##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 30, 2008
 Commission File Number 0-9286
 COCA-COLA BOTTLING CO.
CONSOLIDATED
  Delaware
    
    56-0950585(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)
 4100 Coca-Cola Plaza,
Charlotte, North Carolina 28211
  704) 557-4400
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding at April 30, 2008Common Stock, $1.00 Par Value
    
    
    6,643,677Class B Common Stock, $1.00 Par Value
    
    
    2,499,652




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##### 



COCA-COLA BOTTLING CO. CONSOLIDATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 30, 2008
 INDEX
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Consolidated Statements of Operations
    
    
    3Consolidated Balance Sheets
    
    
    4Consolidated Statements of Changes in Stockholders Equity
    
    
    6Consolidated Statements of Cash Flows
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    32Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    51Item 4.
    
    Controls and Procedures
    
    
    52PART II  OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    53Item 6.
    
    Exhibits
    
    
    54Signature
    
    
    55Exhibit 10.1Exhibit 12Exhibit 31.1Exhibit 31.2Exhibit 32
  2




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##### Table of Contents



Item l. Financial Statements.
 
 
 First Quarter2008
    
    
    2007Net sales
    
    $
    337,674
    
    
    $
    337,556Cost of sales
    
    
    197,756
    
    
    
    186,065Gross margin
    
    
    139,918
    
    
    
    151,491Selling, delivery and administrative expenses
    
    
    136,243
    
    
    
    130,942Income from operations
    
    
    3,675
    
    
    
    20,549Interest expense
    
    
    10,434
    
    
    
    12,218Minority interest
    
    
    (339
    )
    
    
    681Income (loss) before income taxes
    
    
    (6,420
    )
    
    
    7,650Income tax provision (benefit)
    
    
    (2,085
    )
    
    
    2,999Net income (loss)
    
    $
    (4,335
    )
    
    $
    4,651Basic net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51Weighted average number of Common Stock
shares outstanding
    
    
    6,644
    
    
    
    6,643Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51Weighted average number of Class B Common
Stock shares outstanding
    
    
    2,500
    
    
    
    2,480Diluted net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51Weighted average number of Common Stock
shares outstanding  assuming dilution
    
    
    9,144
    
    
    
    9,131Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51Weighted average number of Class B Common
Stock shares outstanding  assuming dilution
    
    
    2,500
    
    
    
    2,488Cash dividends per share:Common Stock
    
    $
    .25
    
    
    $
    .25Class B Common Stock
    
    $
    .25
    
    
    $
    .25
  3




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##### Table of Contents



Unaudited
    
    
    
    
    
    
    UnauditedMarch 30,
    
    
    Dec. 30,
    
    
    April 1,2008
    
    
    2007
    
    
    2007ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    9,930
    
    
    $
    9,871
    
    
    $
    55,039Accounts receivable, trade, less allowance for
doubtful accounts of $858, 
$1,137 and $1,328,
respectively
    
    
    107,412
    
    
    
    92,499
    
    
    
    102,356Accounts receivable from The Coca-Cola Company
    
    
    14,158
    
    
    
    3,800
    
    
    
    16,724Accounts receivable, other
    
    
    6,655
    
    
    
    7,867
    
    
    
    8,801Inventories
    
    
    65,556
    
    
    
    63,534
    
    
    
    63,746Prepaid expenses and other current assets
    
    
    24,881
    
    
    
    20,758
    
    
    
    17,543Total current assets
    
    
    228,592
    
    
    
    198,329
    
    
    
    264,209Property, plant and equipment, net
    
    
    358,626
    
    
    
    359,930
    
    
    
    376,185Leased property under capital leases, net
    
    
    69,829
    
    
    
    70,862
    
    
    
    73,962Other assets
    
    
    35,662
    
    
    
    35,655
    
    
    
    36,108Franchise rights, net
    
    
    520,672
    
    
    
    520,672
    
    
    
    520,672Goodwill, net
    
    
    102,049
    
    
    
    102,049
    
    
    
    102,049Other identifiable intangible assets, net
    
    
    4,192
    
    
    
    4,302
    
    
    
    4,636Total
    
    $
    1,319,622
    
    
    $
    1,291,799
    
    
    $
    1,377,821
  4




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Unaudited
    
    
    
    
    
    
    UnauditedMarch 30,
    
    
    Dec. 30,
    
    
    April 1,2008
    
    
    2007
    
    
    2007LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Current portion of debt
    
    $
    42,100
    
    
    $
    7,400
    
    
    $
    103,000Current portion of obligations under capital leases
    
    
    2,645
    
    
    
    2,602
    
    
    
    2,476Accounts payable, trade
    
    
    44,887
    
    
    
    51,323
    
    
    
    42,615Accounts payable to The Coca-Cola Company
    
    
    22,610
    
    
    
    11,597
    
    
    
    23,111Other accrued liabilities
    
    
    55,540
    
    
    
    54,511
    
    
    
    51,827Accrued compensation
    
    
    12,935
    
    
    
    23,447
    
    
    
    10,416Accrued interest payable
    
    
    14,337
    
    
    
    8,417
    
    
    
    18,562Total current liabilities
    
    
    195,054
    
    
    
    159,297
    
    
    
    252,007Deferred income taxes
    
    
    165,988
    
    
    
    168,540
    
    
    
    158,192Pension and postretirement benefit obligations
    
    
    33,645
    
    
    
    32,758
    
    
    
    57,276Other liabilities
    
    
    95,045
    
    
    
    93,632
    
    
    
    95,722Obligations under capital leases
    
    
    76,935
    
    
    
    77,613
    
    
    
    79,581Long-term debt
    
    
    591,450
    
    
    
    591,450
    
    
    
    591,450Total liabilities
    
    
    1,158,117
    
    
    
    1,123,290
    
    
    
    1,234,228Commitments and Contingencies (Note 14)Minority interest
    
    
    47,666
    
    
    
    48,005
    
    
    
    46,683Stockholders Equity:Common Stock, $1.00 par value:Authorized  30,000,000 shares;

Issued  9,706,051, 9,706,051 and 9,705,551 shares,
respectively
    
    
    9,706
    
    
    
    9,706
    
    
    
    9,705Class B Common Stock, $1.00 par value:Authorized  10,000,000 shares; 
Issued  3,127,766, 3,107,766 and 3,108,266 shares,
respectively
    
    
    3,127
    
    
    
    3,107
    
    
    
    3,108Capital in excess of par value
    
    
    102,732
    
    
    
    102,469
    
    
    
