SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                          ---------------------------

                                   FORM 20-F
               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  for the fiscal year ended December 31, 1999
                        Commission file number 1-12290
                          ---------------------------

                          PANAMERICAN BEVERAGES, INC.
            (Exact name of Registrant as specified in its charter)

                              Republic of Panama
                (Jurisdiction of incorporation or organization)
                          ---------------------------

                              c/o Panamco, L.L.C.
                               701 Waterford Way
                                   Suite 800
                             Miami, Florida 33126
                   (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the
Act.

                                                        Name of each exchange
          Title of each class                            on which registered
          -------------------                            -------------------

Class A Common Stock, $.01 par value per share         New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the
Act.

                                     None
                              __________________
                               (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                     None
                              __________________
                               (Title of Class)

    Indicate the number of outstanding shares of each of the issuer's classes
of capital or common stock as of the close of the period covered by the annual
report.

    Class A Common Stock: 120,381,600

    Class B Common Stock: 8,971,555

    Series C Preferred Stock: 2

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

             Yes    X           No
                  -----              -----

    Indicate by check mark which financial statement item the Registrant has
elected to follow.

             Item 17            Item 18      X
                    -----                 -----


<PAGE>



                               TABLE OF CONTENTS

                                                                          Page

Item 1   Description of Business.....................................        1
Item 2   Description of Property.....................................       26
Item 3   Legal Proceedings...........................................       26
Item 4   Control of Registrant.......................................       28
Item 5   Nature of Trading Market....................................       30
Item 6   Exchange Controls and Other Limitations Affecting Security
             Holders.................................................       31
Item 7   Taxation....................................................       33
Item 8   Selected Financial Data.....................................       38
Item 9   Management's Discussion and Analysis of Financial Condition and
            Results of Operations....................................       40
Item 9A  Quantitative and Qualitative Disclosures About Market Risk..       65
Item 10  Directors and Officers of Registrant........................       67
Item 11  Compensation of Directors and Officers......................       71
Item 12  Options to Purchase Securities from Registrant or Subsidiaries..   73
Item 13  Interest of Management in Certain Transactions..................   73
Item 15  Defaults upon Senior Securities.................................   73
Item 16  Changes in Securities and Changes in Security for Registered
             Securities.......................................              73
Item 17  Financial Statements.............................................  74
Item 18  Financial Statements.............................................  74
Item 19  Financial Statements and Exhibits................................  74


<PAGE>


ITEM 1.  DESCRIPTION OF BUSINESS

Overview

     Panamerican Beverages, Inc. ("Panamco" or the "Company") is the largest
soft drink bottler in Latin America and one of the world's three largest
bottlers of the soft drink products of The Coca-Cola Company ("The Coca-Cola
Company" or "Coca-Cola"). In 1999, our sales accounted for approximately 6% of
the worldwide unit case volume of soft drink sales of The Coca-Cola Company,
or the equivalent of one bottle in every case. Our 1999 sales represented
approximately 22% of the Latin American unit case volume of The Coca-Cola
Company's soft drink products. Sales of products of The Coca-Cola Company
accounted for more than 88% of our net sales in 1999.

     We have a more than  50-year  bottling  relationship  with The  Coca-Cola
Company.  On November 1, 1995,  The Coca-Cola  Company  designated  Panamco an
"anchor bottler",  making us one of their strategic  partners in The Coca-Cola
Company's  worldwide  bottling  system.  The  Coca-Cola  Company  has  been  a
stockholder   of  our  company   since  1993  and  today   beneficially   owns
approximately  24% of our  common  stock.  The  Coca-Cola  Company  has  three
representatives on our Board of Directors.

     We operate in diverse markets in Latin America. We operate in:

     o    Mexico
          a substantial part of central Mexico (excluding Mexico City),

     o    Brazil
          greater Sao Paulo, Campinas, Santos and part of Mato Grosso do Sul
          in Brazil,

     o    Colombia
          most of the Country,

     o    Costa Rica
          all of the Country,

     o    Venezuela
          all of the Country,

     o    Nicaragua
          all of the Country, and

     o    Guatemala
          Guatemala City and surrounding areas.

