Coca Cola 2007 Annual Report Download - page 19

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will always ensure full compliance by our associates and agents with all applicable legal requirements. Improper
conduct by our associates 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 or rainy 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 such 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 continuing 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 allegations of product contamination, 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 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
demand for our products.
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