ompanyialReportl983

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CONTENTS2 Financial Highlights3 Letter to Shareholders8 Soft Drink Business Sectors

16 Foods Business Sector22 Entertainment Business Sector29 Financial Information51 Directors and Officers56 Shareholder Information

Soft Drink Business Sectors. The Coca-ColaCompany is the world leader in the production and dis-tribution of syrups and concentrates for soft drinks.More than 35 percent of all soft drinks consumedworldwide in 1983 were Company products, sold inmore than 155 countries through more than 1,400 bot-tlers and 4,000 fountain wholesalers and distributors.Soft drinks represented 69 percent of 1983 net revenuesand 80 percent of operating income from the Com-pany's four Business Sectors. Coca-Cola, the world'snumber one soft drink, generated 72 percent of theCompany's worldwide soft drink unit sales volume.

North America Soft Drink Business Sector is madeup of the soft drink operations in the United States(Coca-Cola USA) and Canada (Coca-Cola Ltd.). Softdrink unit sales in the North America Sector repre-sented 40 percent of the Company's total worldwidesoft drink volume in 1983.

International Soft Drink Business Sector encom-passes all Company soft drink operating units outsidethe United States and Canada. Soft drink unit sales inthe International Sector accounted for 60 percent of theCompany's 1983 total worldwide soft drink volume.

Foods Business Sector. The Coca-Cola CompanyFoods Division, the largest operating unit in the FoodsBusiness Sector, is one of the world's leading citrusprocessors. The Foods Division produces and marketsthe Minute Maid brand of frozen and chilled juices,Five Alive frozen and chilled fruit-juice beverages, Hi-Cfruit drinks, Maryland Club and Butter-Nut brand cof-fees and Ronco pasta products. Belmont Springs WaterCo., Inc., which markets bottled water in the greaterBoston area, is another unit of the Foods Division. Alsowithin the Foods Business Sector is Presto Products,Incorporated, a leading private-label supplier of house-hold consumer products.

Entertainment Business Sector. The various unitsof Columbia Pictures Industries, Inc., as well as one-third equity in Tri-Star Pictures, a new motion picturestudio jointly owned by Columbia, CBS Inc., and TimeInc.'s Home Box Office, form the Entertainment Busi-ness Sector. Columbia is a major producer and distrib-utor of films and television programs and participatesin joint ventures for the production and worldwide mar-keting and distribution of home entertainment video-cassettes and videodiscs. Columbia's subsidiary,Mylstar Electronics, Inc., manufactures and marketscoin-operated electronic amusement games.

12 FL. OZ. (354 •

1OO% PURE--:•:•

ORANGE JUICE

Financial Highlights(In millions except per share data)

The Coca-Cola Company and Subsidiaries

Year Ended December 31, 1983 1982 % Change

Net operating revenuesOperating incomeIncome from continuing operations

before income taxesIncome from continuing operations

Net incomeIncome per share from continuing

operationsNet income per shareDividends per share

Shareholders' equity at year-endIncome from continuing operations

to net operating revenuesIncome from continuing operations to

average shareholders' equity

$6,829.0

S 992.6

$1,000.3$ 558.3$ 558.8

$ 4.10

$ 4.10

$ 2.68

$2,920.8

8.2%

19.6%

$6,021.1

$ 879.8

$ 918.1

$ 503.0

$ 512.2

$ 3.88

$ 3.95

$ 2.48

$2,778.7

13.4%

12.8%

9.0%11.0%9.1%

5.7%3.8%8.1%5.1%

8.4%

19.9%

Net Operating Revenues $ &\\\an$i Income Per Share From ContinuingOperationsi«

Dividends Per Share $>

•74 '75 '76 '77 78 '79 'SO 'B1 '82 'B3 7t '75 '76 '77 '78 '79 '80 '81 '82 83 74 '75 '76 '77 '78 '79 '80 '81 'B2 '83

Ib Our Shareholders:

The Coca-Cola Company had an excellent year in 1983, achieving substan-tial growth in industries characterized by dynamic changes, and we wereat the forefront of those changes.

To operate more effectively in today's business environment and more sharplyfocus management's attention on the expansion opportunities within the indus-tries in which we operate, we have regrouped the Company's various units intofour Business Sectors. The North America Soft Drink Business Sector is made upof our soft drink businesses in the United States (Coca-Cola USA) and Canada(Coca-Cola Ltd.), while the International Soft Drink Business Sector includes oursoft drink operating units in the rest of the world. Our Houston-based Foods Divi-sion and Presto Products, Incorporated, make up the Foods Business Sector. OurEntertainment Business Sector, headquartered in New York City, presently con-sists of the various units of Columbia Pictures Industries, Inc., along with theCompany's share of equity in, and direction of, the joint-venture movie studio,Tri-Star Pictures.

In 1983, the North America and the International Soft Drink Business Sectorsachieved significant increases in unit sales, profit and market share, furtherenhancing the Company's position as the driving force in the competitive world-wide soft drink industry. New products and packaging and aggressive marketingactivities led the Foods Business Sector to a record performance in volume, shareand earnings, in spite of strong, new competitors in the industry. Our EntertainmentBusiness Sector produced overall profits well above expectations in ColumbiaPictures' first full year as part of the Company.

Operating Highlights. For the Company as a whole, operating incomeincreased 12.8 percent. Net income from continuing operations in 1983increased 11.0 percent and earnings per share from continuing operationsincreased 5.7 percent. Our return on average shareholders' equity was 19.6percent for the year.

Our primary financial goals are to continue growth in earnings per share andto increase the return on shareholders' equity. We will continue to look for addi-tional high-return investment opportunities in the years ahead.

Last year the Company reached important milestones toward realizing its stra-tegic vision for this decade. In the soft drink area, our North America Soft DrinkBusiness Sector further strengthened its leadership position in every category —take-home, fountain and bottle/can vending markets. At the close of the year, theCompany's soft drinks achieved the strongest gain in U.S. market share in morethan 12 years.

The best example of our commitment to invest in high-growth opportunitieswas last year's explosive growth of diet Coke. Introduced only in July 1982, this

Roberto C. Goizueta fright). Chairman, Board of Directors, and Chief Executive Officer, withDonald R. Keoagh, President and Chief Operating Officer

product captured 17 percent of the fast-growing U.S. diet soft drink market seg-ment by the end of 1983 and became the fourth largest-selling soft drink andthe top low-calorie drink in North America.

Last year we also launched caffeine-free versions of our leading soft drinks,Coca-Cola, diet Coke and TAB, in the United States as well as in four inter-national markets.

International Soft Drink Investment Opportunities. The Company andits bottlers introduced diet Coca-Cola to 28 markets outside the United States andCanada, capitalizing on the enormous international growth potential for low-calorie soft drinks. In previously established low-calorie markets, diet Coke is byfar the leader. Diet Coke also has been introduced to establish low-calorie marketswhere none existed and is creating and filling demand.

Outside the United States, the fountain business is only emerging, and we viewits expansion as an opportunity full of promise. Last year our international foun-tain unit volume increased 9 percent, and we have placed a high priority on thisgrowing business segment.

Even our most aggressive actions to enhance the Company's worldwide softdrink leadership would be unsuccessful without a vigorous bottling system inplace. The Coca-Cola bottler system has always been strong, but we are begin-

ning to realize even greater results from our three-year-old bottler refranchisingprogram. Since 1981, in the United States alone, the Company has participatedin transactions valued at nearly $2.5 billion to ensure that the new owners ofCoca-Cola bottling companies are committed to the same growth goals as we.Outside the United States, the Company has been instrumental in bottler owner-ship changes primarily in Canada, Germany, Greece and Venezuela. In eachmarket, these aggressive new bottlers are attaining growth in soft drink volumeand market share. A dramatic example is the Philippines, where our 1981 $30-million joint-venture bottling agreement has brought a staggering business turn-around. Unit volume increased over 30 percent in both 1982 and 1983, and wehave recaptured the leading market share position in that country.

Soft Drink Operating Results. Virtually all our soft drink operations contrib-uted significantly to a superior Company performance in 1983. Soft drink unitvolume in North America increased 7 percent, and operating income increasedstrongly. Coca-Cola USA enjoyed a 7-percent increase in retail unit sales and asubstantial profit gain for the year, while Canada posted unit-volume growth of11 percent and an excellent improvement in operating income.

Internationally, soft drink unit volume achieved continued increases in1983, and operating income increased 4 percent. Excluding operations in LatinAmerica, the International Soft Drink Business Sector's unit volume increased7 percent in 1983 and operating income increased 18 percent —this in spite ofthe weakness of most foreign hard currencies relative to the U.S. dollar. Softdrink per-unit profitability also improved in every major geographical areaexcept Latin America.

As a result of severely depressed economic conditions in Latin America,associated with reduced consumer purchasing power—coupled withgovernment-imposed price controls and sharply declining exchange rates —unit volume declined 8 percent and operating income decreased 44 percent to$69 million. Nevertheless, in 1983 we maintained our soft drink market share inLatin America at over 44 percent, attributable to the success of "Coke is it!"advertising, careful attention to packaging and pricing, and excellent productmarketing and distribution by our local bottlers. Although our income from LatinAmerica was lower in 1983 than 1982, we posted an operating profit in virtuallyevery market. Latin America presents excellent long-term opportunities based ona large, youthful population.

In Europe and Africa, operating income increased 18 percent as a result of a5-percent rise in soft drink unit volume. Our soft drink business in the Pacificachieved a 9-percent increase in unit volume for 1983. New products and pack-ages in Japan contributed to a 9-percent rise in volume and a dramatically accel-erating growth trend, well above the industry rate and any of our competitors.Our combined Pacific operations achieved a 17-percent increase in earningsin 1983.

Foods Operating Results. The Foods Division had another year of impressivegains in 1983 with a good increase in operating profit, the result of a 10-percentrise in unit sales of frozen concentrated orange juice and 10-percent growth inchilled orange juice unit sales. One of every four glasses of orange juice madefrom frozen concentrate in the United States is Minute Maid — the clear marketleader. Despite the emergence in 1983 of new, competing orange juice brands,Minute Maid achieved an all-time high market share during the year of approxi-mately 25 percent, 2.5 percentage points above the previous high attainedin 1982.

To capitalize further on the growth of the orange juice category, the Foods Sec-tor is segmenting the market and expanding the Minute Maid line with new pack-ages and two new products— Minute Maid reduced acid orange juice and MinuteMaid orange juice with more pulp, each aimed at satisfying specific consumerpreferences.

With the rollout of the Hi-C line of fruit drinks in convenient, single-servingaseptic packages that require no refrigeration, the Foods Sector revitalized thismarket segment, and the Hi-C brand increased 21 percent in sales volume.

Entertainment Operating Results. In our newest business area, the rapidlyexpanding entertainment industry, we are pleased to report that our Entertain-ment Business Sector surpassed expectations for its first full year as part of theCompany, earning $91 million in 1983 operating income, attributable largely torecord profits from Columbia's television operations.

Columbia Pictures Television continued its industry leadership in supplyingnetwork programming, and it posted an outstanding year in syndication activi-ties. These achievements resulted in the television division contributing the larg-est share of Columbia's overall annual profits for the first time.

Profits from the theatrical release of motion pictures in 1983 in this country fellshort of projections for the year. Although Columbia Pictures' overall film profitperformance last year was disappointing. "Tootsie" achieved excellent results.Moreover, Columbia swept last year's Academy Awards, with "Tootsie" and"Gandhi" capturing a total of nine Oscars, including "Best Picture" for "Gandhi"Impressive success for both "Tootsie" and "Gandhi" in international marketscontributed significantly to the Entertainment Business Sector's 1983 profit per-formance, and "Tbotsie" now ranks as the highest-grossing film in Columbia'shistory. In the fall, the attention of American movie-goers was captured by "TheBig Chill!' which enjoyed excellent box-office receipts and produced a strongearnings stream.

Mylstar Electronics, Inc., formerly D. Gottlieb & Co.. showed very good perfor-mance with its highly successful video game, "Q*berC and introduced nearyear-end a new state-of-the-art, laser-technology, coin-operated game called"M.A.C.H. 3!'

Recent joint-venture agreements put into place by the Entertainment BusinessSector provide additional opportunities for long-term growth. The first films fromTri-Star Pictures —the new joint-venture movie studio formed by Columbia, CBSInc., and Time Inc.'s Home Box Office —will be released in the spring of 1984,and, from that point forward, Tri-Star will begin contributing to Columbia's reve-nues through box-office earnings and distribution fees. Other Columbia arrange-ments, such as financing and licensing agreements with HBO and CBS, provideimportant outside financing and significantly reduce the risk for Columbia's pro-duction of motion pictures. Columbia continues to participate in successful jointventures with RCA for worldwide marketing and distribution of videocassettesand videodiscs and with Bell & Howell for the production of videocassettes.

Future Investments. While we have been concentrating our investments inhigh-growth opportunities, we have divested businesses which generate lowerreturns. Last November's sale of The Wine Spectrum to Joseph E. Seagram &Sons, Inc., was in line with our strategy to concentrate our resources on the busi-ness areas where return on assets is the highest. The sale of The Wine Spectrumaffords us new resources to apply to our other businesses.

Looking to the future, we are taking hold of a number of opportunities to sup-port and expand our existing businesses — investments for growth that will helpthe Company achieve its financial objectives- In our North America and Interna-tional Soft Drink Business Sectors, we will continue to commit funds to ensurea financially sound, aggressive franchise system; to build a strong internationalfountain business; and to remain the leader in the innovation and application ofpackaging, ingredients, distribution systems and sales equipment. Investmentareas for the Foods Business Sector include fruit juices and fruit drinks in bothU.S. and international markets, as well as expansion of aseptic packaging ca-pacity. We will continue to explore investment opportunities in the specialtyprocessed-food area that offer good margins and potential for further growth ofthe Foods Business Sector. The Entertainment Business Sector will be a principalrecipient of additional investment activity. We expect to increase film productionthrough further innovative financing arrangements and joint ventures, and weare examining the advisability of expanding our involvement in the U.S. andinternational cable television industry.

In order to provide a source of ready capital to finance projects in support of ourbusiness, we recently formed a new subsidiary, Coca-Cola Financial Corporation.This subsidiary will support investments in sales and production equipment by

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our bottlers and other customers.In the future, the Company will be just as aggressive with its financial policies

as it has become in the past few years with its successful operating policies. Spe-cifically, while we will always remain a financially strong Company, we intendto use low-cost debt in our Company's financial structure to a greater extentthan we have in the past. This will permit us to be ready to invest in high-growth,high-return opportunities as they become available to us. Furthermore, as statedpublicly on previous occasions, and as a general rule, we plan to increase the per-centage of earnings reinvested in our business by raising dividends annually at arate lower than the prior year's growth in earnings per share, thus decreasing overtime our dividend payout ratio, which in 1983 reached 65 percent.

