What changed in this filing

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Item 1A. Risk Factors

2020-11-03 compared with 2020-08-04 · 28 added, 17 removed, 58 unchanged (44% of the section changed)

3 unchanged sentences

The COVID-19 pandemic and other pandemic outbreaks in the future could materially adversely affect our business, financial condition, results of operations or cash flows.

The COVID-19 pandemic has had a significant impact on our business and results of operations, as government-imposed restrictions on social and commercial activity to promote social distancing have caused significant changes to consumer purchasing behavior.

The COVID-19 pandemic has significantly impacted our business and results of operations, as government-imposed restrictions on social and commercial activity to promote social distancing have caused significant changes to consumer purchasing behavior.

Governmental and societal impositions of restrictions on public gatherings have had, and we expect will continue to have, adverse effects on our business, including, but not limited to, the following:

• Due to the closing or restrictive operations of restaurants, schools and amusement and recreational facilities, we saw a decrease in on-premise consumption and sales in the second quarter of 2020.

This negative trend is likely to continue throughout the remainder of 2020, and, if the COVID-19 pandemic continues or intensifies, its negative impacts on our sales could be more prolonged and may become more severe.

While since the outbreak we have experienced increased sales in our larger retail customer outlets from pantry loading as consumers stock up on certain of our products with the expectation of spending more time at home during the crisis, such increased sales levels may not continue in the longer term and may not offset the pressure we are experiencing in our on-premise customer outlets.

• Consumer demand has shifted away from some of our more profitable products sold for immediate consumption through smaller retail store and on-premise outlets to lower margin, take home products sold in larger retail store outlets, including grocery stores and mass merchandise outlets.

We expect this shift in consumer purchasing patterns is likely to continue while shelter-in-place and social distancing behaviors are mandated or encouraged, and possibly for a period of time thereafter.

As a result, our profitability could decline significantly if this shift in our business continues.

• Deteriorating economic conditions in our territory affected by the COVID-19 pandemic, such as increasing unemployment, decreasing disposable income, declining consumer confidence, or economic slowdowns or recessions, could cause a decrease in demand for our products overall or in different channels.

• Disruptions in our concentrate suppliers’ production and distribution operations could increase concentrate costs and may create delays in delivery of concentrate, which could adversely impact our ability to manufacture and distribute certain of our products to our customers.

Further, disruptions in supply chains have placed, and may continue to place, constraints on our ability to procure beverage containers, such as plastic bottles and cans, which has increased, and in the future, could increase our packaging costs and alter the product offerings to our customers.

• We may be required to write off obsolete inventory, accounts receivable, and balances of advanced funding provided to customers that permanently close or suffer financial hardships as a result of the COVID-19 pandemic’s damaging impacts on their respective businesses.

• The current uncertain credit market conditions and their actual or perceived effects on our financial condition and results of operations, along with the current unfavorable economic environment in the United States, may increase the likelihood that one or more of the major independent credit agencies will downgrade our credit ratings, which could have a negative effect on our borrowing costs and our ability to access bank and capital markets.

• Governmental authorities in the United States may increase or impose new income taxes or indirect taxes, or revise interpretations of existing tax rules and regulations, as a means of financing the costs of stimulus and other measures enacted or taken, or that may be enacted or taken in the future, to protect populations and economies from the impact of the COVID-19 pandemic.

• Due to the closing or restricted operations of many public locations, we have experienced a decrease in sales volume in “on-premise” accounts, where products are typically consumed immediately, such as restaurants, schools, amusement parks and recreational facilities.

This negative trend is likely to continue for the remainder of 2020, and, if the COVID‑19 pandemic continues or intensifies, its negative impact on our net sales may persist or become more severe.

We have experienced increased sales volume in our larger retail customer outlets as consumers stock up on certain of our products with the expectation of spending more time at home during the pandemic;

however, such increased sales volume may not continue in the long term and may not offset the pressure we are experiencing in our on-premise customer outlets.

• Consumer demand has shifted from higher margin products sold for immediate consumption through smaller retail stores and on-premise locations to lower margin, take home products sold in grocery stores, mass merchandise stores and club stores.

We expect this shift in consumer purchasing behavior to continue while shelter-in-place and social distancing behaviors are mandated or encouraged, and possibly for a period of time thereafter.

• Deteriorating economic conditions in our territories, such as increasing unemployment, decreasing disposable income, declining consumer confidence, or economic slowdowns or recessions, could cause an overall decrease in demand for our products or a shift in the types of products sold.

• Disruptions in our concentrate suppliers’ production and distribution operations could increase concentrate costs and create delays in delivery of concentrate, which could adversely impact our ability to manufacture and distribute certain products.

Further, disruptions in supply chains have placed, and may continue to place, constraints on our ability to procure beverage containers, such as plastic bottles and aluminum cans.

These supply chain disruptions have increased, and in the future could increase further, our packaging costs and alter the product offerings to our customers.

• We may be required to write off obsolete inventory, accounts receivable and balances of advanced funding provided to customers that permanently close or suffer financial hardships as a result of the COVID-19 pandemic.

• The current uncertain credit market conditions and the actual or perceived effects on our financial condition and results of operations, along with the current unfavorable economic environment in the United States, may increase the likelihood that one or more of the nationally recognized rating agencies will downgrade our credit ratings, which could result in higher borrowing costs for the Company or reduced access to capital markets, which could have a material adverse impact on the Company’s operating results or financial position.

measures enacted or taken, or that may be enacted or taken in the future, to protect populations and economies from the impact of the COVID-19 pandemic.

Alternatively, concerns about the difficulty or desirability of financing additional fiscal stimulus at the federal level could prevent such stimulus from being authorized in a timely manner or at all.

Such actions could have an adverse effect on our results of operations or cash flows.

18 unchanged sentences

Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 2, 2019 (File No.

4.1 First Amended and Restated Revolving Credit Loan Agreement, dated as of October 7, 2020, by and between the Company and Piedmont Coca ‑ Cola Bottling Partnership.

Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 13, 2020 (File No.

4.2 Form of Demand Short-Term Promissory Note (included in Exhibit 4.1 above).

Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on October 13, 2020 (File No.

10.1 First Amendment to Lease Agreement, dated as of June 30, 2020, between the Company and Harrison Limited Partnership One.

1 unchanged sentence

10.2* Separation Agreement and Release, dated as of July 14, 2020, by and between the Company and William J.

Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2020 (File No.

10.3 Amendment No.

3 to Limited Liability Company Agreement of CONA Services LLC, dated as of August 5, 2020 and effective as of January 1, 2019, by and among the Company, The Coca ‑ Cola Company and the other bottlers named therein.

Filed herewith.

23 unchanged sentences

COCA-COLA CONSOLIDATED, INC.

August 4, 2020 By:

November 3, 2020 By:

Scott Anthony

2 unchanged sentences

(Principal Financial Officer of the Registrant)

August 4, 2020 By:

/s/ William J.

Senior Vice President and Chief Accounting Officer

November 3, 2020 By:

/s/ Matthew J.

Senior Vice President, Financial Planning and

Chief Accounting Officer

(Principal Accounting Officer of the Registrant)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors