Jackson Kelly - VP and IR Muhtar Kent - Chairman and CEO Gary Fayard - CFO Sandy Douglas - SVP, Global Chief Customer Officer and President, Coca-Cola America Ahmet Bozer - EVP and President of Coca-Cola International

Bill Schmidt - Deutsche Bank Bryan Spillane - Bank of America John Faucher - JPMorgan Judy Hong - Goldman Sachs Dara Mohsenian - Morgan Stanley Ali Dibadj - Sanford Bernstein

At this time, I would like to welcome everyone to The Coca-Cola Company's Fourth Quarter 2013 Earnings Results Conference Call. Today's call is being recorded. If you have any objections, please disconnect at this time. All participants will be on a listen-only mode until the formal question-and-answer portion of this call. (Operator Instructions). Due to the interest in this call, we request a limit of one question per person. I would like to remind everyone that the purpose of this conference is to talk with investors and therefore questions from the media will not be addressed. Media participants should contact Coca-Cola's Media Relations Department, if they have questions. I would now like to introduce Jackson Kelly, Vice President and Investor Relations Officer. Mr. Kelly, you may begin.

Good morning and thank you for being with us today. I’m joined by Muhtar Kent, our Chairman and Chief Executive Officer; and Gary Fayard, our Chief Financial Officer. Following prepared remarks by Muhtar and Gary this morning, we’ll turn the call over for your questions. Ahmet Bozer, Executive Vice President and President of Coca-Cola International; Sandy Douglas, Senior Vice President, Global Chief Customer Officer and President, Coca-Cola America; and Irial Finan, Executive Vice President, the Coca Cola Company and President of Bottling Investments and Supply Chain will also be available for the Q&A session. Before we begin, I would like to remind you that this conference call may contain forward-looking statements, including statements concerning long-term earnings objective and should be considered in conjunction with a cautionary statement contained in our earnings release and in the Company's most recent periodic SEC report. In addition, I would also like to note that we have posted schedules under the Financial Reports and Information tab in the Investors section of our company website at www.coca-colacompany.com. These schedules reconcile certain non-GAAP financial measures which may be referred to by our senior executives during this morning's discussion to our results as reported under Generally Accepted Accounting Principles. Please look on our website for this information. I would now like to turn the call over to Muhtar.

Thank you, Jackson, and good morning, everyone. I want to start off today by recognizing that many of you are attending the CAGNY conference this week, given the timing of our earnings call and the fact that I will also presenting at CAGNY this coming Friday, we will keep our prepared remarks a little bit shorter to ensure that we have adequate time for your questions and that we can get you back into the conference. With 2013 behind us I am now looking forward to joining forces with our global system associates as we work to restore momentum to our business in 2014. 2013 was clearly marked by ongoing persistent macroeconomic challenges and our business was not immune to these pressures. Nevertheless we delivered sound financial results and we grew global value share in non-alcoholic ready-to-drink beverages for a 26th consecutive quarter. Our volume -- our worldwide volume grew 1% in the fourth quarter and 2% for the full-year. We delivered full-year comparable currency neutral operating income growth of 6% after excluding the impact of structural changes off of a comparable currency neutral ex-structural revenue growth of 3% for the full-year. And we delivered full-year comparable currency neutral EPS growth of 8% in line with our long-term growth targets. This performance underscores our ability to generate sound financial results even in a challenging environment. Our sparkling brands grew 1% in the full-year cycling 3% with brand Coca-Cola adding nearly a 100 million unit cases. In fact all of our billion dollar Sparkling brands except for Diet Coke Coca-Cola Light grew in 2013 contributing more than 140 million incremental cases in the full year. As of the end of 2013 we've gained core sparkling value share for 17 consecutive quarters. For the full year our portfolio of still beverage brands…

