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Article by DailyStocks_admin    (02-29-12 01:25 AM)

Description

Coca Cola Co. Director MARIA ELENA LAGOMASINO bought 3000 shares on 2-22-2012 at $ 69.27

BUSINESS OVERVIEW

General
The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries.
We make our branded beverage products available to consumers throughout the world through our network of Company-owned or controlled bottling and distribution operations as well as independently owned bottling partners, distributors, wholesalers and retailers — the world's largest beverage distribution system. Of the approximately 56 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to us account for more than 1.7 billion.
We believe that our success depends on our ability to connect with consumers by providing them with a wide variety of options to meet their desires, needs and lifestyle choices. Our success further depends on the ability of our people to execute effectively, every day.
Our goal is to use our Company's assets — our brands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of our management and associates — to become more competitive and to accelerate growth in a manner that creates value for our shareowners.
We were incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a Georgia corporation with the same name that had been organized in 1892.
Acquisition of Coca-Cola Enterprises Inc.'s North American Business and Related Transactions
On October 2, 2010, we acquired the North American business of Coca-Cola Enterprises Inc. ("CCE"), one of our major bottlers, consisting of CCE's production, sales and distribution operations in the United States, Canada, the British Virgin Islands, the United States Virgin Islands and the Cayman Islands, and a substantial majority of CCE's corporate segment. CCE shareowners other than the Company exchanged their CCE common stock for common stock in a new entity named Coca-Cola Enterprises, Inc. ("New CCE"), which after the closing of the transaction continued to hold the European operations that had been held by CCE prior to the acquisition. The Company does not have any ownership interest in New CCE. Upon completion of the CCE transaction, we combined the management of the acquired North American business with the management of our existing foodservice business; Minute Maid and Odwalla juice businesses; North America supply chain operations; and Company-owned bottling operations in Philadelphia, Pennsylvania, into a unified bottling and customer service organization called Coca-Cola Refreshments ("CCR"). In addition, we reshaped our remaining Coca-Cola North America ("CCNA") operations into an organization that primarily provides franchise leadership and consumer marketing and innovation for the North American market. As a result of the transaction and related reorganization, our North American businesses operate as aligned and agile organizations with distinct capabilities, responsibilities and strengths.

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;

•"Company Trademark Beverages" means beverages bearing our trademarks and certain other beverage products bearing trademarks licensed to us by third parties for which we provide marketing support and from the sale of which we derive economic benefit; and

•"Trademark Coca-Cola Beverages" or "Trademark Coca-Cola" means beverages bearing the trademark Coca-Cola or any trademark that includes Coca-Cola or Coke (that is, Coca-Cola, Diet Coke and Coca-Cola Zero and all their variations and line extensions, including Coca-Cola Light, caffeine free Diet Coke, Cherry Coke, etc.). Likewise, when we use the capitalized word "Trademark" together with the name of one of our other beverage products (such as "Trademark Fanta," "Trademark Sprite" or "Trademark Simply"), we mean beverages bearing the indicated trademark (that is, Fanta, Sprite or Simply, respectively) and all its variations and line extensions (such that "Trademark Fanta" includes Fanta Orange, Fanta Zero Orange and Fanta Apple; "Trademark Sprite" includes Sprite, Diet Sprite, Sprite Zero and Sprite Light; and "Trademark Simply" includes Simply Orange, Simply Apple and Simply Grapefruit).
Our Company markets, manufactures and sells:

•beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we refer to this part of our business as our "concentrate business" or "concentrate operations"); and

•finished sparkling and still beverages (we refer to this part of our business as our "finished products business" or "finished products operations").
Generally, finished products operations generate higher net operating revenues but lower gross profit margins than concentrate operations.
In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to authorized bottling and canning operations (to which we typically refer as our "bottlers" or our "bottling partners"). Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages are packaged in authorized containers bearing our trademarks or trademarks licensed to us — such as cans and refillable and nonrefillable glass and plastic bottles — and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate consumption, or to fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.
Our finished products operations consist primarily of the production, sales and distribution operations managed by CCR and our Company-owned or controlled bottling and distribution operations. CCR is included in our North America operating segment, and our Company-owned or controlled bottling and distribution operations are included in our Bottling Investments operating segment. Our finished products operations generate net operating revenues by selling sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers, such as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through nonexclusive appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor restrict the territories in which the wholesalers may resell in the United States.
For information about net operating revenues and unit case volume related to our concentrate operations and finished products operations, respectively, refer to the heading "Our Business — General" in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this report, which is incorporated herein by reference.
Most of our branded beverage products, particularly outside of North America, are manufactured, sold and distributed by independently owned and managed bottling partners. However, from time to time we acquire or take control of bottling or canning operations, often in underperforming markets where we believe we can use our resources and expertise to improve performance. Owning such a controlling interest enables us to compensate for limited local resources; help focus the bottler's sales and marketing programs; assist in the development of the bottler's business and information systems; and establish an appropriate capital structure for the bottler. The Company-owned or controlled bottling operations, other than those managed by CCR, are included in our Bottling Investments group.
In line with our long-term bottling strategy, we may periodically consider options for reducing our ownership interest in a Bottling Investments group bottler. One such option is to combine our bottling interests with the bottling interests of others to form strategic business alliances. Another option is to sell our interest in a bottling operation to one of our other bottling partners in which we have an equity method investment. In both of these situations, our Company continues to participate in the bottler's results of operations through our share of the strategic business alliance's or equity method investee's earnings or losses.

During 2011, our Company introduced a variety of new brands, brand extensions and new beverage products. The Latin America group launched Frugos Sabores Caseros, a juice nectar targeted to capture the homemade juice category, in Peru, and leveraged its existing portfolio through search and reapply initiatives such as Powerade ION4, glacéau smartwater, Del Valle Limon & Nada and Burn, an energy drink. In the Pacific group, Fanta, a fruit-flavored sparkling beverage, was relaunched in Singapore and Malaysia after a significant period of absence from those markets; Real Leaf, a green tea-based beverage, extended its footprint with launches of two varieties in Vietnam; and in South Korea we introduced three flavor variants of the Georgia Emerald Mountain Blend ready-to-drink coffee beverage and Burn Intense, an energy drink. The Europe group saw the launch of Powerade ION4 in Denmark, Norway, Sweden and France, with France also launching Powerade Zero. In the Eurasia and Africa group, Turkey saw the launch of Cappy Pulpy, and India launched Fanta Powder, an orange-flavored powder formulation. Schweppes Novida, a sparkling malt drink, was launched in Kenya and Uganda; and in Uganda we also launched Coca-Cola Zero. In Egypt, we launched Cappy Fruitbite, the Company's first juice drink with real fruit pieces in that market, and Schweppes Gold, a sparkling flavored malt drink. In addition, in Ghana, we launched Schweppes Malt, a dark malt drink.
In furtherance of our commitments to sustainability and innovation, our PlantBottle technology, which allows us to replace 100 percent petroleum-based PET plastic with PET plastic that contains up to 30 percent material derived from plants, is becoming more widely used around the world. By the end of 2011, PlantBottle packaging was available in 20 countries, and nearly 10 billion PlantBottle packages had been shipped. Also in 2011, the availability of our Coca-Cola Freestyle fountain dispenser expanded in the United States to over 2,000 locations in 44 states. In addition, we added 19 beverages to bring the number of regular and low-calorie beverage choices available on Coca-Cola Freestyle to 125 in honor of the Company's 125 th anniversary.
We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and (2) concentrate sales. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and "unit case volume" means the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners (the "Coca-Cola system") to customers. Unit case volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale of which we derive economic benefit. In addition, unit case volume includes sales by joint ventures in which the Company has an equity interest. We believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. The unit case volume numbers used in this report are derived based on estimates received by the Company from its bottling partners and distributors. Concentrate sales volume represents the amount of concentrates and syrups (in all cases expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product introductions and changes in product mix can impact unit case volume and concentrate sales volume and can create differences between unit case volume and concentrate sales volume growth rates. In addition to the items mentioned above, the impact of unit case volume from certain joint ventures, in which the Company has an equity interest, but to which the Company does not sell concentrates or syrups, may give rise to differences between unit case volume and concentrate sales volume growth rates.
Distribution System and Bottler's Agreements
We make our branded beverage products available to consumers in more than 200 countries through our network of Company-owned or controlled bottling and distribution operations as well as independently owned bottling partners, distributors, wholesalers and retailers — the world's largest beverage distribution system. Consumers enjoy finished beverage products bearing our trademarks at a rate of more than 1.7 billion servings each day. We continue to expand our marketing presence and increase our unit case volume in developed, developing and emerging markets. Our strong and stable system helps us to capture growth by manufacturing, distributing and marketing existing, enhanced and new innovative products to our consumers throughout the world.
The Coca-Cola system sold approximately 26.7 billion, 25.5 billion and 24.4 billion unit cases of our products in 2011, 2010 and 2009, respectively. Sparkling beverages represented approximately 75 percent, 76 percent and 77 percent of our worldwide unit case volume for 2011, 2010 and 2009, respectively. Trademark Coca-Cola Beverages accounted for approximately 49 percent, 50 percent and 51 percent of our worldwide unit case volume for 2011, 2010 and 2009, respectively.
In 2011, unit case volume in the United States ("U.S. unit case volume") represented approximately 20 percent of the Company's worldwide unit case volume. Of the U.S. unit case volume for 2011, approximately 70 percent was attributable to sparkling beverages and approximately 30 percent to still beverages. Trademark Coca-Cola Beverages accounted for approximately 49 percent of U.S. unit case volume for 2011.

