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Raw material costs, including the costs for plastic bottles, aluminum cans, PET resin, carbon dioxide and high fructose corn syrup, are subject to significant price volatility, which may be worsened by periods of increased demand, supply constraints or high inflation.
−Removed: International or domestic geopolitical or other events, including the imposition of tariffs and/or quotas by the U.S.
+Added: International or domestic geopolitical or other events, including armed conflict or the imposition of tariffs and/or quotas by the U.S.
government on any of these raw materials, could adversely impact the supply and cost of these raw materials to the Company.
−Removed: The COVID-19 pandemic has resulted in certain raw materials not being available at commercially favorable terms or at all, and other similar pandemics may have such an effect in the future.
+Added: recent years, the COVID-19 pandemic resulted in certain raw materials not being available at commercially favorable terms or at all, and future pandemics or other events causing widespread supply chain disruption may also have such an effect.
In addition, there are no limits on the prices The Coca‑Cola Company and other beverage companies can charge for concentrate.
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Limited suppliers for certain of the Company’s raw materials could have an adverse effect on the Company’s ability to negotiate the lowest costs and, in light of the Company’s relatively low in-plant raw material inventory levels, has the potential for causing interruptions in the Company’s supply of raw materials and in its manufacture of finished goods.
+Added: For example, during 2022, the Company experienced intermittent shortages of carbon dioxide supply that caused work stoppages at certain of its manufacturing facilities.
+Added: These work stoppages were offset by increased production at other facilities, but similar stoppages in the future could adversely affect the Company’s results of operations and profitability.
The Company uses significant amounts of fuel for its delivery fleet and other vehicles used in the distribution of its products.
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The Company’s freight cost and the timely delivery of its products may be adversely impacted by a number of factors which could reduce the profitability of the Company’s operations, including driver shortages, reduced availability of independent contractor drivers, higher fuel costs, weather conditions, traffic congestion, increased government regulation and other matters.
−Removed: The Company purchases all of the plastic bottles used in its manufacturing plants from Southeastern Container and Western Container, two manufacturing cooperatives the Company co-owns with several other Coca‑Cola bottlers, and a majority of its aluminum cans from two domestic suppliers.
−Removed: In 2020, the COVID-19 pandemic caused significant tightening in the domestic market for aluminum cans due to changing consumer purchasing patterns and, as a result, the Company changed its typical sourcing model and began to source aluminum cans from international locations.
−Removed: The inability of these plastic bottle or aluminum can suppliers to meet the Company’s requirements for containers could result in the Company not being able to fulfill customer orders and production demand until alternative sources of supply are located.
+Added: The Company purchases all of the plastic bottles used in its manufacturing plants from Southeastern Container and Western Container, two manufacturing cooperatives the Company co-owns with several other Coca‑Cola bottlers, and all of its aluminum cans from two domestic suppliers.
+Added: The inability of these suppliers to meet the Company’s requirements for containers could result in the Company not being able to fulfill customer orders and production demand until alternative sources of supply are located.
The Company attempts to mitigate these risks by working closely with key suppliers and by purchasing business interruption insurance where appropriate.
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The increased costs associated with these reinvestments, the potential for disruption in manufacturing and distribution and the risk the Company may not realize a satisfactory return on its investments could adversely affect the Company’s business, financial condition or results of operations.
−Removed: The Company’s business and results of operations may be adversely affected by the inability to attract and retain front-line employees in a tight labor market.
−Removed: In 2021, the U.S.
−Removed: economy experienced unusually tight labor market conditions as the supply of available workers frequently fell short of the number of workers necessary to fill all available jobs.
−Removed: As a result, the Company experienced difficulty in attracting and retaining front-line workers and significant turnover.
−Removed: Tight labor markets and a lack of available workers has led, and may lead in the future, to increased labor costs in the form of higher salaries and increased overtime.
−Removed: If the Company cannot retain adequate front-line
−Removed: employees to produce and deliver its products, its business operations may be adversely affected and higher labor costs have had, and may have in the future, an adverse effect on our results of operations.
−Removed: Moreover, the supply of front-line workers, and the Company’s ability to retain such workers, may be adversely impacted by future COVID-19 regulations and policies.
−Removed: The Company is actively monitoring the status of announced and potential regulations concerning vaccination or periodic testing for COVID-19 and the impact that such regulations, if implemented, may have on its workforce.
