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Coca Cola Annual Report

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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, 2008 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. 1-2217 20FEB200902055832 (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, 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.

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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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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): Yes 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 27, 2008, the last business day of the Registrant’s most recently completed second fiscal quarter, was $113,780,250,547 (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 23, 2009 was 2,314,658,162.

DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company’s Proxy Statement for the Annual Meeting of Shareowners to be held on April 22, 2009, are incorporated by reference in Part III. Large accelerated filer Table of Contents Page Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part I Item Item Item Item Item Item Item 1. 1A. 1B. 2. 3. 4. X. Business . . . . . . . . . . . . . . . . . . . . . . . . . . Risk Factors . . . . . . . . . . . . . . . . . . . . . . . Unresolved Staff Comments . . . . . . . . . . .

Properties . . . . . . . . . . . . . . . . . . . . . . . . . Legal Proceedings . . . . . . . . . . . . . . . . . . . Submission of Matters to a Vote of Security Executive Officers of the Company . . . . . . ……. ……. ……. ……. ……. Holders . ……. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 12 20 20 21 25 25 Part II Item 5. Item Item Item Item Item Item Item 6. 7. 7A. 8. 9. 9A. 9B. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 32 33 71 72 147 147 147 Part III Item Item Item Item Item 10. 11. 12. 13. 14. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 148 148 148 148 Part IV Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 157 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 forwardlooking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results—are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made.

However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company’s historical experience and our present expectations or projections.

These risks and uncertainties include, but are not limited to, those described in Part I, ‘‘Item 1A. Risk Factors’’ and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange Commission. PART I ITEM 1. BUSINESS General The Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries.

Along with Coca-Cola, which is recognized as the world’s most valuable brand, we market four of the world’s top five nonalcoholic sparkling brands, including Diet Coke, Fanta and Sprite. In this report, the terms ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ or ‘‘our’’ mean The Coca-Cola Company and all entities included in our consolidated financial statements. Our business is nonalcoholic beverages—principally sparkling beverages, but also a variety of still beverages. We manufacture everage concentrates and syrups, which we sell to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as finished beverages, which we sell primarily to distributors. Our Company owns or licenses nearly 500 brands, including diet and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and energy and sports drinks. In addition, we have ownership interests in numerous beverage joint ventures, bottling and canning operations, although most of these operations are independently owned and managed.

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. Our Company is one of numerous competitors in the commercial beverages market. Of the approximately 54 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to us account for approximately 1. 6 billion. We believe that our success depends on our ability to connect with consumers by providing them with a wide variety of choices to meet their desires, needs and lifestyle choices.

Our success further depends on the ability of our people to execute effectively, every day. Our goal is to use our Company’s assets—our brands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of our management and associates—to become more competitive and to accelerate growth in a manner that creates value for our shareowners. 1 Operating Segments The Company’s operating structure is the basis for our internal financial reporting.

As of December 31, 2008, 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, 2008, reflected changes we made effective July 1, 2008, when we reconfigured our former European Union operating segment to include the Adriatic and Balkans business unit and renamed it the Europe operating segment; and combined the remaining former Eurasia operating segment with the former Africa operating egment to form the Eurasia and Africa operating segment. We revised previously reported operating segment information to conform to our current operating structure. 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 5 and Note 21 of Notes to Consolidated Financial Statements set forth in Part II, ‘‘Item 8.

Financial Statements and Supplementary Data’’ of this report, incorporated herein by reference. For certain risks attendant to our non-U. S. operations, refer to ‘‘Item 1A. Risk Factors,’’ below. Products and Distribution Our Company manufactures and sells beverage concentrates, sometimes referred to as ‘‘beverage bases,’’ and syrups, including fountain syrups, and finished beverages.

As used in this report: • ‘‘concentrates’’ means flavoring ingredients and, depending on the product, sweeteners used to prepare syrups or finished beverages; • ‘‘syrups’’ means the 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, that 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 energy drinks and carbonated waters and flavored waters; • ‘‘still beverages’’ means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees and sports drinks; and • ‘‘Company Trademark Beverages’’ means beverages bearing our trademarks and certain other beverage products licensed to us for which we provide marketing support and from the sale of which we derive economic benefit. 2 We sell the concentrates and syrups for bottled and canned beverages to authorized bottling and canning operations. In addition to concentrates and syrups for sparkling beverages and flavored still beverages, we also sell concentrates (in powder form) for purified water products such as Dasani to authorized bottling operations. Authorized bottlers and canners either combine our syrups with sparkling water or combine our concentrates with sweeteners (depending on the product), still water and/or sparkling water to produce finished sparkling beverages.

The finished sparkling beverages are packaged in authorized containers bearing our trademarks or trademarks licensed to us—such as cans and refillable and nonrefillable glass and plastic bottles (‘‘bottle/can products’’)—and are then sold to retailers (‘‘bottle/can retailers’’) or, in some cases, wholesalers. For our fountain products in the United States, we manufacture fountain syrups and sell them to authorized fountain wholesalers and some fountain retailers. The wholesalers are authorized to sell the Company’s fountain syrups by a nonexclusive appointment from us that neither restricts us in setting the prices at which we sell fountain syrups to the wholesalers nor restricts the territory in which the wholesalers may resell in the United States.