During 2011, our Company introduced a variety of new brands, brand extensions and new beverage products. The Latin America group launched Frugos Sabores Caseros, a juice nectar targeted to capture the homemade juice category, in Peru, and leveraged its existing portfolio through search and reapply initiatives such as Powerade ION4, glacéau smartwater, Del Valle Limon & Nada and Burn, an energy drink. In the Pacific group, Fanta, a fruit-flavored sparkling beverage, was relaunched in Singapore and Malaysia after a significant period of absence from those markets; Real Leaf, a green tea-based beverage, extended its footprint with launches of two varieties in Vietnam; and in South Korea we introduced three flavor variants of the Georgia Emerald Mountain Blend ready-to-drink coffee beverage and Burn Intense, an energy drink. The Europe group saw the launch of Powerade ION4 in Denmark, Norway, Sweden and France, with France also launching Powerade Zero. In the Eurasia and Africa group, Turkey saw the launch of Cappy Pulpy, and India launched Fanta Powder, an orange-flavored powder formulation. Schweppes Novida, a sparkling malt drink, was launched in Kenya and Uganda; and in Uganda we also launched Coca-Cola Zero. In Egypt, we launched Cappy Fruitbite, the Company's first juice drink with real fruit pieces in that market, and Schweppes Gold, a sparkling flavored malt drink. In addition, in Ghana, we launched Schweppes Malt, a dark malt drink.
In furtherance of our commitments to sustainability and innovation, our PlantBottle technology, which allows us to replace 100 percent petroleum-based PET plastic with PET plastic that contains up to 30 percent material derived from plants, is becoming more widely used around the world. By the end of 2011, PlantBottle packaging was available in 20 countries, and nearly 10 billion PlantBottle packages had been shipped. Also in 2011, the availability of our Coca-Cola Freestyle fountain dispenser expanded in the United States to over 2,000 locations in 44 states. In addition, we added 19 beverages to bring the number of regular and low-calorie beverage choices available on Coca-Cola Freestyle to 125 in honor of the Company's 125 th anniversary.
We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and (2) concentrate sales. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and "unit case volume" means the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners (the "Coca-Cola system") to customers. Unit case volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale of which we derive economic benefit. In addition, unit case volume includes sales by joint ventures in which the Company has an equity interest. We believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. The unit case volume numbers used in this report are derived based on estimates received by the Company from its bottling partners and distributors. Concentrate sales volume represents the amount of concentrates and syrups (in all cases expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product introductions and changes in product mix can impact unit case volume and concentrate sales volume and can create differences between unit case volume and concentrate sales volume growth rates. In addition to the items mentioned above, the impact of unit case volume from certain joint ventures, in which the Company has an equity interest, but to which the Company does not sell concentrates or syrups, may give rise to differences between unit case volume and concentrate sales volume growth rates.
Distribution System and Bottler's Agreements
We make our branded beverage products available to consumers in more than 200 countries through our network of Company-owned or controlled bottling and distribution operations as well as independently owned bottling partners, distributors, wholesalers and retailers — the world's largest beverage distribution system. Consumers enjoy finished beverage products bearing our trademarks at a rate of more than 1.7 billion servings each day. We continue to expand our marketing presence and increase our unit case volume in developed, developing and emerging markets. Our strong and stable system helps us to capture growth by manufacturing, distributing and marketing existing, enhanced and new innovative products to our consumers throughout the world.
The Coca-Cola system sold approximately 26.7 billion, 25.5 billion and 24.4 billion unit cases of our products in 2011, 2010 and 2009, respectively. Sparkling beverages represented approximately 75 percent, 76 percent and 77 percent of our worldwide unit case volume for 2011, 2010 and 2009, respectively. Trademark Coca-Cola Beverages accounted for approximately 49 percent, 50 percent and 51 percent of our worldwide unit case volume for 2011, 2010 and 2009, respectively.
In 2011, unit case volume in the United States ("U.S. unit case volume") represented approximately 20 percent of the Company's worldwide unit case volume. Of the U.S. unit case volume for 2011, approximately 70 percent was attributable to sparkling beverages and approximately 30 percent to still beverages. Trademark Coca-Cola Beverages accounted for approximately 49 percent of U.S. unit case volume for 2011. subject to termination by the Company for nonperformance or upon the occurrence of certain defined events of default that may vary from contract to contract.

CEO BACKGROUND

HERBERT A. ALLEN Director since 1982 Age 71

Mr. Allen is President, Chief Executive Officer and a Director of Allen & Company Incorporated, a privately held investment firm, and has held these positions for more than the past five years. Over the past five years he served as a Director of Convera Corporation and has not held any other public company directorships during that period.

RONALD W. ALLEN Director since 1991 Age 69

Mr. Allen is an Advisory Director of Delta Air Lines, Inc., a major U.S. air transportation company. From July 1997 through July 2005, Mr. Allen was a consultant to and Advisory Director of Delta. He retired as Delta’s Chairman of the Board, President and Chief Executive Officer in July 1997. He is a Director of Aaron’s, Inc., Aircastle Limited, Forward Air Corporation and Guided Therapeutics, Inc. He also served as a Director of Interstate Hotels & Resorts, Inc. during the past five years.


HOWARD G. BUFFETT Director since 2010 Age 56

Mr. Buffett is President of Buffett Farms and President of the Howard G. Buffett Foundation, a private foundation that supports humanitarian initiatives focused on agriculture, nutrition, water and conservation, and has held these positions for more than the past five years. He is a Director of Berkshire Hathaway Inc. and Lindsay Corporation. He was also a Director of ConAgra Foods, Inc. during the past five years.


BARRY DILLER Director since 2002 Age 69

Mr. Diller is Chairman of the Board and Senior Executive of IAC/InterActiveCorp, an interactive commerce company. Mr. Diller held the positions of Chairman of the Board and Chief Executive Officer of IAC and its predecessors since August 1995 and ceased serving as Chief Executive Officer in December 2010. Mr. Diller is also Chairman of the Board and Senior Executive of Expedia, Inc., an online travel company. Mr. Diller served as the non-executive Chairman of the Board of Live Nation Entertainment, Inc. from January 2010 to October 2010 and was a member of the board until January 2011. Mr. Diller served as the non-executive Chairman of the Board of Ticketmaster Entertainment, Inc. from August 2008 through January 2010, when Ticketmaster Entertainment, Inc. merged with Live Nation, Inc. to form Live Nation Entertainment, Inc. Mr. Diller also is a Director of The Washington Post Company and, other than described above, has not held any other public company directorships during the past five years.


EVAN G. GREENBERG Director since 2011 Age 56

Mr. Greenberg is the Chairman, President and Chief Executive Officer of ACE Limited, the parent company of the ACE Group of Companies, a global insurance and reinsurance organization. He served as President and Chief Operating Officer of ACE Limited from June 2003 to May 2004, when he was elected to the position of President and Chief Executive Officer. Mr. Greenberg has served on the board of ACE Limited since 2002 and was elected as Chairman of the Board in May 2007. Prior to joining the ACE Group in 2001, Mr. Greenberg held a number of senior management positions at American International Group, Inc., most recently serving as President and Chief Operating Officer from 1997 until 2000. Other than as described above, Mr. Greenberg has not held any other public company directorships during the past five years.


ALEXIS M. HERMAN Director since 2007 Age 63

Ms. Herman is the Chair and Chief Executive Officer of New Ventures LLC, a corporate consulting company, and has held these positions since 2001. She serves as Chair of the Business Advisory Board of Sodexo, Inc., an integrated food and facilities management services company and as Chair of Toyota Motor Corporation’s North American Diversity Advisory Board. As chair of the Company’s Human Resources Task Force from 2001 to 2006, Ms. Herman worked with the Company to identify ways to improve its human resources policies and practices following the November 2000 settlement of an employment lawsuit. From 1997 to 2001, she served as U.S. Secretary of Labor. She is also a Director of Cummins Inc., Entergy Corporation and MGM Resorts International and has not held any other public company directorships during the past five years.


MUHTAR KENT Director since 2008 Age 58

Mr. Kent is Chairman of the Board and Chief Executive Officer of the Company. He has held the position of Chairman of the Board since April 23, 2009 and the position of Chief Executive Officer since July 1, 2008. From December 2006 through June 2008, Mr. Kent served as President and Chief Operating Officer of the Company. From January 2006 through December 2006, Mr. Kent served as President of Coca-Cola International and was elected Executive Vice President of the Company in February 2006. From May 2005 through January 2006, he was President and Chief Operating Officer of the Company’s North Asia, Eurasia and Middle East Group. Mr. Kent originally joined the Company in 1978 and held a variety of marketing and operations roles until 1995, when he became Managing Director of Coca-Cola Amatil Limited-Europe. From 1999 until his return to the Company in May 2005, he served as President and Chief Executive Officer of the Efes Beverage Group, a large publicly held beverage company, which was also the majority shareholder of Coca-Cola Içecek A.S., currently the sixth largest bottler in the Coca-Cola system. Other than the Company, he has not held any other public company directorships during the past five years.