−Removed: If a significant number of our teammates are negatively impacted by regulations requiring vaccination or periodic testing of unvaccinated teammates, it may result in teammate attrition and our business operations may be adversely affected.
The reliance on purchased finished products from external sources could have an adverse impact on the Company’s profitability.
−Removed: The Company does not, and does not plan to, manufacture all products it distributes and, therefore, remains reliant on purchased finished products from external sources to meet customer demand.
+Added: The Company does not, and does not plan to, manufacture all of the products it distributes and, therefore, remains reliant on purchased finished products from external sources to meet customer demand.
As a result, the Company is subject to incremental risk, including, but not limited to, product quality and availability, price variability and production capacity shortfalls for externally purchased finished products, which could have an impact on the Company’s profitability and customer relationships.
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The Company’s business is also impacted by changes in consumer concerns or perceptions surrounding the product manufacturing processes and packaging materials, including single-use and other plastic packaging, and the environmental and sustainability impact of such manufacturing processes and packaging materials.
−Removed: Any of these factors may reduce consumers’ willingness to purchase the Company’s products and any inability on the part of the Company to anticipate or react to such changes could result in reduced demand for the Company’s products or erode the Company’s competitive and financial position and could adversely affect the Company’s business, reputation, financial condition or results of operations.
+Added: Any of these factors may reduce consumers’ willingness to purchase the Company’s products and any inability on the part of the Company to anticipate or react to such
+Added: changes could result in reduced demand for the Company’s products or erode the Company’s competitive and financial position and could adversely affect the Company’s business, reputation, financial condition or results of operations.
The Company’s success depends on its ability to maintain consumer confidence in the safety and quality of all of its products.
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As the Company distributes, markets and manufactures beverage brands owned by others, the success of the Company’s business depends in large measure on the ability of The Coca‑Cola Company and other beverage companies to develop and introduce product innovations to meet the changing preferences of the broad consumer market, and failure to satisfy these consumer preferences could adversely affect the Company’s profitability.
−Removed: 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.
−Removed: The COVID-19 pandemic has had a significant impact on our business.
−Removed: Future pandemics may also pose risks similar to, or more severe than, the risks associated with the COVID-19 pandemic and such risks are impossible to predict with certainty at this time.
−Removed: Any of the negative impacts of the COVID-19 pandemic, including those described below, alone or in combination with others, may have a material adverse effect on our business, financial condition, results of operations or cash flows.
−Removed: • The closing or restricted operations of many public locations, which caused a decrease in sales volume in on-premise locations during 2020 and parts of 2021.
−Removed: • Consumer demand may shift 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, as experienced during the onset of the COVID-19 pandemic.
−Removed: • 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.
−Removed: 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.
−Removed: These supply chain disruptions have increased, and in the future could increase further, our packaging costs and alter the product offerings to our customers.
−Removed: • Actions we have taken or may take, or decisions we have made or may make, because of the COVID-19 pandemic may result in legal claims or litigation against us.
−Removed: • The resumption of normal business operations may be delayed or constrained by the persistence of the COVID-19 pandemic, including variants of the disease, and lingering effects on our consumers, customers, suppliers and/or third-party service providers and business partners.
+Added: The Company’s business and results of operations may be adversely affected by the inability to attract and retain front-line employees in a tight labor market.
+Added: In recent years, the U.S.
+Added: economy has experienced a challenging labor market as the supply of available workers frequently fell short of the number of workers necessary to fill all available jobs.
+Added: As a result, the Company experienced difficulty in attracting and retaining front-line workers and faced periods of high turnover.
+Added: Tight labor markets and a lack of available workers has led, and may lead in the future, to increased labor costs in the form of higher salaries, increased overtime and other compensation adjustments to remain competitive in a challenging labor market.
+Added: If the Company cannot retain adequate front-line employees to produce and deliver its products, its business operations may be adversely affected and higher labor costs have had, and may have in the future, an adverse effect on our results of operations.
Changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients and product safety and sustainability, could reduce demand for the Company’s products and reduce profitability.
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Legislation has been proposed in Congress and by certain state and local governments which would prohibit the sale of soft drink products in non-refillable bottles and cans or require a mandatory deposit as a means of encouraging the return of such containers, each in an attempt to reduce solid waste and litter.
−Removed: Similarly, the Company is aware of proposed legislation that would impose fees or taxes on various types of containers used in its business.
+Added: Similarly, the Company is aware of proposed legislation that would impose fees or
+Added: taxes on various types of containers used in its business, as well as proposed legislation around new recycling regulations and the reduction of single-use plastics.