Outside the United States, fountain syrups typically are manufactured by authorized bottlers from concentrates sold to them by the Company. The bottlers then typically sell the fountain syrups to wholesalers or directly to fountain retailers. Finished beverages manufactured by us include a variety of sparkling and still beverages. We sell these beverages to authorized bottlers or distributors, wholesalers or directly to retailers. We manufacture and sell juice and juice-drink products and certain water products to retailers and wholesalers in the United States and numerous other countries, both directly and through a network of business partners, including certain Coca-Cola bottlers.

Our beverage products include Coca-Cola, caffeine free Coca-Cola, Cherry Coke, Diet Coke (sold under the trademark Coca-Cola Light in many countries other than the United States), caffeine free Diet Coke, Diet Coke Sweetened with Splenda, Diet Coke with Lime, Diet Cherry Coke, Diet Coke Plus, Coca-Cola Zero (sold under the trademark Coke Zero in some countries), Fanta, Sprite, Diet Sprite/Sprite Zero (sold under the trademark Sprite Light in many countries other than the United States), Pibb Xtra, Mello Yello, Tab, Fresca and Barq’s brand sparkling beverages, Powerade, Aquarius, Sokenbicha, Ciel, Bonaqa/Bonaqua, Dasani, Dasani brand flavored waters, Georgia brand ready-to-drink coffees (sold in Japan), Lift, Thums Up, Kinley, Eight O’Clock, Qoo, Mother, Vault, NOS, Full Throttle and other products developed for specific countries. Our ? beverage products also include enhanced water brands such as glaceau vitaminwater and smartwater, sold primarily in North America, Fuze fortified beverages, enhanced water, tea-flavored beverages, and sports and fruit drinks sold in the United States, and Matte Leao herbal beverages sold in Brazil. In many countries (excluding the United States, among others), our Company’s beverage products also include Schweppes, Canada Dry, Dr Pepper and Crush.

Our Company produces, distributes and markets juice and juice-drink products, including Minute Maid juices and juice drinks, Simply Orange and other juices and juice drinks, Cappy juices, Odwalla nourishing health beverages, Five Alive refreshment beverages and Bacardi mixers concentrate (manufactured and marketed under license agreements from Bacardi & Company Limited). We have a license to manufacture and sell concentrates for Seagram’s mixers, a line of sparkling beverages, in the United States and certain other countries. In addition, in the United States we market Nestea and Enviga products under a ? ? sublicense agreement with a subsidiary of Nestle S. A. (‘‘Nestle’’). Multon, a Russian juice business (‘‘Multon’’) operated as a joint venture with Coca-Cola Hellenic Bottling Company S. A. (‘‘Coca-Cola Hellenic’’), manufactures, markets and sells juice products under various trademarks, including Dobriy, Rich and Nico, in ? Russia, Ukraine and Belarus.

Beverage Partners Worldwide (‘‘BPW’’), the Company’s joint venture with Nestle, markets ready-to-drink tea products under various trademarks, including Nestea, Enviga, Yang Guang, Nagomi, Frestea, Ten Ren, Yuan Ye, Heaven & Earth, Tian Yu Di, Nestea Vitao and Nestea Cool, in various markets worldwide, other than the United States and Japan. We manufacture, market and sell packaged juices, nectars and fruit-flavored beverages under the del Valle trademark through joint ventures with our bottling partners in ` Mexico and Brazil. Ilko Coffee International, S. r. l. (‘‘Ilko’’), a joint venture with illycaffe S. p. A. , and Ilko 3 Hellenic Partners GmbH, a joint venture between Ilko and Coca-Cola Hellenic, manufacture, market and sell ready-to-drink coffee under the illy issimo brand. 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. During 2008, we expanded our still beverage offerings by acquiring from Carlsberg Group Beverages (‘‘Carlsberg’’) the mineral water brands Kildevaeld and Kurvand in Denmark and entering into a license agreement regarding mineral water brand Ramlosa in Denmark. As a part of this same transaction, the Company also expanded its sparkling beverage offerings by acquiring from Carlsberg the soft drink brand Hyvaa Paivaa in Finland and entering into a license agreement regarding the energy drink Battery in Finland.

Also, in October 2008, we entered into agreements for the distribution of Monster Energy trademark beverages, including Monster Energy, Java Monster and Lost Energy, in portions of 21 states in the United States, Canada and six Western European countries. In addition, during 2008, our Company introduced a variety of new brands, brand extensions and new beverage products. Among numerous examples, in North America, we launched Powerade Zero in Mixed Berry, Strawberry and Grape flavors, Simply Orange with Mango, Simply Orange with Pineapple, Odwalla Mojito Mambo natural juice drink and Odwalla Pomegranate Strawberry, both sweetened with Truvia brand sweetener, a natural sweetener made with rebiana, which is derived from the stevia plant, and Sprite Green, a new reduced calorie Sprite line extension, sweetened with Truvia. In Latin America, we launched ?

