Coca Cola 2006 Annual Report Download - page 127

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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Coca-Cola Company and Subsidiaries
Management of the Company is responsible for the preparation and integrity of the consolidated financial statements
appearing in our annual report on Form 10-K. The financial statements were prepared in conformity with generally
accepted accounting principles appropriate in the circumstances and, accordingly, include certain amounts based on our
best judgments and estimates. Financial information in this annual report on Form 10-K is consistent with that in the
financial statements.
Management of the Company is responsible for establishing and maintaining adequate internal control over financial
reporting as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 (‘‘Exchange Act’’). The
Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the consolidated financial statements. Our internal control over financial
reporting is supported by a program of internal audits and appropriate reviews by management, written policies and
guidelines, careful selection and training of qualified personnel and a written Code of Business Conduct adopted by our
Company’s Board of Directors, applicable to all Company Directors and all officers and employees of our Company and
subsidiaries.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements
and even when determined to be effective, can only provide reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
The Audit Committee of our Company’s Board of Directors, composed solely of Directors who are independent in
accordance with the requirements of the New York Stock Exchange listing standards, the Exchange Act and the Company’s
Corporate Governance Guidelines, meets with the independent auditors, management and internal auditors periodically to
discuss internal control over financial reporting and auditing and financial reporting matters. The Audit Committee reviews
with the independent auditors the scope and results of the audit effort. The Audit Committee also meets periodically with
the independent auditors and the chief internal auditor without management present to ensure that the independent
auditors and the chief internal auditor have free access to the Audit Committee. Our Audit Committee’s Report can be
found in the Company’s 2007 Proxy statement.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31,
2006. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in Internal Control—Integrated Framework. During 2006, the Company acquired Kerry
Beverages Limited (subsequently renamed Coca-Cola China Industries Limited), Apollinaris GmbH and TJC Holdings
(Pty) Ltd. and began consolidating the operations of Brucephil, Inc. Refer to Note 19 of Notes to Consolidated Financial
Statements for additional information regarding these events. Management has excluded these businesses from its
evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. The net
operating revenues attributable to these businesses represented approximately 1.6 percent of the Company’s consolidated
net operating revenues for the year ended December 31, 2006, and their aggregate total assets represented approximately
6.1 percent of the Company’s consolidated total assets as of December 31, 2006. Based on our assessment, management
believes that the Company maintained effective internal control over financial reporting as of December 31, 2006.
The Company’s independent auditors, Ernst & Young LLP, a registered public accounting firm, are appointed by the
Audit Committee of the Company’s Board of Directors, subject to ratification by our Company’s shareowners. Ernst &
Young LLP have audited and reported on the consolidated financial statements of The Coca-Cola Company and
subsidiaries, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and
the effectiveness of the Company’s internal control over financial reporting. The reports of the independent auditors are
contained in this annual report.
E. Neville Isdell Connie D. McDaniel
Chairman, Board of Directors, Vice President
and Chief Executive Officer and Controller
February 20, 2007 February 20, 2007
Gary P. Fayard
Executive Vice President
and Chief Financial Officer
February 20, 2007
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