Coca-Cola Consolidated Annual Report 2006

Plain-text annual report

Coca-Cola Bottling Co. Consolidated is the second largest Coca-Cola bottler in the United States. We are a leader in manufacturing, marketing and distribution of soft drinks. With corporate oﬃces in Charlotte, N.C., we have operations 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 18.7 million people. Coca-Cola Bottling Co. Consolidated is listed on the NASDAQ Stock Market (Global Market) under the symbol COKE. This annual report is printed on recycled paper. Fiscal Year Financial Summary* ______________________________________ In Thousands (Except Per Share Data) _______________________________________________________________ $1,267,227 Net sales 600,693 Gross margin 36,550 Income before income taxes 14,702 Income taxes 21,848 Net income Basic net income per share $1,431,005 622,579 31,160 7,917 23,243 $1,380,172 618,911 38,752 15,801 22,951 2005 2004 2006 Common Stock Class B Common Stock $ 2.55 $ 2.55 $ 2.53 $ 2.53 $ 2.41 $ 2.41 Diluted net income per share Common Stock Class B Common Stock $ 2.55 $ 2.54 $ 2.53 $ 2.53 $ 2.41 $ 2.41 * The ﬁnancial information in this Summary Annual Report was derived from and should be read in conjunction with the audited consolidated ﬁnancial statements and notes thereto and management’s discussion and analysis of the ﬁnancial condition and results of operations, which are included in the Company’s Annual Report on Form 10-K for the ﬁscal year ended December 31, 2006. The ﬁscal years presented are the 52-week periods ended December 31, 2006, and January 1, 2006, and the 53-week period ended January 2, 2005. This Summary Annual Report includes forward-looking statements that reﬂect management’s current outlook for future periods. These statements relate to, among other things, future growth in the nonalcoholic beverage business; growth potential in carbonated soft drinks, or sparkling beverages; stock keeping units (SKUs) approaching 1,000 units in the near future; introduction of a number of new nonalcoholic beverage products in 2007; unprecedented cost of goods increases in 2007; restructuring costs in 2007; continued conversion of operations in 2007 to incorporate the CooLift® delivery system and the six-day delivery cycle; rolling out a new service management system for our fountain and vending equipment services function; and new business initiatives providing tangible ﬁnancial results during the next three to 10 years. These forward-looking statements are subject to risks and uncertainties that could cause the anticipated events not to occur or actual results to diﬀer materially from historical results or management’s anticipated results. The forward-looking statements in this Summary Annual Report should be read in conjunction with the Risk Factors section and the detailed cautionary information regarding forward-looking statements in the Company’s Annual Report on Form 10-K for the ﬁscal year ended December 31, 2006. The Company undertakes no obligation to publicly update or revise any forward- looking statements. D ear Shareholders: The soft drink industry has faced con- siderable challenges during the past several years, and 2006 was no exception. Among the obstacles we faced were signiﬁcant increases in raw material costs, escalating energy costs, market pricing pressures and insuﬃcient innovation to address con- sumers’ desire for enhanced variety. Nevertheless, Coca-Cola Bottling Co. Consolidated (CCBCC) realized a strong fourth quarter in 2006 with net income of $8.6 million, or $.94 per basic share, compared to $1.9 million, or $.21 per basic share, for the fourth quarter of 2005. CCBCC’s new sleek can packaging brings a renewed energy to the “make” portion of our mission statement. CCBCC earned $23.2 million in 2006, or $2.55 per basic share, compared to $23.0 million, or $2.53 per basic share, the previous year. CCBCC’s net income in the fourth quarter and full year of 2006 reﬂected the favorable impact of a $4.9 million reduction in income tax expense. This was the result of agreements with state taxing authorities to settle certain tax positions. These favorable tax settlements impacted basic net income per share by $.54 for the fourth quarter and full year of 2006. The Company’s net income in the full year of 2005 