Dividend and Other Board Matters. At its February 16, 1984, meeting, theDirectors declared a quarterly dividend of 69 cents, equivalent to a full-year divi-dend in 1984 of $2.76 per share, a 3-percent increase over the 1983 dividend.This is the 22nd consecutive year in which our Board of Directors has approveddividend increases. As one implementation step of our new financial policiesendorsed by the Board, the Directors approved the Company's repurchase of sixmillion shares of its common stock for cash in the open market. We believe thisaction offers significant benefits to shareholders as it will enhance our return onequity and earnings per share. This move also demonstrates our continued confi-dence in the future growth of the business.

Also at this February meeting, the Board of The Coca-Cola Company elected asa Director Richard J. Flamson III. Chairman and Chief Executive Officer of Secu-rity Pacific Corporation in Los Angeles, whom we warmly welcome. Mr. Flamsonbrings exceptional talents to our Board, and the Company will benefit greatlyfrom his participation as a Director.

In 1983, three Directors did not stand for re-election. Thomas H. Choate,Fillmore B. Eisenberg and Lindsey Hopkins contributed broad knowledge, ability,experience and sound judgment in their service to our Board over 57 collectiveyears, which we recognize with deep gratitude.

Strategic Focus. We take pride in the Company's 1983 accomplishments,particularly when judged against the targets we set in 1981. At that time wecommitted ourselves to our "Strategy for the 1980s;1 a key goal of which is to con-tinue a strong financial and operating performance. There is no greater resourcein our Company for achieving this objective than that represented by the wealthof experience and by the commitment and resolve of our people — those who gen-erate the ideas and make the many daily decisions which affect our "bottom line"and our future. Backed by the support and wise guidance of our Board ofDirectors and complemented by the strength and vitality of our bottling partnersworldwide, our organization is functioning cohesively and with a sharp strategicfocus. We look with confidence to meeting the challenges of 1984 and beyond.

Roberto C. GoizuetaChairman, Board of Directors,and Chief Executive Officer

Donald R. KeoughPresident andChief Operating Officer

February 16, 1984

Soft Drink Business Sectors

Company enhancesworldwide industryleadership

Diet Coke, now NorthAmerica's number one dietsoft drink, launched in 28international markets

Coca-Cola USAstrengthens leadershipin take-home, fountainand bottle/can vendingmarkets

Europe and Africa,Pacific postexcellent results

In the worldwide soft drink industry, The Coca-Cola Companyenhanced its competitive stance with a 3-percent rise in com-bined soft drink unit volume and further improvements in mar-

ket share. This performance was fueled by substantial growth inthe diet soft drink segment and the realization of benefits from ourstrengthened international bottling system. Operating earningsfrom soft drinks increased 7 percent and contributed 80 percent ofoperating income from the Company's four Business Sectors.

North America Soft Drink Business SectorIn the North America Soft Drink Business Sector, soft drink unit volume rose

7 percent, and operating income increased strongly.Coca-Cola USA enjoyed an exceptionally successful year in all market seg-

ments it serves, strengthening its leadership position and setting new standardsin the U.S. soft drink industry. The Company's flagship Division achieved astrong increase in operating profit, due in part to a 7-percent increase in retailunit sales and a volume gain of 6 percent in syrup gallon sales. Similar growthrates were achieved for unit sales in foodstores, which account for about 40 per-cent of U.S. volume, and for all other bottle/can segments, which represent about27 percent. An even higher growth rate was attained for fountain unit sales,which account for about 33 percent of U.S. volume.

Product Performance. For Coca-Cola, the highly successful "Coke is it!"advertising campaign showed continued versatility and strength in 1983.Aggressive marketing enhanced the leadership position of Coke, the nation'snumber one soft drink.

The phenomenal growth of diet Coke in the United States is probably the most

Soft DrinksMel Operating Revenues is Millions! Operating Income ;s MM

Introduced in WestGermany and 27 otherinternational markets lastyear, diet Coke (calledCoca-Cola light in somecountries) capitalized ongrowing consumer demandfor great-tasting, low-calorie soft drinks.

remarkable success story in the history of the soft drink industry, as well as inAmerican consumer product marketing. In less than one year after its July 1982introduction, diet Coke became the nation's number one low-calorie beverage andthe number four soft drink overall. This success is attributable to diet Coke'staste, effective positioning to both male and female consumers, and the inherentstrengths of the Coca-Cola bottler system.

In August 1983, diet Coke became the nation's first soft drink to contain ablend of saccharin and aspartame sweeteners, providing an improved, moresugar-like taste. National availability of diet Coke with this sweetener blend wasachieved by year's end.

Even as diet Coke gained widespread acceptance, TAB remained the favoritelow-calorie soft drink of a large, loyal group of consumers, most of whom arewomen. In October, Coca-Cola USA launched a new advertising campaign,"You're my TAB!!' to reinforce the brand's popularity with its establishedconsumers.

The combination of diet Coke and TAB gave Coca-Cola USA a pre-eminentfoodstore share of nearly 45 percent in low-calorie colas — the fastest-growing U.S.market segment now and in the foreseeable future. Foodstore sales of the Divi-sion's low-calorie colas grew more than 60 percent in 1983.

In May, caffeine-free Coca-Cola, caffeine-free diet Coke and caffeine-free TABwere introduced for consumers who prefer the option of enjoying their favoritesoft drink brands without caffeine. Now available in nearly all of the nation, theseproducts have made impressive gains in established caffeine-free cola markets.

Backed by a bold, new competitive advertising campaign initiated in the fourthquarter. Sprite achieved positive sales momentum. Sugar-free Sprite was reintro-duced in December with a new name, diet Sprite, and a new taste following theaddition of aspartame as a sweetening ingredient along with saccharin.

Fountain Growth. Coca-Cola USA achieved record-high syrup gallon salesthrough fountain accounts in 1983 and made major gains in the number andsize of its accounts. Company products were sold at 230,000 locations, represent-ing a large majority of the nation's fountain outlets. In chain accounts, increaseswere well in excess of 10 million gallons in annualized syrup volume. The Divi-sion's products were served in 95 of the country's top 100 foodservice chains, upfrom 93 of the top 100 chains in 1982.

Equipment Innovations. Development of the BTS 150 —a compact, inte-grated and self-contained beverage dispenser utilizing a patented syrup package— was completed in 1983. Test marketing of the BTS 150, designed for smalloffice and retail locations, began in 13 U.S. markets. In the area of cold bottle/canvending, more than 8,000 "talking" and video-display vendors were placed, anda new unit that accepts dollar bills was test marketed.

Contract Amendment. Bottlers accounting for more than 85 percent of U.S.volume signed a contract amendment in 1983 which forges a "new constitution"for the Coca-Cola business in this country. Demonstrating a spirit of cooperationand understanding, this contract amendment provides an effective pricing mech-anism and enhances the possibility of product innovations and marketingresponsiveness for bottlers and Company alike.

Olympics. In 1984, Coca-Cola USA will play a prominent role in the OlympicSummer Games in Los Angeles. Extensive advertising and promotional activities

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TAB retained a large con-sumer following whilediet Coke became NorthAmerica's number one low-calorie soft drink in 1983.Together, the two productscommand nearly 45 per-centofthe low-calorie colasegment in U.S. foodstoresales.

Caffeine-free versions ofCoca-Cola and the Com-pany's other leadingcolas, diet Coke andTAB, have achievedimpressive results inU.S. markets. Extensiveadvertising and promo-tional activities forCoca-Cola, diet Coke,TAB and Sprite willhighlight Coca-ColaUSA's role as the officialsoft drink supplier forthe 1984 OlympicSummer Games inLos Angeles.

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are under way to highlight the Division's role as the official soft drink supplier forthe 1984 Summer Games. Activities include Olympics-related television com-mercials and consumer promotions for Coca-Cola, diet Coke, TAB and Sprite, aswell as continuing co-sponsorship of the U.S. Olympic Hall of Fame.

Canada. Unit volume increased 11 percent in Canada, and the Companyposted significant gains in operating profit. Aggressive promotions and merchan-dising, introductions of diet Coke and the Company's three caffeine-free colas,and rapid growth in the diet segment contributed to this performance. Diet Cokeachieved national availability in 1983. The Company's low-calorie products cap-tured more than 50 percent of the Canadian diet soft drink market and contrib-uted 20 percent of our Canadian volume in 1983.

Future Growth. Looking further into the 1980s, the North America Soft DrinkBusiness Sector expects to achieve sustained growth from the principal factorsthat drive growth in consumption — demographics, disposable income, productavailability and aggressive marketing. In every major leadership area, the Com-pany is in an excellent position to take advantage of growth opportunities — and,moreover, to spearhead that growth.

International Soft Drink Business SectorIn the International Soft Drink Business Sector, combined unit volume

achieved continued growth in 1983, despite the sluggishness of foreign econo-mies. Operating profit from the Company's International Sector increased 4 per-cent. New products and packages, the introduction of diet Coke in 28 markets,and 9-percent growth in the Company's international fountain, or post-mix, busi-ness contributed to a dramatically strengthened competitive position.

Latin America. Continuation of severe economic conditions throughout LatinAmerica effected overall declines in Company volume and profit in that part ofthe world. Unit volume in Latin America decreased 8 percent, while operatingincome fell 44 percent, the result of price controls, high inflation and currencydevaluations. Even so, the Company and its bottlers maintained a market shareof over 44 percent through aggressive marketing and product distribution drives.Operating income from Latin America represented 12 percent of the Company's1983 non-U.S. operating earnings.

Although unit volume in Mexico declined 12 percent for the year, Mexicoremained the Company's second-largest world market by volume, and its long-term potential is great. In 1983, the Company continued to increase its share ofthe Mexican post-mix segment and launched two juice-based products—Kin,which contains 10-percent apple juice, and Cappy, a 50-percent juice product in arange of five flavors —to tap the growth potential of the juice-containing beveragesegment, which has averaged over 20-percent annual growth since 1981.

In Argentina, unit volume grew 12 percent despite economic difficulties, andthe Company's market share increased in 1983. Brazil, however, experienced a14-percent decline in unit volume due primarily to recessionary pressures. Inboth markets, price controls and dramatically declining exchange rates causedsharp profit declines in 1983. Nevertheless, the Company improved its strongcompetitive position in Argentina with the launch of "Coke is it!" advertising,product promotions for Sprite and Coke, and aggressive bottler efforts to expanddistribution. The Company maintained its competitive position in Brazil with the

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Momentum increased/orSprite in 1983 with thelaunch of a bold, new com-petitive advertising cam-paign. Sugar-free Spritewas reintroduced with anewname. dietSprite. anda new sweetener blend ofaspartame and saccharin.

Safes of Company prod-ucts through fountainoutlets, representingone-third of Coca-ColaUSA's volume, reachedrecord levels last year.

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appointment of six new bottlers, the introduction of the country's first can for softdrinks, and product promotions in the growing distribution channel of supermar-kets. Colombia increased soft drink unit volume 11 percent, aided by national dis-tribution drives for Coca-Cola and the introduction of two new Fanta flavors.

Long-term growth opportunities in Latin America hold promise. Per capita softdrink consumption is only one-third the U.S. level, and half the population isunder 18 years of age. The Company's bottlers have invested more than $400million in their property, plant and equipment over five years, and plans continuefor the introduction of diet Coke and other new products and packages. Theseactions ensure that our Latin American soft drink business is positioned for sus-tained growth as the various economies recover.

Europe and Africa. The Company posted excellent results in Europe andAfrica, despite sluggish economic conditions and the dramatic strength of theU.S. dollar against major European currencies. Unit volume rose 5 percent inEurope and Africa, and operating income increased 18 percent, indicating excel-lent trends in per-unit profitability and in local currency earnings.

The 1983 introduction of diet Coke (called Coca-Cola light in some countries)to eight European markets, as well as investment to expand the fountain market,contributed to unit-volume growth in Europe.

West Germany, the Company's fourth-largest market in volume sales world-wide, achieved significantly higher operating profit. This gain came in spite of aunit-volume decline of 7 percent and an unfavorable exchange rate. With theJune introduction of Coca-Cola light by the Company and its strong network oflocal bottlers, the West German diet segment grew 24 percent for the year, and atyear-end Coke light had captured nearly 40 percent of the low-calorie market. Inaddition, the Company's overall market share in Germany reached a record highduring 1983.

Unit volume in Spain rose 3 percent, benefiting from the introduction of"Coke is it!" advertising, the launch of caffeine-free Coca-Cola, market shareincreases, and growth from cans and plastic bottles. Italy enjoyed continued suc-cess with Sprite, which outsells all competing lemon-lime products after twoyears on the market. Fanta flavors performed well, and distribution of Coca-Colaand Fanta Lemon in .5-liter cans expanded. The Company's soft drink unit vol-ume in Italy rose 7 percent.

In Great Britain, unit volume expanded 13 percent, aided by the introductionof diet Coke, and operating profit grew substantially. Diet Coke expanded the low-calorie segment by 35 percent, and at year-end it had contributed more than 8points to the Company's diet soft drink market share, Belgium achieved a 4-per-cent rise in volume, introduced caffeine-free Coca-Cola and enjoyed flourishingsales of Minute Maid orange juice and Five Alive fruit beverage.

Soft drink sales in Africa remained vigorous, with unit-volume growth of 16percent. In South Africa, unit volume increased 6 percent, aided by the success-ful introduction of diet Coke, substantial growth from Fanta flavors and contin-ued contribution from the two-liter bottle. Bottler case sales in Nigeria rose 15percent. Demand for soft drinks in Nigeria, already the Company's 11 th-largestmarket by volume, continues to outpace supply, and the country's large popula-tion and favorable climate, offer excellent growth prospects. Additional produc-tion capacity in Egypt brought 35-percent unit-volume growth for 1983, and theCompany is again the industry leader following its 1979 re-entry into the market.

Pacific. In the Pacific, unit volume increased 9 percent in 1983, and operating

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Capitalizing on thegrowing market for juice-containing beverages inMexico, the Company in-troduced the juice-basedproduct. Kin, with 10-percent apple juice. Fanta,the world's third largest-selling soft drink brand,contributes significantly tothe Company's worldwideleadership position.

income grew 17 percent. Youthful populations and per capita soft drink con-sumption levels at only 8 percent of the U.S. rate offer enormous growth opportu-nities in the Pacific, and the Company has been investing aggressively in newproducts and packages.