Thanks, Muhtar, and good morning everyone. As Muhtar shared earlier, 2013 presented numerous challenges to our industry and to our business and as a result, our full year volume growth was below our expectations. However, before we put 2013 behind us I wanted to reflect on a few items that I shared with you all at CAGNY last February. Specifically, I’ve talked about how our unwavering focus on long-term value creation for our shareowners and apart from competing in a great industry, there were three specific points I emphasized. First, we are focused on delivering value creating volume growth and despite volume growth being below our expectations in 2013 we delivered full year operating income and EPS growth in line with our long-term growth targets. Secondly, our goal is to take volume share and although we fell short on volume, we again gained global value share in non-alcoholic ready-to-bring beverages into 2013. Lastly, I emphasized the critical role that the evolution of our franchise system plays in creating sustainable long-term growth. Our Company and our system made solid progress on this front throughout 2013. We sold 51% of our Philippines bottling operations to Coca-Cola Thums Up. Our four bottling partners in the greater Tokyo area merged to form Coca-Cola East Japan. Our seven bottling partners in Spain and Portugal merged and the integration of that bottler is underway. We merged our company own bottling operations in Brazil with an independent local bottler to form the second largest bottler in Brazil. And we also continue to advance the system of the future work in North America. Having said that, let’s quickly review a few key drivers of our financial performance this year. Unit case sales and concentrate sales were in line on a consolidated basis in the fourth quarter and for…

(Operator Instructions) Our first question today is from Bill Schmidt from Deutsche Bank.

Hi, good morning, can you guys talk about, through the outlook geography by geography and then maybe how the pace of growth is going to differ between volume and pricing given some of the big currency moves and also obviously the tax in Mexico and I have a follow up if I could.

Sure Bill, good morning, this is Muhtar. Let me just first just take a step back and just say that in a way we’ve had a speed bump we know that would have come on our road to 2020. We dealt with commodities in 2011 and ’12, volatility in weather has become a norm, uncertain economies, internal also execution issues caused us to underperform versus our expectations in 2013, I’ll start with -- by saying that. We have looked at everything, we’ve looked at our people, priorities, marketing, selling and innovation and we have refreshed our plans, and with a simple but scales offset of priorities on marketing our brands, system execution by our franchisees and bottling partners and Company owned bottlers and on innovation of all kinds, business models like the one that you -- we’ve recently announced with Green Mountain, brands, equipment, packaging, the lot. Our long term outlook is our performance algorithm which we have and will deliver going forward and 2014 will be a year of steady improvement as we get back up to speed. But make no mistake, our leadership team is confident, accountable, our system will market well, we will sell well and we are going to achieve our 2020 vision. Now let me just take you through a quick tour of the world, and I will ask Ahmet also to comment. Starting with Asia, I think China is going to sustain its growth. India, in terms of its macroeconomic outlook, and I think we will continue to benefit from that. In India I think there's election coming up and usually when there are elections, there’s a little bit of easing of fiscal discipline, I think that will play into a little bit of added disposable incomes. In South-East Asia certainly we've seen quite…

Yes. I will add few things, I guess, to really compare some of these issues that have existed even last year, how they are different now? For example emerging market currencies; when the first news on discontinuation of [paper] came out last year around May or June; there was a bit of a shock in emerging markets. We see that over the last seven or eight months these emerging markets are sort of finding ways to deal with it, by no means it’s certain, by no means it’s perfect. But it certainly feels a little bit more under control compared to when it first came up and the interest rate and things like that have been baked into those expectations. So, I guess the message there is countries and our business we're finding ways to deal with that new reality of less liquidity coming out of United States. I would just add Muhtar to your comment on Europe north south divide, that is very much true but we are sort of beginning to see sort of different shades of grey in the south as well. There are some encouraging signs in Spain, sort of less so in Italy at this point in time although there is a new Prime Minister there and we’re hopeful with the new programs to be announced if they are. And the Eastern Europe, it continues to struggle in terms of consumer confidence and economic. So north continues to do well and south is even showing different performance now. The other point that Muhtar mentioned is political uncertainty, it's another common thing to many of our emerging markets. They eventually could impact the economic realities but again so far in countries like Turkey and Thailand it’s been fine. And let me just in the interest of giving time to other questions, let me just stop it here.

Sandy, do you want to add any commentary to North America. I think it’s important to say in North America that we believe in the North American market, we believe in the demographics, we believe this is a growth market; we have grown in all but two quarters of the last 15 quarters in the United States. We believe we can do better and we’re intent and thus we’ll be focused on achieving that. Sandy?