reﬂected the favorable impact of $4.2 million after tax, or $.46 per basic share, as a result of proceeds received from the settlement of litigation related to high fructose corn syrup. This gain was oﬀset partially by the impact of ﬁnanc- ing transaction costs of $1.0 million, or $.11 per basic share. While traditional sugar carbonated soft drinks remain our largest-selling product category, sales in this category continue to decline as consumers increasingly opt for more variety and diﬀerent alternatives for hydration and liquid refreshment. The numerous reasons for this shift include an 2 • Letter to Shareholders increased consumer desire for specialization and personalization in their beverage choices, as well as an increasing focus by some consumers on health and wellness. Even though sugar carbonated soft drink sales are declining, the total nonalcoholic beverage business is growing steadily. Con- sumers are indeed drinking more nonalco- holic beverages than ever, and this steady growth is projected well into the future. Accordingly, CCBCC has begun moving beyond the parameters of a traditional soft drink bottler and is in the process of trans- forming itself to better capitalize on this changing environment. Carbonated soft drinks, or sparkling beverages, continue to make up the major- ity of our business, and we remain com- mitted to being the very best soft drink bottler possible. We are encouraged by The Coca-Cola Company’s energized focus on sparkling beverages, and with the right brand and packages, we believe there is growth potential in this category. Current growth in our business is coming from our very strong low-calorie sparkling beverage portfolio, water and other noncarbonated drinks. To meet consumer desires, we are introducing new products and packages at an accelerated rate. This proliferation of products leads to complexities, and during the last several years, we have seen stock keeping units (SKUs) we sell grow from less than 200 to more than 450 today. We anticipate this number may approach 1,000 in the near future. Our redesigned sales and delivery sys- tems better position us to handle this SKU proliferation. The ﬁrst step was to move from conventional to predictive selling, and then to implement the CooLift® delivery system designed by the team at CCBCC. The CooLift® delivery system uses a newly designed powered lift and pre-built sales orders on custom pallets to signiﬁcantly improve delivery eﬃciencies. We have implemented the CooLift® system in roughly half of CCBCC’s operations thus far. Since the CooLift® delivery system pre- sents such a compelling solution for distri- butors, we have patented the technology Tab Energy and Enviga are examples of the innovative sleek can packaging. Letter to Shareholders • 3 and established a wholly owned subsidiary, Swift Water Logistics, Inc., to market and sell the delivery system to bottlers, dis- tributors and other companies focused on improving delivery eﬃciencies. CCBCC has always been known as an innovative company, and following that tradition, we established a wholly owned subsidiary, ByB Brands, Inc. (ByB), to create and sell exciting, new nonalcoholic beverages. ByB’s current brands include Cinnabon Premium Coﬀee Lattes, the vita- min-enhanced beverage Respect and the noncarbonated, ﬂavored drink Tum-E Yummies. Cinnabon Lattes, through a series of agreements, will soon be available in 41 states nationwide. Respect and Tum-E Yummies are currently being sold in CCBCC sales territories, and we plan to expand the reach of both products in the near future. We anticipate CCBCC will introduce a number of new nonalcoholic beverage products in 2007 to focus on meeting the ever-changing consumer desire for customization and variety. As we stated at the outset, 2006 was a challenging year, and the third quarter was particularly disappointing. Recogniz- ing this, your Company began reviewing additional resource eﬃciencies in the fourth quarter that enabled us to improve our ﬁnancial results. It also properly positioned us going into 2007, a year in which we must deal with unprec- edented cost of goods increases, particularly aluminum cans and sweetener. In order to improve operating eﬃciencies and oﬀset, to some extent, the anticipated increases in raw material costs, your Company