concern represents a significant challenge to our industry. We understand and recognize that obesity is a

complex public health challenge and are committed to being a part of the solution.

We recognize the uniqueness of consumers' lifestyles and dietary choices. We are working to pair commercial

actions with community engagement to bring together business, government and civil society to help pursue

solutions that address obesity. Commercially, we continue to:

• offer reduced-, low- or no-calorie beverage options;

• provide transparent nutrition information, featuring calories on the front of all of our packages;

• provide our beverages in a range of packaging sizes; and

• market responsibly, including no advertising to children under 12.

The heritage of our Company is to lead, and innovation is critical for leadership. As such, we are resolute in

continuing to innovate and are committed to partnering to find winning solutions in the area of noncaloric

sweeteners. This includes working to reduce caloric sweeteners, and therefore the calories, in our beverages. We

want to be a more helpful and credible partner in the fight against obesity. Across the Coca-Cola system, we are

mobilizing our assets in marketing and in community outreach to increase awareness and spur action.

Water Quality and Quantity

Water quality and quantity is an issue that increasingly requires our Company's attention and collaboration with

other companies, suppliers, governments, nongovernmental organizations and communities where we operate.

Water is a main ingredient in substantially all of our products, is vital to the production of the agricultural

ingredients on which our business relies and is needed in our manufacturing process. It also is critical to the

prosperity of the communities we serve. Water is a limited natural resource facing unprecedented challenges from

overexploitation, flourishing food demand, increasing pollution, poor management and the effects of climate change.

Our Company has a robust water stewardship and management program and continues to work to improve water use

efficiency, treat wastewater prior to discharge and achieve our goal of replenishing the water that we and our

bottling partners source and use in our finished products. We regularly assess the specific water-related risks that we

and many of our bottling partners face and have implemented a formal water risk management program. We are

actively collaborating with other companies, governments, nongovernmental organizations and communities to

advocate for needed water policy reforms and action to protect water availability and quality around the world. We

are working with our global partners to develop and implement sustainability-related water projects that address

local needs. We are encouraging improved water efficiency and conservation efforts throughout our system.

Through these integrated programs, we believe that our Company is in an excellent position to leverage the water-

related knowledge we have developed in the communities we serve — through source water availability assessments

and planning, water resource management, water treatment, wastewater treatment systems and models for working

with communities and partners in addressing water and sanitation needs. As demand for water continues to increase

around the world, we expect commitment and continued action on our part will be crucial to the successful long-

term stewardship of this critical natural resource.

Evolving Consumer Preferences

We are impacted by shifting consumer demographics and needs, on-the-go lifestyles, aging populations and

consumers who are empowered with more information than ever. As a consequence of these changes, consumers

want more choices. We are committed to meeting their needs and to generating new growth through our portfolio of

more than 500 brands and more than 3,800 beverage products, including more than 1,100 low- and no-calorie

products, new product offerings, innovative packaging and ingredient education efforts. We are also committed to

continuing to expand the variety of choices we provide to consumers to meet their ever-changing needs, desires and

lifestyles.

35

Increased Competition and Capabilities in the Marketplace

Our Company is facing strong competition from some well-established global companies and many local

participants. We must continue to strengthen our capabilities in marketing and innovation in order to maintain our

brand loyalty and market share while we strategically expand into other profitable categories of the nonalcoholic

beverage segment of the commercial beverage industry.

Product Safety and Quality

As the world's largest beverage company, we strive to meet the highest of standards in both product safety and

product quality. We are aware that some consumers have concerns and negative viewpoints regarding certain

ingredients used in our products. Our system works every day to share safe and refreshing beverages with the world.

We have rigorous product and ingredient safety and quality standards designed to ensure safety and quality in each

of our products, and we drive innovation that provides new beverage options to meet consumers' evolving needs and

preferences. Across the Coca-Cola system, we take great care in an effort to ensure that every one of our beverages

meets the highest standards for safety and quality.

We work to ensure consistent safety and quality through strong governance and compliance with applicable

regulations and standards. We stay current with new regulations, industry best practices and marketplace conditions

and engage with standard-setting and industry organizations. Additionally, we manufacture and distribute our

products according to strict policies, requirements and specifications set forth in an integrated quality management

program that continually measures all operations within the Coca-Cola system against the same stringent standards.

Our quality management system also identifies and mitigates risks and drives improvement. In our quality

laboratories, we stringently measure the quality attributes of ingredients as well as samples of finished products

collected from the marketplace.

We perform due diligence to ensure that product and ingredient safety and quality standards are maintained in the

more than 200 countries where our products are sold. We consistently reassess the relevance of our requirements

and standards and continually work to improve and refine them across our entire supply chain.

Food Security

Increased demand for commodities and decreased agricultural productivity in certain regions of the world as a result

of changing weather patterns may limit the availability or increase the cost of key agricultural commodities, such as

sugarcane, corn, sugar beets, citrus, coffee and tea, which are important sources of ingredients for our products and

could impact the food security of communities around the world. We are dedicated to implementing our sustainable

sourcing commitment, which is founded on principles that protect the environment, uphold workplace rights and

help build more sustainable communities. To support this commitment, our programs focus on economic

opportunity, with an emphasis on female farmers, and environmental sustainability designed to help address these

agricultural challenges. Through joint efforts with farmers, communities, bottlers, suppliers and key partners, as well

as our increased and continued investment in sustainable agriculture, we can together help make a positive strategic

impact on food security.

All of these challenges and risks — obesity; water quality and quantity; evolving consumer preferences; increased

competition and capabilities in the marketplace; product safety and quality; and food security — have the potential

to have a material adverse effect on the nonalcoholic beverage segment of the commercial beverage industry and on

our Company; however, we believe our Company is well positioned to appropriately address these challenges and

risks.

See also ''Item 1A. Risk Factors'' in Part I of this report for additional information about risks and uncertainties

facing our Company.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in

the United States, which require management to make estimates, judgments and assumptions that affect the amounts

reported in our consolidated financial statements and accompanying notes. We believe our most critical accounting

policies and estimates relate to the following:

• Principles of Consolidation

• Recoverability of Current and Noncurrent Assets

• Pension Plan Valuations

• Revenue Recognition

• Income Taxes

36

Management has discussed the development, selection and disclosure of critical accounting policies and estimates

with the Audit Committee of the Company's Board of Directors. While our estimates and assumptions are based on

our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ

from these estimates and assumptions. For a discussion of the Company's significant accounting policies, refer to

Note 1 of Notes to Consolidated Financial Statements.

Principles of Consolidation

Our Company consolidates all entities that we control by ownership of a majority voting interest as well as variable

interest entities for which our Company is the primary beneficiary. Generally, we consolidate only business

enterprises that we control by ownership of a majority voting interest. However, there are situations in which

consolidation is required even though the usual condition of consolidation (ownership of a majority voting interest)

does not apply. Generally, this occurs when an entity holds an interest in another business enterprise that was

achieved through arrangements that do not involve voting interests, which results in a disproportionate relationship

between such entity's voting interests in, and its exposure to the economic risks and potential rewards of, the other

business enterprise. This disproportionate relationship results in what is known as a variable interest, and the entity

in which we have the variable interest is referred to as a "VIE." An enterprise must consolidate a VIE if it is

determined to be the primary beneficiary of the VIE. The primary beneficiary has both (1) the power to direct the

activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to

absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations, for which

we were not determined to be the primary beneficiary. Our variable interests in these VIEs primarily relate to profit

guarantees or subordinated financial support. Refer to Note 11 of Notes to Consolidated Financial Statements.

Although these financial arrangements resulted in our holding variable interests in these entities, they did not

empower us to direct the activities of the VIEs that most significantly impact the VIEs' economic performance. Our

Company's investments, plus any loans and guarantees, related to these VIEs totaled $2,687 million and $2,274

million as of December 31, 2015 and 2014, respectively, representing our maximum exposures to loss. The

Company's investments, plus any loans and guarantees, related to these VIEs were not significant to the Company's

consolidated financial statements.

In addition, our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations,

for which we were determined to be the primary beneficiary. As a result, we have consolidated these entities. Our

Company's investments, plus any loans and guarantees, related to these VIEs totaled $221 million and $266 million

as of December 31, 2015 and 2014, respectively, representing our maximum exposures to loss. The assets and

liabilities of VIEs for which we are the primary beneficiary were not significant to the Company's consolidated

financial statements.

Creditors of our VIEs do not have recourse against the general credit of the Company, regardless of whether they are

accounted for as consolidated entities.

Recoverability of Current and Noncurrent Assets

Our Company faces many uncertainties and risks related to various economic, political and regulatory environments

in the countries in which we operate, particularly in developing or emerging markets. Refer to the heading "Our

Business — Challenges and Risks" above and "Item 1A. Risk Factors" in Part I of this report. As a result,

management must make numerous assumptions which involve a significant amount of judgment when completing

recoverability and impairment tests of current and noncurrent assets in various regions around the world.

We perform recoverability and impairment tests of current and noncurrent assets in accordance with accounting

principles generally accepted in the United States. For certain assets, recoverability and/or impairment tests are

required only when conditions exist that indicate the carrying value may not be recoverable. For other assets,

impairment tests are required at least annually, or more frequently, if events or circumstances indicate that an asset

may be impaired.

Our equity method investees also perform such recoverability and/or impairment tests. If an impairment charge is

recorded by one of our equity method investees, the Company records its proportionate share of such charge as a

reduction of equity income (loss) — net in our consolidated statements of income. However, the actual amount we

record with respect to our proportionate share of such charges may be impacted by items such as basis differences,

deferred taxes and deferred gains.

37

Management's assessments of the recoverability and impairment tests of noncurrent assets involve critical

accounting estimates. These estimates require significant management judgment, include inherent uncertainties and

are often interdependent; therefore, they do not change in isolation. Factors that management must estimate include,

among others, the economic life of the asset, sales volume, pricing, cost of raw materials, delivery costs, inflation,

cost of capital, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from

the sale of assets. These factors are even more difficult to predict when global financial markets are highly volatile.

The estimates we use when assessing the recoverability of current and noncurrent assets are consistent with those we

use in our internal planning. When performing impairment tests, we estimate the fair values of the assets using

management's best assumptions, which we believe would be consistent with what a hypothetical marketplace

participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. The

variability of these factors depends on a number of conditions, including uncertainty about future events, and thus

our accounting estimates may change from period to period. If other assumptions and estimates had been used when

these tests were performed, impairment charges could have resulted. As mentioned above, these factors do not

change in isolation and, therefore, we do not believe it is practicable or meaningful to present the impact of changing

a single factor. Furthermore, if management uses different assumptions or if different conditions occur in future

periods, future impairment charges could result. Refer to the heading "Operations Review" below for additional

information related to our present business environment. Certain factors discussed above are impacted by our

current business environment and are discussed throughout this report, as appropriate.

Investments in Equity and Debt Securities

The carrying values of our investments in equity securities are determined using the equity method, the cost method

or the fair value method. We account for investments in companies that we do not control or account for under the

equity method either at fair value or under the cost method, as applicable. Investments in equity securities, other

than investments accounted for under the equity method, are carried at fair value if the fair value of the security is

readily determinable. Equity investments carried at fair value are classified as either trading or available-for-sale

securities. Realized and unrealized gains and losses on trading securities and realized gains and losses on available-

for-sale securities are included in net income. Unrealized gains and losses, net of deferred taxes, on available-for-

sale securities are included in our consolidated balance sheets as a component of accumulated other comprehensive

income (loss) ("AOCI"), except for the change in fair value attributable to the currency risk being hedged, if

applicable, which is included in net income. Trading securities are reported as either marketable securities or other

assets in our consolidated balance sheets. Securities classified as available-for-sale are reported as either marketable

securities or other investments in our consolidated balance sheets, depending on the length of time we intend to hold

the investment. Investments in equity securities that do not qualify for fair value accounting or equity method

accounting are accounted for under the cost method. In accordance with the cost method, our initial investment is

recorded at cost and we record dividend income when applicable dividends are declared. Cost method investments

are reported as other investments in our consolidated balance sheets.

Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities

that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as

held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and

classified as either trading or available-for-sale.

The following table presents the carrying values of our investments in equity and debt securities (in millions):

December 31, 2015

Carrying

Value

Percentage

of Total

Assets

Equity method investments $ 12,318 14 %

Securities classified as available-for-sale 8,606 10

Securities classified as trading 322 *

Cost method investments 190 *

Total $ 21,436 24 %

* Accounts for less than 1 percent of the Company's total assets.

38

Investments classified as trading securities are not assessed for impairment, since they are carried at fair value with

the change in fair value included in net income. We review our investments in equity and debt securities that are

accounted for using the equity method or cost method or that are classified as available-for-sale or held-to-maturity

each reporting period to determine whether a significant event or change in circumstances has occurred that may

have an adverse effect on the fair value of each investment. When such events or changes occur, we evaluate the fair

value compared to our cost basis in the investment. We also perform this evaluation every reporting period for each

investment for which our cost basis has exceeded the fair value. The fair values of most of our Company's

investments in publicly traded companies are often readily available based on quoted market prices. For investments

in nonpublicly traded companies, management's assessment of fair value is based on valuation methodologies

including discounted cash flows, estimates of sales proceeds and appraisals, as appropriate. We consider the

assumptions that we believe hypothetical marketplace participants would use in evaluating estimated future cash

flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability

to accurately predict future cash flows, especially in emerging and developing markets, may impact the

determination of fair value.

In the event the fair value of an investment declines below our cost basis, management is required to determine if the

decline in fair value is other than temporary. If management determines the decline is other than temporary, an

impairment charge is recorded. Management's assessment as to the nature of a decline in fair value is based on,

among other things, the length of time and the extent to which the market value has been less than our cost basis, the

financial condition and near-term prospects of the issuer, and our intent and ability to retain the investment for a

period of time sufficient to allow for any anticipated recovery in market value.

In 2013, four of the Company's Japanese bottling partners merged as Coca-Cola East Japan Bottling Company, Ltd.,

now known as Coca-Cola East Japan Co., Ltd. ("CCEJ"), a publicly traded entity, through a share exchange. The

terms of the agreement included the issuance of new shares of one of the publicly traded bottlers in exchange for

100 percent of the outstanding shares of the remaining three bottlers according to an agreed-upon share exchange

ratio. As a result, the Company recorded a net charge of $114 million for those investments in which the Company's

carrying value was greater than the fair value of the shares received. These charges were recorded in the line item

other income (loss) — net in our consolidated statement of income and impacted the Corporate operating segment.

Refer to the heading "Operations Review — Other Income (Loss) — Net" below as well as Note 17 of Notes to

Consolidated Financial Statements.

The following table presents the difference between calculated fair values, based on quoted closing prices of

publicly traded shares, and our Company's cost basis in investments in publicly traded companies accounted for

under the equity method (in millions):

December 31, 2015

Fair

Value Carrying

Value Difference

Monster Beverage Corporation $ 5,071 $ 3,118 $ 1,953

Coca-Cola FEMSA, S.A.B. de C.V. 4,360 1,853 2,507

Coca-Cola HBC AG 1,851 1,105 746

Coca-Cola Amatil Limited 1,496 685 811

Coca-Cola İçecek A.Ş. 653 202 451

Coca-Cola East Japan Co., Ltd. 627 448 179

Coca-Cola Bottling Co. Consolidated 453 104 349

Embotelladora Andina S.A. 396 275 121

Corporación Lindley S.A. 191 83 108

Total $ 15,098 $ 7,873 $ 7,225

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Other Assets

Our Company invests in infrastructure programs with our bottlers that are directed at strengthening our bottling

system and increasing unit case volume. Additionally, our Company advances payments to certain customers for

distribution rights as well as to fund future marketing activities intended to generate profitable volume and expenses

such payments over the periods benefited. Payments under these programs are generally capitalized and reported in

the line items prepaid expenses and other assets or other assets, as appropriate, in our consolidated balance sheets.

When facts and circumstances indicate that the carrying value of these assets (or asset groups) may not be

recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume

and the resulting gross profit and cash flows. These estimated future cash flows are consistent with those we use in

our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is

less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by

which the carrying amount exceeds the fair value.

Property, Plant and Equipment

As of December 31, 2015, the carrying value of our property, plant and equipment, net of depreciation, was $12,571

million, or 14 percent of our total assets. Certain events or changes in circumstances may indicate that the

recoverability of the carrying amount or remaining useful life of property, plant and equipment should be assessed,

including, among others, the manner or length of time in which the Company intends to use the asset, a significant

decrease in market value, a significant change in the business climate in a particular market, or a current period

operating or cash flow loss combined with historical losses or projected future losses. When such events or changes

in circumstances are present and an impairment review is performed, we estimate the future cash flows expected to

result from the use of the asset (or asset group) and its eventual disposition. These estimated future cash flows are

consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and

without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss

recognized is the amount by which the carrying amount exceeds the fair value. We use a variety of methodologies to

determine the fair value of property, plant and equipment, including appraisals and discounted cash flow models,

which are consistent with the assumptions we believe hypothetical marketplace participants would use.

Goodwill, Trademarks and Other Intangible Assets

Intangible assets are classified into one of three categories: (1) intangible assets with definite lives subject to

amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. For intangible

assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value

may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be

performed at least annually or more frequently if events or circumstances indicate that assets might be impaired.

The following table presents the carrying values of intangible assets included in our consolidated balance sheet (in

millions):

December 31, 2015

Carrying

Value

Percentage

of Total

Assets1

Goodwill $ 11,289 13 %

Bottlers' franchise rights with indefinite lives 6,000 7

Trademarks with indefinite lives 5,989 7

Definite-lived intangible assets, net 690 1

Other intangible assets not subject to amortization 164 *

Total $ 24,132 27 %

* Accounts for less than 1 percent of the Company's total assets.

1 The total percentage does not add due to rounding.

When facts and circumstances indicate that the carrying value of definite-lived intangible assets may not be

recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume

and the resulting gross profit and cash flows. These estimated future cash flows are consistent with those we use in

our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is

less than the carrying amount of the asset (or asset group), we recognize an impairment loss. The impairment loss

recognized is the amount by which the carrying amount exceeds the fair value. We use a variety of methodologies to

determine the fair value of these assets, including discounted cash flow models, which are consistent with the

assumptions we believe hypothetical marketplace participants would use.

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We test intangible assets determined to have indefinite useful lives, including trademarks, franchise rights and

goodwill, for impairment annually, or more frequently if events or circumstances indicate that assets might be

impaired. Our Company performs these annual impairment reviews as of the first day of our third fiscal quarter. We

use a variety of methodologies in conducting impairment assessments of indefinite-lived intangible assets, including,

but not limited to, discounted cash flow models, which are based on the assumptions we believe hypothetical

marketplace participants would use. For indefinite-lived intangible assets, other than goodwill, if the carrying

amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess.

The Company has the option to perform a qualitative assessment of indefinite-lived intangible assets, other than

goodwill, prior to completing the impairment test described above. The Company must assess whether it is more

likely than not that the fair value of the intangible asset is less than its carrying amount. If the Company concludes

that this is the case, it must perform the testing described above. Otherwise, the Company does not need to perform

any further assessment. During 2015, the Company performed qualitative assessments on 25 percent of the carrying

value of our indefinite-lived intangible assets other than goodwill.

We perform impairment tests of goodwill at our reporting unit level, which is one level below our operating

segments. Our operating segments are primarily based on geographic responsibility, which is consistent with the

way management runs our business. Our operating segments are subdivided into smaller geographic regions or

territories that we sometimes refer to as "business units." These business units are also our reporting units. The

Bottling Investments operating segment includes all Company-owned or consolidated bottling operations, regardless

of geographic location, except for bottling operations managed by CCR, which are included in our North America

operating segment. Generally, each Company-owned or consolidated bottling operation within our Bottling

Investments operating segment is its own reporting unit. Goodwill is assigned to the reporting unit or units that

benefit from the synergies arising from each business combination.

The goodwill impairment test consists of a two-step process, if necessary. The first step is to compare the fair value

of a reporting unit to its carrying value, including goodwill. We typically use discounted cash flow models to

determine the fair value of a reporting unit. The assumptions used in these models are consistent with those we

believe hypothetical marketplace participants would use. If the fair value of the reporting unit is less than its

carrying value, the second step of the impairment test must be performed in order to determine the amount of

impairment loss, if any. The second step compares the implied fair value of the reporting unit's goodwill with the

carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds its implied fair

value, an impairment charge is recognized in an amount equal to that excess. The loss recognized cannot exceed the

carrying amount of goodwill.

The Company has the option to perform a qualitative assessment of goodwill prior to completing the two-step

process described above to determine whether it is more likely than not that the fair value of a reporting unit is less

than its carrying amount, including goodwill and other intangible assets. If the Company concludes that this is the

case, it must perform the two-step process. Otherwise, the Company will forego the two-step process and does not

need to perform any further testing. During 2015, the Company performed qualitative assessments on 10 percent of

our consolidated goodwill balance. As of December 31, 2015, we did not have any reporting unit with a material

amount of goodwill for which it is reasonably likely that it will fail step one of a goodwill impairment test in the

near term.

Intangible assets acquired in recent transactions are naturally more susceptible to impairment, primarily due to the

fact that they are recorded at fair value based on recent operating plans and macroeconomic conditions present at the

time of acquisition. Consequently, if operating results and/or macroeconomic conditions deteriorate shortly after an

acquisition, it could result in the impairment of the acquired assets. A deterioration of macroeconomic conditions

may not only negatively impact the estimated operating cash flows used in our cash flow models but may also

negatively impact other assumptions used in our analyses, including, but not limited to, the estimated cost of capital

and/or discount rates. Additionally, as discussed above, in accordance with accounting principles generally accepted

in the United States, we are required to ensure that assumptions used to determine fair value in our analyses are

consistent with the assumptions a hypothetical marketplace participant would use. As a result, the cost of capital

and/or discount rates used in our analyses may increase or decrease based on market conditions and trends,

regardless of whether our Company's actual cost of capital has changed. Therefore, if the cost of capital and/or

discount rates change, our Company may recognize an impairment of an intangible asset in spite of realizing actual

cash flows that are approximately equal to, or greater than, our previously forecasted amounts.

On June 12, 2015, the Company closed a transaction with Monster. Under the terms of the transaction, the Company

was required to discontinue selling energy products under one of the trademarks included in the glacéau portfolio.

During the year ended December 31, 2015, the Company recognized impairment charges of $418 million, primarily

as a result of discontinuing these products. The total combined fair value of the various trademarks in the glacéau

portfolio significantly exceeds the remaining combined carrying value of $2.9 billion as of December 31, 2015.

However, the fair value of the individual trademark that was the subject of the impairment charges currently equals

its carrying value. If the future operating results of

41

this trademark do not support the current near-term financial projections, or if macroeconomic conditions change

causing the cost of capital and/or discount rate to increase without an offsetting increase in the operating results, it is

likely that we would be required to recognize an additional impairment charge related to this trademark.

During 2015, the Company also recorded a charge of $55 million related to the impairment of a Venezuelan

trademark. The Venezuelan trademark impairment was due to the Company's revised expectations regarding the

convertibility of the local currency.

These charges were recorded in our Corporate operating segment in the line item other operating charges in our

consolidated statement of income and were determined by comparing the fair value of the trademarks, derived using

discounted cash flow analyses, to the respective carrying value. Management will continue to monitor the fair value

of our intangible assets in future periods.

The Company did not record any significant impairment charges related to intangible assets during the year ended

December 31, 2014. During 2013, the Company recorded charges of $195 million related to certain intangible

assets. These charges included $113 million related to the impairment of trademarks recorded in our Bottling

Investments and Asia Pacific operating segments. These impairments were primarily due to a strategic decision to

phase out certain local-market brands, which resulted in a change in the expected useful life of the intangible assets,

and were determined by comparing the fair value of the trademarks, derived using discounted cash flow analyses, to

the current carrying value. Additionally, the remaining charge of $82 million related to goodwill recorded in our

Bottling Investments operating segment. This charge was primarily the result of management's revised outlook on

market conditions and volume performance. The total impairment charges of $195 million were recorded in our

Corporate operating segment in the line item other operating charges in our consolidated statements of income.

Pension Plan Valuations

Our Company sponsors and/or contributes to pension and postretirement health care and life insurance benefit plans

covering substantially all U.S. employees. We also sponsor nonqualified, unfunded defined benefit pension plans for

certain associates and participate in multi-employer pension plans in the United States. In addition, our Company

and its subsidiaries have various pension plans and other forms of postretirement arrangements outside the United

States.

Management is required to make certain critical estimates related to actuarial assumptions used to determine our

pension expense and obligations. We believe the most critical assumptions are related to (1) the discount rate used to

determine the present value of the liabilities and (2) the expected long-term rate of return on plan assets. All of our

actuarial assumptions are reviewed annually. Changes in these assumptions could have a material impact on the

measurement of our pension expense and obligations.

At each measurement date, we determine the discount rate primarily by reference to rates of high-quality, long-term

corporate bonds that mature in a pattern similar to the future payments we anticipate making under the plans. As of

December 31, 2015 and 2014, the weighted-average discount rate used to compute our pension obligations was 4.25

percent and 3.75 percent, respectively.

During the years ended December 31, 2015, 2014, and 2013, for plans using the yield curve approach, the Company

measured the related service and interest components of net periodic benefit cost for pension and other

postretirement benefit plans utilizing the single weighted-average discount rate derived from the yield curve.

Effective January 1, 2016, the Company changed the method used to calculate the service and interest components

and will measure these costs by applying the specific spot rates along the yield curve to the plans' projected cash

flows. The Company believes the new approach provides a more precise measurement of service and interest costs

by improving the correlation between projected cash flows and the corresponding spot yield curve rates. The change

does not affect the measurement of the Company's pension and other postretirement benefit obligations for those

plans and is accounted for as a change in accounting estimate, which is applied prospectively. In 2016, we expect

the change in estimate to reduce pension and other postretirement net periodic benefit plan costs by $73 million.

The expected long-term rate of return on plan assets is based upon the long-term outlook of our investment strategy

as well as our historical returns and volatilities for each asset class. We also review current levels of interest rates

and inflation to assess the reasonableness of our long-term rates. Our pension plan investment objective is to ensure

all of our plans have sufficient funds to meet their benefit obligations when they become due. As a result, the

Company periodically revises asset allocations, where appropriate, to improve returns and manage risk. The

weighted-average expected long-term rate of return used to calculate our pension expense was 8.25 percent in 2015

and 2014.

42

In 2015, the Company's total pension expense related to defined benefit plans was $305 million. In 2016, we expect

our total pension expense to be $105 million. The anticipated decrease is primarily due to settlement and special

termination costs incurred in 2015 of $169 million, the new method to calculate service and interest costs described

above, an increase in the weighted-average discount rate used to calculate the Company's benefit obligations and the

impact of $471 million of contributions the Company made in early 2016 to U.S. pension plans. The impact of these

items will be partially offset by unfavorable asset performance compared to our expected return during 2015 and a

decrease in the expected return on assets for U.S. plans. The estimated impact of a 50 basis-point decrease in the

discount rate on our 2016 pension expense would be an increase to our pension expense of $34 million.

Additionally, the estimated impact of a 50 basis-point decrease in the expected long-term rate of return on plan

assets on our 2016 pension expense would be an increase to our pension expense of $29 million.

The sensitivity information provided above is based only on changes to the actuarial assumptions used for our U.S.

pension plans. As of December 31, 2015, the Company's primary U.S. plan represented 59 percent and 62 percent of

the Company's consolidated projected pension benefit obligation and pension assets, respectively. Refer to Note 13

of Notes to Consolidated Financial Statements for additional information about our pension plans and related

actuarial assumptions.

Effective December 31, 2014, the Company revised our mortality assumptions used to determine the projected

benefit obligation of the U.S. defined benefit pension plans. The revised assumptions were derived from the

mortality tables and the mortality improvement scales published by the Society of Actuaries in October 2014. The

change in mortality assumptions for the U.S. plans resulted in an increase in the projected benefit obligation at

December 31, 2014 of $210 million.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery of products has occurred, the

sales price is fixed or determinable and collectibility is reasonably assured. For our Company, this generally means

that we recognize revenue when title to our products is transferred to our bottling partners, resellers or other

customers. Title usually transfers upon shipment to or receipt at our customers' locations, as determined by the

specific sales terms of each transaction. Our sales terms do not allow for a right of return except for matters related

to any manufacturing defects on our part.

Our customers can earn certain incentives which are included in deductions from revenue, a component of net

operating revenues in our consolidated statements of income. These incentives include, but are not limited to, cash

discounts, funds for promotional and marketing activities, volume-based incentive programs and support for

infrastructure programs. Refer to Note 1 of Notes to Consolidated Financial Statements. The aggregate deductions

from revenue recorded by the Company in relation to these programs, including amortization expense on

infrastructure programs, were $6.8 billion, $7.0 billion and $6.9 billion in 2015, 2014 and 2013, respectively. In

preparing the financial statements, management must make estimates related to the contractual terms, customer

performance and sales volume to determine the total amounts recorded as deductions from revenue. Management

also considers past results in making such estimates. The actual amounts ultimately paid may be different from our

estimates. Such differences are recorded once they have been determined and have historically not been significant.

Income Taxes

Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the

various jurisdictions in which we operate. Significant judgment is required in determining our annual tax expense

and in evaluating our tax positions. We establish reserves to remove some or all of the tax benefit of any of our tax

positions at the time we determine that the positions become uncertain based upon one of the following: (1) the tax

position is not "more likely than not" to be sustained, (2) the tax position is "more likely than not" to be sustained,

but for a lesser amount, or (3) the tax position is "more likely than not" to be sustained, but not in the financial

period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is

uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge

of all relevant information, (2) the technical merits of a tax position are derived from authorities such as legislation

and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances

of the tax position, and (3) each tax position is evaluated without considerations of the possibility of offset or

aggregation with other tax positions taken. We adjust these reserves, including any impact on the related interest and

penalties, in light of changing facts and circumstances, such as the progress of a tax audit. Refer to the heading

"Operations Review — Income Taxes" below and Note 14 of Notes to Consolidated Financial Statements.

On September 17, 2015, the Company received a Notice from the IRS for the tax years 2007 through 2009, after a

five-year audit. In the Notice, the IRS claims that the Company's United States taxable income should be increased

by an amount that creates a potential additional federal income tax liability of approximately $3.3 billion for the

period, plus interest. No penalties were asserted in the Notice; however, the IRS has since taken the position that it is

not precluded from asserting penalties and notified the Company that it may do so. The disputed amounts largely

relate to a transfer pricing matter involving the

43

appropriate amount of taxable income the Company should report in the United States in connection with its

licensing of intangible property to certain related foreign licensees regarding the manufacturing, distribution, sale,

marketing and promotion of products in overseas markets. The IRS designated the matter for litigation on October

15, 2015. The Company firmly believes that the IRS' claims are without merit and plans to pursue all available

administrative and judicial remedies necessary to resolve this matter. To that end, the Company filed a petition in

U.S. Tax Court on December 14, 2015. The Company believes that the final adjudication of this matter will not have

a material impact on its consolidated financial position, results of operations or cash flows and that it has adequate

tax reserves for all tax matters. However, if this dispute were to be ultimately determined adversely to us, the

additional tax, interest and any potential penalties could have a material adverse impact on the Company's financial

position, results of operations or cash flows. Refer to Note 11 of Notes to Consolidated Financial Statements for

additional information.

A number of years may elapse before a particular matter for which we have established a reserve is audited and

finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. The tax benefit

that has been previously reserved because of a failure to meet the "more likely than not" recognition threshold would

be recognized in our income tax expense in the first interim period when the uncertainty disappears under any one of

the following conditions: (1) the tax position is "more likely than not" to be sustained, (2) the tax position, amount,

and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax

position has expired. Settlement of any particular issue would usually require the use of cash.

Tax law requires items to be included in the tax return at different times than when these items are reflected in the

consolidated financial statements. As a result, the annual tax rate reflected in our consolidated financial statements is

different from that reported in our tax return (our cash tax rate). Some of these differences are permanent, such as

expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation

expense. These timing differences create deferred tax assets and liabilities. Deferred tax assets and liabilities are

determined based on temporary differences between the financial reporting and tax bases of assets and liabilities.

The tax rates used to determine deferred tax assets or liabilities are the enacted tax rates in effect for the year and

manner in which the differences are expected to reverse. Based on the evaluation of all available information, the

Company recognizes future tax benefits, such as net operating loss carryforwards, to the extent that realizing these

benefits is considered more likely than not.

We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing our forecasted

taxable income using both historical and projected future operating results; the reversal of existing taxable

temporary differences; taxable income in prior carryback years (if permitted); and the availability of tax planning

strategies. A valuation allowance is required to be established unless management determines that it is more likely

than not that the Company will ultimately realize the tax benefit associated with a deferred tax asset. As of

December 31, 2015, the Company's valuation allowances on deferred tax assets were $477 million and primarily

related to uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards generated

in various jurisdictions. Current evidence does not suggest we will realize sufficient taxable income of the

appropriate character within the carryforward period to allow us to realize these deferred tax benefits. If we were to

identify and implement tax planning strategies to recover these deferred tax assets or generate sufficient income of

the appropriate character in these jurisdictions in the future, it could lead to the reversal of these valuation

allowances and a reduction of income tax expense. The Company believes it will generate sufficient future taxable

income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated balance sheets.

The Company does not record a U.S. deferred tax liability for the excess of the book basis over the tax basis of its

investments in foreign corporations to the extent that the basis difference results from earnings that meet the

indefinite reversal criteria. These criteria are met if the foreign subsidiary has invested, or will invest, the

undistributed earnings indefinitely. The decision as to the amount of undistributed earnings that the Company

intends to maintain in non-U.S. subsidiaries takes into account items including, but not limited to, forecasts and

budgets of financial needs of cash for working capital, liquidity plans, capital improvement programs, merger and

acquisition plans, and planned loans to other non-U.S. subsidiaries. The Company also evaluates its expected cash

requirements in the United States. Other factors that can influence that determination are local restrictions on

remittances (for example, in some countries a central bank application and approval are required in order for the

Company's local country subsidiary to pay a dividend), economic stability and asset risk. As of December 31, 2015,

undistributed earnings of the Company's foreign subsidiaries that met the indefinite reversal criteria amounted to

$31.9 billion. Refer to Note 14 of Notes to Consolidated Financial Statements.

The Company's effective tax rate is expected to be 22.5 percent in 2016. This estimated tax rate does not reflect the

impact of any unusual or special items that may affect our tax rate in 2016.

44

Operations Review

Our organizational structure as of December 31, 2015, consisted of the following operating segments, the first six of

which are sometimes referred to as "operating groups" or "groups": Eurasia and Africa; Europe; Latin America;

North America; Asia Pacific; Bottling Investments; and Corporate. For further information regarding our operating

segments, refer to Note 19 of Notes to Consolidated Financial Statements.

Structural Changes, Acquired Brands and Newly Licensed Brands

In order to continually improve upon the Company's operating performance, from time to time, we engage in buying

and selling ownership interests in bottling partners and other manufacturing operations. In addition, we also acquire

brands or enter into license agreements for certain brands to supplement our beverage offerings. These items impact

our operating results and certain key metrics used by management in assessing the Company's performance.

Unit case volume growth is a metric used by management to evaluate the Company's performance because it

measures demand for our products at the consumer level. The Company's unit case volume represents the number of

unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and

its bottling partners to customers and, therefore, reflects unit case volume for consolidated and unconsolidated

bottlers. Refer to the heading "Beverage Volume" below.

Concentrate sales volume represents the amount of concentrates and syrups (in all cases expressed in equivalent unit

cases) sold by, or used in finished products sold by, the Company to its bottling partners or other customers. Refer to

the heading "Beverage Volume" below.

Our Bottling Investments operating segment and our other finished product operations, including the finished

product operations in our North America operating segment, typically generate net operating revenues by selling

sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-

to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners

who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to

fountain retailers such as restaurants and convenience stores who use the fountain syrups to produce beverages for

immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to

fountain retailers. For these consolidated finished product operations, we recognize the associated concentrate sales

volume at the time the unit case or unit case equivalent is sold to the customer. Our concentrate operations typically

generate net operating revenues by selling concentrates and syrups to authorized bottling and canning operations.

For these concentrate operations, we recognize concentrate revenue and concentrate sales volume when we sell

concentrate to the authorized unconsolidated bottling and canning operations, and we typically report unit case

volume when finished products manufactured from the concentrates and syrups are sold to the customer. When we

analyze our net operating revenues we generally consider the following four factors: (1) volume growth (unit case

volume or concentrate sales volume, as appropriate), (2) acquisitions and divestitures (including structural changes

defined below), as applicable, (3) changes in price, product and geographic mix and (4) foreign currency

fluctuations. Refer to the heading "Net Operating Revenues" below.

We generally refer to acquisition and divestitures of bottling, distribution or canning operations and consolidation or

deconsolidation of bottling and distribution entities for accounting purposes as structural changes ("structural

changes"). Typically, structural changes do not impact the Company's unit case volume on a consolidated basis or at

the geographic operating segment level. We recognize unit case volume for all sales of Company beverage products

regardless of our ownership interest in the bottling partner, if any. However, the unit case volume reported by our

Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit

case volume of our consolidated bottling operations.

"Acquired brands" refers to brands acquired during the past 12 months. Typically, the Company has not reported

unit case volume or recognized concentrate sales volume related to acquired brands in periods prior to the closing of

a transaction. Therefore, the unit case volume and concentrate sales volume from the sale of these brands is

incremental to prior year volume. We do not generally consider acquired brands to be structural changes.

"Licensed brands" refers to brands not owned by the Company, but for which we hold certain rights, generally

including, but not limited to, distribution rights, and from which we derive an economic benefit when these brands

are ultimately sold. Typically, the Company has not reported unit case volume or recognized concentrate sales

volume related to these brands in periods prior to the beginning of the term of a license agreement. Therefore, in the

year that the licenses are entered into, the unit case volume and concentrate sales volume from the sale of these

brands is incremental to prior year volume. We do not generally consider newly licensed brands to be structural

changes.

45

In 2015, the Company closed a transaction with Monster ("Monster Transaction"), which has been included as a

structural change (a component of acquisitions and divestitures) in our analysis of net operating revenues on a

consolidated basis as well as for the Eurasia and Africa, Europe, Latin America, North America, Asia Pacific and

Corporate operating segments. This transaction consisted of multiple elements including, but not limited to, the

acquisition of Monster's non-energy brands and the expansion of our distribution of Monster products into additional

U.S. territories. These elements of the transaction impacted the Company's unit case volume and concentrate sales

volume and therefore, in addition to being included as a structural change (a component of acquisitions and

divestitures), they are also considered acquired brands. See further discussion of this transaction in Note 2 of Notes

to Consolidated Financial Statements. Also during 2015, the Company acquired a South African bottler, which has

been included as a structural change (a component of acquisitions and divestitures) in our analysis of net operating

revenues on a consolidated basis as well as for the Bottling Investments operating segment. Refer to "Net Operating

Revenues" below.

In 2014, the Company began refranchising territories in North America that were previously managed by CCR to

certain of our unconsolidated bottling partners. The impact of these refranchising activities has been included as a

structural change (a component of acquisitions and divestitures) in our analysis of net operating revenues on a

consolidated basis as well as for our North America operating segment. In addition, for non-Company-owned and

licensed beverage products sold in the refranchised territories, we have eliminated the unit case volume and

associated concentrate sales from the base year when calculating volume growth rates on a consolidated basis as

well as for the North America operating segment. Refer to the headings "Beverage Volume" and "Net Operating

Revenues" below.

In 2014, the Company made a decision to change our process of buying and selling recyclable materials in North

America. Also during 2014, the Company transitioned our Russian juice operations to an existing joint venture with

an unconsolidated bottling partner and acquired a majority interest in bottling operations in Sri Lanka and Nepal.

The impact of these changes is included as a structural change (a component of acquisitions and divestitures) in our

analysis of net operating revenues on a consolidated basis as well as for our North America and Bottling

Investments operating segments. Refer to the heading "Net Operating Revenues" below.

In January 2014, the Venezuelan government enacted a new law ("Fair Price Law") that imposes limits on profit

margins earned in the country, which limited the amount of revenue the Company was able to recognize in 2014 as

compared to 2013. The impact of the Fair Price Law has been included as a structural change in our analysis of

operating results for our Latin America segment for the year ended December 31, 2014. Refer to the heading "Net

Operating Revenues" below.