Coca-Cola (Japan) Company Ltd. enjoyed an outstanding year with robustprofit growth and a unit-volume increase of 9 percent, elevating Japan from theCompany's fourth-largest to its third-largest market in volume sales worldwide.Vigorous marketing and new packaging supported the major brands Coca-Cola,Sprite and Fanta. Performance also benefited from an aggressive vendor place-ment program, as well as from sales of nutrient-enriched Real Gold and GeorgiaCoffee. Japan's excellent performance in 1983 is evidence of the Company'sefforts in recent years to revitalize this major market.

The Philippines achieved 32-percent volume growth as well as significant earn-ings increases, despite the declining Philippine peso. With a 49-percent marketshare, the Company again leads this important market. In Korea, strong perfor-mance by Hi-C juice-containing flavors, along with new packages for Coca-Cola,Fanta and Kin, contributed to volume growth of 19 percent, Australia postedsomewhat lower unit volume in 1983, partly due to unfavorable economicconditions.

In China, ground was broken in Fujian (Fukien) Province for the country's thirdbottling facility. Slated to begin operation in 1984, the new plant will bottle prod-ucts of The Coca-Cola Company including, for the first time in China, FantaOrange and Sprite.

International Outlook. For the International Soft Drink Business Sector as awhole, the Company expects 1984 performance to benefit from the introductionof new products and packages, further investments in the international fountainsegment, expansion of juice and juice-based beverages, and a projected 19 addi-tional market introductions of diet Coca-Cola.

Historical and Future GrowthOver the past 10 years, the U.S. soft drink industry has averaged 3 to 4 percent

annual unit growth, while the Company has grown 4 percent domestically. TheCompany's international growth has averaged 6 percent per year, outperformingthe industry rate of 4 to 5 percent.

In 1983, the Company's domestic soft drink volume gain exceeded its histori-cal rate, as well as the annual industry growth rate, aided by the rapidly growingdiet soft drink business. Given the very positive outlook for this profitable cate-gory, the Company expects industry unit growth in line with historical trendsand Company unit growth continuing to exceed the industry.

Because of unfavorable economic conditions outside the United States,both Company and industry volume growth for 1983 fell below 10-year trends.However, despite continued uncertainties stemming from the Latin Americaneconomy and international currency exchange rates, the Company is firmly posi-tioned to build upon its historical performance in the worldwide soft drink busi-ness through its investments in aggressive marketing, innovative products andpackaging, and a strong bottler system.

McUo Yello was amongsix Company productssuccessfully introducednationally in Australia lastyear. Real Cold taps thegrowth opportunities ofJapan's expanding marketfor nutrient-enrichedbeverages.

15

Foods Business Sector

Foods Business Sectorgenerates recordrevenues, profits

Minute Maidfrozen orange juiceattains highest-evermarket share

Volume increases1O percent forfrozen and chilledorange juice

Aseptic packaging bringsconvenience, new growthopportunities

Outstanding performance by established brands plus nota-ble growth in new product sales made 1983 a record yearfor the Foods Business Sector. The Coca-Cola Company

Foods Division, the largest operating unit within the Sector, main-tained its leadership positions in virtually all the product areas inwhich it competes. Operating income for the Foods Business Sec-tor reached $121 million, an increase of 3 percent.

Minute Maid. The orange juice market underwent significant change during1983 as several competitive brands entered the market. This new competitionspurred increased promotional and marketing activity and stimulated growth forthe overall orange juice category. The Minute Maid brand maintained its positionas the nation's leading orange juice in this competitive environment. MinuteMaid frozen concentrated orange juice, the Division's flagship product, posted arecord-high market share for the second year in a row and grew 10 percent in vol-ume during 1983, while volume for Minute Maid chilled orange juice from con-centrate also increased 10 percent.

The Division has been able to reach additional consumers with new orangejuice products developed to meet the needs of specific segments of the market.One such product, Minute Maid frozen concentrated orange juice with more pulp,introduced in 1982, has become the second leading orange juice product in thefrozen case behind regular Minute Maid. During 1983, Minute Maid frozen con-centrated orange juice with more pulp experienced a volume increase of 52percent over 1982.

FoodsNet Operating Revenues •. MM Operating Income ($ Minions)

Capitalizing on the out-standing growth opportuni-ties offered by convenient,single-serving aseptic pack-aging, which last yearfueled 21-percent volumegrowth for (he Hi-C brand,the Foods Division isexpanding its aseptic pro-duction capacity and itsline ofaseptically packagedproducts.

16

In addition, new Minute Maid reduced acid frozen concentrated orange juice,introduced nationally in January 1983, has carved out a niche among con-sumers who prefer a slightly sweeter tasting, less acidic orange juice. In its firstyear in national distribution, Minute Maid reduced acid orange juice has shownexceptional promise for future growth, obtaining more than a 1.5-percentmarket share.

Hi-C in Aseptic Packaging. Aseptic packaging has been another area of sig-nificant growth for the Foods Division. In January 1983, the Division became thefirst U.S. firm to market an aseptically packaged fruit drink nationwide. Hi-C inthe Drink Box, an 8.45-ounce (250-mL) single-serving aseptic package, was animmediate and resounding success, not only achieving significant volume in itsinitial months, but revitalizing the entire fruit drink category. Hi-C in the DrinkBox as well as Hi-C in the traditional 46-ounce ready-to-serve container benefitedfrom this resurgence of consumer interest in fruit drinks. The Hi-C in the DrinkBox television campaign has a lighthearted approach which appeals to both chil-dren and adults. Overall volume for Hi-C brand products increased 21 percentover 1982.

Tb continue capitalizing on the growth opportunities of the rapidly expandingmarket for aseptically packaged juices and juice drinks, the Foods Division hasinvested over $20 million in additional aseptic production equipment, includinga major expansion project at the Division's Paw Paw, Michigan, plant. This addedproduction capability will enable the Division to expand its product line of asep-tically packaged drinks to more flavors of Hi-C as well as to other juices and juice-containing beverages.

The Division test marketed several Minute Maid brand juices and the Five Alivebrand fruit beverage in aseptic packages in 1983 and plans to introduce theseproducts nationally in 1984. In test markets, aseptically packaged Five Alive out-sold all other aseptically packaged flavors and brought renewed interest to thechilled and frozen varieties of Five Alive brand products as well. Since the intro-duction of chilled Five Alive in 1981, this all-natural refreshment beverage hashad a 45-percent increase in sales volume, becoming the second largest-sellingfruit beverage in the dairy case. With the national introduction of asepticallypackaged Five Alive in 1984, the Division anticipates accelerated growth of theentire line of Five Alive brand products.

Minute Maid Ades. Minute Maid frozen concentrated ades experienced astrong year, in part because of an unusually long, hot summer which increaseddemand during the traditional selling season for these products. Minute Maidfrozen concentrate for lemonade achieved a 17-percent increase in volume over1982, while volume for chilled Minute Maid lemonade increased 40 percent.Both products will provide an excellent base for increased growth through added

18

Minute Maidfrozenconcentrated orange juicewith more pulp and MinuteMaid reduced acidfrozenconcentrated orange juice,two new products devel-oped to meet specific con-sumer needs, generatedsubstantial sales volumein 1983.

Minute Maidfrozen con-centrated orangejuice,the leading orange juicein the United States,captured an all-timehigh market sharein 1983.

19

distribution in 1984.

Coffee. In March 1983, the Division created a separate coffee unit to handleproduction and marketing of Maryland Club and Butter-Nut brand coffees. Thisrestructuring has resulted in a more efficient organization that can respond morerapidly to the competitive environment of the coffee market. In fall 1983, the newcoffee unit introduced Maryland Club and Butter-Nut Filter Blend Coffees, spe-cially formulated for use in paper filter coffeemakers.

Ronco. To achieve its growth potential, the Foods Division intends to broadenits product base beyond its traditional scope of expertise in the fruit juice andfruit-based beverage arenas. Through the 1982 acquisition of Ronco Foods, theDivision is applying its marketing and business development knowledge to thegrowing U.S. pasta market. In late 1983, the Division introduced Ronco productsin two new markets and test marketed a consumer-oriented marketing plan toevaluate its effectiveness in the competitive pasta category.

Presto. Also included in the Foods Business Sector is Presto Products, Incorpo-rated, headquartered in Appleton, Wisconsin. Presto is a leading private-labelsupplier of household consumer products, including plastic wraps, plastic filmproducts such as disposable trash bags, and health and beauty aids. Presto alsosupplies industrial products, plastic cutlery and straws to a variety of industrial,foodscrvice and institutional facilities. In 1983, Presto results were below prior-year levels due to competitive industry conditions.

Growth Strategy. In 1984, the Foods Business Sector's overall strategy will beto grow faster than the specific product categories in which it competes. In addi-tion, the Sector will continue the development of new product expansions andwill seek additional opportunities for adding new product categories. Within thisenvironment, the Foods Business Sector expects to achieve continued increasesin unit volume, revenues and profitability.

20

An innovative marketingcampaign featuring color-ful new packaging wastest marketed for Roncoproducts during the year.Kxpanded availability ofproducts like Ili-C DrinkMix in the two-gallon pouchin restaurants, hotels andotherfoodservice outlets isamong the growth objec-tives of the Foods Division.

MinuteMaid1OO% PURE

ORANGE

NO PRESERVATIVESOR SUGAR ADDED

Volume for chilled MinuteMaid orange juice grew 10percent in 1983, contribut-ing to a record profit yearfor the Foods BusinessSector.

21

Entertainment Business Sector

Dynamic earningsgrowth achieved

"Tootsie"highest-grossing filmin Columbia's history

Columbia capitalizeson home video andpay TV expansion

Columbia PicturesInternational achievesrecord theatrical rentals

Syndication performancegenerates record profitsfor TV division

Tri-Star poised to becomemajor earnings source

In its first full year as part of The Coca-Cola Company, theEntertainment Business Sector experienced dynamic growthin its organization and earnings. Comprised of the units within

Columbia Pictures Industries, Inc.—which achieved new levels ofsuccess—and its joint-venture participation in Tri-Star Pictures,the Sector earned $91 million in operating profit in 1983.

The Sector made important strides in reaching its primaryobjective—to become a greater and more profitable factor in theentertainment industry. The Entertainment Business Sectorexpects to continue its progress in 1984 by increasing the productfrom Columbia Pictures, Columbia Pictures Television, MylstarElectronics, Inc., and Columbia's other divisions. Tri-Star Pictures,a joint venture of Columbia, CBS Inc., and Home Box Office, Inc., asubsidiary of Time Inc., will begin to contribute to the Sector's rev-enue and profit with its first film releases in 1984. The Entertain-ment Business Sector will continue to investigate other venturesand new lines of business within the entertainment industry tohelp attain its growth objective.

Columbia Pictures. Columbia Pictures is a leading producer and distributorof motion pictures. Several of its theatrical releases last year enjoyed box-office andcritical success, but the film division's overall 1983 results were below expectations.Accordingly, remedial steps have been taken to achieve improved profitability.

Oneof the year's highlights was that "Tootsie," starring Dustin Hoffman,

Entertainment'Net Operating Revenues , r Operjting Income.' i,

"The Big Chill" became oneof Columbia's mostftnan-cially successful jail filmsever in the United States.

22

became Columbia's highest-grossing film ever—a position previously held by1977's "Close Encounters of the Third Kind'—and the best-selling comedy inmotion picture history. Initially released in December 1982, "Tootsie" has earnedmore than $140 million in domestic and international film rentals. "Gandhi"swept the 1982 Academy Awards by garnering eight Oscars including "BestPicture." Sir Richard Attenborough won the award for "Best Director," and BenKingsley won the "Best Actor" award. In 1983 "The Big Chill," an ensemble com-edy about the reunion of college friends after 15 years, became one of the mostfinancially successful films ever released domestically by Columbia duringthe fall period.

Other films distributed in 1983 included "Blue Thunder," an action dramaabout a police helicopter pilot, starring Roy Scheider; "Christine," a thriller abouta car that takes on human qualities, from the Stephen King best seller; "TheDresser," the story of an English stage actor and his dresser in wartime England,starring Albert Finney and Tom Courtenay; "Educating Rita," a film depictingthe relationship between a college professor and an ill-educated hairdresser whois his student, starring Michael Caine and Julie Walters; "The Man Who LovedWomen," a comedy about a sculptor who is an incurable romantic, starringBurt Reynolds and Julie Andrews; and "Richard Pryor... Here and Now," aeon-cert film featuring the popular comedian.

Columbia Pictures has planned a full release schedule for 1984, beginningwith "Against All Odds," an action/romance produced and directed by TaylorHackford and starring Rachel Ward, Jeff Bridges, James Woods and RichardWidrnark; "Moscow on the Hudson," a comedy starring Robin Williams, pro-duced and directed by Paul Mazursky; "The Karate Kid," a contemporary dramastarring Ralph Macchio, produced by Jerry Weintraub and directed by JohnAvildsen; and "Ghostbusters," an Ivan Reitman comedy starring Bill Murray,Dan Aykroyd. Sigourney Weaver and Harold Ramis.

Additional Film Markets. Besides releasing its films in theaters, Columbiahas other increasingly important markets for its motion pictures, particularly thepay television and videocassette/videodisc markets. Columbia's involvement inthe growing pay television field has been enhanced by licensing and financingagreements with Home Box Office. During the term of these agreements, HBOhas exclusive pay television rights to some Columbia films, and HBO also investsin films produced by Columbia. In addition, HBO pays minimum pay televisionlicensing fees for all Columbia films. These fees reduce risk and are subject toincrease depending on the theatrical rental performance of the films.

The market for videocassettcs and videodiscs grew phenomenally during1983, and Columbia effectively capitalized on this growth by expanding itslicensing and distribution activities through its joint venture, RCA/ColumbiaPictures Home Video. Two of its videocassettes that performed particularly wellwere "Gandhi" and "Blue Thunder," which were among the industry's most suc-cessful video titles of the year.

24

II est Tbotsie... Elle est Dustin Hoffman

Auchomageila

accepteunrole

femininetest

devenuune star.

Si seufcment il pouvait le dire a la femme qu'il aime.

"The Dresser," initiallyreleased in December, hasearned critical acclaim.International rentals for"Tootsie" contributed sig-nificantly to a record yearfor Columbia Pictures Inter-national Corporation.

The continued successof "T.J. Hooker" andother television produc-tions maintainedColumbia's positionas a leading supplier ofnetwork programs.

25

Columbia Pictures International Corporation. Columbia Pictures Interna-tional Corporation had a record year in theatrical rentals, despite the significantnegative impact of translating local-currency revenues into 1983's stronger dol-lar. Nineteen territories broke individual theatrical rental records, largely due toextensive worldwide bookings of "Tootsie" and "Gandhi!' Other films experienc-ing overseas theatrical success were "Blue Thunder" and "Annie!'

