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 September 28, 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  (Registrants telephone number, including area code)
 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 October 31, 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 SEPTEMBER 28, 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
    
    
    36Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    60Item 4.
    
    Controls and Procedures
    
    
    61PART II  OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    62Item 6.
    
    Exhibits
    
    
    62Signatures
    
    
    63
  2




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##### 



Item 1. Financial Statements.
  
   Third Quarter
    
    
    First Nine Months2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    381,563
    
    
    $
    367,360
    
    
    $
    1,115,240
    
    
    $
    1,095,359Cost of sales
    
    
    225,736
    
    
    
    212,148
    
    
    
    647,615
    
    
    
    619,366Gross margin
    
    
    155,827
    
    
    
    155,212
    
    
    
    467,625
    
    
    
    475,993Selling, delivery and administrative expenses
    
    
    149,384
    
    
    
    134,972
    
    
    
    421,300
    
    
    
    402,710Income from operations
    
    
    6,443
    
    
    
    20,240
    
    
    
    46,325
    
    
    
    73,283Interest expense
    
    
    9,406
    
    
    
    12,135
    
    
    
    29,789
    
    
    
    36,647Minority interest
    
    
    705
    
    
    
    110
    
    
    
    1,726
    
    
    
    1,960Income (loss) before income taxes
    
    
    (3,668
    )
    
    
    7,995
    
    
    
    14,810
    
    
    
    34,676Income tax provision (benefit)
    
    
    (523
    )
    
    
    2,722
    
    
    
    7,135
    
    
    
    13,061Net
income (loss)
    
    $
    (3,145
    )
    
    $
    5,273
    
    
    $
    7,675
    
    
    $
    21,615Basic net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.37Weighted average number of Common Stock
shares outstanding
    
    
    6,644
    
    
    
    6,644
    
    
    
    6,644
    
    
    
    6,644Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.37Weighted average number of Class B Common
Stock shares outstanding
    
    
    2,500
    
    
    
    2,480
    
    
    
    2,500
    
    
    
    2,480Diluted net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.36Weighted average number of Common Stock
shares outstanding  assuming dilution
    
    
    9,144
    
    
    
    9,144
    
    
    
    9,159
    
    
    
    9,140Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .83
    
    
    $
    2.36Weighted average number of Class B Common
Stock shares outstanding  assuming dilution
    
    
    2,500
    
    
    
    2,500
    
    
    
    2,515
    
    
    
    2,496Cash dividends per share:Common Stock
    
    $
    .25
    
    
    $
    .25
    
    
    $
    .75
    
    
    $
    .75Class B Common Stock
    
    $
    .25
    
    
    $
    .25
    
    
    $
    .75
    
    
    $
    .75
  3




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##### 



Unaudited
    
    
    
    
    
    
    UnauditedSept. 28,
    
    
    Dec. 30,
    
    
    Sept. 30,2008
    
    
    2007
    
    
    2007ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    20,583
    
    
    $
    9,871
    
    
    $
    88,400Accounts receivable, trade, less allowance for
doubtful accounts 
of $1,043, $1,137 and $1,056,
respectively
    
    
    105,580
    
    
    
    92,499
    
    
    
    96,914Accounts receivable from The Coca-Cola Company
    
    
    12,661
    
    
    
    3,800
    
    
    
    19,768Accounts receivable, other
    
    
    11,539
    
    
    
    7,867
    
    
    
    10,128Inventories
    
    
    65,595
    
    
    
    63,534
    
    
    
    62,822Prepaid expenses and other current assets
    
    
    19,334
    
    
    
    20,758
    
    
    
    16,000Total current assets
    
    
    235,292
    
    
    
    198,329
    
    
    
    294,032Property, plant and equipment, net
    
    
    351,575
    
    
    
    359,930
    
    
    
    359,391Leased property under capital leases, net
    
    
    67,763
    
    
    
    70,862
    
    
    
    71,896Other assets
    
    
    36,365
    
    
    
    35,655
    
    
    
    34,670Franchise rights, net
    
    
    520,672
    
    
    
    520,672
    
    
    
    520,672Goodwill, net
    
    
    102,049
    
    
    
    102,049
    
    
    
    102,049Other identifiable intangible assets, net
    
    
    3,973
    
    
    
    4,302
    
    
    
    4,413Total
    
    $
    1,317,689
    
    
    $
    1,291,799
    
    
    $
    1,387,123
  4




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##### 



Unaudited
    
    
    
    
    
    
    UnauditedSept. 28,
    
    
    Dec. 30,
    
    
    Sept. 30,2008
    
    
    2007
    
    
    2007LIABILITIES AND STOCKHOLDERS EQUITYCurrent
Liabilities:Current portion of debt
    
    $
    176,693
    
    
    $
    7,400
    
    
    $
    100,000Current portion of obligations under capital leases
    
    
    2,735
    
    
    
    2,602
    
    
    
    2,559Accounts payable, trade
    
    
    37,071
    
    
    
    51,323
    
    
    
    38,445Accounts payable to The Coca-Cola Company
    
    
    38,346
    
    
    
    11,597
    
    
    
    21,896Other accrued liabilities
    
    
    61,654
    
    
    
    54,511
    
    
    
    53,993Accrued compensation
    
    
    17,563
    
    
    
    23,447
    
    
    
    16,652Accrued interest payable
    
    
    15,060
    
    
    
    8,417
    
    
    
    18,760Total current liabilities
    
    
    349,122
    
    
    
    159,297
    
    
    
    252,305Deferred income taxes
    
    
    163,403
    
    
    
    168,540
    
    
    
    152,392Pension and postretirement benefit obligations
    
    
    34,560
    
    
    
    32,758
    
    
    
    57,064Other liabilities
    
    
    109,720
    
    
    
    93,632
    
    
    
    97,175Obligations under capital leases
    
    
    75,545
    
    
    
    77,613
    
    
    
    78,280Long-term debt
    
    
    414,757
    
    
    
    591,450
    
    
    
    591,450Total liabilities
    
    
    1,147,107
    
    
    
    1,123,290
    
    
    
    1,228,666Commitments and Contingencies(Note 14)Minority interest
    
    
    49,731
    
    
    
    48,005
    
    
    
    47,963Stockholders
Equity:Common Stock, $1.00 par value:Authorized - 30,000,000 shares; 
Issued - 9,706,051, 9,706,051 and 9,706,051 shares,
respectively
    
    
    9,706
    
    
    
    9,706
    
    
    
    9,706Class B Common Stock, $1.00 par value:Authorized - 10,000,000 shares; 

Issued -3,127,766, 3,107,766 and 3,107,766 shares,
respectively
    
    
    3,127
    
    
    
    3,107
    
    
    
    3,107Capital in excess of par value
    
    
    102,449
    
    
    
    102,469
    
    
    
    102,003Retained earnings
    
    
    79,891
    
    
    
    79,227
    
    
    
    83,267Accumulated other comprehensive loss
    
    
    (13,068
    )
    
    
    (12,751
    )
    
    
    (26,335
    )182,105
    
    
    
    181,758
    
    
    
    171,748Less-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
    
    
    120,851
    
    
    
