Coca Cola 2010 Annual Report Download - page 4

ownership interest in New CCE. Upon completion of the CCE transaction, we combined the management of the
acquired North American business with the management of our existing foodservice business, Minute Maid and
Odwalla juice businesses, North America supply chain operations and Company-owned bottling operations in
Philadelphia, Pennsylvania, into a unified bottling and customer service organization called Coca-Cola Refreshments
(‘‘CCR’’). In addition, we reshaped our remaining Coca-Cola North America (‘‘CCNA’’) operations into an organization
that primarily provides franchise leadership and consumer marketing and innovation for the North American market.
As a result of the transaction and related reorganization, our North American businesses operate as aligned and agile
organizations with distinct capabilities, responsibilities and strengths.
In contemplation of the closing of our acquisition of CCE’s North American business, we reached an agreement with
Dr Pepper Snapple Group, Inc. (‘‘DPS’’) to distribute certain DPS brands in territories where DPS brands had been
distributed by CCE prior to the CCE transaction. Under the terms of our agreement with DPS, concurrently with the
closing of the CCE transaction, we entered into license agreements with DPS to distribute Dr Pepper trademark brands
in the U.S., Canada Dry in the Northeast U.S., and Canada Dry and C’ Plus in Canada, and we made a net one-time
cash payment of $715 million to DPS. Under the license agreements, the Company agreed to meet certain performance
obligations to distribute DPS products in retail and foodservice accounts and vending machines. The license agreements
have initial terms of 20 years, with automatic 20-year renewal periods unless otherwise terminated under the terms of
the agreements. The license agreements replaced agreements between DPS and CCE existing immediately prior to the
completion of the CCE transaction. In addition, we entered into an agreement with DPS to include Dr Pepper and Diet
Dr Pepper in our Coca-Cola Freestyle fountain dispensers in certain outlets throughout the United States. The
Coca-Cola Freestyle agreement has a term of 20 years.
On October 2, 2010, we sold all of our ownership interests in Coca-Cola Drikker AS (the ‘‘Norwegian bottling
operation’’) and Coca-Cola Drycker Sverige AB (the ‘‘Swedish bottling operation’’) to New CCE for approximately
$0.9 billion in cash. In addition, in connection with the acquisition of CCE’s North American business, we granted to
New CCE the right to acquire our majority interest in our German bottler at any time from 18 to 39 months after
February 25, 2010, at the then current fair value and subject to terms and conditions as mutually agreed.
Operating Segments
The Company’s operating structure is the basis for our internal financial reporting. As of December 31, 2010, our
operating structure included the following operating segments, the first six of which are sometimes referred to as
‘‘operating groups’’ or ‘‘groups’’:
• Eurasia and Africa
• Europe
• Latin America
• North America
• Pacific
• Bottling Investments
• Corporate
Our North America operating segment includes the CCE North American business we acquired on October 2, 2010.
Except to the extent that differences among operating segments are material to an understanding of our business taken
as a whole, the description of our business in this report is presented on a consolidated basis.
For financial information about our operating segments and geographic areas, refer to Note 19 of Notes to
Consolidated Financial Statements set forth in Part II, ‘‘Item 8. Financial Statements and Supplementary Data’’ of this
report, incorporated herein by reference. For certain risks attendant to our non-U.S. operations, refer to ‘‘Item 1A.
Risk Factors,’’ below.
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