Coca Cola 2011 Annual Report Download - page 19

Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.
We are party to various litigation claims and legal proceedings. We evaluate these litigation claims and legal proceedings to assess
the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments
and estimates, we establish reserves and/or disclose the relevant litigation claims or legal proceedings, as appropriate. These
assessments and estimates are based on the information available to management at the time and involve a significant amount of
management judgment. We caution you that actual outcomes or losses may differ materially from those envisioned by our current
assessments and estimates. In addition, we have bottling and other business operations in markets with high-risk legal compliance
environments. Our policies and procedures require strict compliance by our associates and agents with all United States and local
laws and regulations and consent orders 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 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 product safety or quality issues, or negative publicity, even if unwarranted, damage our brand image and corporate reputation, our
business may suffer.
Our success depends on our ability to maintain consumer confidence in the safety and quality of our products. Our success also
depends on our ability to maintain the brand image of our existing products, build up brand image for new products and brand
extensions, and maintain our corporate reputation. We cannot assure you, however, that our commitment to product safety and
quality and our continuing investment in advertising and marketing will have the desired impact on our products’ brand image and
on consumer preferences. Product safety or quality issues, actual or perceived, 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.
Allegations of product safety or quality issues or contamination, even if untrue, may require us from time to time to recall a
beverage or other product from all of the markets in which the affected production was distributed. Such issues or recalls could
negatively affect our profitability and brand image. In some emerging markets, the production and sale of counterfeit or
‘‘spurious’’ products, which we and our bottling partners may not be able to fully combat, may damage the image and reputation
of our products. In addition, campaigns by activists attempting to connect us or our bottling system with human and workplace
rights issues in certain emerging markets could adversely impact our corporate image and reputation. For example, in June 2011,
the United Nations Human Rights Council endorsed the Guiding Principles for Business and Human Rights, which outlines how
businesses should implement the corporate responsibility to respect human rights principles included in the UN ‘‘Protect, Respect
and Remedy’’ framework on human rights. Through our Human Rights Statement and Workplace Rights Policy and Supplier
Guiding Principles, and our participation in the United Nations Global Compact and its LEAD program, as well as our active
participation in the Global Business Initiative on Human Rights, we have made a number of commitments to respect all human
rights. Allegations that we are not respecting any of the 30 human rights found in the United Nations Universal Declaration of
Human Rights, even if untrue, could have a significant impact on our corporate reputation and long-term financial results. Also,
adverse publicity surrounding obesity and health concerns related to our products, water usage, environmental concerns, labor
relations and the like, could negatively affect our Company’s overall reputation and our products’ acceptance by consumers.
Changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations 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, and 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, including increased government
regulations to limit carbon dioxide and other greenhouse gas emissions as a result of concern over climate change or to limit or
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