Coca cola’s capital structure choices

20FEB200902055832 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-02217 (Exact name of Registrant as specified in its charter) DELAWARE 58-0628465 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Coca-Cola Plaza Atlanta, Georgia 30313 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (404) 676-2121 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered COMMON STOCK, $0.25 PAR VALUE NEW YORK STOCK EXCHANGE Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer’’ and ‘‘smaller reporting company’’ in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the common equity held by non-affiliates of the Registrant (assuming for these purposes, but without conceding, that all executive officers and Directors are ‘‘affiliates’’ of the Registrant) as of June 28, 2013, the last business day of the Registrant’s most recently completed second fiscal quarter, was $176,841,594,528 (based on the closing sale price of the Registrant’s Common Stock on that date as reported on the New York Stock Exchange). The number of shares outstanding of the Registrant’s Common Stock as of February 24, 2014, was 4,405,893,150. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company’s Proxy Statement for the Annual Meeting of Shareowners to be held on April 23, 2014, are incorporated by reference in Part III. Table of Contents Page Forward-Looking Statements …………………………………………………. 1 Part I Item 1. Business ……………………………………………………………… 1 Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Item X. Executive Officers of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . 143 Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Part III Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . 144 Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Part IV Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 FORWARD-LOOKING STATEMENTS This report contains information that may constitute ‘‘forward-looking statements.’’ Generally, the words ‘‘believe,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘estimate,’’ ‘‘anticipate,’’ ‘‘project,’’ ‘‘will’’ and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results — are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forwardlooking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part I, ‘‘Item 1A. Risk Factors’’ and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange Commission. PART I ITEM 1. BUSINESS In this report, the terms ‘‘The Coca-Cola Company,’’ ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ mean The Coca-Cola Company and all entities included in our consolidated financial statements. General The Coca-Cola Company is the world’s largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and market four of the world’s top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries. We make our branded beverage products available to consumers throughout the world through our network of Company-owned or -controlled bottling and distribution operations as well as independent bottling partners, distributors, wholesalers and retailers — the world’s largest beverage distribution system. Beverages bearing trademarks owned by or licensed to us account for 1.9 billion of the approximately 57 billion beverage servings of all types consumed worldwide every day. We believe our success depends on our ability to connect with consumers by providing them with a wide variety of options to meet their desires, needs and lifestyles. Our success further depends on the ability of our people to execute effectively, every day. Our goal is to use our Company’s assets — our brands, financial strength, unrivaled distribution system, global reach, and the talent and strong commitment of our management and associates — to become more competitive and to accelerate growth in a manner that creates value for our shareowners. We were incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a Georgia corporation with the same name that had been organized in 1892. 1 Acquisition of Coca-Cola Enterprises Inc.’s Former North America Business and Related Transactions On October 2, 2010, we acquired the former North America business of Coca-Cola Enterprises Inc. (‘‘CCE’’), one of our major bottlers, consisting of CCE’s production, sales and distribution operations in the United States, Canada, the British Virgin Islands, the United States Virgin Islands and the Cayman Islands, and a substantial majority of CCE’s corporate segment. CCE shareowners other than the Company exchanged their CCE common stock for common stock in a new entity named Coca-Cola Enterprises, Inc. (‘‘New CCE’’), which, after the closing of the transaction, continued to hold the European operations that had been held by CCE prior to the acquisition. The Company does not have any ownership interest in New CCE. Upon completion of the CCE transaction, we combined the management of the acquired North America business with the management of our existing foodservice business; Minute Maid and Odwalla juice businesses; North America supply chain operations; and Company-owned bottling operations in Philadelphia, Pennsylvania, into a unified bottling and customer service organization called Coca-Cola Refreshments (‘‘CCR’’). In addition, we reshaped our remaining Coca-Cola North America operations into an organization that primarily provides franchise leadership and consumer marketing and innovation for the North American market. As a result of the transaction and related reorganization, our North American businesses operate as aligned and agile organizations with distinct capabilities, responsibilities and strengths. In contemplation of the closing of our acquisition of CCE’s former North America