Yes. Thanks Muhtar. We have a great business in North America and our focus in accelerating the business is on our brands, on our customers and on our capability. And I’m really happy to be working with Irial and Paul and our all of our U.S. bottlers. I think Irial and Paul bring a tremendous amount of selling and executional energy that will help us build on our momentum. On my end, over the last six to seven weeks, Paul and I have met with our major customers. We’ve met with our bottlers and we’ve gone through the brand plant in detail looking at opportunities to focus and strengthen them and to move resources to emphasize advertising and brand building on our largest brands. And I think with the plan in place our focus as a system Irial, Paul and I, and our bottlers is to improve all aspects of our execution, whether it’s marketing or sales or in the marketplace. And we believe as a result of that that we will improve steadily over time and we share the confidence that Muhtar expressed in the long term health of North America. It’s a great market. It will grow. And I think we can be confident about our long term future there.

And our next question is from Bryan Spillane from Bank of America.

Just a follow up to Bill’s question. I guess if we think about 2014 there is a lot of moving parts with exchange rates and some of the volatility in emerging markets. Maybe Gary could you talk a little bit about how we should think about currency neutral and also maybe sort of neutral of the effects of structural change? Are you still looking at a currency neutral sort of on-algorithm year in operating profits? And also just some of the other major drivers behind volume that might influence that cost of goods sold inflation, price mix, country mix that sort of thing? I think that would be helpful.

Yes. Bryan thanks and let me say back and go through all of those. So, let me start at the top, when you’re the industry leader you have to believe in rational pricing and believe we should get pricing for our brands because our brands are worth it and we would expect to have positive price mix this year to go with the volume that we’ll have this year. When you look at commodity, it’s fairly benign from what we’re saying for 2014 so not a big deal. But now the currency among the worst we’ve seen in years and there is not a whole lot you can do about it when all the emerging market currencies kind of melt down as they did earlier at the end of December or early January. But with that said, let me be very clear, ours is a growth business, is a business model that is built on growth and we know that we cannot save our way to prosperity. We will have productivity but that productivity will be reinvested for growth and while we are reinvesting for growth in our marketing, we have our goals are also in addition while we’re increasing the marketing we will also have a goal and is a goal up for this year up hitting our long term growth model this year. So we’re going to significantly increase our marketing but at the same time the goal is we will hit long term growth model this year.

Thank you. Our next question is from John Faucher from JPMorgan.

Thanks, just one quick follow up to Gary’s question and then a question for Muhtar or Gary’s answer rather. Gary, does that include a Mexico impact in hitting your long-term algorithm in 2014? And then Muhtar, responding to Gary’s question about ramping up the marketing, I guess how do we view, there is a sense out there in the market that given the headwinds for the category that adding more marketing could be sort of pushing on a string so to speak. So what is it that you are seeing that says these headwinds that you are facing can be offset with higher marketing? Thanks.

Thanks, just one quick follow up to Gary’s question and then a question for Muhtar or Gary’s answer rather. Gary, does that include a Mexico impact in hitting your long-term algorithm in 2014? And then Muhtar, responding to Gary’s question about ramping up the marketing, I guess how do we view, there is a sense out there in the market that given the headwinds for the category that adding more marketing could be sort of pushing on a string so to speak. So what is it that you are seeing that says these headwinds that you are facing can be offset with higher marketing? Thanks.

John its Gary, thanks for the question. First as Muhtar said in the prepared remarks, it's too early to tell what’s going to happen in Mexico. We have planned around Mexico of what we believe is the most likely day. But we have a portfolio of brands that are marketed and sold across 200 countries and our job is to manage that portfolio. So unless something unforeseen should happen, I think the answer has to be yes, it includes what could happen to Mexico, if that changes, we’ll update you obviously, but we’re going -- what we believe would happen today.

And just add to Gary’s answer and to the second part of your question John, I’ll just tell you very simply that the Coca-Cola way is to grow our way to success and we invest for growth together with our [bumping] partners and we have great -- the greatest system in the world and we have had tremendous amount of experience to say that a good marketing, good selling works for our business and it will work for our business. We have numerous cases to prove that and we’re going to continue to build on our marketing in both quantity and quality. This is a global increase in marketing and in every country that we operate in large or small, we know it works and when we invest in marketing, our global partners invest and feed on the street, in more coolers in more trucks, and more line and that’s what we see happening and that’s what we will see we believe happening to our business as we restore steady momentum in through 2014 and beyond.

Thank you. Our next question is from Judy Hong from Goldman Sachs.