DONALD R. KEOUGH Director since 2004 Age 84

Mr. Keough is non-executive Chairman of the Board of Allen & Company Incorporated, a privately held investment firm, and non-executive Chairman of the Board of Allen & Company LLC, an investment banking firm, and has held these positions for more than the past five years. He also is Chairman of DMK International, a family investment company. Mr. Keough retired as President, Chief Operating Officer and a Director of the Company in April 1993, positions he had held since March 1981. He was again elected as a Director in February 2004. He is a Director of Berkshire Hathaway Inc. and IAC/InterActiveCorp. He was also a Director of Convera Corporation during the past five years.


MARIA ELENA LAGOMASINO Director since 2008 Age 61

Ms. Lagomasino is Chief Executive Officer of GenSpring Family Offices, LLC, an affiliate of SunTrust Banks, Inc., and has held this position since November 2005. From September 2001 to March 2005, Ms. Lagomasino was Chairman and Chief Executive Officer of JPMorgan Private Bank, a division of JPMorgan Chase & Co. Prior to assuming this position, she was managing director of The Chase Manhattan Bank in charge of its Global Private Banking Group. She served as a Director of the Company from April 2003 to April 2006. Ms. Lagomasino is a Director of Avon Products, Inc. and has not held any other public company directorships during the past five years.


DONALD F. McHENRY Director since 1981Age 74

Mr. McHenry is Distinguished Professor in the Practice of Diplomacy and International Affairs at the School of Foreign Service, Georgetown University. He has held this position for more than the past five years. From 1981 to May 2007, he was a principal owner and President of the IRC Group, LLC, a Washington, D.C. consulting firm. He also served as a Director of AT&T Corporation and International Paper Company during the past five years.


SAM NUNN Director since 1997 Age 72

Mr. Nunn is Co-Chairman and Chief Executive Officer of the Nuclear Threat Initiative, a position he has held since 2001. The Nuclear Threat Initiative is a charitable organization working to reduce the global threats from nuclear, biological and chemical weapons. He served as a member of the United States Senate from 1972 through 1996. He is a Director of Chevron Corporation, Dell Inc. and General Electric Company. He also served as a Director of Internet Security Systems, Inc. and Scientific-Atlanta, Inc. during the past five years.


JAMES D. ROBINSON III Director since 1975 Age 75

Mr. Robinson is Co-Founder and General Partner of RRE Ventures, a private information technology-focused venture capital firm, and has held this position since 1994. He is also President of JD Robinson, Inc., a strategic advisory firm. From June 2005 until February 2008, he was non-executive Chairman of the Board of Bristol-Myers Squibb Company. He previously served as Chairman and Chief Executive Officer of American Express Company from 1977 to 1993. Mr. Robinson also served as a Director of First Data Corporation and Novell, Inc. during the past five years.


PETER V. UEBERROTH Director since 1986 Age 73

Mr. Ueberroth is an investor and Chairman of the Contrarian Group, Inc., a business management company, and has held this position since 1989. He is the non-executive Co-Chairman of Pebble Beach Company. Mr. Ueberroth is also a Director of Aircastle Limited. He also served as a Director of Adecco SA, Ambassadors International, Inc. and Hilton Hotels Corporation during the past five years.


JACOB WALLENBERG Director since 2008 Age 55

Mr. Wallenberg is Chairman of the Board of Investor AB, a Swedish industrial holding company, and has held this position since April 2005. Mr. Wallenberg is also Vice Chairman of Skandinaviska Enskilda Banken AB, a North European financial group, having served as its Chief Executive Officer from 1997 to 1998 and as its Chairman of the Board from April 1998 to April 2005. Mr. Wallenberg also serves as Vice Chairman of Atlas Copco AB and SAS AB, both Swedish companies. Since January 2008, Mr. Wallenberg is a Senior Advisor to Foundation Asset Management Sweden AB. From January 2006 until December 2007, he was a Senior Advisor to Thisbe AB. He was acting Chairman of W Capital Management AB from January 2002 to December 2005. He is a Director of ABB Ltd and has not held any other public company directorships during the past five years.


JAMES B. WILLIAMS Director since 1979 Age 77

Mr. Williams retired in March 1998 as Chairman of the Board and Chief Executive Officer of SunTrust Banks, Inc., a bank holding company, which positions he had held for more than five years. He is a Director of Marine Products Corporation, Rollins, Inc. and RPC, Inc. He also served as a Director of Genuine Parts Company and Georgia Pacific Corporation during the past five years.

MANAGEMENT DISCUSSION FROM LATEST 10K

Overview
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand The Coca-Cola Company, our operations and our present business environment. MD&A is provided as a supplement to — and should be read in conjunction with — our consolidated financial statements and the accompanying notes thereto contained in "Item 8. Financial Statements and Supplementary Data" of this report. This overview summarizes the MD&A, which includes the following sections:

•Our Business — a general description of our business and the nonalcoholic beverage segment of the commercial beverage industry, our objective, our strategic priorities, our core capabilities, and challenges and risks of our business.

•Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical judgments and estimates.

•Operations Review — an analysis of our Company's consolidated results of operations for the three years presented in our consolidated financial statements. Except to the extent that differences among our operating segments are material to an understanding of our business as a whole, we present the discussion in the MD&A on a consolidated basis.

•Liquidity, Capital Resources and Financial Position — an analysis of cash flows; off-balance sheet arrangements and aggregate contractual obligations; foreign exchange; an overview of financial position; and the impact of inflation and changing prices.

Our Business
General
The Coca-Cola Company is the world's largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. We own and market four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries.
We make our branded beverage products available to consumers throughout the world through our network of Company-owned or controlled bottling and distribution operations as well as independently owned bottling partners, distributors, wholesalers and retailers — the world's largest beverage distribution system. Of the approximately 56 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to us account for more than 1.7 billion.
We believe our success depends on our ability to connect with consumers by providing them with a wide variety of choices to meet their desires, needs and lifestyle choices. Our success further depends on the ability of our people to execute effectively, every day.
Our goal is to use our Company's assets — our brands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of our management and associates — to become more competitive and to accelerate growth in a manner that creates value for our shareowners.
Our Company markets, manufactures and sells:

•beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we refer to this part of our business as our "concentrate business" or "concentrate operations"); and

•finished sparkling and still beverages (we refer to this part of our business as our "finished products business" or "finished products operations").
Generally, finished products operations generate higher net operating revenues but lower gross profit margins than concentrate operations.
In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to authorized bottling and canning operations (to which we typically refer as our "bottlers" or our "bottling partners"). Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages are packaged in authorized containers bearing our trademarks or trademarks licensed to us — such as cans and refillable and nonrefillable glass and plastic bottles — and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our bottling partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as restaurants and convenience stores which use the fountain syrups to produce beverages for immediate consumption, or to fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.
Our finished products operations consist primarily of the production, sales and distribution operations managed by CCR and our Company-owned or controlled bottling and distribution operations. CCR is included in our North America operating segment, and our Company-owned or controlled bottling and distribution operations are included in our Bottling Investments operating segment. Our finished products operations generate net operating revenues by selling sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling partners who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers such as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through nonexclusive appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor restrict the territories in which the wholesalers may resell in the United States.

Acquisition of CCE's North American Business and Related Transactions
Pursuant to the terms of the business separation and merger agreement entered into on February 25, 2010, as amended (the "merger agreement"), on October 2, 2010 (the "acquisition date"), we acquired CCE's North American business, consisting of CCE's production, sales and distribution operations in the United States, Canada, the British Virgin Islands, the United States Virgin Islands and the Cayman Islands, and a substantial majority of CCE's corporate segment. We believe this acquisition will result in an evolved franchise system that will enable us to better serve the unique needs of the North American market. The creation of a unified operating system will strategically position us to better market and distribute our nonalcoholic beverage brands in North America.
Under the terms of the merger agreement, the Company acquired the 67 percent of CCE's North American business that was not already owned by the Company for consideration that included: (1) the Company's 33 percent indirect ownership interest in CCE's European operations; (2) cash consideration; and (3) replacement awards issued to certain current and former employees of CCE's North American and corporate operations. At closing, CCE shareowners other than the Company exchanged their CCE common stock for common stock in a new entity, which was renamed Coca-Cola Enterprises, Inc. (which is referred to herein as "New CCE") and which continues to hold the European operations held by CCE prior to the acquisition. At closing, New CCE became 100 percent owned by shareowners that held shares of common stock of CCE immediately prior to the closing, other than the Company. As a result of this transaction, the Company does not own any interest in New CCE.
As of October 1, 2010, our Company owned 33 percent of the outstanding common stock of CCE. Based on the closing price of CCE's common stock on the last day of trading prior to the acquisition date, the fair value of our investment in CCE was $5,373 million, which reflected the fair value of our ownership in both CCE's North American business and its European operations. We remeasured our equity interest in CCE to fair value upon the close of the transaction. As a result, we recognized a gain of $4,978 million, which was classified in the line item other income (loss) — net in our consolidated statement of income. The gain included a $137 million reclassification adjustment related to foreign currency translation gains recognized upon the disposal of our indirect investment in CCE's European operations. The Company relinquished its indirect ownership interest in CCE's European operations to New CCE as part of the consideration to acquire the 67 percent of CCE's North American business that was not already owned by the Company.