    101,418Retained earnings
    
    
    72,453
    
    
    
    79,227
    
    
    
    70,865Accumulated other comprehensive loss
    
    
    (12,925
    )
    
    
    (12,751
    )
    
    
    (26,932
    )175,093
    
    
    
    181,758
    
    
    
    158,164Less-Treasury stock, at cost:Common  3,062,374 shares
    
    
    60,845
    
    
    
    60,845
    
    
    
    60,845Class B Common  628,114 shares
    
    
    409
    
    
    
    409
    
    
    
    409Total stockholders equity
    
    
    113,839
    
    
    
    120,504
    
    
    
    96,910Total
    
    $
    1,319,622
    
    
    $
    1,291,799
    
    
    $
    1,377,821
  5




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Capital
    
    
    
    
    
    
    AccumulatedClass B
    
    
    in
    
    
    
    
    
    
    OtherCommon
    
    
    Common
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    TreasuryStock
    
    
    Stock
    
    
    Par Value
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    TotalBalance on
December 31, 2006
    
    $
    9,705
    
    
    $
    3,088
    
    
    $
    101,145
    
    
    $
    68,495
    
    
    $
    (27,226
    )
    
    $
    (61,254
    )
    
    $
    93,953Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,651
    
    
    
    
    
    
    
    
    
    
    
    4,651Foreign currency
translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2Pension and postretirement
benefit adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292
    
    
    
    
    
    
    
    292Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,945Cash dividends paid 
Common ($.25 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,661
    )
    
    
    
    
    
    
    
    
    
    
    (1,661
    )Class B Common
($.25 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (620
    )
    
    
    
    
    
    
    
    
    
    
    (620
    )Issuance of 20,000
shares of Class B
Common Stock
    
    
    
    
    
    
    20
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    293
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293Balance on
April 1, 2007
    
    $
    9,705
    
    
    $
    3,108
    
    
    $
    101,418
    
    
    $
    70,865
    
    
    $
    (26,932
    )
    
    $
    (61,254
    )
    
    $
    96,910Balance on
December 30, 2007
    
    $
    9,706
    
    
    $
    3,107
    
    
    $
    102,469
    
    
    $
    79,227
    
    
    $
    (12,751
    )
    
    $
    (61,254
    )
    
    $
    120,504Comprehensive
income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,335
    )
    
    
    
    
    
    
    
    
    
    
    (4,335
    )Foreign currency
translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Pension and postretirement
benefit adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (67
    )
    
    
    
    
    
    
    (67
    )Total comprehensive
income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,395
    )Adjustment to change
measurement date for
SFAS No. 158, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (153
    )
    
    
    (114
    )
    
    
    
    
    
    
    (267
    )Cash dividends paid 
Common ($.25 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,661
    )
    
    
    
    
    
    
    
    
    
    
    (1,661
    )Class B Common
($.25 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (625
    )
    
    
    
    
    
    
    
    
    
    
    (625
    )Issuance of 20,000
shares of Class B
Common Stock
    
    
    
    
    
    
    20
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    283
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    283Balance on
March 30, 2008
    
    $
    9,706
    
    
    $
    3,127
    
    
    $
    102,732
    
    
    $
    72,453
    
    
    $
    (12,925
    )
    
    $
    (61,254
    )
    
    $
    113,839
  6




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First Quarter2008
    
    
    2007Cash Flows from Operating ActivitiesNet income (loss)
    
    $
    (4,335
    )
    
    $
    4,651Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Depreciation expense
    
    
    16,629
    
    
    
    16,944Amortization of intangibles
    
    
    110
    
    
    
    111Deferred income taxes
    
    
    (2,085
    )
    
    
    754Losses on sale of property, plant and equipment
    
    
    369
    
    
    
    679Amortization of debt costs
    
    
    615
    
    
    
    768Amortization of deferred gain related to terminated
interest rate agreements
    
    
    (426
    )
    
    
    (424
    )Stock compensation expense
    
    
    283
    
    
    
    293Minority interest
    
    
    (339
    )
    
    
    681Increase in current assets less current liabilities
    
    
    (28,879
    )
    
    
    (21,518
    )(Increase) decrease in other noncurrent assets
    
    
    147
    
    
    
    (285
    )Increase (decrease) in other noncurrent liabilities
    
    
    1,753
    
    
    
    (142
    )Other
    
    
    (152
    )
    
    
    (92
    )Total adjustments
    
    
    (11,975
    )
    
    
    (2,231
    )Net cash provided by (used in) operating activities
    
    
    (16,310
    )
    
    
    2,420Cash Flows from Investing ActivitiesAdditions to property, plant and equipment
    
    
    (14,835
    )
    
    
    (8,415
    )Proceeds from the sale of property, plant and equipment
    
    
    174
    
    
    
    197Investment in plastic bottle manufacturing cooperative
    
    
    (729
    )
    
    
    (758
    )Net cash used in investing activities
    
    
    (15,390
    )
    
    
    (8,976
    )Cash Flows from Financing ActivitiesProceeds from lines of credit, net
    
    
    34,700
    
    
    
    3,000Cash dividends paid
    
    
    (2,286
    )
    
    
    (2,281
    )Principal payments on capital lease obligations
    
    
    (635
    )
    
    
    (593
    )Other
    
    
    (20
    )
    
    
    (354
    )Net cash provided by (used in) financing activities
    
    
    31,759
    
    
    
    (228
    )Net increase (decrease) in cash
    
    
    59
    
    
    
    (6,784
    )Cash at beginning of period
    
    
    9,871
    
    
    
    61,823Cash at end of period
    
    $
    9,930
    
    
    $
    55,039Significant non-cash investing and financing activities:Issuance of Class B Common Stock in connection with stock award
    
    $
    1,171
    
    
    $
    929Capital lease obligations incurred
    
    
    
    
    
    
    5,144
  7




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8




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##### Table of Contents



March 30,
    
    Dec. 30,
    
    April 1,In Thousands
    
    2008
    
    2007
    
    2007Finished products
    
    $
    41,822
    
    
    $
    37,649
    
    
    $
    38,279Manufacturing materials
    
    
    6,923
    
    
    
    9,198
    
    
    
    9,700Plastic shells, plastic pallets and other inventories
    
    
    16,811
    
    
    
    16,687
    
    
    
    15,767Total inventories
    
    $
    65,556
    
    
    $
    63,534
    
    
    $
    63,746
   March 30,
    
    Dec. 30,
    
    April 1,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesLand
    
    $
    12,280
    
    
    $
    12,280
    
    
    $
    12,455Buildings
    
    
    110,721
    
    
    