business, we reached an agreement with Dr Pepper Snapple Group, Inc. (‘‘DPSG’’) to distribute certain DPSG brands in territories where DPSG brands had been distributed by CCE prior to the CCE transaction. Under the terms of our agreement with DPSG, concurrently with the closing of the CCE transaction, we entered into license agreements with DPSG to distribute Dr Pepper trademark brands in the United States, Canada Dry in the Northeastern United States, and Canada Dry and C’ Plus in Canada, and we made a net one-time cash payment of $715 million to DPSG. Under the license agreements, the Company agreed to meet certain performance obligations to distribute DPSG products in retail and foodservice accounts and vending machines. The license agreements have initial terms of 20 years, with automatic 20-year renewal periods unless otherwise terminated under the terms of the agreements. The license agreements replaced agreements between DPSG and CCE existing immediately prior to the completion of the CCE transaction. In addition, we entered into an agreement with DPSG to include Dr Pepper and Diet Dr Pepper in our Coca-Cola Freestyle fountain dispensers in certain outlets throughout the United States. The Coca-Cola Freestyle agreement has a term of 20 years. On October 2, 2010, we sold all of our ownership interests in Coca-Cola Drikker AS (the ‘‘Norwegian bottling operation’’) and Coca-Cola Drycker Sverige AB (the ‘‘Swedish bottling operation’’) to New CCE for $0.9 billion in cash. Operating Segments The Company’s operating structure is the basis for our internal financial reporting. As of December 31, 2013, our operating structure included the following operating segments, the first six of which are sometimes referred to as ‘‘operating groups’’ or ‘‘groups’’: • Eurasia and Africa • Europe • Latin America • North America • Pacific • Bottling Investments • Corporate Our operating structure as of December 31, 2013, reflected changes we made, effective January 1, 2013, when we transferred our India and South West Asia business unit from the Eurasia and Africa operating segment to the Pacific operating segment. We revised previously reported operating segment information to conform to our operating structure in effect as of December 31, 2013. Effective January 1, 2014, we changed the name of the Pacific operating segment to Asia Pacific. Except to the extent that differences among operating segments are material to an understanding of our business taken as a whole, the description of our business in this report is presented on a consolidated basis. For financial information about our operating segments and geographic areas, refer to Note 19 of Notes to Consolidated Financial Statements set forth in Part II, ‘‘Item 8. Financial Statements and Supplementary Data’’ of this report, incorporated herein by reference. For certain risks attendant to our non-U.S. operations, refer to ‘‘Item 1A. Risk Factors’’ below. 2 Products and Brands As used in this report: • ‘‘concentrates’’ means flavoring ingredients and, depending on the product, sweeteners used to prepare syrups or finished beverages, and includes powders for purified water products such as Dasani; • ‘‘syrups’’ means beverage ingredients produced by combining concentrates and, depending on the product, sweeteners and added water; • ‘‘fountain syrups’’ means syrups that are sold to fountain retailers, such as restaurants and convenience stores, which use dispensing equipment to mix the syrups with sparkling or still water at the time of purchase to produce finished beverages that are served in cups or glasses for immediate consumption; • ‘‘sparkling beverages’’ means nonalcoholic ready-to-drink beverages with carbonation, including carbonated energy drinks and carbonated waters and flavored waters; • ‘‘still beverages’’ means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks; • ‘‘Company Trademark Beverages’’ means beverages bearing our trademarks and certain other beverage products bearing trademarks licensed to us by third parties for which we provide marketing support and from the sale of which we derive economic benefit; and • ‘‘Trademark Coca-Cola Beverages’’ or ‘‘Trademark Coca-Cola’’ means beverages bearing the trademark Coca-Cola or any trademark that includes Coca-Cola or Coke (that is, Coca-Cola, Diet Coke and Coca-Cola Zero and all their variations and line extensions, including Coca-Cola Light, caffeine free Diet Coke, Cherry Coke, etc.). Likewise, when we use the capitalized word ‘‘Trademark’’ together with the name of one of our other beverage products (such as ‘‘Trademark Fanta,’’ ‘‘Trademark Sprite’’ or ‘‘Trademark Simply’’), we mean beverages bearing the indicated trademark (that is, Fanta, Sprite or Simply, respectively) and all its variations and line extensions (such that ‘‘Trademark Fanta’’ includes Fanta Orange, Fanta Zero Orange, Fanta Apple, etc.; ‘‘Trademark Sprite’’ includes Sprite, Diet Sprite, Sprite Zero, Sprite Light, etc.; and ‘‘Trademark Simply’’ includes Simply Orange, Simply Apple, Simply Grapefruit, etc.). Our Company markets, manufactures and sells: • beverage concentrates, sometimes referred to as ‘‘beverage bases,’’ and syrups, including fountain syrups (we refer to this part of our business as our ‘‘concentrate business’’ or ‘‘concentrate operations’’); and • finished sparkling and still beverages (we refer to this part of our business as our ‘‘finished product business’’ or ‘‘finished product operations’’). Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to authorized bottling and canning operations (to which we typically refer as our ‘‘bottlers’’ or our ‘‘bottling partners’’). Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages are packaged in authorized containers — such as cans and refillable and nonrefillable glass and plastic bottles — bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers. Our finished product operations consist primarily of our Company-owned or -controlled bottling, sales and distribution operations, including CCR. Our Company-owned or -controlled bottling, sales and distribution operations, other than CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating segment. Our finished product operations generate net operating revenues by selling sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers, such as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the 3 fountain syrups to fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through nonexclusive appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor restrict the territories in which the wholesalers may resell in the United States. For information about net operating revenues and unit case volume related to our concentrate operations and finished product operations, refer to the heading ‘‘Our Business — General’’ in Part II, ‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ of this report, which is incorporated herein by reference. We own numerous valuable nonalcoholic beverage brands, including the following: Coca-Cola Minute Maid Glaceau Vitaminwater Del Valle ´ 3 Diet Coke/Coca-Cola Light Powerade Georgia1 Ayataka4 Coca-Cola Zero Aquarius Simply2 Bonaqua/Bonaqa Sprite Dasani Minute Maid Pulpy Schweppes5 Fanta 1 Georgia is primarily a coffee brand sold mainly in Japan. 2 Simply is a juice and juice drink brand sold in North America. 3 We manufacture, market and sell juices and juice drinks under the Del Valle trademark primarily in Mexico and Brazil through joint ventures with our bottling partners. 4 Ayataka is a green tea brand sold in Japan. 5 Schweppes is owned by the Company in certain countries other than the United States. In 2012, we invested in the beverage business of Aujan Industries Company J.S.C. (‘‘Aujan’’), one of the largest independent beverage companies in the Middle East. As a result of this transaction, we acquired 50 percent of the Aujan entity that holds the rights to Aujan-owned brands, including Rani, a juice brand, and Barbican, a flavored malt beverage brand, in certain territories. In addition, Beverage Partners Worldwide (‘‘BPW’’), the Company’s joint venture with Nestle S.A. (‘‘Nestl ´ e’’), markets and ´ distributes Nestea products in Europe, Canada, Australia and certain markets in Asia under agreements with our bottlers (the Nestea trademark is owned by Societ ´ e des Produits Nestl ´ e S.A.). ´ We also produce and/or distribute certain third-party brands, including certain brands of Monster Beverage Corporation (‘‘Monster’’), primarily Monster Energy, which we distribute in designated territories in the United States and Canada, and certain of our bottlers distribute in designated U.S. and international territories pursuant to master distribution and coordination agreements with Monster to which we are a party; and certain DPSG brands which we produce and distribute in designated territories in the United States and Canada pursuant to license agreements with DPSG. Consumer demand determines the optimal menu of Company product offerings. Consumer demand can vary from one locale to another and can change over time within a single locale. Employing our business strategy, and with special focus on core brands, our Company seeks to build its existing brands and, at the same time, to broaden its historical family of brands, products and services in order to create and satisfy consumer demand locale by locale. We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and (2) concentrate sales. As used in this report, ‘‘unit case’’ means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and ‘‘unit case volume’’ means the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners (the ‘‘Coca-Cola system’’) to customers. Unit case volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale of which we derive economic benefit. In addition, unit case volume includes sales by joint ventures in which the Company has an equity interest. We believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. The unit case volume numbers used in this report are derived based on estimates received by the Company from its bottling partners and distributors. Concentrate sales volume represents the amount of concentrates and syrups (in all cases expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers’ inventory practices, supply point changes, timing of price increases, new product introductions and changes in product mix can impact unit case volume and concentrate sales volume and can create differences between unit case volume and concentrate sales volume growth rates. In addition to the items mentioned above, the impact of unit case volume 4 from certain joint ventures in which the Company has an equity interest but to which the Company does not sell concentrates or syrups may give rise to differences between unit case volume and concentrate sales volume growth rates. Distribution System and Bottler’s Agreements We make our branded beverage products available to consumers in more than 200 countries through our network of Companyowned or -controlled bottling and distribution operations as well as independent bottling partners, distributors, wholesalers and retailers — the world’s largest beverage distribution system. Consumers enjoy finished beverage products bearing our trademarks at a rate of 1.9 billion servings each day. We continue to expand our marketing presence in an effort to increase our unit case volume in