Just a few questions, first, just the North America Gary, the profitability decline in fourth quarter was pretty surprising. So maybe you could give us a little bit of color in terms of the components of the profits decline in North America. And just broadly in North America from a profitability perspective, the business hasn’t really grown since the acquisition of the bottler. So as you think about the next couple of years, thinking about the refranchising opportunities and all the productivity savings, are we at a point where we can actually see growth in this business from a profitability perspective in 2014? Or is this more of a transition year or so with the investment that’s going on? Goldman Sachs: Just a few questions, first, just the North America Gary, the profitability decline in fourth quarter was pretty surprising. So maybe you could give us a little bit of color in terms of the components of the profits decline in North America. And just broadly in North America from a profitability perspective, the business hasn’t really grown since the acquisition of the bottler. So as you think about the next couple of years, thinking about the refranchising opportunities and all the productivity savings, are we at a point where we can actually see growth in this business from a profitability perspective in 2014? Or is this more of a transition year or so with the investment that’s going on?

Judy its Gary, let me take the first part of that question. On the fourth quarter profit -- operating profit decline, it was down 12% I think in the fourth quarter. And by the way I know the answer to this one specifically, because I asked the same question some time back, and got into my new detail on it. And 100% of that change is because of -- it's an all in OpEx or primarily all in OpEx and it’s what we’re cycling from 2012, there were some incentive compensation, accrual reversals in the fourth quarter of 2012 that did not happen in 2013 and that cycling caused a significant change in OpEx swing year-on-year in the fourth quarter only and it’s what swung North America to that 12% operating income loss. So I think it’s much more reasonable to actually look at North America, look at it for the full year and you will get a better picture of actual performance versus the fourth quarter. When you look at the full year then you will see -- that is where we’ve got some challenges as Muhtar said around volume and particularly in sparkling around diets and lights but that’s what we are specifically on.

Just let me add to in terms of the outlook and that is that as I said we are confident about and excited about first our performance algorithm worldwide but also in terms of steady improvement as we get back up to speed in the United States. And I think that that will -- when we start restoring the momentum in the United States which we believe is going to happen, well that will also bring the results in the -- financial results that we will be happier with as we move into 2014 and beyond. It’s going to take a while, this is not a fix -- an immediate fix but we know that it’s going to be a steady improvement.

And just in terms of the media investments, is there any color you can give us in terms of the breakdown by regions, by categories, is North America likely to get the proportionate amount in terms of the media spending increase in 2014? Goldman Sachs: And just in terms of the media investments, is there any color you can give us in terms of the breakdown by regions, by categories, is North America likely to get the proportionate amount in terms of the media spending increase in 2014?

Can’t give you the specifics on the geographic mix Judy, but as we announced it’s about $1 billion by 2016 and it is a global number. And again there will be a good distribution and we will be again also looking and tracking through franchise leadership, resulting also system increase and investments in all the key markets.

Thank you. Our next question is from Dara Mohsenian from Morgan Stanley.

Hi, I also wanted to touch on profit in North America. It sounds like in 2013, you view the profit challenges as more driven from a volume perspective but given the diet soft drink where you seem to be more secular around longer term health concerns, I am just wondering if going forward you may manage more for profitability and lean more on pricing than driving volume growth. Is there any change as you look at the algorithm between pricing and volume and which metric you will focus on going forward?

Thanks, Dara. Sandy you want to take it and then [indiscernible] if you want to comment.

Yes, I think the key to the North America growth algorithm is investing in our brands and our feet on the street and a key element to that is getting our pricing, so that we can have the revenue to be able to reinvest in sustainable growth. Where we had issues over the years in my experience in North America is when we did not get the price we needed, when our marketing execution was not what it needed to be and therefore the feet on the street started to get reduced and ultimately it hurt sustainable growth. Our plan going forward and it’s going to take some time and we're focused on improving it, is to make sure that we get the price and that we execute the marketing well and feed the feet on the street which creates the virtuous cycle in the United States just like it does around the world. [Gary] do you want to add to that?

I guess the only comment I would say, Muhtar already mentioned that we are an industry leader and industry leaders have to set the tone in terms of price, in terms of how to market their brands in any given market. And actually 50 days, in less than 50 days into my new involvement in North America, I am really excited about the future. I am excited about the enthusiasm, the passion of our people. Our job, mine, Paul’s, Sandy’s is really is to make sure that excitement translates into performance and into results. And as Sandy said, it’s not going to happen overnight but I feel we've already started on the journey and over the next quarters, the next couple of years, you will see very positive momentum in our market in North America.