    110,721
    
    
    
    111,533
    
    
    10-50 yearsMachinery and equipment
    
    
    106,575
    
    
    
    106,180
    
    
    
    101,118
    
    
    5-20 yearsTransportation equipment
    
    
    174,785
    
    
    
    174,882
    
    
    
    185,475
    
    
    4-13 yearsFurniture and fixtures
    
    
    38,587
    
    
    
    38,350
    
    
    
    39,841
    
    
    4-10 yearsCold drink dispensing equipment
    
    
    325,586
    
    
    
    323,629
    
    
    
    328,404
    
    
    6-13 yearsLeasehold and land improvements
    
    
    60,047
    
    
    
    60,023
    
    
    
    58,119
    
    
    5-20 yearsSoftware for internal use
    
    
    52,155
    
    
    
    51,681
    
    
    
    36,677
    
    
    3-10 yearsConstruction in progress
    
    
    13,336
    
    
    
    6,635
    
    
    
    16,603Total property, plant and equipment, at cost
    
    
    894,072
    
    
    
    884,381
    
    
    
    890,225Less: Accumulated depreciation
and amortization
    
    
    535,446
    
    
    
    524,451
    
    
    
    514,040Property, plant and equipment, net
    
    $
    358,626
    
    
    $
    359,930
    
    
    $
    376,185
  9




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##### Table of Contents



March 30,
    
    Dec. 30,
    
    April 1,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesLeased property under capital leases
    
    $
    88,619
    
    
    $
    88,619
    
    
    $
    88,619
    
    
    3-29 yearsLess: Accumulated amortization
    
    
    18,790
    
    
    
    17,757
    
    
    
    14,657Leased property under capital leases, net
    
    $
    69,829
    
    
    $
    70,862
    
    
    $
    73,962
      March 30,
    
    Dec. 30,
    
    April 1,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesOther identifiable intangible assets
    
    $
    6,599
    
    
    $
    6,599
    
    
    $
    6,599
    
    
    1-16 yearsLess: Accumulated amortization
    
    
    2,407
    
    
    
    2,297
    
    
    
    1,963Other identifiable intangible assets, net
    
    $
    4,192
    
    
    $
    4,302
    
    
    $
    4,636
  10




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March 30,
    
    Dec. 30,
    
    April 1,In Thousands
    
    2008
    
    2007
    
    2007Accrued marketing costs
    
    $
    6,406
    
    
    $
    6,787
    
    
    $
    4,656Accrued insurance costs
    
    
    15,281
    
    
    
    14,228
    
    
    
    11,562Accrued taxes (other than income taxes)
    
    
    2,080
    
    
    
    502
    
    
    
    2,208Employee benefit plan accruals
    
    
    8,936
    
    
    
    9,933
    
    
    
    8,752Checks and transfers yet to be presented for payment from
zero balance cash account
    
    
    13,550
    
    
    
    13,279
    
    
    
    9,681All other accrued liabilities
    
    
    9,287
    
    
    
    9,782
    
    
    
    14,968Total other accrued liabilities
    
    $
    55,540
    
    
    $
    54,511
    
    
    $
    51,827
   Interest
    
    Interest
    
    March 30,
    
    Dec. 30,
    
    April 1,In Thousands
    
    Maturity
    
    Rate
    
    Paid
    
    2008
    
    2007
    
    2007Lines of Credit
    
    
    2008
    
    
    
    2.87
    %
    
    Varies
    
    $
    42,100
    
    
    $
    7,400
    
    
    $
    3,000Debentures
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000Debentures
    
    
    2009
    
    
    
    7.20
    %
    
    Semi-annually
    
    
    57,440
    
    
    
    57,440
    
    
    
    57,440Debentures
    
    
    2009
    
    
    
    6.375
    %
    
    Semi-annually
    
    
    119,253
    
    
    
    119,253
    
    
    
    119,253Senior Notes
    
    
    2012
    
    
    
    5.00
    %
    
    Semi-annually
    
    
    150,000
    
    
    
    150,000
    
    
    
    150,000Senior Notes
    
    
    2015
    
    
    
    5.30
    %
    
    Semi-annually
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000Senior Notes
    
    
    2016
    
    
    
    5.00
    %
    
    Semi-annually
    
    
    164,757
    
    
    
    164,757
    
    
    
    164,757633,550
    
    
    
    598,850
    
    
    
    694,450Less: Current portion of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,100
    
    
    
    7,400
    
    
    
    103,000Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    591,450
    
    
    $
    591,450
    
    
    $
    591,450
 11




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12




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##### Table of Contents



March 30, 2008
    
    December 30, 2007
    
    April 1, 2007Notional
    
    Remaining
    
    Notional
    
    Remaining
    
    Notional
    
    RemainingIn Thousands
    
    Amount
    
    Term
    
    Amount
    
    Term
    
    Amount
    
    TermInterest rate swap agreement  floating
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    25,000
    
    
    0.7 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    0.7 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    0.7 yearsInterest rate swap agreement  floating
    
    
    50,000
    
    
    1.2 years
    
    
    50,000
    
    
    1.4 years
    
    
    50,000
    
    
    2.2 yearsInterest rate swap agreement  floating
    
    
    50,000
    
    
    1.3 years
    
    
    50,000
    
    
    1.5 years
    
    
    50,000
    
    
    2.3 yearsInterest rate swap agreement  floating
    
    
    50,000
    
    
    4.7 years
    
    
    50,000
    
    
    4.9 years
    
    
    50,000
    
    
    5.7 yearsInterest rate swap agreement  floating
    
    
    25,000
    
    
    1.1 years
    
    
    25,000
    
    
    1.3 years
    
    
    25,000
    
    
    2.1 yearsInterest rate swap agreement  floating
    
    
    25,000
    
    
    7.0 years
    
    
    25,000
    
    
    7.2 years
    
    
    25,000
    
    
    8.0 yearsInterest rate swap agreement  floating
    
    
    25,000
    
    
    4.7 years
    
    
    25,000
    
    
    4.9 years
    
    
    25,000
    
    
    5.7 years
    13




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##### Table of Contents



Cash and Cash Equivalents, Accounts Receivable and Accounts Payable
  Public Debt Securities
  Non-Public Variable Rate Debt
  Deferred Compensation Plan Assets
  Derivative Financial Instruments
  Letters of Credit
   March 30, 2008
    
