by OCC Plaza — Among numerous examples, we introduced Nanairo-Acha in Japan; Bonaqua BonActive in Hong Kong; and new Fanta flavors including
164 KB – 142 Pages
PAGE – 1 ============
20FEB200406462039UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2005 ORTRANSITION 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(Exact name of Registrant as specified in its charter) DELAWARE58-0628465 (State or other jurisdiction of(IRS Employer incorporation or organization)Identification No.) One Coca-Cola PlazaAtlanta, Georgia30313 (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 className of each exchange on which registered COMMON STOCK, $0.25 PAR VALUENEW YORK STOCK EXCHANGE Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark 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 or a non-accelerated filer. See definition of ‚‚accelerated filer™™ or ‚‚large accelerated filer™™ in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer 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 July 1, 2005, the last business day of the Registrant™s most recently completed second fiscal quarter, was $87,349,477,246 (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 21, 2006 was 2,367,883,247. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company™s Proxy Statement for the Annual Meeting of Shareowners to be held on April 19, 2006, are incorporated by reference in Part III.
PAGE – 2 ============
Table of Contents Page Forward-Looking Statements ..1 Part I Item 1.Business ..1 Item 1A.Risk Factors ..12 Item 1B.Unresolved Staff Comments ..18 Item 2.Properties .18 Item 3.Legal Proceedings .19 Item 4.Submission of Matters to a Vote of Security Holders 23 Item X.Executive Officers of the Company 24 Part II Item 5.Market for the Registrant™s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities27 Item 6.Selected Financial Data 29 Item 7.Management™s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A.Quantitative and Qualitative Disclosures About Market Risk 62 Item 8.Financial Statements and Supplementary Data .63 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 124 Item 9A.Controls and Procedures ..124 Item 9B.Other Information 124 Part III Item 10.Directors and Executive Officers of the Registrant .125 Item 11.Executive Compensation ..125 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters125 Item 13.Certain Relationships and Related Transactions 125 Item 14.Principal Accountant Fees and Services 125 Part IV Item 15.Exhibits and Financial Statement Schedules 126 Signatures132
PAGE – 3 ============
FORWARD-LOOKING STATEMENTS This report contains information that may constitute ‚‚forward-looking statements.™™ Generally, the words ‚‚believe,™™ ‚‚expect,™™ ‚‚intend,™™ ‚‚estimate,™™ ‚‚anticipate,™™ ‚‚project,™™ ‚‚will™™ and similar expressions identify forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the futureŠincluding statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general optimism about future operating resultsŠare forward-looking statements. As and when made, management believes that these forward- looking statements are reasonable. 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. 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 GeneralThe Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverageconcentrates 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 and include the leading soft drink products in most of these countries. In this report, the terms ‚‚Company,™™ ‚‚we,™™ ‚‚us™™ or ‚‚our™™ mean The Coca-Cola Company and all subsidiaries included in our consolidated financial statements.Our business is nonalcoholic beveragesŠprincipally carbonated soft drinks, but also a variety ofnoncarbonated beverages. We manufacture beverage concentrates and syrups, which we sell to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as some finished beverages, which we sell primarily to distributors. We also produce, market and distribute certain juice and juice drinks and certain water products. In addition, we have ownership interests in numerous 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 50 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to us account for more than 1.3 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 assetsŠour brands, financial strength, unrivaled distribution system, andthe strong commitment of management and employeesŠto become more competitive and to accelerate growth in a manner that creates value for our shareowners.1
PAGE – 4 ============
Operating SegmentsThe Company™s operating structure is the basis for our Company™s internal financial reporting.As of December31, 2005, our operating structure included the following operating segments, the first six of which are sometimes referred to as ‚‚operating groups™™ or ‚‚groups.™™North America Africa East, South Asia and Pacific Rim European Union Latin America North Asia, Eurasia and Middle East Corporate Our operating structure as of December31, 2005, reflected the changes we made during the second quarter of 2005, when we replaced our then existing Europe, Eurasia and Middle East operating segment and Asia operating segment with three new operating segments: European Union; East, South Asia and Pacific Rim; and North Asia, Eurasia and Middle East. The North America operating segment included the United States, Canada and Puerto Rico. The European Union operating segment included our operations in all current member states of the European Union as well as the European Free Trade Association countries, Switzerland, Israel and the Palestinian Territories, and Greenland. The North Asia, Eurasia and Middle East operating segment included our operations in China, Japan, Eurasia, the Middle East (other than Israel and the Palestinian Territories), Russia, Ukraine and Belarus, and those in other European countries not included in the European Union operating segment. The East, South Asia and Pacific Rim operating segment included our operations in India, the Philippines, Southeast and West Asia, and South Pacific and Korea. In the first quarter of 2006, the Company made certain changes to its operating structure primarily toestablish a new, separate internal organization for its consolidated bottling operations and its unconsolidated bottling investments. This new structure will result in the reporting of a separate operating segment, along with the six existing geographic operating segments and Corporate, beginning with the first quarter of 2006.Except to the extent that differences between operating segments are material to an understanding of ourbusiness 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 20 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. We also manufacture and sell some finished beverages, both carbonated and noncarbonated, including certain juice and juice-drink products; sports drinks; ready-to-drink coffees and teas; and water products.As used in this report: ‚‚concentrates™™ means flavoring ingredients and, depending on the product, sweeteners used to prepare beverage syrups or finished beverages;2