Gladiator energy drink, Aquarius sparkling flavored water, del Valle juice and glaceau vitaminwater. In Europe, new launches included Coca-Cola Light Plus Lemon, Coca-Cola Light with Green Tea and The Spirit of Georgia—Blood Orange Prickly Pear. In Africa, we launched Schweppes Novida and Aquarius. In Japan, we launched Hajime Chaka, Aquarius Zero, Georgia Emerald Mountain Blend Black and Fanta Zero Lemon. Our Company measures the volume of 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 ases (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. Such products licensed to, or distributed by, our Company or owned by Coca-Cola system bottlers account for a minimal portion of total unit case volume. In addition, unit case volume includes sales by joint ventures in which the Company has an equity interest.

Although most of our Company’s revenues are not based directly on unit case volume, 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, syrups, beverage bases and powders (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. Most of our revenues are based on concentrate sales, a primarily wholesale activity. Unit case volume and concentrate sales 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 and can create differences between unit case volume and concentrate sales growth rates. In addition to the items mentioned above, the impact of unit case volume from certain joint ventures, in which the Company has an equity interest, but to which the Company does not sell concentrates, may give rise to differences between unit case volume and concentrate sales growth rates. 4 In 2008, concentrates and syrups for beverages bearing the trademark ‘‘Coca-Cola’’ or any trademark that includes ‘‘Coca-Cola’’ or ‘‘Coke’’ ‘‘Coca-Cola Trademark Beverages’’) accounted for approximately 52 percent of the Company’s total concentrate sales. In 2008, concentrate sales in the United States (‘‘U. S. concentrate sales’’) represented approximately 23 percent of the Company’s worldwide concentrate sales. Approximately 56 percent of U. S. concentrate sales for 2008 was attributable to sales of beverage concentrates and syrups to 74 authorized bottler ownership groups in 393 licensed territories. Those bottlers prepare and sell Company Trademark Beverages for the food store and vending machine distribution channels and for other distribution channels supplying products for home and immediate consumption. Approximately 32 percent of 2008 U. S. oncentrate sales was attributable to fountain syrups sold to fountain retailers and to 470 authorized fountain wholesalers, some of which are authorized bottlers. The remaining approximately 12 percent of 2008 U. S. concentrate sales was attributable to sales by the Company of finished beverages, including juice and juice-drink products and certain water products. Coca-Cola Enterprises Inc. , including its bottling subsidiaries and divisions (‘‘CCE’’), accounted for approximately 42 percent of the Company’s U. S. concentrate sales in 2008. At December 31, 2008, our Company held an ownership interest of approximately 35 percent in CCE, which is the world’s largest bottler of Company Trademark Beverages.

In 2008, concentrate sales outside the United States represented approximately 77 percent of the Company’s worldwide concentrate sales. The countries outside the United States in which our concentrate sales were the largest in 2008 were Mexico, Brazil, China and Japan, which together accounted for approximately 29 percent of our worldwide concentrate sales. Approximately 89 percent of non-U. S. unit case volume for 2008 was attributable to sales of beverage concentrates and syrups to authorized bottlers together with sales by the Company of finished beverages, other than juice and juice-drink products, in 442 licensed territories. Approximately 5 percent of 2008 non-U. S. unit case volume was attributable to fountain syrups.

The remaining approximately 6 percent of 2008 non-U. S. unit case volume was attributable to juice and juice-drink products. In addition to conducting our own independent advertising and marketing activities, we may provide promotional and marketing services or funds to our bottlers. In most cases, we do this on a discretionary basis under the terms of commitment letters or agreements, even though we are not obligated to do so under the terms of the bottling or distribution agreements between our Company and the bottlers. Also, on a discretionary basis in most cases, our Company may develop and introduce new products, packages and equipment to assist its bottlers.

Likewise, in many instances, we provide promotional and marketing services and/or funds and/or dispensing equipment and repair services to fountain and bottle/can retailers, typically pursuant to marketing agreements. The aggregate amount of funds provided by our Company to bottlers, resellers or other customers of our Company’s products, principally for participation in promotional and marketing programs, was approximately $4. 4 billion in 2008. Bottler’s Agreements and Distribution Agreements Most of our products are manufactured and sold by our bottling partners. We typically sell concentrates and syrups to our bottling partners, who convert them into finished packaged products which they sell to distributors and other customers.

Separate contracts (‘‘Bottler’s Agreements’’) exist between our Company and 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 beverages in such containers in the territory for sale outside 5 the territory, and (2) to prepare, package, distribute and sell such beverages in the territory in any other manner or form. Territorial restrictions on bottlers vary in some cases in accordance with local law. 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. The Bottler’s Agreements between us and our authorized bottlers in the United States differ in certain respects from those in the other countries in which Company Trademark Beverages are sold. As further discussed below, the principal differences involve the duration of the agreements; the inclusion or exclusion of canned beverage production rights; the inclusion or exclusion of authorizations to manufacture and distribute fountain syrups; in some cases, the degree of flexibility on the part of the Company to determine the pricing of syrups and concentrates; and the extent, if any, of the Company’s obligation to provide marketing support.