Like its domestic counterpart, RCA/Columbia Pictures International Video alsobenefited from the flourishing home entertainment market. The joint venture,which expanded its operations into a number of new foreign territories, madestrong contributions to Columbia Pictures International's earnings.

Another important development is a planned partnership designed to takeadvantage of the growing pay television market in the United Kingdom. HBO,Twentieth Century-Fox, Columbia and the United Kingdom's Goldcrest Filmsand Television are the partners in the venture, which intends to make program-ming available to cable operators.

Columbia Pictures Television. Columbia Pictures Television, which producesprograms for the networks and syndicates programs to television stations, postedrecord profits in 1983 and for the first time in Columbia's history became its larg-est profit generator, primarily through syndication activities.

Columbia Pictures Television maintained its position as a leading supplier tothe networks for the 1983-84 season. Columbia Pictures Television produced fourand one-half hours of primetime series and two daytime series. Its four prime-time hour-long shows, all for ABC, were "Fantasy Island!' starring RicardoMontalban and Christopher Hewett, in its seventh year; "Hart to Hart!' starringRobert Wagner and Stephanie Powers, in its fifth year; "Ripley's Believe It Or Not!'with Jack and Holly Palance as hosts/narrators; and "T.J. Hooker!' starringWilliam Shatner. Columbia Pictures Television's continuing daytime series are"Days of Our Lives!' on NBC for 18 years, and "The Young and the Restless!' onCBS for 10 years.

During the year, Columbia Pictures Television also produced several programsfor telecast in 1984. These include the primetime hour-long programs, "BlueThunder," starring James Farentino, based on the successful Columbia film, and"Mickey Spillane's Mike Hammer," starring Stacy Keach. Columbia also pro-duced for the 1983-84 season several miniseries and made-for-TV movies, includ-ing "The First Olympics—Athens 1896!' "The Last Days of Pompeii" and "TheMaster of Ballantrae!'

Program Syndication. An important source of revenue for Columbia PicturesTelevision is the syndication of programs to television stations in the UnitedStates. The division's extensive catalog of programs for syndication includes theshows it has produced in the last four decades and those it has purchased from

26

Syndication of televisionprograms like "FantasyIsland" helped makeColumbia Pictures Televi-sion the EntertainmentBusiness Sector's largestprofit generator in 1983.During the year, Mylstarintroduced the coin-operated videogame"M.A.C.H. 3'.'

•• B^MBMBHIcgm^ wwHu _. ^^^^_« ri|

^^^^^^^HBBH ^^^^*^

Robert Redford stars in"The Natural" the firstfilm to be produced bythe joint-venture studio,Tri-Star Pictures.

27

other producers. "Fantasy Island" was the most significant contributor to syndi-cation earnings in 1983. "Barney Miller," "Charlie's Angels" and "Soap" also per-formed well as syndicated properties. In late 1984 "Hart to Hart" and "Benson"will enter the syndication market.

Mylstar Electronics, Inc. Mylstar Electronics, Inc., formerly known asD. Gottlieb & Co., manufactures and markets coin-operated, non-gambling elec-tronic amusement games. In 1983, Mylstar had record earnings and emergedas a significant factor in the videogame segment of the industry. Contributingimportantly to Mylstar's 1983 performance were the sales of "Q*bert" and"M.A.C.H. 3;' two of the year's best-selling videogames. "Q*bert" performedstrongly in the home video market through a licensing agreement with ParkerBrothers, a division of General Mills, Inc., and "Q*bert" also became part of asuccessful Saturday morning children's television series on CBS. "M.A.C.H. 31'which utilizes videodisc technology, became an immediate best seller upon itsintroduction. Despite the unit's significant progress in 1983, the uncertaintiesof the videogame market require caution in predicting Mylstar's future results.

Tri-Star Pictures. In its first year of operation, Tri-Star Pictures was success-fully established as an important motion picture company. It began productionof and acquired several films last year for 1984 distribution. "The Natural!' withBarry Lcvinson directing Robert Redford, Robert Duvall and Glenn Close, will bereleased in May 1984. "The Natural" will be followed by a number of other filmsin 1984, including "The Muppets Take Manhattan!' featuring Miss Piggy. Kermitthe Frog and the other Muppets; "Songwriter," produced by Sydney Pollackwith Willie Nelson, Kris Kristofferson and Gary Busey in featured roles; and "TheTexas Picture," to be directed by Robert Benton, which will star Sally Field.

Besides increasing the volume of filmed entertainment for the EntertainmentBusiness Sector, Tri-Star is expected to become a major source of future earningsfor Columbia. In addition to the income it will enjoy as an equity partner inTri-Star, Columbia will receive a percentage of Tri-Star's film rentals for providingdomestic and international theatrical distribution services.

Growth Plans. The Enterlainment Business Sector is committed to strongearnings growth in 1984 and beyond by increasing the amount of product in itsexisting lines of business and through acquisitions. The Sector plans to take ad-vantage of the accelerating demand for delivery systems of home entertainmentin both domestic and international markets.

28

"Gandhi"posted excellentresults in the expandinguideocassette/videodiscmarket. Pro/if continuesto be generated from dis-tribution of 1962 's"Lawrence of Arabia" andmore than 1,8OO other filmsavailable from Columbia'sextensive film library.

Financial Report The Coca-Cola Company and Subsidiaries

Financial Review Incorporating Management'sDiscussion and Analysis 30Selected Financial Data 34Consolidated Statements of Income 36Consolidated Balance Sheets 37Consolidated Statements of Shareholders' Equity 38Consolidated Statements of Changesin Financial Position 39Notes to Consolidated Financial Statements 40Report of Independent Accountants 46Report of Management 47Supplemental Information on the Effects ofChanging Prices 48Quarterly Data 50Board of Directors 51Corporate Officers 52Officers—Operating Units 52Shareholder Information 56

29

Financial Review Incorporating Management'sDiscussion and Analysis

The Coca-Cola Company and Subsidiaries

BUSINESS OBJECTIVES AND STRATEGY

The core of the Company's strategy is a commitmentto maximize shareholder value by achieving growth inearnings per share at a rate in excess of inflation andto increase the return on equity in order to provideshareholders an above average total return on theirinvestment.

Rate of Growth in Earningsvs Inflation t%)

(% Change in Income per Share 1romContinuing Operations vs% Change in Average ConsumerPrice Index

D Inflation

• Earnings

in Averag—Urban)

'81 '8!

Tb achieve this commitment, management focuseson the following areas:

Unit Sales Volume: A primary goal is to increaseunit sales volume at rates in excess of the respectiveindustry rates. For example, in 1983 unit growth of theCompany's worldwide soft drink operations increased3%, well in excess of the worldwide soft drink industry.This performance helped the Company obtain itsobjective of increasing earnings per share from contin-uing operations at a rate in excess of inflation.

Profit Margins: While increasing unit volume inexcess of industry rates is a key objective, the profitcontribution per unit sold is also important. It is theCompany's objective to maintain or improve "real"profits per unit (after adjusting for the effects of infla-tion). This objective is accomplished by maintainingtight controls over pricing policies and operatingexpenses.

At December 31, 1983, bottlers representing over90% of the Company's bottled Coca-Cola soft drink vol-ume in the United States had agreed to an amendedbottler contract (the "1978 Amendment") which givesthe Company better pricing flexibility and results inadditional marketing expenditures by the Company.Excluding adjustments for sugar prices, in 1983 and1982 the Company raised prices in the United Statesprincipally to cover the effects of inflation.

In the United States, Coca-Cola is partially sweetenedwith high fructose corn syrup (HFCS), a form of sugar.In 1983, this product was used at the 75% level for

Coca-Cola fountain syrup and at the 50% level forCoca-Cola sold in bottles and cans. In early 1984 theCompany authorized the use of high fructose cornsyrup at up to the 75 % level for Coca-Cola sold in bot-tles and cans.

By carefully managing expenses, the Company canimprove its operating results. In 1983 and 1982 thepercentage of expenses to gross profits was 67.5% com-pared to 68.7% in 1981; this improvement representsan increase in operating income in excess of $30 millionfor both 1983 and 1982 in comparison to 1981. TheCompany's success in controlling expenses has helpedachieve increased earnings in difficult economic times.

Management of Resources: A key element of theCompany's strategy is to concentrate its resources inconsumer markets offering attractive returns and highgrowth potential.

In line with this strategy, since 1981 the Companyhas sold three operations, The Wine Spectrum in 1983,Tenco Division in 1982 and Aqua-Chem, Inc. in 1981.These dispositions have generated more than $360 mil-lion which has been or will be invested in other areas ofthe business. In addition, the Company carefully man-ages its investment in the various components of work-ing capital.

The Company's emphasis on growth is reflected inthe pattern of investment spending. The cumulativereinvestment in the soft drink business approximated$ 1 billion for the last four years. Since June 1982, theCompany has invested in excess of $800 million in theentertainment industry, including the initial acquisi-tion cost of Columbia Pictures Industries, Inc. ("Colum-bia"). The Company's Foods Division is makinginvestments in TETRA-BRIK aseptic packaging equip-ment to support the expected growth in this area. In1982, the Company purchased Ronco Foods Company,a manufacturer and distributor of pasta products.

Return on Assets . • • :

(Income from Continuing Operationsto Average Total Assets)

30

Financial Review Incorporating Management'sDiscussion and Analysis (continued)

Capital Structure: One of the Company's financialgoals is to maintain a strong financial position whileutilizing prudent amounts of long-term debt. AtDecember 31, 1983, long-term debt represented 14.5%of total capital. In the future, the Company envisionsincreasing the use of such debt in order to fund attrac-tive investment opportunities. This policy is aimed atincreasing the return on shareholders' equity and thetotal return to shareholders.

Long-Term Debt to Total Capital <

1 '82 'S3

Return on Shareholders' Equity <%)

(Income (rom Continuing Operationsto Average Shareholders' Equity)

1 '83 '83

Dividends: The Company has increased its dividendin each of the past 22 years. Management plans toincrease the percentage of earnings reinvested in thebusiness by raising dividends annually at a rate lowerthan the prior year's growth in earnings per share, thusdecreasing over time the dividend payout ratio. Theannual dividend was $2.68 per share, $2.48 per shareand $2.32 per share in 1983, 1982 and 1981, respec-tively. At its February 1984 meeting, the Board ofDirectors increased the quarterly dividend to 69 cents,equivalent to a full year dividend of $2.76 in 1984.

The above actions are illustrative of the Company'sefforts to achieve its goal of enhancing its growth pros-pects and increasing the return on equity

MANAGEMENT'S DISCUSSION AND ANALYSIS

RevenuesNet operating revenues continued to increase in 1983

as in 1982. A significant amount of the increase forboth years is attributable to the inclusion of the resultsof Columbia which was acquired in June 1982 in a pur-chase transaction.

Soft Drinks: Soft drinks accounted for 69%, 73%and 80% of consolidated net operating revenues in1983, 1982 and 1981, respectively. Sales volumeincreased by 3% in 1983 and 1982. Soft drink revenuesincreased by $281 million in 1983 and decreased by$145 million in 1982.

In addition to volume, soft drink revenues areaffected by sugar prices and foreign exchange rates,both of which generally decreased in 1983 and 1982.The price of Coca-Cola syrup sold to bottlers in theUnited States is adjusted quarterly for changes in themarket price of sugar and fructose. This practice mini-mizes the effects of sweetener prices on gross margins.Approximately 63% of soft drink sales volume is gener-ated outside the United States. As exchange ratesdecline, local currency revenues translate into fewerUnited States dollars.

Entertainment: Entertainment revenues in 1983were generated from the following: motion pictures—60%; television programming—32%; amusementgames and other—8%. Motion picture revenuesbenefited significantly from the box office successof TOOTSIE, GANDHI, BLUE THUNDER, SPRINGBREAK and THE BIG CHILL. Television programmingrevenues were improved greatly by the initial syndica-tion of FANTASY ISLAND. Revenues from the sale ofamusement games were enhanced by Q* BERT, theCompany's most successful game in its history, andM.A.C.H. 3, a new laser-disc technology coin videomachine.

Foods: Revenues for the Foods Business Sectorincreased by 12% and l%in 1983 and 1982, respec-tively. These increases were primarily the results ofincreased volume for citrus products combined withmodest price increases.

31

Financial Review Incorporating Management'sDiscussion and Analysis (continued)

Gross ProfitGross profit as a percentage of net operating reve-

nues was45% in 1983 and 1982 and 44% in 1981.Maintaining and improving gross profit margins whileholding down price increases is an integral part of theCompany's operating philosophy. Costs and expensesare minimized through the use of policies and proce-dures designed to continuously monitor inventorylevels and production expenses. Other factors whichimpact gross margins are the Company's innovativemarketing techniques and market acceptance anddemand for the Company's major products.

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

$1.52 billion in 1983, $1.37 billion in 1982 and $1.32billion in 1981. Expenditures for media advertising,excluding amounts capitalized as film productioncosts, were $463 million in 1983, $392 million in 1982and $391 million in 1981.

Administrative and general expenses increased16.2% and 13.9% in 1983 and 1982, respectively, pri-marily because of inflation and expansion of the busi-ness which includes the purchase of Columbia in 1982.Such expenses, as a percentage of net operating reve-nues, remained relatively stable at about 8% over thethree years ended December 31, 1983.

Total Selling Expenses is

D Media Advertising

1 "82 83

Interest Income and ExpenseInterest income decreased by $23 million in 1983

and increased by $36 million in 1982. The decrease in1983 resulted from lower interest rates and lower aver-age invested balances. Both interest rates and averageinvested balances were higher in 1982 compared to1981.

A decrease in interest expense of $2 million in 1983was due primarily to lower interest rates. Interestexpense increased by $36 million in 1982 primarilybecause of increased borrowings for the acquisitions ofColumbia and Associated Coca-Cola Bottling Co., Inc.

Other Income and DeductionsIn other income (net) the decrease in 1983 and

increase in 1982 resulted primarily from fluctuationsin net foreign exchange gains. In 1982, the Companyadopted Statement of Financial Accounting StandardsNo. 52, "Foreign Currency Translation!1 See ForeignOperations.

Discontinued OperationsThe Company has sold the following operations

whose operating results have been reported as discon-tinued operations: 1983—The Wine Spectrum forapproximately book value plus advances; 1982—TencoDivision for approximately book value; and 1981—Aqua-Chem, Inc. for approximately $42 million overbook value.

Lines of BusinessThe Soft Drink Business Sectors manufacture and

sell soft drink syrups and concentrates to bottling andcanning operations and approved wholesalers. TheseSectors also sell some bottled and canned consumerproducts.