has reorganized and restructured its Coca-Cola franchise business. As a result of this restructuring, CCBCC estimates incurring $1.5 million to $2 million for one-time termination beneﬁts, as well as $1.0 million to $1.5 million for other restructuring costs. In total, CCBCC estimates incur- ring $3 million in expenses related to these changes in 2007. Your Company’s mission statement asserts we will make, sell and deliver soft drinks better than anyone else, and that our values honor God. That remains at the heart of everything we do, and our commitment to our values and our culture is steadfast. We recognize we are in a rapidly changing business environment, and we believe we are taking the necessary steps to embrace and lead this change so we can continue to win in 2007 and beyond. While change can be challenging, it can also be exciting and renewing. The challenges we face serve as a test for us as a company, but we are opti- mistic because we ﬁrmly believe we have the right plan, the right culture and the right people to lead this change. J. Frank Harrison, III Chairman of the Board and Chief Executive Oﬃcer William B. Elmore President and Chief Operating Oﬃcer 4 • Letter to Shareholders M ore than 120 years have passed since thirsty consumers ﬁrst embraced a refreshing and delicious new drink called Coca-Cola. Many billions of servings later, Coca-Cola is arguably the world’s biggest brand, and the contour bottle is one of the most recognized sym- bols on the planet. When Coca-Cola Bottling Co. Con- solidated (CCBCC) and its fellow bottling pioneers built the soft drink industry, it was a diﬃcult and challenging business, but not a complex one – one product, one package, eager and thirsty consumers and very few competitors. While Coca-Cola is still the best-selling beverage brand in the world, the industry it spawned has become considerably more complex. There are now thousands of bever- age products sold in hundreds of package and size combinations. The number of stock keeping units (SKUs) CCBCC sells has grown from less than 200 a few years ago to more than 450 today, and analysts predict that number could approach 1,000 in the near future. Early bottlers partnered with a rapidly growing retailer base to sell the one package – the 6.5-ounce green glass bottle – of one brand, Coca-Cola. Today, there are not only hundreds of competing beverage prod- ucts, but the retailer proposition is more Retailers enjoy CCBCC’s energy at the Coca-Cola 600 Dealer Days event. complex as well, with fewer, larger and more powerful retail customers. For much of the industry’s history, Coca-Cola bottlers faced competition from a handful of regional brands, but there was really only one primary competitor. The “cola wars” centered on taste, marketing, availability, price and customer service, but the consumer preference was clear – colas were king. While colas and other carbonated soft drinks continue to be the largest portion of the soft drink busi- ness, consumer preferences are changing. Energy drinks, bottled waters, teas, vitamin- enhanced beverages, coﬀee lattes and other products are providing the “new” news that caters to consumers looking for more variety in their beverages. To compete and win in this changing environment, CCBCC must not only recognize the changing dynamics of the business, but embrace the exciting opportunities these changes present. We believe we are well-positioned Our Business • 5 CCBCC’s energy results in revolutionary innovations like the CooLift ® delivery system. 6 • Our Business to lead this change by building on the work your Company has already undertaken in product innovation, process innovation and redesign, information systems enhancements, resource eﬃciency and a relentless focus on our Coca-Cola franchise sales business. PRODUCT INNOVATION During 2006, CCBCC established ByB Brands, Inc. (ByB), a wholly owned subsidiary that creates and develops beverage brands. ByB is oﬀ to an energetic start, launching Cinnabon Premium Coﬀee Lattes in CCBCC sales territories in 2006. Early in 2007, ByB entered into distribution agree- ments making Cinnabon Lattes available in 41 states nationwide. In addition, ByB has introduced the vitamin-enhanced beverage Respect and the noncarbonated, ﬂavored drink Tum-E Yummies in CCBCC sales