Coca Cola 2005 Annual Report Download - page 19

If we are unable to maintain brand image and product quality, or if we encounter other product issues such as
product recalls, our business may suffer.
Our success depends on our ability to maintain brand image for our existing products and effectively build
up brand image for new products and brand extensions. We cannot assure you, however, that additional
expenditures and our renewed commitment to advertising and marketing will have the desired impact on our
products’ brand image and on consumer preferences. Product quality issues, real or imagined, or allegations of
product contamination, even when false or unfounded, could tarnish the image of the affected brands and may
cause consumers to choose other products. In addition, because of changing government regulations or
implementation thereof, allegations of product contamination or lack of consumer interest in certain products,
we may be required from time to time to recall products entirely or from specific markets. Product recalls could
affect our profitability and could negatively affect brand image. Also, adverse publicity surrounding obesity
concerns, water usage, labor relations and the like could negatively affect our Company’s overall reputation and
our products’ acceptance by consumers.
Changes in the legal and regulatory environment in the countries in which we operate could increase our costs or
reduce our revenues.
Our Company’s business is subject to various laws and regulations in the numerous countries throughout
the world in which we do business, including laws and regulations relating to competition, product safety,
advertising and labeling, container deposits, recycling or stewardship, the protection of the environment, and
employment and labor practices. In the United States, the production, distribution and sale of many of our
products are subject to, among others, the Federal Food, Drug and Cosmetic Act, the Occupational Safety and
Health Act, the Lanham Act, as well as various state and local statutes and regulations. Outside the United
States, the production, distribution, sale, advertising and labeling of many of our products are also subject to
various laws and regulations. Changes in applicable laws or regulations or evolving interpretations thereof could,
in certain circumstances result in increased compliance costs or capital expenditures, which could affect our
profitability, or impede the production or distribution of our products, which could affect our revenues.
Changes in accounting standards and taxation requirements could affect our financial results.
New accounting standards or pronouncements that may become applicable to our Company from time to
time, or changes in the interpretation of existing standards and pronouncements, could have a significant effect
on our reported results for the affected periods. We are also subject to income tax in the numerous jurisdictions
in which we generate revenues. In addition, our products are subject to import and excise duties and/or sales or
value-added taxes in many jurisdictions in which we operate. Increases in income tax rates could reduce our
after-tax income from affected jurisdictions, while increases in indirect taxes could affect our products’
affordability and therefore reduce our sales.
If we are not able to achieve our overall long term goals, the value of an investment in our Company could be
negatively affected.
We have established and publicly announced certain long-term growth objectives. These objectives were
based on our evaluation of our growth prospects, which are generally based on volume and sales potential of
many product types, some of which are more profitable than others, and on an assessment of potential level or
mix of product sales. There can be no assurance that we will achieve the required volume or revenue growth or
mix of products necessary to achieve our growth objectives.
If we are unable to protect our information systems against data corruption, cyber-based attacks or network security
breaches, our operations could be disrupted.
We are increasingly dependent on information technology networks and systems, including the Internet, to
process, transmit and store electronic information. In particular, we depend on our information technology
17