2 0 0 0
A n n u a l
R e p o r t
Coca-Cola Bottling Co. Consolidated (CCBCC)
is the second largest Coca-Cola bottler in the
United States. The Company is a leader in the manu-
facturing, marketing and distribution of soft
drinks. With corporate offices in Charlotte, N.C.,
the Company does business in 11 states, primarily in
the Southeast. The Company has one of the highest
per capita soft drink consumption rates in the world
and manages bottling territories with a consumer
base of close to 18 million people. Coca-Cola
Bottling Co. Consolidated is listed on the NASDAQ
National Market System under the symbol COKE.
This annual report is printed on recycled paper.
F i n a n c i a l
S u m m a r y
In Thousands (Except Per Share Data)
Fiscal Year
Net sales
Gross margin
2000
1999
1998
$ 995,134
$ 972,551
$ 928,502
464,893
429,438
393,583
Restructuring expense
2,232
Income before income taxes
9,835
4,986
23,245
Net income
6,294
3,241
14,878
Average Common and Class B
Common shares outstanding
Basic net income per share
Basic net income plus amortization
expense per share*
8,733
8,588
$
$
.72
2.02
$
$
.38
1.63
8,365
1.78
3.01
$
$
* Includes CCBCC’s share of Piedmont Coca-Cola Bottling Partnership’s
amortization expense. Amortization expense has been adjusted for income
taxes at the Company’s marginal tax rate. Certain prior year amounts have
been reclassified to conform to current year classifications.
L e t t e r T o
S h a r e h o l d e r s
I
f we assessed last year’s performance of Coca-Cola Bottling Co.
Consolidated in sports terms, we might say 2000 was a rebuilding
year. Typical of an athletic team’s rebuilding year, we suffered some
setbacks, made strategic adjustments, learned from our experiences, redefined
our vision and put a new plan into effect.
We believe we have emerged from this year of rebuilding as a much
CCBCC is constantly
stronger Company that is better positioned for the future.
innovating the way we
To understand how your Company performed in 2000, it’s important
do business. The high-
to consider the obstacles we encountered. First, we faced a challenging
business environment and a slowing economy. Fuel costs escalated, and
tech Norand unit is one
we experienced considerable price increases in packaging and other costs
such novel tool. Route
of goods — including an unprecedented increase in concentrate pricing.
Further, the Company endured a five-month labor strike in West
salesmen are able to
Virginia which impacted sales and profitability during the second and
use the hand-held
device to quickly and
accurately measure
product levels at
third quarters.
Faced with these obstacles, the major objective in 2000 was to
improve the financial health of the business. The key components in
this strategy included increasing prices to improve margins, managing
expenses and paying down debt to improve interest costs and coverage.
We had an operationally focused plan to manage the price/volume
vending machines and
equation and increase productivity in 2000 and beyond.
determine which
In 2000, we increased net selling prices by 6.5 percent,
which had a short-term negative impact on volume. In spite of
products need to
this one-year downturn, our volume performance on a multiyear
be replenished.
basis is very strong and consistent with other major Coca-Cola bottlers.
In fact, in the fourth quarter we saw sales rebounding with an increase
in sales volume. We took steps to reduce spending following several
years of significant incremental investments in both equipment and
human resources.
We also set out to be more efficient and improve productivity.
Your Company has begun to see the results of our investment in our
value chain initiative that you will read about later in this report.
In addition, the Company has taken steps to consolidate operations,
including merging several sales centers and divesting a small part of our
selling territories — areas in Kentucky and Ohio — which were a better
3
L e t t e r T o
S h a r e h o l d e r s
geographic fit with another Coca-Cola bottler. This divestiture allowed the
Company to reorganize its business in West Virginia to be more efficient.
Net income for 2000 was $6.3 million compared to $3.2 million in
1999, including the one-time gain from the sale of the Kentucky and Ohio
territories. Operating cash flow grew to $142 million, up about 5 percent.
Free cash flow increased significantly which enabled us to pay down debt by
$60 million — or 8 percent. This lower debt load should not only reduce
interest costs in 2001, but should also improve our interest coverage ratios.
As the nation’s second largest Coca-Cola bottler, our relationship with
The Coca-Cola Company is important. As The Coca-Cola Company
Chairman and Chief
Executive Officer Frank
Harrison, III and
President and Chief
continues to move forward with its rebuilding and streamlining of
Operating Officer Bill
operations, our relationship remains strong. We are optimistic about
The Coca-Cola Company’s future and look forward to further enhancing
Elmore visit an exciting
our working relationship while building long-term shareholder value for
new CCBCC facility in
you, our shareholders.
Considering the formidable challenges we faced during the year,
Charlotte, N.C. The new
we are pleased with Coca-Cola Consolidated’s performance in 2000.
sales center, adjacent
We want to affirm our commitment to long-term profitable growth
and increased shareholder value. We are grateful to a truly outstanding
to Snyder Production
management team for their leadership and creativity and to all our
employees for their continued dedication and hard work. We have
a strong team in place; we’re ready for the future.
Center (SPC), places
Charlotte’s bulk,
conventional and cold
drink departments
together under
one roof.
J. Frank Harrison, III
Chairman of the Board of Directors
and Chief Executive Officer
William B. Elmore
President and Chief Operating Officer
5
Q u e s t i o n s & A n s w e r s w i t h
P r e s i d e n t a n d C O O B i l l E l m o r e
“I want to welcome Bill Elmore as the Company’s new president and
chief operating officer,” said Frank Harrison.“Bill has been a part of the
Coca-Cola Consolidated family since 1985, and he has held a leadership role
in virtually every department and function in the Company. Like Jim Moore,
Bill is a superior leader who has the talent and vision to guide this Company’s
operations for many years to come.” A discussion with Bill on the outlook
for 2001 appears below.
Q What are Coca-Cola Consolidated’s priorities for 2001?
A We are dedicated to continuing to improve the financial health of the
Company, primarily through targeted price increases and disciplined capital
and operating expense management that allows us to further pay down debt.
As we move forward, we must have a balanced approach that delivers
appropriate financial results while continuing to grow our consumer franchise.
Our key priorities include managing the price/volume equation, increasing
productivity, implementing our value chain initiative, improving the
efficiencies of our distribution systems and technical service function,
strengthening our cold drink business, managing our key customer and
supplier relationships and executing in the marketplace.
Q How do you effectively manage the price/volume equation?
A Managing the price/volume equation is our most important priority as
well as our most challenging task. As with all consumer products that are
price elastic, when prices increase, volume — at least temporarily —
declines. We witnessed that last year. It is important to note that over the last
20 years or so, soft drink prices have actually declined relative to inflation.
While our industry has become much more productive, most, if not all, of the
cost savings have benefited the consumer. In 2000, we took the necessary step
to pass on our increased costs, and as expected, volume declined.
Going forward, price increases must be more in line with inflation. At the
same time, we plan to be more surgical and responsive in pricing actions.
It’s important that we protect sales volume and market share while getting
price realization. I’m confident we’ll be able to do that — and in fact,
in the fourth quarter of 2000, we saw volume begin to rebound.
Q How do you continue to improve productivity?
A Productivity is already a core competency within Coca-Cola Consolidated.
Some tools that are just becoming available to us will enable us to increase
efficiencies in almost every aspect of our business. These tools emerged from our
value chain, distribution and technical services initiatives. Using these tools
and, in some cases, redesigned processes, will help us grow margin and manage
capital and operating expenditures while becoming much more efficient.
Eye-catching glass-
front venders are the
latest introduction
into the marketplace.
Workplace break
rooms and other
locations where
people seek refresh-
ment will benefit from
this new tool.
Consumers can see
the technology at
work as their bever-
age of choice gently
drops into the arm
and the drink is
placed upright into
the receptacle.
7
Q u e s t i o n s & A n s w e r s w i t h
P r e s i d e n t a n d C O O B i l l E l m o r e
Take the value chain initiative. The goal is to improve decision-making in our
manufacturing and transportation systems. We have made a major investment in
value chain that is already beginning to generate returns, such as improved efficiencies
in sales forecasting, production, product movement, inventory management and
warehouse layout.
Better processes require less inventory buffer which translates into lower investment
in working capital, reduced losses from damaged product, improved warehouse
efficiencies, increased manufacturing productivity and lower transportation costs.
By the second quarter of 2001, our entire system will have implemented the
value chain processes. These improvements in sales forecasting, raw materials
procurement and automated production scheduling are showing appreciable
improvement in manufacturing productivity and warehouse costs.
Q What changes do you expect in your distribution systems?
A Much like the value chain process, we are looking at every aspect of
our distribution systems and have discovered innovative ways to improve
productivity. Our goal is to provide satisfactory customer service at a
lower cost. We’re looking at various methods to deliver our products in
more efficient ways, from changing the size of our trucks to technology
improvements to how we sell our products. The benefits of improving our
distribution systems include achieving better sales results, reducing delivery
costs, reducing employee turnover and improving warehouse efficiencies.
I’m encouraged by what we have already learned and look forward to
expanding these initiatives throughout the Company in the next few years.
Q In the past, the Company has placed an emphasis on its cold drink
A Coca-Cola Consolidated has a highly developed cold drink business that
business. Is cold drink still a priority?
continues to be a critically important part of our success, and we are doing
a number of things to strengthen this key channel. We have more than
175,000 pieces of cold drink equipment in place, and our goal is to increase
sales through this large asset base. We’re growing our customer base and at the
same time taking steps to make sure each account and location is profitable.
Another innovative tool we will use to grow our cold drink business is on-line
vending. This new technology uses radios placed on vending machines to
communicate to us when product is needed or if the machine is in need of
repair. The tool provides data to ensure that we have the right inventory for
our various brands while reducing out-of-stock conditions. It also enables us
to significantly reduce the amount of time that a machine is inoperable due
to mechanical problems. Because it communicates to us when a delivery is
needed, unnecessary trips to deliver product are eliminated, allowing us to
achieve greater sales and lower operating costs.
9
The introduction of
Dasani has been one of
the biggest success
stories in recent CCBCC
history. Available in a
variety of packages and
outlets — including
vending machines — Dasani
has become a favorite of
consumers who love the
fresh taste of this
purified, mineral-enhanced
water. At Snyder
Production Center, the
bottles are labeled
before being
packaged for distribution.
Q u e s t i o n s & A n s w e r s w i t h
P r e s i d e n t a n d C O O B i l l E l m o r e
Another way to improve our cold drink business is to better manage the service and
repair of our cold drink assets. I’m excited about our technical service initiative.
We have instituted a parts management system, which has dramatically improved
parts ordering and inventory efficiencies. In addition, we have decided to outsource
our vender refurbishment. The benefits of this initiative include increased sales and
profit per asset, reduction in parts expense, reduction in facility capital requirements,
improved vender delivery productivity and increased technician productivity.
Q What are some of the key constituent groups Coca-Cola Consolidated
A There are a number of key relationships that are critical to our success.
is reaching out to?
Those constituencies include The Coca-Cola Company, our key customers
and suppliers, other Coca-Cola bottlers, our employees, community leaders
in the cities and towns where we do business and our consumers.
Our partners at The Coca-Cola Company have experienced a major
restructuring over the last year or so. There is new leadership and a
new approach toward the franchise company’s relationship with the
bottler system. We have an excellent relationship with The Coca-Cola
Company, and we are working well together to meet mutual goals.
It is a two-way relationship. Just as a strong Coca-Cola Company is
important to our success, The Coca-Cola Company needs strong and
profitable bottler partners.
We enjoy excellent relationships with both our key customers and key
suppliers, based on our core values of honesty, integrity and respect.
Consolidation among customers and suppliers has reduced the number
while increasing the size and power of many of these groups. These
changing dynamics make it necessary to work with neighboring
Coca-Cola bottlers to effectively meet the needs of large retail accounts
that cross territory lines. We have taken some innovative steps so that our
key customers can deal with the Coca-Cola system as seamlessly as possible.
Coca-Cola Consolidated’s employees make everything possible. I believe
this Company has the best workforce in the industry. We are continuing
to take steps to develop our employee associates and build a workforce that
reflects the diversity of our communities. Our goal is also to provide attractive
compensation and benefits programs that will enable us to retain our most
valuable assets — our people. Further, we understand that our consumers
are the backbone of our success, and we recognize that the economic health
of the communities where we do business has a direct impact on our
business. So, we will continue to reach out to civic, business, political,
religious and charitable leaders in order to help build stronger communities
for both our employees and consumers.
