Coca Cola 2014 Annual Report Download - page 21

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equipment or processes, or a cessation of operations at our or our bottling partners’ facilities, as well as damage to our and the
Coca-Cola system’s image and reputation, all of which could harm our and the Coca-Cola system’s profitability.
Changes in accounting standards could affect our reported financial results.
New accounting standards or pronouncements that may become applicable to our Company from time to time, or changes in the
interpretation of existing standards and pronouncements, could have a significant effect on our reported financial results for the
affected periods.
If we are not able to achieve our overall long-term growth objectives, the value of an investment in our Company could be negatively affected.
We have established and publicly announced certain long-term growth objectives. These objectives were based on, among other things,
our evaluation of our growth prospects, which are generally driven by the sales potential of many product types, some of which are
more profitable than others, and on an assessment of the potential price and product mix. There can be no assurance that we will
realize the sales potential and the price and product mix necessary to achieve our long-term growth objectives.
If global credit market conditions deteriorate, our financial performance could be adversely affected.
The cost and availability of credit vary by market and are subject to changes in the global or regional economic environment. If
conditions in major credit markets deteriorate, our and our bottling partners’ ability to obtain debt financing on favorable terms may
be negatively affected, which could affect our and the Coca-Cola system’s profitability as well as our share of the income of bottling
partners in which we have equity method investments. A decrease in availability of consumer credit resulting from unfavorable credit
market conditions, as well as general unfavorable economic conditions, may also cause consumers to reduce their discretionary
spending, which could reduce the demand for our beverages and negatively affect our net operating revenues and the Coca-Cola
system’s profitability.
Default by or failure of one or more of our counterparty financial institutions could cause us to incur significant losses.
As part of our hedging activities, we enter into transactions involving derivative financial instruments, including forward contracts,
commodity futures contracts, option contracts, collars and swaps, with various financial institutions. In addition, we have significant
amounts of cash, cash equivalents and other investments on deposit or in accounts with banks or other financial institutions in the
United States and abroad. As a result, we are exposed to the risk of default by or failure of counterparty financial institutions. The risk
of counterparty default or failure may be heightened during economic downturns and periods of uncertainty in the financial markets. If
one of our counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of default or
our assets that are deposited or held in accounts with such counterparty may be limited by the counterparty’s liquidity or the applicable
laws governing the insolvency or bankruptcy proceedings. In the event of default by or failure of one or more of our counterparties, we
could incur significant losses, which could negatively impact our results of operations and financial condition.
If we are unable to timely implement our previously announced actions to reinvigorate growth, or we do not realize the economic benefits we
anticipate from these actions, our results of operations for future periods could be negatively affected.
In October 2014, we announced that we were taking actions to reinvigorate growth, including streamlining and simplifying our
operating model to speed decision making and enhance local market focus; expanding our productivity and reinvestment program
by targeting additional productivity; refocusing on our core business model, including refranchising the majority of Company-owned
North America bottling territories by the end of 2017 and substantially all of the remaining territories no later than 2020; strategically
targeting brand and growth investments that leverage our global strengths; and driving revenue and profit growth with clear portfolio
roles across our markets while providing local operations with a clear line of sight and aligned compensation targets. We have begun
implementing these actions and have incurred, and we expect will continue to incur, significant costs and expenses with the associated
programs, initiatives and activities. In addition, in connection with refranchising transactions, we recorded, and we expect will continue
to record, noncash losses related to the derecognition of intangible assets transferred or that will be transferred to bottling partners.
If we are unable to implement some or all of these actions fully or in the envisioned timeframe, or otherwise we do not timely capture
the efficiencies, cost savings and revenue growth opportunities we anticipate from these actions, our results of operations for future
periods could be negatively affected.
If we fail to realize a significant portion of the anticipated benefits of our strategic relationships with Keurig and Monster, our financial
performance could be adversely affected.
In February 2014, we entered into a 10-year global strategic agreement with Keurig to collaborate on the development and
introduction of the Company’s global brand portfolio for use in Keurig’s forthcoming Keurig Kold™ at-home beverage system. In
order to further align our long-term interests, since entering into the global strategic agreement we have acquired Keurig shares
representing in the aggregate 16 percent of Keurig’s issued and outstanding common stock. In addition, in August 2014,