developed, developing and emerging markets. Our strong and stable system helps us to capture growth by manufacturing, distributing and marketing existing, enhanced and new innovative products to our consumers throughout the world. The Coca-Cola system sold 28.2 billion, 27.7 billion and 26.7 billion unit cases of our products in 2013, 2012 and 2011, respectively. The number of unit cases sold in 2012 does not include BPW unit case volume for those countries in which BPW was phased out during 2012, nor does it include unit case volume of products distributed in the United States under a sublicense from a subsidiary of Nestle which terminated at the end of 2012. Sparkling beverages represented 74 percent, 75 percent and 75 percent ´ of our worldwide unit case volume for 2013, 2012 and 2011, respectively. Trademark Coca-Cola Beverages accounted for 47 percent, 48 percent and 49 percent of our worldwide unit case volume for 2013, 2012 and 2011, respectively. In 2013, unit case volume in the United States (‘‘U.S. unit case volume’’) represented 19 percent of the Company’s worldwide unit case volume. Of the U.S. unit case volume for 2013, 68 percent was attributable to sparkling beverages and 32 percent to still beverages. Trademark Coca-Cola Beverages accounted for 46 percent of U.S. unit case volume for 2013. Unit case volume outside the United States represented 81 percent of the Company’s worldwide unit case volume for 2013. The countries outside the United States in which our unit case volumes were the largest in 2013 were Mexico, China, Brazil and Japan, which together accounted for 31 percent of our worldwide unit case volume. Of the non-U.S. unit case volume for 2013, 75 percent was attributable to sparkling beverages and 25 percent to still beverages. Trademark Coca-Cola Beverages accounted for 48 percent of non-U.S. unit case volume for 2013. In our concentrate operations, we typically sell concentrates and syrups to our bottling partners, who use the concentrate to manufacture finished products which they sell to distributors and other customers. Outside the United States, our concentrate operations also include the sale of concentrates for fountain beverages to our bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers. Our five largest independent bottling partners based on unit case volume in 2013 were: • Coca-Cola FEMSA, S.A.B. de C.V. (‘‘Coca-Cola FEMSA’’), which has bottling and distribution operations in a substantial part of central Mexico, including Mexico City, and the southeast and northeast parts of Mexico; greater Sao Paulo, ˜ Campinas, Santos, the state of Mato Grosso do Sul, the state of Parana, part of the state of Goi ´ as, part of the state of Rio ´ de Janeiro and part of the state of Minas Gerais in Brazil; Guatemala City and the surrounding areas in Guatemala; most of Colombia; all of Costa Rica, Nicaragua, Panama and Venezuela; greater Buenos Aires, Argentina; and all of the Philippines; • Coca-Cola HBC AG (‘‘Coca-Cola Hellenic’’), which has bottling and distribution operations in Armenia, Austria, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, the Former Yugoslav Republic of Macedonia, Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Montenegro, Nigeria, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland and Ukraine; • Arca Continental, S.A.B. de C.V., which has bottling and distribution operations in northern and western Mexico, Ecuador and northern Argentina; • New CCE, which has bottling and distribution operations in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden; and • Swire Beverages (‘‘Swire’’), which has bottling and distribution operations in Hong Kong, Taiwan, seven provinces in mainland China and territories in 11 states in the western United States. 5 In 2013, these five bottling partners combined represented 34 percent of our total unit case volume. Being a bottler does not create a legal partnership or joint venture between us and our bottlers. Our bottlers are independent contractors and are not our agents. In our finished product operations we typically sell finished beverages to retailers directly or to distributors, wholesalers and bottling partners who in turn distribute them to retailers. In addition, in the United States our finished product operations’ customers include fountain retailers, such as restaurants and convenience stores who use the fountain syrups for immediate consumption, and fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers. Bottler’s Agreements We have separate contracts (‘‘Bottler’s Agreements’’) with each of our bottling partners regarding the manufacture and sale of Company products. Subject to specified terms and conditions and certain variations, the Bottler’s Agreements generally authorize the bottlers to prepare specified Company Trademark Beverages, to package the same in authorized containers, and to distribute and sell the same in (but, subject to applicable local law, generally only in) an identified territory. The bottler is obligated to purchase its entire requirement of concentrates or syrups for the designated Company Trademark Beverages from the Company or Company-authorized suppliers. We typically agree to refrain from selling or distributing, or from authorizing third parties to sell or distribute, the designated Company Trademark Beverages throughout the identified territory in the particular authorized containers; however, we typically reserve for ourselves or our designee the right (1) to prepare and package such Company Trademark Beverages in such containers in the territory for sale outside the territory, (2) to prepare, package, distribute and sell such Company Trademark Beverages in