Coca-Cola FEMSA, S.A. De C.V

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 Commission file number 1-12260 Coca-Cola FEMSA, S.A. de C.V. (Exact name of registrant as specified in its charter) Not Applicable (Translation of registrant’s name into English) United Mexican States (Jurisdiction of incorporation or organization) Rio Amazonas No. 43 06500 Mexico, D.F., Mexico (Address of principal executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered American Depositary Shares (“ADSs”), each representing 10 Series L shares (“Series L Shares”), without par value............. New York Stock Exchange, Inc. Series L Shares, without par value........................................................... New York Stock Exchange, Inc. (for listing purposes only) 8.95% Notes due November 1, 2006 (the “Notes”)............................... New York Stock Exchange, Inc. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None The number of outstanding shares of each class of capital or common stock as of December 31, 1999 was: 726,750,000 Series A shares, without par value (“Series A Shares”) 427,500,000 Series D shares, without par value (“Series D Shares”) 270,750,000 Series L Shares, without par value 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18 TABLE OF CONTENTS Page PART I..............................................................................................................................................................................................3 Item 1. Description Of Business ..........................................................................................................................................3 Item 2. Description Of Property .........................................................................................................................................28 Item 3. Legal Proceedings...................................................................................................................................................29 Item 4. Control Of Registrant..............................................................................................................................................29 Item 5. Nature Of Trading Market......................................................................................................................................32 Item 6. Exchange Controls And Other Limitations Affecting Securityholders...........................................................36 Item 7. Taxation ....................................................................................................................................................................38 Item 8. Selected Financial And Operating Data...............................................................................................................42 Item 9. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations................47 Item 9A. Quantitative And Qualitative Disclosure About Market Risk.....................................................................6362 Item 10. Directors And Officers Of Registrant...................................................................................................................64 Item 11. Compensation Of Directors And Officers ...........................................................................................................65 Item 12. Options To Purchase Securities From Registrant Or Subsidiaries ..................................................................66 Item 13. Interest Of Management In Certain Transactions* ...........................................................................................67 PART II...........................................................................................................................................................................................67 Item 14. Description Of Securities To Be Regis tered* .....................................................................................................67 PART III .........................................................................................................................................................................................67 Item 15. Defaults Upon Senior Securities*.........................................................................................................................67 Item 16. Changes In Securities And Changes In Security For Registered Securities* ...............................................67 PART IV .........................................................................................................................................................................................67 Item 17. Financial Statements*.............................................................................................................................................67 Item 18. Financial Statements ...............................................................................................................................................67 Item 19. Financial Statements And Exhibits .......................................................................................................................68 _________________ * Omitted because the item is inapplicable or the answer is negative. i Unless the context otherwise requires, the terms “Coca-Cola FEMSA” and the “Company” are used in this Form 20-F to refer to Coca-Cola FEMSA, S.A. de C.V. and its subsidiaries on a consolidated basis. Coca-Cola FEMSA publishes its financial statements in Mexican pesos and prepares such financial statements in accordance with generally accepted accounting principles in Mexico (“Mexican GAAP”). Included elsewhere in this Form 20-F are the Company’s Consolidated Financial Statements. The Consolidated Financial Statements were prepared giving effect to Bulletin B-10, “Recognition of the Effects of Inflation on Financial Information,” and Bulletin B-12, “Statement of Changes in Financial Position,” issued by the Mexican Institute of Public Accountants. Generally, Bulletin B-10 is designed to provide for the recognition of certain effects of inflation by requiring Coca-Cola FEMSA to restate non-monetary liabilities using the National Consumer Price Index (“NCPI”), to restate the components of stockholders’ equity using the NCPI, and to record gains or losses in purchasing power from holding monetary liabilities or assets. Through December 31, 1996, Bulletin B-10 further required that non- monetary assets be restated at replacement cost or using the NCPI; for purposes of the Consolidated Financial Statements, non-monetary assets have been restated at replacement cost. On January 1, 1997, the Fifth Amendment to Bulletin B-10 went into effect, which establishes an option to restate fixed assets by: (i) applying the NCPI or (ii) for domestic fixed assets, applying the NCPI, and, for imported equipment, first applying the inflation rate of the country of origin, and then translating at the year-end exchange rate. The second option was adopted by the Company. Bulletin B-10 requires restatement of all financial statements to constant pesos as of the date of the most recent balance sheet presented. Bulletin B-12 requires that the statement of changes in financial position reconcile changes from the restated historical balance sheet to the current balance sheet. Accordingly, except as otherwise indicated, all data in the Consolidated Financial Statements and the selected financial information derived therefrom set forth below have been stated or restated in constant pesos of December 31, 1999. The effect of inflation accounting under Mexican GAAP has not been reversed in the reconciliation to generally accepted accounting principles in the United States (“U.S. GAAP”). See Notes 21 and 22 to the Consolidated Financial Statements. As a result of the Company’s territorial acquisitions during the past years, consolidated results of operations for 1995, 1996, 1997, 1998 and 1999 are not directly comparable. Coca-Cola FEMSA de Buenos Aires S.A. (“Coca-Cola FEMSA Buenos Aires”), the Company’s wholly owned Argentine subsidiary, maintains its financial records in Argentine pesos, which are translated into Mexican pesos for purposes of consolidation. In order to consolidate financial information for Coca-Cola FEMSA Buenos Aires with the Company’s other financial information for a particular period, the Company translates such subsidiary’s information using the product of the U.S. dollar/Argentine peso exchange rate and the Mexican peso/U.S. dollar exchange rate, in each case as in effect at the end of such period. Prior to 1998, the Company restated Coca-Cola FEMSA Buenos Aires financial information for prior periods by applying the Argentine Wholesale Price Index

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