    120,504
    
    
    
    110,494Total
    
    $
    1,317,689
    
    
    $
    1,291,799
    
    
    $
    1,387,123
  5




---



##### 



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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,615
    
    
    
    
    
    
    
    
    
    
    
    21,615Foreign currency
translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    15Pension and postretirement
benefit adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    876
    
    
    
    
    
    
    
    876Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,506Cash dividends paidCommon ($.75 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,983
    )
    
    
    
    
    
    
    
    
    
    
    (4,983
    )Class B Common

($.75 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,860
    )
    
    
    
    
    
    
    
    
    
    
    (1,860
    )Issuance of 20,000
shares of Class B
Common Stock
    
    
    
    
    
    
    20
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    878
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    878Conversion of Class B Common
Stock into Common Stock
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance on
September 30, 2007
    
    $
    9,706
    
    
    $
    3,107
    
    
    $
    102,003
    
    
    $
    83,267
    
    
    $
    (26,335
    )
    
    $
    (61,254
    )
    
    $
    110,494Balance on
December 30, 2007
    
    $
    9,706
    
    
    $
    3,107
    
    
    $
    102,469
    
    
    $
    79,227
    
    
    $
    (12,751
    )
    
    $
    (61,254
    )
    
    $
    120,504Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,675
    
    
    
    
    
    
    
    
    
    
    
    7,675Foreign currency
translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Pension and postretirement
benefit adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    
    
    
    
    (200
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,472Adjustment to change
measurement date for
SFAS No. 158, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (153
    )
    
    
    (114
    )
    
    
    
    
    
    
    (267
    )Cash dividends paidCommon ($.75 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,983
    )
    
    
    
    
    
    
    
    
    
    
    (4,983
    )Class B Common

($.75 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,875
    )
    
    
    
    
    
    
    
    
    
    
    (1,875
    )Issuance of 20,000
shares of Class B
Common Stock
    
    
    
    
    
    
    20
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance on
September 28, 2008
    
    $
    9,706
    
    
    $
    3,127
    
    
    $
    102,449
    
    
    $
    79,891
    
    
    $
    (13,068
    )
    
    $
    (61,254
    )
    
    $
    120,851
  6




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##### 



First Nine Months2008
    
    
    2007Cash Flows from Operating ActivitiesNet income
    
    $
    7,675
    
    
    $
    21,615Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation expense
    
    
    50,386
    
    
    
    50,793Amortization of intangibles
    
    
    329
    
    
    
    334Deferred income taxes
    
    
    1,044
    
    
    
    5,092Loss on sale of property, plant and equipment
    
    
    1,117
    
    
    
    298Amortization of debt costs
    
    
    1,834
    
    
    
    2,051Amortization of deferred gain related to terminated
interest rate agreements
    
    
    (1,311
    )
    
    
    (1,273
    )Provision for liabilities to exit from multi-employer pension plan
    
    
    13,812
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    878Minority interest
    
    
    1,726
    
    
    
    1,960Increase in current assets less current liabilities
    
    
    (2,828
    )
    
    
    (9,154
    )(Increase) decrease in other noncurrent assets
    
    
    (1,341
    )
    
    
    1,499Decrease in other noncurrent liabilities
    
    
    (9,423
    )
    
    
    (13,330
    )Other
    
    
    (170
    )
    
    
    15Total adjustments
    
    
    55,175
    
    
    
    39,163Net cash provided by operating activities
    
    
    62,850
    
    
    
    60,778Cash Flows from Investing ActivitiesAdditions to property, plant and equipment
    
    
    (41,175
    )
    
    
    (30,603
    )Proceeds from the sale of property, plant and equipment
    
    
    1,126
    
    
    
    7,684Investment in plastic bottle manufacturing cooperative
    
    
    (968
    )
    
    
    (2,256
    )Net cash used in investing activities
    
    
    (41,017
    )
    
    
    (25,175
    )Cash Flows from Financing ActivitiesRepayments of lines of credit
    
    
    (7,400
    )
    
    
    Cash dividends paid
    
    
    (6,858
    )
    
    
    (6,843
    )Principal payments on capital lease obligations
    
    
    (1,935
    )
    
    
    (1,811
    )Proceeds from termination of interest rate swap agreements
    
    
    5,142
    
    
    
    Other
    
    
    (70
    )
    
    
    (372
    )Net cash used in financing activities
    
    
    (11,121
    )
    
    
    (9,026
    )Net increase in cash
    
    
    10,712
    
    
    
    26,577Cash at beginning of period
    
    
    9,871
    
    
    
    61,823Cash at end of period
    
    $
    20,583
    
    
    $
    88,400Significant 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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##### 



Sept. 28,
    
    Dec. 30,
    
    Sept. 30,In Thousands
    
    2008
    
    2007
    
    2007Finished products
    
    $
    40,250
    
    
    $
    37,649
    
    
    $
    37,340Manufacturing materials
    
    
    7,261
    
    
    
    9,198
    
    
    
    8,150Plastic shells, plastic pallets and other inventories
    
    
    18,084
    
    
    
    16,687
    
    
    
    17,332Total inventories
    
    $
    65,595
    
    
    $
    63,534
    
    
    $
    62,822
   Sept. 28,
    
    Dec. 30,
    
    Sept. 30,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesLand
    
    $
    12,212
    
    
    $
    12,280
    
    
    $
    12,280Buildings
    
    
    110,708
    
    
    
    110,721
    
    
    
    110,454
    
    
    10-50 yearsMachinery and equipment
    
    
    118,154
    
    
    
    106,180
    
    
    
    103,400
    
    
    5-20 yearsTransportation equipment
    
    
    179,787
    
    
    
    174,882
    
    
    
    176,966
    
    
    4-13 yearsFurniture and fixtures
    
    
    38,877
    
    
    
    38,350
    
    
    
    40,363
    
    
    4-10 yearsCold drink dispensing equipment
    
    
    327,054
    
    
    
    323,629
    
    
    
    325,685
    
    
    6-13 yearsLeasehold and land improvements
    
    
    60,979
    
    
    
    60,023
    
    
    
    59,047
    
    
    5-20 yearsSoftware for internal use
    
    
    58,611
    
    
    
    51,681
    
    
    
    49,608
    
    
    3-10 yearsConstruction in progress
    
    
    4,082
    
    
    
    6,635
    
    
    
    3,524Total property, plant and equipment, at cost
    
    
    910,464
    
    
    
    884,381
    
    
    
    881,327Less: Accumulated depreciation
and amortization
    
    
    558,889
    
    
    
    524,451
    
    
    
    521,936Property, plant and equipment, net
    
    $
    351,575
    
    
    $
    359,930
    
    
    $
    359,391
  9




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##### 



Sept. 28,
    
    Dec. 30,
    
    Sept. 30,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesLeased property under capital leases
    
    $
    88,619
    
    
    $
    88,619
    
    
    $
    88,619
    
    
    3-29 yearsLess: Accumulated amortization
    
    
    20,856
    
    
    
    17,757
    
    
    
