Coca Cola 2014 Annual Report Download - page 19

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manner, we could experience delays in reporting our financial results, and we may lose revenue and profits as a result of our inability
to timely manufacture, distribute, invoice and collect payments for concentrate or finished products. Misuse, leakage or falsification
of information could result in a violation of data privacy laws and regulations, damage the reputation and credibility of the Company
and have a negative impact on net operating revenues. In addition, we may suffer financial and reputational damage because of lost
or misappropriated confidential information belonging to us, our current or former employees, or to our bottling partners, other
customers, suppliers or consumers, and may become subject to legal action and increased regulatory oversight. The Company could
also be required to spend significant financial and other 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. Although the incidents that we have
experienced to date have not had a material effect on our business, financial condition or results of operations, there can be no
assurance that such incidents will not have a material adverse effect on us in the future. In order to address risks to our information
systems, we continue to make investments in personnel, technologies, cyber-insurance and training of Company personnel. 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 that 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.
Unfavorable general economic conditions in the United States could negatively impact our financial performance.
In 2014, our net operating revenues in the United States were $19.8 billion, or 43 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, 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 2014, our
operations outside the United States accounted for $26.2 billion, or 57 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.