Outside the United States The Bottler’s Agreements between us and our authorized bottlers outside the United States generally are of stated duration, subject in some cases to possible extensions or renewals of the term of the contract. Generally, these contracts are subject to termination by the Company following the occurrence of certain designated events. These events include defined events of default and certain changes in ownership or control of the bottler. In certain parts of the world outside the United States, we have not granted comprehensive beverage production rights to the bottlers. In such instances, we or our authorized suppliers sell Company Trademark Beverages to the bottlers for sale and distribution throughout the designated territory, often on a nonexclusive basis.

A majority of the Bottler’s Agreements in force between us and bottlers outside the United States authorize the bottlers to manufacture and distribute fountain syrups, usually on a nonexclusive basis. Our Company generally has complete flexibility to determine the price and other terms of sale of the concentrates and syrups we sell to bottlers outside the United States. In some instances, however, we have agreed or may in the future agree with a bottler with respect to concentrate pricing on a prospective basis for specified time periods. Outside the United States, in most cases, we have no obligation to provide marketing support to the bottlers. Nevertheless, we may, at our discretion, contribute toward bottler expenditures for advertising and marketing.

We may also elect to undertake independent or cooperative advertising and marketing activities. Within the United States In the United States, with certain very limited exceptions, the Bottler’s Agreements for Coca-Cola Trademark Beverages and other cola-flavored beverages have no stated expiration date. Our standard contracts for other sparkling beverage flavors and for still beverages are of stated duration, subject to bottler renewal rights. The Bottler’s Agreements in the United States are subject to termination by the Company for nonperformance or upon the occurrence of certain defined events of default that may vary from contract to contract.

The ‘‘1987 Contract,’’ described below, is terminable by the Company upon the occurrence of certain events, including: • the bottler’s insolvency, dissolution, receivership or the like; • any disposition by the bottler or any of its subsidiaries of any voting securities of any bottler subsidiary without the consent of the Company; • any material breach of any obligation of the bottler under the 1987 Contract; or • except in the case of certain bottlers, if a person or affiliated group acquires or obtains any right to acquire beneficial ownership of more than 10 percent of any class or series of voting securities of the bottler without authorization by the Company. 6

Under the terms of the Bottler’s Agreements, bottlers in the United States are authorized to manufacture and distribute Company Trademark Beverages in bottles and cans. However, these bottlers generally are not authorized to manufacture fountain syrups. Rather, as described above, our Company manufactures and sells fountain syrups to authorized fountain wholesalers (including certain authorized bottlers) and some fountain retailers. These wholesalers in turn sell the syrups or deliver them on our behalf to restaurants and other retailers. In the United States, the form of Bottler’s Agreement for cola-flavored sparkling beverages that covers the largest amount of U. S. oncentrate sales (the ‘‘1987 Contract’’) gives us complete flexibility to determine the price and other terms of sale of concentrates and syrups for Company Trademark Beverages. In some instances, we have agreed or may in the future agree with a bottler with respect to concentrate pricing on a prospective basis for specified time periods. Bottlers operating under the 1987 Contract accounted for approximately 94. 4 percent of our Company’s total U. S. concentrate sales for bottled and canned beverages in 2008, excluding direct sales by the Company of juice and juice-drink products and other finished beverages (‘‘U. S. bottle/can concentrate sales’’). Certain other forms of U. S.

Bottler’s Agreements, entered into prior to 1987, provide for concentrates or syrups for certain Coca-Cola Trademark Beverages and other cola-flavored Company Trademark Beverages to be priced pursuant to a stated formula. Bottlers accounting for approximately 5. 3 percent of U. S. bottle/can concentrate sales in 2008 have contracts for certain Coca-Cola Trademark Beverages and other cola-flavored Company Trademark Beverages with pricing formulas that generally provide for a baseline price. This baseline price may be adjusted periodically by the Company, up to a maximum indexed ceiling price, and is adjusted quarterly based upon changes in certain sugar or sweetener prices, as applicable. Bottlers accounting for the remaining approximately 0. 3 percent of U. S. ottle/can concentrate sales in 2008 operate under our oldest form of contract, which provides for a fixed price for Coca-Cola syrup used in bottles and cans. This price is subject to quarterly adjustments to reflect changes in the quoted price of sugar. We have standard contracts with bottlers in the United States for the sale of concentrates and syrups for non-cola-flavored sparkling beverages and certain still beverages in bottles and cans, and, in certain cases, for the sale of finished still beverages in bottles and cans. All of these standard contracts give the Company complete flexibility to determine the price and other terms of sale.

Under the 1987 Contract and most of our other standard beverage contracts with bottlers in the United States, our Company has no obligation to participate with bottlers in expenditures for advertising and marketing. Nevertheless, at our discretion, we may contribute toward such expenditures and undertake independent or cooperative advertising and marketing activities. Some U. S. Bottler’s Agreements that predate the 1987 Contract impose certain marketing obligations on us with respect to certain Company Trademark Beverages. As a practical matter, our Company’s ability to exercise its contractual flexibility to determine the price and other terms of sale of its syrups, concentrates and finished beverages under various agreements described above is subject, both outside and within the United States, to competitive market conditions.