    16,723Leased property under capital leases, net
    
    $
    67,763
    
    
    $
    70,862
    
    
    $
    71,896
      Sept. 28,
    
    Dec. 30,
    
    Sept. 30,
    
    EstimatedIn Thousands
    
    2008
    
    2007
    
    2007
    
    Useful LivesOther identifiable intangible assets
    
    $
    6,599
    
    
    $
    6,599
    
    
    $
    6,599
    
    
    1-16 yearsLess: Accumulated amortization
    
    
    2,626
    
    
    
    2,297
    
    
    
    2,186Other identifiable intangible assets, net
    
    $
    3,973
    
    
    $
    4,302
    
    
    $
    4,413
  10




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##### 



Sept. 28,
    
    Dec. 30,
    
    Sept. 30,In Thousands
    
    2008
    
    2007
    
    2007Accrued marketing costs
    
    $
    9,121
    
    
    $
    6,787
    
    
    $
    6,798Accrued insurance costs
    
    
    16,558
    
    
    
    14,228
    
    
    
    13,392Accrued taxes (other than income taxes)
    
    
    2,517
    
    
    
    502
    
    
    
    2,822Accrued income taxes
    
    
    3,840
    
    
    
    
    
    
    
    3,086Employee benefit plan accruals
    
    
    11,010
    
    
    
    9,933
    
    
    
    8,429Checks and transfers yet to be presented for payment from
zero balance cash account
    
    
    10,235
    
    
    
    13,279
    
    
    
    9,958All other accrued liabilities
    
    
    8,373
    
    
    
    9,782
    
    
    
    9,508Total other accrued liabilities
    
    $
    61,654
    
    
    $
    54,511
    
    
    $
    53,993
   Interest
    
    Interest
    
    Sept. 28,
    
    Dec. 30,
    
    Sept. 30,In Thousands
    
    Maturity
    
    Rate
    
    Paid
    
    2008
    
    2007
    
    2007Lines of Credit
    
    
    2008
    
    
    
    
    
    
    Varies
    
    $
    
    
    
    $
    7,400
    
    
    $
    Debentures
    
    
    2007
    
    
    
    
    
    
    Semi-annually
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    164,757591,450
    
    
    
    598,850
    
    
    
    691,450Less: Current portion of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    176,693
    
    
    
    7,400
    
    
    
    100,000Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    414,757
    
    
    $
    591,450
    
    
    $
    591,450
 11




---



##### 



12




---



##### 



September 28, 2008
    
    December 30, 2007
    
    September 30, 2007Notional
    
    Remaining
    
    Notional
    
    Remaining
    
    Notional
    
    RemainingIn Thousands
    
    Amount
    
    Term
    
    Amount
    
    Term
    
    Amount
    
    TermInterest rate swap agreement  floating
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    25,000
    
    
    0.2 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    0.2 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    0.2 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    1.4 years
    
    
    50,000
    
    
    1.7 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    1.5 years
    
    
    50,000
    
    
    1.8 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    4.9 years
    
    
    50,000
    
    
    5.2 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    1.3 years
    
    
    25,000
    
    
    1.6 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    7.2 years
    
    
    25,000
    
    
    7.5 yearsInterest rate swap agreement  floating
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    4.9 years
    
    
    25,000
    
    
    5.2 years
   13




---



##### 



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
 14




---



##### 



September 28, 2008
    
    December 30, 2007
    
    September 30, 2007Carrying
    
    Fair
    
    Carrying
    
    Fair
    
    Carrying
    
    FairIn Thousands
    
    Amount
    
    Value
    
    Amount
    
    Value
    
    Amount
    
    ValuePublic debt securities
    
    $
    591,450
    
    
    $
    550,420
    
    
    $
    591,450
    
    
    $
    575,833
    
    
    $
    691,450
    
    
    $
    676,324Non-public variable rate debt
    
    
    
    
    
    
    
    
    
    
    7,400
    
    
    
    7,400
    
    
    
    
    
    
    
    Deferred compensation plan assets
    
    
    6,444
    
    
    
    6,444
    
    
    
    6,386
    
    
    
    6,386
    
    
    
    6,252
    
    
    
    6,252Interest rate swap agreements
    
    
    
    
    
    
    
    
    
    
    (2,337
    )
    
    
    (2,337
    )
    
    
    2,353
    
    
    
    2,353Fuel hedging agreements
    
    
    
    
    
    
    
    
    
    
    (340
    )
    
    
    (340
    )
    
    
    
    
    
    
    (154
    )Letters of credit
    
    
    
    
    
    
    19,332
    
    
    
    
    
    
    
    21,389
    
    
    
    
    
    
    
    21,271
    
 15




---



##### 



In Thousands
    
    
    
    
    Level 1AssetsDeferred compensation plan assets
    
    
    
    
    $
    6,444LiabilitiesDeferred compensation plan liabilities
    
    
    
    
    
    6,444
    Sept. 28,
    
    Dec. 30,
    
    Sept. 30,In Thousands
    
    2008
    
    2007
    
    2007Accruals for executive benefit plans
    
    $
    77,601
    
    
    $
    75,438
    
    
    $
    74,462Other
    
    
    32,119
    
    
    
    18,194
    
    
    
    22,713Total other liabilities
    
    $
    109,720
    
    
    $
    93,632
    
    
    $
    97,175
    16




---



##### 



17




---



##### 



First Nine MonthsIn Thousands
    
    2008
    
    
    2007Statutory expense
    
    $
    5,184
    
    
    $
    12,137State income taxes, net of federal effect
    
    
    645
    
    
    
    1,510Manufacturing deduction benefit
    
    
    (487
    )
    
    
    (1,141
    )Meals and entertainment
    
    
    507
    
    
    
    440Adjustment
for uncertain tax positions
    
    
    1,277
    
    
    
    (75
    )Other, net
    
    
    9
    
    
    
    190Income tax expense
    
    $
    7,135
    
    
    $
    13,061
   18




---



##### 



19




---



##### 



Application ofDec. 30,
    
    SFAS No. 158
    
    Pre-tax
    
    Tax
    
    Sept. 28,In Thousands
    
    2007
    
    After tax(1)
    
    Activity
    
    Effect
    
    2008Net pension activity:Actuarial loss
    
    $
    (12,684
    )
    
    $
    23
    
    
    $
    333
    
    
    $
    (128
    )
    
    $
    (12,456
    )Prior service costs
    
    
    (55
    )
    
    
    1
    
    
    
    12
    
    
    
    (5
    )
    
    
    (47
    )Net postretirement benefits activity:Actuarial loss
    
    
    (9,928
    )
    
    
    141
    
    
    
    687
    
    
    
    (264
    )
    
    
    (9,364
    )Prior service costs
    
    
    9,833
    
    
    
    (275
    )
    
    
    (1,338
    )
    
    
    514
    
    
    
    8,734Transition asset
    
    
    60
    
    
    
    (4
    )
    
    
    (18
    )
    
    
    7
    
    
    
    45Foreign currency translation adjustment
    
    
    23
    
    
    
    
    
    
    
    (5
    )
    
    
    2
    
    
    
    20Total
    
    $
    (12,751
    )
    
    $
    (114
    )
    
    $
    (329
    )
    