     These  territories  have an aggregate  population  of  approximately  122
million people, or about 24% of the total population of Latin America.  Within
these  territories,  we have the  exclusive  right to produce  and  distribute
substantially  all of The Coca-Cola  Company's  soft drink  products.  We also
produce and  distribute  a variety of flavored  soft drinks and bottled  water
products  under  licensed and  proprietary  trademarks in select  territories,
including  Canada  Dry  products  in Costa  Rica  and  Schweppes  products  in
Venezuela.   We  distribute   Kaiser  and  Heineken  beers  in  our  franchise
territories in Brazil. We also have the right to


<PAGE>


distribute  Regional  beer  throughout  most  of  Venezuela,  which  we  began
distributing in the northeast of Venezuela in early 1999.

     Our business  began in 1941,  when Albert H. Staton,  Sr., and a group of
investors  acquired  a  core  of the  franchised  bottling  operations  of The
Coca-Cola  Company  in  Mexico.  We were  incorporated  in  Panama  in 1945 as
successor  to a Mexican  company  through  which the  business  was  initially
conducted.  By expanding into other Latin American markets,  we have been able
to diversify,  in part,  our business  risk. In 1944 and 1945, we expanded our
operations  to Colombia  and Brazil,  respectively.  In 1950,  we acquired The
Coca-Cola  Company's  bottling  franchise for the Sao Paulo  territory.  Since
then, our operating units have acquired  additional bottling franchises within
their  respective  countries.  We entered the Costa Rican market in 1995, both
the  Venezuelan  market and the  Nicaraguan  market in 1997 and the Guatemalan
market in 1998.

     At the end of the first quarter of 2000, we moved our principal executive
offices from Mexico City to Miami, Florida.

Corporate Structure

Holding Company Structure

     We are a holding  company  and conduct our  operations  through  tiers of
subsidiaries.  The following chart shows our corporate structure and ownership
interest in our country level holding  companies and describes their interests
in their bottling subsidiaries as of December 31, 1999:

[GRAPHIC OMITTED]


     As a holding  company,  our ability to pay operating  expenses,  any debt
service obligations and dividends primarily depends upon receipt of sufficient
funds from our majority-owned  subsidiaries,  which are in turn dependent upon
receipt   of  funds  from  their   majority-owned   subsidiaries.   See  "Item
6.--Exchange  Controls and Other Limitations Affecting Security Holders" for a
discussion of limitations  imposed by exchange  control laws on the payment of
dividends. At present, Mexico (since the beginning of 1999) and Costa Rica


                                      2


<PAGE>


impose  withholding  taxes of  approximately  7.6% and 15%,  respectively,  on
dividends paid to us by domestic subsidiaries.  In addition,  Brazil imposes a
basic withholding tax of 15% on dividends paid to us by domestic  subsidiaries
that are derived from earnings generated prior to January 1, 1996. The payment
of  dividends  by our  subsidiaries  is also  subject in certain  instances to
statutory  restrictions  or restrictive  covenants in debt  instruments and is
contingent  upon the earnings and cash flow of, and permitted  borrowings  by,
such subsidiaries.  In addition, the minority shareholders in less than wholly
owned  subsidiaries  receive a pro rata portion of all dividends paid by those
subsidiaries.

Subsidiary Operations

     Mexico

     We own approximately 98% of the capital stock of Panamco Mexico,  S.A. de
C.V.  ("Panamco  Mexico"),  a Mexican  corporation that in turn owns interests
ranging  from 86% to 99% in five  bottling  subsidiaries  that own and operate
eight soft drink  bottling  plants  and two water  bottling  plants in Mexico.
Panamco  Mexico also owns  majority and minority  interests in companies  that
produce  materials and equipment used in the production  and  distribution  of
soft drinks. Panamco Mexico and its consolidated subsidiaries are collectively
referred to herein as "Panamco Mexico".

     Brazil

     We indirectly own  approximately 98% of the capital stock of Refrescos do
Brasil S.A.  ("Panamco  Brasil"),  a Brazilian  holding  company  that through
subsidiaries  owns a bottling  subsidiary that, in turn, owns and operates two
bottling plants in Brazil, including our state-of-the-art  facility in Jundiai
and owns an 11.6%  interest  in the Kaiser beer  brewery.  In order to compete
more aggressively with Antarctica and Brahma, in 1983. The Coca-Cola  Company,
together  with Panamco  Brasil,  other  Brazilian  bottlers of products of The
Coca-Cola  Company and the  Heineken  Beer  Company,  established  Cervejarias
Kaiser,  S.A.  ("Kaiser").  Between 1995 and 1998 Panamco Brasil increased its
interest in Kaiser to 11.6% in connection  with its  acquisition of all of the
capital stock of  Refrigerantes de Santos,  S.A.  ("Santos") and the shares of
Kaiser  owned by Santos.  Panamco  Brasil  also has  facilities  that  produce
equipment  used in the  distribution  of soft drinks.  In September  1998,  we
acquired all the capital  stock of the  Brazilian  bottler,  Refrigerantes  do
Oeste  S.A.  ("R.O.S.A.").   R.O.S.A.  produces,  distributes  and  sells  The
Coca-Cola  Company's  products  in the western  central  part of Brazil in the
state of Matto Grosso do Sul. Panamco Brasil and its consolidated subsidiaries
are collectively referred to herein as "Panamco Brasil".

     Colombia

     We own approximately  97% of the capital stock of Panamco Colombia,  S.A.
("Panamco Colombia"), a Colombian corporation that owns interests ranging from
65% to 100% in  subsidiaries  that own and operate an aggregate of 18 bottling
plants and own majority and minority  interests in  corporations  that produce
materials and equipment used in the production and distribution of soft drinks
such as Friomix del Cauca, a cooler building company. Panamco Colombia and its
consolidated  subsidiaries  are  collectively  referred  to herein as "Panamco
Colombia".


                                      3


<PAGE>


     Venezuela

     In May 1997, we acquired all the capital stock of Embotelladora Coca-Cola
y Hit de Venezuela S.A. ("Panamco Venezuela") (the "Venezuela Acquisition").
Panamco Venezuela, through its subsidiaries (the "Venezuelan Bottlers"),
produces, distributes and sells products of The Coca-Cola Company and other
soft drink products throughout Venezuela. Panamco Venezuela owns and operates
13 bottling plants. We also acquired the right to distribute Regional beer
throughout Venezuela, which we began distributing in the northeast of
Venezuela in 1999. Panamco Venezuela and the Venezuelan Bottlers are
collectively referred to herein as "Panamco Venezuela".

     Central America

     Costa Rica. We own all the capital stock of  Embotelladora  Panamco Costa
Rica, S.A.  ("Panamco Costa Rica").  Panamco Costa Rica produces,  distributes
and sells The Coca-Cola  Company's  products and  distributes and sells Canada
Dry products in Costa Rica.  Panamco Costa Rica owns and operates one bottling
plant.  Panamco Costa Rica also owns a plastics  business.  We acquired  these
operations in 1995 and 1996.

     Nicaragua.  In  August  1997,  we  acquired  all  the  capital  stock  of
Embotelladora Milca, S.A. ("Panamco  Nicaragua").  Panamco Nicaragua produces,
distributes and sells The Coca-Cola Company's  products,  and other soft drink
products, throughout Nicaragua.

     Guatemala.  In March 1998,  we acquired all the capital of  Embotelladora
Central, S.A. ("Panamco Guatemala").  Panamco Guatemala produces,  distributes
and sells The Coca-Cola Company's  products,  and other soft drink products in
Guatemala City and surrounding areas.

     Panamco  Costa  Rica,   Panamco   Nicaragua  and  Panamco  Guatemala  are
collectively referred to as "Panamco Central America".


                                      4

<PAGE>


Our Franchise Territories

     We have exclusive rights under our bottling agreements with The Coca-Cola
Company  to  bottle  and  distribute  soft  drinks  and  water  in  all of the
territories in which we operate.  We market all our other soft drink,  bottled
water,   beer  products  and  other   beverages   only  within  our  franchise
territories.

     The countries  where we operate and our franchise  territories  are shown
below:

[GRAPHIC OMITTED]


Mexico

     Our  Mexican  territories  consist of the states of  Guanajuato,  Puebla,
Tlaxcala,  Michoacan  and most of  Veracruz,  an area  which has an  aggregate
population  of  more  than  18  million  people,  or  about  19% of the  total
population of the country.

Brazil

     Our Brazilian territories,  with a population of approximately 26 million
people or about 16% of the total population of the country, consist of greater
Sao Paulo,  the third largest  metropolitan  area in the world, the contiguous
area of greater  Campinas,  the  adjacent  coastal  areas of Santos,  and Mato
Grosso do Sul.


