Coca-Cola Consolidated
Annual Report 2007

Plain-text annual report

Our Business • 2Letter to Shareholders • 2 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 approximately 19 million people. Coca‑Cola Bottling Co. Consolidated is listed on The NASDAQ Stock Market (Global Select Market) under the symbol COKE. This annual report is printed on recycled paper. FINANCIAL SUMMARY* In Thousands Fiscal Year (Except Per Share Data) 2007 2006 2005 Net sales Gross margin Income before income taxes Income taxes Net income Basic net income per share Common Stock Class B Common Stock Diluted net income per share Common Stock Class B Common Stock $1,435,999 621,134 32,239 12,383 19,856 $1,431,005 622,579 31,160 7,917 23,243 $1,380,172 618,911 38,752 15,801 22,951 $ $ $ $ 2.18 2.18 2.17 2.17 $ $ $ $ 2.55 2.55 2.55 2.54 $ $ $ $ 2.53 2.53 2.53 2.53 * 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 30, 2007. The fiscal years presented are the 52-week periods ended December 30, 2007, December 31, 2006, and January 1, 2006. This Summary Annual Report includes forward-looking statements that reflect management’s current outlook for future periods. These statements relate to, among other things, continued capital spending discipline in 2008; the consumer trend away from sparkling beverages; significant growth in sales and gross margin from our enhanced-water category, fruit/vegetable juice product category and other still beverages; focus on our own proprietary brands; a marketing emphasis on the strengths of our entire cola portfolio of Coke, Diet Coke and Coke Zero; innovation of sparkling beverage packaging; continued additions of stock keeping units (SKUs) in 2008 and the challenge this creates; the CooLift» delivery system and the potential to transform our delivery process and the related cost structure; the upgrade of our sales order handheld devices; the upgrade of our demand-planning software; installation of an automated, state-of-the-art order assembly system will greatly improve order assembly accuracy while reducing costs; an expanded dual packaging strategy; new immediate consumption technology; and our positive outlook for the future. 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 30, 2007. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Letter to Shareholders 2 • Letter to Shareholders DDear Shareholders: In 2007, our Company faced one of its most challenging years in its 106‑year history. Significant raw material cost increases, dramatically escalating energy prices, increasingly competitive product categories and a continued softness in demand for carbonated – or sparkling – soft drinks presented unprecedented challenges. Despite these obstacles, Coca‑Cola Bottling Co. Consolidated (“Coke Consoli‑ dated”) generated solid operating results with net income of $19.9 million, or basic net income per share of $2.18. Last year, we invested in the business by reorganizing our franchise business to improve operating efficiencies and offset, to some extent, these increased raw material costs. While we believe this restruc‑ turing is beneficial to our long‑term performance, we did incur after‑tax costs of $1.7 million, which negatively impacted our basic net income per share by $0.18. Without these restructuring costs in 2007, our net income totaled $21.6 million, which equates to basic net income per share of $2.36. This was a solid performance com‑ pared to net income in 2006 of $23.2 million, or basic net income per share of $2.55, especially when considering the 2006 results included a favorable benefit of $4.9 million, or basic net income per share of $0.54, due to a reduction in income tax expense as a result of agreements with state taxing authorities to settle certain tax positions. We also continued our focus on improving the finan‑ cial strength of our Company in 2007. We reduced our debt and capital lease obligations, net of cash, by approximately $38 million and strengthened our market position with a number of key customers. Also, the debt‑reduction strategy we began in 2000 has suc‑ cessfully lowered our total debt (including capital leases and our Piedmont Bottling subsidiary for all years) from approximately $1.04 billion to $679 million at the end of 2007. This strategy has helped improve our profitability as interest expense has been reduced from $67.4 million in 2000 to $47.6 million in 2007. While 2007 was a successful year, it was clearly a tale of two halves, with strong net sales, gross margin and net income in the first half and decidedly different results in the last half. We are disappointed in the second‑half results; however, it is important to consider the dramatic