Coca Cola 2013 Annual Report Download - page 19

Unfavorable general economic conditions in the United States could negatively impact our financial performance.
In 2013, our net operating revenues in the United States were $19.8 billion, or 42 percent of our total net operating revenues.
Unfavorable general economic conditions, such as a recession or economic slowdown, in the United States could negatively affect
the affordability of, and consumer demand for, some of our beverages in our flagship market. Under difficult economic conditions,
consumers may seek to reduce discretionary spending by forgoing purchases of our products or by shifting away from our
beverages to lower-priced products offered by other companies, including private label brands. Softer consumer demand for our
beverages in the United States could reduce our profitability and could negatively affect our overall financial performance.
Unfavorable economic and political conditions in international markets could hurt our business.
We derive a significant portion of our net operating revenues from sales of our products in international markets. In 2013, our
operations outside the United States accounted for $27.0 billion, or 58 percent, of our total net operating revenues. Unfavorable
economic conditions in our major international markets, the financial uncertainties in some countries in the eurozone and
unstable political conditions, including civil unrest and governmental changes, in certain of our other international markets could
undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products.
Product boycotts resulting from political activism could reduce demand for our products, while restrictions on our ability to
transfer earnings or capital across borders, price controls, limitation on profits, import authorization requirements and other
restrictions on business activities which have been or may be imposed or expanded as a result of political and economic instability
or otherwise could impact our profitability. In addition, U.S. trade sanctions against countries such as Iran and Syria and/or
financial institutions accepting transactions for commerce within such countries could increase significantly, which could make it
impossible for us to continue to make sales to bottlers in such countries.
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.
Climate change may have a long-term adverse impact on our business and results of operations.
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 of the world as a
result of changing weather patterns may limit the availability or increase the cost of key agricultural commodities, such as
sugarcane, corn, beets, citrus, coffee and tea, which are important sources of ingredients for our products, and could impact the
food security of communities around the world. Climate change may also exacerbate water scarcity and cause a further
deterioration of water quality in affected regions, which could limit water availability for the Coca-Cola system’s bottling
operations. Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our
supply chain or impact demand for our products. As a result, the effects of climate change could have a long-term adverse impact
on our business and results of operations.
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