In 2013, the Company acquired a majority interest in bottling operations in Myanmar, sold a majority interest in our

previously consolidated bottling operations in the Philippines and deconsolidated our bottling operations in Brazil as

a result of their combination with an independent bottling partner. Accordingly, the impact to net operating revenues

related to these transactions is included as a structural change (a component of acquisitions and divestitures) in our

analysis of net operating revenues for our Bottling Investments segment. Refer to the heading "Net Operating

Revenues" below.

The Company sells concentrates and syrups to both consolidated and unconsolidated bottling partners. The

ownership structure of our bottling partners impacts the timing of recognizing concentrate revenue and concentrate

sales volume. When we sell concentrates or syrups to our consolidated bottling partners, we are not able to

recognize the concentrate revenue or concentrate sales volume until the bottling partner has sold finished products

manufactured from the concentrates or syrups to a third party or independent customer. When we sell concentrates

or syrups to our unconsolidated bottling partners, we recognize the concentrate revenue and concentrate sales

volume when the concentrates or syrups are sold to the bottling partner. The subsequent sale of the finished products

manufactured from the concentrates or syrups to a customer does not impact the timing of recognizing the

concentrate revenue or concentrate sales volume. When we account for an unconsolidated bottling partner as an

equity method investment, we eliminate the intercompany profit related to these transactions until the equity method

investee has sold finished products manufactured from the concentrates or syrups to a third party or independent

customer.

The Company is currently pursuing certain transactions that, if completed, will be included as structural changes for

the applicable periods. In November 2014, the Company and two of our existing bottling partners entered into an

agreement to combine each of the parties' bottling operations in Southern and East Africa. In August 2015, the

Company entered into an agreement to merge our German bottling operations with the bottling operations of two of

our existing bottling partners. Subject to receiving any required regulatory and shareholder approvals, we expect

each of these transactions to close during the second quarter of 2016. Additionally, in 2016 we announced our intent

to refranchise 100 percent of Company-owned North America bottling territories by the end of 2017. The Company

also announced that we have entered into a non-binding letter of intent to refranchise Company-owned bottling

operations in China to two of our existing bottling partners.

46

Beverage Volume

We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and

(2) concentrate sales. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces

of finished beverage (24 eight-ounce servings); and "unit case volume" means the number of unit cases (or unit case

equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners to

customers. Unit case volume primarily consists of beverage products bearing Company trademarks. Also included in

unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola

system bottlers for which our Company provides marketing support and from the sale of which we derive economic

benefit. In addition, unit case volume includes sales by certain joint ventures in which the Company has an equity

interest. We believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system

because it measures trends at the consumer level. The unit case volume numbers used in this report are derived

based on estimates received by the Company from its bottling partners and distributors. Concentrate sales volume

represents the amount of concentrates and syrups (in all instances expressed in equivalent unit cases) sold by, or

used in finished beverages sold by, the Company to its bottling partners or other customers. Unit case volume and

concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality,

bottlers' inventory practices, supply point changes, timing of price increases, new product introductions and changes

in product mix can impact unit case volume and concentrate sales volume and can create differences between unit

case volume and concentrate sales volume growth rates. In addition to the items mentioned above, the impact of unit

case volume from certain joint ventures in which the Company has an equity interest but to which the Company

does not sell concentrates or syrups may give rise to differences between unit case volume and concentrate sales

volume growth rates.

Information about our volume growth by operating segment is as follows:

Percent Change

2015 vs. 2014 2014 vs. 2013

Year Ended December 31, Unit

Cases1,2 Concentrate

Sales Unit

Cases1,2 Concentrate

Sales

Worldwide 2 % 2 % 3 2 % 2 % 4

Eurasia & Africa 3 % 2 % 4 % 3 %

Europe 2 2 (2 ) (2 )

Latin America 1 1 1 —

North America 1 2 3 — (1 )

Asia Pacific 4 2 5 5

Bottling Investments 8 N/A (2 ) N/A

1 Bottling Investments operating segment data

reflects unit case volume growth for

consolidated bottlers only.

2 Geographic segment data reflects unit case volume growth for all bottlers, both consolidated and unconsolidated, and

distributors in the applicable geographic areas.

3 After considering the impact of structural changes, concentrate sales volume both worldwide and for North America for the

year ended December 31, 2015 grew 1 percent.

4 After considering the impact of structural changes, worldwide concentrate sales volume for the year ended December 31, 2014

grew 1 percent.

Unit Case Volume

The Coca-Cola system sold 29.2 billion, 28.6 billion and 28.2 billion unit cases of our products in 2015, 2014 and

2013, respectively. The number of unit cases sold in 2015 and 2014 does not include certain licensed beverage

brands sold in the North American refranchised territories and certain brands owned by our Russian juice company.

Refer to the heading "Structural Changes, Acquired Brands and Newly Licensed Brands" above. The Company

eliminated the unit case volume related to these structural changes from the base year, where applicable, when

calculating the volume growth rates.

47

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Unit case volume in Eurasia and Africa increased 3 percent, which consisted of 2 percent growth in sparkling

beverages and 6 percent growth in still beverages. The group's sparkling beverage growth included 3 percent growth

in Trademark Coca-Cola, and the growth in still beverages was led by packaged water and juices and juice drinks.

Eurasia and Africa benefited from unit case volume growth of 8 percent, 6 percent and 2 percent in the Central, East

& West Africa, Southern Africa, and Middle East & North Africa business units, respectively, partially offset by a

decline of 4 percent in the Russia, Ukraine & Belarus business unit.

In Europe, unit case volume grew 2 percent, reflecting 7 percent growth in still beverages and 1 percent growth in

sparkling beverages. The growth in still beverages was driven by the group's performance in packaged water, teas,

sports drinks and the expansion of the innocent brand. The group's sparkling beverage growth included 9 percent

growth in Coca-Cola Zero and 4 percent growth in Trademark Fanta.

Unit case volume in Latin America grew 1 percent as a result of growth in still beverages of 4 percent and even

sparkling beverage volume. The growth in still beverages was led by growth in packaged water, juices and juice

drinks and sports drinks. The Latin Center and South Latin business units reported unit case volume growth of 4

percent and 3 percent, respectively. The Mexico business unit reported unit case volume growth of 3 percent,

reflecting growth in Trademark Coca-Cola of 3 percent. The growth in the Latin Center, South Latin and Mexico

business units was partially offset by a unit case volume decline of 4 percent in the Brazil business unit.

In North America, unit case volume grew 1 percent. This increase reflects 5 percent growth in still beverage volume

and even sparkling beverage volume. The still beverage growth in the group was led by 8 percent growth in

packaged water and 6 percent growth in teas. After considering the impact of the acquired volume resulting from the

Monster Transaction, North America unit case volume growth remained 1 percent.

Unit case volume in Asia Pacific increased 4 percent, which consisted of 4 percent growth in both sparkling and still

beverage volume. The sparkling beverage volume growth was led by a 5 percent increase in Trademark Coca-Cola,

a 4 percent increase in Trademark Sprite and a 6 percent increase in Trademark Fanta. Still beverage volume growth

was led by increases in packaged water and teas of 12 percent and 6 percent, respectively. China's unit case volume

grew 5 percent during the year, led by 12 percent growth in Trademark Coca-Cola and 3 percent growth in

Trademark Sprite. India reported unit case volume growth of 4 percent and Japan reported even volume during the

year.

Unit case volume for Bottling Investments increased 8 percent. This increase primarily reflects the growth in China

and India. In addition, unit case volume in Germany grew 2 percent. The Company's consolidated bottling

operations accounted for 34 percent, 69 percent, and 100 percent of the unit case volume in China, India and

Germany, respectively.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Unit case volume in Eurasia and Africa increased 4 percent, which consisted of 3 percent growth in sparkling

beverages and 8 percent growth in still beverages. The group's sparkling beverage growth included 2 percent growth

in Trademark Coca-Cola, 3 percent growth in Trademark Sprite, and 2 percent growth in Trademark Fanta. Growth

in the group's still beverages was led by packaged water, juices and juice drinks and teas. The group's growth

reflects a continued focus on improved marketplace execution and providing greater consumer choice in package

and price options. Eurasia and Africa benefited from unit case volume growth of 7 percent and 6 percent in the

Middle East & North Africa and Central, East & West Africa business units, respectively. This growth was partially

offset by a decline in unit case volume of 1 percent in the Russia, Ukraine & Belarus business unit.

In Europe, unit case volume declined 2 percent as a result of a decline in sparkling beverages of 3 percent, partially

offset by growth in still beverages of 1 percent. The decline in sparkling beverages reflects the softness in the

macroeconomic environment and continuing competitive pressures in the market. The growth in still beverages was

led by growth in juices and juice drinks.

Unit case volume in Latin America increased 1 percent reflecting growth in still beverages of 6 percent and even

sparkling beverage volume. The growth in still beverages was led by packaged water, value-added dairy and sports

drinks. Latin America benefited from unit case volume growth of 6 percent and 2 percent in the Latin Center and

Brazil business units, respectively, partially offset by a volume decline of 1 percent in the Mexico business unit. The

decline in Mexico was primarily due to the impact of a new excise tax that went into effect on January 1, 2014.

In North America, unit case volume was even, reflecting 1 percent growth in still beverages offset by a decline of 1

percent in sparkling beverages. The still beverage growth was led by 8 percent growth in packaged water and 4

percent growth in teas.

48

Unit case volume in Asia Pacific increased 5 percent, which consisted of 5 percent growth in sparkling beverages

and 4 percent growth in still beverages. The growth in sparkling beverages was led by a 5 percent increase in

Trademark Sprite, a 4 percent increase in Trademark Fanta and a 3 percent increase in brand Coca-Cola. Still

beverage volume growth was led by packaged water and growth in teas and value-added dairy of 6 percent and 10

percent, respectively. China's unit case volume grew 4 percent, led by 5 percent growth in brand Coca-Cola and 6

percent growth in Trademark Fanta. India reported double-digit volume growth, and Japan reported a volume

decline of 1 percent, reflecting 1 percent growth in sparkling beverages offset by a 1 percent decline in still

beverages.

Unit case volume for Bottling Investments decreased 2 percent. This decrease primarily reflects the deconsolidation

of our bottling operations in Brazil during July 2013 as a result of their combination with an independent bottling

partner. The unfavorable impact of these transactions on the group's unit case volume results was partially offset by

growth in other key markets, including China and India, where we own or otherwise consolidate bottling operations.

The Company's consolidated bottling operations accounted for 35 percent and 65 percent of the unit case volume in

China and India, respectively.

Concentrate Sales Volume

In 2015, worldwide concentrate sales volume and unit case volume both grew 2 percent compared to 2014. After

considering the impact of structural changes, concentrate sales volume grew 1 percent during the year ended

December 31, 2015. In 2014, worldwide concentrate sales volume and unit case volume both grew 2 percent

compared to 2013. After considering the impact of structural changes, concentrate sales volume grew 1 percent

during the year ended December 31, 2014. The differences between concentrate sales volume and unit case volume

growth rates worldwide and for individual operating segments in 2015 and 2014 were primarily due to the timing of

concentrate shipments and the impact of unit case volume from certain joint ventures in which the Company has an

equity interest, but to which the Company does not sell concentrates, syrups, beverage bases or powders.

Analysis of Consolidated Statements of Income

Percent Change

Year Ended December 31, 2015 2014 2013 2015 vs.

2014 2014 vs.

2013

(In millions except percentages and per share data)

NET OPERATING REVENUES $ 44,294 $ 45,998 $ 46,854 (4 )% (2 )%

Cost of goods sold 17,482 17,889 18,421 (2 ) (3 )

GROSS PROFIT 26,812 28,109 28,433 (5 ) (1 )

GROSS PROFIT MARGIN 60.5 % 61.1 % 60.7 %

Selling, general and administrative expenses 16,427 17,218 17,310 (5 ) (1 )

Other operating charges 1,657 1,183 895 40 32

OPERATING INCOME 8,728 9,708 10,228 (10 ) (5 )

OPERATING MARGIN 19.7 % 21.1 % 21.8 %

Interest income 613 594 534 3 11

Interest expense 856 483 463 77 4

Equity income (loss) — net 489 769 602 (36 ) 28

Other income (loss) — net 631 (1,263 ) 576 * *

INCOME BEFORE INCOME TAXES 9,605 9,325 11,477 3 (19 )

Income taxes 2,239 2,201 2,851 2 (23 )

Effective tax rate 23.3 % 23.6 % 24.8 %

CONSOLIDATED NET INCOME 7,366 7,124 8,626 3 (17 )

Less: Net income attributable to noncontrolling

interests 15 26 42 (40 ) (38 )

NET INCOME ATTRIBUTABLE TO

SHAREOWNERS OF

THE COCA-COLA COMPANY $ 7,351 $ 7,098 $ 8,584 4 % (17 )%

BASIC NET INCOME PER SHARE1 $ 1.69 $ 1.62 $ 1.94 4 % (16 )%

DILUTED NET INCOME PER SHARE1 $ 1.67 $ 1.60 $ 1.90 5 % (16 )%

* Calculation is not meaningful.

1 Calculated based on net income attributable to shareowners of The Coca-Cola Company.

49

Net Operating Revenues

Year Ended December 31, 2015 versus Year Ended December 31, 2014

The Company's net operating revenues decreased $1,704 million, or 4 percent.

The following table illustrates, on a percentage basis, the estimated impact of key factors resulting in the increase

(decrease) in net operating revenues for each of our operating segments:

Percent Change 2015 vs. 2014

Volume1

Acquisitions &

Divestitures

Price,

Product & Geographic

Mix Currency

Fluctuations Total

Consolidated 1 % — % 2 % (7 )% (4 )%

Eurasia & Africa 2 % (1 )% 3 % (14 )% (10 )%

Europe 2 (1 ) 1 (9 ) (7 )

Latin America 1 — 9 (23 ) (13 )

North America 1 (1 ) 3 (1 ) 2

Asia Pacific 2 — (3 ) (8 ) (9 )

Bottling Investments 6 3 (3 ) (10 ) (4 )

Corporate * * * * * * Calculation is not meaningful.

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for

our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For

our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the

increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating

segment data reflects unit case volume growth for consolidated bottlers only. Refer to the heading "Beverage Volume" above.

Refer to the heading "Beverage Volume" above for additional information related to changes in our unit case and

concentrate sales volumes.

"Acquisitions and Divestitures" refers to acquisitions and divestitures of brands or businesses, some of which the

Company considers to be structural changes. Refer to the heading "Structural Changes, Acquired Brands and Newly

Licensed Brands" above for additional information related to the structural changes. The acquisitions and

divestitures percent change for 2015 versus 2014 in the table above consisted entirely of structural changes.

Price, product and geographic mix had a favorable 2 percent impact on our consolidated net operating revenues.

Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the

following:

• Eurasia and Africa — favorable price mix in most of the segment's business units, partially offset by

unfavorable geographic mix;

• Latin America — favorable price mix in all four of the segment's business units and the impact of inflationary

environments in certain markets;

• North America — favorably impacted as a result of price increases and package mix;

• Asia Pacific — unfavorable product and channel mix as well as unfavorable geographic mix; and

• Bottling Investments — unfavorable price mix attributable to channel, product and package mix.

The unfavorable impact of foreign currency fluctuations decreased our consolidated net operating revenues by

7 percent. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign

currencies, including the South African rand, euro, U.K. pound sterling, Brazilian real, Mexican peso, Australian

dollar and Japanese yen, which had an unfavorable impact on our Eurasia and Africa, Europe, Latin America, Asia

Pacific and Bottling Investments operating segments. Refer to the heading "Liquidity, Capital Resources and

Financial Position — Foreign Exchange" below.

Net operating revenue growth rates are impacted by sales volume; acquisitions and divestitures; price, product and

geographic mix; and foreign currency fluctuations. The size and timing of acquisitions and divestitures are not

consistent from period to period. The Company currently expects acquisitions and divestitures to have a mid single-

digit unfavorable impact on full year 2016 net operating revenues. Based on current spot rates and our hedging

coverage in place, we expect currencies will continue to have an unfavorable impact on our full year 2016 net

operating revenues.

50

Year Ended December 31, 2014 versus Year Ended December 31, 2013

The Company's net operating revenues decreased $856 million, or 2 percent.

The following table illustrates, on a percentage basis, the estimated impact of key factors resulting in the increase

(decrease) in net operating revenues for each of our operating segments:

Percent Change 2014 vs. 2013

Volume1

Acquisitions

&

Divestitures

Price, Product &

Geographic

Mix Currency

Fluctuations Total

Consolidated 1 % (2 )% 1 % (2 )% (2 )%

Eurasia & Africa 3 % — % 4 % (8 )% (1 )%

Europe (2 ) — 4 2 4

Latin America — (4 ) 8 (10 ) (6 )

North America (1 ) (1 ) 1 — (1 )

Asia Pacific 5 1 (2 ) (6 ) (2 )

Bottling Investments 5 (9 ) (2 ) (2 ) (8 )

Corporate * * * * * * Calculation is not meaningful.

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for

our geographic operating segments (expressed in equivalent unit cases) after considering the impact of structural changes. For

our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the

increase (decrease) in unit case volume after considering the impact of structural changes. Our Bottling Investments operating

segment data reflects unit case volume growth for consolidated bottlers only. Refer to the heading "Beverage Volume" above.

Refer to the heading "Beverage Volume" above for additional information related to changes in our unit case and

concentrate sales volumes.

"Acquisitions and Divestitures" refers to acquisitions and divestitures of brands or businesses, some of which the

Company considers to be structural changes. Refer to the heading "Structural Changes, Acquired Brands and Newly

Licensed Brands" above for additional information related to the structural changes. The acquisitions and

divestitures percent change for 2014 versus 2013 in the table above consisted entirely of structural changes. The

impact of the Venezuelan Fair Price Law reduced our Latin America segment revenues by 5 percent in 2014.

Price, product and geographic mix had a favorable 1 percent impact on our consolidated net operating revenues.

Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the

following:

• Eurasia and Africa — favorable price mix in all of the segment's business units;

• Europe — favorable impact as a result of consolidating the juice and smoothie business of Fresh Trading Ltd.

("innocent") in May 2013 and favorable price mix in all of the segment's business units;

• Latin America — favorable price mix in all four of the segment's business units and the impact of inflationary

environments in certain markets; and

• Asia Pacific — unfavorable geographic mix.

The unfavorable impact of foreign currency fluctuations decreased our consolidated net operating revenues by

2 percent. The unfavorable currency impact was primarily due to a stronger U.S. dollar compared to certain other

foreign currencies, including the South African rand, Mexican peso, Brazilian real, Australian dollar and Japanese

yen, which had an unfavorable impact on our Eurasia and Africa, Latin America, Asia Pacific and Bottling

Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed

above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies,

including the euro and British pound, which had a favorable impact on our Europe and Bottling Investments

operating segments. Refer to the heading "Liquidity, Capital Resources and Financial Position — Foreign

Exchange" below.

51

Net Operating Revenues by Operating Segment

Information about our net operating revenues by operating segment as a percentage of Company net operating

revenues is as follows:

Year Ended December 31, 2015 2014 2013

Eurasia & Africa 5.5 % 5.9 % 5.9 %

Europe 10.3 10.5 9.9

Latin America 9.0 10.0 10.1

North America 49.2 46.7 46.1

Asia Pacific 10.6 11.4 11.5

Bottling Investments 15.1 15.2 16.2

Corporate 0.3 0.3 0.3

Total 100.0 % 100.0 % 100.0 %

The percentage contribution of each operating segment fluctuates over time due to net operating revenues in certain

operating segments growing at a faster rate compared to other operating segments. Net operating revenue growth

rates are impacted by sales volume; acquisitions and divestitures; price, product and geographic mix; and foreign

currency fluctuations. For additional information about the impact of foreign currency fluctuations, refer to the

heading "Liquidity, Capital Resources and Financial Position — Foreign Exchange" below.

Gross Profit Margin

As a result of our finished goods operations, which are primarily included in our North America and Bottling

Investments operating segments, the following inputs represent a substantial portion of the Company's total cost of

goods sold: (1) sweeteners, (2) metals, (3) juices and (4) PET. The Company enters into hedging activities related to

certain commodities in order to mitigate a portion of the price risk associated with forecasted purchases. Many of the

derivative financial instruments used by the Company to mitigate the risk associated with these commodity

exposures, including any related foreign currency exposure, do not qualify for hedge accounting. As a result, the

changes in fair value of these derivative instruments have been, and will continue to be, included as a component of

net income in each reporting period. The Company recorded losses related to these derivatives of $206 million, $8

million and $120 million during the years ended December 31, 2015, 2014 and 2013, respectively, in the line item

cost of goods sold in our consolidated statements of income. Refer to Note 5 of Notes to Consolidated Financial

Statements. We do not currently expect changes in commodity costs to have a significant impact on our 2016 gross

profit margin as compared to 2015.

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Our gross profit margin decreased to 60.5 percent in 2015 from 61.1 percent in 2014. The decrease was primarily

due to the impact of acquisitions and divestitures and the unfavorable impact of foreign currency exchange rate

fluctuations, partially offset by positive price mix and slightly lower commodity costs. Refer to Note 2 of Notes to

Consolidated Financial Statements for additional information related to acquisitions and divestitures.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Our gross profit margin increased to 61.1 percent in 2014 from 60.7 percent in 2013. The increase was partially due

to the deconsolidation of our Brazilian bottling operations in July 2013 as well as lower commodity costs, primarily

in our North America finished goods business, and favorable geographic mix. Refer to Note 2 of Notes to

Consolidated Financial Statements for additional information regarding the impact of the deconsolidation of our

Brazilian bottling operations.

The favorable geographic mix was primarily due to growth in emerging markets. Although this shift in geographic

mix has a negative impact on net operating revenues, it generally has a favorable impact on our gross profit margin

due to the correlated impact it has on our product mix. The product mix in the majority of our emerging and

developing markets is more heavily skewed toward our sparkling beverage products, which generally yield a higher

gross profit margin compared to our still beverages and finished products.

52

Selling, General and Administrative Expenses

The following table sets forth the significant components of selling, general and administrative expenses (in

millions):

Year Ended December 31, 2015 2014 2013

Stock-based compensation expense $ 236 $ 209 $ 227

Advertising expenses 3,976 3,499 3,266

Selling and distribution expenses 6,025 6,412 6,419

Other operating expenses 6,190 7,098 7,398

Selling, general and administrative expenses $ 16,427 $ 17,218 $ 17,310

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Selling, general and administrative expenses decreased $791 million, or 5 percent. During the year ended December

31, 2015, fluctuations in foreign currency decreased selling, general and administrative expenses by 6 percent. The

increase in stock-based compensation was primarily due to reversals in 2014 of previously recognized expenses

related to the Company's long-term incentive programs as performance criteria were not achieved. The increase in

advertising expenses reflects the Company's increased investments to strengthen our brands, partially offset by a

foreign currency exchange impact of 13 percent. The decrease in selling and distribution expenses reflects the

impact of acquisitions and divestitures. The decrease in other operating expenses reflects the shift of the Company's

marketing spending to more consumer-facing advertising expenses as well as savings from our productivity and

reinvestment initiatives. Foreign currency exchange rate fluctuations have a more significant impact on both

advertising and other operating expenses as compared to our selling and distribution expenses since they are

generally transacted in local currency. Our selling and distribution expenses are primarily related to our Company-

owned bottling operations, of which the majority of expenses are attributable to CCR and are primarily denominated

in U.S. dollars. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information related to

acquisitions and divestitures.

In 2016, our pension expense is expected to decrease by $200 million compared to 2015. The anticipated decrease is

primarily due to settlement and special termination costs incurred in 2015 of $169 million, the new method to

calculate service and interest costs, an increase in the weighted-average discount rate used to calculate the

Company's benefit obligations and the impact of $471 million of contributions the Company made in early 2016 to

U.S. pension plans. The impact of these items will be partially offset by unfavorable asset performance compared to

our expected return during 2015 and a decrease in the expected return on assets for U.S. plans. Refer to the heading

"Liquidity, Capital Resources and Financial Position" below for information related to these contributions. Refer to

the heading "Critical Accounting Policies and Estimates — Pension Plan Valuations" above and Note 13 of Notes to

Consolidated Financial Statements for additional information related to the pension plan assumptions used by the

Company.

As of December 31, 2015, we had $319 million of total unrecognized compensation cost related to nonvested share-

based compensation arrangements granted under our plans. This cost is expected to be recognized over a weighted-

average period of 1.8 years as stock-based compensation expense. This expected cost does not include the impact of

any future stock-based compensation awards. Refer to Note 12 of Notes to Consolidated Financial Statements.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Selling, general and administrative expenses decreased $92 million, or 1 percent. Foreign currency fluctuations

decreased selling, general and administrative expenses by 2 percent. The decrease in stock-based compensation was

primarily due to reversals in 2014 of previously recognized expenses related to the Company's long-term incentive

compensation programs. The increase in advertising expenses reflects the company's increased investment to

strengthen our brands. This increase was partially offset by a foreign currency exchange impact of 4 percent. The

decrease in selling and distribution expenses is a result of the refranchising of certain territories in North America in

2014 and the deconsolidation of our Brazilian bottling operations as a result of their combination with an

independent bottling partner in July 2013.

53

Other Operating Charges

Other operating charges incurred by operating segment were as follows (in millions):

Year Ended December 31, 2015 2014 2013

Eurasia & Africa $ 16 $ 26 $ 2

Europe (25 ) 111 57

Latin America 40 295 —

North America 384 281 277

Asia Pacific 3 38 47

Bottling Investments 357 247 194

Corporate 882 185 318

Total $ 1,657 $ 1,183 $ 895

In 2015, the Company incurred other operating charges of $1,657 million. These charges included $691 million due

to the Company's productivity and reinvestment program and $292 million due to the integration of our German

bottling operations. In addition, the Company recorded impairment charges of $418 million primarily due to the

discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and incurred a

charge of $100 million due to a cash contribution we made to The Coca-Cola Foundation. The Company also

incurred a charge of $111 million due to the write-down we recorded related to receivables from our bottling partner

in Venezuela and an impairment of a Venezuelan trademark primarily due to changes in exchange rates as a result of

the establishment of the new open market exchange system. Refer to Note 18 of Notes to Consolidated Financial

Statements for additional information on the Company's productivity, integration and restructuring initiatives. Refer

to Note 2 of Notes to Consolidated Financial Statements for additional information on the Monster Transaction.

Refer to Note 1 of Notes to Consolidated Financial Statements for additional information on the Venezuelan

currency change. Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these charges had

on our operating segments.

In 2014, the Company incurred other operating charges of $1,183 million. These charges primarily consisted of

$601 million due to the Company's productivity and reinvestment program and $208 million due to the integration

of our German bottling operations. In addition, the Company incurred a charge of $314 million due to a write-down

we recorded related to receivables from our bottling partner in Venezuela and an impairment of a Venezuelan

trademark primarily due to higher exchange rates. The write-down was recorded as a result of our revised

assessment of the U.S. dollar value we expect to realize upon the conversion of the Venezuelan bolivar into U.S.

dollars by our bottling partner to pay our concentrate sales receivables. The Company also recorded a loss of $36

million as a result of the restructuring and transition of the Company's Russian juice operations to an existing joint

venture with an unconsolidated bottling partner. Refer to Note 18 of Notes to Consolidated Financial Statements and

see below for additional information on our productivity and reinvestment program as well as the Company's other

productivity, integration and restructuring initiatives. Refer to Note 1 of Notes to Consolidated Financial Statements

for additional information on the Venezuelan currency rate change. Refer to Note 19 of Notes to Consolidated

Financial Statements for the impact these charges had on our operating segments.

In 2013, the Company incurred other operating charges of $895 million, which primarily consisted of $494 million

associated with the Company's productivity and reinvestment program; $195 million due to the impairment of

certain intangible assets; $188 million due to the Company's other productivity, integration and restructuring

initiatives; and $22 million due to charges associated with certain of the Company's fixed assets. Refer to Note 17 of

Notes to Consolidated Financial Statements for further information on the impairment charges. Refer to Note 18 of

Notes to Consolidated Financial Statements and see below for further information on the Company's productivity

and reinvestment program, as well as the Company's other productivity, integration and restructuring initiatives.

Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these charges had on our operating

segments.

Productivity and Reinvestment Program

In February 2012, the Company announced a four-year productivity and reinvestment program designed to further

enable our efforts to strengthen our brands and reinvest our resources to drive long-term profitable growth. This

program is focused on the following initiatives: global supply chain optimization; global marketing and innovation

effectiveness; operating expense leverage and operational excellence; data and information technology systems

standardization; and the integration of Coca-Cola Enterprises Inc.'s ("Old CCE") former North America business.

54

In February 2014, the Company announced the expansion of our productivity and reinvestment program to drive an

incremental $1 billion in productivity by 2016 that will primarily be redirected into increased media investments.

Our incremental productivity goal consists of two relatively equal components. First, we will expand savings

through global supply chain optimization, data and information technology system standardization, and resource and

cost reallocation. Second, we will increase the effectiveness of our marketing investments by transforming our

marketing and commercial model to redeploy resources into more consumer-facing marketing investments to

accelerate growth.

In October 2014, the Company announced that we are further expanding our productivity and reinvestment program

and extending it through 2019. The expansion of the productivity initiatives will focus on four key areas:

restructuring the Company's global supply chain, including manufacturing in North America; implementing zero-

based work, an evolution of zero-based budget principles, across the organization; streamlining and simplifying the

Company's operating model; and further driving increased discipline and efficiency in direct marketing investments.

The Company expects that the expanded productivity initiatives will generate an incremental $2 billion in

annualized productivity. This productivity will enable the Company to fund marketing initiatives and innovation

required to deliver sustainable net revenue growth and will also support margin expansion and increased returns on

invested capital over time. We expect to achieve total annualized productivity of approximately $3.6 billion by 2019

from the initiatives implemented under this program since it began in 2012.

We have incurred total pretax expenses of $2,056 million since the initiative commenced in 2012. Refer to Note 18

of Notes to Consolidated Financial Statements for additional information.

Integration of Our German Bottling Operations

In 2008, the Company began the integration of our German bottling operations acquired in 2007. Since the

integration commenced, the Company has incurred total pretax expenses of $1,127 million primarily related to

involuntary terminations. We are currently reviewing additional restructuring opportunities within the German

bottling operations, including integration costs related to information technology and other initiatives. If

implemented, these initiatives will result in additional charges in future periods. Our German bottling operations are

now classified as held for sale. Refer to Note 18 of Notes to Consolidated Financial Statements.

Operating Income and Operating Margin

Information about our operating income contribution by operating segment on a percentage basis is as follows:

Year Ended December 31, 2015 2014 2013

Eurasia & Africa 11.3 % 11.2 % 10.6 %

Europe 33.1 29.4 28.0

Latin America 24.9 23.8 28.4

North America 28.5 25.2 23.8

Asia Pacific 25.1 25.2 24.2

Bottling Investments — 0.1 1.1

Corporate (22.9 ) (14.9 ) (16.1 )

Total 100.0 % 100.0 % 100.0 %

Information about our operating margin on a consolidated basis and by operating segment is as follows:

Year Ended December 31, 2015 2014 2013

Consolidated 19.7 % 21.1 % 21.8 %

Eurasia & Africa 40.7 % 39.7 % 39.3 %

Europe 63.6 58.9 61.5

Latin America 54.3 50.4 61.3

North America 11.4 11.4 11.3

Asia Pacific 46.5 46.6 46.1

Bottling Investments — 0.1 1.5

Corporate * * *

* Calculation is not meaningful.

55

Year Ended December 31, 2015 versus Year Ended December 31, 2014

In 2015, foreign currency exchange rate fluctuations unfavorably impacted consolidated operating income by

12 percent. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign

currencies, including the South African rand, euro, U.K. pound sterling, Brazilian real, Mexican peso, Australian

dollar and Japanese yen, which had an unfavorable impact on our Eurasia and Africa, Europe, Latin America, Asia

Pacific and Bottling Investments operating segments. Refer to the heading "Liquidity, Capital Resources and

Financial Position — Foreign Exchange" below.

During the year ended December 31, 2015, the Company's operating income was unfavorably impacted by the

refranchising of additional territories in North America and the sale of the Company's energy brands as part of the

Monster Transaction. The refranchising activities unfavorably impacted our North America operating segment and

the sale of the energy brands unfavorably impacted our Eurasia and Africa, Europe, Latin America, North America

and Asia Pacific operating segments. Refer to Note 2 of Notes to Consolidated Financial Statements for additional

information.

Operating income for Eurasia and Africa for the years ended December 31, 2015 and 2014 was $987 million and

$1,084 million, respectively. The segment was unfavorably impacted by fluctuations in foreign currency exchange

rates of 16 percent, partially offset by favorable pricing across most of the segment's business units.

Operating income for Europe for the years ended December 31, 2015 and 2014 was $2,888 million and $2,852

million, respectively. The Europe group was favorably impacted by a reduction in other operating charges primarily

related to the Company's productivity and reinvestment program. The favorable impact of the reduction in other

operating charges was partially offset by the unfavorable impact of foreign currency exchange rate fluctuations of 3

percent.

Operating income for the Latin America segment for the years ended December 31, 2015 and 2014 was $2,169

million and $2,316 million, respectively. Foreign currency exchange rate fluctuations unfavorably impacted

operating income by 31 percent, partially offset by the reduction in other operating charges and favorable price mix

in all of the segment's business units.

North America's operating income for the years ended December 31, 2015 and 2014 was $2,490 million and $2,447

million, respectively. The segment was favorably impacted by price increases and product and package mix,

partially offset by an increase in other operating charges.

Operating income in Asia Pacific for the years ended December 31, 2015 and 2014 was $2,189 million and $2,448

million, respectively. Operating income for the segment reflects the unfavorable impact of foreign currency

exchange rate fluctuations of 8 percent.

Our Bottling Investments segment's operating income for the years ended December 31, 2015 and 2014 was zero

and $9 million, respectively. The Bottling Investments segment was unfavorably impacted by an increase in other

operating charges partially offset by the favorable impact of acquisitions and divestitures. Refer to Note 2 of Notes

to Consolidated Financial Statements for additional information related to acquisitions and divestitures.

The Corporate segment's operating loss for the years ended December 31, 2015 and 2014 was $1,995 million and

$1,448 million, respectively. Operating loss in 2015 was unfavorably impacted by an impairment charge of $418

million primarily related to the discontinuation of the energy products in the glacéau portfolio as a result of the

Monster Transaction, a charge of $100 million due to a cash contribution we made to The Coca-Cola Foundation

and a $111 million charge due to an impairment of a Venezuelan trademark and a write-down the Company

recorded on receivables from our bottling partner in Venezuela.

56

Year Ended December 31, 2014 versus Year Ended December 31, 2013

In 2014, foreign currency exchange rate fluctuations unfavorably impacted consolidated operating income by

6 percent. The unfavorable impact of changes in foreign currency exchange rates was primarily due to a stronger

U.S. dollar compared to certain other foreign currencies, including the South African rand, Mexican peso, Brazilian

real, Australian dollar and Japanese yen, which had an unfavorable impact on our Eurasia and Africa, Latin

America, Asia Pacific and Bottling Investments operating segments. The unfavorable impact of a stronger U.S.

dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to

certain other foreign currencies, including the euro and British pound, which had a favorable impact on our Europe

and Bottling Investments operating segments. Refer to the heading "Liquidity, Capital Resources and Financial

Position — Foreign Exchange" below.

Operating income for Eurasia and Africa for the years ended December 31, 2014 and 2013 was $1,084 million and

$1,087 million, respectively. The segment was unfavorably impacted by fluctuations in foreign currency exchange

rates of 12 percent. The unfavorable impact of the foreign currency exchange rates was offset by favorable pricing

across many of the segment's markets.

Europe’s operating income for the years ended December 31, 2014 and 2013 was $2,852 million and $2,859 million,

respectively. The Europe group was favorably impacted by foreign currency exchange rate fluctuations of 2 percent.

The favorable impact of the foreign currency exchange rate fluctuations was offset by lower concentrate sales

volume and increased charges related to the Company’s productivity and reinvestment program.

Operating income in Latin America for the years ended December 31, 2014 and 2013 was $2,316 million and

$2,908 million, respectively. Foreign currency exchange rate fluctuations and the Venezuelan Fair Price Law

unfavorably impacted operating income by 12 percent and 9 percent, respectively. Operating income was also

unfavorably impacted by the write-down of receivables from our local bottling partner in Venezuela. Refer to Note 1

of Notes to Consolidated Financial Statements for additional information on the write-down of receivables. The

impact of these items was partially offset by favorable price mix in all of the segment's business units.

North America's operating income for the years ended December 31, 2014 and 2013 was $2,447 million and $2,432

million, respectively. The segment was favorably impacted by positive price mix and lower commodity costs,

partially offset by increased marketing investments.

Operating income in Asia Pacific for the years ended December 31, 2014 and 2013 was $2,448 million and $2,478

million, respectively. Operating income was favorably impacted by a 5 percent increase in concentrate sales and a

reduction in operating expenses, offset by the unfavorable impact of foreign currency exchange rate fluctuations of 8

percent.

Our Bottling Investments segment's operating income for the years ended December 31, 2014 and 2013 was $9

million and $115 million, respectively. The primary reason for the decrease in operating income was the

deconsolidation of the Company's Brazilian bottling operations in July 2013 and increased restructuring expenses

incurred by our German bottling operations. In addition, fluctuations in foreign currency unfavorably impacted the

segment's 2014 operating income by 4 percent.

The Corporate segment's operating loss for the years ended December 31, 2014 and 2013 was $1,448 million and

$1,651 million, respectively. Operating loss in 2013 was unfavorably impacted by a $195 million charge due to the

impairment of certain intangible assets.

57

Interest Income

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Interest income was $613 million in 2015, compared to $594 million in 2014, an increase of $19 million, or 3

percent. The increase primarily reflects higher average cash and investment balances and higher average interest

rates in certain of our international locations, partially offset by the unfavorable impact of fluctuations in foreign

currency exchange rates due to a stronger U.S. dollar against most major currencies.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Interest income was $594 million in 2014, compared to $534 million in 2013, an increase of $60 million, or

11 percent. The increase primarily reflects higher cash balances and higher average interest rates in certain of our

international locations, partially offset by the unfavorable impact of fluctuations in foreign currency exchange rates

due to a stronger U.S. dollar against most major currencies.

Interest Expense

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Interest expense was $856 million in 2015, compared to $483 million in 2014, an increase of $373 million, or 77

percent. The increase is primarily due to charges of $320 million the Company recorded on the early extinguishment

of certain long-term debt. These charges included the difference between the reacquisition price and the net carrying

amount of the debt extinguished, including the impact of the related fair value hedging relationship. Interest expense

also increased as a result of an overall increase in the total debt balances and a shift in the mix of our debt portfolio

from short-term to long-term debt. During the year ended December 31, 2015, the Company issued

SFr1,325 million, €8,500 million and $4,000 million of long-term debt. Refer to Note 5 of Notes to Consolidated

Financial Statements for additional information related to the Company's hedging program. Refer to the heading

"Liquidity, Capital Resources and Financial Position — Cash Flows from Financing Activities — Debt Financing"

below and Note 10 of Notes to Consolidated Financial Statements for additional information related to the

Company's long-term debt.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Interest expense was $483 million in 2014, compared to $463 million in 2013, an increase of $20 million, or 4

percent. The increase primarily reflects the impact of additional long-term debt the Company issued during late 2013

and 2014 as well as the unfavorable impact of interest rate swaps. In addition, interest expense in 2013 included

charges related to the Company's early extinguishment of long-term debt. Refer to Note 5 of Notes to Consolidated

Financial Statements for additional information related to the Company's hedging program. Refer to the heading

"Liquidity, Capital Resources and Financial Position — Cash Flows from Financing Activities — Debt Financing"

below for additional information related to the Company's long-term debt.