    December 30, 2007
    
    April 1, 2007Carrying
    
    Fair
    
    Carrying
    
    Fair
    
    Carrying
    
    FairIn Thousands
    
    Amount
    
    Value
    
    Amount
    
    Value
    
    Amount
    
    ValuePublic debt securities
    
    $
    591,450
    
    
    $
    588,616
    
    
    $
    591,450
    
    
    $
    575,833
    
    
    $
    691,450
    
    
    $
    681,014Non-public variable rate debt
    
    
    42,100
    
    
    
    42,100
    
    
    
    7,400
    
    
    
    7,400
    
    
    
    3,000
    
    
    
    3,000Deferred compensation plan assets
    
    
    6,810
    
    
    
    6,810
    
    
    
    6,386
    
    
    
    6,386
    
    
    
    4,956
    
    
    
    4,956Interest rate swap agreements
    
    
    (8,405
    )
    
    
    (8,405
    )
    
    
    (2,337
    )
    
    
    (2,337
    )
    
    
    8,883
    
    
    
    8,883Fuel hedging agreements
    
    
    (654
    )
    
    
    (654
    )
    
    
    (340
    )
    
    
    (340
    )
    
    
    (667
    )
    
    
    (667
    )Letters of credit
    
    
    
    
    
    
    21,496
    
    
    
    
    
    
    
    21,389
    
    
    
    
    
    
    
    21,252
  14




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##### Table of Contents



In Thousands
    
    Level 1
    
    Level 2AssetsDeferred compensation plan assets
    
    $
    6,810Interest rate swap agreements
    
    
    
    
    
    $
    8,405Fuel hedging agreements
    
    
    
    
    
    
    654LiabilitiesDeferred compensation plan liabilities
    
    
    6,810
  15




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##### Table of Contents



March 30,
    
    
    Dec. 30,
    
    
    April 1,In Thousands
    
    2008
    
    
    2007
    
    
    2007Accruals for executive benefit plans
    
    $
    77,222
    
    
    $
    75,438
    
    
    $
    71,945Other
    
    
    17,823
    
    
    
    18,194
    
    
    
    23,777Total other liabilities
    
    $
    95,045
    
    
    $
    93,632
    
    
    $
    95,722
      16




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##### Table of Contents



First QuarterIn Thousands
    
    2008
    
    2007Statutory expense (benefit)
    
    $
    (2,247
    )
    
    $
    2,677State income taxes (benefits), net of federal effect
    
    
    (279
    )
    
    
    333Manufacturing deduction benefit
    
    
    128
    
    
    
    (224
    )Meals and entertainment
    
    
    (103
    )
    
    
    83State income tax adjustment
    
    
    159
    
    
    
    Other, net
    
    
    257
    
    
    
    130Income tax expense (benefit)
    
    $
    (2,085
    )
    
    $
    2,999
 17




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18




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##### Table of Contents



ApplicationDec. 30,
    
    SFAS No. 158
    
    Pre-tax
    
    Tax
    
    March 30,In Thousands
    
    2007
    
    After tax(1)
    
    Activity
    
    Effect
    
    2008Net pension activity:Actuarial loss
    
    $
    (12,684
    )
    
    $
    23
    
    
    $
    111
    
    
    $
    (43
    )
    
    $
    (12,593
    )Prior service costs
    
    
    (55
    )
    
    
    1
    
    
    
    4
    
    
    
    (2
    )
    
    
    (52
    )Net postretirement benefits activity:Actuarial loss
    
    
    (9,928
    )
    
    
    141
    
    
    
    229
    
    
    
    (88
    )
    
    
    (9,646
    )Prior service costs
    
    
    9,833
    
    
    
    (275
    )
    
    
    (446
    )
    
    
    171
    
    
    
    9,283Transition asset
    
    
    60
    
    
    
    (4
    )
    
    
    (6
    )
    
    
    3
    
    
    
    53Foreign currency translation adjustment
    
    
    23
    
    
    
    
    
    
    
    12
    
    
    
    (5
    )
    
    
    30Total
    
    $
    (12,751
    )
    
    $
    (114
    )
    
    $
    (96
    )
    
    $
    36
    
    
    $
    (12,925
    )
 Dec. 31,
    
    Pre-tax
    
    Tax
    
    April 1,In Thousands
    
    2006
    
    Activity
    
    Effect
    
    2007Net pension activity:Actuarial loss
    
    $
    (24,673
    )
    
    $
    623
    
    
    $
    (246
    )
    
    $
    (24,296
    )Prior service costs
    
    
    (31
    )
    
    
    6
    
    
    
    (2
    )
    
    
    (27
    )Net postretirement benefits activity:Actuarial loss
    
    
    (13,512
    )
    
    
    305
    
    
    
    (119
    )
    
    
    (13,326
    )Prior service costs
    
    
    10,915
    
    
    
    (446
    )
    
    
    175
    
    
    
    10,644Transition asset
    
    
    75
    
    
    
    (6
    )
    
    
    2
    
    
    
    71Foreign currency translation adjustment
    
    
    
    
    
    
    3
    
    
    
    (1
    )
    
    
    2Total
    
    $
    (27,226
    )
    
    $
    485
    
    
    $
    (191
    )
    
    $
    (26,932
    )
 (1)
    
    See Note 18 of the consolidated financial statements for additional information.
  sm ®
  19




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##### Table of Contents



Annual
    
    First QuarterShares
    
    Grant-Date
    
    Compensation
    
    CompensationYear
    
    Awarded
    
    Price
    
    Expense
    
    Expense2007
    
    
    20,000
    
    
    $
    58.53
    
    
    $
    1,170,600
    
    
    $
    292,6502008
    
    
    20,000
    
    
    
    56.50
    
    
    
    1,130,000
    
    
    
    282,500
 20




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##### Table of Contents



Recently Adopted Pronouncement
  Before
    
    
    
    
    
    AfterApplication of
    
    
    
    
    
    Application ofIn Thousands
    
    SFAS No. 158
    
    Adjustment
    
    SFAS No. 158Pension and postretirement benefit obligations
    
    $
    32,758
    
    
    $
    434
    
    
    $
    33,192Deferred income taxes
    
    
    168,540
    
    
    
    (167
    )
    
    
    168,373Total liabilities
    
    
    1,123,290
    
    
    
    267
    
    
    
    1,123,557Retained earnings
    
    
    79,227
    
    
    
    (153
    )
    
    
    79,074Accumulated other comprehensive loss
    
    
    (12,751
    )
    
    
    (114
    )
    
    
    (12,865
    )Total stockholders equity
    
    
    120,504
    
    
    
    (267
    )
    