Shoppers can’t walk
by CCBCC’s prominent
grocery store displays
without taking notice.
Attractive, creative
product displays in key
locations in stores
ensure our consumers
don’t have to search
for us ... we’re right in
front of them. This kind
of convenience keeps
our consumers happy
while boosting sales.
11
A T r i b u t e
Coca-Cola Bottling Co. Consoli-
dated would not be what it is today without
the leadership and dedicated service of
James L. Moore, Jr.
The employees and shareholders of
CCBCC are fortunate that Jim Moore joined
Coca-Cola Consolidated in March 1987.
For the past 14 years, Jim has guided this
organization through acquisitions, pricing
pressures and volume fluctuations, changes
in the industry and in the company, new
product launches, technological triumphs,
the move to sell in new and innovative
venues and more.
Jim has been a hands-on leader.
of North Carolina. He and his wife, Sue, have
In a 1990 interview, he was asked why he
two adult daughters and one grandson. Prior
still spent so much time in the trade. He
to his distinguished career in the soft drink
responded, “I need to get a regular dose of
industry, Jim served his country (1964-66)
reality. I believe it is absolutely essential to
as a military intelligence officer, including
be in the trade, talking with customers and
a tour in Vietnam. He currently serves
working with our own people. Otherwise,
as chairman of Charlotte’s Presbyterian
you can end up breathing your own exhaust.
Hospital board of trustees and is a member
My view is simply that very little good is
of the board of directors of Park Meridian
accomplished by just sitting behind a desk.”
Financial Corporation.
Having done most every job in the
As Jim moves into his new role as
“At the end of 2000,
Jim Moore ended a
remarkable 14-year
tenure as president
and chief operating
officer of Coca-Cola
Consolidated,” said
Frank Harrison.
“I want to personally
thank Jim for his out-
standing service to
this Company. Jim is an
excellent operator
and a leader who is one
of the most respected
people in the soft
drink industry. I look
forward to his
continued support
soft drink business from district manager to
Vice Chairman of the Board, his fellow
and guidance as vice
chairman of Coca-Cola
Consolidated’s Board
of Directors.”
12
CEO, Jim understands the business and the
Board members and CCBCC management
people in it intimately. We at CCBCC were
wish him well and thank him for his
the beneficiaries of his no-nonsense, “roll-the-
profound contributions to the Company
sleeves-up-and-get-the-job-done” attitude.
he has nurtured for more than a decade.
A 1964 graduate of Davidson College,
His wisdom, knowledge and hard work
Jim also earned an MBA from the University
will continue to add value to our Company.
Table of Contents
Management’s Discussion and Analysis ...................................................................... 14
Report of Independent Accountants............................................................................ 20
Report of Management ............................................................................................... 21
Consolidated Balance Sheets ....................................................................................... 22
Consolidated Statements of Operations ...................................................................... 24
Consolidated Statements of Cash Flows...................................................................... 25
Consolidated Statements of Changes in Stockholders’ Equity ..................................... 26
Notes to Consolidated Financial Statements ............................................................... 27
Selected Financial Data ............................................................................................... 46
Summary of Quarterly Stock Prices............................................................................. 47
Directors and Executive Officers................................................................................. 48
Corporate Information ................................................................................ Inside Cover
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 13
2000 Management’s
Discussion and Analysis
INTRODUCTION
The Company
Coca-Cola Bottling Co. Consolidated (the “Company”)
is engaged in the production, marketing and distribution
of products of The Coca-Cola Company, which include
some of the most recognized and popular beverage
brands in the world. The Company is currently the sec-
ond largest bottler of products of The Coca-Cola Com-
pany in the United States. The Company also distributes
several other beverage brands. The Company’s product
offerings include carbonated soft drinks, teas, juices,
isotonics and bottled water. The Company has
expanded its bottling territory primarily throughout the
Southeast via acquisitions and, combined with internally
generated growth, has increased its sales from $130 mil-
lion in 1984 to almost $1 billion in 2000. The Company
is also a partner with The Coca-Cola Company in a
partnership that operates additional bottling territory
with net sales of $287 million in 2000.
Acquisitions and Divestitures
During 2000, the Company sold most of its bottling
territory in Kentucky and Ohio to another Coca-Cola
bottler. After a management review of the Company’s
operations, it was determined that this territory could
be operated more efficiently by another Coca-Cola bot-
tler due primarily to geographic proximity to the cus-
tomers. Without the requirement to service this terri-
tory, the Company was able to reorganize operations in
its West Virginia territory to further improve efficien-
cies. Management believes that the combination of the
proceeds from the sale and the efficiencies gained will
lead to higher profitability and better returns in this part
of our bottling territory.
14 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
During 1999 and 1998, the Company expanded its
bottling territory by acquiring four Coca-Cola bottlers
as follows:
• Carolina Coca-Cola Bottling Company, Inc., a
Coca-Cola bottler with operations in central South
Carolina in May 1999;
• The bottling rights and operating assets of a small
Coca-Cola bottler in north central North Carolina
in May 1999;
• Lynchburg Coca-Cola Bottling Co., Inc., a
Coca-Cola bottler with operations in central
Virginia in October 1999; and
• The bottling rights and operating assets of a
Coca-Cola bottler located in Florence, Alabama in
January 1998.
Acquisition related costs including interest expense
and non-cash charges such as amortization of intangible
assets will be incurred. To the extent these expenses are
incurred and not offset by cost savings or increased
sales, the Company’s acquisition strategy may depress
short-term earnings. The Company believes that contin-
ued growth through selected acquisitions will enhance
long-term stockholder value.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”)
has issued Statement No. 133, “Accounting for Deriva-
tive Instruments and Hedging Activities.” As subse-
quently amended by FASB Statement No. 138, State-
ment No. 133 is effective for all fiscal quarters of all
fiscal years beginning after June 15, 2000. Statement
No. 133 will require the Company to recognize all
derivatives on the balance sheet at fair value. Deriva-
Management’s Discussion and Analysis
tives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair
value of the hedged assets, liabilities or firm commit-
ments through earnings or recognized in other compre-
hensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative’s change
in fair value will be immediately recognized in earnings.
The Company will adopt the provisions of Statement
No. 133 in the first quarter of 2001. The adoption of
Statement No. 133 will not have a material impact on
the earnings and financial position of the Company.
The Year in Review
The year 2000 was a transitional year for the Company.
During the latter part of the 1990’s, the Company expe-
rienced above industry average volume growth. How-
ever, net selling prices had not increased, even at the rate
of inflation. During 2000, the Company was faced with
significant cost increases for concentrate, certain pack-
aging materials and fuel. Additionally, marketing sup-
port the Company had historically received from The
Coca-Cola Company was adjusted downward signifi-
cantly and interest rates on the Company’s floating rate
debt increased. In the face of the aforementioned cost
increases, the Company raised its net selling prices
during the year by approximately 6.5% over 1999.
As with most consumer products, increases in selling
prices temporarily dampened sales demand. The
increase in prices was the primary driver behind a
decline in unit sales volume of approximately 5% for
the year on a constant territory basis. Unit sales volume
declined 5.5% through the first three quarters of 2000.
However, volume increased by 1% during the fourth
quarter of the year.
Higher net selling prices more than offset volume
declines and resulted in an increase in net sales of 2.3%
in 2000 to $995 million. On a constant territory basis,
net sales increased by approximately 1% in 2000.
Income from operations plus depreciation and amortiza-
tion increased from $135 million in 1999 to $142 mil-
lion in 2000, an increase of 5%. Net income for 2000
increased to $6.3 million from $3.2 million in 1999.
Net income for 2000 includes a gain, net of tax, of
$5.6 million related to the sale of bottling territory pre-
viously discussed. During 2000, the Company also
recorded a provision for impairment of certain fixed
assets of $2.0 million, net of tax.
After several years of significant capital spending, the
Company was well positioned in 2000 with a strong
infrastructure to support the business. The investment in
infrastructure in prior years allowed the Company to
significantly reduce capital spending in 2000 to
$49.2 million from over $264.1 million in 1999, which
included approximately $155 million for the purchase
of equipment that was previously leased. The Company
anticipates capital spending to be lower in 2001 than it
was in the late 1990’s. As a result of increased cash flow
from operations, reduced capital spending and the sale
of bottling territory in Kentucky and Ohio, the Com-
pany reduced its long-term debt by approximately
$60 million during 2000.
The Company continues to focus on its key long-
term objectives including increasing per capita con-
sumption, operating cash flow and stockholder value.
We believe we will be able to achieve these objectives
over the long-term because of superior products, a solid
relationship with our strategic partner, The Coca-Cola
Company, select acquisitions, an experienced manage-
ment team and a work force of approximately 6,000
talented individuals working together as a team. We are
committed to working with The Coca-Cola Company to
ensure that we fully utilize our joint resources to maxi-
mize the full potential with our consumers and
customers.
Significant Events of Prior Years
On June 1, 1994, the Company executed a management
agreement with South Atlantic Canners, Inc. (“SAC”), a
manufacturing cooperative located in Bishopville, South
Carolina. The Company is a member of the cooperative
and receives a fee for managing the day-to-day opera-
tions of SAC pursuant to this 10-year management
agreement.
On July 2, 1993, the Company and The Coca-Cola
Company formed Piedmont Coca-Cola Bottling Partner-
ship (“Piedmont”) to distribute and market soft drink
products of The Coca-Cola Company and other third
party licensors, primarily in certain portions of North
Carolina and South Carolina. The Company provides a
portion of the soft drink products to Piedmont and
receives a fee for managing the business of Piedmont
pursuant to a management agreement. The Company
and The Coca-Cola Company, through their respective
subsidiaries, each beneficially own a 50% interest in
Piedmont. The Company is accounting for its invest-
ment in Piedmont using the equity method of
accounting.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 15
Management’s Discussion and Analysis
RESULTS OF OPERATIONS
2000Comparedto1999
Net Income
The Company reported net income of $6.3 million or
basic net income per share of $.72 for fiscal year 2000
compared to $3.2 million or $.38 basic net income per
share for fiscal year 1999. Diluted net income per share
for 2000 was $.71 compared to $.37 in 1999. Net
income in 2000 included the gain on the sale of bottling
territory discussed above, offset somewhat by a provi-
sion for impairment of certain fixed assets.
Net Sales and Gross Margin
Net sales for 2000 grew by 2.3% to $995 million, com-
pared to $973 million in 1999. On a constant territory
basis, net sales increased by approximately 1% due to
an increase in net selling price for the year of approxi-
mately 6.5% partially offset by a decline in unit volume
of approximately 5% for the year. Sales growth in 2000
was highlighted by the continued strong growth of
Dasani bottled water. Noncarbonated products now
account for almost 7% of the Company’s bottle and
can volume.
Gross margin increased by $35.5 million from 1999
to 2000 representing an 8% increase. The increase in
gross margin was driven by higher selling prices, which
more than offset a decline in unit volume as discussed
above. The Company’s gross margin as a percentage of
sales increased from 44.2% in 1999 to 46.7% in 2000.
On a per unit basis, gross margin increased 13% in
2000 over 1999.
Cost of Sales and Operating Expenses
Cost of sales on a per unit basis increased by approxi-
mately 2% in 2000. This increase was due to signifi-
cantly higher costs for concentrate and increased pack-
aging costs, offset somewhat by decreases in
manufacturing labor and overhead expenses.
Selling, general and administrative (“S,G&A”)
expenses increased by $31.3 million or 11% in 2000
over 1999 levels primarily due to a reduction in market-
ing funding received from The Coca-Cola Company.
Total marketing funding support from The Coca-Cola
Company and other beverage companies declined from
$63.5 million in 1999 to $49.0 million in 2000. The
Company anticipates that marketing funding support in
2001 will be more consistent with amounts received in
2000 than amounts received in 1999. The balance of the
increase in S,G&A expenses was due to enhancements
in employee compensation programs, higher fuel costs,
costs associated with a strike by employees in certain
branches of the Company’s West Virginia territory (pri-
marily security costs to protect Company personnel and
assets) and compensation expense related to a restricted
16 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
stock award for the Company’s Chairman and Chief
Executive Officer.
The Company relies extensively on advertising and
sales promotion in the marketing of its products. The
Coca-Cola Company and other beverage companies
that supply concentrates, syrups and finished products
to the Company make substantial marketing and adver-
tising expenditures to promote sales in the local territo-
ries served by the Company. The Company also benefits
from national advertising programs conducted by The
Coca-Cola Company and other beverage companies.