    $
    126
    
    
    $
    (13,068
    )
 Dec. 31,
    
    Pre-tax
    
    Tax
    
    Sept. 30,In Thousands
    
    2006
    
    Activity
    
    Effect
    
    2007Net pension activity:Actuarial loss
    
    $
    (24,673
    )
    
    $
    1,868
    
    
    $
    (735
    )
    
    $
    (23,540
    )Prior service costs
    
    
    (31
    )
    
    
    18
    
    
    
    (7
    )
    
    
    (20
    )Net postretirement benefits activity:Actuarial loss
    
    
    (13,512
    )
    
    
    916
    
    
    
    (360
    )
    
    
    (12,956
    )Prior service costs
    
    
    10,915
    
    
    
    (1,339
    )
    
    
    527
    
    
    
    10,103Transition asset
    
    
    75
    
    
    
    (19
    )
    
    
    7
    
    
    
    63Foreign currency translation adjustment
    
    
    
    
    
    
    22
    
    
    
    (7
    )
    
    
    15Total
    
    $
    (27,226
    )
    
    $
    1,466
    
    
    $
    (575
    )
    
    $
    (26,335
    )
 (1)
    
    See Note 18 of the consolidated financial statements for additional information.  sm
 20




---



##### 



Potential
    
    RecordedAnnual
    
    Nine MonthShares
    
    Grant-Date
    
    Compensation
    
    CompensationYear
    
    Awarded
    
    Price
    
    Expense
    
    Expense2007
    
    
    20,000
    
    
    $
    58.53
    
    
    $
    1,170,600
    
    
    $
    877,9502008
    
    
    20,000
    
    
    
    56.50
    
    
    
    1,130,000
    
    
    
    
 21




---



##### 



Recently Adopted Pronouncement
  22




---



##### 



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
 Pension Plans
   Third Quarter
    
    First Nine MonthsIn Thousands
    
    2008
    
    2007
    
    2008
    
    2007Service cost
    
    $
    20
    
    
    $
    20
    
    
    $
    61
    
    
    $
    59Interest cost
    
    
    2,701
    
    
    
    2,634
    
    
    
    8,104
    
    
    
    7,902Expected return on plan assets
    
    
    (3,410
    )
    
    
    (3,224
    )
    
    
    (10,231
    )
    
    
    (9,674
    )Amortization of prior service cost
    
    
    4
    
    
    
    6
    
    
    
    12
    
    
    
    18Recognized net actuarial loss
    
    
    111
    
    
    
    623
    
    
    
    333
    
    
    
    1,868Net periodic pension cost (income)
    
    $
    (574
    )
    
    $
    59
    
    
    $
    (1,721
    )
    
    $
    173
  Postretirement Benefits
  23




---



##### 



Third Quarter
    
    First Nine MonthsIn Thousands
    
    2008
    
    2007
    
    2008
    
    2007Service cost
    
    $
    128
    
    
    $
    107
    
    
    $
    384
    
    
    $
    319Interest cost
    
    
    536
    
    
    
    552
    
    
    
    1,608
    
    
    
    1,657Amortization of unrecognized transitional assets
    
    
    (6
    )
    
    
    (7
    )
    
    
    (18
    )
    
    
    (19
    )Recognized net actuarial loss
    
    
    229
    
    
    
    306
    
    
    
    687
    
    
    
    916Amortization of prior service cost
    
    
    (446
    )
    
    
    (447
    )
    
    
    (1,338
    )
    
    
    (1,339
    )Net periodic postretirement benefit cost
    
    $
    441
    
    
    $
    511
    
    
    $
    1,323
    
    
    $
    1,534
 401(k) Savings Plan
  Multi-Employer
Benefits
    24




---



##### 



First Nine MonthsIn Millions
    
    2008
    
    
    2007Payments by the Company for concentrate, syrup,
sweetener and other purchases
    
    $
    285.7
    
    
    $
    254.4Marketing funding support payments to the Company
    
    
    35.2
    
    
    
    28.4Payments by the Company net of marketing funding support
    
    $
    250.5
    
    
    $
    226.0Payments by the Company for customer marketing programs
    
    $
    37.1
    
    
    $
    35.0Payments by the Company for cold drink equipment parts
    
    
    5.3
    
    
    
    4.2Fountain delivery and equipment repair fees paid to the Company
    
    
    7.6
    
    
    
    7.1Presence marketing funding support provided by
The Coca-Cola Company on the Companys behalf
    
    
    3.0
    
    
    
    3.2Sales of finished products to The Coca-Cola Company
    
    
    7.8
    
    
    
    24.8
    25




---



##### 



26




---



##### 



Third Quarter
    
    First Nine MonthsIn Thousands
    
    2008
    
    2007
    
    2008
    
    2007Bottle/can sales:Sparkling beverages (including energy products)
    
    $
    258,200
    
    
    $
    255,804
    
    
    $
    762,741
    
    
    $
    760,359Still beverages
    
    
    66,160
    
    
    
    58,897
    
    
    
    186,020
    
    
    
    158,280Total bottle/can sales
    
    
    324,360
    
    
    
    314,701
    
    
    
    948,761
    
    
    
    918,639Other sales:Sales to other Coca-Cola bottlers
    
    
    31,231
    
    
    
    27,804
    
    
    
    94,356
    
    
    
    101,774Post-mix and other
    
    
    25,972
    
    
    
    24,855
    
    
    
    72,123
    
    
    
    74,946Total other sales
    
    
    57,203
    
    
    
    52,659
    
    
    
    166,479
    
    
    
    176,720Total net sales
    
    $
    381,563
    
    
    $
    367,360
    
    
    $
    1,115,240
    
    
    $
    1,095,359
  27




---



##### 



Third Quarter
    
    
    First Nine MonthsIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator for basic and diluted net income (loss) per
Common Stock and Class B Common Stock share:Net income (loss)
    
    $
    (3,145
    )
    
    $
    5,273
    
    
    $
    7,675
    
    
    $
    21,615Less dividends:Common Stock
    
    
    1,661
    
    
    
    1,661
    
    
    
    4,983
    
    
    
    4,983Class B Common Stock
    
    
    625
    
    
    
    620
    
    
    
    1,875
    
    
    
    1,860Total undistributed earnings (losses)
    
    $
    (5,431
    )
    
    $
    2,992
    
    
    $
    817
    
    
    $
    14,772Common Stock undistributed earnings (losses)
 basic
    
    $
    (3,946
    )
    
    $
    2,179
    
    
    $
    594
    
    
    $
    10,757Class B Common Stock undistributed earnings (losses)
 basic
    
    
    (1,485
    )
    
    
    813
    
    
    
    223
    
    
    
    4,015Total undistributed earnings (losses)  basic
    
    $
    (5,431
    )
    
    $
    2,992
    
    
    $
    817
    
    
    $
    14,772Common Stock undistributed earnings (losses)  diluted
    
    $
    (3,946
    )
    
    $
    2,174
    
    
    $
    593
    
    
    $
    10,738Class B Common Stock undistributed earnings
(losses)  diluted
    
    
    (1,485
    )
    
    
    818
    
    
    