Equity Income (Loss) — Net

Year Ended December 31, 2015 versus Year Ended December 31, 2014

Equity income (loss) — net represents our Company's proportionate share of net income or loss from each of our

equity method investees. In 2015, equity income was $489 million, compared to equity income of $769 million in

2014, a decrease of $280 million, or 36 percent. This decrease reflects, among other items, the unfavorable impact of

the challenging economic conditions around the world where many of our equity method investees operate and

fluctuations in foreign currency exchange rates due to a stronger U.S. dollar against most major currencies. The

impact of these items was partially offset by the impact of acquisitions of equity investees. Refer to Note 2 of Notes

to Consolidated Financial Statements for additional information.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

In 2014, equity income was $769 million, compared to equity income of $602 million in 2013, an increase of $167

million, or 28 percent. This increase was primarily due to more favorable operating results reported by several of our

equity method investees, a decrease in the impact of unusual or infrequent charges recorded by certain of our equity

method investees, and the deconsolidation of our Brazilian bottling operations during 2013, which is now an equity

method investee. This increase was partially offset by the unfavorable impact of foreign currency fluctuations.

58

Other Income (Loss) — Net

Other income (loss) — net includes, among other things, the impact of foreign currency exchange gains and losses;

dividend income; rental income; gains and losses related to the disposal of property, plant and equipment; gains and

losses related to business combinations and disposals; realized and unrealized gains and losses on trading securities;

realized gains and losses on available-for-sale securities; other-than-temporary impairments of available-for-sale

securities; and the accretion of expense related to certain acquisitions. The foreign currency exchange gains and

losses are primarily the result of the remeasurement of monetary assets and liabilities from certain currencies into

functional currencies. The effects of the remeasurement of these assets and liabilities are partially offset by the

impact of our economic hedging program for certain exposures on our consolidated balance sheets. Refer to Note 5

of Notes to Consolidated Financial Statements.

In 2015, other income (loss) — net was income of $631 million. This income included a net gain of $1,403 million

as a result the Monster Transaction, primarily due to the difference in the recorded carrying value of the assets

transferred, including an allocated portion of goodwill, compared to the value of the total assets and business

acquired. Other income (loss) — net also included net foreign currency exchange gains of $149 million and

dividend income of $83 million. This income was partially offset by noncash losses of $1,006 million due to

refranchising activities in North America. The net foreign currency exchange gains included a gain of $300 million

associated with our foreign-denominated debt partially offset by a charge of $27 million due to the initial

remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate. The

Company determined that based on its economic circumstances, the SIMADI rate best represented the applicable

rate at which future transactions could be settled, including the payment of dividends. As such, the Company

remeasured the net assets related to its operations in Venezuela using the current SIMADI rate. Refer to Note 2 of

Notes to Consolidated Financial Statements for additional information on the Monster Transaction and North

America refranchising. Refer to the heading "Liquidity, Capital Resources and Financial Position — Foreign

Exchange" below and Note 1 of Notes to Consolidated Financial Statements for additional information on the charge

due to the change in Venezuelan exchange rates.

In 2014, other income (loss) — net was a loss of $1,263 million, primarily due to noncash losses of $799 million

related to the refranchising of certain territories in North America and foreign exchange losses of $569 million,

including a charge of $372 million due to the remeasurement of the net monetary assets of our Venezuelan

subsidiary using the SICAD 2 exchange rate. These charges were partially offset by dividend income of $51 million

and net gains of $45 million related to fluctuations in the carrying value of the Company's trading securities and

sales of available-for-sale securities. Refer to Note 1, Note 2 and Note 17 of Notes to Consolidated Financial

Statements.

In 2013, other income (loss) — net was income of $576 million, primarily related to a gain of $615 million due to

the deconsolidation of our Brazilian bottling operations as a result of their combination with an independent bottling

partner; a gain of $139 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional

shares of its own stock at per share amounts greater than the carrying value of the Company's per share investment;

and dividend income of $70 million. The favorable impact of these items was partially offset by a charge of $140

million due to the devaluation of the Venezuelan bolivar, which resulted in the Company remeasuring the net assets

related to its operations in Venezuela, and a net charge of $114 million related to our investment in four bottling

partners that merged during 2013 to form CCEJ through a share exchange. Refer to Note 2 and Note 17 of Notes to

Consolidated Financial Statements.

Income Taxes

Our effective tax rate reflects the tax benefits of having significant operations outside the United States, which are

generally taxed at rates lower than the U.S. statutory rate of 35.0 percent. As a result of employment actions and

capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants, including

Brazil, Costa Rica, Singapore and Swaziland. The terms of these grants expire from 2016 to 2023. We anticipate

that we will be able to extend or renew the grants in these locations. Tax incentive grants favorably impacted our

income tax expense by $223 million, $265 million and $279 million for the years ended December 31, 2015, 2014

and 2013, respectively. In addition, our effective tax rate reflects the benefits of having significant earnings

generated in investments accounted for under the equity method of accounting, which are generally taxed at rates

lower than the U.S. statutory rate.

59

A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows:

Year Ended December 31, 2015 2014 2013

Statutory U.S. federal tax rate 35.0 % 35.0 % 35.0 %

State and local income taxes — net of federal benefit 1.2 1.0 1.0

Earnings in jurisdictions taxed at rates different from the

statutory U.S. federal tax rate (12.7 ) 1 (11.5 ) 6,7 (10.3 ) 10,11,12

Equity income or loss (1.7 ) 2 (2.2 ) (1.4 ) 13

Other operating charges 1.2 3,4 2.9 8,9 1.2 14

Other — net 0.3 5 (1.6 ) (0.7 )

Effective tax rate 23.3 % 23.6 % 24.8 %

1 Includes a pretax charge of $27 million (or a 0.1 percent

impact on our effective tax rate) due to the remeasurement of

the net monetary assets of our local Venezuelan subsidiary into

U.S. dollars using the SIMADI exchange rate. Refer to Note 1

and Note 17 of Notes to Consolidated Financial Statements.

2 Includes a tax benefit of $5 million on a pretax charge of $87 million (or a 0.3 percent impact on our effective tax rate)

related to our proportionate share of unusual or infrequent items recorded by our equity method investees. Refer to Note 17 of

Notes to Consolidated Financial Statements.

3 Includes a tax benefit of $45 million on a pretax charge of $225 million (or a 0.3 percent impact on our effective tax rate)

primarily due to an impairment of a Venezuelan trademark, a write-down of receivables from our bottling partner in

Venezuela, a cash contribution to The Coca-Cola Foundation and charges associated with ongoing tax litigation. Refer to

Note 1 and Note 17 of Notes to Consolidated Financial Statements.

4 Includes a tax benefit of $259 million on pretax charges of $983 million (or a 0.9 percent impact on our effective tax rate)

primarily related to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to

Note 18 of Notes to Consolidated Financial Statements.

5 Includes tax expense of $150 million on pretax income of $77 million (or a 1.3 percent impact on our effective rate) primaril y

due to the gain related to the Monster Transaction, offset by charges related to the refranchising of certain territories in North

America and charges associated with the early extinguishment of long-term debt. Refer to Note 2 and Note 17 of Notes to

Consolidated Financial Statements.

6 Includes tax expense of $6 million on a pretax net charge of $372 million (or a 1.5 percent impact on our effective tax rate)

due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S. dollars using the SICAD 2

exchange rate. Refer to Note 1 of Notes to Consolidated Financial Statements.

7 Includes tax expense of $18 million (or a 0.2 percent impact on our effective tax rate) related to amounts required to be

recorded for changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions.

8 Includes tax expense of $55 million on a pretax charge of $352 million (or a 1.9 percent impact on our effective tax rate)

primarily due to an impairment of a Venezuelan trademark, a write-down on receivables from our bottling partner in

Venezuela, a charge associated with certain of the Company's fixed assets, and as a result of the restructuring and transition of

the Company's Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Refer to Note 1

and Note 17 of Notes to Consolidated Financial Statements.

9 Includes a tax benefit of $191 million on pretax charges of $809 million (or a 1 percent impact on our effective tax rate)

primarily related to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to

Note 18 of Notes to Consolidated Financial Statements.

10 Includes a tax benefit of $26 million (or a 0.2 percent impact on our effective tax rate) related to amounts required to be

recorded for changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions.

11 Includes tax expense of $279 million on pretax net gains of $501 million (or a 0.9 percent impact on our effective tax rate)

related to the deconsolidation of our Brazilian bottling operations upon their combination with an independent bottler and a

loss due to the merger of four of the Company's Japanese bottling partners. Refer to Note 2 and Note 17 of Notes to

Consolidated Financial Statements.

12 Includes tax expense of $3 million (or a 0.5 percent impact on our effective tax rate) related to a charge of $149 million due

to the devaluation of the Venezuelan bolivar. Refer to Note 19 of Notes to Consolidated Financial Statements.

13 Includes a tax benefit of $8 million on a pretax charge of $159 million (or a 0.4 percent impact on our effective tax rate)

related to our proportionate share of unusual or infrequent items recorded by our equity method investees. Refer to Note 17 of

Notes to Consolidated Financial Statements.

14 Includes a tax benefit of $175 million on pretax charges of $877 million (or a 1.2 percent impact on our effective tax rate)

primarily related to impairment charges recorded on certain of the Company's intangible assets and charges related to the

Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to Note 17 and Note 18 of

Notes to Consolidated Financial Statements.

60

As of December 31, 2015, the gross amount of unrecognized tax benefits was $168 million. If the Company were to

prevail on all uncertain tax positions, the net effect would be a benefit to the Company's effective tax rate of $148

million, exclusive of any benefits related to interest and penalties. The remaining $20 million, which was recorded

as a deferred tax asset, primarily represents tax benefits that would be received in different tax jurisdictions in the

event the Company did not prevail on all uncertain tax positions.

A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions):

Year Ended December 31, 2015 2014 2013

Beginning balance of unrecognized tax benefits $ 211 $ 230 $ 302

Increase related to prior period tax positions 4 13 1

Decrease related to prior period tax positions (9 ) (2 ) (7 )

Increase related to current period tax positions 5 11 8

Decrease related to settlements with taxing authorities (5 ) (5 ) (4 )

Decrease due to lapse of the applicable statute of limitations (23 ) (32 ) (59 )

Increase (decrease) due to effect of foreign currency exchange rate

changes (15 ) (4 ) (11 )

Ending balance of unrecognized tax benefits $ 168 $ 211 $ 230

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

The Company had $111 million, $113 million and $105 million in interest and penalties related to unrecognized tax

benefits accrued as of December 31, 2015, 2014 and 2013, respectively. Of these amounts, $8 million of expense

and $8 million of benefit were recognized through income tax expense in 2014 and 2013, respectively. For the year

ended December 31, 2015, an insignificant amount of interest and penalties were recognized through income tax

expense. If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would also be a

benefit to the Company's effective tax rate.

Based on current tax laws, the Company's effective tax rate in 2016 is expected to be 22.5 percent before

considering the effect of any unusual or special items that may affect our tax rate.

Liquidity, Capital Resources and Financial Position

We believe our ability to generate cash flows from operating activities is one of our fundamental financial strengths.

Refer to the heading "Cash Flows from Operating Activities" below. The near-term outlook for our business remains

strong, and we expect to generate substantial cash flows from operations in 2016. As a result of our expected cash

flows from operations, we have significant flexibility to meet our financial commitments. The Company does not

typically raise capital through the issuance of stock. Instead, we use debt financing to lower our overall cost of

capital and increase our return on shareowners' equity. Refer to the heading "Cash Flows from Financing Activities"

below. We have a history of borrowing funds domestically and continue to have the ability to borrow funds

domestically at reasonable interest rates. In addition, our domestic entities have recently borrowed and continue to

have the ability to borrow funds in international markets at reasonable interest rates. Our debt financing includes the

use of an extensive commercial paper program as part of our overall cash management strategy. The Company

reviews its optimal mix of short-term and long-term debt regularly and may replace certain amounts of commercial

paper, short-term debt and current maturities of long-term debt with new issuances of long-term debt in the future.

In addition to the Company's cash balances, commercial paper program, and our ability to issue long-term debt, we

also had $8,340 million in lines of credit for general corporate purposes as of December 31, 2015. These backup

lines of credit expire at various times from 2016 through 2019.

We have significant operations outside the United States. Unit case volume outside the United States represented

81 percent of the Company's worldwide unit case volume in 2015. We earn a substantial amount of our consolidated

operating income and income before income taxes in foreign subsidiaries that either sell concentrate to our local

bottling partners or, in certain instances, sell finished products directly to our customers to fulfill the demand for

Company beverage products outside the United States. A significant portion of these foreign earnings is considered

to be indefinitely reinvested in foreign jurisdictions where the Company has made, and will continue to make,

substantial investments to support the ongoing development and growth of our international operations.

Accordingly, no U.S. federal and state income taxes have been provided on the portion of our foreign earnings that

is considered to be indefinitely reinvested in foreign jurisdictions. The Company's cash, cash equivalents, short-term

investments and marketable securities held by our foreign subsidiaries totaled $17.9 billion as of December 31,

2015. With the exception of an insignificant amount, for which U.S. federal and state income taxes have already

been provided, we do not intend, nor do we foresee a need, to repatriate these funds.

61

Net operating revenues in the United States were $20.4 billion in 2015, or 46 percent of the Company's consolidated

net operating revenues. We expect existing domestic cash, cash equivalents, short-term investments, marketable

securities, cash flows from operations and the issuance of debt to continue to be sufficient to fund our domestic

operating activities and cash commitments for investing and financing activities. In addition, we expect existing

foreign cash, cash equivalents, short-term investments, marketable securities and cash flows from operations to

continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities.

In the future, should we require more capital to fund significant discretionary activities in the United States than is

generated by our domestic operations and is available through the issuance of domestic debt, we could elect to

repatriate future periods' earnings from foreign jurisdictions. This alternative could result in a higher effective tax

rate in the future. While the likelihood is remote, the Company could also elect to repatriate earnings from foreign

jurisdictions that have previously been considered to be indefinitely reinvested. Upon distribution of those earnings

in the form of dividends or otherwise, the Company would be subject to additional U.S. income taxes (net of an

adjustment for foreign tax credits) and withholding taxes payable to various foreign jurisdictions, where applicable.

This alternative could also result in a higher effective tax rate in the period in which such a determination is made to

repatriate prior period foreign earnings. Refer to Note 14 of Notes to Consolidated Financial Statements for further

information related to our income taxes and undistributed earnings of the Company's foreign subsidiaries.

Based on all the aforementioned factors, the Company believes its current liquidity position is strong, and we will

continue to meet all of our financial commitments for the foreseeable future. These obligations and anticipated cash

outflows include, but are not limited to, regular quarterly dividends, debt maturities, capital expenditures, share

repurchases and obligations included under the heading "Off-Balance Sheet Arrangements and Aggregate

Contractual Obligations" below.

Cash Flows from Operating Activities

Net cash provided by operating activities for the years ended December 31, 2015, 2014 and 2013 was $10,528

million, $10,615 million and $10,542 million, respectively.

Cash flows from operating activities decreased $87 million, or 1 percent, in 2015 compared to 2014. This decrease

primarily reflects the impact of foreign currency fluctuations and an increase in tax payments, partially offset by the

efficient management of working capital. Refer to the heading "Operations Review — Net Operating Revenues"

above for additional information on the impact of foreign currency fluctuations. Refer to Note 14 of Notes to

Consolidated Financial Statements for additional information on the tax payments.

Cash flows from operating activities increased $73 million, or 1 percent, in 2014 compared to 2013. This increase

primarily reflects the incremental pension contributions that were made in the first quarter of 2013 compared to

2014 as well as efficient management of working capital. The increase was partially offset by an unfavorable impact

of currency exchange rates during 2014. Refer to the heading "Operations Review — Net Operating Revenues"

above for additional information on the impact of foreign currency fluctuations.

Cash Flows from Investing Activities

Our cash flows provided by (used in) investing activities are summarized as follows (in millions):

Year Ended December 31, 2015 2014 2013

Purchases of investments $ (15,831 ) $ (17,800 ) $ (14,782 )

Proceeds from disposals of investments 14,079 12,986 12,791

Acquisitions of businesses, equity method investments and

nonmarketable securities (2,491 ) (389 ) (353 )

Proceeds from disposals of businesses, equity method investments

and nonmarketable securities 565 148 872

Purchases of property, plant and equipment (2,553 ) (2,406 ) (2,550 )

Proceeds from disposals of property, plant and equipment 85 223 111

Other investing activities (40 ) (268 ) (303 )

Net cash provided by (used in) investing activities $ (6,186 ) $ (7,506 ) $ (4,214 )

62

Purchases of Investments and Proceeds from Disposals of Investments

In 2015, purchases of investments were $15,831 million and proceeds from disposals of investments were $14,079

million. This activity resulted in a net cash outflow of $1,752 million during 2015. In 2014, purchases of

investments were $17,800 million and proceeds from disposals of investments were $12,986 million, resulting in a

net cash outflow of $4,814 million. In 2013, purchases of investments were $14,782 million and proceeds from

disposals of investments were $12,791 million, resulting in a net cash outflow of $1,991 million. These investments

include time deposits that have maturities greater than three months but less than one year and are classified in the

line item short-term investments in our consolidated balance sheets. The purchases during the years ended

December 31, 2015 and 2014 include our investments in Keurig Green Mountain, Inc. ("Keurig") of $830 million

and $1,567 million, respectively, partially offset by the net purchases and proceeds of our short-term investments

that were made as part of the Company's overall cash management strategy. Refer to Note 2 of Notes to

Consolidated Financial Statements for additional information on our investment in Keurig. In December 2015,

Keurig announced that it had entered into an agreement with JAB Holding Company ("JAB") under which a JAB-

led investor group will acquire Keurig for $92 per share in cash. The transaction is expected to close in the first

quarter of 2016, subject to customary closing conditions, including receipt of regulatory approvals. Upon the sale of

its shares, the Company will receive proceeds of approximately $2,380 million.

Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities

In 2015, the Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled

$2,491 million, which primarily included our equity investments in Monster and in Indonesian bottling operations

and the acquisition of a controlling interest in a South African bottling operation.

In 2014, the Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled

$389 million, which primarily included a joint investment with one of our bottling partners in a dairy company in

Ecuador.

In 2013, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled

$353 million. These activities primarily included our acquisition of the majority of the remaining outstanding shares

of innocent and a majority interest in bottling operations in Myanmar.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information related to our acquisitions

during the years ended December 31, 2015, 2014 and 2013.

Proceeds from Disposals of Businesses, Equity Method Investments and Nonmarketable Securities

In 2015, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $565

million, which included cash received as a result of a Brazilian bottling entity's majority interest owners exercising

their option to acquire from us an additional equity interest. The proceeds from disposals of businesses, equity

method investments and nonmarketable securities during 2015 also included the proceeds from the sale of the

Company's distribution assets, certain working capital items, and the grant of exclusive rights to distribute certain

beverage brands not owned by the Company, but distributed by CCR, to certain unconsolidated bottling partners as

part of the North America refranchising. Refer to Note 2 of Notes to Consolidated Financial Statements for

additional information.

In 2014, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $148

million, which represented the proceeds from the sale of the Company's distribution assets, certain working capital

items, and the grant of exclusive rights to distribute certain beverage brands not owned by the Company, but

distributed by CCR, to certain unconsolidated bottling partners as part of the North America refranchising. Refer to

Note 2 of Notes to Consolidated Financial Statements for additional information.

In 2013, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $872

million. These proceeds primarily related to the sale of a majority ownership interest in our previously consolidated

Philippine bottling operations, and separately, the deconsolidation of our Brazilian bottling operations. Refer to

Note 2 of Notes to Consolidated Financial Statements for additional information.

Property, Plant and Equipment

Purchases of property, plant and equipment net of disposals for the years ended December 31, 2015, 2014 and 2013

were $2,468 million, $2,183 million and $2,439 million, respectively.

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Total capital expenditures for property, plant and equipment and the percentage of such totals by operating segment

were as follows (in millions):

Year Ended December 31, 2015 2014 2013

Capital expenditures $ 2,553 $ 2,406 $ 2,550

Eurasia & Africa 0.7 % 1.3 % 1.6 %

Europe 1.4 2.2 1.3

Latin America 2.7 2.3 2.5

North America 52.5 53.7 53.9

Asia Pacific 3.2 3.2 4.6

Bottling Investments 28.8 26.1 25.2

Corporate 10.7 11.2 10.9

We expect our annual 2016 capital expenditures to be $2.5 billion to $3.0 billion as we continue to make

investments to enable growth in our business and further enhance our operational effectiveness.

Other Investing Activities

In 2015, cash used in other investing activities included a $530 million payment related to the Monster Transaction,

partially offset by the cash flow impact of the Company's derivative contracts designated as net investment hedges.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Monster

Transaction and Note 5 of Notes to Consolidated Financial Statements for additional information on the Company's

derivative contracts designated as net investment hedges.

In 2014, other investing activities were primarily related to loans to Fairlife, LLC, a value-added dairy joint venture,

as well as local investments in Argentina.

In 2013, other investing activities were primarily related to the acquisition of trademarks and certain other intangible

assets. None of these investments was individually significant.

Cash Flows from Financing Activities

Our cash flows provided by (used in) financing activities were as follows (in millions):

Year Ended December 31, 2015 2014 2013

Issuances of debt $ 40,434 $ 41,674 $ 43,425

Payments of debt (37,738 ) (36,962 ) (38,714 )

Issuances of stock 1,245 1,532 1,328

Purchases of stock for treasury (3,564 ) (4,162 ) (4,832 )

Dividends (5,741 ) (5,350 ) (4,969 )

Other financing activities 251 (363 ) 17

Net cash provided by (used in) financing activities $ (5,113 ) $ (3,631 ) $ (3,745 )

Debt Financing

Our Company maintains debt levels we consider prudent based on our cash flows, interest coverage ratio and

percentage of debt to capital. We use debt financing to lower our overall cost of capital, which increases our return

on shareowners' equity. This exposes us to adverse changes in interest rates. Our interest expense may also be

affected by our credit ratings.

As of December 31, 2015, our long-term debt was rated "AA" by Standard & Poor's, "Aa3" by Moody's and "A+"

by Fitch. Our commercial paper program was rated "A-1+" by Standard & Poor's, "P-1" by Moody's and "F1" by

Fitch. In assessing our credit strength, all three agencies consider our capital structure (including the amount and

maturity dates of our debt) and financial policies as well as the aggregated balance sheet and other financial

information of the Company. In addition, some rating agencies also consider the financial information of certain

bottlers, including CCE, Coca-Cola Amatil Limited, Coca-Cola Bottling Co. Consolidated, Coca-Cola FEMSA and

Coca-Cola Hellenic. While the Company has no legal obligation for the debt of these bottlers, the rating agencies

believe the strategic importance of the bottlers to the Company's business model provides the Company with an

incentive to keep these bottlers viable. It is our expectation that the credit rating agencies will continue using this

methodology. If our credit ratings were to be downgraded as a result of changes in our capital structure,

64

our major bottlers' financial performance, changes in the credit rating agencies' methodology in assessing our credit

strength, or for any other reason, our cost of borrowing could increase. Additionally, if certain bottlers' credit ratings

were to decline, the Company's equity income could be reduced as a result of the potential increase in interest

expense for those bottlers.

In February 2016, Standard & Poor's downgraded the Company's long-term debt rating to AA- with a stable outlook.

The Company does not believe that this downgrade will have a material adverse effect on our cost of borrowing.

We monitor our financial ratios and, as indicated above, the rating agencies consider these ratios in assessing our

credit ratings. Each rating agency employs a different aggregation methodology and has different thresholds for the

various financial ratios. These thresholds are not necessarily permanent, nor are they always fully disclosed to our

Company.

Our global presence and strong capital position give us access to key financial markets around the world, enabling

us to raise funds at a low effective cost. This posture, coupled with active management of our mix of short-term and

long-term debt and our mix of fixed-rate and variable-rate debt, results in a lower overall cost of borrowing. Our

debt management policies, in conjunction with our share repurchase program and investment activity, can result in

current liabilities exceeding current assets.

Issuances and payments of debt included both short-term and long-term financing activities. In 2015, the Company

had issuances of debt of $40,434 million, which included net issuances of $25,923 million of commercial paper and

short-term debt with maturities greater than 90 days. The Company's total issuances of debt also included long-term

debt issuances of $14,511 million, net of related discounts, premiums and issuance costs.

During 2015, the Company made payments of $37,738 million, which included net payments of $208 million of

commercial paper and short-term debt with maturities of 90 days or less, $31,711 million of payments of

commercial paper and short-term debt with maturities greater than 90 days and long-term debt payments of $5,819

million. The long-term debt payments included the extinguishment of $2,039 million of long-term debt prior to

maturity, which resulted in associated charges of $320 million that were recorded in the line item interest expense in

our consolidated statement of income. These charges included the difference between the reacquisition price and the

net carrying amount of the debt extinguished, including the impact of the related fair value hedging relationship.

In 2014, the Company had issuances of debt of $41,674 million, which included net issuances of $317 million of

commercial paper and short-term debt with maturities of 90 days or less and $37,799 million of issuances of

commercial paper and short-term debt with maturities greater than 90 days. The Company's total issuances of debt

also included long-term debt issuances of $3,558 million, net of related discounts and issuance costs.

During 2014, the Company made payments of debt of $36,962 million, which included $35,921 million for

payments of commercial paper and short-term debt with maturities greater than 90 days or less and long-term debt

payments of $1,041 million.

In 2013, the Company had issuances of debt of $43,425 million, which included $35,944 million of issuances of

commercial paper and short-term debt with maturities greater than 90 days. The Company's total issuances of debt

also included long-term debt issuances of $7,481 million, net of related discounts and issuance costs.

During 2013, the Company made payments of debt of $38,714 million, which included $70 million of net payments

of commercial paper and short-term debt with maturities of 90 days or less, $35,199 million of payments of

commercial paper and short-term debt with maturities greater than 90 days and long-term debt payments of $3,445

million. The long-term debt payments included the extinguishment of $2,154 million of long-term debt prior to

maturity, which resulted in associated charges of $53 million, including hedge accounting adjustments reclassified

from accumulated other comprehensive income, in the line item interest expense in our consolidated statement of

income during the year ended December 31, 2013.

The carrying value of the Company's long-term debt included fair value adjustments related to the debt assumed

from Old CCE of $411 million and $464 million as of December 31, 2015 and 2014, respectively. These fair value

adjustments are being amortized over the number of years remaining until the underlying debt matures. As of

December 31, 2015, the weighted-average maturity of the assumed debt to which these fair value adjustments relate

was approximately 20 years. The amortization of these fair value adjustments will be a reduction of interest expense

in future periods, which will typically result in our interest expense being less than the actual interest paid to service

the debt. Total interest paid was $515 million, $498 million and $498 million in 2015, 2014 and 2013, respectively.

Refer to Note 10 of Notes to Consolidated Financial Statements for additional information related to the Company's

long-term debt balances.

65

Issuances of Stock

The issuances of stock in 2015, 2014 and 2013 were primarily related to the exercise of stock options by Company

employees.

Share Repurchases

On July 20, 2006, the Board of Directors of the Company authorized a share repurchase program of up to 600

million shares of the Company's common stock. The program took effect on October 31, 2006. Although there were

approximately 43 million shares that were yet to be purchased under this share repurchase program, the Board of

Directors authorized a new share repurchase program of up to 500 million shares of the Company's common stock

on October 18, 2012 ("2012 Plan"). The 2012 Plan allowed the Company to continue repurchasing shares following

the completion of the prior program. The table below presents annual shares repurchased and average price per

share:

Year Ended December 31, 2015 2014 2013

Number of shares repurchased (in millions) 86 98 121

Average price per share $ 41.33 $ 40.97 $ 39.84

Since the inception of our initial share repurchase program in 1984 through our current program as of December 31,

2015, we have purchased 3.3 billion shares of our Company's common stock at an average price per share of $15.36.

In addition to shares repurchased under the share repurchase program authorized by our Board of Directors, the

Company's treasury stock activity also includes shares surrendered to the Company to pay the exercise price and/or

to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options

and/or the vesting of restricted stock issued to employees. In 2015, we repurchased $3.5 billion of our stock.

However, due to the timing of settlements, the total amount of treasury stock purchases that settled during 2015 was

$3.6 billion, which includes treasury stock that was purchased and settled during 2015 as well as treasury stock

purchased in December 2014 that settled in early 2015. The net impact of the Company's treasury stock issuance and

purchase activities in 2015 resulted in a net cash outflow of $2.3 billion. We currently expect to repurchase

$2.0 billion to $2.5 billion of our stock during 2016, net of proceeds from the issuance of treasury stock due to the

exercise of employee stock options.

Dividends

The Company paid dividends of $5,741 million, $5,350 million and $4,969 million during the years ended

December 31, 2015, 2014 and 2013, respectively.

At its February 2016 meeting, our Board of Directors increased our quarterly dividend by 6 percent, raising it to

$0.35 per share, equivalent to a full year dividend of $1.40 per share in 2016. This is our 54 th consecutive annual

increase. Our annual common stock dividend was $1.32 per share, $1.22 per share and $1.12 per share in 2015, 2014

and 2013, respectively. The 2015 dividend represented an 8 percent increase from 2014, and the 2014 dividend

represented a 9 percent increase from 2013.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Off-Balance Sheet Arrangements

In accordance with the definition under SEC rules, the following qualify as off-balance sheet arrangements:

• any obligation under certain guarantee contracts;

• a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that

serves as credit, liquidity or market risk support to that entity for such assets;

• any obligation under certain derivative instruments; and

• any obligation arising out of a material variable interest held by the registrant in an unconsolidated entity that

provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing,

hedging or research and development services with the registrant.

As of December 31, 2015, we were contingently liable for guarantees of indebtedness owed by third parties of $572

million, of which $263 million was related to VIEs. These guarantees are primarily related to third-party customers,

bottlers, vendors and container manufacturing operations and have arisen through the normal course of business.

These guarantees have various terms, and none of these guarantees was individually significant. The amount

represents the maximum potential future payments that we could be required to make under the guarantees;

however, we do not consider it probable that we will be required to satisfy these guarantees. Management concluded

that the likelihood of any significant amounts being paid by our

66

Company under these guarantees is not probable. As of December 31, 2015, we were not directly liable for the debt

of any unconsolidated entity, and we did not have any retained or contingent interest in assets as defined above.

Our Company recognizes all derivatives as either assets or liabilities at fair value in our consolidated balance sheets.

Refer to Note 5 of Notes to Consolidated Financial Statements.

As of December 31, 2015, the Company had $8,340 million in lines of credit for general corporate purposes. These

backup lines of credit expire at various times from 2016 through 2019. There were no borrowings under these

backup lines of credit during 2015. These credit facilities are subject to normal banking terms and conditions. Some

of the financial arrangements require compensating balances, none of which are presently significant to our

Company.

Aggregate Contractual Obligations

As of December 31, 2015, the Company's contractual obligations, including payments due by period, were as

follows (in millions):

Payments Due by Period

Total 2016 2017-2018 2019-2020 2021 and

Thereafter

Short-term loans and notes

payable:1

Commercial paper borrowings $ 13,035 $ 13,035 $ — $ — $ —

Lines of credit and other short-

term borrowings 95 95 — — —

Current maturities of long-term

debt2 2,679 2,679 — — —

Long-term debt, net of current

maturities2 28,150 — 6,660 6,232 15,258

Estimated interest payments3 6,011 553 1,022 899 3,537

Accrued income taxes4 331 331 — — —

Purchase obligations5 16,365 9,812 1,303 840 4,410

Marketing obligations6 4,260 2,302 914 546 498

Lease obligations 900 212 254 172 262

Held-for-sale obligations7 838 675 87 40 36

Total contractual obligations $ 72,664 $ 29,694 $ 10,240 $ 8,729 $ 24,001 1 Refer to Note 10 of Notes to Consolidated Financial Statements for information regarding

short-term loans and notes payable. Upon payment of outstanding commercial paper, we

typically issue new commercial paper. Lines of credit and other short-term borrowings

are expected to fluctuate depending upon current liquidity needs, especially at

international subsidiaries.

2 Refer to Note 10 of Notes to Consolidated Financial Statements for information regarding long-term debt. We will consider

several alternatives to settle this long-term debt, including the use of cash flows from operating activities, issuance of

commercial paper or issuance of other long-term debt.

3 We calculated estimated interest payments for our long-term debt based on the applicable rates and payment dates. For our

variable rate debt, we have assumed the December 31, 2015 rate for all years presented. We typically expect to settle such

interest payments with cash flows from operating activities and/or short-term borrowings.

4 Refer to Note 14 of Notes to Consolidated Financial Statements for information regarding income taxes. As of December 31,

2015, the noncurrent portion of our income tax liability, including accrued interest and penalties related to unrecognized tax

benefits, was $267 million, which was not included in the total above. At this time, the settlement period for the noncurrent

portion of our income tax liability cannot be determined. In addition, any payments related to unrecognized tax benefits would

be partially offset by reductions in payments in other jurisdictions.

5 Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that

specify all significant terms, including long-term contractual obligations, open purchase orders, accounts payable and certain

accrued liabilities. We expect to fund these obligations with cash flows from operating activities.

6 We expect to fund these marketing obligations with cash flows from operating activities.

7 Represents liabilities of the Company's North American territories, German bottling operations and South African bottling

operations that are classified as held for sale.

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The total accrued benefit liability for pension and other postretirement benefit plans recognized as of December 31,

2015, was $2,619 million. Refer to Note 13 of Notes to Consolidated Financial Statements. This amount is impacted

by, among other items, pension expense, funding levels, plan amendments, changes in plan demographics and

assumptions, and the investment return on plan assets. Because the accrued liability does not represent expected

liquidity needs, we did not include this amount in the contractual obligations table.

We generally expect to fund all future pension contributions with cash flows from operating activities. Our

international pension plans are generally funded in accordance with local laws and income tax regulations.

As of December 31, 2015, the projected benefit obligation of the U.S. qualified pension plans was $6,405 million,

and the fair value of plan assets was $5,628 million. The projected benefit obligation of all pension plans other than

the U.S. qualified pension plans was $2,754 million, and the fair value of all other pension plan assets was

$2,061 million. The majority of this underfunding is attributable to an international pension plan for certain non-

U.S. employees that is unfunded due to tax law restrictions, as well as certain unfunded U.S. nonqualified pension

plans. These U.S. nonqualified pension plans provide, for certain associates, benefits that are not permitted to be

funded through a qualified plan because of limits imposed by the Internal Revenue Code of 1986. The expected

benefit payments for these unfunded pension plans are not included in the table above. However, we anticipate

annual benefit payments for these unfunded pension plans to be $72 million in 2016 and remain near that level

through 2031, decreasing annually thereafter. Refer to Note 13 of Notes to Consolidated Financial Statements.

The Company expects to contribute an additional $512 million to our global pension plans, the majority of which

will be allocated to our U.S. plans. Refer to Note 13 of Notes to Consolidated Financial Statements. We did not

include our estimated contributions to our various plans in the table above.

In general, we are self-insured for large portions of many different types of claims; however, we do use commercial

insurance above our self-insured retentions to reduce the Company's risk of catastrophic loss. Our reserves for the

Company's self-insured losses are estimated through actuarial procedures of the insurance industry and by using

industry assumptions, adjusted for our specific expectations based on our claim history. As of December 31, 2015,

our self-insurance reserves totaled $560 million. Refer to Note 11 of Notes to Consolidated Financial Statements.

We did not include estimated payments related to our self-insurance reserves in the table above.

Deferred income tax liabilities as of December 31, 2015 were $5,434 million. Refer to Note 14 of Notes to

Consolidated Financial Statements. This amount is not included in the total contractual obligations table because we

believe that presentation would not be meaningful. Deferred income tax liabilities are calculated based on temporary

differences between the tax bases of assets and liabilities and their respective book bases, which will result in

taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The

results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future

periods. As a result, scheduling deferred income tax liabilities as payments due by period could be misleading,

because this scheduling would not relate to liquidity needs.

Foreign Exchange

Our international operations are subject to certain opportunities and risks, including currency fluctuations and

governmental actions. We closely monitor our operations in each country and seek to adopt appropriate strategies

that are responsive to changing economic and political environments, and to fluctuations in foreign currencies.

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In 2015, we used 72 functional currencies. Due to the geographic diversity of our operations, weakness in some of

these currencies might be offset by strength in others. In 2015, 2014 and 2013, the weighted-average exchange rates

for foreign currencies in which the Company conducted operations (all operating currencies), and for certain

individual currencies, strengthened (weakened) against the U.S. dollar as follows:

Year Ended December 31, 2015 2014 2013

All operating currencies (15 )% (5 )% (5 )%

Brazilian real (27 )% (10 )% (9 )%

Mexican peso (16 ) (4 ) 4

Australian dollar (17 ) (7 ) (6 )

South African rand (15 ) (12 ) (13 )

British pound (8 ) 6 (2 )

Euro (17 ) 1 3

Japanese yen (14 ) (8 ) (18 )

These percentages do not include the effects of our hedging activities and, therefore, do not reflect the actual impact

of fluctuations in foreign currency exchange rates on our operating results. Our foreign currency management

program is designed to mitigate, over time, a portion of the impact of exchange rate changes on our net income and

earnings per share.

The total currency impacts on net operating revenues, including the effect of our hedging activities, were decreases

of 7 percent and 2 percent in 2015 and 2014, respectively. The total currency impacts on income before income

taxes, including the effect of our hedging activities, were decreases of 6 percent in 2015 and 9 percent in 2014.

Foreign currency exchange gains and losses are primarily the result of the remeasurement of monetary assets and

liabilities from certain currencies into functional currencies. The effects of the remeasurement of these assets and

liabilities are partially offset by the impact of our economic hedging program for certain exposures on our

consolidated balance sheets. Refer to Note 5 of Notes to Consolidated Financial Statements. Foreign currency

exchange gains and losses are included as a component of other income (loss) — net in our consolidated financial

statements. Refer to the heading "Operations Review — Other Income (Loss) — Net" above. The Company

recorded foreign currency exchange gains of $149 million in 2015 and foreign currency losses of $569 million and

$162 million in 2014 and 2013, respectively.

Hyperinflationary Economies

A hyperinflationary economy is one that has cumulative inflation of 100 percent or more over a three-year period. In

accordance with accounting principles generally accepted in the United States, local subsidiaries in

hyperinflationary economies are required to use the U.S. dollar as their functional currency and remeasure the

monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency

for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized

currently in income.

Venezuela has been designated as a hyperinflationary economy. In February 2013, the Venezuelan government

devalued its currency to an official rate of exchange ("official rate") of 6.3 bolivars per U.S. dollar. At that time, the

Company remeasured the net monetary assets of our Venezuelan subsidiary at the official rate. As a result of the

devaluation, we recognized a loss of $140 million from remeasurement in the line item other income (loss) — net in

our consolidated statement of income.

Beginning in the first quarter of 2014, the Venezuelan government recognized three legal exchange rates to convert

bolivars to the U.S. dollar: (1) the official rate of 6.3 bolivars per U.S. dollar; (2) SICAD 1, which was available to

foreign investments and designated industry sectors to exchange a limited volume of bolivars for U.S. dollars using

a bid rate established at weekly auctions; and (3) SICAD 2, which applied to transactions that did not qualify for

either the official rate or SICAD 1. As of March 28, 2014, the three legal exchange rates were 6.3 (official rate),

10.8 (SICAD 1) and 50.9 (SICAD 2). We determined that the SICAD 1 rate was the most appropriate rate to use for

remeasurement given our circumstances and estimates of the applicable rate at which future transactions could be

settled, including the payment of dividends. Therefore, as of March 28, 2014, we remeasured the net monetary

assets of our Venezuelan subsidiary using an exchange rate of 10.8 bolivars per U.S. dollar, resulting in a charge of

$226 million recorded in the line item other income (loss) — net in our consolidated statement of income.

69

In December 2014, due to the continued lack of liquidity and increasing economic uncertainty, the Company

reevaluated the rate that should be used to remeasure the monetary assets and liabilities of our Venezuelan

subsidiary. As of December 31, 2014, we determined that the SICAD 2 rate of 50 bolivars per U.S. dollar was the

most appropriate legally available rate and remeasured the net monetary assets of our Venezuelan subsidiary,

resulting in a charge of $146 million recorded in the line item other income (loss) — net in our consolidated

statement of income.

In February 2015, the Venezuelan government merged SICAD 1 and SICAD 2 into a single mechanism called

SICAD and introduced a new open market exchange rate system, SIMADI. As a result, management determined that

the SIMADI rate was the most appropriate legally available rate and remeasured the net monetary assets of our

Venezuelan subsidiary, resulting in a charge of $27 million recorded in the line item other income (loss) — net in

our consolidated statement of income.