territories. We are also encouraged and energized by new product innovations from The Coca-Cola Com- pany. Two new product oﬀerings include Enviga, a green tea-based, calorie-burning beverage, and Gold Peak, a premium tea. In addition, the announced purchase of FUZE by The Coca-Cola Company will give the Coke system a number of excellent new products to satisfy consumer demands. PROCESS INNOVATION AND REDESIGN As we evolve into a total nonalcoholic bever- age company, we must eﬃciently make, sell and deliver the exploding number of SKUs. Again, your Company is well-positioned to do this with the work we began several years ago redesigning our selling and delivery functions. As part of this work, we moved to pre-sell, or predictive selling, which is an essential ingredient in our overall redesign. During 2006, we rolled out our CooLift® delivery system to more than half of CCBCC’s operations. The CooLift® system improves delivery eﬃciencies while making the route deliv- ery job less physically demanding for our employees. The CooLift® system, along with a four-day work week and a six-day delivery cycle, enables us to signiﬁcantly improve delivery eﬃciencies and customer service. We will continue the process of converting our operations in 2007 to incorporate the CooLift® delivery system and the six-day delivery cycle where appropriate. The CooLift® system could revolution- ize the beverage industry and has attracted much attention from other companies. As a result, we formed another wholly owned subsidiary, Swift Water Logistics, Inc., to market and sell the CooLift® system to distributors and other soft drink bottlers. Swift Water Logistics is selling CooLift® equipment and related consulting services, and we are excited about its long-term prospects. INFORMATION SYSTEMS ENHANCEMENTS During the past several years, the Company has invested considerable time and ﬁnancial resources to implement and upgrade its information systems to facilitate new processes and enable our employees to quickly access information for improved decision-making. The growth in SKUs demands more robust information systems and tools to manage an even more complex beverage portfolio. Our focus has been on developing new delivery-system applica- tions, sales-demand planning, production planning, inventory and warehouse man- agement systems and upgraded core ﬁnancial systems. In 2007, we plan to roll out a new service management system that will support and enable improved processes and informa- tion in our fountain and vending equipment services function. This function is an integral component of our cold drink business, as it handles the movement, repair and refurbish- ment of our more than 200,000 cold drink assets. The cold drink busi- ness is a key component of our Coca-Cola franchise business, as it has attractive margins and provides a great opportunity for brand building with consumers. We have realized signiﬁcant improvements in our informa- tion systems in the past few years, with more to come. RESOURCE EFFICIENCY We are operating in a very diﬃcult raw material cost envi- ronment, with packaging, sweet- ener and other cost of goods expected to reach unprecedented levels in 2007. This pressure comes amid continued elevated energy costs and increases in labor and employee health care beneﬁts. Accordingly, we must continually assess and improve the Gold Peak, a premium tea, offers consumers an exciting new beverage option. Our Business • 7 use of capital and operating resources and eliminate unnecessary spending. We remain focused on iden- tifying opportunities to increase the use of resources to improve results, while streamlining operations to reduce ineﬃciencies. In the ﬁrst quarter of 2007, we began streamlining operations and our organizational structure, which primarily involved a consolidation of the franchise business into one sales division, as well as a reorganization of other sales, delivery, sup- ply chain and support functions. FOCUSING ON THE CORE BUSINESS We are energized by the progress of our new business initiatives. Our new business initiatives are designed to leverage our core competencies and complement our Coca-Cola franchise sales business. We anticipate these new business initiatives will provide tangible ﬁnancial results during the next three to 