Significant Equity Method Investments and Company Bottling Operations Our Company maintains business relationships with three types of bottlers: • bottlers in which the Company has no ownership interest; • bottlers in which the Company has invested and has a noncontrolling ownership interest; and • bottlers in which the Company has invested and has a controlling ownership interest. In 2008, bottling operations in which we had no ownership interest produced and distributed approximately 24 percent of our worldwide unit case volume. We have equity positions in 43 unconsolidated bottling, canning and distribution operations for our products worldwide.

These cost or equity method investees produced and distributed approximately 54 percent of our worldwide unit case volume in 2008. Controlled and consolidated 7 bottling operations produced and distributed approximately 11 percent of our worldwide unit case volume in 2008. The remaining approximately 11 percent of our worldwide unit case volume in 2008 was produced by our fountain operations and our juice and juice drink, sports drink and other finished beverage operations. We make equity investments in selected bottling operations with the intention of maximizing the strength and efficiency of the Coca-Cola system’s production, distribution and marketing capabilities around the world.

These investments are intended to result in increases in unit case volume, net revenues and profits at the bottler level, which in turn generate increased concentrate sales for our Company’s concentrate and syrup business. When this occurs, both we and our bottling partners benefit from long-term growth in volume, improved cash flows and increased shareowner value. The level of our investment generally depends on the bottler’s capital structure and its available resources at the time of the investment. Historically, in certain situations, we have viewed it as advantageous to acquire a controlling interest in a bottling operation, often on a temporary basis.

Owning such a controlling interest has allowed us to compensate for limited local resources and has enabled us to help focus the bottler’s sales and marketing programs and assist in the development of the bottler’s business and information systems and the establishment of appropriate capital structures. In line with our long-term bottling strategy, we may periodically consider options for reducing our ownership interest in a bottler. One such option is to combine our bottling interests with the bottling interests of others to form strategic business alliances. Another option is to sell our interest in a bottling operation to one of our equity method investee bottlers. In both of these situations, our Company continues to participate in the bottler’s results of operations through our share of the strategic business alliances’ or equity method investees’ earnings or losses.

In cases where our investments in bottlers represent noncontrolling interests, our intention is to provide expertise and resources to strengthen those businesses. Significant investees in which we have noncontrolling ownership interests include the following: Coca-Cola Enterprises Inc. (‘‘CCE’’). Our ownership interest in CCE was approximately 35 percent at December 31, 2008. CCE is the world’s largest bottler of the Company’s beverage products. In 2008, sales of concentrates, syrups, mineral waters, juices, sweeteners and finished products by the Company to CCE were approximately $6. 8 billion. CCE estimates that the territories in which it markets beverage products to retailers (which include portions of 46 states and the District of Columbia in the United States, the U. S.

Virgin Islands and certain other Caribbean islands, Canada, Great Britain, continental France, the Netherlands, Luxembourg, Belgium and Monaco) contain approximately 78 percent of the United States population, 98 percent of the population of Canada, and 100 percent of the populations of Great Britain, continental France, the Netherlands, Luxembourg, Belgium and Monaco. In 2008, CCE’s net operating revenues were approximately $21. 8 billion. Excluding fountain products, in 2008, approximately 59 percent of the unit case volume of CCE consisted of Coca-Cola Trademark Beverages; approximately 34 percent of its unit case volume consisted of other Company Trademark Beverages; and approximately 7 percent of its unit case volume consisted of beverage products of other companies. Coca-Cola Hellenic Bottling Company S. A. (‘‘Coca-Cola Hellenic’’). At December 31, 2008, our ownership interest in Coca-Cola Hellenic was approximately 23 percent.

Coca-Cola Hellenic has bottling and distribution rights, through direct ownership or joint ventures, in Armenia, Austria, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Former Yugoslavian Republic of Macedonia, Greece, Hungary, Italy, Kosovo, Latvia, Lithuania, Moldova, Nigeria, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia, Montenegro, Slovakia, Slovenia, Switzerland and Ukraine. Coca-Cola Hellenic estimates that the territories in which it markets beverage products contain approximately 90 percent of the population of Italy and 100 percent of the populations of the other countries named above in which Coca-Cola Hellenic has bottling and distribution rights. In 2008, Coca-Cola Hellenic’s net sales of beverage products were approximately $9 billion. 8

In 2008, approximately 41 percent of the unit case volume of Coca-Cola Hellenic consisted of Coca-Cola Trademark Beverages; approximately 54 percent of its unit case volume consisted of other Company Trademark Beverages; and approximately 5 percent of its unit case volume consisted of beverage products of Coca-Cola Hellenic or other companies. Coca-Cola FEMSA, S. A. B. de C. V. (‘‘Coca-Cola FEMSA’’). Our ownership interest in Coca-Cola FEMSA was approximately 32 percent at December 31, 2008. Coca-Cola FEMSA is a Mexican holding company with bottling subsidiaries in a substantial part of central Mexico, including Mexico City and southeastern Mexico; ? reater Sao Paulo, Campinas, Santos, the state of Matto Grosso do Sul, the state of Minas Gerais and part of the state of Goias in Brazil; central Guatemala; most of Colombia; all of Costa Rica, Nicaragua, Panama and Venezuela; and greater Buenos Aires, Argentina. Coca-Cola FEMSA estimates that the territories in which it markets beverage products contain approximately 48 percent of the population of Mexico, 26 percent of the population of Brazil, 98 percent of the population of Colombia, 47 percent of the population of Guatemala, 100 percent of the populations of Costa Rica, Nicaragua, Panama and Venezuela, and 31 percent of the population of Argentina. In 2008, Coca-Cola FEMSA’s net sales of beverage products were approximately $8 billion.