Certain of the marketing expenditures by The
Coca-Cola Company and other beverage companies are
made pursuant to annual arrangements. Although The
Coca-Cola Company has advised the Company that it
intends to provide marketing funding support in 2001,
it is not obligated to do so under the Company’s master
bottle contract. A portion of the marketing funding and
infrastructure support from The Coca-Cola Company is
subject to annual performance requirements. The Com-
pany is in compliance with all current performance
requirements, as amended. Significant decreases in mar-
keting support from The Coca-Cola Company or other
beverage companies could adversely impact operating
results of the Company.
Depreciation expense in 2000 increased $4.2 million
or 7%. The increase for 2000 was due to significant
capital expenditures in 1999 of $264.1 million, of
which approximately $155 million related to the pur-
chase of equipment that was previously leased. Capital
expenditures in 2000 totaled $49.2 million. Deprecia-
tion expense should increase at a lower rate in future
years than it has in the past three years due to antici-
pated lower levels of capital spending.
Investment in Partnership
The Company’s share of Piedmont’s net income in 2000
was $2.5 million. This compares to the Company’s
share of Piedmont’s net loss of $2.6 million in 1999.
The increase in income from Piedmont of $5.1 million
reflects improved operating results at Piedmont prima-
rily due to higher gross margin resulting from increased
net selling prices.
Interest Expense
Interest expense increased by $2.8 million or 5.5% in
2000. The increase was primarily due to higher interest
rates on the Company’s floating rate debt. The Compa-
ny’s overall weighted average borrowing rate for 2000
was 7.3% compared to 6.8% in 1999. During 2000, the
Company repaid approximately $60 million of its long-
term debt. This reduction in long-term debt should
reduce interest expense in 2001.
Management’s Discussion and Analysis
Other Income/Expense
Other income for 2000 was approximately $1 million, a
change of $6.4 million versus other expense of $5.4 mil-
lion in 1999. The change in other income (expense) in
2000 is primarily due to a gain on the sale of bottling
territory of $8.8 million, before tax, as previously dis-
cussed, offset somewhat by a provision for impairment
of certain fixed assets of $3.1 million, before tax.
Income Taxes
The effective tax rate for federal and state income taxes
was approximately 36% in 2000 versus approximately
35% in 1999.
1999Comparedto1998
Net Income
The Company reported net income of $3.2 million or
basic net income per share of $.38 for fiscal year 1999
compared to $14.9 million or $1.78 basic net income
per share for fiscal year 1998. Diluted net income per
share for 1999 was $.37 compared to $1.75 in 1998.
The decline in net income was primarily attributable to
lower than anticipated volume growth and higher
expenses related to the Company’s investment in the
infrastructure considered necessary to support acceler-
ated long-term growth. Investments in additional per-
sonnel, vehicles and cold drink equipment resulted in
cost increases that the Company anticipated would be
offset by higher sales volume. Soft drink industry
growth levels slowed significantly during 1999 and the
Company’s higher cost structure negatively impacted
1999 earnings. The Company reduced its workforce by
approximately 5% in the fourth quarter of 1999 to
reduce staffing costs.
Net Sales
Net sales for 1999 grew by approximately 5% to
$973 million, compared to $929 million in 1998. The
increase was due to volume growth of 2%, an increase
in net selling price of 3% and acquisitions of additional
bottling territories in South Carolina, North Carolina
and Virginia. Also, the Company’s 1998 fiscal year
included a 53rd week. Sales growth in noncarbonated
beverages, including POWERaDE, Fruitopia and Dasani
bottled water remained strong in 1999. Sales to other
bottlers decreased by 11% during 1999 over 1998 lev-
els, primarily due to lower sales to Piedmont.
Cost of Sales and Operating Expenses
Cost of sales on a per case basis increased by approxi-
mately 1% in 1999. This increase was due to higher raw
material costs, including concentrate and packaging
costs, as well as increases in manufacturing labor and
overhead resulting from wage rate increases and an
increase in the number of stockkeeping units.
S,G&A expenses increased by approximately
$16 million or 6% in 1999 over 1998 levels. Lease
expense declined significantly in 1999 as compared to
1998 as a result of the purchase of approximately
$155 million of equipment in January 1999 that had
been previously leased. Excluding lease expense, S,G&A
expenses increased by approximately $31 million or
12% in 1999. Increased S,G&A expenses resulted from
higher employment costs for additional personnel to
support anticipated volume growth and higher costs in
certain of the Company’s labor markets, offset some-
what by lower incentive accruals, as well as additional
marketing expenses and higher costs for sales develop-
ment programs. In addition, S,G&A expenses increased
due to remediation and testing of Year 2000 issues of
approximately $1 million and an increase in bad debt
expense of $.4 million. Increased marketing funding
support from The Coca-Cola Company of approxi-
mately $2 million mitigated a portion of the increase in
S,G&A expenses.
Depreciation expense in 1999 increased $23.5 mil-
lion or 63% over 1998. The increase was due to signifi-
cant capital expenditures over the past several years,
including $264.1 million in 1999, of which approxi-
mately $155 million related to the purchase of equip-
ment that was previously leased.
A pre-tax restructuring charge of $2.2 million was
recorded in the fourth quarter of 1999 consisting of
employee termination benefit costs of $1.8 million and
facility lease costs and other related expenses of
$.4 million. The objectives of the restructuring were to
consolidate and streamline sales divisions and reduce
the overall operating expense base.
Investment in Partnership
The Company’s share of Piedmont’s net loss of $2.6 mil-
lion increased from a loss of $.5 million in 1998. The
increase in the loss reflected the impact of lower than
expected volume growth in 1999 and higher infrastruc-
ture costs.
Interest Expense
Interest expense increased by $10.6 million or 27% in
1999 over 1998. The increase was due to additional
debt related to the purchase of approximately $155 mil-
lion of equipment that was previously leased, additional
borrowings to fund acquisitions and capital expendi-
tures. The Company’s overall weighted average borrow-
ing rate for 1999 was 6.8% compared to 7.1% in 1998.
Other Income/Expense
Other expense increased from $4.1 million in 1998 to
$5.4 million in 1999. Approximately half of the increase
in other expense from 1998 to 1999 related to net losses
of Data Ventures LLC, in which the Company held a
31.25% equity interest. Data Ventures LLC provided
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 17
Management’s Discussion and Analysis
certain computerized data management products and
services to the Company related to inventory control
and marketing program support.
Income Taxes
The effective tax rate for federal and state income taxes
was approximately 35% in 1999 versus approximately
36% in 1998.
FINANCIAL CONDITION
Total assets decreased from $1.11 billion at January 2,
2000 to $1.06 billion at December 31, 2000. The
decrease was primarily due to depreciation of property,
plant and equipment exceeding capital expenditures and
amortization of intangible assets, principally acquired
franchise rights.
Working capital increased by $21.3 million to
$14.3 million at December 31, 2000 from a deficit of
$7.0 million at January 2, 2000. The change in working
capital was primarily due to decreases in the current
portion of long-term debt of $18.7 million, accounts
payable and accrued liabilities of $15.0 million and
accrued interest of $6.3 million, partially offset by an
increase of $13.7 million in amounts due to Piedmont.
The increase in amounts due to Piedmont reflected the
improved operating results and the timing of cash flows
at Piedmont in 2000.
Total long-term debt decreased by $60.4 million to
$692.2 million at December 31, 2000 compared to
$752.6 million at January 2, 2000. Repayment of long-
term debt during 2000 resulted from free cash flow
from operations of approximately $40 million and
approximately $20 million from the sale of bottling ter-
ritory, as previously discussed.
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
Sources of capital for the Company include operating
cash flows, bank borrowings, issuance of public or pri-
vate debt and the issuance of equity securities. Manage-
ment believes that the Company, through these sources,
has sufficient financial resources available to maintain
its current operations and provide for its current capital
expenditure and working capital requirements, sched-
uled debt payments, interest and income tax liabilities
and dividends for stockholders.
Investing Activities
Additions to property, plant and equipment during 2000
were $49.2 million. Capital expenditures during 2000
were funded with cash flow from operations. Leasing is
used for certain capital additions when considered cost
effective related to other sources of capital. The Com-
pany currently leases approximately $50 million of its
cold drink equipment in addition to two production
facilities and certain distribution and administrative
facilities. Total lease expense in 2000 was $15.7 million
compared to $13.7 million in 1999.
At the end of 2000, the Company had no material
commitments for the purchase of capital assets other
than those related to normal replacement of equipment.
The Company considers the acquisition of bottling terri-
tories on an ongoing basis.
Financing Activities
In January 1999, the Company filed an $800 million
shelf registration for debt and equity securities. This
shelf registration included $200 million of unused avail-
18 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
ability from a $400 million shelf registration filed in
October 1994.
In April 1999, the Company issued $250 million of
10-year debentures at a fixed rate of 6.375% under its
shelf registration. The Company subsequently entered
into interest rate swap agreements totaling $100 million
related to the newly issued debentures. The net proceeds
from the issuance of debentures were used to refinance
borrowings related to the purchase of assets previously
leased, as discussed above, repay certain maturing
Medium-Term Notes and repay other corporate
borrowings.
The Company borrows from time to time under lines
of credit from various banks. On December 31, 2000,
the Company had $170 million available under these
lines, of which $12.9 million was outstanding. Loans
under these lines are made at the sole discretion of the
banks at rates negotiated at the time of borrowing.
In December 1997, the Company extended the matu-
rity of a revolving credit facility to December 2002 for
borrowings of up to $170 million. There were no
amounts outstanding under this facility as of Decem-
ber 31, 2000.
Interest Rate Hedging
The Company periodically uses interest rate hedging
products to modify risk from interest rate fluctuations
in its underlying debt. The Company has historically
altered its fixed/floating rate mix based upon antici-
pated cash flows from operations relative to the Compa-
ny’s debt level and the potential impact of increases in
interest rates on the Company’s overall financial condi-
tion. Sensitivity analyses are performed to review the
Management’s Discussion and Analysis
impact on the Company’s financial position and cover-
age of various interest rate movements. The Company
does not use derivative financial instruments for trading
purposes.
The weighted average interest rate of the debt portfo-
lio as of December 31, 2000 was 7.1% compared to
7.0% at the end of 1999. The Company’s overall
FORWARD-LOOKING STATEMENTS
This Annual Report to Stockholders, as well as informa-
tion included in, or incorporated by reference from,
future filings by the Company with the Securities and
Exchange Commission and information contained in
written material, press releases and oral statements
issued by or on behalf of the Company, contains, or
may contain several forward-looking management com-
ments and other statements that reflect management’s
current outlook for future periods. These statements
include, among others, statements relating to: our
expectations concerning increasing long-term stock-
holder value, per capita consumption and operating
cash flow; the sufficiency of our financial resources to
fund our operations; our expectations concerning mar-
keting support payments from The Coca-Cola Company
and other beverage companies; our expectations about
higher profitability and better returns in our West Vir-
ginia territory; our expectations about interest expense;
weighted average borrowing rate on its long-term debt
in 2000 increased to 7.3% from 6.8% in 1999.
Approximately 41% of the Company’s debt portfolio of
$692.2 million as of December 31, 2000 was subject to
changes in short-term interest rates.
our acquisition strategy and our capital expenditure
requirements. These statements and expectations are
based on the current available competitive, financial and
economic data along with the Company’s operating
plans, and are subject to future events and uncertainties.
Among the events or uncertainties which could
adversely affect future periods are: lower than expected
net pricing resulting from increased marketplace compe-
tition, an inability to meet performance requirements
for expected levels of marketing support payments from
The Coca-Cola Company, an inability to meet require-
ments under bottling contracts, the inability of our alu-
minum can or PET bottle suppliers to meet our demand,
material changes from expectations in the cost of raw
materials, higher than expected fuel prices, an inability
to meet projections for performance in acquired bottling
territories and unfavorable interest rate fluctuations.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 19
Report of Independent Accountants
To the Board of Directors and Stockholders of Coca-Cola Bottling Co. Consolidated
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of opera-
tions, of cash flows and of changes in stockholders’ equity present fairly, in all material respects, the financial posi-
tion of Coca-Cola Bottling Co. Consolidated and its subsidiaries (the “Company”) at December 31, 2000 and Janu-
ary 2, 2000, and the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company’s management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our audits of these statements in accor-
dance with auditing standards generally accepted in the United States of America, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-
statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 14, 2001
20 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Report of Management
The management of Coca-Cola Bottling Co. Consolidated is responsible for the preparation and integrity of the
consolidated financial statements of the Company. The financial statements and notes have been prepared by the
Company in accordance with generally accepted accounting principles and, in the judgment of management, present
fairly the Company’s financial position and results of operations. The financial information contained elsewhere in
this annual report is consistent with that in the financial statements. The financial statements and other financial
information in this annual report include amounts that are based on management’s best estimates and judgments and
give due consideration to materiality.