cost increase in key raw materials. International instabil‑ ity and rising global demand for energy drove oil prices to $100 per barrel, pushing certain commodity costs, particularly diesel, to all‑time highs. The increase in oil prices also directly contributed to double‑digit cost increases for sweetener. For the second year in a row, the demand for ethanol and other corn byproducts caused prices for corn‑based sweeteners to rise approximately 21 percent from the previous year. In addition, aluminum can prices were up approxi‑ mately 18 percent in 2007. To best address these challenges, the Company focused intensely on managing controllable expenses, in particular improving the efficiency and effectiveness of our supply chain. Further, we were very measured in capital spending in 2007, and will continue this discipline in 2008 while making the necessary investments to achieve long‑term success. Traditional sparkling beverages are our largest‑selling product cat‑ egory, representing more than 80 percent of our total sales. Sales in this category continued to decline in 2007 due to reduced purchase frequency. There are many reasons for this, including the impact of higher retail pricing, a lack of effective innovation in the category and an increasing number of alternative beverages. This consumer trend away from sparkling beverages presents us with both challenges and opportunities. Our Business • 3Letter to Shareholders • 3 Letter to Shareholders • 3 In 2007, we made real progress in addressing this issue. Our partners at The Coca‑Cola Company made significant investments in the fast‑growing still beverage category with purchases of the FUZE® and glacéau® companies. Glacéau’s vitaminwater® and smartwater® lineups are outstanding products with strong consumer appeal. Vitaminwa‑ ter already dominates the enhanced‑water category, and given our customer relationships and distribution capabilities, we expect to sig‑ nificantly increase the growth trajectory for this brand. FUZE® has an outstanding line of premium juice drinks and teas, as well as a strong entry in the energy drink category under the NOS® trademark. We also completed a distribution agreement with Campbell’s® to sell a number of its vegetable and fruit drinks, including V8® 100% Vegetable Juice drinks, V8 V‑Fusion® juice drinks and V8 Splash® juice drinks in certain package sizes for specific channels of trade. The combination of these new products, along with our existing Minute Maid® product line, gives us leadership in the fruit/vegetable juice product category in all immediate consumption channels. We are very bullish on this expanded and enhanced portfolio of bever‑ ages and expect it to deliver significant growth in sales and gross margin going forward. During the past several years, we have talked about our transforma‑ tion from a traditional soft drink bottler primarily selling sparkling beverages into a total nonalcoholic beverage company. We believe 2007 demonstrates the most material advancement to date. We added the aforementioned products on a staged basis in the latter part of 2007, and this transformation provides us with real momen‑ tum moving into 2008. In addition, we remain focused on creating and building our own proprietary brands as a vital part of our long‑ term strategy. We are excited about the expanded brand portfolio, but also recognize the critical importance of sparkling beverages. We are particularly encouraged by consumers’ embrace of Coca‑Cola Zero, and we believe a marketing emphasis on the strengths of our entire cola portfolio of Coke, Diet Coke and Coke Zero will be a winning strategy. This “Red‑Silver‑Black” portfolio strategy tells consumers we can deliver the best cola taste – with or without calories – with this family of mega brands. One critical component in re‑energizing sparkling beverages is pack‑ aging. The new 20‑ounce “grip” bottle introduced in 2007 enjoyed positive consumer acceptance. In 2008, we will continue to innovate our sparkling beverage packaging, including the broad‑scale availabil‑ ity of eight‑pack eight‑ounce cans and the introduction of a number of other exciting packaging offerings. While our expanded brand and package portfolio creates great opportunities in the marketplace, the additions also create challenges in sales, warehousing and delivery. We added more than 125 new stock keeping units (SKUs) in 2007, and today we sell approximately 500 different brand and package combinations. This is a four‑fold increase in the past eight years, and we expect this trend to continue for the foreseeable future. As a result, we continue to work diligently to improve our sales