    
    120,237
 21




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##### Table of Contents



Pension Plans
   First QuarterIn Thousands
    
    2008
    
    2007Service cost
    
    $
    21
    
    
    $
    20Interest cost
    
    
    2,701
    
    
    
    2,634Expected return on plan assets
    
    
    (3,410
    )
    
    
    (3,225
    )Amortization of prior service cost
    
    
    4
    
    
    
    6Recognized net actuarial loss
    
    
    111
    
    
    
    623Net periodic
pension cost (income)
    
    $
    (573
    )
    
    $
    58
  Postretirement Benefits
   First QuarterIn Thousands
    
    2008
    
    2007Service cost
    
    $
    128
    
    
    $
    106Interest cost
    
    
    536
    
    
    
    552Amortization of unrecognized transitional assets
    
    
    (6
    )
    
    
    (6
    )Recognized net actuarial loss
    
    
    229
    
    
    
    305Amortization of prior service cost
    
    
    (446
    )
    
    
    (446
    )Net periodic postretirement benefit cost
    
    $
    441
    
    
    $
    511
 22




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##### Table of Contents



401(k) Savings Plan
     First QuarterIn Millions
    
    2008
    
    
    2007Payments by the Company for concentrate, syrup,
sweetener and other purchases
    
    $
    87.3
    
    
    $
    75.4Marketing funding support payments to the Company
    
    
    8.5
    
    
    
    6.8Payments by the Company net of marketing funding support
    
    $
    78.8
    
    
    $
    68.6Payments by the Company for customer marketing programs
    
    $
    11.0
    
    
    $
    10.0Payments by the Company for cold drink equipment parts
    
    
    1.6
    
    
    
    1.3Fountain delivery and equipment repair fees paid to the Company
    
    
    2.3
    
    
    
    2.3Presence marketing funding support provided by
The Coca-Cola Company on the Companys behalf
    
    
    1.1
    
    
    
    1.1Sales of finished products to The Coca-Cola Company
    
    
    3.7
    
    
    
    10.9
  23




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24




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First QuarterIn Thousands
    
    2008
    
    2007Bottle/can sales:Sparkling beverages (including energy products)
    
    $
    234,552
    
    
    $
    233,963Still beverages
    
    
    53,456
    
    
    
    46,186Total bottle/can sales
    
    
    288,008
    
    
    
    280,149Other sales:Sales to other Coca-Cola bottlers
    
    
    28,028
    
    
    
    34,883Post-mix and other
    
    
    21,638
    
    
    
    22,524Total other sales
    
    
    49,666
    
    
    
    57,407Total net sales
    
    $
    337,674
    
    
    $
    337,556
  25




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##### Table of Contents



First QuarterIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007Numerator for basic and diluted net income (loss) per Common
Stock 
and Class B Common Stock share:Net income (loss)
    
    $
    (4,335
    )
    
    $
    4,651Less dividends:Common Stock
    
    
    1,661
    
    
    
    1,661Class B Common Stock
    
    
    625
    
    
    
    620Total undistributed earnings (losses)
    
    $
    (6,621
    )
    
    $
    2,370Common Stock undistributed earnings (losses)  basic
    
    $
    (4,811
    )
    
    $
    1,726Class B Common Stock undistributed earnings (losses)  basic
    
    
    (1,810
    )
    
    
    644Total undistributed earnings (losses)  basic
    
    $
    (6,621
    )
    
    $
    2,370Common Stock undistributed earnings (losses)  diluted
    
    $
    (4,811
    )
    
    $
    1,724Class B Common Stock undistributed earnings (losses)  diluted
    
    
    (1,810
    )
    
    
    646Total undistributed earnings (losses)  diluted
    
    $
    (6,621
    )
    
    $
    2,370Numerator for basic net income (loss) per Common Stock share:Dividends on Common Stock
    
    $
    1,661
    
    
    $
    1,661Common Stock undistributed earnings (losses)  basic
    
    
    (4,811
    )
    
    
    1,726Numerator for basic net income (loss) per Common Stock share
    
    $
    (3,150
    )
    
    $
    3,387Numerator for basic net income (loss) per Class B Common
Stock share:Dividends in Class B Common Stock
    
    $
    625
    
    
    $
    620Class B Common Stock undistributed earnings (losses)  basic
    
    
    (1,810
    )
    
    
    644Numerator for basic net income (loss) per Class B
Common Stock share
    
    $
    (1,185
    )
    
    $
    1,264
 26




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First QuarterIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007Numerator for diluted net income (loss) per Common Stock share:Dividends on Common Stock
    
    $
    1,661
    
    
    $
    1,661Dividends on Class B Common Stock
assumed converted to Common Stock
    
    
    625
    
    
    
    620Common Stock undistributed earnings (losses)  diluted
    
    
    (6,621
    )
    
    
    2,370Numerator for diluted net income (loss) per Common Stock share
    
    $
    (4,335
    )
    
    $
    4,651Numerator for diluted net income (loss) per Class B Common Stock share:Dividends on Class B Common Stock
    
    
    625
    
    
    
    620Class B Common Stock undistributed earnings (losses)  diluted
    
    
    (1,810
    )
    
    
    646Numerator for diluted net income (loss) per Class B Common
Stock share
    
    $
    (1,185
    )
    
    $
    1,266
 27




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##### Table of Contents



First QuarterIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007Denominator for basic net income (loss) per Common
Stock and Class B Common Stock share:Common Stock weighted average shares
outstanding  basic
    
    
    6,644
    
    
    
    6,643Class B Common Stock weighted average shares
outstanding  basic
    
    
    2,500
    
    
    
    2,480Denominator for diluted net income (loss) per Common
Stock and Class B Common Stock share:Common Stock weighted average shares
outstanding  diluted (assumes
 conversion of
Class B Common Stock to Common Stock)
    
    
    9,144
    
    
    
    9,131Class B Common Stock weighted average shares
outstanding  diluted
    
    
    2,500
    
    
    
    2,488Basic net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51Diluted net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51
 
  (1)
    
    For purposes of the diluted net income (loss) per share computation for Common Stock, shares
of Class B Common Stock are assumed to be converted; therefore, 100% of undistributed earnings
is allocated to Common Stock.(2)
    
    For purposes of the diluted net income (loss) per share computation for Class B Common Stock,
weighted average shares of Class B Common Stock are assumed to be outstanding for the entire
period and not converted.(3)
    
    Denominator for diluted net income (loss) per share for Common Stock and Class B Common
Stock includes the dilutive effect of shares relative to the restricted stock award.
 28