The Entertainment Business Sector is engaged inthe production and distribution of theatrical motionpictures and television series and features, and themanufacture and sale of coin-operated amusementgames.

Citrus, Hi-C fruit drinks, coffee and pasta productsare reported as "Foods!' Plastic products are not mate-rial and are also included in the Foods Business Sector.

Financial PositionLiquidity and Capital Resources: At December 31,

1983, working capital was $939 million, an increase of$189 million over the prior year. This increase resultedprimarily from the sale of the Company's wine busi-ness in November 1983, which generated currentassets in excess of $230 million. The Company's pri-mary source of working capital continues to be fundsprovided by operations. Working capital provided fromcontinuing operations was $823 million in 1983, a6.5% increase over 1982. The primary uses of cashgenerated from operations are dividends and capitalexpenditures.

Working capital was $750 million at December 31,1982, a $120 million increase over 1981. This increasewas due primarily to the acquisition of Columbia,the issuance of $300 million principal amount of long-term debt and continued profitable operations. Alsoincluded in other current assets at December 31, 1982was the Company's remaining investment of $120 mil-

32

Financial Review Incorporating Management'sDiscussion and Analysis (continued)

lion in the assets of Associated Coca-Cola Bottling Co.,Inc. These remaining assets were sold in 1983.

In 1983, the Company formed a finance subsidiarywhich will begin operations in 1984. This subsidiarywill have expected capitalization of approximately$400 million of which about 15% will be funded by anequity contribution of the Company and will provideloans principally for sales equipment to the Company'sbottlers and other customers.

As of December 31, 1983, the Entertainment Busi-ness Sector had invested approximately $27 million intwo joint ventures which produce, acquire and distrib-ute motion picture films.

The Company maintains credit lines at various finan-cial institutions. At December 31, 1983, the unusedportion of the credit lines was $295 million.

Capital Expenditures: Capital expenditures (exclud-ing the initial acquistion of Columbia) in 1983 and1982 were as follows (in millions):

1983 1982

Soft DrinksEntertainmentFoodsCorporate

$238734528

$384

$250545424

$382

Capital expenditures for the Soft Drink and Foods Busi-ness Sectors related primarily to capacity expansionand improved efficiency. Capital expenditures in theEntertainment Sector consisted primarily of the pur-chase of an administrative building in 1983. In 1982capital expenditures include various capital assetsacquired in connection with the purchase of Columbia.

Capital Expenditures is M,ii,onsiMI 384

Foreign OperationsThe Company distributes its products in over 155

countries and uses approximately 40 functional cur-rencies. Financial statements for the Company's for-eign operations are translated to United States dollarsin accordance with Statement of Financial AccountingStandards No. 52, "Foreign Currency Translation"(SFAS 52) which was adopted as of January 1, 1982.The adoption of SFAS 52 required establishment of aforeign currency translation adjustment whichreduced shareholders' equity by $11.7 million as ofJanuary 1, 1982. Further reductions of $76.2 millionand $42.8 million were recorded for the years endedDecember 31, 1983 and 1982, respectively. The impactof SFAS 52 on 1981 is not material and such financialstatements have not been restated.

Translation adjustments are an inherent result of theprocess of translating financial statements of entitieswith functional currencies other than the United Statesdollar. Translation adjustments accumulated in share-holders' equity do not represent the effect on netincome resulting from the use of SFAS 52.

In accordance with SFAS 52 the United States dollaris used as the functional currency in countries consid-ered to have hyper inflationary economies, such as Bra-zil and Mexico. Exchange gains (gains and losses onforeign currency transactions and translation of bal-ance sheet accounts in hyperinflationary countries)were $9 million in 1983 and $27 million in 1982. Suchamounts are included in other income (net of otherdeductions) in the consolidated statements of income.

In general, the Company does not enter into forwardexchange contracts to hedge its net investment in for-eign operations. The Company does, however, engagein various hedging activities to minimize potentiallosses on cash flows denominated in foreign currenciesand to offset foreign exchange movements on firm com-mitments and certain other transactions where poten-tial for loss exists.

Additional InformationFor additional information concerning the Company's

operations, cash flow, liquidity and capital sources,this analysis should be read in conjunction with theLetter to Shareholders and the information on pages36 through 45 of this Annual Report. For informationrelating to the effects of inflation on the operations ofthe Company see pages 48 and 49, "SupplementalInformation on the Effects of Changing Prices!' Addi-tional information concerning operations in differentindustries and different geographical areas is presentedon pages 44 and 45.

1 '« '83

33

Selected Financial Data(In millions except per share data)

Year Ended December 31,

The Coca-Cola Company and Subsidiaries

1983 1982 1981

Summary of Operations (a,b)Net operating revenuesCost of goods and servicesGross profitSelling, administrative and

general expensesOperating incomeInterest income— netOther income (deductions)— netIncome from continuing operations

before income taxesIncome taxesIncome from continuing operations

Year-End PositionCash and current marketable securitiesProperty, plant and equipment— netTotal assetsLong-term debtTotal debtShareholders' equityTotal capital (c)Per Share Data (e)Income from continuing operationsNet incomeDividendsFinancial RatiosIncome from continuing operations

to net operating revenuesIncome from continuing operations

to average shareholders' equityLong-term debt to total capitalTotal debt to total capitalDividend payoutOther DataAverage shares outstanding (e)Capital expendituresDepreciation

$6,8293,773

3,056

2,063993

10(3)

1,000442

S 558

S 6111,5615,228

513620

2,9213,541

S 4.104.102.68

8.2%

19.6%14.5%17.5%65.3%

136$ 384

154

$6,0213,3112,710

1,830880317

918415

$ 503

$ 2611,5394,923

462583

2,7793,362

$ 3.883.952.48

8.4%

19.9%13.7%17.3%62.8%

130$ 382

144

$5,6993,1882,511

1,725786

32(23)

795355

$ 440

$ 3401,4093,565

137232

2,2712,503

$ 3.563.902.32

7.7%

20.2%5.5%9.3%

59.5%

124$ 330

133

Notes:(a) Operating results for 1974-1982 have been restated to exclude the results of the Company's wine business which was sold in November

1983 and accounted for as a discontinued operation.(b) In June 1982, the Company acquired Columbia Pictures Industries. Inc. in a purchase transaction.

In 1982. the Company adopted Statement of Financial Accounting Standards No. 52. "Foreign Currency Translation!'See Note 10 tothe Consolidated Financial Statements.

Net Operating Revenues (SBiiuon Operating Income ($Mnnons) Income Per Share From ContinuingOperations isi *10

'74 '/S '76 '77 '78 '79 'SO '81 'BS 'S3 '7« '75 '76 '77 '78 '79 '80 '81 '82 '83 '74 '75 '7* '77 '7« '79 'M '81 '»2

1980 1979 1978 1977 1976 1975 1974

$5,4753,1032,372

1,635737

5(9)

733329

$ 404

$ 2311,3413,406

133228

2,0752,303

$ 3.273.422.16

7.4%

20.2%5.8%9.9%

63.2%

124$ 293

127

$4,5882,5212,067

1,37868926(3)

712318

$ 394

$ 1491,2842,938

31139

1,9192,058

$ 3.183.401.96

8.6%

21.5%1.5%6.8%

57.6%

124$ 381

106

$4,0132,2031,810

1,16764328

(14)

657300

$ 357

$ 3211,0652,583

1569

1,7401,809

$ 2.893.031.74

8.9%

21.6%.8%

3.8%57.4%

124$ 306

88

$3,3281,8361,492

92257023(9)

584268

$ 316

$ 350887

2,2541557

1,5781,635

$ 2.562.681.54

9.5%

21.0%.9%

3.5%57.5%

123$ 264

77

$2,9281,6141,314

80650823(4)

527245

$ 282

$ 364738

2,0071152

1,4341,486

$ 2.292.381.325

9.6%

20.6%.7%

3.5%55.7%

123$ 191

67

$2,7731,6331,140

693447

16(8)

455218

$ 237

$ 389647

1,8011642

1,3021,344

$ 1.932.021.15

8.5%

19.0%1.2%3.1%

56.9%

123$ 145

64

$2,4251,462

963

616347

155

367170

$ 197(d)

$ 241601

1,6101269

1,1901,259

$ 1.60(d)1.65(d)1.04

8.1%

17.1%1.0%5.5%

63.0%

123$ 154

57

(c) Includes shareholders' equity and total debt.(d) In 1974, the Company adopted the last-in, first-out (LIFO) accounting method for certain major categories of inventories. This accounting

change caused a reduction in net income of $31.2 million ($.25 per share) in 1974.(e) Adjusted for a two-for-one stock split in 1977.

Return on Shareholders' Equity, , Dividends Per Share ($)

'74 '75 '76 '77 '7B '79 '80 '81 '8! '83

Shareholders' Equity atYear-End

•7* '75 '78 77 '78 '79 '«0 '81 '82 '63 '74 '75 '76 '77 '78 '79 'SO '81 '8! '83

34 35

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

Year Ended December 31,

The Coca-Cola Company and Subsidiaries

1983 1982 1981

Net Operating RevenuesCost of goods and services

Gross ProfitSelling, administrative and general expenses

Operating IncomeInterest incomeInterest expenseOther income (deductions)— net

Income From Continuing OperationsBefore Income Taxes

Income taxes

Income From Continuing OperationsDiscontinued operations:

Income from discontinued operations(net of applicable income taxes of$414 in 1983, $4,683 in 1982and $12,234 in 1981)

Gain on disposal of discontinued operations(net of applicable income taxes of $13,274)

Net Income

Per Share:Continuing operationsDiscontinued operations

Net income

Average Shares Outstanding

$6,828,9923,772,741

3,056.2512,063,626

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

1,000,332442,072

558,260

527

$ 558,787

$ 4.10

$ 4.10

136,222

$6,021,1353,310,847

2,710,2881,830,527

879,761106,17274,5606,679

918,052415,076

502,976

9,256

$ 512,232

$ 3.88.07

$ 3.95

129,793

$5,698,9013,187,924

2,510,9771,724,925

786,05270,60438,301(23,211)

795,144355,221

439,923

12,788

29,071

$ 481,782

$ 3.56.34

$ 3.90

123,610

See Notes to Consolidated Financial Statements.

36

Consolidated Balance Sheets(In thousands except per share data)

Assets

The Coca-Cola Company and SubsidiariesDecember 31,

1983 1982

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

$20,160 in 1983 and $21,336 in 1982Inventories and unamortized film costsPrepaid expenses and other assetsTotal Current AssetsInvestments, Film Costs and Other AssetsInvestments, at costUnamortized film costsOther assets

$ 319,385292,084

779,729744,107195,009

2,330,314

241,780252,612240.88O

735,272Property, Plant and EquipmentLandBuildings and improvementsMachinery and equipmentContainers

Less allowances for depreciation

128,642618,586

1,412,697341,597

2,501,522940,716

1,560,806Goodwill and Other Intangible Assets 6O1.43O

$5,227,822

$ 177,53083,381

751,775808,799255,080

2,076,565

221,909211,460241,395

674,764

126,201602,475

1,383,668333,472

2,445,816907,250

1,538,566633,415

$4,923,310

Liabilities and Shareholders' Equity 1983 1982

CurrentLoans and notes payableCurrent maturities of long-term debtAccounts payable and accrued expensesParticipations and other entertainment obligationsAccrued taxes— including income taxesTotal Current LiabilitiesParticipations and Other Entertainment ObligationsLong-Term DebtDeferred Income TaxesShareholders' EquityCommon stock, no par value-

Authorized: 180,000,000 sharesin 1983 and 140,000,000 sharesin 1982;

Issued: 136,653,676 shares in 1983and 136,099,741 shares in 1982

Capital surplusRetained earningsForeign currency translation adjustment

$ 85,91320,783

910,951154,213219,240

1,391,100

226,129

513,202

176,635

68,704500,031

2,494,215(130,640)

2,932,310Less treasury stock, at cost (300,588 shares

in 1983; 359,338 shares in 1982) 11,554

2,920,756

$5,227,822

$ 70,56150,623

792,250154,803258,574

1,326,811190,408462,344

165,093

68,427478,308

2,300,217(54,486)

2,792,466

13,8122,778,654

$4,923,310

See Notes to Consolidated Financial Statements.

37

Consolidated Statements of Shareholders' Equity(In thousands except per share data)

Three Years Ended December 31, 1983

The Coca-Cola Company and Subsidiaries

AmountNumber of SharesForeign

Common Treasury Common Capital Retained Currency TreasuryStock Stock Stock Surplus Earnings Translation Stock

Balance January 1, 1981Sales to employees

exercising stock optionsand appreciation rights

Tax benefit from sale ofoption shares by employees

Net incomeDividends (per share—$2.32)

123,990 401 $62,372 $113,172 $1,914,547 $ — $(15,353)

35 - 17 841

181481,782(286,787)

Balance December 31, 1981Effect of restating asset

and liability balances as ofJanuary 1, 1982 for adoptionof SFAS No. 52 (net of incometaxes of $2,316)

Sales to employeesexercising stock optionsand appreciation rights

Tax benefit from sale ofoption shares by employees

Purchase of Columbia PicturesIndustries, Inc.

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

Treasury stock issued to officersNet incomeDividends (per share—$2.48)

124,025 401 62,389 114,194 2,109,542 — (15,353)

- (11,657)

121 -

11,954 —

(42)

61 3,685

814

5,977 359,579

- 36— (42,829)

1,541512,232(321,557)

Balance December 31, 1982Sales to employees

exercising stock optionsand appreciation rights

Tax benefit from sale ofoption shares by employees

Translation adjustments (netof income taxes of $ 13,346)

Treasury stock issuedin connection with anacquisition

Stock issued under RestrictedStock Award Plan

Net incomeDividends (per share—$2.68)

136,100 359

387 —

68,427 478,308 2,300,217 (54,486) [13,812)

194 13,327

— 1,616 — — —

— (76,154)

(58)

167 —

(1,847)

83 8,627558,787

— — (364,789)

2,258

Balance December 31, 1983 136,654 301 $68,704 $500,031 $2,494,215 $(130,640) $(11,554)

See Notes to Consolidated Financial Statements.