    224
    
    
    
    4,034Total undistributed earnings (losses)  diluted
    
    $
    (5,431
    )
    
    $
    2,992
    
    
    $
    817
    
    
    $
    14,772Numerator for basic net income (loss) per Common
Stock share:Dividends on Common Stock
    
    $
    1,661
    
    
    $
    1,661
    
    
    $
    4,983
    
    
    $
    4,983Common Stock undistributed earnings (losses)  basic
    
    
    (3,946
    )
    
    
    2,179
    
    
    
    594
    
    
    
    10,757Numerator for basic net income (loss) per Common
Stock share
    
    $
    (2,285
    )
    
    $
    3,840
    
    
    $
    5,577
    
    
    $
    15,740Numerator for basic net income (loss) per Class B
Common Stock share:Dividends on Class B Common Stock
    
    $
    625
    
    
    $
    620
    
    
    $
    1,875
    
    
    $
    1,860Class B Common Stock undistributed earnings (losses)
 basic
    
    
    (1,485
    )
    
    
    813
    
    
    
    223
    
    
    
    4,015Numerator for basic net income (loss) per Class B
Common Stock share
    
    $
    (860
    )
    
    $
    1,433
    
    
    $
    2,098
    
    
    $
    5,875
 28




---



##### 



Third Quarter
    
    
    First Nine MonthsIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator for diluted net income (loss) per
Common Stock share:Dividends on Common Stock
    
    $
    1,661
    
    
    $
    1,661
    
    
    $
    4,983
    
    
    $
    4,983Dividends on Class B Common Stock
assumed converted to Common Stock
    
    
    625
    
    
    
    620
    
    
    
    1,875
    
    
    
    1,860Common Stock undistributed earnings (losses)
 diluted
    
    
    (5,431
    )
    
    
    2,992
    
    
    
    817
    
    
    
    14,772Numerator for diluted net income (loss) per
Common Stock share
    
    $
    (3,145
    )
    
    $
    5,273
    
    
    $
    7,675
    
    
    $
    21,615Numerator for diluted net income (loss) per Class B
Common Stock share:Dividends on Class B Common Stock
    
    $
    625
    
    
    $
    620
    
    
    $
    1,875
    
    
    $
    1,860Class B Common Stock undistributed earnings (losses)
 diluted
    
    
    (1,485
    )
    
    
    818
    
    
    
    224
    
    
    
    4,034Numerator for diluted net income (loss) per Class B
Common Stock share
    
    $
    (860
    )
    
    $
    1,438
    
    
    $
    2,099
    
    
    $
    5,894
 29




---



##### 



Third Quarter
    
    
    First Nine MonthsIn Thousands (Except Per Share Data)
    
    2008
    
    
    2007
    
    
    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
    
    
    
    6,644
    
    
    
    6,644
    
    
    
    6,644Class B Common Stock weighted average shares
outstanding  basic
    
    
    2,500
    
    
    
    2,480
    
    
    
    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
    
    
    
    9,144
    
    
    
    9,159
    
    
    
    9,140Class B Common Stock weighted average shares
outstanding  diluted
    
    
    2,500
    
    
    
    2,500
    
    
    
    2,515
    
    
    
    2,496Basic net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.37Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.37Diluted net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .84
    
    
    $
    2.36Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    .83
    
    
    $
    2.36
 
 NOTES TO TABLE(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 per share for Common Stock and Class B Common Stock
includes the dilutive effect of shares relative to the restricted
stock award. 30




---



##### 



31




---



##### 



First Nine MonthsIn Thousands
    
    2008
    
    2007Accounts receivable, trade, net
    
    $
    (13,081
    )
    
    $
    (5,615
    )Accounts receivable from The Coca-Cola Company
    
    
    (8,861
    )
    
    
    (14,853
    )Accounts receivable, other
    
    
    (3,672
    )
    
    
    (1,563
    )Inventories
    
    
    (2,061
    )
    
    
    4,233Prepaid expenses and other current assets
    
    
    1,259
    
    
    
    (2,564
    )Accounts payable, trade
    
    
    (14,252
    )
    
    
    (5,605
    )Accounts payable to The Coca-Cola Company
    
    
    26,749
    
    
    
    148Other accrued liabilities
    
    
    10,332
    
    
    
    10,932Accrued compensation
    
    
    (5,884
    )
    
    
    (3,019
    )Accrued interest payable
    
    
    6,643
    
    
    
    8,752Increase in current assets less current liabilities
    
    $
    (2,828
    )
    
    $
    (9,154
    )
  Recently Adopted Pronouncements
   32




---



##### 



Recently Issued Pronouncements
    33




---



##### 



34




---



##### 



Severance Pay
    
    RelocationIn Thousands
    
    and Benefits
    
    and Other
    
    TotalBalance at December 31, 2006
    
    $
    
    
    
    $
    
    
    
    $
    Provision
    
    
    1,607
    
    
    
    988
    
    
    
    2,595Cash payments
    
    
    1,607
    
    
    
    988
    
    
    
    2,595Balance at September 30, 2007
    
    $
    
    
    
    $
    
    
    
    $
    Balance at December 30, 2007
    
    $
    
    
    
    $
    
    
    
    $
    Provision
    
    
    3,998
    
    
    
    48
    
    
    
    4,046Cash payments
    
    
    3,130
    
    
    
    48
    
    
    
    3,178Balance at September 28, 2008
    
    $
    868
    
    
    $
    
    
    
    $
    868
 35




---



##### 



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 third quarter of 2008 (Q3 2008) and the first
nine months of 2008 (YTD 2008) and changes from the third quarter of 2007 (Q3 2007) and
the first nine months of 2007 (YTD 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 Q3 2008
and YTD 2008 compared to Q3 2007 and YTD 2007.
    
    Financial Condition  an analysis of the Companys financial condition as of the end of
Q3 2008 compared to year-end 2007 and the end of Q3 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
   36




---



##### 



Third Quarter
    
    First Nine MonthsIn Thousands
    
    2008
    
    2007
    
    2008
    
    2007Bottle/can sales:Sparkling beverages (including energy products)
    
    $
    258,200
    
    
    $
    255,804
    
    
    $
    762,741
    
    
    $
    760,359Still beverages
    
    
    66,160
    
    
    
    58,897
    
    
    
    186,020
    
    
    
    158,280Total bottle/can sales
    
    
    324,360
    
    
    
    314,701
    
    
    
    948,761
    
    
    
    918,639Other sales:Sales to other Coca-Cola bottlers
    
    
    31,231
    
    
    
    27,804
    
    
    
    94,356
    
    
    
    101,774Post-mix and other
    
    
    25,972
    
    
    
    24,855
    
    
    
    72,123
    
    
    
    74,946Total other sales
    
    
    57,203
    
    
    
    52,659
    
    
    
    166,479
    
    
    
    176,720Total net sales
    
    $
    381,563
    
    
    $
    367,360
    
    
    $
    1,115,240
    
    
    $
    1,095,359
 Areas of Emphasis
  Revenue Management
  37




---



##### 



Product Innovation and Beverage Portfolio Expansion
 ©
    38




---



##### 



Distribution Cost Management
   
    
    bulk delivery for large supermarkets,
mass merchandisers and club stores;
    
    advanced sales delivery for convenience stores, drug stores, small supermarkets and
certain on-premise accounts; and
    
    full service delivery for its full
service vending customers.
  Productivity
  39