In addition to the foreign currency exchange exposure related to our Venezuelan subsidiary's net monetary assets,

we also sell concentrate to our bottling partner in Venezuela from outside the country. These sales are denominated

in U.S. dollars. During the years ended December 31, 2015 and December 31, 2014, as a result of the continued lack

of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of

Venezuelan bolivars into U.S. dollars by our bottling partner to pay our concentrate sales receivables, we recorded

write-downs of $56 million and $296 million, respectively, recorded in the line item other operating charges in our

consolidated statements of income.

We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. As a

result of the Company's revised expectations regarding the convertibility of the local currency, we recognized

impairment charges of $55 million and $18 million, respectively, during the years ended December 31, 2015 and

December 31, 2014. These charges were recorded in the line item other operating charges in our consolidated

statements of income.

During the year ended December 31, 2015, the Company continued to use the SIMADI rate to remeasure the net

monetary assets of our Venezuelan subsidiary. As of December 31, 2015, the combined value of the net monetary

assets of our Venezuelan subsidiary, the receivables from our bottling partner in Venezuela and the intangible assets

associated with products sold in Venezuela was $100 million. Included in this combined value is $15 million of cash

and cash equivalents. Despite the additional currency conversion mechanisms, the Company's ability to pay

dividends from Venezuela is still restricted due to the low volume of U.S. dollars available for conversion.

In February 2016, the Venezuelan government devalued its currency and changed its official and most preferential

exchange rate, which will continue to be used for purchases of certain essential goods, to 10 bolivars per U.S. dollar

from 6.3. The Venezuelan government announced it will reduce its three-tier system of exchange rates to two tiers

by eliminating the SICAD rate. Additionally, the government announced that the SIMADI rate will be allowed to

float freely beginning at a rate of 203 bolivars per U.S. dollar. As a result, the Company expects to continue to

record losses on foreign currency exchange, may incur additional write-downs of receivables or impairment charges

and will continue to record our proportionate share of any charges recorded by our equity method investee that has

operations in Venezuela.

Impact of Inflation and Changing Prices

Inflation affects the way we operate in many markets around the world. In general, we believe that, over time, we

will be able to increase prices to counteract the majority of the inflationary effects of increasing costs and to

generate sufficient cash flows to maintain our productive capability.

70

Overview of Financial Position

The following table illustrates the change in the individual line items of the Company's consolidated balance sheet

(in millions):

December 31, 2015 2014 Increase

(Decrease) Percent

Change

Cash and cash equivalents $ 7,309 $ 8,958 $ (1,649 ) (18 )%

Short-term investments 8,322 9,052 (730 ) (8 )

Marketable securities 4,269 3,665 604 16

Trade accounts receivable — net 3,941 4,466 (525 ) (12 )

Inventories 2,902 3,100 (198 ) (6 )

Prepaid expenses and other assets 2,752 3,066 (314 ) (10 )

Assets held for sale 3,900 679 3,221 474

Equity method investments 12,318 9,947 2,371 24

Other investments 3,470 3,678 (208 ) (6 )

Other assets 4,207 4,407 (200 ) (5 )

Property, plant and equipment — net 12,571 14,633 (2,062 ) (14 )

Trademarks with indefinite lives 5,989 6,533 (544 ) (8 )

Bottlers' franchise rights with indefinite lives 6,000 6,689 (689 ) (10 )

Goodwill 11,289 12,100 (811 ) (7 )

Other intangible assets 854 1,050 (196 ) (19 )

Total assets $ 90,093 $ 92,023 $ (1,930 ) (2 )%

Accounts payable and accrued expenses $ 9,660 $ 9,234 $ 426 5 %

Loans and notes payable 13,129 19,130 (6,001 ) (31 )

Current maturities of long-term debt 2,677 3,552 (875 ) (25 )

Accrued income taxes 331 400 (69 ) (17 )

Liabilities held for sale 1,133 58 1,075 1,853

Long-term debt 28,407 19,063 9,344 49

Other liabilities 4,301 4,389 (88 ) (2 )

Deferred income taxes 4,691 5,636 (945 ) (17 )

Total liabilities $ 64,329 $ 61,462 $ 2,867 5 %

Net assets $ 25,764 $ 30,561 $ (4,797 ) 1 (16 )%

1 Includes a decrease in net assets of $3,959 million

resulting from foreign currency translation adjustments

in various balance sheet accounts.

The increases (decreases) in the individual line items in the table above are primarily attributable to North America

refranchising and the Company's German bottling operations being classified as held for sale. Refer to Note 2 of

Notes to Consolidated Financial Statements for additional information. Additionally, the increases (decreases)

include the impact of the following:

• Equity method investments increased primarily due to our investment in Monster and a bottling partner in

Indonesia, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations. Refer to

Note 2 of Notes to Consolidated Financial Statements for additional information.

• Trademarks with indefinite lives decreased primarily due to the sale of our energy brands and the

discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction. Refer to

Note 2 of Notes to Consolidated Financial Statements for additional information.

• Loans and notes payable and current maturities of long-term debt decreased primarily due to the payments

related to commercial paper and the retirement of $3,500 million of long-term debt during the year ended

December 31, 2015.

• Long-term debt increased primarily due to the issuances of Swiss franc-denominated, euro-denominated and

U.S. dollar-denominated debt, partially offset by the early extinguishment of debt during the year ended

December 31, 2015. Refer to Note 10 of Notes to Consolidated Financial Statements for additional

information.

71

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our Company uses derivative financial instruments primarily to reduce our exposure to adverse fluctuations in

foreign currency exchange rates, interest rates, commodity prices and other market risks. We do not enter into

derivative financial instruments for trading purposes. As a matter of policy, all of our derivative positions are used to

reduce risk by hedging an underlying economic exposure. Because of the high correlation between the hedging

instrument and the underlying exposure, fluctuations in the value of the instruments are generally offset by

reciprocal changes in the value of the underlying exposure. The Company generally hedges anticipated exposures up

to 36 months in advance; however, the majority of our derivative instruments expire within 24 months or less.

Virtually all of our derivatives are straightforward over-the-counter instruments with liquid markets.

We monitor our exposure to financial market risks using several objective measurement systems, including a

sensitivity analysis to measure our exposure to fluctuations in foreign currency exchange rates, interest rates and

commodity prices. Refer to Note 5 of Notes to Consolidated Financial Statements for additional information about

our hedging transactions and derivative financial instruments.

Foreign Currency Exchange Rates

We manage most of our foreign currency exposures on a consolidated basis, which allows us to net certain

exposures and take advantage of any natural offsets. In 2015, we used 72 functional currencies and generated

$23,934 million of our net operating revenues from operations outside the United States; therefore, weaknesses in

some currencies might be offset by strengths in other currencies over time. We use derivative financial instruments

to further reduce our net exposure to foreign currency fluctuations.

Our Company enters into forward exchange contracts and purchases currency options (principally euros and

Japanese yen) and collars to hedge certain portions of forecasted cash flows denominated in foreign currencies.

Additionally, we enter into forward exchange contracts to offset the earnings impact related to foreign currency

fluctuations on certain monetary assets and liabilities. We also enter into forward exchange contracts as hedges of

net investments in international operations.

The total notional values of our foreign currency derivatives were $18,060 million and $23,553 million as of

December 31, 2015 and 2014, respectively. This total includes derivative instruments that are designated and qualify

for hedge accounting as well as economic hedges. The fair value of the contracts that qualify for hedge accounting

resulted in a net unrealized gain of $692 million as of December 31, 2015. At the end of 2015, we estimate that a

10 percent weakening of the U.S. dollar would have eliminated the net unrealized gain and created an unrealized

loss of $486 million. The fair value of the contracts that do not qualify for hedge accounting resulted in a net

unrealized gain of $278 million, and we estimate that a 10 percent weakening of the U.S. dollar would have

decreased the net unrealized gain to $238 million.

Interest Rates

The Company is subject to interest rate volatility with regard to existing and future issuances of debt. We monitor

our mix of fixed-rate and variable-rate debt as well as our mix of short-term debt and long-term debt. From time to

time, we enter into interest rate swap agreements to manage our exposure to interest rate fluctuations.

Based on the Company's variable-rate debt and derivative instruments outstanding as of December 31, 2015, a

1 percentage point increase in interest rates would have increased interest expense by $252 million in 2015.

However, this increase in interest expense would have been partially offset by the increase in interest income related

to higher interest rates.

The Company is subject to interest rate risk related to its investments in highly liquid securities. These investments

are primarily managed by external managers within the guidelines of the Company's investment policy. Our policy

requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal

loss. In addition, our policy limits the amount of credit exposure to any one issuer. We estimate that a 1 percentage

point increase in interest rates would result in a $52 million decrease in the fair value of our portfolio of highly

liquid securities.

72

Commodity Prices

The Company is subject to market risk with respect to commodity price fluctuations, principally related to our

purchases of sweeteners, metals, juices, PET and fuels. We manage our exposure to commodity risks primarily

through the use of supplier pricing agreements that enable us to establish the purchase prices for certain inputs that

are used in our manufacturing and distribution business. We also use derivative financial instruments to manage our

exposure to commodity risks at times. Certain of these derivatives do not qualify for hedge accounting, but they are

effective economic hedges that help the Company mitigate the price risk associated with the purchases of materials

used in our manufacturing processes and the fuel used to operate our extensive vehicle fleet.

Open commodity derivatives that qualify for hedge accounting had notional values of $8 million and $9 million as

of December 31, 2015 and 2014, respectively. The fair value of the contracts that qualify for hedge accounting

resulted in a net unrealized gain of $1 million. The potential change in fair value of these commodity derivative

instruments, assuming a 10 percent decrease in underlying commodity prices, would have resulted in a net

unrealized loss of $1 million.

Open commodity derivatives that do not qualify for hedge accounting had notional values of $893 million and

$816 million as of December 31, 2015 and 2014, respectively. The fair value of the contracts that do not qualify for

hedge accounting resulted in a net unrealized loss of $170 million. The potential change in fair value of these

commodity derivative instruments, assuming a 10 percent decrease in underlying commodity prices, would have

increased the net unrealized loss to $226 million.

73

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TABLE OF CONTENTS

Page

Consolidated Statements of Income 75

Consolidated Statements of Comprehensive Income 76

Consolidated Balance Sheets 77

Consolidated Statements of Cash Flows 78

Consolidated Statements of Shareowners' Equity 79

Notes to Consolidated Financial Statements 80

Report of Management 142

Report of Independent Registered Public Accounting Firm 144

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 145

Quarterly Data (Unaudited) 146

74

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31, 2015 2014 2013

(In millions except per share data)

NET OPERATING REVENUES $ 44,294 $ 45,998 $ 46,854

Cost of goods sold 17,482 17,889 18,421

GROSS PROFIT 26,812 28,109 28,433

Selling, general and administrative expenses 16,427 17,218 17,310

Other operating charges 1,657 1,183 895

OPERATING INCOME 8,728 9,708 10,228

Interest income 613 594 534

Interest expense 856 483 463

Equity income (loss) — net 489 769 602

Other income (loss) — net 631 (1,263 ) 576

INCOME BEFORE INCOME TAXES 9,605 9,325 11,477

Income taxes 2,239 2,201 2,851

CONSOLIDATED NET INCOME 7,366 7,124 8,626

Less: Net income attributable to noncontrolling interests 15 26 42

NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF

THE COCA-COLA COMPANY $ 7,351 $ 7,098 $ 8,584

BASIC NET INCOME PER SHARE1 $ 1.69 $ 1.62 $ 1.94

DILUTED NET INCOME PER SHARE1 $ 1.67 $ 1.60 $ 1.90

AVERAGE SHARES OUTSTANDING 4,352 4,387 4,434

Effect of dilutive securities 53 63 75

AVERAGE SHARES OUTSTANDING ASSUMING DILUTION 4,405 4,450 4,509

1 Calculated

based on net

income

attributable

to

shareowners

of The

Coca-Cola

Company.

Refer to Notes to Consolidated Financial Statements.

75

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31, 2015 2014 2013

(In millions)

CONSOLIDATED NET INCOME $ 7,366 $ 7,124 $ 8,626

Other comprehensive income:

Net foreign currency translation adjustment (3,959 ) (2,382 ) (1,187 )

Net gain (loss) on derivatives 142 357 151

Net unrealized gain (loss) on available-for-sale securities (684 ) 714 (80 )

Net change in pension and other benefit liabilities 86 (1,039 ) 1,066

TOTAL COMPREHENSIVE INCOME 2,951 4,774 8,576

Less: Comprehensive income (loss) attributable to noncontrolling

interests (3 ) 21 39

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO

SHAREOWNERS OF THE COCA-COLA COMPANY $ 2,954 $ 4,753 $ 8,537

Refer to Notes to Consolidated Financial Statements.

76

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2015 2014

(In millions except par value)

ASSETS

CURRENT ASSETS

Cash and cash equivalents $ 7,309 $ 8,958

Short-term investments 8,322 9,052

TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 15,631 18,010

Marketable securities 4,269 3,665

Trade accounts receivable, less allowances of $352 and $331, respectively 3,941 4,466

Inventories 2,902 3,100

Prepaid expenses and other assets 2,752 3,066

Assets held for sale 3,900 679

TOTAL CURRENT ASSETS 33,395 32,986

EQUITY METHOD INVESTMENTS 12,318 9,947

OTHER INVESTMENTS 3,470 3,678

OTHER ASSETS 4,207 4,407

PROPERTY, PLANT AND EQUIPMENT — net 12,571 14,633

TRADEMARKS WITH INDEFINITE LIVES 5,989 6,533

BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES 6,000 6,689

GOODWILL 11,289 12,100

OTHER INTANGIBLE ASSETS 854 1,050

TOTAL ASSETS $ 90,093 $ 92,023

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Accounts payable and accrued expenses $ 9,660 $ 9,234

Loans and notes payable 13,129 19,130

Current maturities of long-term debt 2,677 3,552

Accrued income taxes 331 400

Liabilities held for sale 1,133 58

TOTAL CURRENT LIABILITIES 26,930 32,374

LONG-TERM DEBT 28,407 19,063

OTHER LIABILITIES 4,301 4,389

DEFERRED INCOME TAXES 4,691 5,636

THE COCA-COLA COMPANY SHAREOWNERS' EQUITY

Common stock, $0.25 par value; Authorized — 11,200 shares;

Issued — 7,040 and 7,040 shares, respectively 1,760 1,760

Capital surplus 14,016 13,154

Reinvested earnings 65,018 63,408

Accumulated other comprehensive income (loss) (10,174 ) (5,777 )

Treasury stock, at cost — 2,716 and 2,674 shares, respectively (45,066 ) (42,225 )

EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA

COMPANY 25,554 30,320

EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS 210 241

TOTAL EQUITY 25,764 30,561

TOTAL LIABILITIES AND EQUITY $ 90,093 $ 92,023

Refer to Notes to Consolidated Financial Statements.

77

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31, 2015 2014 2013

(In millions)

OPERATING ACTIVITIES

Consolidated net income $ 7,366 $ 7,124 $ 8,626

Depreciation and amortization 1,970 1,976 1,977

Stock-based compensation expense 236 209 227

Deferred income taxes 73 (40 ) 648

Equity (income) loss — net of dividends (122 ) (371 ) (201 )

Foreign currency adjustments (137 ) 415 168

Significant (gains) losses on sales of assets — net (374 ) 831 (670 )

Other operating charges 929 761 465

Other items 744 149 234

Net change in operating assets and liabilities (157 ) (439 ) (932 )

Net cash provided by operating activities 10,528 10,615 10,542

INVESTING ACTIVITIES

Purchases of investments (15,831 ) (17,800 ) (14,782 )

Proceeds from disposals of investments 14,079 12,986 12,791

Acquisitions of businesses, equity method investments and nonmarketable

securities (2,491 ) (389 ) (353 )

Proceeds from disposals of businesses, equity method investments and

nonmarketable securities 565 148 872

Purchases of property, plant and equipment (2,553 ) (2,406 ) (2,550 )

Proceeds from disposals of property, plant and equipment 85 223 111

Other investing activities (40 ) (268 ) (303 )

Net cash provided by (used in) investing activities (6,186 ) (7,506 ) (4,214 )

FINANCING ACTIVITIES

Issuances of debt 40,434 41,674 43,425

Payments of debt (37,738 ) (36,962 ) (38,714 )

Issuances of stock 1,245 1,532 1,328

Purchases of stock for treasury (3,564 ) (4,162 ) (4,832 )

Dividends (5,741 ) (5,350 ) (4,969 )

Other financing activities 251 (363 ) 17

Net cash provided by (used in) financing activities (5,113 ) (3,631 ) (3,745 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND

CASH EQUIVALENTS (878 ) (934 ) (611 )

CASH AND CASH EQUIVALENTS

Net increase (decrease) during the year (1,649 ) (1,456 ) 1,972

Balance at beginning of year 8,958 10,414 8,442

Balance at end of year $ 7,309 $ 8,958 $ 10,414

Refer to Notes to Consolidated Financial Statements.

78

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY

Year Ended December 31, 2015 2014 2013

(In millions except per share data)

EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-

COLA COMPANY

NUMBER OF COMMON SHARES OUTSTANDING

Balance at beginning of year 4,366 4,402 4,469

Purchases of treasury stock (86 ) (98 ) (121 )

Treasury stock issued to employees related to stock compensation plans 44 62 54

Balance at end of year 4,324 4,366 4,402

COMMON STOCK $ 1,760 $ 1,760 $ 1,760

CAPITAL SURPLUS

Balance at beginning of year 13,154 12,276 11,379

Stock issued to employees related to stock compensation plans 532 526 569

Tax benefit (charge) from stock compensation plans 94 169 144

Stock-based compensation 236 209 227

Other activities — (26 ) (43 )

Balance at end of year 14,016 13,154 12,276

REINVESTED EARNINGS

Balance at beginning of year 63,408 61,660 58,045

Net income attributable to shareowners of The Coca-Cola Company 7,351 7,098 8,584 Dividends (per share — $1.32, $1.22 and $1.12 in 2015, 2014 and 2013,

respectively) (5,741 ) (5,350 ) (4,969 )

Balance at end of year 65,018 63,408 61,660

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Balance at beginning of year (5,777 ) (3,432 ) (3,385 )

Net other comprehensive income (loss) (4,397 ) (2,345 ) (47 )

Balance at end of year (10,174 ) (5,777 ) (3,432 )

TREASURY STOCK

Balance at beginning of year (42,225 ) (39,091 ) (35,009 )

Stock issued to employees related to stock compensation plans 696 891 745

Purchases of treasury stock (3,537 ) (4,025 ) (4,827 )

Balance at end of year (45,066 ) (42,225 ) (39,091 )

TOTAL EQUITY ATTRIBUTABLE TO SHAREOWNERS OF

THE COCA-COLA COMPANY $ 25,554 $ 30,320 $ 33,173

EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Balance at beginning of year $ 241 $ 267 $ 378

Net income attributable to noncontrolling interests 15 26 42

Net foreign currency translation adjustment (18 ) (5 ) (3 )

Dividends paid to noncontrolling interests (31 ) (25 ) (58 )

Acquisition of interests held by noncontrolling owners — — (34 )

Contributions by noncontrolling interests — — 6

Business combinations (3 ) (22 ) 25

Deconsolidation of certain entities — — (89 )

Other activities 6 — —

TOTAL EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS $ 210 $ 241 $ 267

Refer to Notes to Consolidated Financial Statements.

79

THE COCA-COLA COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500

nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters,

enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and

market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.

Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than

200 countries.

We make our branded beverage products available to consumers throughout the world through our network of

Company-owned or -controlled bottling and distribution operations, as well as independent bottling partners,

distributors, wholesalers and retailers — the world's largest beverage distribution system. Beverages bearing

trademarks owned by or licensed to us account for more than 1.9 billion of the approximately 58 billion servings of

all beverages consumed worldwide every day.

Our Company markets, manufactures and sells:

• beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we

refer to this part of our business as our "concentrate business" or "concentrate operations"); and

• finished sparkling and still beverages (we refer to this part of our business as our "finished product business"

or "finished product operations").

Generally, finished product operations generate higher net operating revenues but lower gross profit margins than

concentrate operations.

In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to

authorized bottling and canning operations (to which we typically refer as our "bottlers" or our "bottling partners").

Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or

sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages

are packaged in authorized containers — such as cans and refillable and nonrefillable glass and plastic bottles —

bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through

wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our

bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers

such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate

consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain

retailers.

Our finished product operations consist primarily of Company-owned or -controlled bottling, sales and distribution

operations, including Coca-Cola Refreshments ("CCR"), our bottling and customer service organization for the

United States and Canada. Our Company-owned or -controlled bottling, sales and distribution operations, other than

CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating

segment. Our finished product operations generate net operating revenues by selling sparkling beverages and a

variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink teas and coffees,

and certain water products, to retailers or to distributors, wholesalers and bottling partners who distribute them to

retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers, such

as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption,

or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers. In the

United States, we authorize wholesalers to resell our fountain syrups through nonexclusive appointments that neither

restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor restrict the territories in which

the wholesalers may resell in the United States.

80

Summary of Significant Accounting Policies

Basis of Presentation

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in

the United States ("U.S. GAAP"). The preparation of our consolidated financial statements requires us to make

estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the

disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future,

actual results may ultimately differ from these estimates and assumptions. Furthermore, when testing assets for

impairment in future periods, if management uses different assumptions or if different conditions occur, impairment

charges may result.

We use the equity method to account for investments in companies, if our investment provides us with the ability to

exercise significant influence over operating and financial policies of the investee. Our consolidated net income

includes our Company's proportionate share of the net income or loss of these companies. Our judgment regarding

the level of influence over each equity method investment includes considering key factors such as our ownership

interest, representation on the board of directors, participation in policy-making decisions and material intercompany

transactions.

We eliminate from our financial results all significant intercompany transactions, including the intercompany

transactions with consolidated variable interest entities ("VIEs") and the intercompany portion of transactions with

equity method investees.

Principles of Consolidation

Our Company consolidates all entities that we control by ownership of a majority voting interest as well as VIEs for

which our Company is the primary beneficiary. Generally, we consolidate only business enterprises that we control

by ownership of a majority voting interest. However, there are situations in which consolidation is required even

though the usual condition of consolidation (ownership of a majority voting interest) does not apply. Generally, this

occurs when an entity holds an interest in another business enterprise that was achieved through arrangements that

do not involve voting interests, which results in a disproportionate relationship between such entity's voting interests

in, and its exposure to the economic risks and potential rewards of, the other business enterprise. This

disproportionate relationship results in what is known as a variable interest, and the entity in which we have the

variable interest is referred to as a "VIE." An enterprise must consolidate a VIE if it is determined to be the primary

beneficiary of the VIE. The primary beneficiary has both (1) the power to direct the activities of the VIE that most

significantly impact the entity's economic performance, and (2) the obligation to absorb losses or the right to receive

benefits from the VIE that could potentially be significant to the VIE.

Our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations, for which

we were not determined to be the primary beneficiary. Our variable interests in these VIEs primarily relate to profit

guarantees or subordinated financial support. Refer to Note 11. Although these financial arrangements resulted in

our holding variable interests in these entities, they did not empower us to direct the activities of the VIEs that most

significantly impact the VIEs' economic performance. Our Company's investments, plus any loans and guarantees,

related to these VIEs totaled $2,687 million and $2,274 million as of December 31, 2015 and 2014, respectively,

representing our maximum exposures to loss. The Company's investments, plus any loans and guarantees, related to

these VIEs were not significant to the Company's consolidated financial statements.

In addition, our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations,

for which we were determined to be the primary beneficiary. As a result, we have consolidated these entities. Our

Company's investments, plus any loans and guarantees, related to these VIEs totaled $221 million and $266 million

as of December 31, 2015 and 2014, respectively, representing our maximum exposures to loss. The assets and

liabilities of VIEs for which we are the primary beneficiary were not significant to the Company's consolidated

financial statements.

Creditors of our VIEs do not have recourse against the general credit of the Company, regardless of whether they are

accounted for as consolidated entities.

Assets and Liabilities Held for Sale

Our Company classifies long-lived assets or disposal groups to be sold as held for sale in the period in which all of

the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the

asset or disposal group; the asset or disposal group is available for immediate sale in its present condition subject

only to terms that are usual and customary for sales of such assets or disposal groups; an active program to locate a

buyer and other actions required to complete the plan to sell the asset or disposal group have been initiated; the sale

of the asset or disposal group is probable, and transfer of the asset or disposal group is expected to qualify for

recognition as a completed sale within one year, except if events or circumstances beyond our control extend the

period of time required to sell the asset or disposal group beyond one year; the asset or disposal group is being

actively marketed for sale at a price that is reasonable in relation to its current fair

81

value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be

made or that the plan will be withdrawn.

We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying

value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in

which the held-for-sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset or

disposal group until the date of sale. We assess the fair value of a long-lived asset or disposal group less any costs to

sell each reporting period it remains classified as held for sale and report any subsequent changes as an adjustment

to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying

value of the asset at the time it was initially classified as held for sale.

Upon determining that a long-lived asset or disposal group meets the criteria to be classified as held for sale, the

Company ceases depreciation and reports long-lived assets and/or the assets and liabilities of the disposal group, if

material, in the line items assets held for sale and liabilities held for sale, respectively, in our consolidated balance

sheet. Refer to Note 2.

Revenue Recognition

Our Company recognizes revenue when persuasive evidence of an arrangement exists, delivery of products has

occurred, the sales price charged is fixed or determinable, and collectibility is reasonably assured. For our Company,

this generally means that we recognize revenue when title to our products is transferred to our bottling partners,

resellers or other customers. In particular, title usually transfers upon shipment to or receipt at our customers'

locations, as determined by the specific sales terms of the transactions. Our sales terms do not allow for a right of

return except for matters related to any manufacturing defects on our part.

Deductions from Revenue

Our customers can earn certain incentives including, but not limited to, cash discounts, funds for promotional and

marketing activities, volume-based incentive programs and support for infrastructure programs. The costs associated

with these incentives are included in deductions from revenue, a component of net operating revenues in our

consolidated statements of income. For customer incentives that must be earned, management must make estimates

related to the contractual terms, customer performance and sales volume to determine the total amounts earned and

to be recorded in deductions from revenue. In making these estimates, management considers past results. The

actual amounts ultimately paid may be different from our estimates.

In some situations, the Company may determine it to be advantageous to make advance payments to specific

customers to fund certain marketing activities intended to generate profitable volume and/or invest in infrastructure

programs with our bottlers that are directed at strengthening our bottling system and increasing unit case volume.

The Company also makes advance payments to certain customers for distribution rights. The advance payments

made to customers are initially capitalized and included in our consolidated balance sheets in prepaid expenses and

other assets and noncurrent other assets, depending on the duration of the agreements. The assets are amortized over

the applicable periods and included in deductions from revenue. The duration of these agreements typically range up

to 10 years.

Amortization expense for infrastructure programs was $61 million, $72 million and $69 million in 2015, 2014 and

2013, respectively. The aggregate deductions from revenue recorded by the Company in relation to these programs,

including amortization expense on infrastructure programs, were $6.8 billion, $7.0 billion and $6.9 billion in 2015,

2014 and 2013, respectively.

Advertising Costs

Our Company expenses production costs of print, radio, television and other advertisements as of the first date the

advertisements take place. All other marketing expenditures are expensed in the annual period in which the

expenditure is incurred. Advertising costs included in the line item selling, general and administrative expenses in

our consolidated statements of income were $4.0 billion, $3.5 billion and $3.3 billion in 2015, 2014 and 2013,

respectively. As of December 31, 2015 and 2014, advertising and production costs of $207 million and $228

million, respectively, were primarily recorded in the line item prepaid expenses and other assets in our consolidated

balance sheets.

For interim reporting purposes, we allocate our estimated full year marketing expenditures that benefit multiple

interim periods to each of our interim reporting periods. We use the proportion of each interim period's actual unit

case volume to the estimated full year unit case volume as the basis for the allocation. This methodology results in

our marketing expenditures being recognized at a standard rate per unit case. At the end of each interim reporting

period, we review our estimated full year unit case volume and our estimated full year marketing expenditures in

order to evaluate if a change in estimate is necessary. The impact of any changes in these full year estimates is

recognized in the interim period in which the change in estimate occurs. Our full year marketing expenditures are

not impacted by this interim accounting policy.

82

Shipping and Handling Costs

Shipping and handling costs related to the movement of finished goods from manufacturing locations to our sales

distribution centers are included in the line item cost of goods sold in our consolidated statements of income.

Shipping and handling costs incurred to move finished goods from our sales distribution centers to customer

locations are included in the line item selling, general and administrative expenses in our consolidated statements of

income. During the years ended December 31, 2015, 2014 and 2013, the Company recorded shipping and handling

costs of $2.5 billion, $2.7 billion and $2.7 billion, respectively, in the line item selling, general and administrative

expenses. Our customers do not pay us separately for shipping and handling costs related to finished goods.

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares

outstanding during the reporting period. Diluted net income per share is computed similarly to basic net income per

share, except that it includes the potential dilution that could occur if dilutive securities were exercised.

Approximately 27 million, 38 million and 28 million stock option awards were excluded from the computations of

diluted net income per share in 2015, 2014 and 2013, respectively, because the awards would have been antidilutive

for the years presented.

Cash Equivalents

We classify time deposits and other investments that are highly liquid and have maturities of three months or less at

the date of purchase as cash equivalents. We manage our exposure to counterparty credit risk through specific

minimum credit standards, diversification of counterparties and procedures to monitor our credit risk concentrations.

Short-Term Investments

We classify time deposits and other investments that have maturities of greater than three months but less than one

year as short-term investments.

Investments in Equity and Debt Securities

We use the equity method to account for our investments in equity securities if our investment gives us the ability to

exercise significant influence over operating and financial policies of the investee. We include our proportionate

share of earnings and/or losses of our equity method investees in equity income (loss) — net in our consolidated

statements of income. The carrying value of our equity investments is reported in equity method investments in our

consolidated balance sheets. Refer to Note 6.

We account for investments in companies that we do not control or account for under the equity method either at fair

value or under the cost method, as applicable. Investments in equity securities, other than investments accounted for

under the equity method, are carried at fair value if the fair value of the security is readily determinable. Equity

investments carried at fair value are classified as either trading or available-for-sale securities with their cost basis

determined by the specific identification method. Realized and unrealized gains and losses on trading securities and

realized gains and losses on available-for-sale securities are included in other income (loss) — net in our

consolidated statements of income. Unrealized gains and losses, net of deferred taxes, on available-for-sale

securities are included in our consolidated balance sheets as a component of accumulated other comprehensive

income (loss) ("AOCI"), except for the change in fair value attributable to the currency risk being hedged, if

applicable, which is included in other income (loss) — net in our consolidated statements of income. Trading

securities are reported as either marketable securities or other assets in our consolidated balance sheets. Securities

classified as available-for-sale are reported as either marketable securities, other investments or other assets in our

consolidated balance sheets, depending on the length of time we intend to hold the investment. Refer to Note 3.

Investments in equity securities that we do not control or account for under the equity method and do not have

readily determinable fair values for are accounted for under the cost method. Cost method investments are originally

recorded at cost, and we record dividend income when applicable dividends are declared. Cost method investments

are reported as other investments in our consolidated balance sheets, and dividend income from cost method

investments is reported in the line item other income (loss) — net in our consolidated statements of income.

Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities

that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as

held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and

classified as either trading or available-for-sale.

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Each reporting period we review all of our investments in equity and debt securities, except for those classified as

trading, to determine whether a significant event or change in circumstances has occurred that may have an adverse

effect on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared

to our cost basis in the investment. We also perform this evaluation every reporting period for each investment for

which our cost basis exceeded the fair value. The fair values of most of our investments in publicly traded

companies are often readily available based on quoted market prices. For investments in nonpublicly traded

companies, management's assessment of fair value is based on valuation methodologies including discounted cash

flows, estimates of sales proceeds, and appraisals, as appropriate. We consider the assumptions that we believe

hypothetical marketplace participants would use in evaluating estimated future cash flows when employing the

discounted cash flow or estimates of sales proceeds valuation methodologies.

In the event the fair value of an investment declines below our cost basis, management is required to determine if the

decline in fair value is other than temporary. If management determines the decline is other than temporary, an

impairment charge is recorded. Management's assessment as to the nature of a decline in fair value is based on,

among other things, the length of time and the extent to which the market value has been less than our cost basis; the

financial condition and near-term prospects of the issuer; and our intent and ability to retain the investment for a

period of time sufficient to allow for any anticipated recovery in market value.

Trade Accounts Receivable

We record trade accounts receivable at net realizable value. This value includes an appropriate allowance for

estimated uncollectible accounts to reflect any loss anticipated on the trade accounts receivable balances and

charged to the provision for doubtful accounts. We calculate this allowance based on our history of write-offs, the

level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the

economic status of, our bottling partners and customers. We believe our exposure to concentrations of credit risk is

limited due to the diverse geographic areas covered by our operations. Activity in the allowance for doubtful

accounts was as follows (in millions):

Year Ended December 31, 2015 2014 2013

Balance at beginning of year $ 331 $ 61 $ 53

Net charges to costs and expenses1 45 308 30

Write-offs (10 ) (13 ) (14 )

Other2 (14 ) (25 ) (8 )

Balance at end of year $ 352 $ 331 $ 61

1 The increase in 2014 was primarily related to

concentrate sales receivables from our bottling

partner in Venezuela. See Hyperinflationary

Economies discussion below for additional

information.

2 Other includes foreign currency translation and the impact of transferring certain assets to assets held for sale. See Note 2.

A significant portion of our net operating revenues and corresponding accounts receivable is derived from sales of

our products in international markets. Refer to Note 19. We also generate a significant portion of our net operating

revenues by selling concentrates and syrups to bottlers in which we have a noncontrolling interest, including Coca-

Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), Coca-Cola HBC AG ("Coca-Cola Hellenic"), and Coca-Cola

İçecek A.Ş. ("Coca-Cola İçecek"). Refer to Note 6.

Inventories

Inventories consist primarily of raw materials and packaging (which includes ingredients and supplies) and finished

goods (which include concentrates and syrups in our concentrate operations and finished beverages in our finished

product operations). Inventories are valued at the lower of cost or market. We determine cost on the basis of the

average cost or first-in, first-out methods. Refer to Note 4.

Derivative Instruments

Our Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential

impact of certain market risks. The primary market risks managed by the Company through the use of derivative

instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk. All derivatives are

carried at fair value in our consolidated balance sheets in the following line items, as applicable: prepaid expenses

and other assets; other assets; accounts payable and accrued expenses; and other liabilities. The cash flow impact of

the Company's derivative instruments is primarily included in our consolidated statements of cash flows in net cash

provided by operating activities. Refer to Note 5.

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Property, Plant and Equipment

Property, plant and equipment are stated at cost. Repair and maintenance costs that do not improve service potential

or extend economic life are expensed as incurred. Depreciation is recorded principally by the straight-line method

over the estimated useful lives of our assets, which are reviewed periodically and generally have the following

ranges: buildings and improvements: 40 years or less; and machinery, equipment and vehicle fleet: 20 years or less.

Land is not depreciated, and construction in progress is not depreciated until ready for service. Leasehold

improvements are amortized using the straight-line method over the shorter of the remaining lease term, including

renewals that are deemed to be reasonably assured, or the estimated useful life of the improvement. Depreciation is

not recorded during the period in which a long-lived asset or disposal group is classified as held for sale, even if the

asset or disposal group continues to generate revenue during the period. Depreciation expense, including the

depreciation expense of assets under capital lease, totaled $1,735 million, $1,716 million and $1,727 million in

2015, 2014 and 2013, respectively. Amortization expense for leasehold improvements totaled $18 million, $20

million and $16 million in 2015, 2014 and 2013, respectively.

Certain events or changes in circumstances may indicate that the recoverability of the carrying amount of property,

plant and equipment should be assessed, including, among others, a significant decrease in market value, a

significant change in the business climate in a particular market, or a current period operating or cash flow loss

combined with historical losses or projected future losses. When such events or changes in circumstances are

present, we estimate the future cash flows expected to result from the use of the asset or asset group and its eventual

disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the sum

of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we

recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds

the fair value. We use a variety of methodologies to determine the fair value of property, plant and equipment,

including appraisals and discounted cash flow models, which are consistent with the assumptions we believe

hypothetical marketplace participants would use. Refer to Note 7.

Goodwill, Trademarks and Other Intangible Assets

We classify intangible assets into three categories: (1) intangible assets with definite lives subject to amortization,

(2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. We determine the useful lives

of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible

asset. Factors we consider when determining useful lives include the contractual term of any agreement related to

the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or

other local regulations which could impact the useful life of the asset, and other economic factors, including

competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized,

primarily on a straight-line basis, over their useful lives, generally ranging from 1 to 20 years. Refer to Note 8.

When facts and circumstances indicate that the carrying value of definite-lived intangible assets may not be

recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume

and the resulting profit and cash flows. These estimated future cash flows are consistent with those we use in our

internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less

than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which

the carrying amount of the asset or asset group exceeds the fair value. We use a variety of methodologies to

determine the fair value of these assets, including discounted cash flow models, which are consistent with the

assumptions we believe hypothetical marketplace participants would use.

We test intangible assets determined to have indefinite useful lives, including trademarks, franchise rights and

goodwill, for impairment annually, or more frequently if events or circumstances indicate that assets might be

impaired. Our Company performs these annual impairment reviews as of the first day of our third fiscal quarter. We

use a variety of methodologies in conducting impairment assessments of indefinite-lived intangible assets, including,

but not limited to, discounted cash flow models, which are based on the assumptions we believe hypothetical

marketplace participants would use. For indefinite-lived intangible assets, other than goodwill, if the carrying

amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess.

The Company has the option to perform a qualitative assessment of indefinite-lived intangible assets, other than

goodwill, prior to completing the impairment test described above. The Company must assess whether it is more

likely than not that the fair value of the intangible asset is less than its carrying amount. If the Company concludes

that this is the case, it must perform the testing described above. Otherwise, the Company does not need to perform

any further assessment. During 2015, the Company performed qualitative assessments on 25 percent of our

indefinite-lived intangible assets balance.

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We perform impairment tests of goodwill at our reporting unit level, which is one level below our operating

segments. Our operating segments are primarily based on geographic responsibility, which is consistent with the

way management runs our business. Our operating segments are subdivided into smaller geographic regions or

territories that we sometimes refer to as "business units." These business units are also our reporting units. The

Bottling Investments operating segment includes all Company-owned or consolidated bottling operations, regardless

of geographic location, except for bottling operations managed by CCR, which are included in our North America

operating segment. Generally, each Company-owned or consolidated bottling operation within our Bottling

Investments operating segment is its own reporting unit. Goodwill is assigned to the reporting unit or units that

benefit from the synergies arising from each business combination.

The goodwill impairment test consists of a two-step process, if necessary. The first step is to compare the fair value

of a reporting unit to its carrying value, including goodwill. We typically use discounted cash flow models to

determine the fair value of a reporting unit. The assumptions used in these models are consistent with those we

believe hypothetical marketplace participants would use. If the fair value of the reporting unit is less than its

carrying value, the second step of the impairment test must be performed in order to determine the amount of

impairment loss, if any. The second step compares the implied fair value of the reporting unit's goodwill with the

carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds its implied fair

value, an impairment charge is recognized in an amount equal to that excess. The loss recognized cannot exceed the

carrying amount of goodwill.

The Company has the option to perform a qualitative assessment of goodwill prior to completing the two-step

process described above to determine whether it is more likely than not that the fair value of a reporting unit is less

than its carrying amount, including goodwill and other intangible assets. If the Company concludes that this is the

case, it must perform the two-step process. Otherwise, the Company will forego the two-step process and does not

need to perform any further testing. During 2015, the Company performed qualitative assessments on 10 percent of

our consolidated goodwill balance.

Impairment charges related to intangible assets are generally recorded in the line item other operating charges or, to

the extent they relate to equity method investees, in the line item equity income (loss) — net in our consolidated

statements of income.

Contingencies

Our Company is involved in various legal proceedings and tax matters. Due to their nature, such legal proceedings

and tax matters involve inherent uncertainties including, but not limited to, court rulings, negotiations between

affected parties and governmental actions. Management assesses the probability of loss for such contingencies and

accrues a liability and/or discloses the relevant circumstances, as appropriate. Refer to Note 11.