10 years. Having said that, our primary focus and commitment is to the Coca-Cola franchise sales business. This is the heart and soul of CCBCC – yesterday, today and tomorrow. Our Company’s mission statement sets an ambitious goal – to make, sell and deliver soft drinks better than anyone else. To be the best Coca-Cola bottler we can be, we will have to continue to improve our manufacturing, selling and delivery capabilities. We remain commit- ted to achieving that goal. EMBRACING AND LEADING CHANGE CCBCC not only recognizes the imperative for changes in the beverage business, but also embraces it. We are excited about the challenges facing us and the opportunities they present. We believe we have the right plan, the right culture and the right people to lead these changes and to win. Your Company is fortunate to have the most resourceful and dedicated workforce in the industry. They have been tested time and time again, and their desire to excel – and to win – is more evident today than ever. This is why we are convinced that the best is yet to come. CCBCC’s employees use their energy and time to give back to the community through our stewardship program. 8 • Our Business Cover photography: © 2006 Harold Hinson Consolidated Statements of Operations Fiscal Year In Thousands (Except Per Share Data) 2006 2005 2004 Net sales Cost of sales Gross margin Selling, delivery and administrative expenses Amortization of intangibles Income from operations Interest expense Minority interest Income before income taxes Income taxes Net income Basic net income per share: Common Stock Weighted average number of Common shares outstanding Class B Common Stock Weighted average number of Class B Common shares outstanding Diluted net income per share: Common Stock Weighted average number of Common shares outstanding—assuming dilution Class B Common Stock Weighted average number of Class B Common shares $1,431,005 $1,380,172 $1,267,227 666,534 808,426 761,261 622,579 618,911 600,693 537,365 550 525,903 880 513,227 3,117 84,664 50,286 3,218 31,160 7,917 92,128 49,279 4,097 38,752 15,801 84,349 43,983 3,816 36,550 14,702 23,243 $ 22,951 $ 21,848 2.55 $ 2.53 $ 2.41 6,643 6,643 6,643 2.55 $ 2.53 $ 2.41 2,460 2,440 2,420 2.55 $ 2.53 $ 2.41 9,120 9,083 9,063 2.54 $ 2.53 $ 2.41 $ $ $ $ $ outstanding—assuming dilution 2,477 2,440 2,420 These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 9 Consolidated Balance Sheets In Thousands (Except Share Data) ASSETS Current assets: Cash and cash equivalents Accounts receivable, trade, less allowance for doubtful accounts of $1,334 and $1,318, respectively 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 Other assets Franchise rights, net Goodwill, net Other identifiable intangible assets, net Total Dec. 31, 2006 Jan. 1, 2006 $ 61,823 $ 39,608 91,299 4,915 8,565 67,055 13,485 247,142 384,464 69,851 35,542 520,672 102,049 4,747 94,576 2,719 8,388 58,233 8,862 212,386 389,199 73,244 39,235 520,672 102,049 5,054 $1,364,467 $1,341,839 These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 10 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of debt Current portion of obligations under capital leases Accounts payable, trade Accounts payable to The Coca-Cola Company Other accrued liabilities Accrued compensation Accrued interest payable Total current liabilities Deferred income taxes Pension and postretirement benefit obligations Other liabilities Obligations under capital leases Long-term debt Total liabilities Commitments and Contingencies Minority interest Stockholders’ equity: Common Stock, $1.00 par value: Authorized-30,000,000 shares; Issued-9,705,551 and 9,705,451 shares, respectively Class B Common Stock, $1.00 par value: Authorized-10,000,000 shares; Issued-3,088,266 and 3,068,366 shares, respectively Capital in excess of par value Retained earnings Accumulated other comprehensive loss Less-Treasury stock, at cost: Common Stock-3,062,374 shares Class B Common Stock-628,114 shares Total stockholders’ equity Total Dec. 31, 2006 Jan. 1, 2006 $ 100,000 $ 2,435 44,050 21,748 51,030 19,671 10,008 248,942 162,694 57,757 88,598 75,071 591,450 6,539 1,709 35,333 15,516 60,079 18,969 9,670 147,815 167,131 54,844 85,188 77,493 691,450 1,224,512 1,223,921 46,002 42,784 9,705 9,705 3,088 101,145 68,495 (27,226) 3,068 99,376 54,355 (30,116) 155,207 136,388 60,845 409 93,953 60,845 409 75,134 $1,364,467 $1,341,839 These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 11 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 intangibles Deferred income taxes Losses on sale of property, plant and equipment Amortization of debt costs Stock compensation expense Amortization of deferred gains related to terminated interest rate agreements Minority interest (Increase) decrease in current assets less current liabilities (Increase) decrease in other noncurrent assets Increase (decrease) in other noncurrent liabilities Other Total adjustments Net cash provided by operating activities Cash Flows from Investing Activities Additions to property, plant and equipment Proceeds from the sale of property, plant and equipment Proceeds from the redemption of life insurance policies Investment in plastic bottle manufacturing cooperative Other Net cash used in investing activities Cash Flows from Financing Activities Payment of long-term debt Payment of current portion of long-term debt Payment of lines of credit, net Cash dividends paid Principal payments on capital lease obligations Premium on exchange of long-term debt Other Net cash used in financing 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 Class B Common Stock in connection with stock award Capital lease obligations incurred Exchange of long-term debt 2006 Fiscal Year 2005 2004 $ 23,243 $ 22,951 $ 21,848 67,334 550 (7,030) 1,340 2,638 929 (1,689) 3,218 5,863 3,585 2,736 180 79,654 68,222 880 3,105 775 1,967 860 (1,679) 4,097 4,042 (1,475) (1,471) (180) 79,143 70,798 3,117 14,244 752 1,101 1,141 (1,945) 3,816 (9,239) 531 11,596 101 96,013 102,897 102,094 117,861 (63,179) 2,454 (39,992) 4,443 (52,860) 2,225 29,049 (2,338) (243) (63,306) (35,549) (21,586) (39) (6,500) (9,103) (1,696) (38) (8,550) (1,500) (9,084) (1,826) (15,554) 692 (85,000) (78) (9,600) (9,063) (1,843) 150 (17,376) (35,822) (105,434) 22,215 39,608 30,723 8,885 (9,159) 18,044 $ 61,823 $ 39,608 $ 8,885 $ 860 $ 1,141 $ 1,055 37,307 164,757 These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 12 Consolidated Statements of Changes In Stockholders’ Equity In Thousands Balance on December 28, 2003 Comprehensive income: Net income Net gain on derivatives, net of tax Net change in minimum pension liability adjustment, net of tax Total comprehensive income Cash dividends paid Common ($1.00 per share) Class B Common ($1.00 per share) Issuance of Class B Common Stock Common Stock Class B Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total $9,704 $3,029 $ 97,220 $27,703 $(23,930) $(61,254) $52,472 62 (1,935) 21,848 (6,642) (2,421) 21,848 62 (1,935) 19,975 (6,642) (2,421) 1,055 20 1,035 Balance on January 2, 2005 $9,704 $3,049 $ 98,255 $40,488 $(25,803) $(61,254) $64,439 Comprehensive income: Net income Net change in minimum pension liability adjustment, net of tax Total comprehensive income Cash dividends paid Common ($1.00 per share) Class B Common ($1.00 per share) Issuance of Class B Common Stock Conversion of Class B Common Stock into Common Stock (4,313) 22,951 (6,643) (2,441) 22,951 (4,313) 18,638 (6,643) (2,441) 1,141 — 20 (1) 1 1,121 Balance on January 1, 2006 $9,705 $3,068 $ 99,376 $54,355 $(30,116) $(61,254) $75,134 Comprehensive income: Net income Net change in minimum pension liability adjustment, net of tax Total comprehensive income Adjustment to initially apply SFAS No. 158, net of tax Cash dividends paid Common ($1.00 per share) Class B Common ($1.00 per share) Issuance of Class B Common Stock Stock compensation expense 23,243 (6,643) (2,460) 5,442 (2,552) 20 840 929 23,243 5,442 28,685 (2,552) (6,643) (2,460) 860 929 Balance on December 31, 2006 $9,705 $3,088 $101,145 $68,495 $(27,226) $(61,254) $93,953 These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 13 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Coca-Cola Bottling Co. Consolidated: We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of Coca-Cola Bottling Co. Consolidated as of December 31, 2006 and January 1, 2006, and for each of the three years in the period ended December 31, 2006, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006; and in our report dated March 13, 2007, we expressed unqualified opinions thereon (with an explanatory paragraph relating to the