38

Consolidated Statements ofChanges in Financial Position (in thousands)

Year Ended December 31,

The Coca-Cola Company and Subsidiaries

1983 1982 1981

Source of Working CapitalFrom operations:

Income from continuing operationsAdd charges not requiring outlay of working

capital during the year:DepreciationAmortization:

GoodwillNoncurrent film costs

Deferred income taxesOtherTotal From Continuing Operations

Discontinued operations (excludes provisions fordepreciation, amortization and deferredincome taxes of $8,2 19 in 1983, $7,504in 1982 and $7,186 in 1981)

Total From OperationsNet long-term assets of discontinued operations

(including property, plant and equipment)Common stock issuedIncrease in long-term debtIncrease in participations and other

entertainment obligationsTransfer of noncurrent film costs to currentDisposals of property, plant and equipmentDecrease in investments and other assetsDecrease in goodwill (purchase accounting

adjustment)Other

$ 558,260

153,655

16,46857,16712.22O25,460

823,230

8,746831,976

89,99022,00050,398

35,72116,98734,972

—

20,5474,436

1,107,027Application of Working CapitalCash dividendsAcquisitions of purchased companies excluding

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

Additions to property, plant and equipmentAdditions to noncurrent film costsIncrease in investments and other assetsForeign currency translationOther

364,789

7,439(583)

7,480376,197115,30619,36127,299

279

917,567Increase in Working CapitalIncrease (Decrease) in Working Capital

by ComponentCash and marketable securitiesTrade accounts receivableInventories and unamortized film costsPrepaid expenses and other current assetsLoans and notes payableCurrent maturities of long-term debtAccounts payable and accrued expensesParticipations and other entertainment obligationsAccrued taxes— including income taxesIncrease in Working Capital

S 189,460

$ 350,55827,954(64,692)(60,071)(15,352}29,840

(118,701)590

39,334$ 189,460

$ 502,976

143,549

10,10143,49548,70224, 1 1 1

772,934

16,760789,694

1,851370,152249,392

—93,90944,46721,836

—3,302

1,574,603

321,557

56,73989,693

516,115325,01695,804

—21,69328,153

1,454,770$ 119,833

$ (78,631)268,28458,080

192,58619,086

(45, 108)(120,201)(154,803)

(19,460)$ 119,833

$439,923

132,713

3,796

—23,16957,134

656,735

49,045705,780

8,3031,0904,057

——

64,023—

——

783,253

286,787

9,814103

10319,792

—86,284

—11,215

714,005$ 69,248

$108,456(39,632)(59,516)

4,685(2,060)2,013

60,974—

(5,672)$ 69,248

See Notes to Consolidated Financial Statements.

39

Notes to Consolidated Financial Statements The Coca-Cola Company and Subsidiaries

1. Accounting Policies. The major accounting policiesand practices followed by the Company and its subsidi-aries are as follows:Consolidation

The consolidated financial statements include theaccounts of the Company and its majority-owned sub-sidiaries. All significant inter-company accounts andtransactions are eliminated in consolidation.Inventories and Unamortized Film Costs

Inventories are valued at the lower of cost or market.The last-in, first-out (LIFO) method of inventory valua-tion generally is used for sugar and other sweetenersused in beverages in the United States, for certainmajor citrus concentrate products, for substantially allinventories of United States bottling subsidiaries andfor certain other operations. All other inventories arevalued on the basis of average cost or first-in, first-out(FIFO) methods. The excess of current costs over LIFOstated values amounted to approximately $59 millionand $72 million at December 31, 1983 and 1982,respectively.

Unamortized film costs include film production,print, pre-release and other advertising costs expectedto benefit future periods, estimated profit participa-tions, and capitalized interest. The individual film fore-cast method is used to amortize these costs based onthe revenues recognized in proportion to manage-ment's estimate of ultimate revenues to be received.

The costs of feature and television films are classifiedas current assets to the extent such costs are expectedto be recovered through the respective primary mar-kets. Other costs relating to film production are classi-fied as noncurrent.

Revenues from theatrical exhibition of feature filmsare recognized on the dates of exhibition. Revenuesfrom television licensing agreements are recognizedwhen films are available for telecasting.Property, Plant and Equipment

Property, plant and equipment is stated at cost, lessallowance for depreciation, except that foreign subsidi-aries carry bottles and shells in service at amounts(less than cost) which generally correspond with depos-it prices obtained from customers. Approximately90% of depreciation expense was determined by thestraight-line method for the years ended December 31,1983, 1982 and 1981. The rates of depreciation are 2%to 10% for buildings and improvements and 7% to 34%for machinery and equipment. Investment tax creditsare accounted for by the flow-through method.Capitalized Interest

Interest capitalized as part of the cost of acquisition,construction or production of major assets (includingfilm costs) was $18 million, $14 million and $8 millionin 1983, 1982 and 1981, respectively.Goodwill and Other Intangible Assets

Goodwill and other intangible assets are stated onthe basis of cost and, if acquired subsequent to October31, 1970, are being amortized, principally on a straight-

line basis, over the estimated future periods to bebenefited (not exceeding 40 years). Accumulated amor-tization amounted to $42 million and $26 million atDecember 31, 1983 and 1982, respectively.

2. Inventories and Unamortized Film Costs are com-prised of the following (in thousands):

December 31,1983 1982

Finished goodsWork in processRaw materials and

suppliesUnamortized film costs

(includes in processcosts of $60,669 in1983 and $23,26Oin 1982)

$217,32915,173

366.0OO

145,605$744,107

Noncurrent—Unamortizedfilm costs:

CompletedIn process

$147,697104,915

$252,612

$219,00096,305

368,730

124,764$808,799

$113.52797,933

$211,460

3. Short-Term Borrowings and Credit Arrange-ments. Loans and notes payable include amounts pay-able to banks and other financial institutions of $86million and $71 million at December 31, 1983 and1982, respectively.

Under line of credit arrangements for short-term debtwith various financial institutions, the Company andits subsidiaries may borrow up to $360 million. Theselines of credit are subject to normal banking terms andconditions. At December 31, 1983, the unused portionof the credit lines was $295 million. Some of the finan-cial arrangements require compensating balanceswhich are not material.

4. Accounts Payable and Accrued Expenses are com-posed of the following amounts (in thousands):

December 31,1983 1982

Ttade accountspayable

Deposits on bottlesand shells

Other

$768,913

51,37190,667

$910,951

$647,061

67,72577,464

$792,250

40

Notes to Consolidated Financial Statements (continued)

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

December 31,1983 1982

Income taxesSales, payroll and

miscellaneoustaxes

$166,228

53,012

$219,240

$190,790

67,784

$258,574

Maturities of long-term debt for the five years succeed-ing December 31, 1983, are as follows (in thousands):

19841985198619871988

$ 20,783114,768

17,85714,047

111,524

The above notes and other long-term debt instrumentsinclude various restrictions, none of which are presentlysignificant to the Company. The Company is contingentlyliable for guarantees of indebtedness owed by its indepen-dent bottling companies and others in the approximateamount of $94 million at December 31, 1983.

6- Long-Term Debt consists of the following amounts{in thousands):

December 31,1983 1982

97/8% notes dueJune 1, 1985

l!3/4% notes dueOctober 1, 1989

103/8% notes dueJune 1, 1988

97/8% notes dueAugust 1, 1992

Short-term borrow-ings refinancedwith long-term debt

Other

Less currentportion

$ 99,958

97,916

98,534

98,125

—139,452

533,985

20,783

$513,202

$ 99,928

97,548

23,200

—

173,000119,291

512,967

50,623

$462,344

The 97/s% (due June 1, 1985) notes may be redeemedat the option of the Company in whole or in part at 100%of their principal amount, plus accrued interest.

The H3/4% and 10%% notes and the 97/8% (dueAugust 1, 1992) notes were issued by the Company'swholly-owned subsidiary, Coca-Cola InternationalFinance N.V., and bear the Company's full guarantee.The 113/4% notes are redeemable at the Company'soption after September 30, 1986. The 97/8% (due August1, 1992) notes are redeemable at the Company's optionafter July 31, 1989. In addition, all three note issues maybe redeemed at the Company's option under certain lim-ited conditions related to United States and foreigntax laws.

Other long-term debt consists of various mortgagesand notes with maturity dates ranging from 1984 to2010. Interest on a portion of this debt varies with thechanges in the prime rate, and the weighted averageinterest rate applicable to the remainder is approx-imately 13.5%.

7. Pension Plans. The Company and its subsidiariessponsor and/or contribute to various pension plans cov-ering substantially all United States employees and cer-tain employees in non-United States locations. Pensionexpense for continuing operations determined undervarious actuarial cost methods, principally the aggre-gate level cost method, amounted to approximately$39 million in 1983, $35 million in 1982 and $33 mil-lion in 1981. Pension costs are generally fundedcurrently.

The actuarial present value of accumulated benefits,as estimated by consulting actuaries, and net assetsavailable for benefits of Company and subsidiary-sponsored plans in the United States are presentedbelow (in thousands):

January 1,

1983 1982

Actuarial presentvalue of accumulatedplan benefits:

VestedNonvested

$193,12215,940

$209,062

Net assets availablefor benefits $280,731

$178,34314,284

$192,627

$234,836

The weighted average assumed rates of return usedin determining the actuarial present value of accumu-lated plan benefits were approximately 9.5% for 1983and 9.75% for 1982. This change in the assumed rateof return increased the actuarial present value of accu-mulated plan benefits by approximately $9 million atJanuary 1, 1983.

The Company has various pension plans in locationsoutside the United States. These locations are notrequired to report to United States governmental agen-cies and do not determine the actuarial present value ofaccumulated plan benefits or net assets available forbenefits as calculated and disclosed above. For suchplans, the value of the pension funds and balance sheetaccruals exceeded the actuarially computed value ofvested benefits as of January 1, 1983 and 1982, as esti-mated by consulting actuaries.

41

Notes to Consolidated Financial Statements (continued)

8. Income Taxes. The components of income beforeincome taxes for both continuing and discontinuedoperations consisted of the following (in thousands):

Year Ended December 31,1983 1982 1981

United StatesForeign

$ 409,613591.66O

$1,001,273

$357,063574,928

$931,991

$309,654552,857

$862,511

Income taxes for continuing and discontinued opera-tions consisted of the following amounts (in thousands):

UnitedStates

State& Local Foreign Tbtal

Year EndedDecember 31,

1983CurrentDeferred

1982CurrentDeferred

1981CurrentDeferred

$114,1954,493

$ 79,60533,281

$ 86,58915,574

$25,6151,068

$ 22,6381,363

$ 22,4611,646

$287,8469,269

$ 266,70916,163

$ 248,2926,167

$427,65614,830

$ 368,95250,807

$ 357,34223,387

Total tax expense differed from the amount com-puted by applying the statutory federal income tax rateto income before income taxes principally because ofinvestment tax credits which had the effect of reducingthe tax provision by approximately $20 million in1983, $24 million in 1982 and $14 million in 1981.

Deferred taxes are provided principally for deprecia-tion and film costs which are recognized in differentyears for financial statement and income tax purposes.

9. Restricted Stock Award Plan and Stock Options.In May 1983, the shareholders approved the 1983Restricted Stock Award Plan. Under the provisions ofthis Plan, 500,000 shares of restricted common stockmay be granted to certain officers and key employees ofthe Company. Restrictions relate to transferability andlapse over the period from the date of grant to retire-ment. The market value of the shares at the date ofgrant is charged to operations over those periods. In1983, 166,500 shares were granted. At December 31,1983, 333,500 shares were available to be grantedunder this Plan.

The Company's 1983 Stock Option Plan wasapproved in May 1983 and covers 2,000,000 shares ofthe Company's common stock. The Plan provides forthe granting of stock appreciation rights and stockoptions to certain officers and employees. Stock appre-ciation rights permit the holder, upon surrendering allor part of the related stock option, to receive cash, com-mon stock, or a combination thereof, in an amount upto 100% of the difference between the market price andthe option price. Included in options outstanding atDecember 31, 1983, were various options grantedunder previous plans and other options granted not asa part of an option plan.

Further information relating to options is as follows:

1983December 31,

~1982 1981

Options out-standing atJanuary 1

Options grantedin the year

Optionsexercised inthe year

Optionscancelled inthe year

Options out-standing atDecember 31

Optionsexercisable atDecember 31

Shares availableat December 31for optionswhich maybe granted

Option pricesper share

Exercisedin the year

Unexercisedat year-end

1,507,162

487,900

(203,361)

(78,479)

1,713,222

750,026

1,577,858

$25-$50

$25-$52

1,406,360

288,300

(120,791)

(66,707)

1,507,162

781.906

25,261

$22-$44

$25-$68

1,392,457

244,975

(35,651)

(195,421)

1,406,360

755,598

278,121

$22-$34

$22-$68

Not reflected above are options assumed in connec-tion with the acquisition of Columbia Pictures Indus-tries, Inc. covering 94,081 shares of the Company'scommon stock at December 31, 1983. The averageoption price for these options is $37. During 1983options for 169,200 such shares were exercised.

42

Notes to Consolidated Financial Statements (continued)

10. Foreign Operations Currency Translation. In1982, the Company adopted Statement of FinancialAccounting Standards No. 52, "Foreign CurrencyTranslation" (SFAS 52) for translating the financialstatements of its foreign operations. An equity adjust-ment ($11.7 million) was recorded as of January 1,1982, for the cumulative effect of SFAS 52 on prioryears. Net exchange gains (gains and losses on foreigncurrency transactions and translation of balance sheetaccounts of operations in hyperinflationary economies)included in income were $9 million for 1983 and $27million for 1982. The impact of SFAS 52 on 1981 oper-ating results was not material and such financial state-ments have not been restated.

Appropriate United States and foreign income taxeshave been provided for on earnings of subsidiary com-panies which are expected to be remitted to the parentcompany in the near future. Accumulated unremittedearnings of foreign subsidiaries which are expected tobe required for use in the foreign operations wereapproximately $56 million at December 31, 1983,exclusive of amounts which if remitted would resultin little or no tax.

11. Acquisitions. In 1983, the Company purchasedvarious bottling operations. The operating results forthese companies have been included in the consoli-dated statement of income from the dates of acquisi-tion and did not have a significant effect on operatingresults for 1983.

In June 1982, the Company acquired all of the out-standing capital stock of Columbia Pictures Industries,Inc. ("Columbia") in a purchase transaction. The pur-chase price, consisting of cash and common stock of theCompany, was valued at approximately $692 million.The values assigned to assets acquired and liabilitiesassumed are based on studies conducted to determinetheir fair values. The excess cost over net fair value isbeing amortized over forty years using the straight-line method.

The pro forma consolidated results of continuingoperations of the Company, as if Columbia had beenacquired as of January 1, 1981, are as follows (in mil-lions, except per share data):

Year Ended December 31,1982 1981

Net operatingrevenues

Income from continu-ing operations

Income from continu-ing operationsper share

$6,374

489

3.60

$6,434

449

3.31

The pro forma results include adjustments to reflectinterest expense on $333 million of the purchase priceassumed to be financed with debt bearing interest atan annual rate of 11 %, the amortization of the unallo-cated excess cost over net assets of Columbia, theincome tax effects of pro forma adjustments and theissuance of 12.2 million shares of the Company's com-mon stock.