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29




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First QuarterIn Thousands
    
    2008
    
    2007Accounts receivable, trade, net
    
    $
    (14,913
    )
    
    $
    (11,057
    )Accounts receivable from The Coca-Cola Company
    
    
    (10,358
    )
    
    
    (11,809
    )Accounts receivable, other
    
    
    1,212
    
    
    
    (236
    )Inventories
    
    
    (2,022
    )
    
    
    3,309Prepaid expenses and other current assets
    
    
    (4,143
    )
    
    
    (3,994
    )Accounts payable, trade
    
    
    (6,436
    )
    
    
    (1,435
    )Accounts payable to The Coca-Cola Company
    
    
    11,013
    
    
    
    1,363Other accrued liabilities
    
    
    1,360
    
    
    
    3,042Accrued compensation
    
    
    (10,512
    )
    
    
    (9,255
    )Accrued interest payable
    
    
    5,920
    
    
    
    8,554Increase in current assets less current liabilities
    
    $
    (28,879
    )
    
    $
    (21,518
    )
  Recently Adopted Pronouncements
   30




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##### Table of Contents



Recently Issued Pronouncements
    31




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  
    
    Our Business and the Nonalcoholic Beverage Industry  a general description of the
Companys business and the nonalcoholic beverage industry.
    
    Areas of Emphasis  a summary of the Companys key priorities.
    
    Overview of Operations and Financial Condition  a summary of key information and
trends concerning the financial results for the first quarter of 2008 (Q1 2008) and
changes from the first quarter of 2007 (Q1 2007).
    
    Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements
  a discussion of accounting policies that are most important to the portrayal of the
Companys financial condition and results of operations and that require critical judgments
and estimates and the expected impact of new accounting pronouncements.
    
    Results of Operations  an analysis of the Companys results of operations for Q1 2008
compared to Q1 2007.
    
    Financial Condition  an analysis of the Companys financial condition as of the end of
Q1 2008 compared to year-end 2007 and the end of Q1 2007 as presented in the consolidated
financial statements.
    
    Liquidity and Capital Resources  an analysis of capital resources, cash sources and
uses, investing activities, financing activities, off-balance sheet arrangements, aggregate
contractual obligations and hedging activities.
    
    Cautionary Information Regarding Forward-Looking Statements.
  Our Business and the Nonalcoholic Beverage Industry
   32




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##### Table of Contents



First QuarterIn Thousands
    
    2008
    
    2007Bottle/can sales:Sparkling beverages (including energy products)
    
    $
    234,552
    
    
    $
    233,963Still beverages
    
    
    53,456
    
    
    
    46,186Total bottle/can sales
    
    
    288,008
    
    
    
    280,149Other sales:Sales to other Coca-Cola bottlers
    
    
    28,028
    
    
    
    34,883Post-mix and other
    
    
    21,638
    
    
    
    22,524Total other sales
    
    
    49,666
    
    
    
    57,407Total net sales
    
    $
    337,674
    
    
    $
    337,556
 Areas of Emphasis
  Revenue Management
  33




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##### Table of Contents



Product Innovation and Beverage Portfolio Expansion
 ©
    Distribution Cost Management
   
    
    bulk delivery for large supermarkets, mass merchandisers and club stores;
 34




---



##### Table of Contents




    
    advanced sale delivery for convenience stores, drug stores, small supermarkets and
on-premise accounts; and
    
    full service delivery for its full service vending customers.
  Productivity
  Overview of Operations and Financial Condition
  First Quarter
    
    
    
    
    
    %In Thousands (Except Per Share Data)
    
    2008
    
    2007
    
    Change
    
    ChangeNet sales
    
    $
    337,674
    
    
    $
    337,556
    
    
    $
    118
    
    
    
    Gross margin
    
    
    139,918
    
    
    
    151,491
    
    
    
    (11,573
    )
    
    
    (7.6
    )S,D&A expenses
    
    
    136,243
    
    
    
    130,942
    
    
    
    5,301
    
    
    
    4.0Income from operations
    
    
    3,675
    
    
    
    20,549
    
    
    
    (16,874
    )
    
    
    (82.1
    )Interest expense
    
    
    10,434
    
    
    
    12,218
    
    
    
    (1,784
    )
    
    
    (14.6
    )Income (loss) before income taxes
    
    
    (6,420
    )
    
    
    7,650
    
    
    
    (14,070
    )
    
    
    (183.9
    )Income tax provision (benefit)
    
    
    (2,085
    )
    
    
    2,999
    
    
    
    (5,084
    )
    
    
    (169.5
    )Net income (loss)
    
    
    (4,335
    )
    
    
    4,651
    
    
    
    (8,986
    )
    
    
    (193.2
    )Basic net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51
    
    
    $
    (.98
    )
    
    
    (192.2
    )Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51
    
    
    $
    (.98
    )
    
    
    (192.2
    )Diluted net income (loss) per share:Common Stock
    
    $
    (.47
    )
    
    $
    .51
    
    
    $
    (.98
    )
    
    
    (192.2
    )Class B Common Stock
    
    $
    (.47
    )
    
    $
    .51
    
    
    $
    (.98
    )
    
    
    (192.2
    )
    35




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##### Table of Contents



©
    March 30,
    
    December 30,
    
    April 1,In Thousands
    
    2008
    
    2007
    
    2007Debt
    
    $
    633,550
    
    
    $
    598,850
    
    
    $
    694,450Capital lease obligations
    
    
    79,580
    
    
    
    80,215
    
    
    
    82,057Total debt and capital lease obligations
    
    
    713,130
    
    
    
    679,065
    
    
    
    776,507Less: Cash and cash equivalents
    
    
    9,930
    
    
    
    9,871
    
    
    
    55,039Total net debt and capital lease obligations (1)
    
    $
    703,200
    
    
    $
    669,194
    
    
    $
    721,468
 (1)
    
    The non-GAAP measure Total net debt and capital lease obligations is used to
provide readers with additional information to more clearly evaluate the Companys capital
structure and financial leverage. Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements
 Critical Accounting Policies
   36




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##### Table of Contents



New Accounting Pronouncements
 Recently Adopted Pronouncements
    Recently Issued Pronouncements
 
   37




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##### Table of Contents



Results of Operations
 Q1 2008 Compared to Q1 2007
 Net Sales
   Amount
    
    

Attributable
to:(In Millions)$
    9.0
    
    

2.4%
increase in bottle/can volume primarily due to increases in enhanced water and sparkling
beverage volume offset by a decrease in bottled water volume(4.3
    )
    