forecasting, product ordering, manufacturing, warehousing, distribution and delivery processes to better address the challenges this expanded product portfolio creates. A prime example of this effort is our patented CooLift® delivery sys‑ tem, which we have implemented in a number of our sales locations and continue to refine. We believe this new delivery system not only has the potential to transform our delivery process, but also the cost structure of Coke Consolidated’s delivery system. The CooLift® system has already attracted the interest of other bottlers and 4 • Letter to Shareholders distributors. As we continue to develop and refine the system and the processes that support Coke Consolidated, we will also pursue these interested companies. There is no question 2007 was a challenging year for Coke Consoli‑ dated – and we anticipate many of those challenges to continue in 2008. However, we maintain a very positive long‑term outlook because we have a sound business plan, the right company culture, and truly great people who give their all each and every day. It is also important for us to remember we are stewards of one of the best‑known and highly respected brand names in the world, something we take very seriously. At Coke Consolidated, we have a unique and well‑defined culture. We are proud that the Coke Consolidated employees embrace the values of honesty, morality, respectfulness, accountability, courage, discipline and optimism. We believe having these values at the center of our decision‑ making, and as a guiding foundation for the way we conduct business, gives us an edge in the highly complex and rapidly changing environ‑ ment in which we compete. Thank you for the opportunity to serve you. We look forward to an exciting 2008. J. Frank Harrison, III Chairman of the Board and Chief Executive Officer William B. Elmore President and Chief Operating Officer Our Business • 5Letter to Shareholders • 5 talented, dedicated team at Coke Consolidated responded to these chal‑ lenges and delivered remarkably solid results. WWhile 2007 was indeed a challenging year, we are encouraged that the As we reflect on 2007 and begin 2008, there are many positive things to celebrate. First and foremost are our people. The increasing pace of change in the beverage industry promises to accelerate even more. To continue to be a Coca‑Cola system and industry leader, we are focus‑ ing our human‑resource efforts on identifying the critical needs of the organization. We recognize our success is dependent on leadership at all levels in the Company. We are making great strides developing our ability to lead change through more effective employee communication, leadership development and succession planning. Many of the initiatives we began several years ago have started to pay dividends in operational improvements and better equip the Company to perform well in another challenging year. The team will undertake several new initiatives in 2008 to help meet our challenges. One critical need is to upgrade our sales order hand‑ held devices and applications to handle the proliferation of SKUs and provide additional advanced functionality to our sales account manag‑ ers. We also plan to upgrade our demand‑planning software to better forecast sales, manage raw materials, source and ship product and manage inventory levels. Further, we will fine‑tune our order assembly capability to improve our handling of low‑velocity SKUs. Another major initiative and capital expenditure for 2008 will be the installation of an automated, state‑of‑the‑art order assembly system in our Charlotte production center. We believe this sophisticated manu‑ facturing process – the first of its kind in the soft drink industry – will greatly improve order assembly accuracy while reducing costs. Our Business 6 • Our Business “Red-Silver-Black” – a strategy that works. In 2007, we initiated two tests that we believe will help re‑energize our immediate consumption business. Our intelligent vending test in the Myrtle Beach, S.C., market equips each full‑service vend‑ ing machine with a radio transmitter that communicates data to a sophisticated computer program. This technology alerts us when‑ ever a vending machine has a mechanical malfunction requiring repair, and allows us to optimize delivery frequency, product selec‑ tion and inventory levels. The 20‑ounce package has been a longtime staple in convenience stores and a significant source of margin for our business. But as raw material costs have risen, the retail price of the 20‑ounce pack‑ age has also increased. Simultaneously, there has been an explosion of nonalcoholic beverage choices competing for the