The Company maintains a system of internal accounting controls to provide reasonable assurance that assets are
safeguarded and that transactions are executed in accordance with management’s authorization and recorded prop-
erly to permit the preparation of financial statements in accordance with generally accepted accounting principles.
The Internal Audit Department of the Company reviews, evaluates, monitors and makes recommendations on
both administrative and accounting controls, and acts as an integral, but independent, part of the system of internal
controls.
The Company’s independent accountants were engaged to perform an audit of the consolidated financial state-
ments. This audit provides an objective outside review of management’s responsibility to report operating results and
financial condition. Working with the Company’s internal auditors, they review and perform tests, as appropriate, of
the data included in the financial statements.
The Board of Directors discharges its responsibility for the Company’s financial statements primarily through its
Audit Committee. The Audit Committee meets periodically with the independent accountants, internal auditors and
management. Both the independent accountants and internal auditors have direct access to the Audit Committee to
discuss the scope and results of their work, the adequacy of internal accounting controls and the quality of financial
reporting.
William B. Elmore
President and Chief Operating Officer
David V. Singer
Executive Vice President and Chief Financial Officer
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 21
Consolidated Balance Sheets
(In thousands except share data)
ASSETS
Current assets:
Cash
Accounts receivable, trade, less allowance for doubtful accounts of $918 and $850
Accounts receivable from The Coca-Cola Company
Accounts receivable, other
Inventories
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Leased property under capital leases, net
Investment in Piedmont Coca-Cola Bottling Partnership
Other assets
Identifiable intangible assets, net
Excess of cost over fair value of net assets of businesses acquired, less accumulated
amortization of $35,585 and $33,141
Total
Dec. 31,
2000
Jan. 2,
2000
$
8,425
$
9,050
62,661
5,380
8,247
40,502
14,026
60,367
6,018
13,938
41,411
13,275
139,241
144,059
429,978
468,110
7,948
62,730
60,846
10,785
60,216
61,312
284,842
305,783
76,512
58,127
$1,062,097
$1,108,392
See Accompanying Notes to Consolidated Financial Statements.
22 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Dec. 31,
2000
Jan. 2,
2000
$
9,904
3,325
80,999
3,802
16,436
10,483
$
28,635
4,483
96,008
2,346
2,736
16,830
124,949
151,038
148,655
124,171
76,061
1,774
73,900
4,468
682,246
723,964
1,033,685
1,077,541
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Portion of long-term debt payable within one year
Current portion of obligations under capital leases
Accounts payable and accrued liabilities
Accounts payable to The Coca-Cola Company
Due to Piedmont Coca-Cola Bottling Partnership
Accrued interest payable
Total current liabilities
Deferred income taxes
Other liabilities
Obligations under capital leases
Long-term debt
Total liabilities
Commitments and Contingencies (Note 11)
Stockholders’ Equity:
Convertible Preferred Stock, $100 par value:
Authorized — 50,000 shares; Issued — None
Nonconvertible Preferred Stock, $100 par value:
Authorized — 50,000 shares; Issued — None
Preferred Stock, $.01 par value:
Authorized — 20,000,000 shares; Issued — None
Common Stock, $1 par value:
Authorized — 30,000,000 shares; Issued — 9,454,651 and 9,454,626 shares
9,454
9,454
Class B Common Stock, $1 par value:
Authorized — 10,000,000 shares; Issued — 2,969,166 and 2,969,191 shares
2,969
2,969
Class C Common Stock, $1 par value:
Authorized — 20,000,000 shares; Issued — None
Capital in excess of par value
Accumulated deficit
Less — Treasury stock, at cost:
Common — 3,062,374 shares
Class B Common — 628,114 shares
Total stockholders’ equity
Total
99,020
(21,777)
107,753
(28,071)
89,666
92,105
60,845
409
28,412
60,845
409
30,851
$1,062,097
$1,108,392
See Accompanying Notes to Consolidated Financial Statements.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 23
Consolidated Statements of Operations
(In thousands except per share data)
Net sales (includes sales to Piedmont of $69,539, $68,046 and $69,552)
Cost of sales, excluding depreciation shown below (includes $53,463, $56,439 and
$55,800 related to sales to Piedmont)
Gross margin
Fiscal Year
1999
2000
1998
$995,134
$972,551
$928,502
530,241
543,113
534,919
464,893
429,438
393,583
Selling, general and administrative expenses, excluding depreciation shown below
323,223
291,907
276,245
Depreciation expense
Amortization of goodwill and intangibles
Restructuring expense
Income from operations
Interest expense
Other income (expense), net
Income before income taxes
Income taxes
Net income
Basic net income per share
Diluted net income per share
Weighted average number of common shares outstanding
Weighted average number of common shares outstanding — assuming dilution
64,751
14,712
60,567
13,734
2,232
37,076
12,972
62,207
60,998
67,290
53,346
974
9,835
3,541
50,581
(5,431)
4,986
1,745
39,947
(4,098)
23,245
8,367
$ 6,294
$ 3,241
$ 14,878
$
$
.72
.71
$
$
.38
.37
$
$
8,733
8,822
8,588
8,708
1.78
1.75
8,365
8,495
See Accompanying Notes to Consolidated Financial Statements.
24 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Consolidated Statements of Cash Flows
(In thousands)
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense
Amortization of goodwill and intangibles
Deferred income taxes
Gain on sale of bottling territory
Provision for impairment of property, plant and equipment
Losses on sale of property, plant and equipment
Amortization of debt costs
Amortization of deferred gain related to terminated interest rate swaps
Undistributed (earnings) losses of Piedmont Coca-Cola Bottling Partnership
(Increase) decrease in current assets less current liabilities
Increase in other noncurrent assets
Increase in other noncurrent liabilities
Other
Total adjustments
Net cash provided by operating activities
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt
Repayment of current portion of long-term debt
Proceeds from (repayment of) lines of credit, net
Cash dividends paid
Payments on capital lease obligations
Termination of interest rate swap agreements
Debt fees paid
Other
Fiscal Year
1999
2000
1998
$ 6,294
$
3,241
$ 14,878
64,751
14,712
3,541
(8,829)
3,066
2,284
938
(819)
(2,514)
(2,554)
(506)
3,868
58
77,996
84,290
(26,750)
(33,700)
(8,733)
(4,528)
(292)
(387)
60,567
13,734
1,745
37,076
12,972
8,367
2,755
836
(563)
2,631
9,639
(8,451)
9,702
334
2,586
595
(563)
479
570
(8,441)
2,180
79
92,929
55,900
96,170
70,778
251,165
(30,115)
10,200
(8,549)
(4,938)
(3,266)
(468)
(10,540)
26,100
(8,365)
6,480
(102)
(390)
Net cash provided by (used in) financing activities
(74,390)
214,029
13,183
Cash Flows from Investing Activities
Additions to property, plant and equipment
Proceeds from the sale of property, plant and equipment
Acquisitions of companies, net of cash acquired
Proceeds from sale of bottling territory
Net cash used in investing activities
Net increase (decrease) in cash
Cash at beginning of year
Cash at end of year
Significant non-cash investing and financing activities
Issuance of Common Stock in connection with acquisition
Capital lease obligations incurred
(49,168)
16,366
(723)
23,000
(264,139)
753
(44,454)
(47,946)
1,255
(35,006)
(10,525)
(307,840)
(81,697)
(625)
9,050
2,359
6,691
2,264
4,427
$ 8,425
$
9,050
$ 6,691
$ 1,313
$ 21,961
14,225
See Accompanying Notes to Consolidated Financial Statements.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 25
Consolidated Statements of Changes in Stockholders’ Equity
(In thousands)
Common
Stock
Class B
Common
Stock
Capital in
Excess of
Par Value
Accumulated
Deficit
Treasury
Stock
Balance on December 28, 1997
$10,107
$1,948
$103,074
$(46,190)
$61,254
Net income
Cash dividends paid
Exchange of Common Stock for Class B
Common Stock
Balance on January 3, 1999
Net income
Cash dividends paid
Issuance of Common Stock in connection with
acquisition
Balance on January 2, 2000
Net income
Cash dividends paid
(1,021)
9,086
1,021
2,969
368
9,454
14,878
(8,365)
94,709
(31,312)
61,254
3,241
(8,549)
21,593
2,969
107,753
(28,071)
61,254
6,294
(8,733)
Balance on December 31, 2000
$ 9,454
$2,969
$ 99,020
$(21,777)
$61,254
See Accompanying Notes to Consolidated Financial Statements.
26 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
1 SIGNIFICANT ACCOUNTING POLICIES
Coca-Cola Bottling Co. Consolidated (the “Company”)
is engaged in the production, marketing and distribution
of carbonated and noncarbonated beverages, primarily
products of The Coca-Cola Company. The Company
operates in portions of 11 states, principally in the
southeastern region of the United States.
The consolidated financial statements include the
accounts of the Company and its majority owned sub-
sidiaries. All significant intercompany accounts and
transactions have been eliminated. Acquisitions
recorded as purchases are included in the statement of
operations from the date of acquisition.
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The fiscal years presented are the 52-week periods
ended December 31, 2000, January 2, 2000 and the 53-
week period ended January 3, 1999. The Company’s
fiscal year ends on the Sunday closest to December 31.
Certain prior year amounts have been reclassified to
conform to current year classifications.
The Company’s more significant accounting policies
are as follows:
Cash and Cash Equivalents: Cash and cash equiva-
lents include cash on hand, cash in banks and cash
equivalents, which are highly liquid debt instruments
with maturities of less than 90 days.
Inventories: Inventories are stated at the lower of cost,
determined on the first-in, first-out method (“FIFO”),
or market.
Property, Plant and Equipment: Property, plant and
equipment are recorded at cost and depreciated using
the straight-line method over the estimated useful lives
of the assets. Additions and major replacements or bet-
terments are added to the assets at cost. Maintenance
and repair costs and minor replacements are charged to
expense when incurred. When assets are replaced or
otherwise disposed of, the cost and accumulated depre-
ciation are removed from the accounts, and the gains or
losses, if any, are reflected in income.
Software: The Company adopted the provisions of the
American Institute of Certified Public Accountants’
Statement of Position 98-1, “Accounting for the Cost of
Computer Software Developed or Obtained for Internal
Use” in the first quarter of 1999. This statement
requires capitalization of certain costs incurred in the
development of internal-use software. Software is amor-
tized using the straight-line method over its estimated
useful life.
Investment in Piedmont Coca-Cola Bottling Partner-
ship: The Company beneficially owns a 50% interest in
Piedmont Coca-Cola Bottling Partnership (“Piedmont”).
The Company accounts for its interest in Piedmont
using the equity method of accounting.
With respect to Piedmont, sales of soft drink prod-
ucts at cost, management fee revenue and the Compa-
ny’s share of Piedmont’s results from operations are
included in “Net sales.” See Note 3 and Note 15 for
additional information.
Revenue Recognition: Revenues are recognized when
finished products are delivered to customers and both
title and the risks and rewards of ownership are trans-
ferred. Appropriate provision is made for uncollectible
accounts.
IncomeTaxes: The Company provides deferred income
taxes for the tax effects of temporary differences
between the financial reporting and income tax bases of
the Company’s assets and liabilities.
Benefit Plans: The Company has a noncontributory
pension plan covering substantially all nonunion
employees and one noncontributory pension plan cover-
ing certain union employees. Costs of the plans are
charged to current operations and consist of several
components of net periodic pension cost based on vari-
ous actuarial assumptions regarding future experience
of the plans. In addition, certain other union employees
are covered by plans provided by their respective union
organizations. The Company expenses amounts as paid
in accordance with union agreements. The Company
recognizes the cost of postretirement benefits, which
consist principally of medical benefits, during employ-
ees’ periods of active service.
Amounts recorded for benefit plans reflect estimates
related to future interest rates, investment returns,
employee turnover, wage increases and health care costs.