---



##### 



Overview of Operations and Financial Condition
    
    
    a $13.8 million ($7.2 million after-tax, or basic net loss per share of $.78)
charge to freeze the Companys liability to the Central States, Southeast and
Southwest Areas Pension Fund (Central States), a multi-employer pension fund, while preserving the
pension benefits previously earned by Company employees covered by this plan; and
    
    a $4.0 million ($2.1 million after-tax, or basic net loss per share of $.23)
charge for restructuring expense related to the Companys plan initiated in Q3
2008 to reorganize the structure of its operating units and support services,
which resulted in the elimination of approximately 350 positions.
  
    
    a $2.6 million ($1.6 million after-tax, or basic net loss per share of $.18)
charge related to a simplification of the Companys operating management structure
and reduction in workforce.
 Third Quarter
    
    
    
    
    
    %In Thousands (Except Per Share Data)
    
    2008
    
    2007
    
    Change
    
    ChangeNet sales
    
    $
    381,563
    
    
    $
    367,360
    
    
    $
    14,203
    
    
    
    3.9Gross margin
    
    
    155,827
    
    
    
    155,212
    
    
    
    615
    
    
    
    0.4S,D&A expenses
    
    
    149,384
    
    
    
    134,972
    
    
    
    14,412
    
    
    
    10.7Income from operations
    
    
    6,443
    
    
    
    20,240
    
    
    
    (13,797
    )
    
    
    (68.2
    )Interest expense
    
    
    9,406
    
    
    
    12,135
    
    
    
    (2,729
    )
    
    
    (22.5
    )Income (loss) before income taxes
    
    
    (3,668
    )
    
    
    7,995
    
    
    
    (11,663
    )
    
    
    NM
    *Income tax provision (benefit)
    
    
    (523
    )
    
    
    2,722
    
    
    
    (3,245
    )
    
    
    NM
    *Net income (loss)
    
    
    (3,145
    )
    
    
    5,273
    
    
    
    (8,418
    )
    
    
    NM
    *Basic net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    (.92
    )
    
    
    NM
    *Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    (.92
    )
    
    
    NM
    *Diluted net income (loss) per share:Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    (.92
    )
    
    
    NM
    *Class B Common Stock
    
    $
    (.34
    )
    
    $
    .58
    
    
    $
    (.92
    )
    
    
    NM
    *
  First Nine Months
    
    
    
    
    
    %In Thousands (Except Per Share Data)
    
    2008
    
    2007
    
    Change
    
    ChangeNet sales
    
    $
    1,115,240
    
    
    $
    1,095,359
    
    
    $
    19,881
    
    
    
    1.8Gross margin
    
    
    467,625
    
    
    
    475,993
    
    
    
    (8,368
    )
    
    
    (1.8
    )S,D&A expenses
    
    
    421,300
    
    
    
    402,710
    
    
    
    18,590
    
    
    
    4.6Income from operations
    
    
    46,325
    
    
    
    73,283
    
    
    
    (26,958
    )
    
    
    (36.8
    )Interest expense
    
    
    29,789
    
    
    
    36,647
    
    
    
    (6,858
    )
    
    
    (18.7
    )Income before income taxes
    
    
    14,810
    
    
    
    34,676
    
    
    
    (19,866
    )
    
    
    (57.3
    )Income tax provision
    
    
    7,135
    
    
    
    13,061
    
    
    
    (5,926
    )
    
    
    (45.4
    )Net income
    
    
    7,675
    
    
    
    21,615
    
    
    
    (13,940
    )
    
    
    (64.5
    )Basic net income per share:Common Stock
    
    $
    0.84
    
    
    $
    2.37
    
    
    $
    (1.53
    )
    
    
    (64.6
    )Class B Common Stock
    
    $
    0.84
    
    
    $
    2.37
    
    
    $
    (1.53
    )
    
    
    (64.6
    )Diluted net income per share:Common Stock
    
    $
    0.84
    
    
    $
    2.36
    
    
    $
    (1.52
    )
    
    
    (64.4
    )Class B Common Stock
    
    $
    0.83
    
    
    $
    2.36
    
    
    $
    (1.53
    )
    
    
    (64.8
    )
  40




---



##### 



©
    Sept. 28,
    
    December 30,
    
    Sept. 30,In Thousands
    
    2008
    
    2007
    
    2007Debt
    
    $
    591,450
    
    
    $
    598,850
    
    
    $
    691,450Capital lease obligations
    
    
    78,280
    
    
    
    80,215
    
    
    
    80,839Total debt and capital lease obligations
    
    
    669,730
    
    
    
    679,065
    
    
    
    772,289Less: Cash and cash equivalents
    
    
    20,583
    
    
    
    9,871
    
    
    
    88,400Total net debt and capital lease obligations (1)
    
    $
    649,147
    
    
    $
    669,194
    
    
    $
    683,889
 (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. 41




---



##### 



Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements
 Critical Accounting Policies
   New Accounting Pronouncements
 Recently Adopted Pronouncements
    42




---



##### 



Recently Issued Pronouncements
      43




---



##### 



Results of Operations
 Q3 2008 Compared to Q3 2007 and YTD 2008 Compared to YTD 2007
 Net Sales
   Q3 2008
    
    

Attributable to:(In Millions)$
    11.0
    
    

5.3%
increase in bottle/can sales price per unit (in response to increases
in product costs) primarily
due to per unit price increases in all product categories
except bottled water and energy and increased sales of enhanced
water which has a higher per unit price offset by decreases
in higher price packages in higher margin channels2.7
    
    
    9.5% increase in bottler sales price per unit primarily due to a per unit price
increase in all product categories except tea and increased sales of enhanced water
which has a higher per unit price(2.1
    )
    

10%
decrease in post-mix volume(1.4
    )
    
    1.5% decrease in bottle/can volume primarily due to decreases in sugar sparkling
beverages and bottled water volumes offset by an increase in enhanced
water volume4.0
    
    
    Other$
    14.2
    
    
    Total increase in net sales
 44




---



##### 



YTD 2008
    
    
    Attributable to:(In Millions)$
    15.1
    
    

2.6%
increase in bottle/can sales price per unit (in response to increases
in product costs) primarily
due to increased sales of enhanced water which has a higher
per unit price and higher per unit prices of sparkling
products, other than energy products, offset by decreases in
sales of higher price packages in higher margin channels
(primarily convenience) and a lower sales price per unit for
bottled water15.0
    
    
    .6% increase in bottle/can volume primarily due to an increase in enhanced water volume
offset by a decrease in bottled water volume(5.9
    )
    

9.7%
decrease in post-mix volume(3.9
    )
    
    3.8% decrease in bottler sales volume primarily due to decreases in energy and tea
products volume(3.5
    )
    