consumer’s purchase decision in convenience stores. These two factors have led to a steady decline in our 20‑ounce volume in the past several years. In response, we tested a dual package strategy – a combination of a 16‑ounce package, more attractively priced than the 20‑ounce, coupled with either a 24‑ounce or one‑liter package at a higher, but still attractive price. This test produced promising results, and we will expand this effort in 2008. Many of the Company’s selling territories suffered from a near‑ record drought in 2007, with local and state governments imposing a wide range of water‑use restrictions. Fortunately, Coke Consoli‑ dated recognized the importance of being good stewards of this precious resource years ago. We are proud that our production centers exceed industry standards for water‑usage efficiencies, and our production facilities are among the most water‑efficient in the world. In fact, the Charlotte production center has been honored with the Environmental Excellence Award by the local water utility each of the last seven years. The Company has also been recognized for its leadership in the use of energy‑efficient hybrid vehicles. Embracing change can be unsettling for individuals and orga‑ nizations. At Coke Consolidated, our employees have not only embraced change, but are committed to leading change. This Company has the most dedicated and talented workforce in the industry. With their commitment, we feel confident about this great Company’s future success, no matter the challenges. We believe the best is yet to come. Our Business • 7Our Business • 7 CCoca‑Cola Bottling Co. Consolidated lost a dear friend and member of its family when John Montgomery Belk passed away in August 2007. As a longtime board member of our Company, he touched many lives, and his leadership and insight will be missed. His legacy as a business leader, public servant and philanthropist will forever be remembered, as John Belk gave generously of himself for the betterment of the Charlotte community, the state and world. John Belk served as the chief executive officer of the Belk department store organization for more than 50 years. He also held many key leadership roles on the local, state and national levels, including his service as president of the Charlotte Chamber of Commerce and as Mayor of the City of Charlotte from 1969 to 1977. As Charlotte’s mayor, he presided over an unprecedented period of growth and prosperity during which Charlotte became a thriving city and major center for finance, commerce and air transportation. His administration set a positive example of how business and government can work together to build a better community. John Belk was a devoted husband, father and grandfather, respectively, to his wife of 36 years, Claudia Watkins Belk, his daughter, Mary Claudia Pilon, and his three grandchildren. John Belk cared deeply for his company, his community, his church and his family. Coca‑Cola Bottling Co. Consolidated is honored to have had his wisdom as a board member, and we will always cherish his memory. John Montgomery Belk 1920-2007 8 CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Year In Thousands (Except Per Share Data) 2007 2006 2005 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 Stock shares outstanding Class B Common Stock Weighted average number of Class B Common Stock shares outstanding Diluted net income per share: Common Stock Weighted average number of Common Stock shares outstanding — assuming dilution Class B Common Stock Weighted average number of Class B Common Stock shares outstanding — assuming dilution $1,435,999 814,865 $1,431,005 808,426 $1,380,172 761,261 621,134 538,806 445 81,883 47,641 2,003 32,239 12,383 622,579 537,365 550 84,664 50,286 3,218 31,160 7,917 618,911 525,903 880 92,128 49,279 4,097 38,752 15,801 $ 19,856 $ 23,243 $ 22,951 $ $ $ $ 2.18 $ 2.55 $ 2.53 6,644 6,643 6,643 2.18 $ 2.55 $ 2.53 2,480 2,460 2,440 2.17 $ 2.55 $ 2.53 9,141 9,120 9,083 2.17 $ 2.54 $ 2.53 2,497 2,477 2,440 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 30, 2007. 9 Our Business • 99 CONSOLIDATED BALANCE SHEETS In Thousands (Except Share Data) ASSETS Current assets: Cash and cash equivalents Accounts receivable, trade, less allowance for doubtful accounts of $1,137 and $1,334, 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. 30, 2007 Dec. 31, 2006 $ 9,871 $ 61,823 92,499 3,800 7,867 63,534 20,758 198,329 359,930 70,862 35,655 520,672 102,049 4,302 91,299 4,915 8,565 67,055 13,485 247,142 384,464 69,851 35,542 520,672 102,049 4,747 $1,291,799 $1,364,467 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 30, 2007. 