Coca Cola 2008 Annual Report Download - page 10

bottling operations produced and distributed approximately 11 percent of our worldwide unit case volume in
2008. The remaining approximately 11 percent of our worldwide unit case volume in 2008 was produced by our
fountain operations and 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 capabilities 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 concentrate 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 resources
at 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 provide
expertise and resources to strengthen those businesses.
Significant investees in which we have noncontrolling ownership interests include the following:
Coca-Cola Enterprises Inc. (‘‘CCE’’). Our ownership interest in CCE was approximately 35 percent at
December 31, 2008. CCE is the world’s largest bottler of the Company’s beverage products. In 2008, sales of
concentrates, syrups, mineral waters, juices, sweeteners and finished products by the Company to CCE were
approximately $6.8 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 U.S. Virgin Islands
and certain other Caribbean 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 2008, CCE’s net operating revenues were approximately $21.8 billion.
Excluding fountain products, in 2008, approximately 59 percent of the unit case volume of CCE consisted of
Coca-Cola Trademark Beverages; approximately 34 percent of its unit case volume consisted of other Company
Trademark Beverages; and approximately 7 percent of its unit case volume consisted of beverage products of
other companies.
Coca-Cola Hellenic Bottling Company S.A. (‘‘Coca-Cola Hellenic’’). At December 31, 2008, our ownership
interest in Coca-Cola Hellenic was approximately 23 percent. Coca-Cola Hellenic has bottling and distribution
rights, through direct ownership or joint ventures, in Armenia, Austria, Belarus, Bosnia-Herzegovina, Bulgaria,
Croatia, Cyprus, the Czech Republic, Estonia, Former Yugoslavian Republic of Macedonia, Greece, Hungary,
Italy, Kosovo, Latvia, Lithuania, Moldova, Nigeria, Northern Ireland, Poland, Republic of Ireland, Romania,
Russia, Serbia, Montenegro, Slovakia, Slovenia, Switzerland and Ukraine. Coca-Cola Hellenic estimates that the
territories in which it markets beverage products contain approximately 90 percent of the population of Italy and
100 percent of the populations of the other countries named above in which Coca-Cola Hellenic has bottling and
distribution rights. In 2008, Coca-Cola Hellenic’s net sales of beverage products were approximately $9 billion.
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