The Company reviews all assumptions and estimates on
an ongoing basis.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 27
Notes to Consolidated Financial Statements
Intangible Assets and Excess of Cost Over Fair Value
of Net Assets of Businesses Acquired: Identifiable
intangible assets resulting from the acquisition of
Coca-Cola bottling franchises are being amortized on a
straight-line basis over periods ranging from 17 to 40
years. The excess of cost over fair value of net assets of
businesses acquired is being amortized on a straight-line
basis over 40 years.
Impairment of Long-lived Assets: The Company con-
tinually monitors conditions that may affect the carry-
ing value of its intangible or other long-lived assets.
When conditions indicate potential impairment of an
intangible or other long-lived asset, the Company will
undertake necessary market studies and reevaluate pro-
jected future cash flows associated with the asset. When
projected future cash flows, not discounted for the time
value of money, are less than the carrying value of the
asset, the asset will be written down to its estimated net
realizable value.
Net Income Per Share: Basic earnings per share
(“EPS”) excludes dilution and is computed by dividing
net income available for common stockholders by the
weighted average number of Common and Class B
Common shares outstanding. Diluted EPS gives effect to
all securities representing potential common shares that
were dilutive and outstanding during the period. In the
calculation of diluted EPS, the denominator includes the
number of additional common shares that would have
been outstanding if the Company’s outstanding stock
options had been exercised.
Derivative Financial Instruments: The Company uses
financial instruments to manage its exposure to move-
ments in interest rates. The use of these financial instru-
ments modifies the exposure of these risks with the
intent to reduce the risk to the Company. The Company
does not use financial instruments for trading purposes,
nor does it use leveraged financial instruments.
Amounts receivable or payable under interest rate
swap agreements are included in other assets or other
liabilities. Amounts paid or received under interest rate
swap agreements during their lives are recorded as
adjustments to interest expense. Deferred gains or losses
on interest rate swap terminations are amortized over
the lives of the initial agreements as an adjustment to
interest expense.
Premiums paid for interest rate cap agreements are
amortized to interest expense over the terms of the
agreements. Amounts receivable or payable under inter-
est rate cap agreements are included in other assets or
other liabilities.
Insurance Programs: In general, the Company is self-
insured for costs of casualty claims and medical claims.
The Company uses commercial insurance for casualty
claims and medical claims as a risk reduction strategy to
minimize catastrophic losses. Casualty losses are pro-
vided for using actuarial assumptions and procedures
followed in the insurance industry, adjusted for
company-specific history and expectations.
Marketing Costs and Support Arrangements: The
Company directs various advertising and marketing
programs supported by The Coca-Cola Company or
other franchisers. Under these programs, certain costs
incurred by the Company are reimbursed by the appli-
cable franchiser. Franchiser funding is recognized when
performance measures are met or as funded costs are
incurred.
28 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
2 ACQUISITIONS AND DIVESTITURES
On May 28, 1999, the Company acquired substantially
all of the outstanding capital stock of Carolina
Coca-Cola Bottling Company, Inc. (“Carolina”) in
exchange for 368,482 shares of the Company’s Com-
mon Stock, installment notes and cash. The total pur-
chase price was approximately $37 million. Carolina
was a Coca-Cola bottler with operations in central
South Carolina.
On October 29, 1999, the Company acquired
substantially all of the outstanding capital stock of
Lynchburg Coca-Cola Bottling Company, Inc.
(“Lynchburg”) for approximately $24 million.
Lynchburg was a Coca-Cola bottler with operations
in central Virginia.
The Company used its lines of credit for the cash
portion of the acquisitions described above. These
acquisitions have been accounted for under the purchase
method of accounting.
On September 29, 2000, the Company sold substan-
tially all of its bottling territory in the states of
Kentucky and Ohio to Coca-Cola Enterprises Inc. The
Company received cash proceeds of $23.0 million
related to the sale of this territory and certain other
operating assets. The Company recorded a pre-tax gain
of $8.8 million as a result of this sale. The bottling terri-
tory sold represented approximately 3% of the Compa-
ny’s annual sales volume.
3 INVESTMENT IN PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
On July 2, 1993, the Company and The Coca-Cola
Company formed Piedmont to distribute and market
soft drink products primarily in certain portions of
North Carolina and South Carolina. The Company and
The Coca-Cola Company, through their respective sub-
sidiaries, each beneficially own a 50% interest in Pied-
(In thousands)
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
Partners’ equity
Total liabilities and partners’ equity
Company’s equity investment
(In thousands)
Net sales
Cost of sales
Gross margin
Income from operations
Net income (loss)
Company’s equity in net income (loss)
mont. The Company provides a portion of the soft
drink products for Piedmont at cost and receives a fee
for managing the operations of Piedmont pursuant to a
management agreement.
Summarized financial information for Piedmont was
as follows:
Dec. 31,
2000
Jan. 2,
2000
$ 48,068
$ 31,094
319,788
331,979
$367,856
$363,073
$ 17,342
$ 15,370
225,054
227,271
242,396
125,460
242,641
120,432
$367,856
$363,073
$ 62,730
$ 60,216
Fiscal Year
2000
1999
1998
$286,781
$278,202
$269,312
147,671
152,042
151,480
139,110
18,948
126,160
117,832
7,803
11,974
$ 5,028
$ (5,262)
$ 2,514
$ (2,631)
$
$
(958)
(479)
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 29
Notes to Consolidated Financial Statements
4 INVENTORIES
Inventories were summarized as follows:
(In thousands)
Finished products
Manufacturing materials
Plastic pallets and other
Total inventories
Dec. 31,
2000
Jan. 2,
2000
$22,907
$26,240
13,330
4,265
10,476
4,695
$40,502
$41,411
5 PROPERTY, PLANT AND EQUIPMENT
The principal categories and estimated useful lives of property, plant and equipment were as follows:
(In thousands)
Land
Buildings
Machinery and equipment
Transportation equipment
Furniture and fixtures
Vending equipment
Leasehold and land improvements
Software for internal use
Construction in progress
Total property, plant and equipment, at cost
Less: Accumulated depreciation and amortization
Dec. 31,
2000
Jan. 2,
2000
Estimated
Useful Lives
$ 11,311
$ 12,251
10-50 years
5-20 years
4-10 years
4-10 years
6-13 years
5-20 years
3-7 years
97,012
94,652
122,083
35,206
285,772
39,597
17,207
1,162
704,002
274,024
96,072
89,068
126,562
37,002
291,844
41,379
10,523
3,389
708,090
239,980
Property, plant and equipment, net
$429,978
$468,110
On January 15, 1999, the Company purchased
approximately $155 million of equipment (principally
vehicles and vending equipment) previously leased
under various operating lease agreements. The assets
purchased will continue to be used in the distribution
and sale of the Company’s products and will be depreci-
ated over their remaining useful lives, which range from
three years to 12.5 years. The Company used a combi-
nation of its revolving credit facility and its lines of
credit with certain banks to finance this purchase.
In the third quarter of 2000, the Company recorded
a provision for impairment of certain fixed assets for
$3.1 million, which was classified in “Other income
(expense), net.”
30 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
6 LEASED PROPERTY UNDER CAPITAL LEASES
The category and terms of the leased property under capital leases were as follows:
(In thousands)
Transportation and other equipment
Less: Accumulated amortization
Leased property under capital leases, net
Dec. 31,
2000
Jan. 2,
2000
Terms
$13,058
$13,434
1-4 years
5,110
2,649
$ 7,948
$10,785
7 IDENTIFIABLE INTANGIBLE ASSETS
The principal categories and estimated useful lives of identifiable intangible assets were as follows:
(In thousands)
Franchise rights
Customer lists
Other
Identifiable intangible assets
Less: Accumulated amortization
Identifiable intangible assets, net
Dec. 31,
2000
Jan. 2,
2000
Estimated
Useful Lives
$353,036
$361,710
40 years
54,864
16,668
54,864
17-23 years
16,668
17-23 years
424,568
$433,242
139,726
127,459
$284,842
$305,783
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 31
Notes to Consolidated Financial Statements
8 LONG-T ERM DEBT
Long-term debt was summarized as follows:
(In thousands)
Lines of Credit
Term Loan Agreement
Term Loan Agreement
Medium-Term Notes
Medium-Term Notes
Debentures
Debentures
Debentures
Other notes payable
Maturity
Interest
Rate
Fixed(F) or
Variable(V)
Rate
2002
2004
2005
2000
2002
2007
2009
2009
6.99%
7.14%
7.14%
10.00%
8.56%
6.85%
7.20%
6.38%
2001-
2006
5.75%-
10.00%
V
V
V
F
F
F
F
F
F
Interest
Paid
Varies
Varies
Varies
Semi-annually
Semi-annually
Semi-annually
Semi-annually
Semi-annually
Dec. 31,
2000
Jan. 2,
2000
$ 12,900
$ 46,600
85,000
85,000
47,000
100,000
100,000
250,000
85,000
85,000
25,500
47,000
100,000
100,000
250,000
Varies
12,250
13,499
Less: Portion of long-term debt payable within one year
Long-term debt
The principal maturities of long-term debt outstand-
ing on December 31, 2000 were as follows:
(In thousands)
2001
2002
2003
2004
2005
Thereafter
Total long-term debt
$ 9,904
62,121
25
85,020
85,000
450,080
$692,150
In December 1997, the Company extended the matu-
rity date of the revolving credit facility to December
2002 for borrowings of up to $170 million. The agree-
ment contains several covenants which establish ratio
requirements related to debt, interest expense and cash
flow. A facility fee of 1⁄8% per year on the banks’ com-
mitment is payable quarterly. There was no outstanding
balance under this facility as of December 31, 2000.
The Company borrows from time to time under lines
of credit from various banks. On December 31, 2000,
the Company had approximately $170 million of credit
available under these lines, of which $12.9 million was
outstanding. Loans under these lines are made at the
sole discretion of the banks at rates negotiated at the
time of borrowing. The Company intends to renew such
borrowings as they mature. To the extent that these bor-
rowings and the borrowings under the revolving credit
32 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
692,150
752,599
9,904
28,635
$682,246
$723,964
facility do not exceed the amount available under the
Company’s $170 million revolving credit facility, they
are classified as noncurrent liabilities.
On January 22, 1999, the Company filed an
$800 million shelf registration for debt and equity secu-
rities (which included $200 million of unused availabil-
ity from a prior shelf registration). On April 26, 1999
the Company issued $250 million of 10-year debentures
at a fixed interest rate of 6.375%. The Company subse-
quently entered into interest rate swap agreements total-
ing $100 million related to the newly issued debentures.
The net proceeds from this issuance were used princi-
pally for refinancing of short-term debt related to the
purchase of leased assets, with the remainder used to
repay other bank debt.
After taking into account all of the interest rate hedg-
ing activities, the Company had a weighted average
interest rate of 7.1% for the debt portfolio as of Decem-
ber 31, 2000 compared to 7.0% at January 2, 2000.
The Company’s overall weighted average borrowing
rate on its long-term debt was 7.3%, 6.8% and 7.1%
for 2000, 1999 and 1998, respectively.
As of December 31, 2000, after taking into account
all of the interest rate hedging activities, approximately
$284 million or 41% of the total debt portfolio was
subject to changes in short-term interest rates.
If average interest rates for the Company’s debt port-
folio increased by 1%, annual interest expense for the
year ended December 31, 2000 would have increased by
approximately $3 million and net income would have
been reduced by approximately $1.9 million.
Notes to Consolidated Financial Statements
9 DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses interest rate hedging products to
modify risk from interest rate fluctuations in its underly-
ing debt. The Company has historically used derivative
financial instruments from time to time to achieve a tar-
geted fixed/floating rate mix. This target is based upon
anticipated cash flows from operations relative to the
Company’s debt level and the potential impact of
increases in interest rates on the Company’s overall
financial condition.
The Company does not use derivative financial
instruments for trading or other speculative purposes
nor does it use leveraged financial instruments. All of
the Company’s outstanding interest rate swap agree-
ments are LIBOR-based.
Derivative financial instruments were summarized as follows:
(In thousands)
Interest rate swaps-floating
Interest rate swaps-fixed
Interest rate swaps-fixed
Interest rate swaps-floating
Interest rate cap
December 31, 2000
January 2, 2000
Notional
Amount
Remaining
Term
Notional
Amount
Remaining
Term
$ 60,000
3.75 years
60,000
3.75 years
50,000
5 years
$100,000
8.25 years
100,000
9.25 years
35,000
0.5 years
The Company had interest rate swaps with a
The counterparties to these contractual arrangements
notional amount of $100 million at December 31, 2000,
compared to $270 million as of January 2, 2000. In
September 2000, the Company terminated three interest
rate swaps with a total notional amount of $170 mil-
lion. The gains or losses on the termination of these
swaps are being amortized over the remaining term of
the initial swap agreements.
are major financial institutions with which the Com-
pany also has other financial relationships. The Com-
pany is exposed to credit loss in the event of nonperfor-
mance by these counterparties. However, the Company
does not anticipate nonperformance by the other
parties.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 33
Notes to Consolidated Financial Statements
10 FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by
the Company in estimating the fair values of its finan-
cial instruments:
Public Debt: The fair values of the Company’s public
debt are based on estimated market prices.