PAGE – 5 ============
‚‚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 carbonated or noncarbonated water at the time of purchase to produce finished beverages that are served in cups or glasses for immediate consumption;‚‚soft drinks™™ means nonalcoholic carbonated beverages containing flavorings and sweeteners, excluding, among others, waters and flavored waters, juice and juice drinks, sports drinks, teas and coffees; ‚‚noncarbonated beverages™™ means nonalcoholic beverages without carbonation including, but not limited to, waters and flavored waters, juice and juice drinks, sports drinks, teas and coffees; ‚‚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 net revenues; andadditional terms used in this report are defined in the Glossary beginning on page 122. We sell the concentrates and syrups for bottled and canned beverages to authorized bottling and canning operations. In addition to concentrates and syrups for soft-drink products and flavored noncarbonated beverages, we also sell concentrates for purified water products such as Dasani to authorized bottling operations.Authorized bottlers or canners either combine our syrups with carbonated water or combine our concentrates with sweeteners (depending on the product), water and carbonated water to produce finished soft drinks. The finished soft drinks are packaged in authorized containers bearing our trademarksŠsuch as cans and refillable and nonrefillable glass and plastic bottles (‚‚bottle/can products™™)Šand 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 carbonated and noncarbonated beverages. We sell most of these finished beverages and certain water products to authorized bottlers or distributors, who in turn sell these products to retailers or, in some cases, wholesalers. 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, Coca-Cola Classic, caffeine free Coca-Cola, caffeine freeCoca-Cola Classic, 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, Coca-Cola with Lime, Diet Coke with Lime, Cherry Coke, Diet Cherry Coke, Coca-Cola C2, Coca-Cola Zero, Fanta brand soft drinks, Sprite, Diet Sprite Zero/Sprite Zero (sold under the trademark Sprite Light in many countries other than the United States), Sprite Remix, Pibb Xtra, Mello Yello, Tab, Fresca brand soft drinks, Barq™s, Powerade, Minute Maid brand soft drinks, Aquarius, Sokenbicha, Ciel, Bonaqa/Bonaqua, Dasani, Dasani brand flavored waters,Lift, Thums Up, Kinley, Pop Cola, Eight O™Clock, Qoo, Full Throttle, DOBRIY, Rich, Nico andother products developed for specific countries (including Georgia brand ready-to-drink coffees). 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 3
PAGE – 6 ============
Minute Maid juice and juice drinks, Simply Orange orange juice, Odwalla nutritional juices, Five Alive refreshment beverages, Bacardi tropical fruit mixers concentrate (manufactured and marketed under a license from Bacardi & Company Limited) and Hi-C ready-to-serve fruit drinks. We have a license to manufacture and sell concentrates for Seagram™s mixers, a line of carbonated drinks, in the United States and certain other countries. Our Company is the exclusive master distributor of Evian bottled water in the United States and Canada and of Rockstar, an energy drink, in most of the United States and in Canada. Beverage Partners Worldwide (‚‚BPW™™), the Company™s 50 percent-owned joint venture with Nestl ´e S.A. (‚‚Nestl´e™™), marketsready-to-drink teas and coffees in certain countries.Consumer demand determines the optimal menu of Company product offerings. Consumer demand canvary 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.Our Company introduced a variety of new brands, brand extensions and new beverage products in 2005. Among numerous examples, we introduced Nanairo-Acha in Japan; Bonaqua BonActive in Hong Kong;and new Fanta flavors including strawberry, pineapple and apple in Angola,Ghana and Nigeria, respectively. In North America, we launched Coca-Cola Zero, a new calorie-free cola, Diet Coke Sweetened with Splenda brand sweetener, Sugar Free Full Throttle; and Powerade Option, a new low-calorie, low-carbohydrate sports drinks. We also rebranded our Fresca line and added two new calorie-free extensionsŠSparkling Peach Citrus Fresca and Sparkling Black Cherry Citrus Fresca. In Thailand and Vietnam we launched Minute Maid juice and juice drinks under the Splash brand name. We extended the rebranding of Diet Sprite to Diet Sprite Zero/Sprite Zero, which began in Greece in 2002, to now include a total of 77 countries, including the United States. In 2006, we launched Black Cherry Vanilla Coca-Cola, Diet Black Cherry Vanilla Coca-Cola, Full Throttle Fury, Tab Energy and Coca-Cola Blak, a new Coca-Cola and coffee fusion beverage designed to appeal to adult consumers, in France, and we plan to introduce this beverage in the United States later in 2006. Our Company measures the volume of products sold in two ways: (1) unit cases of finished products and(2) gallons. As used in this report, ‚‚unit case™™ means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and ‚‚unit case volume™™ means the number of unit cases (or unit case equivalents) of Companybeverage products directly or indirectly sold by the Coca-Cola bottling 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 it derives income. 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 is a partner. 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 based on estimates received by the Company from its bottling partners and distributors. As used in this report, ‚‚gallon™™ means a unit of measurement for concentrates (sometimes referred to as ‚‚beverage bases™™), syrups, finished beverages and powders (in all cases, expressed in equivalent gallons of syrup) sold by our Company to its bottling partners or other customers. Most of our revenues are based on gallon sales, a primarily ‚‚wholesale™™ activity. Unit case volume and gallon sales growth rates are not necessarily equal during any given period. Items 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 gallon sales and can create differences between unit case volume and gallon salesgrowth rates. 4