Although the CCE transaction was structured to be primarily cashless, under the terms of the merger agreement, we agreed to assume $8.9 billion of CCE debt. In the event the actual CCE debt on the acquisition date was less than the agreed amount, we agreed to make a cash payment to New CCE for the difference. As of the acquisition date, the debt assumed by the Company was $7.9 billion. The total cash consideration paid to New CCE as part of the transaction was $1.4 billion, which included $1.0 billion related to the debt shortfall.
In contemplation of the closing of our acquisition of CCE's North American business, we reached an agreement with 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 our Norwegian and Swedish bottling operations 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.
The Nonalcoholic Beverage Segment of the Commercial Beverage Industry
We operate in the highly competitive nonalcoholic beverage segment of the commercial beverage industry. We face strong competition from numerous other general and specialty beverage companies. We, along with other beverage companies, are affected by a number of factors, including, but not limited to, cost to manufacture and distribute products, consumer spending, economic conditions, availability and quality of water, consumer preferences, inflation, political climate, local and national laws and regulations, foreign currency exchange fluctuations, fuel prices and weather patterns.

Core Capabilities
Consumer Marketing
Marketing investments are designed to enhance consumer awareness of and increase consumer preference for our brands. This produces long-term growth in unit case volume, per capita consumption and our share of worldwide nonalcoholic beverage sales. Through our relationships with our bottling partners and those who sell our products in the marketplace, we create and implement integrated marketing programs, both globally and locally, that are designed to heighten consumer awareness of and product appeal for our brands. In developing a strategy for a Company brand, we conduct product and packaging research, establish brand positioning, develop precise consumer communications and solicit consumer feedback. Our integrated marketing activities include, but are not limited to, advertising, point-of-sale merchandising and sales promotions.
We have disciplined marketing strategies that focus on driving volume in emerging markets, increasing our brand value in developing markets and growing profit in our developed markets. In emerging markets, we are investing in infrastructure programs that drive volume through increased access to consumers. In developing markets, where consumer access has largely been established, our focus is on differentiating our brands. In our developed markets, we continue to invest in brands and infrastructure programs, but at a slower rate than revenue growth.
We are focused on affordability and ensuring we are communicating the appropriate message based on the current economic environment.
Commercial Leadership
The Coca-Cola system has millions of customers around the world who sell or serve our products directly to consumers. We focus on enhancing value for our customers and providing solutions to grow their beverage businesses. Our approach includes understanding each customer's business and needs — whether that customer is a sophisticated retailer in a developed market or a kiosk owner in an emerging market. We focus on ensuring that our customers have the right product and package offerings and the right promotional tools to deliver enhanced value to themselves and the Company. We are constantly looking to build new beverage consumption occasions in our customers' outlets through unique and innovative consumer experiences, product availability and delivery systems, and beverage merchandising and displays. We participate in joint brand-building initiatives with our customers in order to drive customer preference for our brands. Through our commercial leadership initiatives, we embed ourselves further into our retail customers' businesses while developing strategies for better execution at the point of sale.
Franchise Leadership
We must continue to improve our franchise leadership capabilities to give our Company and our bottling partners the ability to grow together through shared values, aligned incentives and a sense of urgency and flexibility that supports consumers' always changing needs and tastes. The financial health and success of our bottling partners are critical components of the Company's success. We work with our bottling partners to identify system requirements that enable us to quickly achieve scale and efficiencies, and we share best practices throughout the bottling system. Our system leadership allows us to leverage recent acquisitions to expand our volume base and enhance margins. With our bottling partners, we work to produce differentiated beverages and packages that are appropriate for the right channels and consumers. We also design business models for sparkling and still beverages in specific markets to ensure that we appropriately share the value created by these beverages with our bottling partners. We will continue to build a supply chain network that leverages the size and scale of the Coca-Cola system to gain a competitive advantage.
Bottling and Distribution Operations
Most of our Company beverage products are manufactured, sold and distributed by independently owned and managed bottling partners. However, over the past several years the amount of Company beverage products that are manufactured, sold and distributed by consolidated bottling and distribution operations has increased. We often acquire bottlers in underperforming markets where we believe we can use our resources and expertise to improve performance. Owning such a controlling interest enables us to compensate for limited local resources; help focus the bottler's sales and marketing programs; assist in the development of the bottler's business and information systems; and establish an appropriate capital structure for the bottler.
Our Company has a long history of providing world-class customer service, demonstrating leadership in the marketplace and leveraging the talent of our global workforce. In addition, we have an experienced bottler management team. All of these factors are critical to build upon as we manage our growing bottling and distribution operations.
The Company has a deep commitment to continuously improving our business. This includes our efforts to develop innovative packaging and merchandising solutions which help drive demand for our beverages and meet the growing needs of our consumers. As we further transform the way we go to market the Company continues to seek out ways to be more efficient.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Recoverability of Current and Noncurrent Assets
Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries in which we operate, particularly in developing and emerging markets. Refer to the heading "Item 1A. Risk Factors" in Part I and "Our Business — Challenges and Risks" in Part II of our Annual Report on Form 10-K for the year ended December 31, 2010 . As a result, management must make numerous assumptions which involve a significant amount of judgment when performing recoverability and impairment tests of noncurrent assets in various regions around the world.
We perform recoverability and impairment tests of noncurrent assets in accordance with accounting principles generally accepted in the United States. For certain assets, recoverability and/or impairment tests are required only when conditions exist that indicate the carrying value may not be recoverable. For other assets, impairment tests are required at least annually, or more frequently if events or circumstances indicate that an asset may be impaired.
Our equity method investees also perform such recoverability and/or impairment tests. If an impairment charge is recorded by one of our equity method investees, the Company records its proportionate share of the charge as a reduction of equity income (loss) — net in our condensed consolidated statements of income. However, the actual amount we record with respect to our proportionate share of such charges may be impacted by items such as basis differences, deferred taxes and deferred gains.
Investments in Equity and Debt Securities
Investments classified as trading securities are not assessed for impairment since they are carried at fair value with the change in fair value included in net income. We review our investments in equity and debt securities that are accounted for using the equity method or cost method or that are classified as available-for-sale or held-to-maturity each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared to our cost basis in the investment. We also perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair value in the prior period. The fair values of most of our Company's investments in publicly traded companies are often readily available based on quoted market prices. For investments in non-publicly traded companies, management's assessment of fair value is based on valuation methodologies including discounted cash flows, estimates of sales proceeds and appraisals, as appropriate. We consider the assumptions that we believe hypothetical marketplace participants would use in evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict future cash flows, especially in developing and emerging markets, may impact the determination of fair value.
In the event the fair value of an investment declines below our cost basis, management is required to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. Management's assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis, the financial condition and near-term prospects of the issuer, and our intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

