Coca Cola 2011 Annual Report Download - page 4

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 $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 negotiate the acquisition of 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, 2011, 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.
Products and Brands
As used in this report:
• ‘‘concentrates’’ means flavoring ingredients and, depending on the product, sweeteners used to prepare syrups or finished
beverages, and includes powders for purified water products such as Dasani;
• ‘‘syrups’’ means beverage ingredients produced by combining concentrates and, depending on the product, sweeteners and
added water;
• ‘‘fountain syrups’’ means syrups that are sold to fountain retailers, such as restaurants and convenience stores, which use
dispensing equipment to mix the syrups with sparkling or still water at the time of purchase to produce finished beverages
that are served in cups or glasses for immediate consumption;
• ‘‘sparkling beverages’’ means nonalcoholic ready-to-drink beverages with carbonation, including carbonated energy drinks
and carbonated waters and flavored waters;
• ‘‘still beverages’’ means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and
enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks;
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