Stock-Based Compensation

Our Company sponsors equity plans that provide for the grant of awards including stock options, restricted stock

units, restricted stock and performance share units. The fair value of our stock option grants is estimated on the grant

date using a Black-Scholes-Merton option-pricing model. The Company recognizes compensation expense on a

straight-line basis over the period the grant is earned by the employee, generally four years.

The fair value of our restricted stock units, restricted stock and certain performance share units is the quoted market

value of the Company's stock on the grant date less the present value of the expected dividends not received during

the relevant holding period. For certain performance share units granted beginning in 2014, the Company includes a

relative total shareowner return ("TSR") modifier to determine the number of shares earned at the end of the

performance period. For these awards, the number of shares earned based on the certified achievement of the

predefined performance criteria will be reduced or increased if total shareowner return over the performance period

relative to a predefined compensation comparator group of companies falls outside of a defined range. The fair value

of performance share units that include the TSR modifier is determined using a Monte Carlo valuation model.

In the period it becomes probable that the minimum performance criteria specified in the performance share award

plan will be achieved, we recognize expense for the proportionate share of the total fair value of the award related to

the vesting period that has already lapsed. The remaining fair value of the award is expensed on a straight-line basis

over the balance of the vesting period. In the event the Company determines it is no longer probable that we will

achieve the minimum performance criteria specified in the plan, we reverse all of the previously recognized

compensation expense in the period such a determination is made. Refer to Note 12.

Pension and Other Postretirement Benefit Plans

Our Company sponsors and/or contributes to pension and postretirement health care and life insurance benefit plans

covering substantially all U.S. employees. We also sponsor nonqualified, unfunded defined benefit pension plans for

certain associates and participate in multi-employer pension plans in the United States. In addition, our Company

and its subsidiaries have various pension plans and other forms of postretirement arrangements outside the United

States. Refer to Note 13.

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Income Taxes

Income tax expense includes United States, state, local and international income taxes, plus a provision for U.S.

taxes on undistributed earnings of foreign subsidiaries not deemed to be indefinitely reinvested. Deferred tax assets

and liabilities are recognized for the tax consequences of temporary differences between the financial reporting basis

and the tax basis of existing assets and liabilities. The tax rate used to determine the deferred tax assets and liabilities

is the enacted tax rate for the year and manner in which the differences are expected to reverse. Valuation

allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The

Company records taxes that are collected from customers and remitted to governmental authorities on a net basis in

our consolidated statements of income.

The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. We

establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it

becomes uncertain based upon one of the following conditions: (1) the tax position is not "more likely than not" to

be sustained, (2) the tax position is "more likely than not" to be sustained, but for a lesser amount, or (3) the tax

position is "more likely than not" to be sustained, but not in the financial period in which the tax position was

originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax

position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the

technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent,

regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and

(3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax

positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally

resolved or when a tax assessment is raised. The number of years subject to tax assessments varies depending on the

tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the "more likely than

not" recognition threshold would be recognized in our income tax expense in the first interim period when the

uncertainty disappears under any one of the following conditions: (1) the tax position is "more likely than not" to be

sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the

statute of limitations for the tax position has expired. Refer to Note 11 and Note 14.

Translation and Remeasurement

We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S.

dollars at the appropriate spot rates as of the balance sheet date. Generally, our foreign subsidiaries use the local

currency as their functional currency. Changes in the carrying value of these assets and liabilities attributable to

fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of AOCI. Refer to

Note 15. Income statement accounts are translated using the monthly average exchange rates during the year.

Monetary assets and liabilities denominated in a currency that is different from a reporting entity's functional

currency must first be remeasured from the applicable currency to the legal entity's functional currency. The effect

of this remeasurement process is recognized in the line item other income (loss) — net in our consolidated

statements of income and is partially offset by the impact of our economic hedging program for certain exposures on

our consolidated balance sheets. Refer to Note 5.

Hyperinflationary Economies

A hyperinflationary economy is one that has cumulative inflation of 100 percent or more over a three-year period. In

accordance with U.S. GAAP, local subsidiaries in hyperinflationary economies are required to use the U.S. dollar as

their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the

rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses

resulting from remeasurement are recognized currently in income.

Venezuela has been designated as a hyperinflationary economy. In February 2013, the Venezuelan government

devalued its currency to an official rate of exchange ("official rate") of 6.3 bolivars per U.S. dollar. At that time, the

Company remeasured the net monetary assets of our Venezuelan subsidiary at the official rate. As a result of the

devaluation, we recognized a loss of $140 million from remeasurement in the line item other income (loss) — net in

our consolidated statement of income.

Beginning in the first quarter of 2014, the Venezuelan government recognized three legal exchange rates to convert

bolivars to the U.S. dollar: (1) the official rate of 6.3 bolivars per U.S. dollar; (2) SICAD 1, which was available to

foreign investments and designated industry sectors to exchange a limited volume of bolivars for U.S. dollars using

a bid rate established at weekly auctions; and (3) SICAD 2, which applied to transactions that did not qualify for

either the official rate or SICAD 1. As of March 28, 2014, the three legal exchange rates were 6.3 (official rate),

10.8 (SICAD 1) and 50.9 (SICAD 2). We determined that the SICAD 1 rate was the most appropriate rate to use for

remeasurement given our circumstances and estimates of the applicable rate at which future transactions could be

settled, including the payment of dividends. Therefore, as of March 28, 2014, we remeasured the net monetary

assets of our Venezuelan subsidiary using an exchange rate of 10.8 bolivars per U.S.

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dollar, resulting in a charge of $226 million recorded in the line item other income (loss) — net in our consolidated

statement of income.

In December 2014, due to the continued lack of liquidity and increasing economic uncertainty, the Company

reevaluated the rate that should be used to remeasure the monetary assets and liabilities of our Venezuelan

subsidiary. As of December 31, 2014, we determined that the SICAD 2 rate of 50 bolivars per U.S. dollar was the

most appropriate legally available rate and remeasured the net monetary assets of our Venezuelan subsidiary,

resulting in a charge of $146 million recorded in the line item other income (loss) — net in our consolidated

statement of income.

In February 2015, the Venezuelan government merged SICAD 1 and SICAD 2 into a single mechanism called

SICAD and introduced a new open market exchange rate system, SIMADI. As a result, management determined that

the SIMADI rate was the most appropriate legally available rate and remeasured the net monetary assets of our

Venezuelan subsidiary, resulting in a charge of $27 million recorded in the line item other income (loss) — net in

our consolidated statement of income.

In addition to the foreign currency exchange exposure related to our Venezuelan subsidiary's net monetary assets,

we also sell concentrate to our bottling partner in Venezuela from outside the country. These sales are denominated

in U.S. dollars. During the years ended December 31, 2015 and December 31, 2014, as a result of the continued lack

of liquidity and our revised assessment of the U.S. dollar value we expect to realize upon the conversion of

Venezuelan bolivars into U.S. dollars by our bottling partner to pay our concentrate sales receivables, we recorded

write-downs of $56 million and $296 million, respectively, recorded in the line item other operating charges in our

consolidated statements of income.

We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. As a

result of the Company's revised expectations regarding the convertibility of the local currency, we recognized

impairment charges of $55 million and $18 million, respectively, during the years ended December 31, 2015 and

December 31, 2014. These charges were recorded in the line item other operating charges in our consolidated

statements of income.

During the year ended December 31, 2015, the Company continued to use the SIMADI rate to remeasure the net

monetary assets of our Venezuelan subsidiary. As of December 31, 2015, the combined value of the net monetary

assets of our Venezuelan subsidiary, the receivables from our bottling partner in Venezuela and the intangible assets

associated with products sold in Venezuela was $100 million. Included in this combined value is $15 million of cash

and cash equivalents. Despite the additional currency conversion mechanisms, the Company's ability to pay

dividends from Venezuela is still restricted due to the low volume of U.S. dollars available for conversion.

In February 2016, the Venezuelan government devalued its currency and changed its official and most preferential

exchange rate, which will continue to be used for purchases of certain essential goods, to 10 bolivars per U.S. dollar

from 6.3. The Venezuelan government announced it will reduce its three-tier system of exchange rates to two tiers

by eliminating the SICAD rate. Additionally, the government announced that the SIMADI rate will be allowed to

float freely beginning at a rate of 203 bolivars per U.S. dollar. As a result, the Company expects to continue to

record losses on foreign currency exchange, may incur additional write-downs of receivables or impairment charges

and will continue to record our proportionate share of any charges recorded by our equity method investee that has

operations in Venezuela.

Recently Issued Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")

2014-09, Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in

U.S. GAAP and is intended to improve and converge with international standards the financial reporting

requirements for revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should

recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for

those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty

of revenue and cash flows arising from customer contracts, including significant judgments and changes in

judgments. ASU 2014-09 allows for both retrospective and prospective methods of adoption and will be effective

for the Company beginning January 1, 2018. The Company is currently evaluating the impact that the adoption of

ASU 2014-09 will have on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which changes the

guidance for evaluating whether to consolidate certain legal entities. Specifically, the amendments modify the

evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. Additionally,

the amendments eliminate the presumption that a general partner should consolidate a limited partnership and affect

the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee

arrangements and related party relationships. ASU 2015-02 will be effective for the Company beginning January 1,

2016. Companies have an option of using either a full retrospective or modified retrospective adoption approach.

The Company does not believe that the adoption of ASU 2015-02 will have a material impact on the Company's

financial position, results of operations or cash flows.

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In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires

that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction

from the carrying amount of that debt liability. The standard will be effective for the Company beginning January 1,

2016 and will be applied retrospectively. The Company expects that the only impact of the adoption of ASU 2015-

03 on our consolidated financial statements will be the change in balance sheet presentation of our debt issuance

costs.

In April 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in

Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This amendment removes the

requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the

net asset value per share. This guidance will be effective for the Company beginning January 1, 2016. The Company

expects that the implementation of this amendment will impact the Company's notes to the consolidated financial

statements but will not have an effect on the Company's financial position or results of operations.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of

Deferred Taxes. The amendments in this update simplify the presentation of deferred income taxes and require that

deferred tax liabilities and assets be classified as noncurrent in a consolidated statement of financial position. These

amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all

periods presented. The amendments will be effective for the Company beginning January 1, 2017. Earlier

application is permitted for all entities as of the beginning of an interim or annual reporting period.

NOTE 2: ACQUISITIONS AND DIVESTITURES

Acquisitions

During 2015, our Company's acquisitions of businesses, equity method investments and nonmarketable securities

totaled $2,491 million, which primarily related to our strategic partnership with Monster Beverage Corporation

("Monster") and an investment in a bottling partner in Indonesia that is accounted for under the equity method of

accounting. The bottling partner in Indonesia is a subsidiary of Coca-Cola Amatil Limited, an equity method

investee. We also acquired the remaining outstanding shares of a bottling partner in South Africa ("South African

bottler"), which was previously accounted for as an equity method investment. We remeasured our previously held

equity interest in the South African bottler to fair value upon the close of the transaction and recorded a loss on the

remeasurement of $19 million during the year ended December 31, 2015. This bottler will be included in the Coca-

Cola Beverages Africa Limited transaction discussed further below.

During 2014, our Company's acquisitions of businesses, equity method investments and nonmarketable securities

totaled $389 million and primarily included a joint investment with one of our bottling partners in a dairy company

in Ecuador, which is accounted for under the equity method of accounting.

During 2013, our Company's acquisitions of businesses, equity method investments and nonmarketable securities

totaled $353 million, which primarily included our acquisition of the majority of the remaining outstanding shares of

Fresh Trading Ltd. ("innocent") and a majority interest in bottling operations in Myanmar. The Company previously

accounted for our investment in innocent under the equity method of accounting. We remeasured our equity interest

in innocent to fair value upon the close of the transaction. The resulting gain on the remeasurement was not

significant to our consolidated financial statements.

Monster Beverage Corporation

On August 14, 2014, the Company and Monster entered into definitive agreements for a long-term strategic

relationship in the global energy drink category. The transaction contemplated under these agreements ("Monster

Transaction") closed on June 12, 2015. As a result of the Monster Transaction, (1) the Company purchased newly

issued shares of Monster common stock representing approximately 17 percent of the outstanding shares of Monster

common stock (after giving effect to the new issuance); (2) the Company sold its global energy drink business

(including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless) to Monster, and the Company

acquired Monster's non-energy drink business (including Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade

and Hansen's Juice Products); and (3) the parties amended their distribution coordination agreements to expand

distribution of Monster products into additional territories pursuant to long-term agreements with the Company's

existing network of Company-owned or -controlled bottling operations and distribution partners. The Coca-Cola

system also became Monster's preferred global distribution partner. The Company made a net cash payment of

$2,150 million to Monster, of which $125 million is being held in escrow, subject to release upon achievement of

milestones relating to the transfer of Monster's domestic distribution rights to our distribution network.

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The Monster Transaction consisted of multiple elements including the purchase of common stock, the acquisition

and divestiture of businesses and the expansion of distribution territories. When consideration transferred is not

solely in the form of cash, measurement is based on either the cost to the acquiring entity (the fair value of the assets

given) or the fair value of the assets acquired, whichever is more clearly evident and, thus, more reliably

measurable. As the majority of the consideration transferred was cash, we believe the fair value of the consideration

transferred is more reliably measurable. The consideration transferred consists of $2,150 million of cash (including

$125 million in escrow) and the fair value of our global energy business of $2,046 million, which we determined

using discounted cash flow analyses, resulting in total consideration transferred of $4,196 million. As such, we have

allocated the total consideration transferred to the individual assets and business acquired based on a relative fair

value basis, using the closing date fair values of each element, as follows (in millions):

June 12,

2015

Equity investment in Monster $ 3,066

Expansion of distribution territories 1,035

Monster non-energy drink business 95

Total assets and business acquired $ 4,196

In addition to our ownership interest in Monster's outstanding common stock, the Company is represented by two

directors on Monster's 10 member Board of Directors. Based on our equity ownership percentage, the significance

that our expanded distribution and coordination agreements have on Monster's operations, and our representation on

Monster's Board of Directors, the Company is accounting for its interest in Monster as an equity method investment.

As a result of the Monster Transaction, the North America Coca-Cola system obtained the right to distribute

Monster products in territories for which it was not previously the authorized distributor ("expanded territories").

These distribution rights are governed by an agreement with an initial term of 20 years, after which it will continue

to remain in effect unless otherwise terminated by either party and there are no future costs of renewal. As such,

these rights were determined to be indefinite-lived intangible assets and are classified in the line item bottlers'

franchise rights with indefinite lives in our consolidated balance sheet. CCR is the distributor in the majority of the

expanded territories. The remainder of the territories are serviced by independent bottling partners. Of the $1,035

million allocated to the expanded distribution rights, the Company derecognized $341 million related to the

expanded territories serviced by the independent bottling partners upon the close of the transaction. As consideration

for these rights, the Company received an up-front payment of $28 million related to these territories, and we will

receive a payment per case on all future sales made by these independent bottlers for the duration of the distribution

agreements. As these payments are dependent on future sales, they are a form of contingent consideration. We

elected to account for this consideration in the same manner as the contingent consideration to be received in the

North America refranchising, discussed below. This resulted in a net loss of $313 million recorded in the line item

other income (loss) — net in our consolidated statement of income during the year ended December 31, 2015.

During the year ended December 31, 2015, the Company recognized a gain of $1,715 million on the sale of our

global energy drink business, primarily due to the difference in the recorded carrying value of the assets transferred,

including an allocated portion of goodwill, compared to the value of the total assets and business acquired. After

considering the loss resulting from the derecognition of the expanded territory rights serviced by the independent

bottling partners, the net gain recognized on the Monster Transaction was $1,403 million, which was recorded in the

line item other income (loss) — net in our consolidated statement of income. Additionally, under the terms of the

Monster Transaction, we were required to discontinue selling energy products under certain trademarks, including

one trademark in the glacéau portfolio. The Company recognized an impairment charge of $380 million upon

closing, primarily related to the discontinuation of the energy products in the glacéau portfolio, which was recorded

in the line item other operating charges in our consolidated statement of income.

During the year ended December 31, 2015, based on the relative fair values of the total assets and business acquired,

$1,620 million of the $2,150 million cash payment made was classified in the line item acquisitions of businesses,

equity method investments and nonmarketable securities in our consolidated statement of cash flows. The remaining

$530 million was classified in the line item other investing activities in our consolidated statement of cash flows.

90

Keurig Green Mountain, Inc.

In February 2014, the Company purchased newly issued shares in Keurig Green Mountain, Inc. ("Keurig") for

$1,265 million, including transaction costs of $14 million. In May 2014, the Company purchased additional shares

of Keurig in the market for $302 million, which represented an additional 2 percent equity position in Keurig.

Subsequent to these purchases, the Company entered into an agreement with Credit Suisse Capital LLC ("CS") to

purchase additional shares of Keurig which would increase the Company's equity position to a 16 percent interest

based on the total number of issued and outstanding shares of Keurig as of May 1, 2014. Under the agreement, the

Company was to purchase from CS, on a date selected by CS no later than February 2015, the lesser of (1)

6.5 million shares of Keurig or (2) the number of shares that shall cause our ownership to equal 16 percent. The

purchase price per share was the average of the daily volume-weighted average price per share from May 15, 2014,

to the date selected by CS, as adjusted in certain circumstances specified in the agreement. CS had exclusive

ownership and control over any such shares until delivered to the Company. In February 2015, the Company

purchased 6.4 million shares from CS under this agreement for a total purchase price of $830 million. As this

agreement qualified as a derivative, we recognized a loss of $58 million in the line item other income (loss) — net in

our consolidated statement of income during the year ended December 31, 2015. The Company recognized a

cumulative loss of $47 million in the line item other income (loss) — net in our consolidated statement of income

over the term of the agreement.

We account for the investment in Keurig as an available-for-sale security, which is included in the line item other

investments in our consolidated balance sheet. These purchases of the shares were included in the line item

purchases of investments in our consolidated statement of cash flows, net of any related derivative impact.

German Bottling Operations

In conjunction with the Company's acquisition of German bottling operations in 2007, the former owners received

put options to sell their respective shares in the operations back to the Company in January 2014. During the year

ended December 31, 2014, the Company paid $503 million to purchase these shares, which was included in the line

item other financing activities in our consolidated statement of cash flows, resulting in 100 percent ownership of our

German bottling operations.

Divestitures

During 2015, proceeds from disposals of businesses, equity method investments and nonmarketable securities

totaled $565 million, which included proceeds from the refranchising of certain of our territories in North America

and proceeds from the sale of a 10 percent interest in a Brazilian bottling partner as a result of the majority owners

exercising their right to acquire additional shares from us.

During 2014, proceeds from disposals of businesses, equity method investments and nonmarketable securities

totaled $148 million, which primarily represented the proceeds from the refranchising of certain of our territories in

North America.

During 2013, proceeds from disposals of businesses, equity method investments and nonmarketable securities

totaled $872 million. These proceeds primarily included the sale of a majority ownership interest in our previously

consolidated bottling operations in the Philippines ("Philippine bottling operations"), and separately, the

deconsolidation of our bottling operations in Brazil ("Brazilian bottling operations").

North America Refranchising

In conjunction with implementing a new beverage partnership model in North America, the Company refranchised

territories that were previously managed by CCR to certain of our unconsolidated bottling partners. These territories

generally border these bottlers' existing territories, allowing each bottler to better service local customers and

provide more efficient execution. By entering into comprehensive beverage agreements ("CBAs") with each of the

bottlers, we granted certain exclusive territory rights for the distribution, promotion, marketing and sale of

Company-owned and licensed beverage products as defined by the CBA. In some cases, the Company has entered

into, or agreed to enter into, manufacturing agreements that authorize certain bottlers that have executed a CBA to

manufacture certain beverage products. If a bottler has not entered into a specific manufacturing agreement, then

under the CBA for these territories, CCR retains the rights to produce these beverage products and the bottlers will

purchase from CCR (or other Company-authorized manufacturing bottlers) substantially all of the related finished

products needed in order to service the customers in these territories.

91

Each CBA generally has a term of 10 years and is renewable, in most cases by the bottler and in some cases by the

Company, indefinitely for successive additional terms of 10 years each. Under the CBA, the bottlers will make

ongoing quarterly payments to the Company based on their gross profit in the refranchised territories throughout the

term of the CBA, including renewals, in exchange for the grant of the exclusive territory rights.

Contemporaneously with the grant of these rights, the Company sold the distribution assets, certain working capital

items, and the exclusive rights to distribute certain beverage brands not owned by the Company, but distributed by

CCR, in each of these territories to the respective bottlers in exchange for cash. These rights include, where

applicable, the recently acquired Monster distribution rights discussed above. During the years ended December 31,

2015 and December 31, 2014, cash proceeds from these sales totaled $362 million and $143 million, respectively.

Included in the cash proceeds for the years ended December 31, 2015 and December 31, 2014 was $83 million and

$42 million, respectively, from Coca-Cola Bottling Co. Consolidated, an equity method investee. Under the

applicable accounting guidance, we were required to derecognize all of the tangible assets sold as well as the

intangible assets transferred, including distribution rights, customer relationships and an allocated portion of

goodwill related to these territories.

Additionally, in September 2015, the Company announced the formation of a new National Product Supply System

("NPSS") which will facilitate optimal operation of the U.S. product supply system. Under the NPSS, the Company

and several of its existing independent producing bottlers will administer key national product supply activities for

these bottlers, which currently represent approximately 95 percent of the U.S. produced volume. As part of the

NPSS, it is anticipated that each of these bottlers will acquire certain production facilities from CCR in exchange for

cash, subject to the parties reaching definitive agreements. The transition of these production facilities is anticipated

to take place by the end of 2017.

We recognized noncash losses of $1,006 million and $799 million during the years ended December 31, 2015 and

December 31, 2014, respectively. These losses primarily related to the derecognition of the intangible assets

transferred or reclassified as held for sale, and were included in the line item other income (loss) — net in our

consolidated statements of income. See further discussion of assets and liabilities held for sale below. We expect to

recover the value of the intangible assets transferred to the bottlers under the CBAs through the future quarterly

payments; however, as the payments for the territory rights are dependent on the bottlers' future gross profit in these

territories, they are considered a form of contingent consideration.

There is diversity in practice as it relates to the accounting for contingent consideration by the seller. The seller can

account for the future contingent payments received as a gain contingency, recognizing the amounts in the income

statement only after the related contingencies are resolved and the gain is realized, which in this arrangement will be

quarterly as the bottlers earn gross profit in the transferred territories. Alternatively, the seller can record a

receivable for the contingent consideration at fair value on the date of sale and record any future differences between

the payments received and this receivable in the income statement as they occur. We elected the gain contingency

treatment since the quarterly payments will be received throughout the terms of the CBAs, including all subsequent

renewals, regardless of the cumulative amount received as compared to the value of the intangible assets transferred.

Philippine Bottling Operations

On January 25, 2013, the Company sold a 51 percent interest in our Philippine bottling operations to Coca-Cola

FEMSA, an equity method investee. The Company accounts for our remaining 49 percent ownership interest in the

Philippine bottling operations under the equity method of accounting. As a result of this transaction, we remeasured

our remaining investment in the Philippine bottling operations to fair value taking into consideration the sale price of

the majority ownership interest. Coca-Cola FEMSA has an option to purchase our remaining ownership interest in

the Philippine bottling operations at any time during the seven years following closing based on the initial purchase

price plus a defined return. Coca-Cola FEMSA also has an option exercisable during the sixth year after closing to

sell its ownership interest back to the Company at a price not to exceed the initial purchase price.

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Brazilian Bottling Operations

On July 3, 2013, the Company combined our Brazilian bottling operations with an independent bottler in Brazil in a

transaction involving a disposition of shares for cash and an exchange of shares for a 44 percent minority ownership

interest in the newly combined entity, which was recorded at fair value. This combination resulted in the

deconsolidation of our Brazilian bottling operations. As a result of this transaction, the Company recognized a gain

of $615 million in the line item other income (loss) — net in our consolidated statement of income during the year

ended December 31, 2013.

The owners of the majority interest have the option to acquire up to 24 percent of the new entity's outstanding shares

from us at any time for a period of six years beginning December 31, 2013, based on an agreed-upon formula. In

December 2014, the Company received notification that the owners of the majority interest had exercised their

option to acquire from us a 10 percent interest in the entity's outstanding shares. During the year ended

December 31, 2014, we recorded an estimated loss of $32 million as a result of the exercise price being lower than

our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of

$6 million during the year ended December 31, 2015, calculated based on the final option price. As a result of this

transaction, the Company's ownership was reduced to 34 percent of the entity’s outstanding shares. The owners of

the majority interest have a remaining option to acquire an additional 14 percent interest of the entity's outstanding

shares at any time through December 31, 2019, based on an agreed-upon formula.

Assets and Liabilities Held for Sale

North America Refranchising

As of December 31, 2015, the Company had entered into agreements to refranchise additional territories in North

America. These territories met the criteria to be classified as held for sale. Additionally, to the extent that the parties

have reached definitive agreements related to the transfer of production assets in conjunction with the new NPSS,

and the related transfer is anticipated to close within a year, the related assets also met the criteria to be classified as

held for sale. As such, we were required to record the related assets and liabilities at the lower of carrying value or

fair value less any costs to sell based on the agreed-upon sale price. The Company expects these transactions to

close at various times throughout 2016.

Coca-Cola European Partners

In August 2015, the Company entered into an agreement to merge our German bottling operations with Coca-

Cola Enterprises, Inc. ("CCE") and Coca-Cola Iberian Partners SA ("CCIP") to create Coca-Cola European Partners

("CCEP"). At closing, the Company will own 18 percent of CCEP, which we anticipate accounting for as an equity

method investment based on our equity ownership percentage, our representation on CCEP's Board of Directors and

other governance rights. The Boards of Directors of the Company, CCE and CCIP have approved the transaction.

The proposed merger is subject to approval by CCE's shareowners, receipt of regulatory clearances and other

customary conditions. The merger is expected to close in the second quarter of 2016. As a result of this agreement,

our German bottling operations met the criteria to be classified as held for sale as of December 31, 2015. We were

not required to record the related assets and liabilities at fair value less any costs to sell because their fair value

exceeded our carrying value.

Coca-Cola Beverages Africa Limited

In November 2014, the Company, SAB Miller plc, and Gutsche Family Investments entered into an agreement to

combine the bottling operations of each of the parties' nonalcoholic ready-to-drink beverage businesses in Southern

and East Africa. Upon completion of the proposed merger, the Company will have an ownership of 11 percent in the

bottler which will be called Coca-Cola Beverages Africa Limited. The Company will also acquire or license several

brands in exchange for cash as a result of the transaction. As of December 31, 2015, our South African bottling

operations and related equity method investments met the criteria to be classified as held for sale, but we were not

required to record these assets and liabilities at fair value less any costs to sell because their fair value exceeded our

carrying value. The Company expects the transaction to close in the second quarter of 2016, subject to regulatory

approval. Based on the proposed governance structure, the Company expects to account for its resulting interest in

the new entity as an equity method investment.

93

The following table presents information related to the major classes of assets and liabilities that were classified as

held for sale in our consolidated balance sheet (in millions):

December

31, 2015 December

31, 2014

Cash, cash equivalents and short-term investments $ 143 $ 30

Trade accounts receivable, less allowances 485 100

Inventories 276 54

Prepaid expenses and other assets 83 7

Equity method investments 92 141

Other assets 25 3

Property, plant and equipment — net 2,021 303

Bottlers' franchise rights with indefinite lives 1,020 410

Trademarks — 43

Goodwill 333 46

Other intangible assets 115 36

Allowance for reduction of assets held for sale (693 ) (494 )

Total assets $ 3,900 1 $ 679 3

Accounts payable and accrued expenses $ 712 $ 48

Current maturities of long-term debt 12 —

Accrued income taxes 4 —

Long-term debt 74 —

Other liabilities 79 6

Deferred income taxes 252 4

Total liabilities $ 1,133 2 $ 58 4

1 Consists of total assets relating

to CCEP of $2,894 million,

North America refranchising of

$589 million, Coca-Cola

Beverages Africa Limited of

$398 million and other assets

held for sale of $19 million,

which are included in the

Europe, North America, Eurasia

and Africa, Bottling

Investments and Corporate

operating segments.

2 Consists of total liabilities relating to CCEP of $924 million, North America refranchising of $123 million and Coca-Cola

Beverages Africa Limited of $86 million, which are included in the Europe, North America, Eurasia and Africa, and Bottling

Investments operating segments.

3 Consists of total assets relating to North America refranchising of $223 million, Coca-Cola Beverages Africa Limited of

$333 million, the Monster Transaction of $43 million and other assets held for sale of $80 million, which are included in the

North America, Eurasia and Africa, Bottling Investments and Corporate operating segments.

4 Consists of total liabilities relating to North America refranchising of $22 million and Coca-Cola Beverages Africa Limited of

$36 million, which are included in the North America, Eurasia and Africa, and Bottling Investments operating segments.

We determined that the operations included in the table above did not meet the criteria to be classified as

discontinued operations under the applicable guidance.

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NOTE 3: INVESTMENTS

Investments in debt and marketable securities, other than investments accounted for under the equity method, are

classified as trading, available-for-sale or held-to-maturity. Our marketable equity investments are classified as

either trading or available-for-sale with their cost basis determined by the specific identification method. Our

investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the

Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-

to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and

classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading securities and

realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses, net

of deferred taxes, on available-for-sale securities are included in our consolidated balance sheets as a component of

AOCI, except for the change in fair value attributable to the currency risk being hedged. Refer to Note 5 for

additional information related to the Company's fair value hedges of available-for-sale securities.

Trading Securities

As of December 31, 2015 and 2014, our trading securities had a fair value of $322 million and $409 million,

respectively, and consisted primarily of equity securities. The Company had net unrealized gains on trading

securities of $19 million, $40 million and $12 million as of December 31, 2015, 2014 and 2013, respectively.

The Company's trading securities were included in the following line items in our consolidated balance sheets (in

millions):

December 31, 2015 2014

Marketable securities $ 229 $ 315

Other assets 93 94

Total trading securities $ 322 $ 409

Available-for-Sale and Held-to-Maturity Securities

As of December 31, 2015 and 2014, the Company did not have any held-to-maturity securities. Available-for-sale

securities consisted of the following (in millions):

Gross Unrealized Estimated Fair

Value Cost Gains Losses

2015

Available-for-sale securities:1

Equity securities $ 3,573 $ 485 $ (84 ) $ 3,974

Debt securities 4,593 64 (25 ) 4,632

Total $ 8,166 $ 549 $ (109 ) $ 8,606

2014

Available-for-sale securities:1

Equity securities $ 2,687 $ 1,463 $ (29 ) $ 4,121

Debt securities 3,796 68 (106 ) 2 3,758

Total $ 6,483 $ 1,531 $ (135 ) $ 7,879 1 Refer to Note 16 for

additional information

related to the estimated

fair value.

2 Includes $101 million recognized in the consolidated income statement line item other income (loss) — net during the year ended

December 31, 2014. The amount was primarily offset by changes in the fair value of foreign currency contracts designated as fair

value hedges. Refer to Note 5 for additional information.

The sale and/or maturity of available-for-sale securities resulted in the following activity (in millions):

Year Ended December 31, 2015 2014 2013

Gross gains $ 103 $ 38 $ 12

Gross losses (42 ) (21 ) (24 )

Proceeds 4,043 4,157 4,212

95

In 2015 and 2014, the Company had investments classified as available-for-sale securities in which our cost basis

exceeded the fair value of our investment. Management assessed each of these investments on an individual basis to

determine if the decline in fair value was other than temporary. Management's assessment as to the nature of a

decline in fair value is based on, among other things, the length of time and the extent to which the market value has

been less than our cost basis; the financial condition and near-term prospects of the issuer; and our intent and ability

to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. As a

result of these assessments, management determined that the decline in fair value of these investments was not other

than temporary and did not record any impairment charges.

The Company uses insurance captives to reinsure group annuity insurance contracts that cover the pension

obligations of certain of our European and Canadian pension plans. In accordance with local insurance regulations,

our insurance captive is required to meet and maintain minimum solvency capital requirements. The Company

elected to invest its solvency capital in a portfolio of available-for-sale securities, which have been classified in the

line item other assets in our consolidated balance sheets because the assets are not available to satisfy our current

obligations. As of December 31, 2015 and 2014, the Company's available-for-sale securities included solvency

capital funds of $804 million and $836 million, respectively.

As of December 31, 2015 and 2014, the Company did not have any held-to-maturity securities. The Company's

available-for-sale securities were included in the following line items in our consolidated balance sheets (in

millions):

December 31, 2015 2014

Cash and cash equivalents $ 361 $ 43

Marketable securities 4,040 3,350

Other investments 3,280 3,512

Other assets 925 974

Total $ 8,606 $ 7,879

The contractual maturities of these investments as of December 31, 2015 were as follows (in millions):

Available-for-Sale Securities

Cost Fair Value

Within 1 year $ 2,496 $ 2,496

After 1 year through 5 years 1,709 1,728

After 5 years through 10 years 111 122

After 10 years 277 286

Equity securities 3,573 3,974

Total $ 8,166 $ 8,606

The Company expects that actual maturities may differ from the contractual maturities above because borrowers

have the right to call or prepay certain obligations.

Cost Method Investments

Cost method investments are initially recorded at cost, and we record dividend income when applicable dividends

are declared. Cost method investments are reported as other investments in our consolidated balance sheets, and

dividend income from cost method investments is reported in other income (loss) — net in our consolidated

statements of income. We review all of our cost method investments quarterly to determine if impairment indicators

are present; however, we are not required to determine the fair value of these investments unless impairment

indicators exist. When impairment indicators exist, we generally use discounted cash flow analyses to determine the

fair value. We estimate that the fair values of our cost method investments approximated or exceeded their carrying

values as of December 31, 2015 and 2014. Our cost method investments had a carrying value of $190 million and

$166 million as of December 31, 2015 and 2014, respectively.

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NOTE 4: INVENTORIES

Inventories consist primarily of raw materials and packaging (which includes ingredients and supplies) and finished

goods (which include concentrates and syrups in our concentrate operations and finished beverages in our finished

product operations). Inventories are valued at the lower of cost or market. We determine cost on the basis of the

average cost or first-in, first-out methods. Inventories consisted of the following (in millions):

December 31, 2015 2014

Raw materials and packaging $ 1,564 $ 1,615

Finished goods 1,032 1,134

Other 306 351

Total inventories $ 2,902 $ 3,100

NOTE 5: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company is directly and indirectly affected by changes in certain market conditions. These changes in market

conditions may adversely impact the Company's financial performance and are referred to as "market risks." When

deemed appropriate, our Company uses derivatives as a risk management tool to mitigate the potential impact of

certain market risks. The primary market risks managed by the Company through the use of derivative and non-

derivative financial instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk.

The Company uses various types of derivative instruments including, but not limited to, forward contracts,

commodity futures contracts, option contracts, collars and swaps. Forward contracts and commodity futures

contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date, and at

a predetermined rate or price. An option contract is an agreement that conveys the purchaser the right, but not the

obligation, to buy or sell a quantity of a currency or commodity at a predetermined rate or price during a period or at

a time in the future. A collar is a strategy that uses a combination of options to limit the range of possible positive or

negative returns on an underlying asset or liability to a specific range, or to protect expected future cash flows. To

do this, an investor simultaneously buys a put option and sells (writes) a call option, or alternatively buys a call

option and sells (writes) a put option. A swap agreement is a contract between two parties to exchange cash flows

based on specified underlying notional amounts, assets and/or indices. We do not enter into derivative financial

instruments for trading purposes. The Company may also designate certain non-derivative instruments, such as our

foreign-denominated debt, in hedging relationships.

All derivatives are carried at fair value in our consolidated balance sheets in the following line items, as applicable:

prepaid expenses and other assets; other assets; accounts payable and accrued expenses; and other liabilities. The

carrying values of the derivatives reflect the impact of legally enforceable master netting agreements and cash

collateral held or placed with the same counterparties, as applicable. These master netting agreements allow the

Company to net settle positive and negative positions (assets and liabilities) arising from different transactions with

the same counterparty.

The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on

whether the derivatives have been designated and qualify as hedging instruments and the type of hedging

relationships. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in

foreign operations. The changes in the fair values of derivatives that have been designated and qualify for fair value

hedge accounting are recorded in the same line item in our consolidated statements of income as the changes in the

fair values of the hedged items attributable to the risk being hedged. The changes in the fair values of derivatives

that have been designated and qualify as cash flow hedges or hedges of net investments in foreign operations are

recorded in AOCI and are reclassified into the line item in our consolidated statement of income in which the

hedged items are recorded in the same period the hedged items affect earnings. Due to the high degree of

effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value

of the derivative instruments are generally offset by changes in the fair values or cash flows of the underlying

exposures being hedged. The changes in the fair values of derivatives that were not designated and/or did not qualify

as hedging instruments are immediately recognized into earnings.

97

For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents,

at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective

and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses, both at the

inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are

effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any

ineffective portion of a financial instrument's change in fair value is immediately recognized into earnings.

The Company determines the fair values of its derivatives based on quoted market prices or pricing models using

current market rates. Refer to Note 16. The notional amounts of the derivative financial instruments do not

necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to

the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and

by other terms of the derivatives, such as interest rates, foreign currency exchange rates, commodity rates or other

financial indices. The Company does not view the fair values of its derivatives in isolation but rather in relation to

the fair values or cash flows of the underlying hedged transactions or other exposures. Virtually all of our

derivatives are straightforward over-the-counter instruments with liquid markets.

The following table presents the fair values of the Company's derivative instruments that were designated and

qualified as part of a hedging relationship (in millions):

Fair Value1,2

Derivatives Designated as Hedging Instruments Balance Sheet Location1 December 31,

2015 December 31,

2014

Assets:

Foreign currency contracts Prepaid expenses and other assets $ 572 $ 923

Foreign currency contracts Other assets 246 346

Commodity contracts Prepaid expenses and other assets 1 —

Interest rate contracts Prepaid expenses and other assets 20 14

Interest rate contracts Other assets 62 146

Total assets $ 901 $ 1,429

Liabilities:

Foreign currency contracts

Accounts payable and accrued

expenses $ 51 $ 24

Foreign currency contracts Other liabilities 75 249

Commodity contracts

Accounts payable and accrued

expenses — 1

Interest rate contracts

Accounts payable and accrued

expenses 53 11

Interest rate contracts Other liabilities 231 35

Total liabilities $ 410 $ 320 1 All of the Company's derivative instruments are carried at fair value in our

consolidated balance sheets after considering the impact of legally enforceable

master netting agreements and cash collateral held or placed with the same

counterparties, as applicable. Current disclosure requirements mandate that

derivatives must also be disclosed without reflecting the impact of master

netting agreements and cash collateral. Refer to Note 16 for the net

presentation of the Company's derivative instruments.

2 Refer to Note 16 for additional information related to the estimated fair value.

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The following table presents the fair values of the Company's derivative instruments that were not designated as

hedging instruments (in millions):

Fair Value1,2

Derivatives Not Designated as Hedging Instruments Balance Sheet Location1 December 31,

2015 December 31,

2014

Assets:

Foreign currency contracts Prepaid expenses and other assets $ 105 $ 44

Foreign currency contracts Other assets 241 231

Commodity contracts Prepaid expenses and other assets 2 9

Commodity contracts Other assets 1 1

Other derivative instruments Prepaid expenses and other assets 17 14

Other derivative instruments Other assets 3 2

Total assets $ 369 $ 301

Liabilities:

Foreign currency contracts

Accounts payable and accrued

expenses $ 59 $ 33

Foreign currency contracts Other liabilities 9 21

Commodity contracts

Accounts payable and accrued

expenses 154 156

Commodity contracts Other liabilities 19 17

Interest rate contracts Other liabilities 1 2

Other derivative instruments

Accounts payable and accrued

expenses 5 11

Other derivative instruments Other liabilities 2 —

Total liabilities $ 249 $ 240 1 All of the Company's derivative instruments are carried at fair value in our

consolidated balance sheets after considering the impact of legally enforceable

master netting agreements and cash collateral held or placed with the same

counterparties, as applicable. Current disclosure requirements mandate that

derivatives must also be disclosed without reflecting the impact of master

netting agreements and cash collateral. Refer to Note 16 for the net

presentation of the Company's derivative instruments.