The carrying value of our investment in Coca-Cola Hellenic Bottling Company S.A. ("Coca-Cola Hellenic") exceeded its fair value as of September 30, 2011. As is the case with most of our equity method investees, we have both the ability and intent to hold our investment in Coca-Cola Hellenic as a long-term investment. Furthermore, under the terms of a shareholders agreement between the Company and another significant shareholder of Coca-Cola Hellenic, the Company is required, unless both parties agree to the contrary, to maintain no less than a 20 percent ownership interest in Coca-Cola Hellenic through December 31, 2018. In addition, we believe that the countries in which Coca-Cola Hellenic has bottling and distribution rights, through direct ownership or joint ventures, have positive growth opportunities. We also believe that the recent volatility of Coca-Cola Hellenic's fair value is at least partly attributable to the volatility in the global financial markets, including the economic events in Greece where Coca-Cola Hellenic is headquartered, and is not necessarily indicative of a change in its long-term value. Based on all of the factors described above, management has concluded that the decline in fair value of our investment in Coca-Cola Hellenic is temporary in nature. Subsequent to the end of the third quarter of 2011, Coca-Cola Hellenic's share price rose to a level where the fair value of our investment exceeded the carrying value. We will continue to monitor our investment in future periods.
As of September 30, 2011 , gross unrealized gains and losses on available-for-sale securities were $ 271 million and $ 13 million , respectively. Management assessed each investment with unrealized losses to determine if the decline in fair value was other than temporary. Based on these assessments, management determined that the decline in fair value of each of these investments was temporary in nature. We will continue to monitor these investments in future periods. Refer to Note 3 of Notes to Condensed Consolidated Financial Statements.
During the three and nine months ended September 30, 2011 , the Company recorded charges of $ 3 million and $ 41 million , respectively, related to the impairment of an investment accounted for under the equity method of accounting. These impairment charges were recorded in the line item other income (loss) — net in our condensed consolidated statements of income and impacted the Corporate operating segment. Refer to Note 10, Note 14 and Note 15 of Notes to Condensed Consolidated Financial Statements.
During the first quarter of 2010, the Company recorded a charge of $ 26 million in the line item other income (loss) — net in our condensed consolidated statement of income as a result of an other-than-temporary decline in the fair value of several available-for-sale securities. Based on management's assessment of each investment, the Company determined that the decline in fair value of each investment was other than temporary based on a number of factors, including, but not limited to, uncertainty regarding our intent to hold certain of these investments for a period of time that would be sufficient to recover our cost basis in the event of a market recovery; the fact that the fair value of each investment had continued to decline during the third and fourth quarters of 2009 and the first quarter of 2010; and the Company's uncertainty around the near-term prospects for certain of the investments. These impairment charges impacted the Bottling Investments and Corporate operating segments. Refer to the heading "Operations Review — Other Income (Loss) — Net," and Note 14 of Notes to Condensed Consolidated Financial Statements for additional information.
Goodwill, Trademarks and Other Intangible Assets
Intangible assets are classified into one of three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be performed at least annually, or more frequently if events or circumstances indicate that an asset might be impaired.
Management's assessments of the recoverability and impairment tests of intangible assets involve critical accounting estimates. These estimates require significant management judgment, include inherent uncertainties and are often interdependent therefore, they do not change in isolation. Factors that management must estimate include, among others, the economic life of the asset, sales volume, pricing, cost of raw materials, delivery costs, inflation, cost of capital, marketing spending, foreign currency exchange rates, tax rates and capital spending. These factors are even more difficult to predict when global financial markets are highly volatile. The estimates we use when assessing the recoverability of definite-lived intangible assets are consistent with those we use in our internal planning. When performing impairment tests of indefinite-lived intangible assets, we estimate the fair values of the assets using management's best assumptions, which we believe would be consistent with what a hypothetical marketplace participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. The variability of these factors depends on a number of conditions, including uncertainty about future events, and thus our accounting estimates may change from period to period. If other assumptions and estimates had been used when these tests were performed, impairment charges could have resulted. As mentioned above, these factors do not change in isolation and, therefore, we do not believe it is practicable or meaningful to present the impact of changing a single factor. Furthermore, if management uses different assumptions or if different conditions occur in future periods, future impairment charges could result. Refer to the heading "Operations Review," below, for additional information related to our present business environment. Certain factors discussed above are impacted by our current business environment and are discussed throughout this report, as appropriate.
Intangible assets acquired in recent transactions are naturally more susceptible to impairment, primarily due to the fact that they are recorded at fair value based on recent operating plans and macroeconomic conditions present at the time of acquisition. Consequently, if operating results and/or macroeconomic conditions deteriorate shortly after an acquisition, it could result in the impairment of the acquired assets. A deterioration of macroeconomic conditions may not only negatively impact the estimated operating cash flows used in our cash flow models, but may also negatively impact other assumptions used in our analyses, including, but not limited to, the estimated cost of capital and/or discount rates. Additionally, as discussed above, in accordance with accounting principles generally accepted in the United States, we are required to ensure that assumptions used to determine fair value in our analyses are consistent with the assumptions a hypothetical marketplace participant would use. As a result, the cost of capital and/or discount rates used in our analyses may increase or decrease based on market conditions and trends, regardless of whether our Company's actual cost of capital has changed. Therefore, if the cost of capital and/or discount rates change, our Company may recognize an impairment of an intangible asset or assets in spite of realizing actual cash flows that are approximately equal to, or greater than, our previously forecasted amounts.
The Company did not record any significant impairment charges related to intangible assets during the nine months ended September 30, 2011 , and October 1, 2010 .
Impact of Natural Disasters in Japan
On March 11, 2011, a major earthquake struck off the coast of Japan, resulting in a tsunami that devastated the northern and eastern regions of the country. As a result of these events, the Company made a donation to a charitable organization to establish the Coca-Cola Japan Reconstruction Fund, which will help rebuild schools and community facilities across the impacted areas of the country.
The Company recorded total charges of $ 84 million related to these events during the nine months ended September 30, 2011 . These charges were recorded in various line items in our condensed consolidated statements of income, including charges of $ 22 million in deductions from revenue, $ 12 million in cost of goods sold and $ 50 million in other operating charges. These charges impacted the Pacific and North America operating segments.
The $ 22 million of charges recorded in deductions from revenue were primarily related to funds we provided our local bottling partners to enable them to continue producing and distributing our beverage products in the affected regions. This support not only helped restore our business operations in the impacted areas, but it also assisted our bottling partners in meeting the evolving customer and consumer needs as the recovery and rebuilding efforts advanced. The $ 12 million of charges in cost of goods sold were primarily related to Company-owned inventory that was destroyed or lost. The $ 50 million of other operating charges were primarily related to the donation discussed above and a $ 1 million impairment charge related to certain Company-owned fixed assets. These fixed assets primarily consisted of Company-owned vending equipment and coolers that were damaged or lost as a result of these events.
Our operations outside the hardest hit regions were minimally impacted, if at all. Our challenges in the affected regions have included, but are not limited to, availability of fuel, concerns related to radiation leakage, rolling power blackouts, a need for energy savings and interruptions to mass transit services. It is not possible to precisely calculate the impact these events will have on our operating results; however, in addition to the $ 84 million of charges described above, we estimate the events in Japan will negatively impact our 2011 full year diluted net income per share by $0.03 to $0.05.
The Company assessed the recoverability of long-lived assets, including intangible assets related to products sold in Japan. Because our operations outside the hardest hit regions were only minimally impacted, if at all, the Company determined that our long-lived assets are recoverable and no impairment is required except for certain fixed assets believed to be physically damaged or lost as a result of the events discussed above. We will continue to refine our estimates in future periods as more information becomes available; however, we do not expect any subsequent adjustments to be significant to the Company's consolidated financial statements.
The Company is assessing its insurance coverage, and we intend to file a claim for certain of our losses in Japan. As of September 30, 2011 , we have not recorded any insurance recovery related to these events, as we are not currently able to deem any amount of potential insurance recovery as probable.
Hyperinflationary Economies
Our Company conducts business in more than 200 countries, some of which have been deemed to be hyperinflationary economies due to excessively high inflation rates in recent years. These economies create financial exposure to the Company. Venezuela was deemed to be a hyperinflationary economy subsequent to December 31, 2009.
As of December 31, 2009, two main exchange rate mechanisms existed in Venezuela. The first exchange rate mechanism is known as the official rate of exchange ("official rate"), which is set by the Venezuelan government. In order to utilize the official rate, entities must seek approval from the government-operated Foreign Exchange Administration Board ("CADIVI"). As of December 31, 2009, the official rate set by the Venezuelan government was 2.15 bolivars per U.S. dollar. The second exchange rate mechanism was known as the parallel rate, which in some circumstances provided entities with a more liquid exchange through the use of a series of transactions via a broker.
Subsequent to December 31, 2009, Venezuela was determined to be a hyperinflationary economy, and the Venezuelan government devalued the bolivar by resetting the official rate to 2.6 bolivars per U.S. dollar for essential goods and 4.3 bolivars per U.S. dollar for nonessential goods. In accordance with hyperinflationary accounting under accounting principles generally accepted in the United States, our local subsidiary was required to use the U.S. dollar as its functional currency. As a result, we remeasured the net assets of our Venezuelan subsidiary using the official rate for nonessential goods of 4.3 bolivars per U.S. dollar. During the first quarter of 2010, we recorded a loss of $103 million related to the remeasurement of our Venezuelan subsidiary's net assets. The loss was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. We classified the impact of the remeasurement loss in the line item effect of exchange rate changes on cash and cash equivalents in our condensed consolidated statement of cash flows.
In early June 2010, the Venezuelan government introduced a newly regulated foreign currency exchange system known as the Transaction System for Foreign Currency Denominated Securities ("SITME"). This new system, which is subject to annual limits, replaced the parallel market whereby entities domiciled in Venezuela are able to exchange their bolivars to U.S. dollars through authorized financial institutions (commercial banks, savings and lending institutions, etc.).
In December 2010, the Venezuelan government announced that it was eliminating the official rate of 2.6 bolivars per U.S. dollar for essential goods. As a result, there are only two exchange rates available for remeasuring bolivar-denominated transactions as of December 31, 2010: the official rate of 4.3 bolivars per U.S. dollar for nonessential goods and the SITME rate. As discussed above, the Company has remeasured the net assets of our Venezuelan subsidiary using the official rate for nonessential goods of 4.3 bolivars per U.S. dollar since January 1, 2010. Therefore, the elimination of the official rate for essential goods had no impact on the remeasurement of the net assets of our Venezuelan subsidiary. We continue to use the official exchange rate for nonessential goods to remeasure the financial statements of our Venezuelan subsidiary. If the official exchange rate devalues further, it would result in our Company recognizing additional foreign currency exchange losses in our consolidated financial statements. As of September 30, 2011 , our Venezuelan subsidiary held net monetary assets of approximately $250 million.
In addition to the foreign currency exchange exposure related to our Venezuelan subsidiary's net assets, we also sell concentrate to our bottling partner in Venezuela from outside the country. These sales are denominated in U.S. dollars. Some of our concentrate sales were approved by the CADIVI to receive the official rate for essential goods of 2.6 bolivars per U.S. dollar prior to the elimination of the official rate for essential goods in December 2010. Prior to the elimination of the official rate for essential goods, our bottling partner in Venezuela was able to convert bolivars to U.S. dollars to settle our receivables related to sales approved by the CADIVI. However, if we are unable to utilize a government-approved exchange rate mechanism to settle future concentrate sales to our bottling partner in Venezuela, the Company's outstanding receivables balance related to these sales will continue to increase. In addition, we have certain intangible assets associated with products sold in Venezuela. If we are unable to utilize a government-approved exchange rate mechanism for concentrate sales, or if the bolivar further devalues, it could result in the impairment of these intangible assets. As of September 30, 2011 , the carrying value of our accounts receivable from our bottling partner in Venezuela and intangible assets associated with products sold in Venezuela was less than $200 million. The revenues and cash flows associated with concentrate sales to our bottling partner in Venezuela in 2011 are not anticipated to be significant to the Company's consolidated financial statements.