In 2008, approximately 64 percent of the unit case volume of Coca-Cola FEMSA consisted of Coca-Cola Trademark Beverages; approximately 35 percent of its unit case volume consisted of other Company Trademark Beverages; and approximately 1 percent of its unit case volume consisted of beverage products of Coca-Cola FEMSA or other companies. Coca-Cola Amatil Limited (‘‘Coca-Cola Amatil’’). At December 31, 2008, our Company’s ownership interest in Coca-Cola Amatil was approximately 30 percent. Coca-Cola Amatil has bottling and distribution rights, through direct ownership or joint ventures, in Australia, New Zealand, Fiji, Papua New Guinea and Indonesia. Coca-Cola Amatil estimates that the territories in which it markets beverage products contain 100 percent of the populations of Australia, New Zealand, Fiji and Papua New Guinea, and 98 percent of the population of Indonesia. In 2008, Coca-Cola Amatil’s net sales of beverage products were approximately $2. 9 billion.

In 2008, approximately 48 percent of the unit case volume of Coca-Cola Amatil consisted of Coca-Cola Trademark Beverages; approximately 40 percent of its unit case volume consisted of other Company Trademark Beverages; and approximately 12 percent of its unit case volume consisted of beverage products of Coca-Cola Amatil. Seasonality Sales of our ready-to-drink nonalcoholic beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes. The volume of sales in the beverages business may be affected by weather conditions. Competition Our Company competes in the nonalcoholic beverages segment of the commercial beverages industry. The nonalcoholic beverages segment of the commercial beverages industry is highly competitive, consisting of numerous firms. These include firms that, like our Company, compete in multiple geographic areas, as well as firms that are primarily regional or local in operation.

Competitive products include numerous nonalcoholic sparkling beverages; various water products, including packaged, flavored and enhanced waters; juices and nectars; fruit drinks and dilutables (including syrups and powdered drinks); coffees and teas; energy and sports and other performance-enhancing drinks; dairy-based drinks; functional beverages; and various other nonalcoholic beverages. These competitive beverages are sold to consumers in both ready-to-drink and other than ready-to-drink form. In many of the countries in which we do business, including the United States, PepsiCo, Inc. is one of our primary competitors. Other significant competitors include, but are not limited to, ? Nestle, Dr Pepper Snapple Group, Inc. , Groupe Danone, Kraft Foods Inc. and Unilever. We also compete against numerous regional and local firms in various geographic areas in which we operate. 9

Competitive factors impacting our business include, but are not limited to, pricing, advertising, sales promotion programs, product innovation, increased efficiency in production techniques, the introduction of new packaging, new vending and dispensing equipment, and brand and trademark development and protection. Our competitive strengths include leading brands with a high level of consumer acceptance; a worldwide network of bottlers and distributors of Company products; sophisticated marketing capabilities; and a talented group of dedicated associates. Our competitive challenges include strong competition in all geographic regions and, in many countries, a concentrated retail sector with powerful buyers able to freely choose among Company products, products of competitive beverage suppliers and individual retailers’ own store-brand beverages.

Raw Materials The principal raw materials used by our business are nutritive and non-nutritive sweeteners. In the United States, the principal nutritive sweetener is high fructose corn syrup, a form of sugar, which is available from numerous domestic sources and is historically subject to fluctuations in its market price. The principal nutritive sweetener used by our business outside the United States is sucrose, another form of sugar, which is also available from numerous sources and is historically subject to fluctuations in its market price. Our Company generally has not experienced any difficulties in obtaining its requirements for nutritive sweeteners.

In the United States, we purchase high fructose corn syrup to meet our and our bottlers’ requirements with the assistance of Coca-Cola Bottlers’ Sales & Services Company LLC (‘‘CCBSS’’). CCBSS is a limited liability company that is owned by authorized Coca-Cola bottlers doing business in the United States. Among other things, CCBSS provides procurement services to our Company for the purchase of various goods and services in the United States, including high fructose corn syrup. The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium, saccharin, cyclamate and sucralose. Generally, these raw materials are readily available from numerous sources.

However, our Company purchases aspartame, an important non-nutritive sweetener that is used alone or in combination with other important non-nutritive sweeteners such as saccharin or acesulfame potassium in our low-calorie sparkling beverage products, primarily from The NutraSweet Company and Ajinomoto Co. , Inc. , which we consider to be our primary sources for the supply of this product. We currently purchase acesulfame potassium from Nutrinova Nutrition Specialties & Food Ingredients GmbH, which we consider to be our primary source for the supply of this product. Our Company generally has not experienced any difficulties in obtaining its requirements for non-nutritive sweeteners. Our Company sells a number of products sweetened with sucralose, a non-nutritive sweetener. We work closely with Tate & Lyle, our sucralose supplier, to maintain continuity of supply.