Non-Public Variable Rate Long-Term Debt: The car-
rying amounts of the Company’s variable rate borrow-
ings approximate their fair values.
Non-Public Fixed Rate Long-Term Debt: The fair val-
ues of the Company’s fixed rate long-term borrowings
are estimated using discounted cash flow analyses based
on the Company’s current incremental borrowing rates
for similar types of borrowing arrangements.
Derivative Financial Instruments: Fair values for the
Company’s interest rate swaps are based on current
settlement values.
The carrying amounts and fair values of the Company’s balance sheet and off-balance-sheet instruments were as
follows:
(In thousands)
Balance Sheet Instruments
Public debt
Non-public variable rate long-term debt
Non-public fixed rate long-term debt
Off-Balance-Sheet Instruments
Interest rate swaps
December 31, 2000
Carrying
Amount
Fair
Value
January 2, 2000
Carrying
Amount
Fair
Value
$497,000
$480,687
$522,500
$484,354
182,900
182,900
216,600
216,600
12,250
12,433
13,499
13,670
(1,669)
(12,174)
The fair values of the interest rate swaps at December 31, 2000 and January 2, 2000, represent the estimated
amounts the Company would have had to pay to terminate these agreements.
34 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
11 COMMITMENTS AND CONTINGENCIES
Operating lease payments are charged to expense as incurred. Such rental expenses included in the consolidated
statements of operations were $15.7 million, $13.7 million and $28.9 million for 2000, 1999 and 1998, respectively.
The following is a summary of future minimum lease payments for all capital and operating leases as of Decem-
ber 31, 2000.
(In thousands)
2001
2002
2003
2004
2005
Thereafter
Total minimum lease payments
Less: Amounts representing interest
Present value of minimum lease payments
Less: Current portion of obligations under capital leases
Long-term portion of obligations under capital leases
The Company is a member of South Atlantic Can-
ners, Inc. (“SAC”), a manufacturing cooperative, from
which it is obligated to purchase a specified number of
cases of finished product on an annual basis. The mini-
mal annual purchases are approximately $40 million.
The Company guarantees a portion of the debt for
one cooperative from which the Company purchases
plastic bottles. The Company also guarantees a portion
of debt for SAC. See Note 15 to the consolidated finan-
cial statements for additional information concerning
these financial guarantees. The total of all debt guaran-
tees on December 31, 2000 was $35.7 million.
The Company has entered into a purchase agreement
for aluminum cans on an annual basis through 2003.
The estimated annual purchases under this agreement
are approximately $100 million for 2001, 2002 and
2003.
On August 3, 1999, North American Container, Inc.
(“NAC”) filed a Complaint For Patent Infringement and
Jury Demand (the “Complaint”) against the Company
and a number of other defendants in the United States
District Court for the Northern District of Texas, Dallas
Division, alleging that certain unspecified blow-molded
plastic containers used, made, sold, offered for sale
and/or used by the Company and other defendants
infringe certain patents owned by the plaintiff. NAC
seeks an unspecified amount of compensatory damages
Capital Leases
Operating Leases
Total
$3,325
1,290
671
208
$16,481
$19,806
11,859
9,954
8,997
8,549
13,149
10,625
9,205
8,549
35,749
35,749
$5,494
$91,589
$97,083
395
5,099
3,325
$1,774
for prior infringement, seeks to have those damages
trebled, seeks pre-judgment and post-judgment interest,
seeks attorneys fees and seeks an injunction prohibiting
future infringement and ordering the destruction of all
infringing containers and machinery used in connection
with the manufacture of the infringing products. The
original Complaint names forty-two other defendants
and additional defendants have been added by amend-
ment. The Company has obtained partial indemnifica-
tion from its suppliers for all damages it may incur in
connection with this proceeding. The Company has filed
an answer to the Complaint, as amended, and has
denied the material allegations of NAC and seeks recov-
ery of attorney fees by having the case declared excep-
tional. The Company has also filed a counterclaim seek-
ing a declaration of invalidity and non-infringement. A
claims construction hearing was held in December
2000. The Court-appointed Special Master has advised
the Company to expect a ruling in April 2001.
The Company is involved in other various claims and
legal proceedings which have arisen in the ordinary
course of its business. The Company believes that the
ultimate disposition of the above noted litigation and its
other claims and legal proceedings will not have a mate-
rial adverse effect on the financial condition, cash flows
or results of operations of the Company.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 35
Notes to Consolidated Financial Statements
12 INCOME TAXES
The provision for income taxes consisted of the following:
Fiscal Year
2000
1999
1998
$ — $ — $ —
—
—
—
865
2,676
3,541
206
1,539
6,378
1,989
1,745
8,367
$3,541
$1,745
$8,367
Net current deferred tax assets of $9.7 million and
$9.6 million were included in prepaid expenses and
other current assets on December 31, 2000 and
January 2, 2000, respectively.
Reported income tax expense is reconciled to the
amount computed on the basis of income before income
taxes at the statutory rate as follows:
Statutory expense
$3,442
$1,745
$8,135
Amortization of franchise and
goodwill assets
State income taxes, net of federal
benefit
Other
418
373
369
9
(328)
(281)
(92)
463
(600)
Income tax expense
$3,541
$1,745
$8,367
On December 31, 2000, the Company had $114 mil-
lion and $80 million of federal and state net operating
losses, respectively, available to reduce future income
taxes. The net operating loss carryforwards expire in
varying amounts through 2020.
$ 105,746
$ 90,577
(In thousands)
Fiscal Year
2000
1999
1998
(In thousands)
Current:
Federal
Total current provision
Deferred:
Federal
State
Total deferred provision
Income tax expense
Deferred income taxes are recorded based upon dif-
ferences between the financial statement and tax bases
of assets and liabilities and available tax credit
carryforwards. Temporary differences and
carryforwards that comprised deferred income tax
assets and liabilities were as follows:
(In thousands)
Intangible assets
Depreciation
Investment in Piedmont Coca-Cola
Bottling Partnership
Lease obligations
Other
Dec. 31,
2000
Jan. 2,
2000
83,943
66,257
27,428
19,775
8,666
25,855
19,775
8,340
Gross deferred income tax liabilities
245,558
210,804
Net operating loss carryforwards
Leased assets
AMT credits
Deferred compensation
Postretirement benefits
Interest rate swap terminations
Other
(45,399)
(32,413)
(15,820)
(15,820)
(12,030)
(9,978)
(13,822)
(12,881)
(11,858)
(12,071)
(2,624)
(5,020)
(3,196)
(9,831)
Gross deferred income tax assets
(106,573)
(96,190)
Deferred income tax liability
$ 138,985
$114,614
36 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
13 CAPITAL T RANSACTIONS
On March 8, 1989, the Company granted J. Frank
Harrison, Jr. an option for the purchase of 100,000
shares of Common Stock exercisable at the closing mar-
ket price of the stock on the day of grant. The closing
market price of the stock on March 8, 1989 was $27.00
per share. The option is exercisable, in whole or in part,
at any time at the election of Mr. Harrison, Jr. over a
period of 15 years from the date of grant. This option
has not been exercised with respect to any such shares.
On August 9, 1989, the Company granted J. Frank
Harrison, III an option for the purchase of 150,000
shares of Common Stock exercisable at the closing mar-
ket price of the stock on the day of grant. The closing
market price of the stock on August 9, 1989 was $29.75
per share. The option may be exercised, in whole or in
part, during a period of 15 years beginning on the date
of grant. This option has not been exercised with
respect to any such shares.
Effective November 23, 1998, J. Frank Harrison, Jr.
exchanged 792,796 shares of the Company’s Common
Stock for 792,796 shares of Class B Common Stock in a
transaction previously approved by the Company’s
Board of Directors (the “Harrison Exchange”).
Mr. Harrison already owned the shares of Common
Stock used to make this exchange. This exchange took
place in connection with a series of simultaneous trans-
actions related to Mr. Harrison Jr.’s personal estate
planning, the net effect of which was to transfer the
entire ownership interest in the Company previously
held by Mr. Harrison and certain Harrison family trusts
into three Harrison family limited partnerships. J. Frank
Harrison, Jr., in his capacity of Manager for J. Frank
Harrison Family, LLC (the general partner of the three
family limited partnerships), exercises sole voting and
investment power with respect to the shares of the
Company’s Common Stock and Class B Common Stock
held by the family limited partnerships.
Pursuant to a Stock Rights and Restriction Agree-
ment dated January 27, 1989, between the Company
and The Coca-Cola Company, in the event that the
Company issues new shares of Class B Common Stock
upon the exchange or exercise of any security, warrant
or option of the Company which results in The
Coca-Cola Company owning less than 20% of the out-
standing shares of Class B Common Stock and less than
20% of the total votes of all outstanding shares of all
classes of the Company, The Coca-Cola Company has
the right to exchange shares of Common Stock for
shares of Class B Common Stock in order to maintain
its ownership of 20% of the outstanding shares of Class
B Common Stock and 20% of the total votes of all out-
standing shares of all classes of the Company. Under
the Stock Rights and Restrictions Agreement, The
Coca-Cola Company also has a preemptive right to pur-
chase a percentage of any newly issued shares of any
class as necessary to allow it to maintain ownership of
both 29.67% of the outstanding shares of Common
Stock of all classes and 22.59% of the total votes of all
outstanding shares of all classes. Effective
November 23, 1998, in connection with the Harrison
Exchange and the related Harrison family limited part-
nership transactions, The Coca-Cola Company, in the
exercise of its rights under the Stock Rights and Restric-
tions Agreement, exchanged 228,512 shares of the
Company’s Common Stock which it held for 228,512
shares of the Company’s Class B Common Stock.
On May 12, 1999, the stockholders of the Company
approved a restricted stock award for J. Frank
Harrison, III, the Company’s Chairman of the Board of
Directors and Chief Executive Officer, consisting of
200,000 shares of the Company’s Class B Common
Stock. The award provides that the shares of restricted
stock would vest at the rate of 20,000 shares per year
over a ten-year period. The vesting of each annual
installment is contingent upon the Company achieving
at least 80% of the Overall Goal Achievement Factor
for the six selected performance indicators used in deter-
mining bonuses for all officers under the Company’s
Annual Bonus Plan. In 2000, the Company achieved
more than 80% of the Overall Goal Achievement Factor
which resulted in the vesting of 20,000 shares, effective
as of January 1, 2001. Compensation expense in 2000
related to the restricted stock award was $1.4 million.
In 1999, the Company did not achieve at least 80% of
the Overall Goal Achievement Factor and thus, the
20,000 shares of restricted stock for 1999 did not vest.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 37
Notes to Consolidated Financial Statements
14 BENEFIT PLANS
Retirement benefits under the Company’s principal pen-
sion plan are based on the employee’s length of service,
average compensation over the five consecutive years
which gives the highest average compensation and the
average of the Social Security taxable wage base during
the 35-year period before a participant reaches Social
Security retirement age. Contributions to the plan are
based on the projected unit credit actuarial funding
method and are limited to the amounts that are cur-
rently deductible for tax purposes.