CONF CALL

Jackson Kelly

Good morning, and thank you for being with us today. I'm joined by Muhtar Kent, our Chairman and Chief Executive Officer; and Gary Fayard, our Chief Financial Officer. Following prepared remarks this morning, we'll turn the call over for your questions.

Before we begin though, I'd like to remind you that this conference call may contain forward-looking statements, including statements concerning long-term earnings objective and should be considered in conjunction with cautionary statements contained in our earnings release and in the company's most recent periodic SEC report.

In addition, I would also like to note that we have posted schedules on our company website at www.thecoca-colacompany.com, under the Reports and Financial Information tab in the Investors section, which reconciles certain non-GAAP measures, financial measures that may be referred to by our senior executives in our discussions this morning, and from time-to-time in discussing our financial performance to our results as reported under generally accepted accounting principles. Please look on our website for this information.

Now I will turn the call over to Muhtar.

Muhtar Kent

Thank you, Jackson, and good morning, everyone. Today, I'm pleased to share The Coca-Cola Company continues to operate from a position of real strength. Our brands continue to get stronger. Our strategies continue to be sound, and our execution continues to be focused and effective. All of this continues to drive sustainable growth and continues to bring us closer to achieving our 2020 Vision. One day, one week, one month and one quarter at a time. Thanks to the extraordinary determination and resolve of our 146,000 company associates around the world, we delivered volume and revenue growth this quarter in every one of our 5 geographic operating groups. And we achieved financial results for both the quarter and the full year in line with or ahead of our long-term growth targets, making this the seventh consecutive quarter we have either met or exceeded our long-term growth targets.

Our global sparkling beverage portfolio kept growing, up 2% for the quarter and a solid 4% for the full year. Our global still beverage portfolio is also performing well, up 6% for the quarter and a strong 8% for the full year. And we gained global volume and value share in nonalcoholic ready-to-drink beverages, while also gaining global share in both sparkling and still beverage categories. We achieved these results for both the quarter and the full year against the backdrop of a volatile global economic landscape. Even as we believe that the unease in the global markets will continue in the near term, the breadth of our global footprint and the strength of our brands create a business that was built for times like these, resilient and resolute to grow.

Our solid performance in 2011 reflects the consistent investments we have made over time to strengthen the health of our brands, starting with brand Coca-Cola, the very oxygen of our business, up 3% in both the quarter and the full year. In fact, brand Coca-Cola grew by at least 24 million servings in 24 different countries this past quarter. Our brand health and brand value have been created over the long-term through strong and consistent investments in our business, rather than through short-term incremental actions. And this is why we remain so committed to our long-term brand investment strategies. Our 2011 performance results underscore how our company, together with our global bottling partners, is well aligned and positioned to lead in this difficult environment.

As we enter into the third year of our 2020 Vision, our roadmap for winning together remains clear to us and our committed bottling partners. The assumptions that shaped our vision have not changed. Our expectations for strong performance have not wavered. The key to our calculus for growth and achieving our 2020 Vision will be to ensure that we keep creating balanced growth across both emerging and developed markets, as well as sparkling and still categories.

We successfully achieved this balance in 2011. For the full year, we delivered almost 1 billion unit cases of incremental organic volume growth, or the equivalent of adding another Japan to our business. And importantly, we delivered positive full year growth in key developed markets like North America, Japan and Germany, while also generating double-digit full year growth in key emerging markets like India and China. And we will continue to make significant investments in our future, all across the world.

In fact, in order to achieve our 2020 Vision, we anticipate our global system will add about 100,000 jobs in this decade as we invest to support the tremendous opportunity we see in nonalcoholic beverages, one of the fastest-growing industries in consumer packaged goods.

So let's review our fourth quarter and full year results. Worldwide, we grew volume 3% this quarter, in line with our long-term growth target. For the full year, we grew worldwide volume by 5%, including the benefit of cross-licensed brands, primarily Dr. Pepper in North America. Excluding these brands, we delivered strong full year volume growth of 4%, also in line with our long-term target.

As for our profit results, we grew comparable earnings per share by 10% for both the quarter and the full year, ahead of our long-term target. As we close the second year of our 2020 Vision, this also marks the second consecutive year we've delivered double-digit comparable earnings per share growth.

Now let's briefly review performance results across our operating groups, beginning first with North America where our team remains focused on driving profitable and sustainable growth. North America volume was up 1% in the quarter, making this North America's seventh consecutive quarter of growth. And for the full year, North America's organic volume growth was also up 1%.

The North America business gained total market volume and value share in sparkling, still and nonalcoholic ready-to-drink beverages in both the quarter and the full year. And we delivered these strong results while in the process of successfully integrating the largest acquisition in our company's history. Our sparkling beverage results in North America were even for the quarter, with brand Coca-Cola volume up 1%. We achieved these results while also earning an increase in retail pricing of 4% in sparkling beverages through the effective execution of our occasion-based brand, package, price and channel strategies.

As for Coke Zero, it was up high-single digits in North America this past quarter and up double digits for the full year, making this the fifth consecutive year of double-digit growth. We also drove positive growth for Fanta, which was up 3% in 2011, its second consecutive year of positive growth.

Our still beverages in North America delivered 3% growth in the quarter and 4% growth for the full year while gaining share for the seventh consecutive quarter. POWERADE continues to be a leading driver of this solid growth, up 11% in the quarter and 12% for the full year. And POWERADE once again captured both volume and value share in the sports drinks category, both for the quarter and for the full year. Our key brands delivered double-digit growth in the quarter led by Gold Peak, which grew double digits for the 19th consecutive quarter.

As we've always said, there's no other western developed market in the world that boasts as dynamic the demographics as those present in North America between now and 2020. Young, vibrant, diverse, educated and entrepreneurial. We like these attributes and have every reason to remain excited about the long-term outlook of our flagship market.

Turning now to our Pacific Group where in 2011, our business again delivered consistent growth across a diverse set of markets. Overall, our Pacific Group volume was up 5% in both the quarter and the full year, and these results were led by China, up double digits in the quarter and for the full year, making this 9 out of the last 10 years that our business in China has delivered double-digit growth.

Our efforts to enhance the consumer experience with our sparkling beverage brands keep paying dividends, with sparkling beverages up double digits in China for both the quarter and the full year. Importantly, we're seeing strong growth across our entire sparkling portfolio, with Coca-Cola, Sprite and Fanta all delivering double-digit growth in both the fourth quarter as well as in the full year 2011.

At the same time, our still beverage portfolio brands are sustaining their solid momentum, also delivering double-digit growth for the full year. These results confirm that we are executing the right strategies and have the right capabilities in place in China to deliver sustainable double-digit growth over the long-term.

Japan's fourth quarter results were up 5%, resulting in slightly positive full year growth, rounding to even. This is a better-than-anticipated full year result in light of the tragic national disasters that occurred last March. This also underscores the strength and resilience of our people and brands across the entire Japanese bottling system. Notably, we realized greater momentum across several key channels in Japan this quarter, including convenience stores and vending as we further increase our focus on single-serve beverages.

Moving now to Latin America where in 2011 we once again expanded our volume and value share leadership position. Volume in this total region was up 4% in the quarter and 6% for the full year. This strong performance was once again led by Mexico, up 4% for the quarter and 9% for the full year. Our business in Mexico gained volume and value share in both sparkling and still beverages for both the quarter and the full year. In fact, our still beverage portfolio in Mexico reached nearly 1 billion unit cases in 2011, a short 4 years after the successful integration of Jugos Del Valle into our winning portfolio.