2 Refer to Note 16 for additional information related to the estimated fair value.

Credit Risk Associated with Derivatives

We have established strict counterparty credit guidelines and enter into transactions only with financial institutions

of investment grade or better. We monitor counterparty exposures regularly and review any downgrade in credit

rating immediately. If a downgrade in the credit rating of a counterparty were to occur, we have provisions requiring

collateral for substantially all of our transactions. To mitigate presettlement risk, minimum credit standards become

more stringent as the duration of the derivative financial instrument increases. In addition, the Company's master

netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same

counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of

financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.

Cash Flow Hedging Strategy

The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted

transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The

changes in the fair values of derivatives designated as cash flow hedges are recorded in AOCI and are reclassified

into the line item in our consolidated statement of income in which the hedged items are recorded in the same period

the hedged items affect earnings. The changes in fair values of hedges that are determined to be ineffective are

immediately reclassified from AOCI into earnings. The maximum length of time for which the Company hedges its

exposure to the variability in future cash flows is typically three years.

99

The Company maintains a foreign currency cash flow hedging program to reduce the risk that our eventual U.S.

dollar net cash inflows from sales outside the United States and U.S. dollar net cash outflows from procurement

activities will be adversely affected by changes in foreign currency exchange rates. We enter into forward contracts

and purchase foreign currency options (principally euros and Japanese yen) and collars to hedge certain portions of

forecasted cash flows denominated in foreign currencies. When the U.S. dollar strengthens against the foreign

currencies, the decline in the present value of future foreign currency cash flows is partially offset by gains in the

fair value of the derivative instruments. Conversely, when the U.S. dollar weakens, the increase in the present value

of future foreign currency cash flows is partially offset by losses in the fair value of the derivative instruments. The

total notional values of derivatives that have been designated and qualify for the Company's foreign currency cash

flow hedging program were $10,383 million and $13,224 million as of December 31, 2015 and 2014, respectively.

The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency

denominated debt due to changes in foreign currency exchange rates. For this hedging program, the Company

records the change in carrying value of the foreign currency denominated debt due to changes in exchange rates into

earnings each period. The changes in fair value of the cross-currency swap derivatives are recorded in AOCI with an

immediate reclassification into earnings for the change in fair value attributable to fluctuations in foreign currency

exchange rates. These swaps had a notional amount of $2,590 million as of December 31, 2014. During the year

ended December 31, 2015, the Company discontinued the cash flow hedge relationships related to these swaps.

Upon discontinuance, the Company recognized a loss of $92 million in other comprehensive income, which will be

reclassified from AOCI into interest expense over the remaining life of the debt, a weighted-average period of

approximately 10 years. The Company did not discontinue any cash flow hedging relationships during the years

ended December 31, 2014 and 2013. During the year ended December 31, 2015, the Company entered into new

cross-currency swaps, which had a notional value of $566 million as of December 31, 2015.

The Company has entered into commodity futures contracts and other derivative instruments on various

commodities to mitigate the price risk associated with forecasted purchases of materials used in our manufacturing

process. These derivative instruments have been designated and qualify as part of the Company's commodity cash

flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated

with future purchases of certain commodities. The total notional values of derivatives that have been designated and

qualify for this program were $8 million and $9 million as of December 31, 2015 and 2014, respectively.

Our Company monitors our mix of short-term debt and long-term debt regularly. From time to time, we manage our

risk to interest rate fluctuations through the use of derivative financial instruments. The Company has entered into

interest rate swap agreements and has designated these instruments as part of the Company's interest rate cash flow

hedging program. The objective of this hedging program is to mitigate the risk of adverse changes in benchmark

interest rates on the Company's future interest payments. The total notional values of these interest rate swap

agreements that were designated and qualified for the Company's interest rate cash flow hedging program were

$3,328 million and $4,328 million as of December 31, 2015 and 2014, respectively.

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The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow

hedges had on AOCI and earnings during the years ended December 31, 2015, 2014 and 2013 (in millions):

Gain (Loss)

Recognized in Other

Comprehensive

Income ("OCI")

Location of Gain (Loss) Recognized in Income1

Gain (Loss)

Reclassified

from AOCI into

Income

(Effective Portion)

Gain (Loss)

Recognized

in Income (Ineffective

Portion and

Amount Excluded

from

Effectiveness Testing)

2015

Foreign currency contracts $ 949 Net operating revenues $ 618 $ 12

Foreign currency contracts 60 Cost of goods sold 62 — 2

Foreign currency contracts 18 Interest expense (9 ) —

Foreign currency contracts (38 )

Other income (loss) —

net (40 ) —

Interest rate contracts (153 ) Interest expense (3 ) 1

Commodity contracts (1 ) Cost of goods sold (3 ) —

Total $ 835 $ 625 $ 13

2014

Foreign currency contracts $ 973 Net operating revenues $ 121 $ — 2

Foreign currency contracts 50 Cost of goods sold 34 — 2

Foreign currency contracts (218 )

Other income (loss) —

net (108 ) —

Interest rate contracts (180 ) Interest expense — —

Commodity contracts — Cost of goods sold 3 —

Total $ 625 $ 50 $ —

2013

Foreign currency contracts $ 218 Net operating revenues $ 149 $ 1

Foreign currency contracts 52 Cost of goods sold 32 — 2

Interest rate contracts 169 Interest expense (12 ) (3 )

Commodity contracts 2 Cost of goods sold (2 ) —

Total $ 441 $ 167 $ (2 )

1 The Company records gains and losses reclassified from AOCI into income for

the effective portion and ineffective portion, if any, to the same line items in our

consolidated statements of income.

2 Includes a de minimis amount of ineffectiveness in the hedging relationship.

As of December 31, 2015, the Company estimates that it will reclassify into earnings during the next 12 months

gains of $697 million from the pretax amount recorded in AOCI as the anticipated cash flows occur.

Fair Value Hedging Strategy

The Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes

in the fair value of fixed-rate debt that results from fluctuations in benchmark interest rates. The Company also uses

cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debt

relating to changes in foreign currency exchange rates and benchmark interest rates. The changes in fair values of

derivatives designated as fair value hedges and the offsetting changes in fair values of the hedged items are

recognized in earnings. The ineffective portions of these hedges are immediately recognized into earnings. As of

December 31, 2015, such adjustments had cumulatively decreased the carrying value of our long-term debt by $86

million. When a derivative is no longer designated as a fair value hedge for any reason, including termination and

maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the

face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if

the hedged item has matured. The total notional values of derivatives that related to our fair value hedges of this type

were $7,963 million and $6,600 million as of December 31, 2015 and 2014, respectively.

101

The Company also uses fair value hedges to minimize exposure to changes in the fair value of certain available-for-

sale securities from fluctuations in foreign currency exchange rates. The changes in fair values of derivatives

designated as fair value hedges and the offsetting changes in fair values of the hedged items due to changes in

foreign currency exchange rates are recognized in earnings. As a result, any difference is reflected in earnings as

ineffectiveness. The total notional values of derivatives that related to our fair value hedges of this type were $2,159

million and $1,358 million as of December 31, 2015 and 2014, respectively.

The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair

value hedges had on earnings during the years ended December 31, 2015, 2014 and 2013 (in millions):

Hedging Instruments and Hedged Items

Location of Gain (Loss)

Recognized in Income

Gain (Loss) Recognized in

Income1

2015

Interest rate contracts Interest expense $ (172 )

Fixed-rate debt Interest expense 169

Net impact to interest expense $ (3 )

Foreign currency contracts Other income (loss) — net $ 110

Available-for-sale securities Other income (loss) — net (131 )

Net impact to other income (loss) — net $ (21 )

Net impact of fair value hedging instruments $ (24 )

2014

Interest rate contracts Interest expense $ 18

Fixed-rate debt Interest expense 11

Net impact to interest expense $ 29

Foreign currency contracts Other income (loss) — net $ 132

Available-for-sale securities Other income (loss) — net (165 )

Net impact to other income (loss) — net $ (33 )

Net impact of fair value hedging instruments $ (4 )

2013

Interest rate contracts Interest expense $ (193 )

Fixed-rate debt Interest expense 240

Net impact to interest expense $ 47

Foreign currency contracts Other income (loss) — net $ 24

Available-for-sale securities Other income (loss) — net (48 )

Net impact to other income (loss) — net $ (24 )

Net impact of fair value hedging instruments $ 23 1 The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of

hedge effectiveness.

Hedges of Net Investments in Foreign Operations Strategy

The Company uses forward contracts and non-derivative financial instruments to protect the value of our

investments in a number of foreign subsidiaries. During the year ended December 31, 2015, the Company

designated a portion of its euro-denominated debt as a hedge of a net investment in our European operations. The

change in the carrying value of the designated portion of the euro-denominated debt due to changes in foreign

currency exchange rates is recorded in net foreign currency translation adjustment, a component of AOCI. For

derivative instruments that are designated and qualify as hedges of net investments in foreign operations, the

changes in fair values of the derivative instruments are recognized in net foreign currency translation adjustment, to

offset the changes in the values of the net investments being hedged. Any ineffective portions of net investment

hedges are reclassified from AOCI into earnings during the period of change.

102

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments

designated as net investment hedges (in millions):

Notional Amount Gain (Loss) Recognized in OCI

as of December 31, Year Ended December 31,

2015 2014 2015 2014 2013

Foreign currency contracts $ 1,347 $ 2,047 $ 661 $ 80 $ 61

Foreign currency denominated debt 10,912 — (24 ) — —

Total $ 12,259 $ 2,047 $ 637 $ 80 $ 61 The Company did not reclassify any deferred gains or losses related to net investment hedges from AOCI to

earnings during the years ended December 31, 2015, 2014 and 2013. In addition, the Company did not have any

ineffectiveness related to net investment hedges during the years ended December 31, 2015, 2014 and 2013. The

cash inflows and outflows associated with the Company's derivative contracts designated as net investment hedges

are classified in the line item other investing activities in our consolidated statements of cash flows.

Economic (Non-Designated) Hedging Strategy

In addition to derivative instruments that are designated and qualify for hedge accounting, the Company also uses

certain derivatives as economic hedges of foreign currency, interest rate and commodity exposure. Although these

derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges.

The changes in fair value of economic hedges are immediately recognized into earnings.

The Company uses foreign currency economic hedges to offset the earnings impact that fluctuations in foreign

currency exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies.

The changes in fair value of economic hedges used to offset those monetary assets and liabilities are immediately

recognized into earnings in the line item other income (loss) — net in our consolidated statements of income. In

addition, we use foreign currency economic hedges to minimize the variability in cash flows associated with

fluctuations in foreign currency exchange rates. The changes in fair values of economic hedges used to offset the

variability in U.S. dollar net cash flows are recognized into earnings in the line items net operating revenues or cost

of goods sold in our consolidated statements of income, as applicable. The total notional values of derivatives

related to our foreign currency economic hedges were $3,605 million and $4,334 million as of December 31, 2015

and 2014, respectively.

The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the

purchase of materials used in the manufacturing process and for vehicle fuel. The changes in fair values of these

economic hedges are immediately recognized into earnings in the line items net operating revenues, cost of goods

sold, and selling, general and administrative expenses in our consolidated statements of income, as applicable. The

total notional values of derivatives related to our economic hedges of this type were $893 million and $816 million

as of December 31, 2015 and 2014, respectively.

The following table presents the pretax impact that changes in the fair values of derivatives not designated as

hedging instruments had on earnings during the years ended December 31, 2015, 2014 and 2013 (in millions):

Derivatives Not Designated as Hedging Instruments

Location of Gain (Loss) Recognized in Income

Year Ended December 31,

2015 2014 2013

Foreign currency contracts Net operating revenues $ 41 $ (6 ) $ 5

Foreign currency contracts Other income (loss) — net (92 ) (85 ) 162

Foreign currency contracts Cost of goods sold 3 — 2

Commodity contracts Net operating revenues (16 ) (48 ) 5

Commodity contracts Cost of goods sold (209 ) (8 ) (122 )

Commodity contracts

Selling, general and administrative

expenses (25 ) (79 ) 7

Interest rate contracts Interest expense — — (3 )

Other derivative instruments

Selling, general and administrative

expenses 1 24 55

Other derivative instruments Other income (loss) — net (37 ) 39 —

Total $ (334 ) $ (163 ) $ 111

103

NOTE 6: EQUITY METHOD INVESTMENTS

Our consolidated net income includes our Company's proportionate share of the net income or loss of our equity

method investees. When we record our proportionate share of net income, it increases equity income (loss) — net in

our consolidated statements of income and our carrying value in that investment. Conversely, when we record our

proportionate share of a net loss, it decreases equity income (loss) — net in our consolidated statements of income

and our carrying value in that investment. The Company's proportionate share of the net income or loss of our equity

method investees includes significant operating and nonoperating items recorded by our equity method investees.

These items can have a significant impact on the amount of equity income (loss) — net in our consolidated

statements of income and our carrying value in those investments. Refer to Note 17 for additional information

related to significant operating and nonoperating items recorded by our equity method investees. The carrying

values of our equity method investments are also impacted by our proportionate share of items impacting the equity

investee's AOCI.

We eliminate from our financial results all significant intercompany transactions, including the intercompany

portion of transactions with equity method investees.

The Company's equity method investments include our ownership interests in Coca-Cola FEMSA, Coca-Cola

Hellenic, Coca-Cola Amatil Limited and Monster. As of December 31, 2015, we owned approximately 28 percent,

24 percent, 29 percent and 17 percent, respectively, of these companies' outstanding shares. As of December 31,

2015, our investment in our equity method investees in the aggregate exceeded our proportionate share of the net

assets of these equity method investees by $4,306 million. This difference is not amortized.

A summary of financial information for our equity method investees in the aggregate is as follows (in millions):

Year Ended December 31,1 2015 2014 2013

Net operating revenues $ 47,498 $ 52,627 $ 53,038

Cost of goods sold 28,749 31,810 32,377

Gross profit $ 18,749 $ 20,817 $ 20,661

Operating income $ 4,483 $ 4,489 $ 4,380

Consolidated net income $ 2,299 $ 2,440 $ 2,364

Less: Net income attributable to noncontrolling interests 65 74 62

Net income attributable to common shareowners $ 2,234 $ 2,366 $ 2,302

Equity income (loss) — net $ 489 $ 769 $ 602 1 The financial information represents the results of the equity method investees during the Company's period of ownership.

December 31, 2015 2014

Current assets $ 17,524 $ 16,184

Noncurrent assets 36,498 40,080

Total assets $ 54,022 $ 56,264

Current liabilities $ 11,820 $ 12,477

Noncurrent liabilities 14,467 16,657

Total liabilities $ 26,287 $ 29,134

Equity attributable to shareowners of investees $ 26,854 $ 26,363

Equity attributable to noncontrolling interests 881 767

Total equity $ 27,735 $ 27,130

Company equity investment $ 12,318 $ 9,947

Net sales to equity method investees, the majority of which are located outside the United States, were

$8,984 million, $10,063 million and $9,178 million in 2015, 2014 and 2013, respectively. Total payments, primarily

marketing, made to equity method investees were $1,380 million, $1,605 million and $1,807 million in 2015, 2014

and 2013, respectively. In addition, purchases of beverage products from equity method investees were $1,131

million, $381 million and $415 million in 2015, 2014 and 2013, respectively. The increase in purchases of beverage

products in 2015 is primarily due to purchases from Monster. Refer to Note 2 for additional information.

104

If valued at the December 31, 2015 quoted closing prices of shares actively traded on stock markets, the value of our

equity method investments in publicly traded bottlers would have exceeded our carrying value by $7,225 million.

Net Receivables and Dividends from Equity Method Investees

Total net receivables due from equity method investees were $1,399 million and $1,448 million as of December 31,

2015 and 2014, respectively. The total amount of dividends received from equity method investees was $367

million, $398 million and $401 million for the years ended December 31, 2015, 2014 and 2013, respectively. The

amount of consolidated reinvested earnings that represents undistributed earnings of investments accounted for

under the equity method as of December 31, 2015 was $3,389 million.

NOTE 7: PROPERTY, PLANT AND EQUIPMENT

The following table summarizes our property, plant and equipment (in millions):

December 31, 2015 2014

Land $ 717 $ 972

Buildings and improvements 4,914 5,541

Machinery, equipment and vehicle fleet 16,723 18,745

$ 22,354 $ 25,258

Less accumulated depreciation 9,783 10,625

Property, plant and equipment — net $ 12,571 $ 14,633

NOTE 8: INTANGIBLE ASSETS

Indefinite-Lived Intangible Assets

The following table summarizes information related to indefinite-lived intangible assets (in millions):

December 31, 2015 2014

Trademarks1 $ 5,989 $ 6,533

Bottlers' franchise rights2,3 6,000 6,689

Goodwill 11,289 12,100

Other 164 170

Indefinite-lived intangible assets $ 23,442 $ 25,492 1 The decrease in 2015 was primarily due to the sale of our energy brands to Monster, an impairment charge recorded related to the

discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and the impairment of a

Venezuelan trademark primarily due to changes in exchange rates as a result of the establishment of the new open market

exchange system. Refer to Note 2 for additional information on the Monster Transaction and Note 1 for additional information on

the Venezuela currency change.

2 The decrease in 2015 was primarily related to North America refranchising and the transfer of intangible assets to assets held for

sale as a result of our entering into an agreement to merge our German bottling operations to form CCEP. These decreases were

partially offset by the acquisition of the Company's rights to distribute Monster products in expanded territories as a result of the

Monster Transaction. The carrying value of these rights as of December 31, 2015 was $640 million. These distribution rights are

governed by an agreement with an initial term of 20 years, after which it will continue to remain in effect unless otherwise

terminated by either party and there are no future costs of renewal. The Company anticipates that these assets will be used

indefinitely. Refer to Note 2 for additional information.

3 The Company has agreements with Dr Pepper Snapple Group, Inc. ("DPSG") to distribute Dr Pepper trademark brands in the

United States, Canada Dry in the Northeastern United States, and Canada Dry and C' Plus in Canada. As of December 31, 2015,

the agreements have remaining terms of 15 years, with automatic 20-year renewal periods unless otherwise terminated under the

terms of the agreements and there are no significant costs to renew the agreements. The Company anticipates that these assets

will be used indefinitely. The carrying values of these rights as of December 31, 2015 and 2014, were $652 million and $784

million, respectively. The decrease is related to North America refranchising. Refer to Note 2 for additional information.

105

The following table provides information related to the carrying value of our goodwill by operating segment (in

millions):

Eurasia &

Africa Europe Latin

America North

America Asia

Pacific Bottling

Investments Total

2014

Balance as of January 1 $ 36 $ 822 $ 156 $ 10,572 $ 117 $ 609 $ 12,312

Effect of foreign currency translation (2 ) (60 ) (9 ) — (2 ) (26 ) (99 )

Acquisitions1 — — — 11 16 3 30

Adjustments related to the finalization

of purchase accounting1 (4 ) (43 ) — — — (14 ) (61 )

Divestitures, deconsolidations and other1 (3 ) — — (79 ) — — (82 )

Balance as of December 31 $ 27 $ 719 $ 147 $ 10,504 $ 131 $ 572 $ 12,100

2015

Balance as of January 1 $ 27 $ 719 $ 147 $ 10,504 $ 131 $ 572 $ 12,100

Effect of foreign currency translation (7 ) (98 ) (24 ) — 2 (37 ) (164 )

Acquisitions1 — — — 27 — — 27

Adjustments related to the finalization

of purchase accounting1 — — — — — 4 4

Impairment — — — — — (4 ) (4 )

Divestitures, deconsolidations and other1,2 — (3 ) — (390 ) — (281 ) (674 )

Balance as of December 31 $ 20 $ 618 $ 123 $ 10,141 $ 133 $ 254 $ 11,289 1

Refer to Note 2 for information related

to the Company's acquisitions and

divestitures.

2 The decrease in 2015 for the North America operating segment was primarily due to the derecognition of goodwill as a result

of the sale of our energy business to Monster and North America refranchising. The 2015 decrease in the Bottling Investments

segment was primarily due to the transfer of our German bottling operations to assets held for sale as a result of the Company

entering into an agreement to merge the operations to form CCEP. Refer to Note 2 for additional information on these

transactions.

Definite-Lived Intangible Assets

The following table summarizes information related to definite-lived intangible assets (in millions):

December 31, 2015 December 31, 2014

Gross

Carrying

Amount Accumulated

Amortization Net

Gross

Carrying Amount

Accumulated Amortization Net

Customer relationships1 $ 493 $ (199 ) $ 294 $ 597 $ (229 ) $ 368

Bottlers' franchise rights1 604 (412 ) 192 664 (375 ) 289

Trademarks 211 (44 ) 167 222 (39 ) 183

Other 97 (60 ) 37 96 (56 ) 40

Total $ 1,405 $ (715 ) $ 690 $ 1,579 $ (699 ) $ 880

1 The decrease in 2015 was primarily due to the derecognition of intangible assets as a

result of the North America refranchising and the transfer of our German bottling

operations to assets held for sale as a result of the Company entering into an agreement

to merge the operations to form CCEP. Refer to Note 2 for additional information.

106

Total amortization expense for intangible assets subject to amortization was $156 million, $168 million and $165

million in 2015, 2014 and 2013, respectively.

Based on the carrying value of definite-lived intangible assets as of December 31, 2015, we estimate our

amortization expense for the next five years will be as follows (in millions):

Amortization

Expense

2016 $ 149

2017 113

2018 60

2019 57

2020 52

NOTE 9: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following (in millions):

December 31, 2015 2014

Accrued marketing $ 2,186 $ 2,103

Other accrued expenses 3,173 3,182

Trade accounts payable 2,795 2,089

Accrued compensation 936 997

Sales, payroll and other taxes 444 511

Container deposits 126 352

Accounts payable and accrued expenses $ 9,660 $ 9,234

NOTE 10: DEBT AND BORROWING ARRANGEMENTS

Short-Term Borrowings

Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31,

2015 and 2014, we had $13,035 million and $19,010 million, respectively, in outstanding commercial paper

borrowings. Our weighted-average interest rates for commercial paper outstanding were approximately 0.5 percent

and 0.2 percent per year as of December 31, 2015 and 2014, respectively.

In addition, we had $9,771 million in lines of credit and other short-term credit facilities as of December 31, 2015.

The Company's total lines of credit included $95 million that was outstanding and primarily related to our

international operations.

Included in the credit facilities discussed above, the Company had $8,340 million in lines of credit for general

corporate purposes. These backup lines of credit expire at various times from 2016 through 2019. There were no

borrowings under these backup lines of credit during 2015. These credit facilities are subject to normal banking

terms and conditions. Some of the financial arrangements require compensating balances, none of which is presently

significant to our Company.

107

Long-Term Debt

During 2015, the Company issued SFr1,325 million, €8,500 million and $4,000 million of long-term debt. The

general terms of the notes issued are as follows:

• SFr200 million total principal amount of notes due October 2, 2017, at a fixed interest rate of 0.00 percent;

• SFr550 million total principal amount of notes due December 22, 2022, at a fixed interest rate of 0.25

percent;

• SFr575 million total principal amount of notes due October 2, 2028, at a fixed interest rate of 1.00 percent;

• €2,000 million total principal amount of notes due March 9, 2017, at a variable interest rate equal to the

three-month Euro Interbank Offered Rate ("EURIBOR") plus 0.15 percent;

• €2,000 million total principal amount of notes due September 9, 2019, at a variable interest rate equal to the

three-month EURIBOR plus 0.23 percent;

• €1,500 million total principal amount of notes due March 9, 2023, at a fixed interest rate of 0.75 percent;

• €1,500 million total principal amount of notes due March 9, 2027, at a fixed interest rate of 1.125 percent;

• €1,500 million total principal amount of notes due March 9, 2035, at a fixed interest rate of 1.625 percent;

• $750 million total principal amount of notes due October 27, 2017, at a fixed interest rate of 0.875 percent;

• $1,500 million total principal amount of notes due October 27, 2020, at a fixed interest rate of 1.875

percent; and

• $1,750 million total principal amount of notes due October 27, 2025, at a fixed interest rate of 2.875

percent.

During 2015, the Company retired $3,500 million of long-term debt upon maturity. The Company also extinguished

$2,039 million of long-term debt prior to maturity, incurring associated charges of $320 million recorded in the line

item interest expense in our consolidated statement of income. These charges included the difference between the

reacquisition price and the net carrying amount of the debt extinguished, including the impact of the related fair

value hedging relationship. The general terms of the notes that were extinguished were as follows:

• $1,148 million total principal amount of notes due November 15, 2017, at a fixed interest rate of 5.35

percent; and

• $891 million total principal amount of notes due March 15, 2019, at a fixed interest rate of 4.875 percent.

During 2014, the Company issued $3,537 million of long-term debt. The general terms of the notes issued are as

follows:

• $1,000 million total principal amount of notes due September 1, 2015, at a variable interest rate equal to the

three-month London Interbank Offered Rate ("LIBOR") plus 0.01 percent;

• $1,015 million total principal amount of euro notes due September 22, 2022, at a fixed interest rate of 1.125

percent; and

• $1,522 million total principal amount of euro notes due September 22, 2026, at a fixed interest rate of 1.875

percent.

During 2014, the Company retired $1,000 million of long-term debt upon maturity.

During 2013, the Company issued $7,500 million of long-term debt. The general terms of the notes issued are as

follows:

• $500 million total principal amount of notes due March 5, 2015, at a variable interest rate equal to the

three-month LIBOR minus 0.02 percent;

• $500 million total principal amount of notes due November 1, 2016, at a variable interest rate equal to the

three-month LIBOR plus 0.10 percent;

• $500 million total principal amount of notes due November 1, 2016, at a fixed interest rate of 0.75 percent;

• $1,250 million total principal amount of notes due April 1, 2018, at a fixed interest rate of 1.15 percent;

• $1,250 million total principal amount of notes due November 1, 2018, at a fixed interest rate of 1.65

percent;

• $1,250 million total principal amount of notes due November 1, 2020, at a fixed interest rate of 2.45

percent;

• $750 million total principal amount of notes due April 1, 2023, at a fixed interest rate of 2.50 percent; and

• $1,500 million total principal amount of notes due November 1, 2023, at a fixed interest rate of 3.20

percent.

108

During 2013, the Company retired $1,250 million of debt upon maturity. The Company also extinguished $2,154

million of long-term debt prior to maturity, incurring associated extinguishment charges of $50 million. The general

terms of the notes that were extinguished were:

• $225 million total principal amount of notes due August 15, 2013, at a fixed interest rate of 5.0 percent;

• $675 million total principal amount of notes due March 3, 2014, at a fixed interest rate of 7.375 percent;

• $900 million total principal amount of notes due March 15, 2014, at a fixed interest rate of 3.625 percent;

and

• $354 million total principal amount of notes due March 1, 2015, at a fixed interest rate of 4.25 percent.

The Company's long-term debt consisted of the following (in millions, except average rate data):

December 31, 2015 December 31, 2014

Amount Average

Rate 1 Amount Average

Rate1

U.S. dollar notes due 2016–2093 $ 15,899 2.1 % $ 17,433 1.8 %

U.S. dollar debentures due 2017–2098 2,122 3.9 2,157 3.9

U.S. dollar zero coupon notes due 20202 148 8.4 143 8.4

Euro notes due 2017–20273 11,364 0.6 2,468 3.7

Swiss franc notes due 2017–20283 1,291 0.9 — —

Other, due through 20984 307 4.2 380 4.0

Fair value adjustment5 (47 ) N/A 34 N/A

Total6,7 $ 31,084 1.7 % $ 22,615 2.2 %

Less current portion 2,677 3,552

Long-term debt $ 28,407 $ 19,063 1 These rates represent the weighted-average effective interest rate on the

balances outstanding as of year end, as adjusted for the effects of

interest rate swap agreements, cross currency swap agreements and fair

value adjustments, if applicable. Refer to Note 5 for a more detailed

discussion on interest rate management.

2 This amount is shown net of unamortized discounts of $23 million and $28 million as of December 31, 2015 and 2014,

respectively.

3 This amount includes adjustments recorded due to changes in foreign currency exchange rates.

4 As of December 31, 2015, the amount shown includes $156 million of debt instruments that are due through 2031.

5 Amount represents changes in fair value due to changes in benchmark interest rates. Refer to Note 5 for additional information

about our fair value hedging strategy.

6 As of December 31, 2015 and 2014, the fair value of our long-term debt, including the current portion, was $31,308 million

and $23,411 million, respectively. The fair value of our long-term debt is estimated based on quoted prices for those or similar

instruments.

7 The above notes and debentures include various restrictions, none of which is presently significant to our Company.

The carrying value of the Company's long-term debt included fair value adjustments related to the debt assumed

from Coca-Cola Enterprises Inc.'s ("Old CCE") former North America business in 2010 of $411 million and $464

million as of December 31, 2015 and 2014, respectively. These fair value adjustments are being amortized over the

number of years remaining until the underlying debt matures. As of December 31, 2015, the weighted-average

maturity of the assumed debt to which these fair value adjustments relate was approximately 20 years. The

amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will

typically result in our interest expense being less than the actual interest paid to service the debt.

Total interest paid was $515 million, $498 million and $498 million in 2015, 2014 and 2013, respectively.

Maturities of long-term debt for the five years succeeding December 31, 2015, are as follows (in millions):

Maturities of

Long-Term Debt

2016 $ 2,677

2017 3,368

2018 3,302

2019 2,294

2020 3,927

109

NOTE 11: COMMITMENTS AND CONTINGENCIES

Guarantees

As of December 31, 2015, we were contingently liable for guarantees of indebtedness owed by third parties of $572

million, of which $263 million was related to VIEs. Refer to Note 1 for additional information related to the

Company's maximum exposure to loss due to our involvement with VIEs. Our guarantees are primarily related to

third-party customers, bottlers, vendors and container manufacturing operations and have arisen through the normal

course of business. These guarantees have various terms, and none of these guarantees was individually significant.

The amount represents the maximum potential future payments that we could be required to make under the

guarantees; however, we do not consider it probable that we will be required to satisfy these guarantees.

We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by

our operations.

Legal Contingencies

The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when

we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably

estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is

reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total

liabilities to the Company that may arise as a result of currently pending legal proceedings will not have a material

adverse effect on the Company taken as a whole.

Indemnifications

At the time we acquire or divest our interest in an entity, we sometimes agree to indemnify the seller or buyer for

specific contingent liabilities. Management believes that any liability to the Company that may arise as a result of

any such indemnification agreements will not have a material adverse effect on the Company taken as a whole.

Tax Audits

The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These

audits may result in the assessment of additional taxes that are subsequently resolved with authorities or potentially

through the courts. Refer to Note 14.

On September 17, 2015, the Company received a Statutory Notice of Deficiency ("Notice") from the Internal

Revenue Service ("IRS") for the tax years 2007 through 2009, after a five-year audit. In the Notice, the IRS claims

that the Company's United States taxable income should be increased by an amount that creates a potential

additional federal income tax liability of approximately $3.3 billion for the period, plus interest. No penalties were

asserted in the Notice; however, the IRS has since taken the position that it is not precluded from asserting penalties

and notified the Company that it may do so. The disputed amounts largely relate to a transfer pricing matter

involving the appropriate amount of taxable income the Company should report in the United States in connection

with its licensing of intangible property to certain related foreign licensees regarding the manufacturing, distribution,

sale, marketing and promotion of products in overseas markets.

The Company has followed the same transfer pricing methodology for these licenses since the methodology was

agreed with the IRS in a 1996 closing agreement that applied back to 1987. The closing agreement provides

prospective penalty protection as long as the Company follows the prescribed methodology and material facts and

circumstances and relevant Federal tax law have not changed. On February 11, 2016, the IRS notified the Company,

without further explanation, that the IRS has determined that material facts and circumstances and relevant Federal

tax law have changed and that it may assert penalties. The Company does not agree with this determination. The

Company's compliance with the closing agreement was audited and confirmed by the IRS in five successive audit

cycles covering the subsequent 11 years through 2006, with the last audit concluding as recently as 2009.

The Notice represents a repudiation of the methodology previously adopted in the 1996 closing agreement. The IRS

designated the matter for litigation on October 15, 2015. Therefore, the Company will be prevented from pursuing

any administrative settlement at IRS Appeals or under the IRS Advance Pricing and Mutual Agreement Program.

110

The Company firmly believes that the IRS' claims are without merit and plans to pursue all available administrative

and judicial remedies necessary to resolve this matter. To that end, the Company filed a petition in the U.S. Tax

Court on December 14, 2015. The Company intends to vigorously defend its position and is confident in its ability

to prevail on the merits. The Company regularly assesses the likelihood of adverse outcomes resulting from

examinations such as this to determine the adequacy of its tax reserves. The Company believes that the final

adjudication of this matter will not have a material impact on its consolidated financial position, results of operations

or cash flows and that it has adequate tax reserves for all tax matters. However, the ultimate outcome of disputes of

this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest, and any potential

penalties could have a material adverse impact on the Company's financial position, results of operations or cash

flows.

Risk Management Programs

The Company has numerous global insurance programs in place to help protect the Company from the risk of loss.

In general, we are self-insured for large portions of many different types of claims; however, we do use commercial

insurance above our self-insured retentions to reduce the Company's risk of catastrophic loss. Our reserves for the

Company's self-insured losses are estimated through actuarial procedures of the insurance industry and by using

industry assumptions, adjusted for our specific expectations based on our claim history. The Company's self-

insurance reserves totaled $560 million and $530 million as of December 31, 2015 and 2014, respectively.

Workforce (Unaudited)

We refer to our employees as "associates." As of December 31, 2015, our Company had approximately 123,200

associates, of which approximately 60,900 associates were located in the United States. Our Company, through its

divisions and subsidiaries, is a party to numerous collective bargaining agreements. As of December 31, 2015,

approximately 17,500 associates, excluding seasonal hires, in North America were covered by collective bargaining

agreements. These agreements typically have terms of three years to five years. We currently expect that we will be

able to renegotiate such agreements on satisfactory terms when they expire. The Company believes that its relations

with its associates are generally satisfactory.

Operating Leases

The following table summarizes our minimum lease payments under noncancelable operating leases with initial or

remaining lease terms in excess of one year as of December 31, 2015 (in millions):

Year Ended December 31,

Operating Lease

Payments

2016 $ 171

2017 109

2018 89

2019 68

2020 59

Thereafter 220

Total minimum operating lease payments1 $ 716

1 Income associated with sublease arrangements is not significant.

NOTE 12: STOCK-BASED COMPENSATION PLANS

Our Company grants awards under its stock-based compensation plans to certain employees of the Company. Total

stock-based compensation expense was $236 million, $209 million and $227 million in 2015, 2014 and 2013,

respectively, and was included as a component of selling, general and administrative expenses in our consolidated

statements of income. The total income tax benefit recognized in our consolidated statements of income related to

awards under these plans was $65 million, $57 million and $62 million in 2015, 2014 and 2013, respectively.

Beginning in 2015, certain employees who had previously been eligible for long-term equity awards received long-

term performance cash awards. Employees who receive these performance cash awards do not receive equity awards

as part of the long-term incentive program.

As of December 31, 2015, we had $319 million of total unrecognized compensation cost related to nonvested stock-

based compensation awards granted under our plans. This cost is expected to be recognized over a weighted-average

period of 1.8 years as stock-based compensation expense. This expected cost does not include the impact of any

future stock-based compensation awards.

111

The Coca-Cola Company 2014 Equity Plan ("2014 Equity Plan") was approved by shareowners in April 2014.

Under the 2014 Equity Plan, a maximum of 500 million shares of our common stock was approved to be issued,

through the grant of equity awards, to certain employees. The 2014 Equity Plan allows for grants of stock options,

performance share units, restricted stock units, restricted stock and other specified award types including cash

awards with performance-based vesting criteria. Beginning in 2015, the 2014 Equity Plan was the primary plan in

use for equity awards and performance cash awards. There were no grants made from the 2014 Equity Plan prior to

2015. As of December 31, 2015, there were 471.6 million shares available to be granted under the 2014 Equity Plan.

In addition to the 2014 Equity Plan, there were 2.7 million shares available to be granted under stock option plans

approved by shareowners in 1999 and 2008 and 0.2 million shares available to be granted under a restricted stock

award plan approved by shareowners in 1989.

Stock Option Awards

Stock options have generally been granted with an exercise price equal to the Company's stock price on the date of

grant. The fair value of each option award is estimated using a Black-Scholes-Merton option-pricing model and is

amortized over the vesting period, generally four years. The weighted-average fair value of options granted during

the past three years and the weighted-average assumptions used in the Black-Scholes-Merton option-pricing model

for such grants were as follows:

2015 2014 2013

Fair value of options at grant date $ 4.38 $ 3.91 $ 3.73

Dividend yield1 3.1 % 2.7 % 2.8 %

Expected volatility2 16.0 % 16.0 % 17.0 %

Risk-free interest rate3 1.8 % 1.6 % 0.9 %

Expected term of the option4 6 years 5 years 5 years 1 The

dividend

yield is the

calculated

yield on

the

Company's

stock at

the time of

the grant.

2 Expected volatility is based on implied volatilities from traded options on the Company's stock, historical volatility of the

Company's stock and other factors.

3 The risk-free interest rate for the period matching the expected term of the option is based on the U.S. Treasury yield curve in

effect at the time of the grant.

4 The expected term of the option represents the period of time that options granted are expected to be outstanding and is derived

by analyzing historical exercise behavior.

Generally, stock options granted from 1999 through July 2003 expire 15 years from the date of grant and stock

options granted in December 2003 and thereafter expire 10 years from the date of grant. The shares of common

stock to be issued and/or sold upon exercise of stock options are made available from either authorized and unissued

Company common stock or from the Company's treasury shares. In 2007, the Company began issuing common

stock under these plans from the Company's treasury shares.

Stock option activity for all plans for the year ended December 31, 2015, was as follows:

Shares

(In millions)

Weighted-

Average Exercise Price

Weighted- Average

Remaining

Contractual Life

Aggregate

Intrinsic

Value (In millions)

Outstanding on January 1, 2015 305 $ 31.60

Granted 13 41.89

Exercised (44 ) 28.31

Forfeited/expired (8 ) 36.53

Outstanding on December 31, 20151 266 $ 32.51 5.55 years $ 2,786

Expected to vest 264 $ 32.45 5.53 years $ 2,775

Exercisable on December 31, 2015 178 $ 29.92 4.43 years $ 2,317

1 Includes 1.0 million stock option replacement awards in

connection with our acquisition of Old CCE's North America

business in 2010. These options had a weighted-average

exercise price of $16.26 and generally vest over 3 years and

expire 10 years from the original date of grant.

112

The total intrinsic value of the options exercised was $594 million, $894 million and $815 million in 2015, 2014 and

2013, respectively. The total shares exercised were 44 million, 58 million and 53 million in 2015, 2014 and 2013,

respectively.

Performance Share Unit Awards

Performance share units require achievement of certain performance criteria, which are predefined by the

Compensation Committee of the Board of Directors at the time of grant. The primary performance criterion used is

compound annual growth in economic profit over a predefined performance period, which is generally three years.

Economic profit is our net operating profit after tax less the cost of the capital used in our business. Beginning in

2015, the Company added net operating revenues as an additional performance criterion. Economic profit and net

operating revenues are adjusted for certain items, which are approved and certified by the Audit Committee of the

Board of Directors. The purpose of these adjustments is to ensure a consistent year-to-year comparison of the

specific performance criteria. In the event the certified results equal the predefined performance criteria, the

Company will grant the number of shares equal to the target award. In the event the certified results exceed the

predefined performance criteria, additional shares up to the maximum award will be granted. In the event the

certified results fall below the predefined performance criteria, a reduced number of shares will be granted. If the

certified results fall below the threshold award performance level, no shares will be granted. The performance share

units granted under this program are then generally subject to a holding period of one year before the shares are

released.

Performance share units generally do not pay dividends or allow voting rights. For most performance share units

granted beginning in 2014, the Company includes a relative TSR modifier to determine the number of shares earned

at the end of the performance period. For these awards, the number of shares earned based on the certified

achievement of the predefined performance criteria will be reduced or increased if total shareowner return over the

performance period relative to a predefined compensation comparator group of companies falls outside of a defined

range. The fair value of performance share units that include the TSR modifier is determined using a Monte Carlo

valuation model. For the remaining awards that do not include the TSR modifier, the fair value of the performance

share units is the quoted market value of the Company stock on the grant date less the present value of the expected

dividends not received during the relevant period.