    3.6% 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)3.1
    
    
    Other$
    19.9
    
    
    Total increase in net sales
   Bottle/Can Sales Volume
    
    Bottle/Can Sales VolumeProduct Category
    
    
    Q3 2008
    
    Q3 2007
    
    % Increase (Decrease)Sparkling beverages (including
energy products)
    
    
    82.7
    %
    
    
    83.2
    %
    
    
    (2.1
    )Still beverages
    
    
    17.3
    %
    
    
    16.8
    %
    
    
    1.5Total bottle/can sales volume
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    (1.5
    )
 Bottle/Can Sales Volume
    
    Bottle/Can Sales VolumeProduct Category
    
    
    YTD 2008
    
    YTD 2007
    
    % Increase (Decrease)Sparkling beverages (including
energy products)
    
    
    83.5
    %
    
    
    84.5
    %
    
    
    (0.5
    )Still beverages
    
    
    16.5
    %
    
    
    15.5
    %
    
    
    6.6Total bottle/can sales volume
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    0.6
  45




---



##### 



Cost of Sales
    Q3 2008
    
    
    Attributable to:(In Millions)$
    10.4
    
    
    Increase in costs primarily due to an increase in purchased products and an increase in raw
material costs such as high fructose corn syrup and plastic
bottles2.5
    
    

Increase
in manufacturing costs primarily due to an increase in fuel
costs0.7
    
    
    Other$
    13.6
    
    
    Total increase in cost of sales
 YTD 2008
    
    
    Attributable to:(In Millions)$
    32.4
    
    
    Increase in costs primarily due to an increase in purchased products and an increase in raw
material costs such as high fructose corn syrup and plastic
bottles12.2
    
    
    .6% increase in bottle/can volume primarily due to increases in enhanced water volume
offset by a decrease in bottled water volume(6.4
    )
    

Increase
in marketing funding support received primarily from The Coca-Cola
Company(4.0
    )
    
    9.7% decrease in post-mix volume(3.0
    )
    

Decrease
in bottler sales cost 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)(3.7
    )
    
    3.8% decrease in bottler sales volume primarily due to decreases in energy and tea
products volume3.3
    
    

Increase
in manufacturing costs primarily due to increased fuel
costs(2.6
    )
    

Increase
in equity investment in plastic bottle cooperative$
    28.2
    
    
    Total increase in cost of sales
  46




---



##### 



Gross Margin
   Q3 2008
    
    
    Attributable to:(In Millions)$
    11.0
    
    
    5.3% increase in bottle/can sales price per unit
(in response to increases in product costs) primarily
due to per unit price increases in all product categories
except bottled water and energy and increased sales of enhanced
water which has a higher per unit price offset by decreases
in higher price packages in higher margin channels(10.4
    )
    
    Increase in costs primarily due to an increase in purchased products and an increase in raw
material costs such as high fructose corn syrup and plastic
bottles2.7
    
    
    9.5% increase in bottler sales price per unit primarily due to per unit price
increases in all product categories except tea and increased sales of enhanced water which
has a higher per unit price(2.5
    )
    

Increase
in manufacturing costs primarily due to increased fuel
costs(0.2
    )
    
    Other$
    0.6
    
    
    Total increase in gross margin
 47




---



##### 



YTD 2008
    
    
    Attributable to:(In Millions)$
    (32.4
    )
    
    Increase in costs primarily due to an increase in purchased products and an increase in raw material costs such
as high fructose corn syrup and plastic bottles15.1
    
    
    2.6% increase in bottle/can sales price per unit
(in response to increases in product costs) primarily due to increased sales of
enhanced water which has a higher per unit price and higher per unit prices of sparkling
products, other than energy products, offset by decreases in sales of higher price packages in higher
margin channels (primarily convenience) and lower sales price per
unit for bottled water6.4
    
    

Increase
in marketing funding support received primarily from The Coca-Cola
Company(3.5
    )
    
    3.6% 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)(3.3
    )
    

Increase
in manufacturing costs primarily due to increased fuel
costs3.0
    
    

Decrease
in bottler sales cost 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)2.8
    
    
    .6% increase in bottle/can volume primarily due to increases in enhanced water volume
offset by a decrease in bottled water volume2.6
    
    

Increase
in equity investment in plastic bottle cooperative0.9
    
    
    Other$
    (8.4
    )
    
    Total decrease in gross margin
   S,D&A Expenses
   48




---



##### 



Q3 2008
    
    
    Attributable to:(In Millions)$
    13.8
    
    

Charge
to exit from multi-employer pension plan3.9
    
    

Increase
in restructuring costs2.2
    
    
    Increase in fuel and other energy costs related to the movement of finished goods from
sales distribution centers to customer locations(1.8
    )
    
    Decrease in marketing costs1.4
    
    

Increase
in property and casualty insurance1.1
    
    

Increase
in estimated bonus expense based on projected 2008 financial
performance(1.0
    )
    
    Decrease in employee benefit costs primarily due to lower pension plan costs, offset
by increases in the Companys 401(k) Savings Plan
contributions(5.2
    )
    
    Other$
    14.4
    
    
    Total increase in S,D&A expenses
 YTD 2008
    
    
    Attributable to:(In Millions)$
    13.8
    
    

Charge
to exit from multi-employer pension plan5.7
    
    
    Increase in fuel and other energy costs related to the movement of finished goods from
sales distribution centers to customer locations(2.4
    )
    
    Decrease in employee benefit costs primarily due to lower pension plan costs, offset
by increases in the Companys 401(k) Savings Plan
contributions2.3
    
    

Increase
in property and casualty insurance costs(1.6
    )
    

Decrease
in estimated bonus expense based on projected 2008 financial
performance1.6
    
    

Gain
on sales of aviation equipment in YTD 2007(1.5
    )
    
    Decrease in estimated compensation expense related to restricted stock award based on
projected 2008 financial performance1.5
    
    

Increase
in restructuring costs(0.8
    )
    
    Other$
    18.6
    
    
    Total increase in S,D&A expenses
    49




---



##### 



Interest Expense
  Minority Interest
  Income Taxes
   50




---



##### 



Financial Condition
    
    
    An increase in current portion of long-term debt of $169.3 million primarily due to the
reclassification from long-term to current of $176.7 million of debentures which mature in May
2009 and July 2009.
    
    An increase in cash and cash equivalents of $10.7 million primarily due to cash flow from
operations.
    
    An increase in accounts receivable, trade of $13.1 million primarily due to higher sales in
the quarter ended September 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 $8.9 million and $26.7 million, respectively, primarily due to the timing
of payments.
    
    A decrease in accounts payable, trade of $14.3 million primarily due to the timing of
payments.
    
    An increase in other accrued liabilities of $7.1 million primarily due to higher income tax
payable.
    
    A decrease in accrued compensation of $5.9 million due primarily to the payment of bonuses
in March 2008 and a lower accrual for 2008 bonuses.
    
    An increase in accrued interest payable of $6.6 million primarily due to the timing of
interest payments.
  
    
    An increase in the current portion of long-term debt of $76.7 million primarily due to the
reclassification from long-term to current of $176.7 million of debentures which mature in May
2009 and July 2009, partially offset by the payment of $100 million in debentures in November
2007.
    