The rapid evolution of our brands in Mexico is a great testament to our team's ability to execute clear, occasion-based channel strategies across all beverage categories in this key market. We're also advancing our momentum in Argentina, which delivered double-digit full year growth while capturing volume and value share in both sparkling and still beverages for the 12th consecutive quarter.

And finally, Brazil, volume was up 1% for the full year. Despite a general slowdown in the economy and unfavorable weather, our business in Brazil keeps outperforming the industry, gaining share across both sparkling and still beverages in both for the quarter as well as the full year.

Let's now turn to the Eurasia and Africa Group. In 2011, we made sound progress against our goal to strategically invest for tomorrow while gaining share today. Volume in this region grew 4% in the quarter and a solid 6% for the full year. Importantly, our growth in Eurasia and Africa was driven by the continued strong momentum of brand Coca-Cola, up 5% in the quarter and 7% for the full year 2011.

Our overall performance in this key region was once again led by India, which delivered 20% growth for the quarter, resulting in double-digit growth for the full year. 2011 was the fifth consecutive year that India achieved double-digit growth. And that’s been the case throughout 2011, growth in India was well balanced across our entire portfolio. Sparkling beverages in India were up over 20% this quarter while brand Coca-Cola was up a strong 15%. And still beverages in India were up 16% this quarter, benefiting from a healthy growth across our juice portfolio, including Maaza, up 19%.

Russia was down low-single digits in the quarter, fourth quarter, cycling last year's very strong 31% growth. On a full year basis, our business in Russia was up mid-single digits. Our business in Russia is being led by the strong growth of brand Coca-Cola, which delivered double-digit growth in 2011. Brand Coca-Cola is now more than twice the size of our primary competitor's cola brand in Russia. Notably, our overall business in Russia keeps outperforming the rest of the industry, gaining both sparkling and still beverage volume and value share.

Turning to Turkey. We gained volume and value share this quarter in both sparkling and still beverages. For 2011, Turkey again delivered double-digit growth as it did the previous year in 2010. And despite geopolitical challenges in the region, our Middle East and North Africa business unit delivered a solid 7% in the quarter and 8% for the full year.

A clear example of our commitment to invest in tomorrow in this exciting Middle East region is our recently announced agreement to acquire approximately half of the equity of Aujan Industries. Aujan holds the #1 position in the still beverage business across the entire Middle East. Their brands hold a top 3 position in every market where they compete. This strong partnership with Aujan, coupled with the strength of our bottling partners, will make the Coca-Cola system a leader in the fast-growing still beverage category in the Middle East.

Let's now turn to Europe, a region of the world that is still facing a very uncertain economic environment. Yet, for The Coca-Cola Company, it is also a region that serves as a testament to how well our system is positioned to face these serious economic challenges. Our business in Europe grew 1% in the quarter, making this Europe's sixth consecutive quarter of volume growth, resulting in a full year growth rate of 2%. We achieved these results by strategically tailoring our price and package offerings to meet the needs of each market and their varying economic conditions. Our growth in Europe was widespread, with positive fourth quarter and full year growth across several key markets in Northwest Europe and Spain. And we saw the continued growth of Innocent, supported by the successful launch of not-from-concentrate juice in Great Britain. Our growth in Europe was once again led by Germany, up a very strong 9% for the quarter and up 6% for the full year, representing our best full year growth result in Germany since 1992.

While some of this growth should be attributed to favorable weather and consumer sentiment, there's no doubt that our bottling restructuring efforts as well as effective marketing campaigns have played a key role in this improvement. We're confident that our business in Germany is in a sound position to continue delivering long-term sustainable growth.

Looking ahead to 2012 and 2013. Despite the lingering debt crisis coupled with economic and political uncertainty, we are confident that we have the right brands, the right structure, the right strategies and right capabilities in place to continue delivering profitable growth in Europe over the longer term.

Now let's turn to an overview of how we are building our brands. As we've said before, we always place our brands first in all that we do, across more than 200 countries all around the world. This is how we've built the world's most valuable beverage brand portfolio, with 15 $1 billion brands, more than any other beverage company. Our top 4 brands: Coca-Cola, Sprite, Fanta and Diet Coke, all once again exceeded $10 billion in global retail sales in 2011. A key component of how we strengthen our global brand portfolio is through innovative consumer engagement. We continuously strive to engage with our consumers in an integrated manner across all social media platforms. A recent example of our efforts in this front was this past weekend's very successful Super Bowl campaign where we engaged fans like never before. Through a unique online viewing experience, fans got to chat with our animated polar bears and see their game reactions. And they watched the bears move from the digital realm of the TV as they starred in 3 new well-received and highly rated TV commercials. And an estimated 300,000-plus fans joined the polar bears live, far exceeding expectations. And by the second quarter, the Coca-Cola Facebook feed was receiving 3,400 hits per second. This is just one of the -- a string of marketing achievements for our company.

Recently, we were humbled by the Advertising Age naming The Coca-Cola Company as its 2011 Marketer of the Year. And it's gratifying to see our global marketing efforts recognized by this industry-leading publication as we strive to develop and deploy the world's most innovative and effective marketing.

Let me update you now on our progress around winning at the point of sale. Our system continues to develop critical capabilities to better support over 20 million customers we partner with each and every week to deliver these servings. We measure our progress against this effort by tracking our results across several high-impact, pragmatic and locally actionable metrics. One metric we have referenced several times this past year is our immediate consumption volume growth. And this metric is meaningful as it drives trial, drives recruitment and system profitability. In 2011, our immediate consumption beverages were up 4% globally, driven by focused in-store activation efforts and cold drink equipment expansion. In fact, as a global system, we've placed over 1.2 million new pieces of cold drink equipment in 2011 and have placed over 2.2 million since 2010, the first year of our 2020 Vision.

Another key metric we monitor closely is the expansion of our right execution daily, or RED program in short. Some of you may remember RED as our world-class commercial process designed to improve execution at the outlet level. Today, operations representing over 1/3 of our global volume utilize RED. And for comparison, when we initiated our 2020 Vision just 3 years ago, less than 15% of our global volume was distributed through operations using RED. So as we move into 2012, our RED program will remain an area of increasing emphasis, focus and growth for our system.

Before concluding our operating results review, I'd like to update you on our productivity goals. A leading priority of our company is to design and implement an effective and efficient business system, with productivity as one of our core pillars of our 2020 Vision. As such, in 2012, we're implementing a new 4-year productivity and reinvestment program that we will -- we expect will achieve between $550 million and $650 million of total incremental annualized savings by the end of 2015. I'm pleased and excited to announce this program from a position of continued growth and momentum towards realizing our 2020 Vision as we consistently deliver results in line with or ahead of our long-term targets. This program will further enable our efforts to strengthen our brands and reinvest our resources to drive long-term profitable growth.

We remain relentless in our efforts to become more efficient, leaner and adaptive to changing market conditions, while at the same time building a continuous improvement in cost management culture in keeping with our 2020 Vision. Gary is going to share further details about this new 4-year program in a few moments.

Finally, I also want to highlight some of the important progress we're making in the area of sustainable packaging, water stewardship and climate protection. By the end of 2011, we've shipped nearly 10 billion PlantBottle packages, helping reduce our annual emissions of carbon dioxide, while also decreasing our dependency on oil-based resin. As noted in our latest Sustainability Report, we improved our water use efficiency for the eighth consecutive year, reducing the average amount of water required to produce each beverage serving. We estimate that we replenished 35% of the water used in our finished products due to some 380-plus community water partnerships in 94 countries as we work toward our goal of water neutrality by 2020. And we increased our production volume while reducing our system-wide global carbon emissions by 2%, putting us a step closer to our goal of growing our business but not our carbon.

These are just a few examples of how we're building our business responsibly by making a positive difference in the communities that we serve -- we proudly serve. These efforts are helping us engage with consumers, reduce our cost of doing business and improve our bottom line.

We are keenly aware of how uncertain the global economic landscape remains today. That said, as we look ahead, we see a world looking for hope, for optimism and for renewal. The Coca-Cola Company and the Coca-Cola system is uniquely positioned to refresh this thirsty world. We're refreshing the thirst of our investors consistently by delivering high-quality returns to shareowners, while also generating steady cash flows and paying a steady healthy dividend. We're refreshing the needs of thirsty global consumers through our diverse brand portfolio and the world's most innovative and effective marketing. We're refreshing the needs of a thirsty system by increasing our levels of global investment along with our dedicated bottling partners. We're refreshing our operations through a culture of continuous improvement. And central to this is extending and driving productivity efforts to design and implement a more effective and efficient business system. And we are refreshing the needs of our communities through global and industry sustainability leadership.

The nonalcoholic ready-to-drink industry grew by $35 billion in total retail value in 2011. We're pleased to say that our Coca-Cola system represented more than 40% of this total industry growth, underscoring that our 2020 Vision is working well. And while 2011 was another strong year of performance for The Coca-Cola Company, we believe we are just getting started and that our best and brightest days lie ahead.

We have a lot to be thankful for, and confident about healthy and beloved brand, a clear roadmap for continued growth, a well-aligned global bottling system, dedicated and passionate associates and strong financial results and discipline. Taking into account all of these assets to our business, we remain resolute in our desire and confident in our ability to achieve our long-term growth targets and further enhance the value of your investment in The Coca-Cola Company.