The pro forma results for the twelve months endedDecember 31, 1981, have been further adjusted toreflect Columbia's repurchase in February 1981 of 2.4million shares of Columbia common stock from certainshareholders as if such repurchase had been consum-mated as of January 1, 1981. Accordingly, interestexpense has been increased for amounts necessaryto fund the cash portion of the purchase price, legalexpenses incurred in litigation with such shareholdershave been eliminated and income taxes have beenadjusted.

In June 1982, the Company purchased AssociatedCoca-Cola Bottling Co., Inc. ("Associated") at a cost ofapproximately $419 million. Associated was acquiredwith the intent of selling all properties to other pur-chasers as part of the Company's strategy to assist inrestructuring its bottler system. Accordingly, the acqui-sition was accounted for as a temporary investmentunder the cost method of accounting. Approximately70% of Associated's operating assets were sold in 1982and the remainder were sold in 1983 for amounts equalto the Company's costs. A substantial portion of suchassets were sold for $245 million to a corporation ownedprincipally by a former director of the Company.

In September 1982, the Company purchased forcash Ronco Foods Company, a manufacturer and dis-tributor of pasta products. This transaction had no sig-nificant effect on the Company's operating results.

12. Discontinued Operations. In November 1983, theCompany sold its wine business for book value plusadvances, amounting to approximately $230 million.In February 1982, the Company sold its Tenco Divi-sion, which manufactured and distributed private labelinstant coffees and teas, for approximately book value.In 1981, the Company sold Aqua-Chem, Inc., a wholly-owned subsidiary which produced steam generators,industrial boilers and water treatment equipment.

Net revenues of discontinued operations were $ 162million, $229 million and $430 million in 1983, 1982and 1981, respectively

43

Notes to Consolidated Financial Statements (continued)

13. Lines of Business (1), The Company operates principally in the soft drink industry. In June 1982, the Com-pany acquired Columbia Pictures Industries, Inc., which operates in the entertainment industry. Citrus, Hi-C fruitdrinks, coffee and pasta products are included in the Foods Business Sector. Plastic products are not material andare also included in the Foods Business Sector. Inter-company transfers between Sectors are not material. Infor-mation concerning operations in different lines of business is as follows (in millions):Year Ended December 31, 1983 1982 1981

Net operating revenues:Soft drinksEntertainmentFoods

Consolidated net operating revenues

Operating income:Soft drinksEntertainmentFoodsGeneral expenses

Consolidated operating income

Identifiable assets at year-end:Soft drinksEntertainmentFoodsCorporate assets (principally marketable

securities, investments and fixed assets)Discontinued operations

Consolidated assets

Capital expenditures (including fixed assetsof purchased companies):Soft drinksEntertainmentFoodsCorporate

Consolidated capital expenditures

Depreciation and amortization of goodwill:Soft drinksEntertainmentFoodsCorporate

Consolidated depreciation andamortization of goodwill

$4,694.6849.5

1,284.9

$6,829.0

$ 858.690.6

121.3(77.9)

$ 992.6

$2,670.61,394.0

431.9

731.3

$5,227.8

$ 237.672.945.128.0

$ 383.6

$ 12O.415.725.28.8

$ 170.1

$4,413.8457.3

1,150.0$6,021.1

$ 800.035.8

117.9(73.9)

$ 879.8

$2,521.41,309.8

380.4

476.2235.5

$4,923.3

$ 249.553.953.724.6

$ 381.7

$ 117.67.6

20.87.6

$ 153.6

$4,558.6

1,140.3$5,698.9

$ 752.0

106.7(72.6)

$ 786.1

$2,472.5

379.0

452.7260.6

$3,564.8

$ 251.5

58.419.6

$ 329.5

$ 109.0

18.78.8

$ 136.5(1) Operating results for 1982 and 1981 have been restated to exclude the results of the Company's wine business, which was sold in 1983

and has been accounted for as a discontinued operation. In addition, certain amounts for 1982 and 1981 have been reclassified on a com-parable basis with 1983.

Net Operating Revenues is Minions Operating Income (»

1983 Data by Line of Business • Soft Drinks D Entertainment fj Foods

44

Notes to Consolidated Financial Statements (continued)

14. Operations in Geographic Areas (1). Information about the Company's operations in different geographicareas is presented below (in millions). Inter-company transfers between geographic areas are not material.

Year Ended December 31, 1983 1982 1981

Net operating revenues:United StatesLatin AmericaEurope and AfricaCanada and Pacific

Consolidated net operating revenues

Operating income:United StatesLatin AmericaEurope and AfricaCanada and PacificGeneral expenses

Consolidated operating income

Identifiable assets at year-end:United StatesLatin AmericaEurope and AfricaCanada and PacificCorporate assets (principally marketable

securities, investments and fixed assets)Discontinued operations

Consolidated assets

$4,071.4401.3

1,225.61,130.7

$6,829.0

$ 498.769.4

295.4207.0(77.9)

$ 992.6

$2,996.5420.9606.5472.6

731.3—

$5,227.8

$3,351.5516.3

1,155.6997.7

$6,021.1

$ 403.2123.2249.5177.8(73.9)

$ 879.8

$2,773.2435.9582.0420.5

476.2235.5

$4,923.3

$3,048.5608.1

1,096.3946.0

$5,698.9

$ 322.3156.1235.6144.7(72.6)

$ 786.1

$1,431.5436.2583.0400.8

452.7260.6

$3,564.8

(1) Operating results for 1982 and 1981 have been restated to exclude the results of the Company's wine business, which was sold in 1983and has been accounted for as a discontinued operation.

Identifiable liabilities of operations outside the United States were $652 million, $627 million and $637 million at December 31, 1983.1982 and 1981, respectively.

Net Operating Revenues & Operating Income Assets ($ Millions)

1983 Data by Geographic Area • United States • Latin America • Europe and Africa D Canada and Pacific

45

Report of Independent Accountants The Coca-Cola Company and Subsidiaries

Board of Directors and ShareholdersThe Coca-Cola CompanyAtlanta, Georgia

We have examined the consolidated balance sheets of The Coca-Cola Company and sub-sidiaries as of December 31, 1983 and 1982, and the related consolidated statements ofincome, shareholders' equity and changes in financial position for each of the three yearsin the period ended December 31, 1983. Our examinations were made in accordance withgenerally accepted auditing standards and, accordingly, included such tests of theaccounting records and such other auditing procedures as we considered necessary in thecircumstances.

In our opinion, the financial statements referred to above present fairly the consolidatedfinancial position of The Coca-Cola Company and subsidiaries at December 31, 1983 and1982, and the consolidated results of their operations and changes in their financial posi-tion for each of the three years in the period ended December 31, 1983, in conformity withgenerally accepted accounting principles consistently applied during the period except forthe change in 1982, with which we concur, in the method of accounting for foreign cur-rency translation as described in Note 10 to the consolidated financial statements.

Atlanta, GeorgiaFebruary?, 1984

46

Report of Management The Coca-Cola Company and Subsidiaries

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

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

The Audit Committee of the Board of Directors, composed solely of Directors who arenot officers of the Company, meets with the independent accountants, management andinternal auditors periodically to discuss internal accounting controls, auditing and finan-cial reporting matters. The Committee reviews with the independent accountants thescope and results of the audit effort. The Committee also meets with the independentaccountants without management present to ensure that the independent accountantshave free access to the Committee.

The independent accountants, Ernst & Whinney, are recommended by the Audit Com-mittee of the Board of Directors, selected by the Board of Directors and ratified by theshareholders. Ernst & Whinney is engaged to examine the consolidated financial state-ments of The Coca-Cola Company and subsidiaries and conduct such tests and relatedprocedures as they deem necessary in conformity with generally accepted auditing stan-dards. The opinion of the independent accountants, based upon their examination of theconsolidated financial statements, is contained in this Annual Report.

Roberto C. GoizuetaChairman, Board of Directors,and Chief Executive Officer

February?, 1984

Sam AyoubSenior Executive Vice Presidentand Chief Financial Officer

47

Supplemental Information on the Effectsof Changing Prices (Unaudited)

The Coca-Cola Company and Subsidiaries

General. The following unaudited disclosures wereprepared in accordance with Statement Nos. 33 and 70issued by the Financial Accounting Standards Boardand are intended to quantify the impact of inflation onearnings and production facilities. The inflation-adjusted data is presented under the specific pricechanges method (current cost). Only those items mostaffected by inflation have been adjusted; i.e., invento-ries, property, plant and equipment, the related costs ofgoods and services sold and depreciation and amortiza-tion expense. Although the resulting measurementscannot be used as precise indicators of the effects ofinflation, they do provide an indication of the effect ofincreases in specific prices of the Company's invento-ries and properties.

The adjustments for specific price changes involvea substantial number of judgments as well as the useof various estimating techniques employed to controlthe cost of accumulating the data. The data reportedshould not be thought of as precise measurements ofthe assets and expenses involved, or of the amount atwhich the assets could be sold. Rather, they representreasonable approximations of the price changes thathave occurred in the business environment in which

the Company operates.A brief explanation of the current cost method is pre-

sented below.The current cost method attempts to measure the

effect of increases in the specific prices of the Com-pany's inventories and properties. It is intended to esti-mate what it would cost in 1983 dollars to replace theCompany's inventories and existing properties.

Under this method, cost of goods sold valued on theaverage method is adjusted to reflect the current cost ofinventories at the date of sale. That portion of cost ofgoods sold valued on the LIFO method approximatesthe current cost of inventory at the date of sale andgenerally remains unchanged from the amounts pre-sented in the primary financial statements.

Current cost depreciation expense is based on theaverage current cost of properties in the year. Thedepreciation methods, salvage values and useful livesare the same as those used in the primary statements.

The current cost of finished products inventory wasapproximated by adjusting historical amounts toreflect current costs for material, labor and overheadexpenses as well as current cost depreciation, whereapplicable. The current costs for inventories other than

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

Year Ended December 31, 1983

Net operating revenuesCost of goods and services (excluding depreciation)Depreciation and amortizationOther operating expensesNet of other (income) and deductionsIncome from continuing operations before income taxesIncome taxesIncome from continuing operations

Income per share from continuing operations

Effective income tax rate

Purchasing power gain from holding netmonetary liabilities in the year

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

Less effect of increase in general price levelIncrease in specific prices over increase in the general price level

Estimated translation adjustment

Inventory and film costsProperty, plant and equipment— net

As Reportedin the

PrimaryStatements

$6,829.03,709.2

156.11,973.0

(9.6)1,000.3

442.0$ 558.3

$ 4.10

44.2%

$ 996.7$1,560.8

Adjusted forChanges in

Specific Prices(Current Costs)

$6,829.03,716.5

226.21,973.0

(13.9)927.2442.0

$ 485.2

$ 3.57

47.7%

$ 27.8

$ 184.1273.9

$ (89.8)

$ (80.0)

$1,198.4$2,174.6

A significant part of the Company's operations are measured in functional currencies other than the United States dollar.Adjustments to reflect the effects of general inflation were determined on the translate-restate method using the U.S.CPI(U).

48

Supplemental Information on the Effectsof Changing Prices (Unaudited) (continued)

finished products was determined on the basis of pricelists or appropriate supplier quotations and by othermanagerial estimates consistent with established pur-chasing and production procedures.

Since motion picture films are the result of a uniqueblending of the artistic talents of many individuals andare produced under widely varying circumstances, it isnot feasible to develop the current cost of film invento-ries, particularly since the Company would rarely, ifever, attempt to duplicate an existing film property. Inview of these considerations and as permitted by State-ment of Financial Accounting Standards No. 46, filminventories have been valued on the basis of constantdollar equivalents. Direct supplier quotations, pub-lished price lists, engineering estimates, constructionquotations, appraisals, published and internally devel-oped indexes were the methods used to determine thecurrent cost of property, plant and equipment.

Under current cost accounting, increases in specificprices (current cost) of inventories and properties heldduring the year are not included in income from con-tinuing operations.

Income Taxes. Taxes on income included in thesupplementary statement of income are the same as

reported in the primary financial statements. In mostcountries, present tax laws do not allow deductions forthe effects of inflation. Thus, taxes are levied on theCompany at rates which, in real terms, exceed estab-lished statutory rates.

Purchasing Power Gain. During periods of inflation,monetary assets, such as cash, marketable securitiesand accounts receivable, lose purchasing power sincethey will buy fewer goods when the general price levelincreases. The holding of monetary liabilities, such asaccounts payable, accruals and debt, results in a gainof purchasing power because cheaper dollars will beused to repay the obligations. The Company has bene-fited from a net monetary liability position in recentyears, resulting in a net gain in purchasing power. Thisgain does not represent an increase in funds availablefor distribution to shareholders and does not necessar-ily imply that incurring more debt would be beneficialto the Company.

Increase in Specific Prices. Shown separately arethe total changes in current costs for inventories andproperties, that component of the total change due togeneral inflation and that component of the changeattributable to fluctuations in exchange rates.

Five-Year Comparison of Selected Supplemental Financial DataAdjusted for Effects of Changing Prices (In Average 1983 Dollars)(In millions except per share data)

Year Ended December 31, 1983 1982 1981 1980 1979

Net operating revenuesCurrent cost information:

Income from continuing operationsIncome per share from continuing operationsIncrease in specific prices over (under) increase

in the general price level, including translationadjustments

Net assets at year-endPurchasing power gain on net monetary itemsCash dividends declared per share:

As reportedAdjusted for general inflation

Market price per common share at year-end:Historical amountAdjusted for general inflation

Average Consumer Price Index — Urban

$6,829.0

485.23.57

(169.8)3,748.0

27.8

2.682.68

53.5053.50298.4

$6,214.7

409.03.16

(191.0)3,732.9

18.2

2.482.56

52.0053.67289.1

$6,242.9

376.33.04

(226.7)3,435.5

26.8

2.322.54

34.7538.07272.4

$6,619.7

317.72.55

26.73,846.7

52.1

2.162.61

33.37540.35246.8

$6,297.4

378.83.05

220.33,882.9

28.4

1.962.69

34.5047.35217.4

49

Unaudited Quarterly Data(For the years ended December 31,1983 and 1982)

The Coca-Cola Company and Subsidiaries

Quarterly Results of Operations(In thousands except per share data)

Net Operating Revenues

First quarterSecond quarterThird quarterFourth quarter

1983$1,483,480 $1,

1,780,037 1,1,832,560 1,1,732,915 1,

$6,828,992 $6,

1982

216,300520,328696,152588,355

021,135

Income From ContinuingOperations

First quarterSecond quarterThird quarterFourth quarter

1983

$ 123,536 $162,104152,29812O.322

$ 558,260 $

1982

106,735139,466143,228113,547

502,976

Income Per Share FromContinuing Operations

First quarterSecond quarterThird quarterFourth quarter

1983

$ .91 $1.191.12.88

$ 4.10 $

1982

.861.131.06.83

3.88

Gross Profit1983 1982

664,242808,397827,323756,289

568,315711,396730,009700,568

$3,056,251 $2,710,288

Net Income1983 1982

S 122,128160,446151,609124,604

107,616139,821143,463121,332

$ 558,787 $ 512,232

Net Income Per Share1983 1982

$ .901.181.11

.91

.871.131.06.89

$ 4.10 3.95

The above results for 1982 and the first two quarters of 1983 have been restated to exclude the results of the Com-pany's wine business, which was sold in November 1983 and has been accounted for as a discontinued operation.