Company’s change in the manner in which it accounts for pension and postretirement benefits in 2006). The consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting referred to above (not presented herein) appear in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. Charlotte, North Carolina March 13, 2007 14 Board of Directors Executive Officers J. Frank Harrison, III Chairman of the Board of Directors and Chief Executive Officer Coca-Cola Bottling Co. Consolidated H. W. McKay Belk President and Chief Merchandising Officer Belk, Inc. Sharon A. Decker Chief Executive Officer The Tapestry Group, LLC William B. Elmore President and Chief Operating Officer Coca-Cola Bottling Co. Consolidated James E. Harris Executive Vice President and Chief Financial Officer MedCath Corporation Deborah S. Harrison Affiliate Broker Fletcher Bright Company Ned R. McWherter Former Director of Piedmont Natural Gas Co., Inc. and Volunteer Distributing Co., Inc. Former Governor of the State of Tennessee John W. Murrey, III Assistant Professor Appalachian School of Law Robert D. Pettus, Jr. Vice Chairman of the Board of Directors Coca-Cola Bottling Co. Consolidated Carl Ware Retired Executive Vice President, Public Affairs and Administration The Coca-Cola Company Dennis A. Wicker Partner Helms Mulliss & Wicker, PLLC Former Lieutenant Governor of the State of North Carolina J. Frank Harrison, III Chairman of the Board of Directors and Chief Executive Officer William B. Elmore President and Chief Operating Officer Robert D. Pettus, Jr. Vice Chairman of the Board of Directors Henry W. Flint Executive Vice President and Assistant to the Chairman William J. Billiard Vice President, Controller and Chief Accounting Officer Clifford M. Deal, III Vice President, Treasurer Norman C. George President, ByB Brands, Inc. Kevin A. Henry Senior Vice President, Human Resources Umesh M. Kasbekar Senior Vice President, Planning and Administration Melvin F. Landis, III Senior Vice President, Chief Marketing and Customer Officer C. Ray Mayhall, Jr. Senior Vice President, Sales Lauren C. Steele Vice President, Corporate Affairs Steven D. Westphal Senior Vice President and Chief Financial Officer Jolanta T. Zwirek Senior Vice President and Chief Information Officer 15 Corporate Information Transfer Agent and Dividend Disbursing Agent The Company’s transfer agent is responsible for stockholder records, issuance of stock certificates and distribution of dividend payments and IRS Form 1099s. The transfer agent also administers plans for dividend reinvestment and direct deposit. Stockholder requests and inquiries concerning these matters are most efficiently answered by corresponding directly with American Stock Transfer & Trust Company, 59 Maiden Lane, New York, New York 10038. Communication may also be made by telephone Toll-Free (800) 937-5449 or via the Internet at www.amstock.com. Stock Listing The NASDAQ Stock Market (Global Market) NASDAQ Symbol – COKE Company Website www.cokeconsolidated.com The Company makes available free of charge through its Internet website its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. Corporate Office The corporate office is located at 4100 Coca-Cola Plaza, Charlotte, North Carolina 28211. The mailing address is Coca-Cola Bottling Co. Consolidated, P. O. Box 31487, Charlotte, NC 28231. Annual Meeting The Annual Meeting of Stockholders of Coca-Cola Bottling Co. Consolidated will be held at Snyder Production Center, 4901 Chesapeake Drive, Charlotte, North Carolina 28216, on April 27, 2007, at 10 a.m. local time. Form 10-K and Code of Ethics for Senior Financial Officers A copy of the Company’s Annual Report to the Securities and Exchange Commission (Form 10-K) and its Code of Ethics for Senior Financial Officers is available to stockholders without charge upon written request to Steven D. Westphal, Senior Vice President and Chief Financial Officer, Coca-Cola Bottling Co. Consolidated, P. O. Box 31487, Charlotte, North Carolina 28231. This information may also be obtained from the Company’s website listed above. 16 Coca-Cola Bottling Co. Consolidated 4100 Coca-Cola Plaza Charlotte, North Carolina 28211 Mailing Address: Post Office Box 31487 Charlotte, NC 28231 704.557.4400 www.cokeconsolidated.com

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