PAGE – 8 ============
the territory, and (2) to prepare, package, distribute and sell such beverages in the territory, in any other manneror form. Territorial restrictions on bottlers vary in some cases in accordance with local law. The Bottler™s Agreements between us and our authorized bottlers in the United States differ in certainrespects 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 StatesThe Bottler™s Agreements between us and our authorized bottlers outside the United States generally are ofstated 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 theconcentrates and syrups we sell to bottlers outside the United States. In some instances, however, we have agreed or may in the future agree with the 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-ColaTrademark Beverages and other cola-flavored beverages have no stated expiration date. Our standard contracts for other soft-drink flavors and for noncarbonated 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.Under the terms of the Bottler™s Agreements, bottlers in the United States are authorized to manufactureand 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 6
PAGE – 9 ============
fountain syrups to authorized fountain wholesalers (including certain authorized bottlers) and some fountainretailers. 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 soft drinks that covers the largest amount of U.S. gallon 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 the bottler with respect to concentrate pricing on a prospective basis for specified time periods. Bottlers operating under the 1987 Contract accounted for approximately 89 percent of our Company™s total U.S. gallon sales for bottled and canned beverages in 2005, excluding direct sales by the Company of juice and juice-drink products and other finished beverages (‚‚U.S. bottle/can gallon 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 10 percent of U.S. bottle/can gallon sales in 2005 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 (less than 1 percent) U.S. bottle/can gallon sales in 2005 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 soft drinks and certain noncarbonated beverages in bottles and cans; and, in certain cases, for the sale of finished noncarbonated 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 soft-drink and noncarbonated beverage contractswith 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 2005, bottling operations in which we had no ownership interest produced and distributed approximately 25 percent of our worldwide unit case volume. We have equity positions in 51 unconsolidated bottling, canning and distribution operations for our products worldwide. These cost or equity method investees produced and distributed approximately 58 percent of our worldwide unit case volume in 2005. Controlled and consolidated bottling operations produced and distributed approximately 7 percent of our worldwide unit case volume in 2005. The remaining approximately 10 percent of our worldwide unit case volume in 2005 was produced and7
PAGE – 10 ============
distributed by our fountain operations plus 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 systems 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 gallon 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 resourcesat 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 provideexpertise and resources to strengthen those businesses.Significant investees in which we have noncontrolling ownership interests include the following: Coca-Cola Enterprises Inc.Our ownership interest in CCE was approximately 36 percent atDecember 31,2005. CCE is the world™s largest bottler of the Company™s beverage products. In 2005, sales of concentrates, syrups and finished products by the Company to CCE were approximately $5.1 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 United States Virgin 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 2005, CCE™s net operating revenues were approximately $18.7 billion. Excluding fountain products, in 2005, approximately 62 percent of the unit case volume of CCE consisted of Coca-Cola Trademark Beverages, 31 percent of its unit case volume consisted of other Company Trademark Beverages and 7 percent of its unit case volume consisted of beverage products of other companies.Coca-Cola Hellenic Bottling Company S.A. (‚‚Coca-Cola HBC™™). At December 31, 2005, our ownership interest in Coca-Cola HBC was approximately 24 percent. Coca-Cola HBC has bottling and distribution rights, through direct ownership or joint ventures, in Armenia, Austria, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Former Yugoslavian Republic of Macedonia, Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Nigeria, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia, Switzerland and Ukraine. Coca-Cola HBC estimates that the territories in which it markets beverage products contain approximately 67 percent of the population of Italy and 100 percent of the populations of the other countries named above in which Coca-Cola HBC has bottling and distribution rights. In 2005, Coca-Cola HBC™s net sales of beverage products were approximately $5.8 billion. In 2005, approximately 46 percent of the unit case volume of Coca-Cola HBC consisted of Coca-Cola Trademark Beverages, approximately 47 percent of its unit case volume consisted of other Company Trademark Beverages 8
164 KB – 142 Pages