    12.3%
decrease in bottler sales volume primarily due to decreases in energy and tea
products volume(2.5
    )
    
    8.4%
decrease in bottler sales price per unit primarily due to a decrease in energy drink volume
as a percentage of total volume (energy drinks have a higher sales
price per unit)(1.7
    )
    
    9.5%
decrease in post-mix volume(1.2
    )
    
    Decrease in bottle/can sales price primarily due to increases in sales of lower price packages in higher margin channels (convenience and drug) and lower sales price per unit
for bottled water partially offset by higher selling prices in other
channels0.8
    
    
    Other$
    0.1
    
    
    Total increase in net sales
  38




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##### Table of Contents



Bottle/Can Sales Volume
    
    Bottle/Can Sales VolumeProduct
Category
    
    Q1 2008
    
    Q1 2007
    
    % IncreaseSparkling beverages (including
energy products)
    
    
    84.4
    %
    
    
    85.4
    %
    
    
    1.2Still beverages
    
    
    15.6
    %
    
    
    14.6
    %
    
    
    9.5Total bottle/can sales volume
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    2.4
   Cost of Sales
   39




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##### Table of Contents



Amount
    
    

Attributable
to:(In Millions)$
    14.1
    
    
    Increase in costs primarily due to an increase in purchased products and an increase in raw
material costs such as aluminum cans, high fructose corn syrup and
plastic bottles5.8
    
    
    2.4% increase in bottle/can volume primarily due to increases in enhanced water and
sparkling beverage volume offset by a decrease in bottled  water volume(4.1
    )
    
    12.3% decrease in bottler sales volume primarily due to decreases in energy drinks and
tea volume(2.1
    )
    
    Decrease in bottler cost price per unit primarily due to a decrease in energy drink
volume as a percentage of total volume (energy drinks have a higher cost per unit)(1.7
    )
    
    Increase
in marketing funding support received primarily from The Coca-Cola Company(1.2
    )
    
    9.5%
decrease in post-mix volume0.9
    
    
    Other$
    11.7
    
    
    Total increase in cost of sales
   Gross Margin
   40




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##### Table of Contents



Amount
    
    

Attributable to:(In Millions)$
    (14.1
    )
    
    Increase in costs primarily due to an increase in purchased
products and an increase in raw material costs3.2
    
    
    2.4% increase in bottle/can volume primarily due to increases in enhanced water and
sparkling beverage volume offset by a decrease in bottled  water volume1.7
    
    
    Increase in marketing funding support received primarily from The Coca-Cola Company(1.2
    )
    
    Decrease in bottle/can sales price primarily due to increased sales of lower price
packages in higher margin channels (convenience and drug) and lower sales price per unit for
bottled water partially offset by higher prices in other channels(1.2
    )
    
    Other$
    (11.6
    )
    
    Total decrease in gross margin
   S,D&A Expenses
    Amount
    
    
    Attributable to:(In Millions)$
    4.7
    
    
    Increase in employee related expenses primarily related to wage increases(2.2
    )
    
    Restructuring costs in Q1 2007 related to the simplification of the Companys
operating management structure and reduction in work force in order to improve operating
efficiencies2.1
    
    
    Increase in fuel and other energy costs related to the movement of finished goods from
sales distribution centers to customer locations1.3
    
    
    Increase
in property and casualty insurance costs(0.7
    )
    
    Decrease in employee benefit costs primarily due to the amendment of the principal
Company-sponsored pension plan, net of increases in the Companys 401(k) Savings Plan
contributions0.1
    
    
    Other$
    5.3
    
    
    Total increase in S,D&A expenses
  41




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##### Table of Contents



Interest Expense
  Minority Interest
  Income Taxes
    42




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##### Table of Contents



Financial Condition
    
    
    An increase in accounts receivable, trade of $14.9 million primarily due to higher sales in
the quarter ended March 2008 compared to the quarter ended December 2007.
 
    
    An increase in accounts receivable from and an increase in accounts payable to The
Coca-Cola Company of $10.4 million and $11.0 million, respectively, primarily due to the
timing of payments.
 
    
    An increase in current portion of long-term debt of $34.7 million due to increased
borrowings on the Companys lines of credit.
 
    
    A decrease in accounts payable, trade of $6.4 million primarily due to the timing of
payments.
 
    
    A decrease in accrued compensation of $10.5 million due to the payment of bonuses in March
of 2008.
 
    
    An increase in interest payable of $5.9 million due to the timing of interest payments on
debt.
  
    
    A decrease in cash and cash equivalents of $45.1 million primarily due to the payment of
$100 million of debentures in November 2007.
 
    
    An increase in accounts receivable, trade of $5.1 million primarily due to the collection
of payments from customers on the last day of March 2008 which was in the second quarter of
2008 while the last day of March 2007 was in the first quarter of 2007.
 
    
    An increase in prepaid expenses and other current assets of $7.3 million primarily due to
an increase in current deferred tax assets.
 
    
    An increase in other accrued liabilities of $3.7 million primarily due to increases in
accrued insurance costs and timing of payments.
 
    
    A decrease in the current portion of debt of $60.9 million primarily due to the payment of
$100 million in debentures in November 2007 partially offset by a $39.1 million increase in
borrowing on the Companys lines of credit.
  Liquidity and Capital Resources
 Capital Resources
  43




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##### Table of Contents



Cash Sources and Uses
   First QuarterIn Millions
    
    2008

    
    2007Cash SourcesCash provided by operating activities
    
    $
    
    
    
    $
    2.4Proceeds from lines of credit, net
    
    
    34.7
    
    
    
    3.0Other
    
    
    .2
    
    
    
    .2Total cash sources
    
    $
    34.9
    
    
    $
    5.6Cash UsesCash used in operating activities
    
    $
    16.3
    
    
    $
    Capital expenditures
    
    
    14.8
    
    
    
    8.4Investment in plastic bottle manufacturing cooperative
    
    
    .7
    
    
    
    .7Payment of debt and capital lease obligations
    
    
    .6
    
    
    
    .6Dividends
    
    
    2.3
    
    
    
    2.3Other
    
    
    .1
    
    
    