With that, let me now turn the call over to Gary.

Gary P. Fayard

Thanks, Muhtar, and good morning, everyone. We once again delivered quality results this quarter and for the full year, in line with or ahead of our long-term growth targets. In fact, our full year volume and profit results were in line with or exceeded our long-term growth targets for the sixth consecutive year. We continue to achieve these consistent high-quality results during a period of still mixed economic recovery, which is a real testament to our global system's ability to execute our strategic plans in alignment with our 2020 Vision.

So let's review our earnings results in more detail. We reported comparable earnings per share of $0.79 this quarter, up 10% versus the prior year. Our full year comparable earnings per share growth also was up 10%, ahead of our long-term growth targets. For the quarter, comparable currency neutral operating income was up 14%, bringing our full year comparable currency neutral operating income growth to 12%, also ahead of our long-term growth target. For clarity, the impact of currency on our comparable operating income results was a 3% headwind for the quarter and a 3% benefit for the full year, right in line with the quarterly and full year outlook range we've provided during our last earnings call in October. Our business delivered comparable currency neutral net revenue growth of 6% this quarter, in line with our long-term growth target, including a 5% increase in concentrate sales and positive price mix.

On a full year basis, our comparable currency neutral net revenue growth came in at 29%, including a 5% increase in concentrate sales, positive price mix and the impact of the CCE transaction. And again, for clarity, the impact of currency on our comparable net revenue results was a 1% headwind for the quarter and a 3% benefit for the full year.

Our combined international and bottling investments group price product mix was a positive 3% for the quarter. And our North American price product mix came in at a positive 2% in the quarter, driven by a 4% increase in our pricing to retailers for our sparkling beverages in North America.

Our consolidated geographic mix was down 1%, which resulted in a consolidated price mix at the midpoint of our long-term target range of 1% to 2%. For 2012, we anticipate our consolidated price mix results will remain in this target range of 1% to 2%.

Turning to the rest of our P&L. We expected our consolidated comparable gross revenues to decrease slightly in 2011, which they did due to increased commodity cost, as well as the impact of our acquisition of CCE's North American bottling operations. Importantly, we expect our 2012 consolidated comparable gross margins will remain in line with 2011, even after taking into consideration further commodity cost inflation, which I'll discuss in a few minutes.

Our comparable currency neutral SG&A expenses were even in the quarter and up 30% for the full year. As explained in prior quarterly calls, this full year increase reflects the impact of acquiring CCE's former North American business, which we did not fully cycle until the fourth quarter of 2011. The increase in SG&A also reflects our continued investments around the world. On this front, for the full year 2011, we grew our direct marketing expenses ahead of unit case growth, sustaining our commitment to invest in the health and the strength of our brands.

As for operating expense leverage, it came in positive this quarter for both North America and the Bottling Investments Group. As expected, operating expense leverage for our international operations came in slightly negative in the fourth quarter due to the timing of expenses. And operating expense leverage for international came in at even for the full year as planned.

For 2012, we expect to capture low-single digit operating expense leverage as we keep strategically investing in brand-building activities around the world and efficiently managing our operating expenses.

Our net interest income came in at a positive $66 million, slightly above the full year forecast we provided in our last earnings call. For 2012, our best estimate is that net interest income will come in between $20 million and $40 million, primarily due to lower interest rates in some international locations. We expect this income to be spread relatively evenly across the quarters in 2012, and we'll update you each quarter as appropriate. Finally, we closed 2011 with an underlying effective tax rate of 23.9% and expect our 2012 underlying effective tax rate to fall between 24% and 25%.

Moving to our cash flow from operations. Year-to-date, this came in at $9.5 billion. As a reminder, this cash flow result includes $769 million contribution made to our pension plans in the first quarter of 2011. Net of these additional pension plan contributions, we grew our net cash flow from operations a positive 7% for the full year.

With regards to our share repurchase program, our net share repurchases totaled $2.9 billion in 2011, at the high end of the $2.5 billion to $3 billion range communicated during our last earnings call. And in 2012, we again expect to repurchase a net share amount within the same $2.5 billion to $3 billion range.

Now let me take a moment to update our outlook on several additional items that may help you model our business in 2012, starting with a quick reminder about this year's calendar. Even though 2012 is a leap year, our first quarter of 2012 will have one less day when compared to the first quarter of 2011. And the fourth quarter of 2012 will have 2 more days when compared to the fourth quarter of 2011.

Now let me come back with our outlook on commodities. As we indicated in our last earnings call, our incremental commodity costs for 2011 came in at approximately $800 million. As a reminder, these costs were related to the raw material and conversion costs associated with sweeteners, metals, juices and PET plastic.

As we look ahead to 2012, we anticipate the underlying commodities related to these inputs will remain somewhat pressured, driven primarily by increases in the cost of juices and sweeteners. As a result, we expect the full year 2012 incremental impact of commodity costs on our results to range between $350 million and $450 million. Having said that, we believe we have the right strategic plans in place to mitigate the impact of these incremental commodity costs and remain confident in our ability to achieve our long-term growth targets.

Turning now to currency. These have continued to fluctuate with the dollar strengthening, although more moderately against many key currencies. We're mostly hedged for 2012 on the euro and yen, with good coverage on several other currencies. After considering these hedged positions, we currently expect currencies to have a low single-digit negative impact on operating income for the first quarter of this year and a mid-single digit negative impact for the full year. As per our normal practice, we'll update you both on our commodity and currency forecast on a quarterly basis as we go through the year.

Now let me update you on our productivity goals. As we closed 2011, we've now successfully completed our 2008 to 2011 4-year global productivity program. We completed this program on plan and with actual annualized savings of over $500 million, exceeding our initial savings target of $400 million to $500 million. As Muhtar mentioned earlier, we're now launching a new 4-year productivity and reinvestment program. In light of this, I want to take a moment and walk you through the components of the new program.

First, a new 4-year global productivity initiative starting this year. This initiative will target between $350 million and $400 million in annualized savings focused around 4 primary areas: one, global supply chain optimization; two, global marketing and innovation effectiveness; three, OpEx leverage and operational excellence; and four, data and IT systems standardization. We're in the initial stages of defining the one-time costs associated with capturing these savings, and we'll provide an update on these costs in our next earnings call.

Second, as we move through 2011, we accelerated our CCR integration efforts to support brand-building initiatives, reinvest in marketing and sales capabilities, as well as to partially offset some of last year's increasing commodity costs. As a result, we effectively realized nearly all of the $350 million in annualized savings in 2011, almost 3 years ahead of schedule. This is a testament to the great work of our CCR team and their ability to effectively realize and capture synergies while simultaneously delivering profitable growth.

Further, we have successfully identified incremental CCR integration synergies in North America, primarily in the area of our North American product supply, which will better enable us to service our customers and consumers. As such, we now believe our CCR integration efforts will capture an incremental $200 million to $250 million above our original $350 million target. And we expect to capture these incremental annualized synergies starting this year in 2012 and fully realize them by the end of 2015.

Correspondingly, we're also increasing our estimate of total one-time cost associated with the capture of CCR synergies from $425 million to $800 million as we implement new initiatives to capture these higher synergies. Therefore, combining both our new global productivity initiative and our newly expanded CCR integration efforts represents a total incremental annualized savings of $550 million to $650 million. We expect to phase in the capture of these total incremental savings over 4 years, starting in 2012 through the end of 2015.

Going forward, we'll report our progress in capturing these total incremental savings under one joint productivity and reinvestment program.

As for how we intend to invest the savings generated by this new program, first, and in line with our 2020 Vision, these funds will enhance ongoing system-wide brand-building initiatives. And second, as these savings are realized, they may also help mitigate potential incremental near-term commodity costs.

As we look back on 2011, we are greatly encouraged by our business achieving yet another solid year of quality results. There is no better proof that our 2020 Vision is working than our company's continued ability to consistently deliver results that meet or exceed our long-term growth targets even while facing volatile market conditions. And as you consider how to model our business going forward, I want to be very clear that our system remains fully committed to continuing our relative historic price premium for our brands in the marketplace. For as we have communicated several times in the past, we strongly believe and have consistently proven that the best way to drive long-term sustainable value is by earning price with our consumers in concert with a robust occasion-based brand package and channel strategy that drives profitable sustainable growth. That is why we remain confident we can keep delivering results in line with our long-term growth targets. Our system is healthy and financially strong. We continue to generate cash, invest in our brands, execute our 2020 Vision and growth strategies and pay a healthy dividend. Our seasoned management team, over 146,000 motivated company associates and highly capable global bottling partners are making the right actions and executing the right strategies to build on our strengths, to refresh a thirsty world and to drive our 2020 Vision.

Before concluding our prepared remarks, I want to remind you that I'm looking forward to presenting at CAGNY in Boca Raton on Wednesday, February 22; as well as at the CAGE Conference in London on Wednesday, March 21. I hope to see many of you there at these great investor and analyst events.

Operator, we're now ready for questions.

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