10 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-30,000,00 shares; Issued-9,706,051 and 9,705,551 shares, respectively Class B Common Stock, $1.00 par value: Authorized-10,000,000 shares; Issued-3,107,766 and 3,088,266 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. 30, 2007 Dec. 31, 2006 $ 7,400 2,602 51,323 11,597 54,511 23,447 8,417 159,297 168,540 32,758 93,632 77,613 591,450 1,123,290 $ 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 1,224,512 48,005 46,002 9,706 9,705 3,107 102,469 79,227 (12,751) 181,758 3,088 101,145 68,495 (27,226) 155,207 60,845 409 120,504 $1,291,799 60,845 409 93,953 $1,364,467 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 30, 2007. 11 Our Business • 1111 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 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 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 Proceeds (payment) of lines of credit, net Cash dividends paid Excess tax benefits from stock-based compensation 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 Fiscal Year 2007 2006 2005 $ 19,856 $ 23,243 $ 22,951 67,881 445 (4,165) 445 2,678 1,171 (1,698) 2,003 1,947 1,058 3,854 23 75,642 95,498 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) 79,143 102,897 102,094 (48,226) 8,566 (3,377) (63,179) 2,454 (2,338) (243) (39,992) 4,443 (43,037) (63,306) (35,549) (100,000) 7,400 (9,124) 173 (2,435) (39) (6,500) (9,103) (1,696) (427) (38) (8,550) (1,500) (9,084) (1,826) (15,554) 692 (104,413) (17,376) (35,822) (51,952) 61,823 22,215 39,608 30,723 8,885 9,871 $ 61,823 $ 39,608 929 5,144 $ 860 $ 1,141 164,757 $ $ 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 30, 2007. 12 12 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY In Thousands Balance on January 2, 2005 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 Common Stock Class B Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total $9,704 $3,049 $ 98,255 $ 40,488 $ (25,803) $ (61,254) $ 64,439 (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 Comprehensive income: Net income Foreign currency translation adjustments, net of tax Pension and postretirement benefit 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 Stock compensation expense Conversion of Class B Common Stock into Common Stock 23 14,452 19,856 (6,644) (2,480) 19,856 23 14,452 34,331 (6,644) (2,480) — 1,344 — 20 (20) 1,344 1 (1) Balance on December 30, 2007 $9,706 $3,107 $102,469 $79,227 $(12,751) $(61,254) $120,504 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 30, 2007. 13 Our Business • 1313 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 30, 2007 and December 31, 2006, and for each of the three years in the period ended December 30, 2007 (not presented herein) appearing in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ending December 30, 2007; and in our report dated March 12, 2008, we expressed an unqualified opinion on those consolidated financial statements. 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. PricewaterhouseCoopers LLP Charlotte, North Carolina March 12, 2008 14 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 William B. Elmore President and Chief Operating Officer Coca-Cola Bottling Co. Consolidated Henry W. Flint Vice Chairman of the Board of Directors Coca-Cola Bottling Co. Consolidated 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 James H. Morgan President and Chief Executive Officer Krispy Kreme Doughnuts, Inc. John W. Murrey, III Assistant Professor Appalachian School of Law 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 Henry W. Flint Vice Chairman of the Board of Directors Steven D. Westphal Executive Vice President of Operations and Systems William J. Billiard Vice President, Controller and Chief Accounting Officer Clifford M. Deal, III Vice President, Treasurer Norman C. George President, ByB Brands, Inc. James E. Harris Senior Vice President and Chief Financial Officer Kevin A. Henry Assistant to the President and Chief Human Resources Officer Umesh M. Kasbekar Senior Vice President, Planning and Administration Melvin F. Landis, III Senior Vice President, Chief Marketing and Customer Officer Lauren C. Steele Vice President, Corporate Affairs Jolanta T. Zwirek Senior Vice President and Chief Information Officer 15 Our Business • 1515 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 NASDAQ Symbol – COKE Select Market) 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 29, 2008, 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 James E. Harris, 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 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 1 • Letter to Shareholders 

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