The following tables set forth a reconciliation of the
beginning and ending balances of the projected benefit
obligation, a reconciliation of beginning and ending bal-
ances of the fair value of plan assets and funded status
of the two Company-sponsored pension plans:
(In thousands)
Projected benefit obligation at beginning of
year
Service cost
Interest cost
Actuarial gain
Acquisition
Benefits paid
Other
Fiscal Year
2000
1999
$81,121
$82,898
3,606
6,180
3,375
5,508
(1,732)
(9,499)
1,500
Net periodic pension cost for the Company-
sponsored pension plans included the following:
(In thousands)
Service cost
Interest cost
Fiscal Year
2000
1999
1998
$ 3,606
$ 3,375
$ 2,586
6,180
5,508
4,934
Estimated return on plan assets
(7,963)
(6,659)
(6,303)
Amortization of unrecognized
transitional assets
Amortization of prior service cost
(133)
Recognized net actuarial loss
(70)
(150)
7
(135)
965
Net periodic pension cost
$ 1,690
$ 3,054
$ 1,004
The weighted average rate assumptions used in deter-
mining pension costs and the projected benefit obliga-
tion were:
Weighted average discount rate used in
determining the actuarial present value of
the projected benefit obligation
Weighted average expected long-term rate of
(2,855)
(2,661)
return on plan assets
33
Weighted average rate of compensation
increase
2000
1999
7.75% 7.75%
9.00% 9.00%
4.00% 4.00%
Projected benefit obligation at end of year
$86,353
$81,121
Fair value of plan assets at beginning of
year
Actual return on plan assets
Employer contributions
Acquisition
Benefits paid
$88,609
$74,624
(1,100)
12,489
3,069
2,222
1,935
(2,855)
(2,661)
Fair value of plan assets at end of year
$87,723
$88,609
(In thousands)
Funded status of the plans
Unrecognized prior service cost
Unrecognized net loss
Prepaid pension cost
Dec. 31,
2000
Jan. 2,
2000
$1,370
$7,489
(324)
8,012
(491)
680
$9,058
$7,678
Prepaid pension costs are included in other assets.
38 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
The Company provides a 401(k) Savings Plan for
substantially all of its employees who are not part of
collective bargaining agreements. Under provisions of
the Savings Plan, an employee is vested with respect to
Company contributions upon the completion of two
years of service with the Company. The total cost for
this benefit in 2000, 1999 and 1998 was $3.1 million,
$3.2 million and $2.0 million, respectively.
The Company currently provides employee leasing
and management services to employees of Piedmont and
SAC. Piedmont and SAC employees participate in the
Company’s employee benefit plans.
The Company provides postretirement benefits for
substantially all of its employees. The Company recog-
nizes the cost of postretirement benefits, which consist
principally of medical benefits, during employees’ peri-
ods of active service. The Company does not pre-fund
these benefits and has the right to modify or terminate
certain of these benefits in the future.
Notes to Consolidated Financial Statements
The following tables set forth a reconciliation of the
beginning and ending balances of the benefit obligation,
a reconciliation of the beginning and ending balances of
fair value of plan assets and funded status of the Com-
pany’s postretirement plan:
(In thousands)
Fiscal Year
2000
1999
Benefit obligation at beginning of year
$36,501
$39,779
Service cost
Interest cost
Plan participants’ contributions
Actuarial (gain) loss
Benefits paid
852
2,816
607
10,251
(3,067)
954
2,608
614
(4,994)
(2,460)
Benefit obligation at end of year
$47,960
$36,501
Fair value of plan assets at beginning of year
$ — $ —
Employer contributions
Plan participants’ contributions
Benefits paid
2,460
607
1,846
614
(3,067)
(2,460)
Fair value of plan assets at end of year
$ — $ —
The components of net periodic postretirement ben-
efit cost were as follows:
(In thousands)
Service cost
Interest cost
Amortization of unrecognized
transitional assets
Recognized net actuarial loss
Fiscal Year
2000
1999
1998
$ 852
$ 954
$ 604
2,816
2,608
2,350
(25)
493
(25)
745
(25)
422
Net periodic postretirement benefit cost
$4,136
$4,282
$3,351
The weighted average discount rate used to estimate
the postretirement benefit obligation was 7.75% as of
December 31, 2000 and January 2, 2000.
The weighted average health care cost trend used in
measuring the postretirement benefit expense was
5.25% in 2000 and is projected to remain at that level
thereafter. A 1% increase or decrease in this annual cost
trend would have impacted the postretirement benefit
obligation and net periodic postretirement benefit cost
as follows:
In Thousands
Impact on
1% Increase
1% Decrease
(In thousands)
Funded status of the plan
Unrecognized net loss
Unrecognized prior service cost
Contributions between measurement date
and fiscal year-end
Accrued liability
Dec. 31,
2000
Jan. 2,
2000
Postretirement benefit obligation
at December 31, 2000
Net periodic postretirement
benefit cost in 2000
$(47,960)
$(36,501)
21,414
11,656
(271)
(295)
864
483
$(25,953)
$(24,657)
$5,213
$(4,280)
663
(525)
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 39
Notes to Consolidated Financial Statements
15 RELATED PARTY T RANSACTIONS
The Company’s business consists primarily of the pro-
duction, marketing and distribution of soft drink prod-
ucts of The Coca-Cola Company, which is the sole
owner of the secret formulas under which the primary
components (either concentrates or syrups) of its soft
drink products are manufactured. Accordingly, the
Company purchases a substantial majority of its
requirements of concentrates and syrups from The
Coca-Cola Company in the ordinary course of its busi-
ness. The Company paid The Coca-Cola Company
approximately $237 million, $258 million and
$225 million in 2000, 1999 and 1998, respectively, for
sweetener, syrup, concentrate and other miscellaneous
purchases. Additionally, the Company engages in a vari-
ety of marketing programs, local media advertising and
similar arrangements to promote the sale of products of
The Coca-Cola Company in bottling territories operated
by the Company. Direct marketing funding support pro-
vided to the Company by The Coca-Cola Company was
approximately $51 million, $55 million and $52 million
in 2000, 1999 and 1998, respectively. Additionally, the
Company earned approximately $1 million, $15 million
and $16 million in 2000, 1999 and 1998, respectively,
related to cold drink infrastructure support. The mar-
keting funding related to cold drink infrastructure sup-
port is covered under a multi-year agreement which
includes certain annual performance requirements. The
Company is in compliance with all such performance
requirements, as amended. In addition, the Company
paid approximately $26 million, $29 million and
$28 million in 2000, 1999 and 1998, respectively, for
local media and marketing program expense pursuant
to cooperative advertising and cooperative marketing
arrangements with The Coca-Cola Company.
The Company has a production arrangement with
Coca-Cola Enterprises Inc. (“CCE”) to buy and sell fin-
ished products at cost. The Coca-Cola Company has
significant equity interests in the Company and CCE. As
of December 31, 2000, CCE has a 7.0% equity interest
in the Company’s total outstanding stock. Sales to CCE
under this agreement were $20.0 million, $21.0 million
and $24.0 million in 2000, 1999 and 1998, respectively.
Purchases from CCE under this arrangement were
$15.0 million, $15.3 million and $15.3 million in 2000,
1999 and 1998, respectively.
In December 1996, the Board of Directors awarded a
retirement benefit to J. Frank Harrison, Jr., Chairman-
Emeritus of the Board of Directors of the Company, for,
among other things, his past service to the Company.
The Company recorded a non-cash, after-tax charge of
$2.7 million in the fourth quarter of 1996 related to this
agreement. Additionally, the Company entered into an
agreement for consulting services with J. Frank
Harrison, Jr. beginning in 1997. Payments in 2000,
1999 and 1998 related to the consulting services agree-
ment totaled $200,000 each year.
On July 2, 1993, the Company and The Coca-Cola
Company formed Piedmont. The Company and The
Coca-Cola Company, through their respective subsidiar-
ies, each beneficially own a 50% interest in Piedmont.
The Company provides a portion of the soft drink prod-
ucts for Piedmont at cost and receives a fee for manag-
ing the operations of Piedmont pursuant to a manage-
ment agreement. The Company sold product at cost to
Piedmont during 2000, 1999 and 1998 totaling
$53.5 million, $56.4 million and $55.8 million,
respectively.
The Company received $13.6 million, $14.2 million
and $14.2 million for management services pursuant to
its management agreement with Piedmont for 2000,
1999 and 1998, respectively.
The Company also subleases various fleet and vend-
ing equipment to Piedmont at cost. These sublease rent-
als amounted to $11.0 million, $10.0 million and
$7.1 million in 2000, 1999 and 1998, respectively. In
addition, Piedmont subleases various fleet and vending
equipment to the Company at cost. These sublease rent-
als amounted to $.2 million, $.2 million and $1.6 mil-
lion in 2000, 1999 and 1998, respectively.
40 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
On November 30, 1992, the Company and the previ-
ous owner of the Company’s Snyder Production Center
in Charlotte, North Carolina agreed to the early termi-
nation of the Company’s lease. Harrison Limited Part-
nership One (“HLP”) purchased the property contem-
poraneously with the termination of the lease, and the
Company leased its Snyder Production Center from
HLP pursuant to a ten-year lease that was to expire on
November 30, 2002. HLP’s sole general partner is a cor-
poration of which J. Frank Harrison, Jr. is the sole
shareholder. HLP’s sole limited partner is a trust of
which J. Frank Harrison, III, Chairman of the Board of
Directors and Chief Executive Officer of the Company,
and Reid M. Henson, Director of the Company are co-
trustees. On August 9, 2000, a Special Committee of the
Board of Directors approved the sale of property and
improvements adjacent to the Snyder Production Center
to HLP and a new lease of both the conveyed property
and the Snyder Production Center from HLP, which
expires on December 31, 2010. The sale closed on
December 15, 2000 at a price of $10.5 million. The
annual base rent the Company is obligated to pay for its
lease of this property is subject to adjustment for an
inflation factor and for increases or decreases in interest
rates, using LIBOR as the measurement device. Rent
expense for this property totaled $2.9 million, $2.6 mil-
lion and $2.7 million in 2000, 1999 and 1998,
respectively.
In May 2000, the Company entered into a five-year
consulting agreement with Reid M. Henson.
Mr. Henson served as a Vice Chairman of the Board of
Directors from 1983 to May 2000. Payments in 2000
related to the consulting agreement totaled $204,000.
On June 1, 1993, the Company entered into a lease
agreement with Beacon Investment Corporation related
to the Company’s headquarters office building. Beacon
Investment Corporation’s sole shareholder is J. Frank
Harrison, III. On January 5, 1999, the Company
entered into a new 10-year lease agreement with Beacon
Investment Corporation which includes the Company’s
headquarters office building and an adjacent office facil-
ity. The annual base rent the Company is obligated to
pay under this lease is subject to adjustment for
increases in the Consumer Price Index and for increases
or decreases in interest rates using the Adjusted Euro-
dollar Rate as the measurement device. Rent expense
under this lease totaled $3.6 million and $3.1 million in
2000 and 1999, respectively. Rent expense under the
previous lease totaled $2.1 million in 1998.
The Company is a shareholder in two cooperatives
from which it purchases substantially all its require-
ments for plastic bottles. Net purchases from these enti-
ties were approximately $49 million, $45 million and
$50 million in 2000, 1999 and 1998, respectively. In
connection with its participation in one of these coop-
eratives, the Company has guaranteed a portion of the
cooperative’s debt. Such guarantee amounted to
$20.4 million as of December 31, 2000.
The Company is a member of SAC, a manufacturing
cooperative. SAC sells finished products to the Com-
pany and Piedmont at cost. The Company also manages
the operations of SAC pursuant to a management agree-
ment. Management fees from SAC were $1.0 million,
$1.3 million and $1.2 million in 2000, 1999 and 1998,
respectively. Also, the Company has guaranteed a por-
tion of debt for SAC. Such guarantee was $15.0 million
as of December 31, 2000.
The Company purchases certain computerized data
management products and services related to inventory
control and marketing program support from Data Ven-
tures LLC (“Data Ventures”), a Delaware limited liabil-
ity company in which the Company holds a 31.25%
equity interest. Also, J. Frank Harrison, III, Chairman
of the Board of Directors and Chief Executive Officer of
the Company, holds a 32.5% equity interest in Data
Ventures. On September 30, 1997, Data Ventures
obtained a $1.9 million unsecured line of credit from
the Company. In December 1999, this line of credit was
increased to $3.0 million. Data Ventures was indebted
to the Company for $2.8 million and $2.1 million as of
December 31, 2000 and January 2, 2000, respectively.
The Company purchased products and services from
Data Ventures for $414,000, $154,000 and $237,000 in
2000, 1999 and 1998, respectively.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 41
Notes to Consolidated Financial Statements
16 RESTRUCTURING
In November 1999, the Company announced a plan to
restructure its operations by consolidating sales divi-
sions and reducing its workforce. Approximately 300
positions were eliminated as a result of the restructur-
ing. The Company recorded a pre-tax restructuring
charge of $2.2 million in the fourth quarter of 1999,
which was funded by cash flow from operations. The
restructuring has been completed and substantially all
amounts have been paid.