And then move to our post the investment in Green Mountain, I was just hoping to get an update on how important a role acquisitions might play in meeting your 2020 vision goals? You mentioned the focus on partnerships earlier in the call, I was hoping you could elaborate there and if acquisitions are greater priority here given some of the difficult macro-conditions and somewhat favourable environment with your healthy balance sheet and still lower rate here.

Look, nothing different than before, so no change. I think we're obviously very excited with the new opportunities for consumption as will be brought to us by the partnership with Green Mountain over time. I think the key is to feel the power of partnerships. The Coca-Cola Company and System is an incredible integration of power of partnerships in every respect and therefore this is yet another one. And so think about if you look at household consumptions in particularly, Western markets, there is a tremendous opportunity to gain incremental consumption occasions for our brand through these kind of partnerships and this is what the Green Mountain partnership is all about. When you look at how beverages are consumed at home and when you look at trends in the next 10 years, people are going to spend more time at home. They are going to work more from home. Home is going to be an even more important place for people for consumers and I think we need to present there with different technologies, different packaging, different ways to serve our brands and that’s why this is important and partnerships like these are going to be important for us over time going forward. And so, our thinking has not really evolved or changed in terms of bolt-on acquisitions, if we see opportunities, we will get them like InneSense like [Ocean] and so forth. And we will continue to seek new power of partnerships, to leverage new power of partnerships also going into the remaining part of our 2020 vision for the next six years.

Thank you. Our next question is from Ali Dibadj from Bernstein.

So I guess the frustration I am hearing from many investors and a lot of questions on this call, is that there is a feeling that the Company isn’t doing enough to change itself despite that the world around it has really changed and many like us we secularly, to sort of continued emphasis on the Coca-Cola way in history which is respectable in volumes, market shares, and even more marketing blaming short-term externalities but it’s been a little while now that we’ve seen tougher volumes, North America will profit continue to shrink, there is only $1 billion cost savings when some competitors are doing more from a pro rata basis. There is limited movement on refranchising and help innovation so far. So I guess might the company ever believe that it needs to focus on new levers of shareholder value creation like pricing up even more lower promotions, massive cost cutting, big portfolio innovation change and indeed returning more cash to shareholders. So, I know there’s lots there but should investors expect bigger bolder change that pay out to meet this truly different world and so what specifically should we be looking for to just kind of sharing your confidence about the story or should we just expect kind of same status quo going forward?

First, Ali I disagree with you. I think we have a great portfolio brand, we have a great system, the best consumer product system in the world and I believe that our programs will work and had worked. We have significantly outperformed and grown since 2012 and yes we’ve had speed bump and certainly that makes us even more focused and more resolute to continue on our road to 2020. And I think that we have -- I will share at CAGNY on Friday the real reasons why we believe in our future and so that’s all I would say.

But I don’t disagree with you about the strength of the brands at all actually, Muhtar. And I don’t disagree with you about the strength of the system. I’m just looking the results and I’m trying to figure out whether enough is changing, enough is different and whether you guys do actually view the world is different enough and [indiscernible] but I actually don’t disagree with you.

I understand and I understand it’s easy for people to have very short memories but we have the experience and we know what we are doing and we will continue to do what we believe and we are focused and we will execute the best and we will achieve our 2020 vision, that’s what this is all about. So that’s what I would say and we have talked about pricing, you’ve heard all colleagues also talked about pricing and I think we don’t want to repeat ourselves.

Thank you Gary, Ahmet, Sandy, Irial and Jackson, we’ve delivered sound full year financial results. We’re implementing the strategic actions that will enable us to restore momentum in 2014 and we see many reasons to believe that we can accelerate our growth over time, achieve our long-term growth model targets and realize our 2020 vision. Our global beverage industry is healthy, the trends that have historically fuelled this, continue to be strong and our global systems commitment and reach are unparalleled. This commitment has never wavered and the strategic decision that we have made over recent years have not only enabled us to deliver solid financial results that also advanced our competitive position, enhanced our capabilities and strengthened our result as a global system to achieve our 2020 vision. That is our promise to our investors, to our customers, to our consumers and the daily objective of the more than 700,000 associates of The Coca Cola system all around the world. As always, we thank you for your interest, your investment in our Company and for joining us this morning.

Thank you. And that does conclude today’s conference. You may disconnect at this time.