50

Board of Directors The Coca-Cola Company and Subsidiaries

HERBERT A. ALLENNew York, N.Y.President and Chief

Executive Officer,Allen & Company Incorporated

C. H. CANDLER, JR.Atlanta, Ga.Retired

ANNE COX CHAMBERSAtlanta, Ga.Chairman,Atlanta Newspapers

GEORGE S. CRAFTAtlanta, Ga.Retired

CHARLES W. DUNCAN, JR.Houston, Tex.President and Principal,Warren-King Companies

RICHARD J. FLAMSON IIILos Angeles, Calif.Chairman, Board of Directors,

and Chief Executive Officer,Security Pacific Corporation andSecurity Pacific National Bank

ROBERTO C. GOIZUETAAtlanta, Ga.Chairman, Board of Directors,

and Chief Executive Officer,The Coca-Cola Company

E. GARLAND HERNDON, JR., M.D.Atlanta, Ga.Senior Vice President,Emory University

JOSEPH W. JONESAtlanta, Ga.Senior Vice President and

Assistant Treasurer,The Coca-Cola Company

DONALD R. KEOUGHAtlanta, Ga.President and

Chief Operating Officer,The Coca-Cola Company

DONALD F. McHENRYWashington, D.C.University Research

Professor of Diplomacy andInternational Affairs,

Georgetown University

JAMES D. ROBINSON IIINew York, N.Y.Chairman, Board of Directors,

and Chief Executive Officer,American Express Company

JAMES M. S1BLEYAtlanta, Ga.Partner in the law firm of

King & Spalding

WILLIAM B. TURNERColumbus, Ga.Chairman, Board of Directors,

and Chief Executive Officer,W. C. Bradley Co. andChairman of the Board,CB&T Bancshares, Inc.

JAMES B. WILLIAMSAtlanta, Ga.President,Trust Company of Georgia

GEORGE W. WOODRUFFAtlanta, Ga.Retired

R.W WOODRUFFAtlanta, Ga.Chairman Emeritus,

Finance Committee,The Coca-Cola Company

51

Corporate Officers The Coca-Cola Company and Subsidiaries

ROBERTO C. GOIZUETAChairman, Board of Directors,

and Chief Executive Officer

DONALD R. KEOUGHPresident and Chief Operating

Officer

SAM AYOUBSenior Executive Vice President

and Chief Financial Officer

GLAUS M. HALLESenior Executive Vice President

Executive Vice PresidentsA. GARTH HAMBYIRA C. HERBERT

Senior Vice PresidentsH. T. CIRCUITBRIAN G. DYSONM.A. GIANTURCO

M. DOUGLAS IVESTERJOSEPH W. JONESROBERT A. KELLEREARL T. LEONARD, JR.KLAUS PUTTERDOUGLAS A. SAARELFRANCIS T. VINCENT. JR.R. V. WALTEMEYER

Vice PresidentsWILLIAM W. ALLISONEUGENE V. AMOROSOHERBERT A. ARNOLDWILLIAM R. BUEHLERROBERT L. CALLAHAN, JR.PHILIP J. CARSWELL, JR.LAWRENCE R. COWARTSERGIO DOLFIMURRAY D. FRIEDMANJOHN J. GILL1NROBERT D. GUY

J. WAYNE JONESW. GLENN KERNELGLORIA E. LEMOSS. W. MAGRUDERALEX MALASPINAMAURY C. ROECOREY R. SMITHHARRY E. TEASLEY, JR.CARL WARE

ROBERT A. KELLERGeneral Counsel

COREY R. SMITHTreasurer

PHILIP J. CARSWELL. JR.Controller

DONALD R. GREENESecretary

Officers-Operating Units

NORTH AMERICASOFT DRINKBUSINESS SECTORBRIAN G. DYSONPresident

Coca-Cola USABRIAN G. DYSONPresident

LAWRENCE R. COWARTSenior Executive Vice President

Executive Vice PresidentsTHOMAS E. DANNEMILLERH. RICHARD HILLER, JR.

Senior Vice PresidentsANTON AMONMICHAEL V. CHEEKHENRY J. COCKERILL, JR.CHARLES D. HARTMANNALLEN A. McCUSKERTHOMAS H. MULLER, JR.ROY G. STOUTDONALD J. ULRICHSERGIO ZYMAN

Vice PresidentsWILLIAM E. ATCHISONM. W. BATESJAMES H.COOLIDGEALBERT E. DAVISWALTER H. DUNNNORMAN P. FINDLEYJAMES L. FORDCHARLES S. FRENETTEA. GORDON GRAYJAMES T HOWELLR. BRUCE KIRKMANDENNIS K. LARSONFRANK E. MORLEY IIIV. RAY MOSSJOHN C. REIDGENE D. RICHARDSONL. NED ROBERTSJAMES A. RUWOLDTWILLIAM R. SALTMERGARY D. SAWYERIRA A. SMITHSTEVEN L. SNYDERJAMES A. STELLMACHRAYMOND R. THOMASCHARLES H. TURNQUISTCHARLES L. WALLACEJACOB H. WALLER

WILLIAM J. DAVISGeneral Counsel

CHESTER J. EVANSController

Coca-Cola Ltd.NEVILLE W. K1RCHMANNChairman of the Board

and President

Vice PresidentsJOHN J. BRENNANJAMES A. DRUMPETER E. LAYCOCKW. RONALD PRINGLEDONALD F. SENIORDAVID A. STEELEJOHN N. VOUDOURIS

JOHN MAIRVice President

and Treasurer

DONALD A. BURWASHVice President, General

Counsel, and Secretary

52

Officers-Operating Units (continued)

INTERNATIONALSOFT DRINKBUSINESS SECTORGLAUS M. HALLEPresidentEurope and Africa Group

KLAUS PUTTERPresident

Senior Vice PresidentsALWIN J. BOLLERROBERT L. DELVILLEGEORG FLEISCHERERICH A. KREUSCHGILBERT J. MARAZZINIFRIEDRICH J. MEYERJ.M.S. de VICUNAANTHONY YOUNG

Vice PresidentsA. ERNESTO CAMINORALPH H. COOPERCHARLES K. HOLMES, JR.BERNARD J. LAPORTEHENRY A. REIDMARTYN C. RICHARDSONEVERWIJN VAN STEEDEN

Latin America GroupH. T CIRCUITPresident

Senior Vice PresidentsSTANLEY J. CLARKJUAN M. DIAZ

Vice PresidentsRAYMOND W. De LAGRAVE

JORGE GIGANTIJOSE LUIS GONZALEZLIONEL A. HUDSONHEINZ H. HUEBNERJOSE OTADUYROLANDO SAFRANA

Pacific GroupJOHN W. GEORGASPresident

Senior Vice PresidentsJOHN HUNTER, JR.WELDON H. JOHNSONROBERT PATERSON

Vice PresidentPETER L. LEE

FOODSBUSINESS SECTORIRA C. HERBERTPresident

Foods DivisionEUGENE V. AMOROSOPresident

B. M. MIDDLEBROOKSChairman

Senior Vice PresidentsTHOMAS C. CLEVELANDMATT S. MILLERCLINTON E. OWENSJONATHAN E. PARKER

Vice PresidentsFRANK E. BLODW. HAROLD BROADWAYSTEVEN M. BRODY

TIMOTHY J. HAASFOY MEYERJAY M. MOWERHARRY S. ROBINSON IIICHARLES R. STELTERH. GRADY TILLER, JR.GEORGE W. TRUITT, JR.MAYNARD C. WHEELER, JR.

HUGH W. THOMPSON IIIVice President

and Treasurer

JOHN-N. TOUCHSTONEVice President, General

Counsel, and Secretary

STEPHEN J. SMITHController

PETER B. MORANPresident,

Minute Maid Canada, Inc.

Presto Products, IncorporatedLAWRENCE W. WIRTHPresident

JOHN E. LYNCHChairman of the Board

JEROME C. REICHExecutive Vice President

Senior Vice PresidentsFRANK H. HECKRODTGERALD W. WICKLAND

GARY W. HOWARDTreasurer

CLARENCE E. WALLACESecretary

ENTERTAINMENTBUSINESS SECTORFRANCIS T. VINCENT, JR.President

Columbia PicturesIndustries, Inc.

FRANCIS T. VINCENT, JR.Chairman of the Board

and Chief Executive Officer

RICHARD C. GALLOPPresident and Chief Operating

Officer

Executive Vice PresidentsPETER S. SEALEYROBERT L. STONE

Senior Vice PresidentsPETER C. KELLSKENNETH LEMBERGER

Vice PresidentsRAYMOND A. BOYCE

PAULM.CHOLAKTHOMAS B. McGRATHHUGH K. SWITZER

KENNETH S. WILLIAMSTreasurer

JAY M. GREENController-Corporate

ELLIS A. REGENBOGENSecretary

Columbia PicturesRICHARD C. GALLOPChairman

GUY McELWAINEPresident and Chief Executive

Officer

ASHLEY BOONEPresident, Columbia Pictures

Domestic Distribution andMarketing Group

JONATHAN L. DOLGENPresident. Columbia Pictures

Domestic Operations andColumbia Pictures Pay-Cableand Home Entertainment Group

JAMES R. SPITZPresident, Columbia Pictures

Domestic Distribution

Columbia Pictures TelevisionHERMAN RUSHPresident

Columbia PicturesInternational Corporation

PATRICK M. WILLIAMSONPresident

Mylstar Electronics, Inc.BOYD W. BROWNEPresident

53

Executive Management

Sam Ayou-b and Roberto C. Goizueta

A. Garth Hamby and R. V. Waltemeyer

Francis T, Vincent Jr.

John W. Georgas

54

The Coca-Cola Company and Subsidiaries

Claus M. Halle, Donald R. Keough and Brian G. Dyson

H. T. Circuit and Ira C. Herbert

M. Douglas Ivester and Robert A. KellerEarl T. Leonard, Jr.. Klaus Putter and Douglas A. Saarel

55

Shareholder Information

Common Stock

(Ticker symbol: KO)

Common stock of The Coca-Cola Company, exceed-ing 136 million shares, is listed and traded on the NewYork Stock Exchange and also is traded on the Boston,Cincinnati, Midwest, Pacific, and Philadelphia StockExchanges. Outside the United States, the Company'scommon stock is listed and traded on the Germanexchange in Frankfurt and on Swiss exchanges inZurich, Geneva, Bern, Basel, and Lausanne. Therewere 76,738 shareholders of record on January 30,1984.

Cash DividendsDividends normally are paid on a quarterly basis,

usually on the first day of April, July and October andon the fifteenth day of December. Management expectsto continue its policy of paying regular cash dividends.Cash dividends were declared on common stock eachquarter for the past three years as follows:

1981 (Full year S2.32)

Annual MeetingThe Annual Meeting of Shareholders will be at

9:00 a.m. (local time), April 18, 1984, at Hotel Inter-Continental Houston, 5150 Westheimer Road, Hous-ton, Texas. Shareholders are cordially invited to attend.

Additional Company InformationThe Annual Report is only one of the sources of infor-

mation available to Company shareholders and thegeneral public. Shareholders regularly receive thefollowing:

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

Notice of Annual Meeting and Proxy Statement, fur-nished to each shareholder in advance of the AnnualMeeting.

A copy of the Company's Annual Report on Form10-K to the Securities and Exchange Commission maybe obtained from the Shareholder CommunicationsDepartment. Also available from Shareholder Com-munications is the brochure. Strategy for the 1980s, aseven-point statement outlining the Company's busi-ness objectives for this decade and beyond. Addition-ally, a variety of information booklets about theCompany and its products are available on request, atno charge, including a copy of the most recent issue ofCommitment, a report on the Company's activities inthe area of social responsibility.

Corporate OfficesThe international headquarters offices of The

Coca-Cola Company are located at 310 North AvenueNW, Atlanta, Ga. 30313, (404) 676-2121.

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

1983 1982 1981

First quarterSecond quarterThird quarterFourth quarter

High

$54.7557.37553.62557.50

Low

$45.5049.37545.62550.75

Closing

$53.5049.87550.87553.50

High

$36.87536.0044.2553.625

Low

$29.7531.87533.37540.375

Closing

$32.7533.7540.5052.00

Hi

$37403437

gh

875257500

Low

$26.7533.7530.5033.00

Closing

$36.87534.7533.7534.75

56

The Coca-Cola Company and Subsidiaries

Automatic Dividend Reinvestment ServiceAll shareholders of record are eligible to participate

in the Company's Automatic Dividend ReinvestmentPlan, which offers convenience and economy in acquir-ing additional shares of the Company's common stockon a regular basis. A major improvement is that theCompany now pays all service charges and brokeragecommissions associated with participation in the Plan.

In addition to having dividends reinvested, partici-pants may make optional cash payments for the pur-chase of additional shares of the Company's commonstock. In response to interest expressed by partici-pants, the maximum optional cash payment permittedby the Plan has been increased from $1,000 to $3,000per quarter.

Shareholders may become participants in the Planby completing an authorization form which can beobtained from Trust Company Bank, the Plan Admin-istrator. Shareholders whose Company stock is regis-tered in the name of a broker, a bank or nominee arenot eligible for participation in the Automatic DividendReinvestment Plan.

Complete information about the Plan may beobtained by writing to the Shareholder Communica-tions Department at the address below.

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

Change of Address or CorrectionsPlease direct address changes and all inquiries

concerning the way your account is listed to:Trust Company BankCorporate Trust DepartmentPost Office Box 4625Atlanta, Ga. 30302

Transfer Agents & RegistrarsTrust Company BankPost Office Box 4625Atlanta.Ga. 30302

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

Dividend Disbursing AgentTrust Company BankPost Office Box 4625Atlanta, Ga. 30302

The Coca-Cola CompanyP.O. Drawer 1734Atlanta, Georgia 30301