17 EARNINGS PER SHARE
The following table sets forth the computation of basic net income per share and diluted net income per share:
(In thousands except per share data)
Numerator:
2000
1999
1998
Numerator for basic net income and diluted net income
$6,294
$3,241
$14,878
Denominator:
Denominator for basic net income per share — weighted average common shares
Effect of dilutive securities — Stock options
8,733
89
8,588
120
Denominator for diluted net income per share — adjusted weighted average common shares
8,822
8,708
8,365
130
8,495
Basic net income per share
Diluted net income per share
$ .72
$ .38
$
1.78
$ .71
$ .37
$ 1.75
42 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
18 RISKS AND UNCERTAINTIES
Approximately 90% of the Company’s sales are prod-
ucts of The Coca-Cola Company, which is the sole sup-
plier of the concentrate required to manufacture these
products. The remaining 10% of the Company’s sales
are products of various other beverage companies. The
Company has bottling contracts under which it has vari-
ous requirements to meet. Failure to meet the require-
ments of these bottling contracts could result in the loss
of distribution rights for the respective product.
The Company currently obtains all of its aluminum
cans from one domestic supplier. The Company cur-
rently obtains all of its PET bottles from two domestic
cooperatives. The inability of either of these aluminum
can or PET bottle suppliers to meet the Company’s
requirement for containers could result in short-term
shortages until alternative sources of supply could be
located. The Company attempts to mitigate these risks
by working closely with key suppliers and by purchas-
ing business interruption insurance where appropriate.
The Company makes significant expenditures each
year on fuel for product delivery. Material increases in
the cost of fuel may result in a reduction in earnings to
the extent the Company is not able to increase its selling
prices to offset the increase in fuel costs.
Certain liabilities of the Company are subject to risk
of changes in both long-term and short-term interest
rates. These liabilities include floating rate debt, leases
with payments determined on floating interest rates,
postretirement benefit obligations and the Company’s
nonunion pension liability.
Less than 10% of the Company’s labor force is cur-
rently covered by collective bargaining agreements.
Three collective bargaining contracts covering approxi-
mately 1% of the Company’s employees expire during
2001.
In March 2000, at the end of a collective bargaining
agreement in Huntington, West Virginia, the Company
and Teamsters Local Union 505 were unable to reach
agreement on wages and benefits. The union elected to
strike and other Teamster-represented sales centers in
West Virginia joined in a sympathy strike. As of
August 7, 2000, the Company and the respective local
unions settled all outstanding issues.
Material changes in the performance requirements or
decreases in levels of marketing funding historically pro-
vided under marketing programs with The Coca-Cola
Company and other franchisers, or the Company’s
inability to meet the performance requirements for the
anticipated levels of such marketing funding support
payments, would adversely affect future earnings. The
Coca-Cola Company is under no obligation to continue
marketing funding at past levels.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 43
Notes to Consolidated Financial Statements
19 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Changes in current assets and current liabilities affecting cash, net of effects of acquisitions and divestitures, were as
follows:
(In thousands)
Accounts receivable, trade, net
Accounts receivable from The Coca-Cola Company
Accounts receivable, other
Inventories
Prepaid expenses and other assets
Accounts payable and accrued liabilities
Accounts payable to The Coca-Cola Company
Accrued interest payable
Due to (from) Piedmont Coca-Cola Bottling Partnership
Fiscal Year
2000
1999
1998
$ (2,294)
$ (1,017)
$ (1,304)
638
5,691
712
(757)
(15,353)
1,456
(6,347)
13,700
4,073
(5,419)
(2,487)
2,542
10,989
(2,848)
1,505
2,301
(5,401)
862
(1,612)
(2,778)
5,986
1,086
1,287
2,444
(Increase) decrease in current assets less current liabilities
$ (2,554)
$ 9,639
$
570
Cash payments for interest and income taxes were as follows:
(In thousands)
Interest
Income taxes (net of refunds)
20 NEW ACCOUNTING PRONOUNCEMENTS
Fiscal Year
1999
2000
1998
$ 58,736
$ 48,221
$ 38,046
2,830
1,939
1,925
The Financial Accounting Standards Board (“FASB”)
has issued Statement No. 133, “Accounting for Deriva-
tive Instruments and Hedging Activities.” As subse-
quently amended by FASB Statement No. 138, State-
ment No. 133 is effective for all fiscal quarters of all
fiscal years beginning after June 15, 2000. Statement
No. 133 will require the Company to recognize all
derivatives on the balance sheet at fair value. Deriva-
tives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair
value of the hedged assets, liabilities or firm commit-
ments through earnings or recognized in other compre-
hensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative’s change
in fair value will be immediately recognized in earnings.
The Company will adopt the provisions of Statement
No. 133 in the first quarter of 2001. The adoption of
Statement No. 133 will not have a material impact on
the earnings and financial position of the Company.
44 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Notes to Consolidated Financial Statements
21 QUARTERLY FINANCIAL DATA (UNAUDITED)
Set forth below are unaudited quarterly financial data for the fiscal years ended December 31, 2000 and January 2,
2000.
(In thousands except per share data)
Year Ended December 31, 2000
Net sales
Gross margin
Net income (loss)
Basic net income (loss) per share
Diluted net income (loss) per share
(In thousands except per share data)
Year Ended January 2, 2000
Net sales
Gross margin
Restructuring expense
Net income (loss)
Basic net income (loss) per share
Diluted net income (loss) per share
1
Quarter
2
3
4
$228,184
$270,933
$258,565
$237,452
105,941
127,931
121,006
110,015
(1,957)
6,317
6,398
(4,464)
(.22)
(.22)
1
.72
.71
.73
.73
(.51)
(.51)
Quarter
2
3
4
$220,263
$261,037
$260,284
$230,967
92,152
115,646
117,356
104,284
(4,480)
6,166
5,827
(.54)
(.54)
.72
.71
.67
.66
2,232
(4,272)
(.49)
(.49)
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 45
Selected Financial Data*
(In thousands except per share data)
Summary of Operations
Net sales
Cost of sales
Selling, general and administrative expenses
Depreciation expense
Amortization of goodwill and intangibles
Restructuring expense
Total costs and expenses
Income from operations
Interest expense
Other income (expense), net
Income before income taxes
Income taxes
Net income
Basic net income per share
Diluted net income per share
Cash dividends per share:
Common
Class B Common
Other Information
Weighted average number of common shares
outstanding
Weighted average number of common shares
outstanding — assuming dilution
Year-End Financial Position
Total assets
Long-term debt
Stockholders’ equity
2000
1999
Fiscal Year**
1998
1997
1996
$ 995,134
$ 972,551
$ 928,502
$ 802,141
$
773,763
530,241
323,223
64,751
14,712
543,113
291,907
60,567
13,734
2,232
534,919
276,245
37,076
12,972
452,893
239,901
33,783
12,221
435,959
236,527
28,608
12,158
932,927
911,553
861,212
738,798
713,252
62,207
53,346
974
9,835
3,541
6,294
.72
.71
1.00
1.00
8,733
8,822
$
$
$
$
$
60,998
50,581
(5,431)
4,986
1,745
3,241
.38
.37
1.00
1.00
67,290
39,947
(4,098)
23,245
8,367
14,878
1.78
1.75
1.00
1.00
$
$
$
$
$
63,343
37,479
(1,594)
24,270
9,004
15,266
1.82
1.79
1.00
1.00
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
8,588
8,365
8,407
8,708
8,495
8,509
60,511
30,379
(4,433)
25,699
9,535
16,164
1.74
1.73
1.00
1.00
9,280
9,330
$1,062,097
$1,108,392
$ 822,702
$ 775,507
$
699,870
682,246
723,964
491,234
493,789
439,453
28,412
30,851
14,198
7,685
20,681
See Management’s Discussion and Analysis for additional information.
*
** All years presented are 52-week years except 1998 which is a 53-week year. See Note 3 and Note 15 to the consolidated financial state-
ments for additional information about Piedmont Coca-Cola Bottling Partnership.
46 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Summary of Quarterly Stock Prices
Fiscal Year
2000
Sales Price
1999
Sales Price
High
Low
Period
End
High
Low
Period
End
$53.00
$46.50
$52.94
$59.50
$54.50
$56.00
52.75
47.75
45.00
41.38
36.50
32.05
45.50
41.94
37.88
57.63
60.00
56.94
52.88
55.75
45.00
56.13
56.13
47.38
The amount and frequency of future dividends will
be determined by the Company’s Board of Directors in
light of the earnings and financial condition of the Com-
pany at such time, and no assurance can be given that
dividends will be declared in the future.
The number of stockholders of record of the Com-
mon Stock and Class B Common Stock, as of
February 15, 2001, was 3,225 and 12, respectively.
First quarter
Second quarter
Third quarter
Fourth quarter
The Company’s Common Stock trades on the Nasdaq
National Market tier of The Nasdaq Stock Market®
under the symbol COKE. The table above sets forth for
the periods indicated the high, low and period end
reported sales prices per share of Common Stock. There
is no trading market for the Company’s Class B Com-
mon Stock. Shares of Class B Common Stock are con-
vertible on a share-for-share basis into shares of Com-
mon Stock.
The quarterly dividend rate of $.25 per share on both
Common Stock and Class B Common Stock shares was
maintained throughout 1998, 1999 and 2000.
C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d 47
Board of Directors
J. Frank Harrison, III
Chairman of the Board of Directors and
Chief Executive Officer
Coca-Cola Bottling Co. Consolidated
J. Frank Harrison, Jr.
Chairman — Emeritus
Coca-Cola Bottling Co. Consolidated
William B. Elmore
President and Chief Operating Officer
Coca-Cola Bottling Co. Consolidated
James L. Moore, Jr.
Vice Chairman of the Board of Directors
Coca-Cola Bottling Co. Consolidated
Reid M. Henson
Retired Vice Chairman of the Board of
Directors
Coca-Cola Bottling Co. Consolidated
John W. Murrey, III
Member
Witt, Gaither & Whitaker, P.C.
Attorneys at Law
H. W. McKay Belk
President, Merchandising and Marketing
Belk, Inc.
H. Reid Jones
Private Investor
John M. Belk
Chairman and Chief Executive Officer
Belk, Inc. and Belk Stores Services, Inc.
Executive Officers
J. Frank Harrison, III
Chairman of the Board of Directors and
Chief Executive Officer
William B. Elmore
President and Chief Operating Officer
James L. Moore, Jr.
Vice Chairman of the Board of Directors
Robert D. Pettus, Jr.
Executive Vice President and Assistant to
the Chairman
David V. Singer
Executive Vice President, Chief Financial
Officer
Ned R. McWherter
Former Governor of the State of
Tennessee
M. Craig Akins
Vice President, Field Sales
Clifford M. Deal, III
Vice President, Treasurer
Norman C. George
Vice President, Marketing and
National Sales
Ronald J. Hammond
Vice President, Value Chain
Kevin A. Henry
Vice President, Human Resources
Carl Ware
Executive Vice President
Global Public Affairs and Administration
The Coca-Cola Company
Umesh M. Kasbekar
Vice President, Planning and
Administration
C. Ray Mayhall, Jr.
Vice President, Distribution and
Technical Services
Lauren C. Steele
Vice President, Corporate Affairs
Steven D. Westphal
Vice President, Controller
Jolanta T. Zwirek
Vice President, Chief Information Officer
48 C o c a - C o l a B o t t l i n g C o . C o n s o l i d a t e d
Corporate Information
Transfer Agent and Dividend
Disbursing Agent
First Union National Bank
Corporate Trust Client Services NC-1153
1525 West W.T. Harris Blvd. 3C3
Charlotte, North Carolina 28288-1153
Stock Listing
Nasdaq National Market System
Nasdaq Symbol - COKE
Form 10-K
A copy of the Company’s annual report to the Securi-
ties and Exchange Commission (Form 10-K) is avail-
able to stockholders without charge upon written
request to David V. Singer, Executive Vice President,
Chief Financial Officer, Coca-Cola Bottling Co.
Consolidated, P.O. Box 31487, Charlotte, North Caro-
lina 28231.
Annual Meeting
The Annual Meeting of Stockholders of Coca-Cola
Bottling Co. Consolidated will be held at Snyder Pro-
duction Center, 4901 Chesapeake Drive, Charlotte,
North Carolina 28216, at 10:00 a.m., on May 9, 2001.
Photography on inside pages by Donna Bise • Photography of contour bottle by Mitchell Kearney • Printing by Classic Graphics
Produced by Crown Communications • Art Direction by Johnston Design
4100 Coca-Cola Plaza
Charlotte, NC 28211
Mailing Address:
Post Office Box 31487
Charlotte, NC 28231
704/557-4400