    A decrease in cash and cash equivalents of $67.8 million primarily due to the payment of
$100 million of debentures in November 2007.
    
    An increase in accounts receivable, trade of $8.7 million primarily due to higher sales in
Q3 2008 compared to Q3 2007 and the collection of payments from customers on the last day of
September 2008 which was in the fourth quarter of 2008, while the last day of September 2007
was in the third quarter of 2007.
    
    A decrease in accounts receivable and an increase in accounts payable to The Coca-Cola
Company of $7.1 million and $16.5 million, respectively, primarily due to the timing of
payments.
    
    An increase in other accrued liabilities of $7.7 million primarily due to higher insurance
accruals.
 51




---



##### 



Liquidity and Capital Resources
 Capital Resources
     Cash Sources and Uses
  52




---



##### 



First Nine MonthsIn Millions
    
    2008
    
    2007Cash SourcesCash provided by operating activities (excluding income tax payments)
    
    $
    66.6
    
    
    $
    77.8Proceeds from the termination of interest rate swap agreements
    
    
    5.1
    
    
    
    Proceeds
from the sale of property, plant and equipment
    
    
    1.2
    
    
    
    7.7Total cash sources
    
    $
    72.9
    
    
    $
    85.5Cash UsesCapital expenditures
    
    $
    41.2
    
    
    $
    30.6Investment in plastic bottle manufacturing cooperative
    
    
    1.0
    
    
    
    2.3Payment of lines of credit, net
    
    
    7.4
    
    
    
    Payment of debt and capital lease obligations
    
    
    1.9
    
    
    
    1.8Dividends
    
    
    6.9
    
    
    
    6.8Income tax payments
    
    
    3.7
    
    
    
    17.0Other
    
    
    .1
    
    
    
    .4Total cash uses
    
    $
    62.2
    
    
    $
    58.9Increase in cash
    
    $
    10.7
    
    
    $
    26.6
 Investing Activities
  Financing Activities
  53




---



##### 



Long-Term DebtStandard & Poors
    
    BBBMoodys
    
    Baa2
   54




---



##### 



Off-Balance Sheet Arrangements
  Aggregate Contractual Obligations
  Payments Due by PeriodOct. 2008-
    
    
    Oct. 2009-
    
    
    Oct. 2011-
    
    
    AfterIn Thousands
    
    Total
    
    
    Sept. 2009
    
    
    Sept. 2011
    
    
    Sept. 2013
    
    
    Sept. 2013Contractual obligations:Total debt, net of interest
    
    $
    591,450
    
    
    $
    176,693
    
    
    $
    
    
    
    $
    150,000
    
    
    $
    264,757Capital lease obligations,
net of interest
    
    
    78,280
    
    
    
    2,735
    
    
    
    6,050
    
    
    
    6,924
    
    
    
    62,571Estimated interest on
long-term debt and capital
lease obligations (1)
    
    
    261,743
    
    
    
    35,161
    
    
    
    55,554
    
    
    
    48,621
    
    
    
    122,407Purchase obligations (2)
    
    
    506,487
    
    
    
    89,380
    
    
    
    178,760
    
    
    
    178,760
    
    
    
    59,587Other long-term liabilities (3)
    
    
    111,444
    
    
    
    7,380
    
    
    
    14,155
    
    
    
    13,528
    
    
    
    76,381Operating leases
    
    
    17,043
    
    
    
    3,519
    
    
    
    4,428
    
    
    
    2,381
    
    
    
    6,715Long-term contractual
arrangements (4)
    
    
    25,737
    
    
    
    6,400
    
    
    
    10,558
    
    
    
    7,040
    
    
    
    1,739Postretirement obligations
    
    
    36,058
    
    
    
    1,966
    
    
    
    4,869
    
    
    
    5,212
    
    
    
    24,011Purchase orders (5)
    
    
    33,358
    
    
    
    33,358Total contractual obligations
    
    $
    1,661,600
    
    
    $
    356,592
    
    
    $
    274,374
    
    
    $
    412,466
    
    
    $
    618,168
 (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.(3)
    
    Includes obligations under executive benefit plans, unrecognized income tax benefits, the
liability to exit from a multi-employer pension plan and other
long-term liabilities. 55




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(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.     Hedging Activities
 Interest Rate Hedging
     56




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##### 



Fuel Hedging
    57




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##### 



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 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 September 28, 2008;
    
    the Companys expectation that it will not make additional contributions to either of
its Company-sponsored pension plans during the remainder of
2008;
    
    the Companys anticipation that
pension expense related to the two Company-sponsored pension plans
will increase significantly in 2009;
    
    the Companys belief that cash
contributions in 2009 to its two Company-sponsored pension plans will be in
the range of $5 million to $15 million;
    
    the Companys belief that postretirement benefit payments are expected to be
approximately $2.3 million in 2008;
    
    the Companys expectation that additions to property, plant and equipment in 2008 will
be in the range of $45 million to $55 million;
    
    the Companys beliefs and estimates regarding the impact of the adoption of certain new
accounting pronouncements;
    
    the Companys belief that innovation of new brands and packages will continue to be
critical to the Companys overall revenue;
    
    the Companys beliefs that the growth prospects 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 expectation that unrecognized tax benefits may be reduced over the next 12
months as a result of tax audits;
 58




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##### 




    
    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 or equity securities, to repay or refinance debentures maturing in
May 2009 and July 2009;
    
    the Companys belief that all of the
banks participating in the Companys $200 million facility have
the ability to and will meet any funding requests from the Company;
    
    the Companys current estimate that it will not achieve at least 80% of the overall goal
achievement factor under its Annual Bonus Plan for 2008;
    
    the Companys belief that the reorganization of its operating units and support services and its
workforce reduction plan was substantially completed by
the end of the third quarter of 2008, that the majority of cash
expenditures were
incurred in the third quarter of 2008 and the annual savings will be $25 million to $30
million from the plan;
    
    the Companys belief that it is competitive in its territories with respect to the
principal methods of competition in the nonalcoholic beverage
industry; and
    
    the Companys estimate that a 10% increase in the market price of certain commodities
over the current market prices would cumulatively increase costs during the next 12 months
by approximately $25 million assuming flat volume.
   59




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##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Debt and Derivative Financial Instruments
   Raw Material and Commodity Price Risk
   60




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##### 



Effects of Changing Prices
  
 Item 4. Controls and Procedures.
   61




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##### 



Item 1A. Risk Factors.
  The Companys ability to access the credit markets.
  
 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
    
    Amendment No. 1, dated as of August 25, 2008, to U.S. $200,000,000 Amended and
Restated Credit Agreement, dated as of March 8, 2007, by and among the Company, the
banks named therein and Citibank, N.A. as Administrative Agent (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).
 62




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##### 



COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)Date:  November 7, 2008
    By:
    /s/  James E. HarrisJames E. HarrisPrincipal Financial Officer of the Registrant
and
Senior Vice President and Chief Financial OfficerDate:  November 7, 2008
    By:
    /s/ William J. BilliardWilliam J. BilliardPrincipal Accounting Officer of the Registrant
and
Vice President, Controller and Chief Accounting Officer 63