                                      5


<PAGE>


Colombia

     Our Colombian  territory  covers  approximately  92% of the population of
that  country  with a  population  of  approximately  40 million  people,  and
includes all major cities.

Venezuela

     We are the only  company  with  the  right to  distribute  The  Coca-Cola
Company's  products in  Venezuela,  which has a population of about 23 million
people.

Central America

     We are the only company that has the right to  distribute  The  Coca-Cola
Company's  products in Costa Rica,  with a  population  of  approximately  3.8
million  people,  and in Nicaragua  with a  population  of  approximately  4.6
million people.  Our Guatemalan  territory which has a population of about 5.4
million  people covers 47% of the  population of that country,  which includes
Guatemala City.

Beverages and Packaging

Our Products

     We produce or  distribute  colas,  flavored soft drinks,  non  carbonated
flavored  drinks,  bottled  drinking water and beer. We produce and distribute
Coca-Cola  products  and our own  proprietary  brands.  In 1999,  88.3% of the
products we produced were products of The Coca-Cola Company.

     We distribute  two types of bottled water  products:  purified  water and
mineral  water.  Purified  water is prepared in a similar  manner to the water
utilized in the soft drink  manufacturing  process.  Mineral water is obtained
from springs and wells. We distribute  mineral water under our own proprietary
trademarks  Risco in  Mexico,  Manantial  in  Colombia,  Crystal in Brazil and
Shangri-la in Guatemala, and we distribute purified water under the trademarks
Risco in Mexico,  Club K, Santa Clara and Soda Clausen in Colombia,  Nevada in
Venezuela, Alpina in Costa Rica and Milca Soda in Nicaragua.

     In Brazil we  distribute  both Kaiser and Heineken  beers.  In connection
with  the  acquisition  of  Panamco  Venezuela,  we  purchased  the  right  to
distribute beer  throughout  Venezuela  under the Regional  trademark.  In the
second  quarter of 1999 we began  distributing  Regional in the  northeast  of
Venezuela.

     Proprietary  Trademarks.  We produce and distribute  flavored soft drinks
under our own  proprietary  trademarks,  including  "Club K",  "Club Soda" and
"Premio" in Colombia and "Super 12" in Costa Rica.  We produce and  distribute
bottled  waters  under our own  proprietary  trademarks  including  "Risco" in
Mexico, "Crystal" in Brazil, "Manantial",  "Premio", "Soda Clausen" and "Santa
Clara" in Colombia, "Alpina" in Costa Rica and "Shangri-la" in Guatemala.


                                      6

<PAGE>


     The  beverage  products  we produce or  distribute  and that  account for
nearly  all of our sales in the period  ending  December  31,  1999 are listed
below:


<TABLE>
<CAPTION>
Panamco Mexico    Panamco Brasil     Panamco Colombia   Panamco Venezuela       Panamco           Panamco          Panamco
                                                                               Costa Rica        Nicaragua        Guatemala
<S>               <C>                 <C>                <C>                  <C>               <C>               <C>
Coca-Cola Soft    Coca-Cola Soft      Coca-Cola Soft     Coca-Cola Soft       Coca-Cola Soft    Coca-Cola Soft    Coca-Cola Soft
Drink Products:   Drink Products:     Drink Products:    Drink Products:      Drink Products:   Drink Products:   Drink Products:

Coca-Cola         Coca-Cola           Coca-Cola          Coca-Cola            Coca-Cola         Coca-Cola         Coca-Cola
Coca-Cola Light   Coca-Cola Light     Coca-Cola Light    Coca-Cola Light      Coca-Cola Light   Coca-Cola Light   Coca-Cola Light
Sprite            Sprite              Sprite             Hit Naranja          Sprite            Sprite            Fanta
Sprite Light      Diet Sprite         Fanta              Hit Pina             Fanta             Fanta             Sprite
Fanta             Fanta               Quatro             Hit Uva              Fresca            Fresca            Lift
Fresca            Diet Fanta          Lift               Hit Manzana                           Diet Sprite
Lift              Simba                                  Frescolita           Other Soft Drinks:                  Bottled Water:
Delaware Punch    Tai                 Other Soft Drinks: Chinotto             Canada Dry        Bottled Water:    Shangri-la*
                  Diet Tai            Roman**            Chinotto Light          Ginger Ale**   Milca Soda**
Bottled Water:    Kuat                Premio*                                 Super 12*         Kinley Soda       Other Products:
Risco*            Kinley Tonic Water  Club Soda*         Other Soft Drinks:                                       Hi-C
                  Kinley Club Soda                       Soda Schweppes**     Bottled Water:    Other Products:
Other Products:   Fanta Uva           Bottled Water:     Aguakina Schweppes** Canada Dry        Hi-C
Keloco*                               Manantial*                               Club Soda**
                  Bottled Water:      Club K*            Bottled Water:       Canada Dry
                  Crystal*            Soda Clausen*      Nevada                 Quinada**
                                      Santa Clara*                            Alpina*
                  Beer:                                  Other Products:
                  Kaiser**                               Malta Regional**     Other Products:
                  Kaiser Light**                         Nestea**             Powerade
                  Kaiser Bock**
                  Kaiser Gold**                          Beer:
                  Kaiser Summer Draft**                  Regional**
                  Heineken**
</TABLE>

[FN]
-----------------------
Unless otherwise indicated, products are proprietary to The Coca-Cola Company.

* Proprietary to Panamco
** Products licensed from third parties
</FN>


The  following  chart shows the  allocation of our net sales during 1999 among
the products described above:

[GRAPHIC OMITTED]


                                      7

<PAGE>


     The estimated  company annual per capita  consumption  for 1997, 1998 and
1999 for our soft drinks in each of our franchise territories is as follows:

<TABLE>
<CAPTION>
                     Panamco  Panamco   Panamco    Panamco     Panamco     Panamco     Panamco
                     Mexico    Brasil  Colombia   Venezuela  Costa Rica   Nicaragua   Guatemala
<S>                  <C>      <C>       <C>        <C>         <C>         <C>          <C>
1997..............    305.7    216.9     117.4      216.5       174.3        95.6        65.5
1998..............    340.4    213.5     113.0      202.3       186.6       112.1        79.2
1999..............    349.1    214.3      91.4      153.6       180.8       112.0        87.0
</TABLE>

[FN]
----------
Source: We have compiled the share of sales information contained herein based
upon several sources.  To determine the portion of a given market  represented
by our sales, we utilize, in certain instances, data supplied by A.C. Nielsen,
The Coca-Cola Company and other third-party  sources. In certain  territories,
we also  periodically  conduct our own surveys by sampling  retail  customers'
weekly purchases and inventory levels.  The methodologies of different surveys
are not identical and referenced  competitors'  franchise areas do not exactly
correspond to ours. Although  management believes the information  obtained in
this fashion is reliable,  we make no representation  or warranty,  express or
implied,  as to the accuracy or  completeness of the industry sales share data
and volume data, or per capita consumption data contained herein.
</FN>


                                      8


<PAGE>


     The  following  table shows our net sales in  thousands of dollars and by
percentage  of total  net  sales by  territory  and  product  for the  periods
indicated:

<TABLE>
<CAPTION>
                                                1997                      1998                      1999
                                               ------                    ------                    -----

                                         Total     Percentage     Total      Percentage     Total        Percentage
                                          Net       of Total       Net        of Total       Net          of Total
                                       Sales (1)    Net Sales    Sales (1)    Net Sales    Sales (1)      Net Sales
                                      -----------  -----------  ----------   -----------  -----------    ----------
<S>                                   <C>             <C>      <C>              <C>         <C>             <C>
Panamco Mexico
 Total products of The Coca-Cola
    Company .......................   $  511,438       20.4%   $  586,964        21.2%      $721,269         29.8%
 Total other soft drinks...........        3,029        0.1         4,306         0.1          7,482          0.3%
 Total bottled water...............       32,305        1.3        47,211         1.7         68,350          2.8%
                                      ----------      -----      --------       -----       --------        ------
    Total Panamco Mexico...........      546,772       21.8       638,481        23.0        797,101         32.9%