The Company is not currently impacted by the policies in these types of proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within its distribution territories in the future.
−Removed: Concerns about perceived negative safety and quality consequences of certain ingredients in the Company’s products, such as non-nutritive sweeteners or ingredients in energy drinks, could result in additional governmental regulations concerning the production, marketing, labeling or availability of the Company’s products or the ingredients in such products, possible new taxes or negative publicity resulting from actual or threatened legal actions against the Company or other companies in the same industry, any of which
−Removed: could damage the reputation of the Company or reduce demand for the Company’s products, which could adversely affect the Company’s profitability.
+Added: Concerns about perceived negative safety and quality consequences of certain ingredients in the Company’s products, such as non-nutritive sweeteners or ingredients in energy drinks, could result in additional governmental regulations concerning the production, marketing, labeling or availability of the Company’s products or the ingredients in such products, possible new taxes or negative publicity resulting from actual or threatened legal actions against the Company or other companies in the same industry, any of which could damage the reputation of the Company or reduce demand for the Company’s products, which could adversely affect the Company’s profitability.
The FDA occasionally proposes major changes to the nutrition labels required on all packaged foods and beverages, including those for most of the Company’s products, which could require the Company and its competitors to revise nutrition labels to include updated serving sizes, information about total calories in a beverage product container and information about any added sugars or nutrients.
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The Company is also a member of the NPSG, which is comprised of The Coca‑Cola Company, the Company and certain other Coca‑Cola bottlers who are regional producing bottlers in The Coca‑Cola Company’s national product supply system.
−Removed: Pursuant to the NPSG Agreement, the Company has agreed to abide by decisions made by the NPSG Board, which include decisions regarding strategic infrastructure investment and divestment planning, optimal national product supply sourcing and new product or packaging infrastructure planning.
+Added: Subject to the terms and conditions of the NPSG Agreement, the Company is required to comply with certain key decisions made by the NPSG Board, which include decisions regarding strategic infrastructure investment and divestment planning, optimal national product supply sourcing and new product or packaging infrastructure planning.
Although the Company has a representative on the NPSG Board, the Company cannot exercise sole decision-making authority relating to the decisions of the NPSG Board, and the interests of other members of the NPSG Board may diverge from those of the Company.
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If a change in control or sale of one of our businesses is delayed or prevented by the provisions in the CBA and the RMA, the market price of our Common Stock could be negatively affected.
−Removed: The concentration of the Company’s capital stock ownership with the Harrison family limits other stockholders’ ability to influence corporate matters.
−Removed: Members of the Harrison family, including the Company’s Chairman of the Board of Directors and Chief Executive Officer, J.
−Removed: Frank Harrison, III, beneficially own shares representing approximately 86% of the total voting power of the Company’s total outstanding Common Stock and Class B Common Stock on a consolidated basis.
−Removed: In addition, three members of the Harrison family, including Mr.
−Removed: Harrison, serve on the Company’s Board of Directors.
−Removed: As a result, members of the Harrison family have the ability to exert substantial influence or actual control over the Company’s management and affairs and over substantially all matters requiring action by the Company’s stockholders.
+Added: The concentration of the Company’s capital stock ownership with our Chairman and Chief Executive Officer limits other stockholders’ ability to influence corporate matters.
+Added: As of December 31, 2022, J.
+Added: Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of the Company’s Class B Common Stock, which represented approximately 71% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.
+Added: Harrison also has the right to acquire 292,386 shares of Class B Common Stock from the Company in exchange for an equivalent number of shares of Common Stock.
+Added: In the event of such an exchange, Mr.
+Added: Harrison would control 1,296,780 shares of the Company’s Class B Common Stock, which would represent approximately 76% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.
+Added: Furthermore, Mr.
+Added: Harrison and another member of the Harrison family serve on the Company’s Board of Directors.
+Added: As a result, Mr.
+Added: Harrison has the ability to exert substantial influence or actual control over the Company’s management and affairs and over substantially all matters requiring action by the Company’s stockholders, including the election of directors and significant corporate transactions, such as a merger or other sale of the Company or its assets.
This concentration of ownership may have the effect of delaying or preventing a change in control otherwise favored by the Company’s other stockholders and could depress the stock price or limit other stockholders’ ability to influence corporate matters, which could result in the Company making decisions that stockholders outside the Harrison family may not view as beneficial.