Although Tate & Lyle is our single source for sucralose, we do not anticipate difficulties in obtaining our requirements for sucralose. With regard to juice and juice-drink products, citrus fruit, particularly orange juice concentrate, is our principal raw material. The citrus industry is subject to the variability of weather conditions. In particular, freezing weather or hurricanes in central Florida may result in shortages and higher prices for orange juice concentrate throughout the industry. Due to our ability to also source orange juice concentrate from the Southern Hemisphere (particularly from Brazil), we normally have an adequate supply of orange juice concentrate that meets our Company’s standards.

Patents, Copyrights, Trade Secrets and Trademarks Our Company owns numerous patents, copyrights and trade secrets, as well as substantial know-how and technology, which we collectively refer to in this report as ‘‘technology. ’’ This technology generally relates to our Company’s products and the processes for their production; the packages used for our products; the design and operation of various processes and equipment used in our business; and certain quality assurance software. Some of the technology is licensed to suppliers and other parties. Our sparkling beverage and other beverage formulae are among the important trade secrets of our Company. 10 We own numerous trademarks that are very important to our business. Depending upon the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained.

Pursuant to our Bottler’s Agreements, we authorize our bottlers to use applicable Company trademarks in connection with their manufacture, sale and distribution of Company products. In addition, we grant licenses to third parties from time to time to use certain of our trademarks in conjunction with certain merchandise and food products. Governmental Regulation Our Company is required to comply, and it is our policy to comply, with applicable laws in the numerous countries throughout the world in which we do business. In many jurisdictions, compliance with competition laws is of special importance to us, and our operations may come under special scrutiny by competition law authorities due to our competitive position in those jurisdictions.

The production, distribution and sale in the United States of many of our Company’s products are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; federal, state and local workplace health and safety laws; various federal, state and local environmental protection laws; and various other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, labeling and ingredients of such products. Outside the United States, the production, distribution and sale of our many products and related operations are also subject to numerous similar and other statutes and regulations.

A California law requires that a specific warning appear on any product that contains a component listed by the state as having been found to cause cancer or birth defects. This law exposes all food and beverage producers to the possibility of having to provide warnings on their products because it recognizes no generally applicable quantitative thresholds below which a warning is not required. Consequently, even trace amounts of listed components can subject an affected product to the requirement of a warning label. Products containing listed substances that occur naturally or that are contributed to such products solely by a municipal water supply are generally exempt from the warning requirement.

No Company beverages produced for sale in California are currently required to display warnings under this law. We are unable to predict whether a component found in a Company product might in the future be added to the California lists pursuant to this law and the related regulations as they currently exist, or as they may be amended. The state has, however, initiated a regulatory process in which caffeine will be evaluated for listing. Furthermore, we are also unable to predict when or whether the increasing sensitivity of detection methodology might result in the detection of an infinitesimal quantity of a listed substance in a Company beverage produced for sale in California.

Bottlers of our beverage products presently offer and use nonrefillable, recyclable containers in the United States and various other markets around the world. Some of these bottlers also offer and use refillable containers, which are also recyclable. Legal requirements apply in various jurisdictions in the United States and overseas requiring that deposits or certain ecotaxes or fees be charged for the sale, marketing and use of certain nonrefillable beverage containers. The precise requirements imposed by these measures vary. Other types of statutes and regulations relating to beverage container deposits, recycling, ecotaxes and/or product stewardship also apply in various jurisdictions in the United States and overseas.

We anticipate that additional, similar legal requirements may be proposed or enacted in the future at local, state and federal levels, both in the United States and elsewhere. All of our Company’s facilities and other operations in the United States and elsewhere around the world are subject to various environmental protection statutes and regulations, including those relating to the use of water resources and the discharge of wastewater. Our policy is to comply with all such legal requirements. Compliance with these provisions has not had, and we do not expect such compliance to have, any material adverse effect on our Company’s capital expenditures, net income or competitive position. 11 Employees We refer to our employees as ‘‘associates. ’ As of December 31, 2008 and 2007, our Company had approximately 92,400 and 90,500 associates, respectively, of which approximately 16,500 and 16,000, respectively, were employed by entities that we have consolidated under the Financial Accounting Standards Board (‘‘FASB’’) Interpretation No. 46 (revised December 2003), ‘‘Consolidation of Variable Interest Entities’’ (‘‘Interpretation No. 46(R)’’). The increase in the total number of associates in 2008 was primarily due to an increase in bottling operations activity, partially offset by a decrease resulting from the sale of certain bottling operations. At the end of 2008 and 2007, our Company had pproximately 13,000 and 13,200 associates, respectively, located in the United States, of which approximately 85 and 1,300, respectively, were employed by entities that we have consolidated under Interpretation No. 46(R). Our Company, through its divisions and subsidiaries, has entered into numerous collective bargaining agreements. We currently expect that we will be able to renegotiate such agreements on satisfactory terms when they expire. The Company believes that its relations with its associates are generally satisfactory. Securities Exchange Act Reports The Company maintains a website at the following address: www. thecoca-colacompany. com. The information on the Company’s website is not incorporated by reference in this annual report on Form 10-K.

