Coca Cola 2011 Annual Report Download - page 21

resources to remedy the damage caused by a security breach or to repair or replace networks and information systems.
Like most major corporations, the Company’s information systems are a target of attacks. In order to address potential risks to
our information systems, we continue to make investments in personnel, technologies, cyberinsurance, training of Company
personnel, bottlers and third parties. The Company maintains an information risk management program which is supervised by
information technology management and reviewed by a cross-functional committee. As part of this program, reports which include
analysis of emerging risks as well as the Company’s plans and strategies to address them are regularly prepared and presented to
senior management.
We may be required to recognize additional impairment charges which could materially affect our financial results.
We assess our goodwill, trademarks and other intangible assets as well as our other long-lived assets as and when required by
accounting principles generally accepted in the United States to determine whether they are impaired and, if they are, we record
appropriate impairment charges. Our equity method investees also perform impairment tests, and we record our proportionate
share of impairment charges recorded by them adjusted, as appropriate, for the impact of items such as basis differences, deferred
taxes and deferred gains. It is possible that we may be required to record significant impairment charges or our proportionate
share of significant charges recorded by equity method investees in the future and, if we do so, our operating or equity income
could be materially adversely affected.
If we do not successfully integrate and manage our Company-owned or controlled bottling operations, our results could suffer.
From time to time we acquire or take control of bottling operations, often in underperforming markets where we believe we can
use our resources and expertise to improve performance. We may incur unforeseen liabilities and obligations in connection with
acquiring, taking control of or managing bottling operations and may encounter unexpected difficulties and costs in restructuring
and integrating them into our Company’s operating and internal control structures. We may also experience delays in extending
our Company’s internal control over financial reporting to newly acquired or controlled bottling operations, which may increase
the risk of failure to prevent misstatements in such operations’ financial records and in our consolidated financial statements. In
2011, net operating revenues generated by our Bottling Investments group (which includes Company-owned or controlled bottling
operations other than those managed by CCR) represented approximately 18 percent of our Company’s consolidated net
operating revenues. Our financial performance depends in large part on how well we can manage and improve the performance of
Company-owned or controlled bottling operations. We cannot assure you, however, that we will be able to achieve our strategic
and financial objectives for such bottling operations. If we are unable to achieve such objectives, our consolidated results could be
negatively affected.
Climate change may negatively affect our business.
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon
dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe and an
increase in the frequency and severity of natural disasters. Decreased agricultural productivity in certain regions as a result of
changing weather patterns may limit availability or increase the cost of key agricultural commodities, such as sugarcane, corn,
beets, citrus, coffee and tea, which are important ingredients for our products. Increased frequency or duration of extreme
weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. Climate
change may also exacerbate water scarcity and cause a further deterioration of water quality in affected regions, which could limit
water availability for our system’s bottling operations. As a result, the effects of climate change could have a long-term adverse
impact on our business and results of operations.
Global or regional catastrophic events could impact our operations and financial results.
Because of our global presence and worldwide operations, our business can be affected by large-scale terrorist acts, especially
those directed against the United States or other major industrialized countries; the outbreak or escalation of armed hostilities;
major natural disasters; or widespread outbreaks of infectious diseases. Such events could impair our ability to manage our
business around the world, could disrupt our supply of raw materials and ingredients, and could impact production, transportation
and delivery of concentrates, syrups and finished products. In addition, such events could cause disruption of regional or global
economic activity, which can affect consumers’ purchasing power in the affected areas and, therefore, reduce demand for our
products.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
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