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Changes in the inputs used to calculate the Company’s acquisition related contingent consideration liability could have a material adverse impact on the Company’s financial condition and results of operations.
−Removed: The Company’s acquisition related contingent consideration liability, which totaled $542.1 million as of December 31, 2021, consists of the estimated amounts due to The Coca‑Cola Company as sub-bottling payments under the CBA with The Coca‑Cola Company and CCR over the useful life of the related distribution rights.
−Removed: Changes in business conditions or other events could materially change both the future cash flow projections and the discount rate used in the calculation of the fair value of contingent consideration under the CBA.
+Added: The Company’s acquisition related contingent consideration liability, which totaled $541.5 million as of December 31, 2022, consists of the estimated amounts due to The Coca‑Cola Company as acquisition related sub-bottling payments under the CBA with The Coca‑Cola Company and CCR over the useful life of the related distribution rights.
+Added: Changes in business conditions or other events could materially change both the future cash flow projections and the discount rate used in the calculation of the fair value of
+Added: contingent consideration under the CBA.
These changes could result in material changes to the fair value of the acquisition related contingent consideration and could materially impact the amount of non-cash expense (or income) recorded each reporting period.
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The Company increasingly relies on information technology systems to process, transmit and store electronic information.
−Removed: Like most companies, the Company’s information technology systems are vulnerable to interruption due to a variety of events beyond the Company’s control, including, but not limited to, power outages, computer and telecommunications failures, computer viruses, other malicious computer programs and cyberattacks, denial-of-service attacks, security breaches, catastrophic events such as fires,
−Removed: tornadoes, earthquakes and hurricanes, usage errors by employees and other security issues.
+Added: Like most companies, the Company’s information technology systems are vulnerable to interruption due to a variety of events beyond the Company’s control, including, but not limited to, power outages, computer and telecommunications failures, computer viruses, other malicious computer programs and cyberattacks, denial-of-service attacks, security breaches, catastrophic events such as fires, tornadoes, earthquakes and hurricanes, usage errors by employees and other security issues.
In addition, third-party providers of data hosting or cloud services, as well as other vendors, customers and suppliers, are vulnerable to cybersecurity incidents involving data the Company shares with them.
−Removed: The third-party service provider for our employee digital timekeeping system suffered a cybersecurity incident that prevented us from accessing the information contained therein during the fourth quarter of 2021 and continuing through the beginning of 2022.
−Removed: The Company immediately responded and implemented mitigation measures to reduce disruptions to our normal operations during the period we could not access the system.
−Removed: While the information technology system and data incidents we have experienced in the past (including the incident involving our employee digital timekeeping system) have not materially impacted our business operations, we expect to continue experiencing these types of incidents in the future, one or more of which could significantly impact the Company.
+Added: While incidents at our third-party service providers have not materially impacted our business operations, one or more of these incidents could significantly impact the Company in the future.
The Company depends heavily upon the efficient operation of technological resources and a failure in these technology systems or controls could negatively impact the Company’s business, financial condition or results of operations.
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Periods of sustained high inflation may have adverse impacts on demand for the Company’s products and on the Company’s ability to sustain margins due to higher input costs.
+Added: In addition, efforts by the government to curb inflation may cause a general economic slowdown.
Adverse economic conditions could also increase the likelihood of customer delinquencies and bankruptcies, which would increase the risk of uncollectability of certain accounts.
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If one of the Company’s counterparties were to become insolvent or enter bankruptcy, the Company’s ability to recover losses incurred as a result of default or to retrieve assets that are deposited or held in accounts with such counterparty may be limited by the counterparty’s liquidity or the applicable laws governing the insolvency or bankruptcy proceedings.
−Removed: Consequently, the Company’s access to capital may be diminished.
+Added: Consequently, the Company’s access to capital may be
Any such event of default or failure could negatively impact the Company’s business, financial condition and results of operations.
−Removed: Changes in the Company’s top customer relationships and marketing strategies could impact sales volume and revenues.
−Removed: The Company faces concentration risks related to a few customers comprising a large portion of the Company’s annual sales volume and net revenue.
−Removed: The Company’s business, financial condition and results of operations could be adversely affected if revenue from one or more of these significant customers is materially reduced or if the cost of complying with the customers’ demands is
+Added: Changes in the Company’s top customer relationships and marketing strategies could impact sales volume and net sales.
+Added: The Company faces concentration risks related to a few customers comprising a large portion of the Company’s annual sales volume and net sales.