    .4Total cash uses
    
    $
    34.8
    
    
    $
    12.4Increase (decrease) in cash
    
    $
    .1
    
    
    $
    (6.8
    )
 44




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##### Table of Contents



Investing Activities
  Financing Activities
      Long-Term DebtStandard & Poors
    
    BBBMoodys
    
    Baa2
   45




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##### Table of Contents



Off-Balance Sheet Arrangements
  46




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##### Table of Contents



Aggregate Contractual Obligations
  Payments Due by PeriodApr. 2008-
    
    Apr. 2009-
    
    Apr. 2011-
    
    AfterIn Thousands
    
    Total
    
    Mar. 2009
    
    Mar. 2011
    
    Mar. 2013
    
    Mar. 2013Contractual obligations:Total debt, net of interest
    
    $
    633,550
    
    
    $
    42,100
    
    
    $
    176,693
    
    
    $
    150,000
    
    
    $
    264,757Capital lease obligations,
net of interest
    
    
    79,580
    
    
    
    2,645
    
    
    
    5,850
    
    
    
    6,694
    
    
    
    64,391Estimated interest on
long-term debt and capital
lease obligations (1)
    
    
    281,735
    
    
    
    39,980
    
    
    
    57,298
    
    
    
    52,473
    
    
    
    131,984Purchase obligations (2)
    
    
    580,250
    
    
    
    95,017
    
    
    
    192,819
    
    
    
    188,137
    
    
    
    104,277Other long-term liabilities (3)
    
    
    92,682
    
    
    
    5,830
    
    
    
    11,202
    
    
    
    10,594
    
    
    
    65,056Operating leases
    
    
    18,081
    
    
    
    3,757
    
    
    
    4,859
    
    
    
    2,641
    
    
    
    6,824Long-term contractual
arrangements (4)
    
    
    21,374
    
    
    
    6,650
    
    
    
    9,110
    
    
    
    3,917
    
    
    
    1,697Interest rate swap agreements (1)
    
    
    1,480
    
    
    
    1,090
    
    
    
    280
    
    
    
    110Postretirement obligations
    
    
    35,931
    
    
    
    2,271
    
    
    
    4,868
    
    
    
    5,212
    
    
    
    23,580Purchase orders (5)
    
    
    16,967
    
    
    
    16,967Total contractual obligations
    
    $
    1,761,630
    
    
    $
    216,307
    
    
    $
    462,979
    
    
    $
    419,778
    
    
    $
    662,566
 (1)
    
    Includes interest payments based on contractual terms and current interest rates for variable
rate debt.(2)
    
    Represents an estimate of the Companys obligation to purchase 17.5 million cases of
finished product on an annual basis through May 2014 from South Atlantic Canners, a
manufacturing cooperative, and other purchase commitments.(3)
    
    Includes obligations under executive benefit plans, unrecognized income tax benefits and
other long-term liabilities.(4)
    
    Includes contractual arrangements with certain prestige properties, athletics venues and
other locations, and other long-term marketing commitments.(5)
    
    Purchase orders include commitments in which a written purchase order has been issued to a
vendor, but the goods have not been received or the services have not been performed.
    47




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##### Table of Contents



Hedging Activities
 Interest Rate Hedging
      Fuel Hedging
  48




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##### Table of Contents



Cautionary Information Regarding Forward-Looking Statements
  
    
    the Companys belief that other parties to certain contractual arrangements will perform
their obligations;
    
    potential marketing funding support from The Coca-Cola Company and other beverage
companies;
    
    the Companys belief that disposition of certain claims and legal proceedings will not
have a material adverse effect on its financial condition, cash flows or results of
operations and that no material amount of loss in excess of recorded amounts is reasonably
possible;
    
    managements belief that the Company has adequately provided for any ultimate amounts
that are likely to result from tax audits;
    
    managements belief that the Company has sufficient resources available to finance its
business plan, meet its working capital requirements and maintain an appropriate level of
capital spending;
    
    the Companys belief that the cooperatives whose debt and lease obligations the Company
guarantees have sufficient assets and the ability to adjust selling prices of their
products to adequately mitigate the risk of material loss and that the cooperatives will
perform their obligations under their debt and lease agreements;
    
    the Companys ability to issue $300 million of securities under acceptable terms under
its shelf registration statement;
    
    the Companys key priorities which are revenue management, product innovation and
beverage portfolio expansion, distribution cost management and productivity;
    
    the Companys hypothetical calculation of the impact of a 1% increase in interest rates
on outstanding floating rate debt and capital lease obligations for the next twelve months
as of March 30, 2008;
    
    the Companys belief that contributions to the principal Company-sponsored pension plan
in 2008 will be approximately $0.3 million;
    
    the Companys belief that postretirement benefit payments are expected to be
approximately $2.3 million in 2008;
    
    the Companys beliefs and estimates regarding the impact of the adoption of certain new
accounting pronouncements;
    
    the Companys expectation that its overall bottle/can revenue will be primarily
dependent upon continued growth in diet sparkling products, sports drinks, bottled water,
enhanced water, tea and energy products, the introduction of new products and the pricing
of brands and packages within channels;
    
    the Companys beliefs that the growth of Company-owned or exclusive licensed brands
appear promising and the cost of developing, marketing and distributing these brands may be
significant;
    
    the Companys belief there will not be any material impact on its liquidity and capital
resources due to the resolution of income tax positions reserved for as uncertain;
    
    the Companys belief that changes in unrecognized tax benefits over the next 12 months
will not have a significant impact on the consolidated financial statements; and
 49




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##### Table of Contents




    
    the Companys expectation that it will use cash flow generated from operations, its
revolving credit facility and potentially other sources, including bank borrowings or
issuance of debentures under its shelf registration statement, to repay or refinance
debentures maturing in May 2009 and July 2009.
   50




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Debt and Derivative Financial Instruments
   Raw Material and Commodity Price Risk
   51




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##### Table of Contents



Effects of Changing Prices
  
 Item 4. Controls and Procedures.
   52




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##### Table of Contents



Item 1A. Risk Factors.
  53




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##### Table of Contents



Item 6. Exhibits.
 ExhibitNumber
    
    Description4.1
    
    The registrant, by signing this report, agrees to furnish the Securities and
Exchange Commission, upon its request, a copy of any instrument which defines the rights
of holders of long-term debt of the registrant and its consolidated subsidiaries which
authorizes a total amount of securities not in excess of 10 percent of the total assets
of the registrant and its subsidiaries on a consolidated basis.10.1*
    
    Letter Agreement, dated as of March 10, 2008, between the Company and The
Coca-Cola Company (filed herewith).12
    
    Ratio of earnings to fixed charges (filed herewith).31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 *
    
    Certain portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested for such
portions of the exhibit.
 54




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##### Table of Contents



COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)Date:  May 9, 2008
    By:
    /s/  James E. HarrisJames E. HarrisPrincipal Financial Officer of the Registrant
and
Senior Vice President and Chief Financial Officer 55