In the period it becomes probable that the minimum performance criteria specified in the plan will be achieved, we

recognize expense for the proportionate share of the total fair value of the performance share units related to the

vesting period that has already lapsed for the shares expected to vest and be released. The remaining fair value of the

shares expected to vest and be released is expensed on a straight-line basis over the balance of the vesting period. In

the event the Company determines it is no longer probable that we will achieve the minimum performance criteria

specified in the plan, we reverse all of the previously recognized compensation expense in the period such a

determination is made.

Performance share units are generally settled in stock, except for certain circumstances such as death or disability, in

which case former employees or their beneficiaries are provided a cash equivalent payment. As of December 31,

2015, performance share units of 5,115,000, 5,306,000 and 1,775,000 were outstanding for the 2013–2015, 2014–

2016 and 2015–2017 performance periods, respectively, based on the target award amounts in the performance share

unit agreements.

The following table summarizes information about performance share units based on the target award amounts in

the performance share unit agreements:

Performance

Share Units

(In thousands)

Weighted-

Average

Grant Date

Fair Value

Outstanding on January 1, 2015 17,426 $ 31.59

Granted1 1,857 37.99

Canceled/forfeited (7,087 ) 30.32

Outstanding on December 31, 20152 12,196 $ 33.30

1 Includes 70 percent of the total

2015 award. The remaining 30

percent of the 2015 award

contained metrics that cannot be

fully defined until 2017; therefore,

these awards are not considered

granted until all of the metrics are

established.

2 The outstanding performance share units as of December 31, 2015, at the threshold award and maximum award levels were 5.0

million and 20.9 million, respectively.

113

The weighted-average grant date fair value of performance share units granted was $37.99 in 2015, $32.33 in 2014

and $32.67 in 2013. The Company did not convert any performance share units into cash equivalent payments in

2015. The Company converted performance share units of 5,403 in 2014 and 54,999 in 2013 to cash equivalent

payments of $0.2 million and $1.8 million, respectively, to former employees or their beneficiaries due to certain

events such as death or disability.

The following table summarizes information about performance share units that were previously converted to

restricted stock or restricted stock units:

Restricted Stock

and Restricted

Stock Units (In thousands)

Weighted-

Average

Grant Date Fair Value1

Nonvested on January 1, 20152 130 $ 25.17

Vested and released (130 ) 25.17

Nonvested on December 31, 2015 — $ — 1 The weighted-

average grant

date fair value is

based on the fair

values of the

performance

share units

granted.

2 The nonvested restricted stock and stock units as of January 1, 2015 are presented at the performance share units' certified

award level.

The total intrinsic value of restricted shares that were vested and released was $5 million, $255 million and $16

million in 2015, 2014 and 2013, respectively. The total restricted share units vested and released in 2015 were

130,017 at the certified award level. In 2014 and 2013, the total restricted share units vested and released were

6,773,934 and 405,963, respectively.

Time-Based Restricted Stock and Restricted Stock Unit Awards

Prior to the release date, time-based restricted stock and restricted stock units granted from the 2014 Equity Plan do

not pay dividends or have voting rights and will be forfeited in the event of the recipient's termination of

employment, except for reasons such as death or disability. Certain other time-based restricted stock awards entitled

participants to vote and receive dividends, while for time-based restricted stock units, participants may receive

payment of dividend equivalents but are not allowed to vote. The fair value of the restricted stock and restricted

stock units expected to vest and be released is expensed on a straight-line basis over the vesting period. As of

December 31, 2015, the Company had outstanding nonvested time-based restricted stock, including restricted stock

units, of 941,205, most of which do not pay dividends or have voting rights.

NOTE 13: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

Our Company sponsors and/or contributes to pension and postretirement health care and life insurance benefit plans

covering substantially all U.S. employees. We also sponsor nonqualified, unfunded defined benefit pension plans for

certain associates. In addition, our Company and its subsidiaries have various pension plans and other forms of

postretirement arrangements outside the United States.

We refer to the funded defined benefit pension plan in the United States that is not associated with collective

bargaining organizations as the "primary U.S. plan." As of December 31, 2015, the primary U.S. plan represented 59

percent and 62 percent of the Company's consolidated projected benefit obligation and pension assets, respectively.

114

Obligations and Funded Status

The following table sets forth the changes in benefit obligations and the fair value of plan assets for our benefit plans

(in millions):

Pension Benefits Other Benefits

Year Ended December 31, 2015 2014 2015 2014

Benefit obligation at beginning of year1 $ 10,346 $ 8,845 $ 1,006 $ 946

Service cost 265 261 27 26

Interest cost 379 406 37 43

Foreign currency exchange rate changes (309 ) (183 ) (14 ) (4 )

Amendments 6 — (10 ) (31 )

Actuarial loss (gain) (479 ) 1,519 (54 ) 88

Benefits paid2 (353 ) (522 ) (59 ) (62 )

Business combinations 1 4 — —

Divestitures3 (218 ) — — —

Settlements4 (499 ) (7 ) — (1 )

Special termination benefits 21 5 2 —

Other (1 ) 18 5 1

Benefit obligation at end of year1 $ 9,159 $ 10,346 $ 940 $ 1,006

Fair value of plan assets at beginning of year $ 8,902 $ 8,746 $ 246 $ 243

Actual return on plan assets (44 ) 574 (3 ) 2

Employer contributions 121 214 — —

Foreign currency exchange rate changes (322 ) (203 ) — —

Benefits paid (270 ) (435 ) (3 ) (3 )

Divestitures3 (206 ) — — —

Settlements4 (486 ) (1 ) — —

Other (6 ) 7 5 4

Fair value of plan assets at end of year $ 7,689 $ 8,902 $ 245 $ 246

Net liability recognized $ (1,470 ) $ (1,444 ) $ (695 ) $ (760 )

1 For pension benefit plans, the benefit obligation is the projected benefit

obligation. For other benefit plans, the benefit obligation is the

accumulated postretirement benefit obligation. The accumulated benefit

obligation for our pension plans was $8,868 million and

$10,028 million as of December 31, 2015 and 2014, respectively.

2 Benefits paid to pension plan participants during 2015 and 2014 included $83 million and $87 million, respectively, in

payments related to unfunded pension plans that were paid from Company assets. Benefits paid to participants of other benefit

plans during 2015 and 2014 included $56 million and $59 million, respectively, that were paid from Company assets.

3 Divestitures are primarily related to the transfer of assets and liabilities associated with the Company's consolidated German

bottling operations to assets held for sale and liabilities held for sale as of December 31, 2015. Refer to Note 2 for additional

information.

4 Settlements are primarily related to the Company's productivity, restructuring and integration initiatives. Refer to Note 18.

Pension and other benefit amounts recognized in our consolidated balance sheets are as follows (in millions):

Pension Benefits Other Benefits

December 31, 2015 2014 2015 2014

Noncurrent asset $ 454 $ 479 $ — $ —

Current liability (72 ) (78 ) (21 ) (20 )

Long-term liability (1,852 ) (1,845 ) (674 ) (740 )

Net liability recognized $ (1,470 ) $ (1,444 ) $ (695 ) $ (760 )

115

Certain of our pension plans have projected benefit obligations in excess of the fair value of plan assets. For these

plans, the projected benefit obligations and the fair value of plan assets were as follows (in millions):

December 31, 2015 2014

Projected benefit obligation $ 7,767 $ 8,753

Fair value of plan assets 5,865 6,854

Certain of our pension plans have accumulated benefit obligations in excess of the fair value of plan assets. For

these plans, the accumulated benefit obligations and the fair value of plan assets were as follows (in millions):

December 31, 2015 2014

Accumulated benefit obligation $ 7,537 $ 8,501

Fair value of plan assets 5,846 6,820

Pension Plan Assets

The following table presents total assets for our U.S. and non-U.S. pension plans (in millions):

U.S. Plans Non-U.S. Plans

December 31, 2015 2014 2015 2014

Cash and cash equivalents $ 222 $ 186 $ 54 $ 75

Equity securities:

U.S.-based companies 1,118 1,274 445 542

International-based companies 398 558 419 505

Fixed-income securities:

Government bonds 442 455 295 411

Corporate bonds and debt securities 1,037 1,379 136 187

Mutual, pooled and commingled funds1 713 863 410 400

Hedge funds/limited partnerships 723 756 41 43

Real estate 462 391 2 17

Other 513 481 259 379

Total pension plan assets2 $ 5,628 $ 6,343 $ 2,061 $ 2,559 1 Mutual, pooled and commingled funds include investments in equity

securities, fixed-income securities and combinations of both. There are

a significant number of mutual, pooled and commingled funds from

which investors can choose. The selection of the type of fund is

dictated by the specific investment objectives and needs of a given

plan. These objectives and needs vary greatly between plans.

2 Fair value disclosures related to our pension assets are included in Note 16. Fair value disclosures include, but are not limited

to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall; a reconciliation of the

beginning and ending balances of Level 3 assets; and information about the valuation techniques and inputs used to measure

the fair value of our pension assets.

116

Investment Strategy for U.S. Pension Plans

The Company utilizes the services of investment managers to actively manage the assets of our U.S. pension plans.

We have established asset allocation targets and investment guidelines with each investment manager. Our asset

allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for

fulfilling the obligations of the plan. Selection of the targeted asset allocation for U.S. plan assets was based upon a

review of the expected return and risk characteristics of each asset class, as well as the correlation of returns among

asset classes. Our target allocation is a mix of 42 percent equity investments, 30 percent fixed-income investments

and 28 percent alternative investments. We believe this target allocation will enable us to achieve the following

long-term investment objectives:

(1) optimize the long-term return on plan assets at an acceptable level of risk;

(2) maintain a broad diversification across asset classes and among investment managers; and

(3) maintain careful control of the risk level within each asset class.

The guidelines that have been established with each investment manager provide parameters within which the

investment managers agree to operate, including criteria that determine eligible and ineligible securities,

diversification requirements and credit quality standards, where applicable. Unless exceptions have been approved,

investment managers are prohibited from buying or selling commodities, futures or option contracts, as well as from

short selling of securities. Additionally, investment managers agree to obtain written approval for deviations from

stated investment style or guidelines. As of December 31, 2015, no investment manager was responsible for more

than 8 percent of total U.S. plan assets.

Our target allocation of 42 percent equity investments is composed of 60 percent global equities, 16 percent

emerging market equities and 24 percent domestic small- and mid-cap equities. Optimal returns through our

investments in global equities are achieved through security selection as well as country and sector diversification.

Investments in the common stock of our Company accounted for approximately 6 percent of our total global equities

and approximately 3 percent of total U.S. plan assets. Our investments in global equities are intended to provide

diversified exposure to both U.S. and non-U.S. equity markets. Our investments in both emerging market equities

and domestic small- and mid-cap equities may experience large swings in their market value on a periodic basis. Our

investments in these asset classes are selected based on capital appreciation potential.

Our target allocation of 30 percent fixed-income investments is composed of 33 percent long-duration bonds and 67

percent with multi-strategy alternative credit managers. Long-duration bonds are intended to provide a stable rate of

return through investments in high-quality publicly traded debt securities. Our investments in long-duration bonds

are diversified in order to mitigate duration and credit exposure. Multi-strategy alternative credit managers invest in

a combination of high-yield bonds, bank loans, structured credit and emerging market debt. These investments are in

lower-rated and non-rated debt securities, which generally produce higher returns compared to long-duration bonds

and also help to diversify our overall fixed-income portfolio.

In addition to equity investments and fixed-income investments, we have a target allocation of 28 percent in

alternative investments. These alternative investments include hedge funds, reinsurance, private equity limited

partnerships, leveraged buyout funds, international venture capital partnerships and real estate. The objective of

investing in alternative investments is to provide a higher rate of return than that available from publicly traded

equity securities. These investments are inherently illiquid and require a long-term perspective in evaluating

investment performance.

Investment Strategy for Non-U.S. Pension Plans

As of December 31, 2015, the long-term target allocation for 71 percent of our international subsidiaries' plan assets,

primarily certain of our European and Canadian plans, is 61 percent equity securities; 25 percent fixed-income

securities; and 14 percent other investments. The actual allocation for the remaining 29 percent of the Company's

international subsidiaries' plan assets consisted of 56 percent mutual, pooled and commingled funds; 1 percent

equity securities; 3 percent fixed-income securities; and 40 percent other investments. The investment strategies of

our international subsidiaries differ greatly, and in some instances are influenced by local law. None of our pension

plans outside the United States is individually significant for separate disclosure.

117

Other Postretirement Benefit Plan Assets

Plan assets associated with other postretirement benefits primarily represent funding of one of the U.S.

postretirement benefit plans through a U.S. Voluntary Employee Beneficiary Association ("VEBA"), a tax-qualified

trust. The VEBA assets are primarily invested in liquid assets due to the level and timing of expected future benefit

payments.

The following table presents total assets for our other postretirement benefit plans (in millions):

December 31, 2015 2014

Cash and cash equivalents $ 8 $ 10

Equity securities:

U.S.-based companies 116 114

International-based companies 6 7

Fixed-income securities:

Government bonds 80 79

Corporate bonds and debt securities 8 9

Mutual, pooled and commingled funds 15 16

Hedge funds/limited partnerships 5 5

Real estate 3 3

Other 4 3

Total other postretirement benefit plan assets1 $ 245 $ 246

1 Fair value disclosures related to

our other postretirement benefit

plan assets are included in

Note 16. Fair value disclosures

include, but are not limited to, the

levels within the fair value

hierarchy in which the fair value

measurements in their entirety fall

and information about the

valuation techniques and inputs

used to measure the fair value of

our other postretirement benefit

plan assets.

Components of Net Periodic Benefit Cost

Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following (in

millions):

Pension Benefits Other Benefits

Year Ended December 31, 2015 2014 2013 2015 2014 2013

Service cost $ 265 $ 261 $ 280 $ 27 $ 26 $ 36

Interest cost 379 406 378 37 43 42

Expected return on plan assets1 (705 ) (713 ) (659 ) (11 ) (11 ) (9 )

Amortization of prior service

cost (credit) (2 ) (2 ) (2 ) (19 ) (17 ) (10 )

Amortization of actuarial loss2 199 73 197 10 2 13

Net periodic benefit cost $ 136 $ 25 $ 194 $ 44 $ 43 $ 72

Settlement charge3 149 4 1 — — —

Special termination benefits3 20 5 2 2 — —

Total cost recognized in

statements of income $ 305 $ 34 $ 197 $ 46 $ 43 $ 72 1 The Company has elected to use the actual fair value of plan assets as the market-related

value of assets in the determination of the expected return on plan assets.

2 Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10 percent of the greater

of the pension benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are generally

amortized over the average future working lifetime of the pension plan participants.

3 The settlement charge and special termination benefits were primarily related to the Company's productivity, restructuring and

integration initiatives. Refer to Note 18.

118

The following table sets forth the changes in AOCI for our benefit plans (in millions, pretax):

Pension Benefits Other Benefits

Year Ended December 31, 2015 2014 2015 2014

Balance in AOCI at beginning of year $ (3,069 ) $ (1,537 ) $ (67 ) $ 13

Recognized prior service cost (credit) (2 ) (2 ) (19 ) (17 )

Recognized net actuarial loss (gain) 348 77 10 2

Prior service credit (cost) arising in current year (6 ) — 10 31

Net actuarial (loss) gain arising in current year (270 ) (1,658 ) 40 (97 )

Foreign currency translation gain (loss) 92 51 — 1

Balance in AOCI at end of year $ (2,907 ) $ (3,069 ) $ (26 ) $ (67 )

The following table sets forth amounts in AOCI for our benefit plans (in millions, pretax):

Pension Benefits Other Benefits

December 31, 2015 2014 2015 2014

Prior service credit (cost) $ 3 $ 10 $ 93 $ 100

Net actuarial loss (2,910 ) (3,079 ) (119 ) (167 )

Balance in AOCI at end of year $ (2,907 ) $ (3,069 ) $ (26 ) $ (67 )

Amounts in AOCI expected to be recognized as components of net periodic pension cost in 2016 are as follows (in

millions, pretax):

Pension Benefits Other Benefits

Amortization of prior service cost (credit) $ (2 ) $ (19 )

Amortization of actuarial loss 181 7

Total $ 179 $ (12 )

Assumptions

Certain weighted-average assumptions used in computing the benefit obligations are as follows:

Pension Benefits Other Benefits

December 31, 2015 2014 2015 2014

Discount rate 4.25 % 3.75 % 4.25 % 3.75 %

Rate of increase in compensation levels 3.50 % 3.50 % N/A N/A

119

Certain weighted-average assumptions used in computing net periodic benefit cost are as follows:

Pension Benefits Other Benefits

Year Ended December 31, 2015 2014 2013 2015 2014 2013

Discount rate 3.75 % 4.75 % 4.00 % 3.75 % 4.75 % 4.00 %

Rate of increase in compensation levels 3.50 % 3.50 % 3.50 % N/A N/A N/A

Expected long-term rate of return on plan

assets 8.25 % 8.25 % 8.25 % 4.75 % 4.75 % 4.75 %

The expected long-term rate of return assumption for U.S. pension plan assets is based upon the target asset

allocation and is determined using forward-looking assumptions in the context of historical returns and volatilities

for each asset class, as well as correlations among asset classes. We evaluate the rate of return assumption on an

annual basis. The expected long-term rate of return assumption used in computing 2015 net periodic pension cost for

the U.S. plans was 8.5 percent. As of December 31, 2015, the 5-year, 10-year and 15-year annualized return on plan

assets for the primary U.S. plan was 6.7 percent, 5.4 percent and 5.7 percent, respectively. The annualized return

since inception was 10.6 percent.

The assumed health care cost trend rates are as follows:

December 31, 2015 2014

Health care cost trend rate assumed for next year 7.00 % 7.50 %

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 %

Year that the rate reaches the ultimate trend rate 2021 2020

The Company's U.S. postretirement benefit plans are primarily defined dollar benefit plans that limit the effects of

medical inflation because the plans have established dollar limits for determining our contributions. As a result, the

effect of a 1 percentage point change in the assumed health care cost trend rate would not be significant to the

Company.

The discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at

which the benefit obligations could be effectively settled. Rates for U.S. and certain non-U.S. plans at December 31,

2015, were determined using a cash flow matching technique whereby the rates of a yield curve, developed from

high-quality debt securities, were applied to the benefit obligations to determine the appropriate discount rate. For

other non-U.S. plans, we base the discount rate on comparable indices within each of the countries. The rate of

compensation increase assumption is determined by the Company based upon annual reviews. We review external

data and our own historical trends for health care costs to determine the health care cost trend rate assumptions.

Effective January 1, 2016, for benefit plans using the yield curve approach, the Company changed the method used

to calculate the service cost and interest cost components of net periodic benefit costs for pension and other

postretirement benefit plans and will measure these costs by applying the specific spot rates along the yield curve to

the plans' projected cash flows. The Company believes the new approach provides a more precise measurement of

service and interest costs by improving the correlation between projected cash flows and the corresponding spot

yield curve rates. The change does not affect the measurement of the Company's pension and other postretirement

benefit obligations for those plans and is accounted for as a change in accounting estimate, which is applied

prospectively.

Cash Flows

Our estimated future benefit payments for funded and unfunded plans are as follows (in millions):

Year Ended December 31, 2016 2017 2018 2019 2020 2021–2025

Pension benefit payments $ 521 $ 504 $ 533 $ 551 $ 570 $ 3,065

Other benefit payments1 61 63 64 65 67 332

Total estimated benefit

payments $ 582 $ 567 $ 597 $ 616 $ 637 $ 3,397

1 The expected benefit payments for our other postretirement benefit plans are net of

estimated federal subsidies expected to be received under the Medicare Prescription Drug,

Improvement and Modernization Act of 2003. Federal subsidies are estimated to be $4

million for the period 2016–2020, and $3 million for the period 2021–2025.

The Company anticipates making pension contributions in 2016 of $512 million, the majority of which will be

allocated to our U.S. plans. The majority of these contributions are discretionary.

120

Defined Contribution Plans

Our Company sponsors qualified defined contribution plans covering substantially all U.S. employees. Under the

largest U.S. defined contribution plan, we match participants' contributions up to a maximum of 3.5 percent of

compensation, subject to certain limitations. Company costs related to the U.S. plans were $94 million, $92 million

and $97 million in 2015, 2014 and 2013, respectively. We also sponsor defined contribution plans in certain

locations outside the United States. Company costs associated with those plans were $35 million, $36 million and

$32 million in 2015, 2014 and 2013, respectively.

Multi-Employer Plans

As a result of our acquisition of Old CCE's North America business during the fourth quarter of 2010, the Company

now participates in various multi-employer pension plans in the United States. Multi-employer pension plans are

designed to cover employees from multiple employers and are typically established under collective bargaining

agreements. These plans allow multiple employers to pool their pension resources and realize efficiencies associated

with the daily administration of the plan.

Multi-employer plans are generally governed by a board of trustees composed of management and labor

representatives and are funded through employer contributions.

The Company's expense for U.S. multi-employer pension plans totaled $40 million, $38 million and $37 million in

2015, 2014 and 2013, respectively. The plans we currently participate in have contractual arrangements that extend

into 2020. If, in the future, we choose to withdraw from any of the multi-employer pension plans in which we

currently participate, we would need to record the appropriate withdrawal liabilities at that time.

NOTE 14: INCOME TAXES

Income before income taxes consisted of the following (in millions):

Year Ended December 31, 2015 2014 2013

United States $ 1,801 $ 1,567 $ 2,451

International 7,804 7,758 9,026

Total $ 9,605 $ 9,325 $ 11,477

Income tax expense consisted of the following for the years ended December 31, 2015, 2014 and 2013 (in millions):

United States State and Local International Total

2015

Current $ 711 $ 69 $ 1,386 $ 2,166

Deferred 120 45 (92 ) 73

2014

Current $ 867 $ 81 $ 1,293 $ 2,241

Deferred (97 ) (21 ) 78 (40 )

2013

Current $ 713 $ 102 $ 1,388 $ 2,203

Deferred 305 38 305 648

We made income tax payments of $2,357 million, $1,926 million and $2,162 million in 2015, 2014 and 2013,

respectively.

121

A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows:

Year Ended December 31, 2015 2014 2013

Statutory U.S. federal tax rate 35.0 % 35.0 % 35.0 %

State and local income taxes — net of federal benefit 1.2 1.0 1.0

Earnings in jurisdictions taxed at rates different from the

statutory U.S. federal rate (12.7 ) 1 (11.5 ) 6,7 (10.3 ) 10,11,12

Equity income or loss (1.7 ) 2 (2.2 ) (1.4 ) 13

Other operating charges 1.2 3,4 2.9 8,9 1.2 14

Other — net 0.3 5 (1.6 ) (0.7 )

Effective tax rate 23.3 % 23.6 % 24.8 %

1 Includes a pretax charge of $27 million (or a 0.1 percent

impact on our effective tax rate) due to the remeasurement of

the net monetary assets of our local Venezuelan subsidiary

into U.S. dollars using the SIMADI exchange rate. Refer to

Note 1 and Note 17.

2 Includes a tax benefit of $5 million on a pretax charge of $87 million (or a 0.3 percent impact on our effective tax rate)

related to our proportionate share of unusual or infrequent items recorded by our equity method investees. Refer to Note 17.

3 Includes a tax benefit of $45 million on a pretax charge of $225 million (or a 0.3 percent impact on our effective tax rate)

primarily due to an impairment of a Venezuelan trademark, a write-down of receivables from our bottling partner in

Venezuela, a cash contribution to The Coca-Cola Foundation and charges associated with ongoing tax litigation. Refer to

Note 1 and Note 17.

4 Includes a tax benefit of $259 million on pretax charges of $983 million (or a 0.9 percent impact on our effective tax rate)

primarily related to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to

Note 18.

5 Includes tax expense of $150 million on pretax income of $77 million (or a 1.3 percent impact on our effective rate) primarily

due to the gain related to the Monster Transaction, offset by charges related to the refranchising of certain territories in North

America and charges associated with the early extinguishment of long-term debt. Refer to Note 2 and Note 17.

6 Includes tax expense of $6 million on a pretax net charge of $372 million (or a 1.5 percent impact on our effective tax rate)

due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S. dollars using the SICAD 2

exchange rate. Refer to Note 1.

7 Includes tax expense of $18 million (or a 0.2 percent impact on our effective tax rate) related to amounts required to be

recorded for changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions.

8 Includes tax expense of $55 million on a pretax charge of $352 million (or a 1.9 percent impact on our effective tax rate)

primarily due to an impairment of a Venezuelan trademark, a write-down on receivables from our bottling partner in

Venezuela, a charge associated with certain of the Company's fixed assets, and as a result of the restructuring and transition of

the Company's Russian juice operations to an existing joint venture with an unconsolidated bottling partner. Refer to Note 1

and Note 17.

9 Includes a tax benefit of $191 million on pretax charges of $809 million (or a 1 percent impact on our effective tax rate)

primarily related to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to

Note 18.

10 Includes a tax benefit of $26 million (or a 0.2 percent impact on our effective tax rate) related to amounts required to be

recorded for changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions.

11 Includes tax expense of $279 million on pretax net gains of $501 million (or a 0.9 percent impact on our effective tax rate)

related to the deconsolidation of our Brazilian bottling operations upon their combination with an independent bottler and a

loss due to the merger of four of the Company's Japanese bottling partners. Refer to Note 2 and Note 17.

12 Includes tax expense of $3 million (or a 0.5 percent impact on our effective tax rate) related to a charge of $149 million due

to the devaluation of the Venezuelan bolivar. Refer to Note 19.

13 Includes a tax benefit of $8 million on a pretax charge of $159 million (or a 0.4 percent impact on our effective tax rate)

related to our proportionate share of unusual or infrequent items recorded by our equity method investees. Refer to Note 17.

14 Includes a tax benefit of $175 million on pretax charges of $877 million (or a 1.2 percent impact on our effective tax rate)

primarily related to impairment charges recorded on certain of the Company's intangible assets and charges related to the

Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to Note 17 and Note 18.

122

Our effective tax rate reflects the tax benefits of having significant operations outside the United States, which are

generally taxed at rates lower than the U.S. statutory rate of 35.0 percent. As a result of employment actions and

capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants, including

Brazil, Costa Rica, Singapore and Swaziland. The terms of these grants expire from 2016 to 2023. We anticipate

that we will be able to extend or renew the grants in these locations. Tax incentive grants favorably impacted our

income tax expense by $223 million, $265 million and $279 million for the years ended December 31, 2015, 2014

and 2013, respectively. In addition, our effective tax rate reflects the benefits of having significant earnings

generated in investments accounted for under the equity method of accounting, which are generally taxed at rates

lower than the U.S. statutory rate.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and

foreign jurisdictions. U.S. tax authorities have completed their federal income tax examinations for all years prior to

2007. With respect to state and local jurisdictions and countries outside the United States, with limited exceptions,

the Company and its subsidiaries are no longer subject to income tax audits for years before 2006. For U.S. federal

and state tax purposes, the net operating losses and tax credit carryovers acquired in connection with our acquisition

of Old CCE's North America business that were generated between the years of 1990 through 2010 are subject to

adjustments until the year in which they are actually utilized is no longer subject to examination. Although the

outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, including interest

and penalties, have been provided for any adjustments that are expected to result from those years.

On September 17, 2015, the Company received a Notice from the IRS for the tax years 2007 through 2009, after a

five-year audit. Refer to Note 11.

As of December 31, 2015, the gross amount of unrecognized tax benefits was $168 million. If the Company were to

prevail on all uncertain tax positions, the net effect would be a benefit to the Company's effective tax rate of $148

million, exclusive of any benefits related to interest and penalties. The remaining $20 million, which was recorded

as a deferred tax asset, primarily represents tax benefits that would be received in different tax jurisdictions in the

event the Company did not prevail on all uncertain tax positions.

A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions):

Year Ended December 31, 2015 2014 2013

Beginning balance of unrecognized tax benefits $ 211 $ 230 $ 302

Increase related to prior period tax positions 4 13 1

Decrease related to prior period tax positions (9 ) (2 ) (7 )

Increase related to current period tax positions 5 11 8

Decrease related to settlements with taxing authorities (5 ) (5 ) (4 )

Decrease due to lapse of the applicable statute of limitations (23 ) (32 ) (59 )

Increase (decrease) due to effect of foreign currency exchange rate

changes (15 ) (4 ) (11 )

Ending balance of unrecognized tax benefits $ 168 $ 211 $ 230

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

The Company had $111 million, $113 million and $105 million in interest and penalties related to unrecognized tax

benefits accrued as of December 31, 2015, 2014 and 2013, respectively. Of these amounts, $8 million of expense

and $8 million of benefit were recognized through income tax expense in 2014 and 2013, respectively. For the year

ended December 31, 2015, an insignificant amount of interest and penalties were recognized through income tax

expense. If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would also be a

benefit to the Company's effective tax rate.

It is expected that the amount of unrecognized tax benefits will change in the next 12 months; however, we do not

expect the change to have a significant impact on our consolidated statements of income or consolidated balance

sheets. These changes may be the result of settlements of ongoing audits, statute of limitations expiring or final

settlements in transfer pricing matters that are the subject of litigation. At this time, an estimate of the range of the

reasonably possible outcomes cannot be made.

123

As of December 31, 2015, undistributed earnings of the Company's foreign subsidiaries amounted to $31.9 billion.

Those earnings are considered to be indefinitely reinvested and, accordingly, no U.S. federal and state income taxes

have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company

would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes

payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax

liability is not practicable because of the complexities associated with its hypothetical calculation; however,

unrecognized foreign tax credits would be available to reduce a portion of the U.S. tax liability.

The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities consist

of the following (in millions):

December 31, 2015 2014

Deferred tax assets:

Property, plant and equipment $ 192 $ 96

Trademarks and other intangible assets 68 68

Equity method investments (including foreign currency translation adjustment) 694 462

Derivative financial instruments 161 134

Other liabilities 1,056 1,082

Benefit plans 1,541 1,673

Net operating/capital loss carryforwards 413 729

Other 175 196

Gross deferred tax assets $ 4,300 $ 4,440

Valuation allowances (477 ) (649 )

Total deferred tax assets1,2 $ 3,823 $ 3,791

Deferred tax liabilities:

Property, plant and equipment $ (1,887 ) $ (2,342 )

Trademarks and other intangible assets (3,422 ) (4,020 )

Equity method investments (including foreign currency translation adjustment) (1,441 ) (1,038 )

Derivative financial instruments (687 ) (457 )

Other liabilities (216 ) (110 )

Benefit plans (367 ) (487 )

Other (726 ) (944 )

Total deferred tax liabilities3 $ (8,746 ) $ (9,398 )

Net deferred tax liabilities $ (4,923 ) $ (5,607 )

1 Noncurrent deferred tax assets

of $360 million and $319

million were included in the line

item other assets in our

consolidated balance sheets as

of December 31, 2015 and 2014,

respectively.

2 Current deferred tax assets of $151 million and $160 million were included in the line item prepaid expenses and other assets

in our consolidated balance sheets as of December 31, 2015 and 2014, respectively.

3 Current deferred tax liabilities of $743 million and $450 million were included in the line item accounts payable and accrued

expenses in our consolidated balance sheets as of December 31, 2015 and 2014, respectively.

As of December 31, 2015 and 2014, we had $62 million of net deferred tax assets and $643 million of net deferred

tax liabilities, respectively, located in countries outside the United States.

As of December 31, 2015, we had $4,419 million of loss carryforwards available to reduce future taxable income.

Loss carryforwards of $356 million must be utilized within the next five years, and the remainder can be utilized

over a period greater than five years.

124

An analysis of our deferred tax asset valuation allowances is as follows (in millions):

Year Ended December 31, 2015 2014 2013

Balance at beginning of year $ 649 $ 586 $ 487

Additions 42 104 169

Decrease due to transfer to assets held for sale (163 ) — —

Deductions (51 ) (41 ) (70 )

Balance at end of year $ 477 $ 649 $ 586

The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future

realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions. These

valuation allowances were primarily related to deferred tax assets generated from net operating losses. Current

evidence does not suggest we will realize sufficient taxable income of the appropriate character within the

carryforward period to allow us to realize these deferred tax benefits. If we were to identify and implement tax

planning strategies to recover these deferred tax assets or generate sufficient income of the appropriate character in

these jurisdictions in the future, it could lead to the reversal of these valuation allowances and a reduction of income

tax expense. The Company believes that it will generate sufficient future taxable income to realize the tax benefits

related to the remaining net deferred tax assets in our consolidated balance sheets.

In 2015, the Company recognized a net decrease of $172 million in its valuation allowances. As a result of our

German bottling operations meeting the criteria to be classified as held for sale, the Company was required to

present the related assets and liabilities as separate line items in our consolidated balance sheets. In addition, the

changes in net operating losses during the normal course of business and changes in deferred tax assets and related

valuation allowances on certain equity investments also contributed to a decrease in the valuation allowances. These

decreases were partially offset by an increase in the valuation allowances primarily due to the impact of currency

devaluations in Venezuela on certain receivables.

In 2014, the Company recognized a net increase of $63 million in its valuation allowances. This increase was

primarily due to the increase in net operating losses during the normal course of business operations and due to the

remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S. dollars using the SICAD 2

exchange rate. The Company recognized a reduction in the valuation allowances primarily due to changes in

deferred tax assets and related valuation allowances on certain equity investments and decreases in net operating

losses during the normal course of business operations.

In 2013, the Company recognized a net increase of $99 million in its valuation allowances. This increase was

primarily due to the addition of a deferred tax asset and related valuation allowance on certain equity method

investments and increases in net operating losses during the normal course of business operations. In addition, the

Company recognized a reduction in the valuation allowances primarily due to the reversal of a deferred tax asset and

related valuation allowance on certain equity method investments.

NOTE 15: OTHER COMPREHENSIVE INCOME

AOCI attributable to shareowners of The Coca-Cola Company is separately presented on our consolidated balance

sheets as a component of The Coca-Cola Company's shareowners' equity, which also includes our proportionate

share of equity method investees' AOCI. Other comprehensive income (loss) ("OCI") attributable to noncontrolling

interests is allocated to, and included in, our balance sheets as part of the line item equity attributable to

noncontrolling interests.

AOCI attributable to shareowners of The Coca-Cola Company consisted of the following (in millions):

December 31, 2015 2014

Foreign currency translation adjustment $ (9,167 ) $ (5,226 )

Accumulated derivative net gains (losses) 696 554

Unrealized net gains (losses) on available-for-sale securities 288 972

Adjustments to pension and other benefit liabilities (1,991 ) (2,077 )

Accumulated other comprehensive income (loss) $ (10,174 ) $ (5,777 )

125

The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-

Cola Company and noncontrolling interests (in millions):

Year Ended December 31, 2015

Shareowners of

The Coca-Cola

Company Noncontrolling

Interests Total

Consolidated net income $ 7,351 $ 15 $ 7,366

Other comprehensive income:

Net foreign currency translation adjustment (3,941 ) (18 ) (3,959 )

Net gain (loss) on derivatives1 142 — 142

Net unrealized gain (loss) on available-for-sale securities2 (684 ) — (684 )

Net change in pension and other benefit liabilities3 86 — 86

Total comprehensive income $ 2,954 $ (3 ) $ 2,951 1

Refer to Note 5 for additional information related to the

net gain or loss on derivative instruments designated and

qualifying as cash flow hedging instruments. 2

Refer to Note 3 for information related to the net unrealized gain or loss on available-for-sale securities.

3 Refer to Note 13 for additional information related to the Company's pension and other postretirement benefit liabilities.

OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method

investees' OCI, for the years ended December 31, 2015, 2014 and 2013, is as follows (in millions):

Before-Tax

Amount Income Tax After-Tax

Amount

2015

Foreign currency translation adjustments:

Translation adjustment arising during the year $ (4,626 ) $ 243 $ (4,383 )

Reclassification adjustments recognized in net income 63 (14 ) 49

Unrealized gains (losses) on net investment hedges arising during the

year 637 (244 ) 393

Net foreign currency translation adjustment (3,926 ) (15 ) (3,941 )

Derivatives:

Unrealized gains (losses) arising during the year 853 (314 ) 539

Reclassification adjustments recognized in net income (638 ) 241 (397 )

Net gain (loss) on derivatives1 215 (73 ) 142

Available-for-sale securities:

Unrealized gains (losses) arising during the year (973 ) 328 (645 )

Reclassification adjustments recognized in net income (61 ) 22 (39 )

Net change in unrealized gain (loss) on available-for-sale securities2 (1,034 ) 350 (684 )

Pension and other benefit liabilities:

Net pension and other benefits arising during the year (169 ) 43 (126 )

Reclassification adjustments recognized in net income 337 (125 ) 212

Net change in pension and other benefit liabilities3 168 (82 ) 86

Other comprehensive income (loss) attributable to The Coca-Cola

Company $ (4,577 ) $ 180 $ (4,397 )

1 Refer to Note 5 for additional information

related to the net gain or loss on derivative

instruments designated and qualifying as cash

flow hedging instruments.

2 Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 for

additional information related to these divestitures.

3 Refer to Note 13 for additional information related to the Company's pension and other postretirement benefit liabilities.

126

Before-Tax

Amount Income Tax After-Tax

Amount

2014

Foreign currency translation adjustments:

Translation adjustment arising during the year $ (2,560 ) $ 183 $ (2,377 )

Net foreign currency translation adjustment (2,560 ) 183 (2,377 )

Derivatives:

Unrealized gains (losses) arising during the year 620 (231 ) 389

Reclassification adjustments recognized in net income (50 ) 18 (32 )

Net gain (loss) on derivatives1 570 (213 ) 357

Available-for-sale securities:

Unrealized gains (losses) arising during the year 1,139 (412 ) 727

Reclassification adjustments recognized in net income (17 ) 4 (13 )

Net change in unrealized gain (loss) on available-for-sale

securities2 1,122 (408 ) 714

Pension and other benefit liabilities:

Net pension and other benefits arising during the year (1,666 ) 588 (1,078 )

Reclassification adjustments recognized in net income 60 (21 ) 39

Net change in pension and other benefit liabilities3 (1,606 ) 567 (1,039 )

Other comprehensive income (loss) attributable to The Coca-Cola

Company $ (2,474 ) $ 129 $ (2,345 )

1 Refer to Note 5 for additional information

related to the net gain or loss on derivative

instruments designated and qualifying as cash

flow hedging instruments.

2 Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 for

additional information related to these divestitures.

3 Refer to Note 13 for additional information related to the Company's pension and other postretirement benefit liabilities.

Before-Tax

Amount Income Tax After-Tax

Amount

2013

Foreign currency translation adjustments:

Translation adjustment arising during the year $ (1,046 ) $ 56 $ (990 )

Reclassification adjustments recognized in net income (194 ) — (194 )

Net foreign currency translation adjustment (1,240 ) 56 (1,184 )

Derivatives:

Unrealized gains (losses) arising during the year 425 (173 ) 252

Reclassification adjustments recognized in net income (167 ) 66 (101 )

Net gain (loss) on derivatives1 258 (107 ) 151

Available-for-sale securities:

Unrealized gains (losses) arising during the year (134 ) 42 (92 )

Reclassification adjustments recognized in net income 12 — 12

Net change in unrealized gain (loss) on available-for-sale

securities2 (122 ) 42 (80 )

Pension and other benefit liabilities:

Net pension and other benefits arising during the year 1,490 (550 ) 940

Reclassification adjustments recognized in net income 198 (72 ) 126

Net change in pension and other benefit liabilities3 1,688 (622 ) 1,066

Other comprehensive income (loss) attributable to The Coca-Cola

Company $ 584 $ (631 ) $ (47 )

1 Refer to Note 5 for additional information

related to the net gain or loss on derivative

instruments designated and qualifying as cash

flow hedging instruments.

2 Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 for

additional information related to these divestitures.

3 Refer to Note 13 for additional information related to the Company's pension and other postretirement benefit liabilities.

