Coca Cola 2006 Annual Report Download - page 19

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compliance by our employees and agents with all United States and local laws and regulations applicable to our
business operations, including those prohibiting improper payments to government officials. Nonetheless, we
cannot assure you that our policies, procedures and related training programs will always ensure full compliance
by our employees and agents with all applicable legal requirements. Improper conduct by our employees or
agents could damage our reputation in the United States and internationally or lead to litigation or legal
proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as
disgorgement of profits.
Adverse weather conditions could reduce the demand for our products.
The sales of our products are influenced to some extent by weather conditions in the markets in which we
operate. Unusually cold weather during the summer months may have a temporary effect on the demand for our
products and contribute to lower sales, which could have an adverse effect on our results of operations for those
periods.
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 net operating 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 Federal Trade
Commission Act, the Lanham Act, state consumer protection laws, the Occupational Safety and Health Act,
various environmental statutes, 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 net operating
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 net operating revenues. In addition, our products are subject to import and excise duties
17