+Added: The Company’s business, financial condition and results of operations could be adversely affected if net sales from one or more of these significant customers is materially reduced or if the cost of complying with the customers’ demands is significant.
Additionally, if receivables from one or more of these significant customers become uncollectible, the Company’s financial condition and results of operations may be adversely impacted.
The Company’s largest customers, Wal-Mart Stores, Inc.
−Removed: and The Kroger Company, accounted for approximately 33% of the Company’s 2021 bottle/can sales volume to retail customers and approximately 23% of the Company’s 2021 total net sales.
+Added: and The Kroger Company, accounted for approximately 32% of the Company’s 2022 total bottle/can sales volume to retail customers and approximately 26% of the Company’s 2022 total net sales.
These customers typically make purchase decisions based on a combination of price, product quality, consumer demand and customer service performance and generally do not enter into long-term contracts.
3 unchanged sentences
Further, the Company’s net sales are affected by promotion of the Company’s products by significant customers, such as in-store displays created by customers or the promotion of the Company’s products in customers’ periodic advertising.
−Removed: If the Company’s significant customers change the manner in which they market or promote the Company’s products, or if the marketing efforts by significant customers become ineffective, the Company’s sales volume and revenue could be adversely impacted.
+Added: If the Company’s significant customers change the manner in which they market or promote the Company’s products, or if the marketing efforts by significant customers become ineffective, the Company’s sales volume and net sales could be adversely impacted.
The Company may not be able to respond successfully to changes in the marketplace.
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and exposing the Company to increased risk that the Company will not be able to refinance the principal amount of debt as it becomes due or that a significant decrease in cash flows from operations could make it difficult for the Company to meet its debt service requirements and to comply with financial covenants in its debt agreements.
−Removed: The Company’s acquisition related contingent consideration, revolving credit facility, term loan facility and pension and postretirement medical benefits are subject to changes in interest rates.
+Added: The Company’s acquisition related contingent consideration, revolving credit facility and pension and postretirement medical benefits are subject to changes in interest rates.
If interest rates increase in the future, the Company’s borrowing costs could increase, which could negatively impact the Company’s financial condition and results of operations and limit the Company’s ability to spend in other areas of the business.
Further, a decline in the interest rates used to discount the Company’s pension and postretirement medical liabilities could increase the cost of these benefits and the amount of the liabilities.
−Removed: In 2017, the United Kingdom’s Financial Conduct Authority (the “FCA”) announced that it will not require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021.
−Removed: In March 2021, the FCA extended the transition dates of certain LIBOR tenors (including all U.S.
−Removed: dollar LIBOR tenors other than one-week and two-month U.S.
−Removed: dollar LIBOR tenors) to June 30, 2023, after which LIBOR reference rates will cease to be provided.
−Removed: The Company has identified its $500 million revolving credit facility as its only LIBOR-indexed financial instrument which extends after 2023 and has included successor LIBOR rate provisions in the underlying loan agreement based on the Alternative Reference Rates Committee’s suggested fallback language.
−Removed: The revolving credit facility’s underlying loan agreement provides that the Secured Overnight Funding Rate (the “SOFR”) will be used as the LIBOR
−Removed: replacement rate for borrowings under the facility unless the Company and its lenders agree to an alternative reference rate based on prevailing market convention at the replacement date.
−Removed: The use of alternative reference rates or other reforms could cause the interest rate calculated for the Company’s revolving credit facility to be materially different than expected.
−Removed: As of December 31, 2021, the Company did not have any outstanding borrowings under its revolving credit facility and currently does not expect the discontinuation of LIBOR to have a material effect on the Company’s business, financial condition or results of operations.
In assessing the Company’s credit strength, credit rating agencies consider the Company’s capital structure, financial policies, consolidated balance sheet and other financial information, and may also consider financial information of other bottling and beverage companies.
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Excise or other taxes imposed on the sale of certain of the Company’s products by the federal government and certain state and local governments, particularly any taxes incorporated into shelf prices and passed along to consumers, could cause consumers to shift away from purchasing products of the Company, which could have a material adverse impact on the Company’s business and financial results.
−Removed: 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 to finance the cost of stimulus packages and other relief 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.
−Removed: Such actions could have an adverse effect on our results of operations or cash flows.
In addition, an assessment of additional taxes resulting from audits of the Company’s tax filings could have an adverse impact on the Company’s profitability, cash flows and financial condition.
16 unchanged sentences
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.