127

The following table presents the amounts and line items in our consolidated statements of income where adjustments

reclassified from AOCI into income were recorded during the year ended December 31, 2015 (in millions):

Description of AOCI Component Financial Statement Line Item

Amount Reclassified from

AOCI into Income

Foreign currency translation adjustments:

Divestitures, deconsolidations and other Other income (loss) — net $ 63

Income before income taxes $ 63

Income taxes (14 )

Consolidated net income $ 49

Derivatives:

Foreign currency contracts Net operating revenues $ (630 )

Foreign currency and commodity contracts Cost of goods sold (59 )

Foreign currency contracts Other income (loss) — net 40

Foreign currency and interest rate contracts Interest expense 11

Income before income taxes $ (638 )

Income taxes 241

Consolidated net income $ (397 )

Available-for-sale securities:

Sale of securities Other income (loss) — net $ (61 )

Income before income taxes $ (61 )

Income taxes 22

Consolidated net income $ (39 )

Pension and other benefit liabilities:

Recognized net actuarial loss (gain) * $ 358

Recognized prior service cost (credit) * (21 )

Income before income taxes $ 337

Income taxes (125 )

Consolidated net income $ 212

* This component of AOCI is included in the Company's computation of

net periodic benefit cost and is not reclassified out of AOCI into a single

line item in our consolidated statements of income in its entirety. Refer

to Note 13 for additional information.

NOTE 16: FAIR VALUE MEASUREMENTS

Accounting principles generally accepted in the United States define fair value as the exchange price that would be

received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the

asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the

inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to

maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used

to measure fair value are as follows:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities

included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices

for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated

by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to

the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow

methodologies and similar techniques that use significant unobservable inputs.

128

Recurring Fair Value Measurements

In accordance with accounting principles generally accepted in the United States, certain assets and liabilities are

required to be recorded at fair value on a recurring basis. For our Company, the only assets and liabilities that are

adjusted to fair value on a recurring basis are investments in equity and debt securities classified as trading or

available-for-sale and derivative financial instruments. Additionally, the Company adjusts the carrying value of

certain long-term debt as a result of the Company's fair value hedging strategy.

Investments in Trading and Available-for-Sale Securities

The fair values of our investments in trading and available-for-sale securities using quoted market prices from daily

exchange traded markets are based on the closing price as of the balance sheet date and are classified as Level 1.

The fair values of our investments in trading and available-for-sale securities classified as Level 2 are priced using

quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market

data. Inputs into these valuation techniques include actual trade data, benchmark yields, broker/dealer quotes and

other similar data. These inputs are obtained from quoted market prices, independent pricing vendors or other

sources.

Derivative Financial Instruments

The fair values of our futures contracts are primarily determined using quoted contract prices on futures exchange

markets. The fair values of these instruments are based on the closing contract price as of the balance sheet date and

are classified as Level 1.

The fair values of our derivative instruments other than futures are determined using standard valuation models. The

significant inputs used in these models are readily available in public markets, or can be derived from observable

market transactions, and therefore have been classified as Level 2. Inputs used in these standard valuation models

for derivative instruments other than futures include the applicable exchange rates, forward rates, interest rates,

discount rates and commodity prices. The standard valuation model for options also uses implied volatility as an

additional input. The discount rates are based on the historical U.S. Deposit or U.S. Treasury rates, and the implied

volatility specific to options is based on quoted rates from financial institutions.

Included in the fair value of derivative instruments is an adjustment for nonperformance risk. The adjustment is

based on current credit default swap ("CDS") rates applied to each contract, by counterparty. We use our

counterparty's CDS rate when we are in an asset position and our own CDS rate when we are in a liability position.

The adjustment for nonperformance risk did not have a significant impact on the estimated fair value of our

derivative instruments.

The following tables summarize those assets and liabilities measured at fair value on a recurring basis (in millions):

December 31, 2015

Level 1 Level 2 Level 3 Netting

Adjustment1 Fair Value

Measurements

Assets:

Trading securities2 $ 183 $ 135 $ 4 $ — $ 322

Available-for-sale securities2 3,913 4,574 119 3 — 8,606

Derivatives4 2 1,268 — (638 ) 5 632 7

Total assets $ 4,098 $ 5,977 $ 123 $ (638 ) $ 9,560

Liabilities:

Derivatives4 $ 24 $ 635 $ — $ (488 ) 6 $ 171

7

Total liabilities $ 24 $ 635 $ — $ (488 ) $ 171

1 Amounts represent the impact of legally enforceable master netting

agreements that allow the Company to settle net positive and negative

positions and also cash collateral held or placed with the same counterparties.

There are no amounts subject to legally enforceable master netting agreements

that management has chosen not to offset or that do not meet the offsetting

requirements. Refer to Note 5.

2 Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.

3 Primarily related to long-term debt securities that mature in 2018.

4 Refer to Note 5 for additional information related to the composition of our derivative portfolio.

5 The Company is obligated to return $184 million in cash collateral it has netted against its derivative position.

6 The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position.

7 The Company's derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $79

million in the line item prepaid expenses and other assets; $553 million in the line item other assets; and $171 million in the

line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.

129

December 31, 2014

Level 1 Level 2 Level 3 Netting

Adjustment1 Fair Value

Measurements

Assets:

Trading securities2 $ 228 $ 177 $ 4 $ — $ 409

Available-for-sale securities2 4,116 3,627 136 3 — 7,879

Derivatives4 9 1,721 — (437 ) 1,293 5

Total assets $ 4,353 $ 5,525 $ 140 $ (437 ) $ 9,581

Liabilities:

Derivatives4 $ 2 $ 558 $ — $ (437 ) $ 123 5

Total liabilities $ 2 $ 558 $ — $ (437 ) $ 123

1 Amounts represent the impact of legally enforceable master netting

agreements that allow the Company to settle net positive and negative

positions and also cash collateral held or placed with the same counterparties.

There are no amounts subject to legally enforceable master netting

agreements that management has chosen not to offset or that do not meet the

offsetting requirements. Refer to Note 5.

2 Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.

3 Primarily related to long-term debt securities that mature in 2018.

4 Refer to Note 5 for additional information related to the composition of our derivative portfolio.

5 The Company's derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $567

million in the line item prepaid expenses and other assets; $726 million in the line item other assets; $14 million in the line

item accounts payable and accrued expenses; and $109 million in the line item other liabilities. Refer to Note 5 for additional

information related to the composition of our derivative portfolio.

Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the years

ended December 31, 2015 and 2014.

The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period.

Gross transfers between levels within the hierarchy were not significant for the years ended December 31, 2015 and

2014.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets

and liabilities at fair value on a nonrecurring basis as required by accounting principles generally accepted in the

United States. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.

130

The gains or losses on assets measured at fair value on a nonrecurring basis are summarized in the table below (in

millions):

Gains (Losses)

December 31, 2015 2014

Assets held for sale1 $ (980 ) $ (494 )

Intangible assets (473 ) 2 (18 ) 2

Investment in formerly unconsolidated subsidiary (19 ) 3 —

Valuation of shares in equity method investee (6 ) 4 (32 ) 4

Total $ (1,478 ) $ (544 )

1 The Company is required to record

assets and liabilities that are held for

sale at the lower of carrying value or

fair value less any costs to sell based

on the agreed-upon sale price. These

charges primarily related to

refranchising activities in North

America. The charges were

calculated based on Level 3 inputs.

Refer to Note 2.

2 The Company recognized losses of $473 million and $18 million during the years ended December 31, 2015 and 2014,

respectively, due to impairment charges on certain intangible assets. The charges incurred during 2015 included $418 million

of impairment charges primarily due to the discontinuation of the energy products in the glacéau portfolio as a result of the

Monster Transaction and a $55 million impairment charge on a Venezuelan trademark. The charges were determined by

comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted

cash flow analyses based on Level 3 inputs. Refer to Note 1, Note 2 and Note 17.

3 The Company recognized a loss of $19 million on our previously held investment in a South African bottler, which had been

accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015. U.S. GAAP

requires the acquirer to remeasure its previously held noncontrolling equity interest in the acquired entity to fair value as of the

acquisition date and recognize any gains or losses in earnings. The Company remeasured our equity interest in the South

African bottler based on Level 3 inputs. Refer to Note 2.

4 In 2014, the Company recognized an estimated loss of $32 million as a result of the owners of the majority interest in a

Brazilian bottling entity exercising their option to acquire from us a 10 percent interest in the entity's outstanding shares. The

exercise price was lower than our carrying value. The transaction closed in January 2015, and the Company recorded an

additional loss of $6 million during the year ended December 31, 2015, calculated based on the final option price. These losses

were determined using Level 3 inputs. Refer to Note 2 and Note 17.

Fair Value Measurements for Pension and Other Postretirement Benefit Plans

The fair value hierarchy discussed above is not only applicable to assets and liabilities that are included in our

consolidated balance sheets but is also applied to certain other assets that indirectly impact our consolidated

financial statements. For example, our Company sponsors and/or contributes to a number of pension and other

postretirement benefit plans. Assets contributed by the Company become the property of the individual plans. Even

though the Company no longer has control over these assets, we are indirectly impacted by subsequent fair value

adjustments to these assets. The actual return on these assets impacts the Company's future net periodic benefit cost,

as well as amounts recognized in our consolidated balance sheets. Refer to Note 13. The Company uses the fair

value hierarchy to measure the fair value of assets held by our various pension and other postretirement benefit

plans.

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Pension Plan Assets

The following table summarizes the levels within the fair value hierarchy for our pension plan assets as of

December 31, 2015 and 2014 (in millions):

December 31, 2015 December 31, 2014

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash and cash equivalents $ 128 $ 148 $ — $ 276 $ 161 $ 100 $ — $ 261

Equity securities:

U.S.-based companies 1,562 — 1 1,563 1,793 6 17 1,816

International-based companies 802 5 10 817 1,050 13 — 1,063

Fixed-income securities:

Government bonds — 736 1 737 — 863 3 866

Corporate bonds and debt securities — 1,171 2 1,173 — 1,533 33 1,566

Mutual, pooled and commingled funds 77 1,046 — 1,123 98 1,134 31 1,263

Hedge funds/limited partnerships — 205 559 764 — 215 584 799

Real estate — — 464 464 — 16 392 408

Other — 15 757 1 772 — 14 846 1 860

Total $ 2,569 $ 3,326 $ 1,794 $ 7,689 $ 3,102 $ 3,894 $ 1,906 $ 8,902

1 Includes purchased

annuity contracts and

insurance-linked

securities.

The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for our U.S. and

non-U.S. pension plans for the years ended December 31, 2015 and 2014 (in millions):

Fixed-

Income Securities

Hedge

Funds/Limited Partnerships

Real Estate

Equity Securities

Mutual,

Pooled and

Commingled Funds Other Total

2014

Balance at beginning of year $ 89 $ 353 $ 251 $ 15 $ — $ 584 $ 1,292

Actual return on plan assets:

Related to assets still held at the

reporting date 17 (17 ) 29 1 — 50 80

Related to assets sold during the year (2 ) 42 7 — — — 47

Purchases, sales and settlements — net (41 ) 198 106 1 31 241 536

Transfers in or out of Level 3 — net (27 ) 9 — — — — (18 )

Foreign currency translation — (1 ) (1 ) — — (29 ) (31 )

Balance at end of year $ 36 $ 584 $ 392 $ 17 $ 31 $ 846 1 $ 1,906

2015

Balance at beginning of year $ 36 $ 584 $ 392 $ 17 $ 31 $ 846 $ 1,906

Actual return on plan assets:

Related to assets still held at the

reporting date 1 (14 ) 32 (6 ) — 42 55

Related to assets sold during the year (4 ) 45 6 — — — 47

Purchases, sales and settlements — net (6 ) (74 ) 32 — (2 ) (76 ) 2 (126 )

Transfers in or out of Level 3 — net (24 ) 21 2 — (29 ) (3 ) (33 )

Foreign currency translation — (3 ) — — — (52 ) (55 )

Balance at end of year $ 3 $ 559 $ 464 $ 11 $ — $ 757 1 $ 1,794 1 Includes purchased

annuity contracts

and insurance-

linked securities.

2 Includes the transfer of assets associated with the Company's consolidated German bottling operations to assets held for sale

and liabilities held for sale as of December 31, 2015. Refer to Note 2 for additional information.

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Other Postretirement Benefit Plan Assets

The following table summarizes the levels within the fair value hierarchy for our other postretirement benefit plan

assets as of December 31, 2015 and 2014 (in millions):

December 31, 2015 December 31, 2014

Level 1 Level 2 Level 3 1 Total Level 1 Level 2 Level 3 1 Total

Cash and cash equivalents $ 1 $ 7 $ — $ 8 $ 9 $ 1 $ — $ 10

Equity securities:

U.S.-based companies 116 — — 116 114 — — 114

International-based

companies 6 — — 6 7 — — 7

Fixed-income securities:

Government bonds 77 3 — 80 76 3 — 79

Corporate bonds and debt

securities — 8 — 8 — 9 — 9

Mutual, pooled and commingled

funds 10 5 — 15 10 6 — 16

Hedge funds/limited

partnerships — 1 4 5 — 1 4 5

Real estate — — 3 3 — — 3 3

Other — — 4 4 — — 3 3

Total $ 210 $ 24 $ 11 $ 245 $ 216 $ 20 $ 10 $ 246

1 Level 3 assets are not a significant portion of other

postretirement benefit plan assets.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents; short-term investments; receivables; accounts payable and

accrued expenses; and loans and notes payable approximate their fair values because of the relatively short-term

maturities of these financial instruments.

The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments.

Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based

expectations for interest rates, credit risk and the contractual terms of the debt instruments. As of December 31,

2015, the carrying amount and fair value of our long-term debt, including the current portion, were $31,084 million

and $31,308 million, respectively. As of December 31, 2014, the carrying amount and fair value of our long-term

debt, including the current portion, were $22,615 million and $23,411 million, respectively.

NOTE 17: SIGNIFICANT OPERATING AND NONOPERATING ITEMS

Other Operating Charges

In 2015, the Company incurred other operating charges of $1,657 million. These charges primarily consisted of

$691 million due to the Company's productivity and reinvestment program and $292 million due to the integration

of our German bottling operations. In addition, the Company recorded impairment charges of $418 million primarily

due to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and

incurred a charge of $100 million due to a cash contribution we made to The Coca-Cola Foundation. The Company

also incurred a charge of $111 million due to the write-down of receivables from our bottling partner in Venezuela

and an impairment of a Venezuelan trademark primarily due to changes in exchange rates as a result of the

establishment of the new open market exchange system. Refer to Note 18 for additional information on the

Company's productivity, integration and restructuring initiatives. Refer to Note 2 for additional information on the

Monster Transaction. Refer to Note 1 for additional information on the Venezuelan currency change. Refer to Note

19 for the impact these charges had on our operating segments.

133

In 2014, the Company incurred other operating charges of $1,183 million. These charges primarily consisted of

$601 million due to the Company's productivity and reinvestment program and $208 million due to the integration

of our German bottling operations. In addition, the Company incurred a charge of $314 million due to a write -down

we recorded related to receivables from our bottling partner in Venezuela and an impairment of a Venezuelan

trademark primarily due to changes in exchange rates. The write-down was recorded as a result of limited

government-approved exchange rate conversion mechanisms. The Company also recorded a loss of $36 million as a

result of the restructuring and transition of the Company's Russian juice operations to an existing joint venture with

an unconsolidated bottling partner. Refer to Note 18 for additional information on our productivity and reinvestment

program as well as the Company's other productivity, integration and restructuring initiatives. Refer to Note 1 for

additional information on the Venezuelan currency change. Refer to Note 19 for the impact these charges had on our

operating segments.

In 2013, the Company incurred other operating charges of $895 million, which primarily consisted of $494 million

associated with the Company's productivity and reinvestment program; $195 million due to the impairment of

certain intangible assets described below; $188 million due to the Company's other restructuring and integration

initiatives; and $22 million due to charges associated with certain of the Company's fixed assets. Refer to Note 18

for additional information on our productivity and reinvestment program as well as the Company's other

productivity, integration and restructuring initiatives. Refer to Note 19 for the impact these charges had on our

operating segments.

During the year ended December 31, 2013, the Company recorded charges of $195 million related to certain

intangible assets. These charges included $113 million related to the impairment of trademarks recorded in our

Bottling Investments and Asia Pacific operating segments. These impairments were primarily due to a strategic

decision to phase out certain local-market value brands, which resulted in a change in the expected useful life of the

intangible assets. The charges were determined by comparing the fair value of the trademarks, derived using

discounted cash flow analyses, to the current carrying value. Additionally, the remaining charge of $82 million was

related to goodwill recorded in our Bottling Investments operating segment. This charge was primarily the result of

management's revised outlook on market conditions and volume performance.

Other Nonoperating Items

Interest Expense

During the year ended December 31, 2015, the Company recorded charges of $320 million due to the early

extinguishment of certain long-term debt. These charges included the difference between the reacquisition price and

the net carrying amount of the debt extinguished, including the impact of the related fair value hedging relationship.

Refer to Note 10 for additional information and Note 19 for the impact this charge had on our operating segments.

Equity Income (Loss) — Net

The Company recorded net charges of $87 million, $18 million and $159 million in equity income (loss) — net

during the years ended December 31, 2015, 2014 and 2013, respectively. These amounts primarily represent the

Company's proportionate share of unusual or infrequent items recorded by certain of our equity method investees.

Refer to Note 19 for the impact these charges had on our operating segments.

Other Income (Loss) — Net

In 2015, the Company recorded a net gain of $1,403 million as a result of the Monster Transaction and charges of

$1,006 million due to the refranchising of certain territories in North America. In addition, the Company recognized

a foreign currency exchange gain of $300 million associated with our foreign-denominated debt partially offset by a

charge of $27 million due to the remeasurement of the net monetary assets of our Venezuelan subsidiary using the

SIMADI exchange rate. Refer to Note 2 for additional information related to the Monster Transaction and North

America refranchising. Refer to Note 1 for additional information related to the charge due to the remeasurement in

Venezuela. Refer to Note 19 for the impact these items had on our operating segments.

In 2014, the Company recorded charges of $799 million due to the refranchising of certain territories in North

America. The Company also incurred a charge of $372 million due to the remeasurement of the net monetary assets

of our Venezuelan subsidiary using the SICAD 2 exchange rate. Refer to Note 2 for more information related to the

North America refranchising, Note 1 for more information related to the charge due to the remeasurement in

Venezuela and Note 19 for the impact these charges had on our operating segments.

134

In 2013, the Company recorded a gain of $615 million due to the deconsolidation of our Brazilian bottling

operations as a result of their combination with an independent bottling partner. Subsequent to this transaction, the

Company accounts for our investment in the newly combined Brazilian bottling operations under the equity method

of accounting. The owners of the majority interest received the option to acquire from us up to 24 percent of the new

entity's outstanding shares at any time for a period of six years beginning December 31, 2013. In December 2014,

the Company received notification that the owners of the majority interest had exercised their option to acquire from

us a 10 percent interest in the entity's outstanding shares. During the year ended December 31, 2014, we recorded an

estimated loss of $32 million as a result of the exercise price being lower than our carrying value. The transaction

closed in January 2015, and the Company recorded an additional loss of $6 million during the year ended December

31, 2015, based on the final option price. Refer to Note 2 for additional information on this transaction. Refer to

Note 19 for the impact these items had on our operating segments.

Effective July 1, 2013, four of the Company's Japanese bottling partners merged as Coca-Cola East Japan Bottling

Company, Ltd. ("CCEJ"), a publicly traded entity, through a share exchange. The terms of the agreement included

the issuance of new shares of one of the publicly traded bottlers in exchange for 100 percent of the outstanding

shares of the remaining three bottlers according to an agreed-upon share exchange ratio. As a result, the Company

recorded a net charge of $114 million for those investments in which the Company's carrying value was greater than

the fair value of the shares received. Refer to Note 19 for the impact this loss had on our operating segments.

In 2013, the Company recorded a charge of $140 million due to the Venezuelan government announcing a currency

devaluation. As a result of this devaluation, the Company remeasured the net monetary assets related to its

operations in Venezuela. Refer to Note 19 for the impact this charge had on our operating segments. The Company

also recognized a gain of $139 million due to Coca-Cola FEMSA issuing additional shares of its own stock at a per

share amount greater than the carrying value of the Company's per share investment. Accordingly, the Company is

required to treat this type of transaction as if the Company sold a proportionate share of its investment in Coca-Cola

FEMSA. Refer to Note 16 for additional information on the measurement of the gain and Note 19 for the impact this

gain had on our operating segments.

NOTE 18: PRODUCTIVITY, INTEGRATION AND RESTRUCTURING INITIATIVES

Productivity and Reinvestment

In February 2012, the Company announced a four-year productivity and reinvestment program designed to further

enable our efforts to strengthen our brands and reinvest our resources to drive long-term profitable growth. This

program is focused on the following initiatives: global supply chain optimization; global marketing and innovation

effectiveness; operating expense leverage and operational excellence; data and information technology systems

standardization; and the integration of Old CCE's North American bottling operations.

In February 2014, the Company announced the expansion of our productivity and reinvestment program to drive

incremental productivity by 2016 that will primarily be redirected into increased media investments. Our

incremental productivity goal consists of two relatively equal components. First, we will expand savings through

global supply chain optimization, data and information technology systems standardization, and resource and cost

reallocation. Second, we will increase the effectiveness of our marketing investments by transforming our marketing

and commercial model to redeploy resources into more consumer-facing marketing investments to accelerate

growth.

In October 2014, the Company announced that we were further expanding our productivity and reinvestment

program and extending it through 2019. The expansion of the productivity initiatives will focus on four key areas:

restructuring the Company's global supply chain, including manufacturing in North America; implementing zero-

based work, an evolution of zero-based budget principles, across the organization; streamlining and simplifying the

Company's operating model; and further driving increased discipline and efficiency in direct marketing investments.

The Company has incurred total pretax expenses of $2,056 million related to this program since it commenced.

These expenses were recorded in the line item other operating charges in our consolidated statement of income.

Refer to Note 19 for the impact these charges had on our operating segments. Outside services reported in the table

below primarily relate to expenses in connection with legal, outplacement and consulting activities. Other direct

costs reported in the table below include, among other items, internal and external costs associated with the

development, communication, administration and implementation of these initiatives; accelerated depreciation on

certain fixed assets; contract termination fees; and relocation costs.

135

The following table summarizes the balance of accrued expenses related to these productivity and reinvestment

initiatives and the changes in the accrued amounts since the commencement of the plan (in millions):

Severance Pay

and Benefits Outside Services Other

Direct Costs Total

2013

Accrued balance as of January 1 $ 12 $ 6 $ 8 $ 26

Costs incurred 188 59 247 494

Payments (113 ) (59 ) (209 ) (381 )

Noncash and exchange 1 — (28 ) (27 )

Accrued balance as of December 31 $ 88 $ 6 $ 18 $ 112

2014

Costs incurred $ 277 $ 77 $ 247 $ 601

Payments (103 ) (79 ) (220 ) (402 )

Noncash and exchange (2 ) — (24 ) (26 )

Accrued balance as of December 31 $ 260 $ 4 $ 21 $ 285

2015

Costs incurred $ 269 $ 56 $ 366 $ 691

Payments (200 ) (47 ) (265 ) (512 )

Noncash and exchange (185 ) 1 (5 ) (70 ) (260 )

Accrued balance as of December 31 $ 144 $ 8 $ 52 $ 204 1 Includes pension settlement charges. Refer to Note 13.

Integration Initiatives

Integration of Our German Bottling Operations

In 2008, the Company began an integration initiative related to our German bottling operations acquired in 2007.

The Company incurred $292 million, $208 million and $187 million of expenses related to this initiative in 2015,

2014 and 2013, respectively, and has incurred total pretax expenses of $1,127 million related to this initiative since

it commenced. These expenses were recorded in the line item other operating charges in our consolidated statements

of income and impacted the Bottling Investments operating segment. The expenses recorded in connection with

these integration activities have been primarily due to involuntary terminations. The Company had $122 million and

$101 million accrued related to these integration costs as of December 31, 2015 and 2014, respectively.

The Company is currently reviewing other restructuring opportunities within the German bottling operations, which

if implemented will result in additional charges in future periods. However, as of December 31, 2015, the Company

had not finalized any additional plans.

NOTE 19: OPERATING SEGMENTS

As of December 31, 2015, our organizational structure consisted of the following operating segments: Eurasia and

Africa; Europe; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate.

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Segment Products and Services

The business of our Company is nonalcoholic beverages. With the exception of North America, our geographic

operating segments (Eurasia and Africa; Europe; Latin America; North America; and Asia Pacific) derive a majority

of their revenues from the manufacture and sale of beverage concentrates and syrups and, in some cases, the sale of

finished beverages. The North America operating segment derives the majority of its revenues from the sale of

finished beverages. Our Bottling Investments operating segment is composed of our Company-owned or

consolidated bottling operations outside of North America, regardless of the geographic location of the bottler, and

equity income from the majority of our equity method investments. Company-owned or consolidated bottling

operations derive the majority of their revenues from the sale of finished beverages. Generally, finished product

operations produce higher net operating revenues but lower gross profit margins compared to concentrate

operations.

The following table sets forth the percentage of total net operating revenues related to concentrate operations and

finished product operations:

Year Ended December 31, 2015 2014 2013

Concentrate operations1 37 % 38 % 38 %

Finished product operations2 63 62 62

Total 100 % 100 % 100 %

1 Includes concentrates sold by the Company to

authorized bottling partners for the manufacture of

fountain syrups. The bottlers then typically sell the

fountain syrups to wholesalers or directly to fountain

retailers.

2 Includes fountain syrups manufactured by the Company, including consolidated bottling operations, and sold to fountain

retailers or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers.

Method of Determining Segment Income or Loss

Management evaluates the performance of our operating segments separately to individually monitor the different

factors affecting financial performance. Our Company manages income taxes and certain treasury-related items,

such as interest income and expense, on a global basis within the Corporate operating segment. We evaluate

segment performance based on income or loss before income taxes.

Geographic Data

The following table provides information related to our net operating revenues (in millions):

Year Ended December 31, 2015 2014 2013

United States $ 20,360 $ 19,763 $ 19,820

International 23,934 26,235 27,034

Net operating revenues $ 44,294 $ 45,998 $ 46,854

The following table provides information related to our property, plant and equipment — net (in millions):

Year Ended December 31, 2015 2014 2013

United States $ 8,266 $ 8,683 $ 8,841

International 4,305 5,950 6,126

Property, plant and equipment — net $ 12,571 $ 14,633 $ 14,967

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Information about our Company's operations by operating segment as of and for the years ended December 31,

2015, 2014 and 2013, is as follows (in millions):

Eurasia &

Africa Europe Latin

America North

America Asia

Pacific Bottling

Investments Corporate Eliminations Consolidated

2015

Net operating revenues:

Third party $ 2,423 $ 4,543 $ 3,999 $ 21,784 $ 4,707 $ 6,682 $ 156 $ — $ 44,294

Intersegment 36 585 75 18 545 49 10 (1,318 ) —

Total net revenues 2,459 5,128 4,074 21,802 5,252 6,731 166 (1,318 ) 44,294

Operating income (loss) 987 2,888 2,169 2,490 2,189 — (1,995 ) — 8,728

Interest income — — — 9 — — 604 — 613

Interest expense — — — — — — 856 — 856

Depreciation and amortization 44 59 41 1,217 85 367 157 — 1,970

Equity income (loss) — net 14 25 (7 ) (17 ) 9 425 40 — 489

Income (loss) before income taxes 1,004 2,919 2,164 1,475 2,207 454 (618 ) — 9,605

Identifiable operating assets1 1,148 3,008 2 1,627 32,042 1,639 7,042 2 27,799 — 74,305

Investments3 1,061 77 657 118 158 8,073 5,644 — 15,788

Capital expenditures 19 35 70 1,341 81 735 272 — 2,553

2014

Net operating revenues:

Third party $ 2,730 $ 4,844 $ 4,597 $ 21,462 $ 5,257 $ 6,972 $ 136 $ — $ 45,998

Intersegment — 692 60 17 489 67 — (1,325 ) —

Total net revenues 2,730 5,536 4,657 21,479 5,746 7,039 136 (1,325 ) 45,998

Operating income (loss) 1,084 2,852 2,316 2,447 2,448 9 (1,448 ) — 9,708

Interest income — — — — — — 594 — 594

Interest expense — — — — — — 483 — 483

Depreciation and amortization 47 75 56 1,195 96 315 192 — 1,976

Equity income (loss) — net 35 31 10 (16 ) 12 691 6 — 769

Income (loss) before income taxes 1,125 2,892 2,319 1,633 2,464 715 (1,823 ) — 9,325

Identifiable operating assets1 1,298 3,358 2 2,426 33,066 1,793 6,975

2 29,482 — 78,398

Investments3 1,081 90 757 48 157 8,781 2,711 — 13,625

Capital expenditures 30 54 55 1,293 76 628 270 — 2,406

2013

Net operating revenues:

Third party $ 2,763 $ 4,645 $ 4,748 $ 21,574 $ 5,372 $ 7,598 $ 154 $ — $ 46,854

Intersegment — 689 191 16 497 78 — (1,471 ) —

Total net revenues 2,763 5,334 4,939 21,590 5,869 7,676 154 (1,471 ) 46,854

Operating income (loss) 1,087 2,859 2,908 2,432 2,478 115 (1,651 ) — 10,228

Interest income — — — — — — 534 — 534

Interest expense — — — — — — 463 — 463

Depreciation and amortization 42 86 58 1,192 130 335 134 — 1,977

Equity income (loss) — net 22 24 13 2 19 524 (2 ) — 602

Income (loss) before income taxes 1,109 2,923 2,920 2,434 2,494 679 (1,082 ) — 11,477

Identifiable operating assets1 1,273 3,713 2 2,918 33,964 1,922 7,011

2 27,742 — 78,543

Investments3 1,157 106 545 49 143 9,424 88 — 11,512

Capital expenditures 40 34 63 1,374 117 643 279 — 2,550 1 Principally cash and cash equivalents, short-term investments, marketable securities, trade

accounts receivable, inventories, goodwill, trademarks and other intangible assets, and property,

plant and equipment — net.

2 Property, plant and equipment — net in Germany represented 10 percent of consolidated property, plant and equipment — net

in 2015, 10 percent in 2014 and 11 percent in 2013. The 2015 amount includes property, plant and equipment — net classified

as held for sale.

3 Principally equity method investments and other investments in bottling companies.

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In 2015, the results of our operating segments were impacted by the following items:

• Operating income (loss) and income (loss) before income taxes were reduced by $16 million for Eurasia and

Africa, $7 million for Latin America, $384 million for North America, $2 million for Asia Pacific,

$353 million for Bottling Investments and $246 million for Corporate due to the Company's productivity and

reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss)

before income taxes were increased by $25 million for Europe due to the refinement of previously established

accruals related to the Company's productivity and reinvestment program. Refer to Note 18.

• Operating income (loss) and income (loss) before income taxes were reduced by $418 million for Corporate

primarily due to an impairment charge primarily related to the discontinuation of the energy products in the

glacéau portfolio as a result of the Monster Transaction. Refer to Note 2 and Note 17.

• Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate

as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 17.

• Income (loss) before income taxes was increased by $1,403 million for Corporate as a result of the Monster

Transaction. Refer to Note 2 and Note 17.

• Income (loss) before income taxes was reduced by $1,006 million for North America due to the refranchising

of certain territories in North America. Refer to Note 2 and Note 17.

• Income (loss) before income taxes was reduced by $320 million for Corporate due to charges the Company

recognized on the early extinguishment of certain long-term debt. Refer to Note 10 and Note 17.

• Income (loss) before income taxes was reduced by $33 million for Latin America and $105 million for

Corporate due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S.

dollars using the SIMADI exchange rate, an impairment of a Venezuelan trademark, and a write-down the

Company recorded on receivables from our bottling partner in Venezuela. Refer to Note 1 and Note 17.

• Income (loss) before income taxes was reduced by $19 million for Corporate as a result of the remeasurement

of our previously held equity interest in a South African bottler to fair value upon our acquisition of the

bottling operations. Refer to Note 2.

• Income (loss) before income taxes was reduced by $6 million for Corporate as a result of a Brazilian bottling

entity's majority interest owners exercising their option to acquire from us an additional equity interest at an

exercise price less than that of our carrying value. Refer to Note 2 and Note 17.

• Income (loss) before income taxes was increased by $3 million for Eurasia and Africa and reduced by

$7 million for Europe and $83 million for Bottling Investments due to the Company's proportionate share of

unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 17.

In 2014, the results of our operating segments were impacted by the following items:

• Operating income (loss) and income (loss) before income taxes were reduced by $26 million for Eurasia and

Africa, $111 million for Europe, $20 million for Latin America, $281 million for North America, $36 million

for Asia Pacific, $211 million for Bottling Investments and $124 million for Corporate due to charges related

to the Company's productivity and reinvestment program as well as other restructuring initiatives. Refer to

Note 18.

• Operating income (loss) and income (loss) before income taxes were reduced by $42 million for Bottling

Investments as a result of the restructuring and transition of the Company's Russian juice operations to an

existing joint venture with an unconsolidated bottling partner. Refer to Note 17.

• Income (loss) before income taxes was reduced by $2 million for Europe and $16 million for Bottling

Investments due to the Company's proportionate share of unusual or infrequent items recorded by certain of

our equity method investees. Refer to Note 17.

• Income (loss) before income taxes was reduced by $799 million for North America due to the refranchising

of certain territories. Refer to Note 2 and Note 17.

• Income (loss) before income taxes was reduced by $275 million for Latin America and $411 million for

Corporate due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S.

dollars using the SICAD 2 exchange rate, an impairment of a Venezuelan trademark, and a write-down the

Company recorded on the concentrate sales receivables from our bottling partner in Venezuela. Refer to

Note 1 and Note 17.

139

• Income (loss) before income taxes was increased by $25 million for Bottling Investments due to the

elimination of intercompany profits resulting from a write-down we recorded on the concentrate sales

receivables from our bottling partner in Venezuela, an equity method investee, partially offset by our

proportionate share of their remeasurement loss. Refer to Note 1.

• Income (loss) before income taxes was reduced by $32 million for Corporate as a result of a Brazilian bottling

entity's majority interest owners exercising their option to acquire from us an additional equity interest at an

exercise price less than that of our carrying value. Refer to Note 2 and Note 17.

In 2013, the results of our operating segments were impacted by the following items:

• Operating income (loss) and income (loss) before income taxes were reduced by $2 million for Eurasia and

Africa, $57 million for Europe, $282 million for North America, $26 million for Asia Pacific, $194 million

for Bottling Investments and $121 million for Corporate due to charges related to the Company's productivity

and reinvestment program as well as other restructuring initiatives. Refer to Note 18.

• Operating income (loss) and income (loss) before income taxes were reduced by $195 million for Corporate

due to impairment charges recorded on certain of the Company's intangible assets. Refer to Note 17.

• Operating income (loss) and income (loss) before income taxes were reduced by $22 million for Asia Pacific

due to charges associated with certain of the Company's fixed assets. Refer to Note 17.

• Income (loss) before income taxes was increased by $615 million for Corporate due to a gain the Company

recognized on the deconsolidation of our Brazilian bottling operations as a result of their combination with an

independent bottling partner. Refer to Note 17.

• Income (loss) before income taxes was reduced by $9 million for Bottling Investments and $140 million for

Corporate due to the devaluation of the Venezuelan bolivar, including our proportionate share of the charge

incurred by an equity method investee that has operations in Venezuela. Refer to Note 1 and Note 17.

• Income (loss) before income taxes was reduced by a net $114 million for Corporate due to the merger of four

of the Company's Japanese bottling partners in which we held equity method investments prior to their

merger into CCEJ. Refer to Note 17.

• Income (loss) before income taxes was increased by $139 million for Corporate due to a gain the Company

recognized as a result of Coca-Cola FEMSA issuing additional shares of its own stock during the year at a per

share amount greater than the carrying value of the Company's per share investment. Refer to Note 17.

• Income (loss) before income taxes was reduced by a net $159 million for Bottling Investments due to the

Company’s proportionate share of unusual or infrequent items recorded by certain of our equity method

investees. Refer to Note 17.

• Income (loss) before income taxes was reduced by $53 million for Corporate due to charges the Company

recognized on the early extinguishment of certain long-term debt, including the hedge accounting adjustments

reclassified from accumulated other comprehensive income to earnings. Refer to Note 10.

NOTE 20: NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash provided by (used in) operating activities attributable to the net change in operating assets and liabilities is

composed of the following (in millions):

Year Ended December 31, 2015 2014 2013

(Increase) decrease in trade accounts receivable $ (212 ) $ (253 ) $ 28

(Increase) decrease in inventories (250 ) 35 (105 )

(Increase) decrease in prepaid expenses and other assets 123 194 (163 )

Increase (decrease) in accounts payable and accrued expenses 1,004 (250 ) (158 )

Increase (decrease) in accrued taxes (306 ) 151 22

Increase (decrease) in other liabilities (516 ) (316 ) (556 )

Net change in operating assets and liabilities $ (157 ) $ (439 ) $ (932 )

140

NOTE 21: SUBSEQUENT EVENT

In February 2016, additional territories in North America met the criteria to be classified as held for sale. Therefore,

we are required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to

sell based on the estimated sale price, which will result in a noncash loss of $296 million in 2016. This loss is

primarily related to the write-down of intangible assets due to the accounting treatment for the contingent

consideration that will be received in exchange for the grant of the exclusive territory rights. The Company expects

these territories to be refranchised at various times throughout 2016. Refer to Note 2 for additional information

about North America refranchising.

The following table presents information related to the major classes of assets and liabilities related to these

additional territories, which were included in the North America operating segment (in millions):

Inventories $ 4

Prepaid expenses and other assets 1

Property, plant and equipment — net 62

Bottlers' franchise rights with indefinite lives 273

Goodwill 10

Other intangible assets 13

Allowance for reduction of assets held for sale (296 )

Total assets $ 67

Accounts payable and accrued expenses $ 1

Other liabilities 1

Deferred income taxes 19

Total liabilities $ 21

141

REPORT OF MANAGEMENT

Management's Responsibility for the Financial Statements

Management of the Company is responsible for the preparation and integrity of the consolidated financial statements

appearing in our Annual Report on Form 10-K. The financial statements were prepared in conformity with generally

accepted accounting principles appropriate in the circumstances and, accordingly, include certain amounts based on

our best judgments and estimates. Financial information in this Annual Report on Form 10-K is consistent with that

in the financial statements.

Management of the Company is responsible for establishing and maintaining a system of internal controls and

procedures to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the

consolidated financial statements. Our internal control system is supported by a program of internal audits and

appropriate reviews by management, written policies and guidelines, careful selection and training of qualified

personnel, and a written Code of Business Conduct adopted by our Company's Board of Directors, applicable to all

officers and employees of our Company and subsidiaries. In addition, our Company's Board of Directors adopted a

written Code of Business Conduct for Non-Employee Directors which reflects the same principles and values as our

Code of Business Conduct for officers and employees but focuses on matters of relevance to non-employee

Directors.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements

and, even when determined to be effective, can only provide reasonable assurance with respect to financial

statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

Management's Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial

reporting as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended

("Exchange Act"). Management assessed the effectiveness of the Company's internal control over financial reporting

as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of

Sponsoring Organizations of the Treadway Commission (2013 Framework) ("COSO") in Internal Control —

Integrated Framework. Based on this assessment, management believes that the Company maintained effective

internal control over financial reporting as of December 31, 2015.

The Company's independent auditors, Ernst & Young LLP, a registered public accounting firm, are appointed by the

Audit Committee of the Company's Board of Directors, subject to ratification by our Company's shareowners.

Ernst & Young LLP has audited and reported on the consolidated financial statements of The Coca-Cola Company

and subsidiaries and the Company's internal control over financial reporting. The reports of the independent auditors

are contained in this annual report.

142

Audit Committee's Responsibility

The Audit Committee of our Company's Board of Directors, composed solely of Directors who are independent in

accordance with the requirements of the New York Stock Exchange listing standards, the Exchange Act, and the

Company's Corporate Governance Guidelines, meets with the independent auditors, management and internal

auditors periodically to discuss internal controls and auditing and financial reporting matters. The Audit Committee

reviews with the independent auditors the scope and results of the audit effort. The Audit Committee also meets

periodically with the independent auditors and the chief internal auditor without management present to ensure that

the independent auditors and the chief internal auditor have free access to the Audit Committee. Our Audit

Committee's Report can be found in the Company's 2016 Proxy Statement.

Muhtar Kent Kathy N. Waller

Chairman of the Board of Directors

and Chief Executive Officer

February 25, 2016

Executive Vice President

and Chief Financial Officer

February 25, 2016

James R. Quincey Larry M. Mark

President and Chief Operating Officer

February 25, 2016

Vice President and Controller

February 25, 2016

Mark Randazza

Vice President and Assistant Controller