We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the Securities and Exchange Commission (the ‘‘SEC’’) in accordance with the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. ITEM 1A. RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations. The risks described below are not the only risks facing our Company.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations. Obesity and other health concerns may reduce demand for some of our products. Consumers, public health officials and government officials are becoming increasingly concerned about the public health consequences associated with obesity, particularly among young people. In addition, some researchers, health advocates and dietary guidelines are encouraging consumers to reduce consumption of certain types of beverages, especially sugar-sweetened beverages.

Increasing public concern about these issues; possible new taxes and governmental regulations concerning the marketing, labeling or availability of our beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for our beverages, which could affect our profitability. Water scarcity and poor quality could negatively impact the Coca-Cola system’s production costs and capacity. Water is the main ingredient in substantially all of our products. It is also a limited resource in many parts of the world, facing unprecedented challenges from overexploitation, increasing pollution, poor management and climate change.

As demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, our system may incur increasing production costs or face capacity constraints which could adversely affect our profitability or net operating revenues in the long run. 12 Changes in the nonalcoholic beverages business environment could impact our financial results. The nonalcoholic beverages business environment is rapidly evolving as a result of, among other things, changes in consumer preferences, including changes based on health and nutrition considerations and obesity concerns; shifting consumer tastes and needs; changes in consumer lifestyles; and competitive product and pricing pressures. In addition, the industry is being affected by the trend toward consolidation in the retail channel, particularly in Europe and the United States.

If we are unable to successfully adapt to this rapidly changing environment, our net income, share of sales and volume growth could be negatively affected. The global credit crisis may adversely affect our liquidity and financial performance. The global credit markets have experienced unprecedented disruptions in recent months. If the current credit crisis were to worsen, we may be unable to access credit markets on favorable terms, which could increase our cost of borrowing. In addition, the current credit crisis may make it more difficult for our bottling partners to access financing on terms comparable to those obtained historically, which would affect the Coca-Cola system’s profitability as well as our share of the income of bottling partners in which we have equity method investments.

The current global credit market conditions and their actual or perceived effects on our and our major bottling partners’ results of operations and financial condition, along with the deteriorating economic environment brought about by the financial crisis, may increase the likelihood that the major independent credit agencies will downgrade our credit ratings, which could have a negative effect on our borrowing costs. The significant decline in the equity markets and in the valuation of other assets precipitated by the credit crisis and financial system instability has affected the value of our pension plan assets. The lower pension plan asset base will negatively affect our return on plan assets and thus increase our pension expense.

In addition, if the current adverse market conditions continue for a prolonged period of time or deteriorate further, it could have an additional negative impact on our future pension benefit expense. As a result of the decline in the fair value of our pension plans assets and a decrease in the discount rate used to calculate pension benefit obligations, we have made and will consider making additional contributions to our U. S. and international pension plans in 2009. In addition, the instability of major financial institutions caused by the credit crisis could increase the counterparty risk associated with our existing derivative financial instruments and may increase the cost of, or may impair our ability to secure credit-worthy counterparties for, future derivative transactions.

The decrease in availability of consumer credit resulting from the financial crisis, as well as general unfavorable economic conditions, may also cause consumers to reduce their discretionary spending, which would reduce the demand for our beverages and negatively affect our net revenues and the Coca-Cola system’s profitability. Increased competition could hurt our business. The nonalcoholic beverages segment of the commercial beverages industry is highly competitive. We compete with major international beverage companies that, like our Company, operate in multiple geographic areas, as well as numerous firms that are primarily local in operation.

In many countries in which we do business, including the United States, PepsiCo, Inc. is a primary competitor. Other significant competitors include, but are ? not limited to, Nestle, Dr Pepper Snapple Group, Inc. , Groupe Danone, Kraft Foods Inc. and Unilever. In addition, in certain markets, our competition includes major beer companies. Our ability to gain or maintain share of sales or gross margins in the global market or in various local markets may be limited as a result of actions by competitors. If we are unable to expand our operations in developing and emerging markets, our growth rate could be negatively affected. Our success depends in part on our ability to grow our usiness in developing and emerging markets, which in turn depends on economic and political conditions in those markets and on our ability to acquire or form strategic business alliances with local bottlers and to make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology. Moreover, the supply of our products in 13 developing and emerging markets must match consumers’ demand for those products. Due to product price, limited purchasing power and cultural differences, there can be no assurance that our products will be accepted in any particular developing or emerging market. Fluctuations in foreign currency exchange could affect our financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U. S. dollar, including the euro, the Japanese yen, the Brazilian real and the Mexican peso. In 2008, we used 69 functional currencies in addition to the U. S. dollar and derived approximately 75 percent of our net operating revenues from operations outside of the United States. Because our consolidated financial statements are presented in U. S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U. S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U. S. ollar against other major currencies will affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. Because of the geographic diversity of our operations, weaknesses in some currencies might be offset by strengths in others over time. We also use derivative financial instruments to further reduce our net exposure to currency exchange rate fluctuations. However, we cannot assure you that fluct

Cite this Coca Cola Annual Report

Coca Cola Annual Report. (2018, Feb 17). Retrieved from https://graduateway.com/coca-cola-annual-report/

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