Panamco Brasil(2)
   Total products of The Coca-Cola
      Company .....................      644,891       25.7       653,738        23.6        389,446         16.1%
   Total bottled water.............       14,795        0.6        19,050         0.7         14,715          0.6%
   Total beer......................      309,408       12.3       225,163         8.1         96,519          4.0%
                                      ----------      -----      --------       -----       --------        ------
      Total Panamco Brasil.........      969,094       38.6       897,951        32.4        500,680         20.7%

Panamco Colombia
   Total products of The Coca-Cola
      Company .....................      460,899       18.4       422,075        15.2         337,333        13.9%
   Total other soft drinks.........       33,717        1.3        31,763         1.1          26,224         1.1%
   Total bottled water.............       43,371        1.7        41,974         1.5          33,457         1.4%
                                      ----------      -----      --------       -----       ---------       ------
      Total Panamco Colombia.......      537,987       21.4       495,812        17.8         397,014        16.4%

Panamco Venezuela(3)
   Total products of The Coca-Cola
      Company......................      338,781       13.5       536,322        19.3         493,671        20.4%
   Total other soft drinks.........       10,738        0.4        14,355         0.5          16,054         0.7%
   Total beer......................           --         --            --          --           2,570         0.1%
                                      ----------      -----      --------       -----       ---------       ------
      Total Panamco Venezuela......      349,519       13.9       550,677        19.8         512,295        21.2%

Panamco Central America(4)
   Total products of The Coca-Cola
      Company .....................       92,943        3.7       173,672         6.3        193,104          8.0%
   Total other soft drinks.........        9,314        0.4        10,183         0.4         10,573          0.5%
   Total bottled water.............        4,581        0.2         6,500         0.2          8,399          0.3%
                                      ----------      -----      --------       -----      ---------        ------
      Total Panamco
        Central America............      106,838        4.3       190,355         6.9        212,076          8.8%


Total consolidated net sales.......   $2,510,210      100.0%   $2,773,276       100.0%    $2,419,166        100.0%
                                      ==========      =====    ==========       =====     ==========        ======

</TABLE>

[FN]
---------

(1)  Net sales are reflected in U.S. dollars translated at the average
     official rates of exchange during the periods shown.
(2)  Data for 1998 includes four months of operations of R.O.S.A.
(3)  Data for 1997 includes eight months of operations of Panamco Venezuela.
(4)  Data for 1997 includes only net sales of Panamco Costa Rica and five
     months of operations of Panamco Nicaragua. Data for 1998 includes net
     sales of Panamco Costa Rica and Panamco Nicaragua and nine months of
     operations of Panamco Guatemala.
</FN>


                                      9

<PAGE>


Packaging

     A majority of our sales are made in returnable glass or plastic bottles.
Recently, we have increased the distribution of nonreturnable presentations,
particularly in Mexico and Brazil. In 1999, 51.9% of our products were
packaged in non-returnable presentations compared to 44.6% in 1998. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". Our beverages are available in returnable presentations in
different package types including returnable PET bottles and glass bottles.
Our nonreturnable presentations include cans, non-returnable glass and plastic
bottles and plastic bags.

Soft Drink Sales Share

     Soft drink sales  represented  88.1% of our total 1999 sales.  Soft drink
products are classified as either colas or other flavored soft drinks.  Of our
total soft drink sales in 1999,  the cola  segment  represented  approximately
69.1% of our total soft drink sales.

     We are a  market  leader  in all our  franchise  territories  in the cola
segment. We also hold a strong share of sales in soft drinks, as shown below:

<TABLE>
<CAPTION>
                                       Estimated Sales Share

                         Panamco  Panamco   Panamco  Panamco   Panamco     Panamco    Panamco
                          Mexico   Brasil  Colombia  Venezuela Costa Rica Nicaragua  Guatemala
<S>                       <C>      <C>       <C>      <C>      <C>         <C>       <C>
Colas
   1997................   82.6%    91.2%     86.7%    77.1%    91.9%       80.1%      --
   1998................   88.5%    90.7%     85.5%    65.4%    90.7%       82.3%      48.4%
   1999................   89.5%    89.4%     90.5%    67.8%    94.5%       84.3%      49.1%
Flavored Soft Drinks
   1997................   47.9%    31.2%     34.4%    89.2%    87.9%       65.2%      --
   1998................   52.5%    27.9%     33.6%    84.2%    83.7%       76.8%      21.3%
   1999................   57.4%    36.0%     40.0%    74.2%    91.2%       84.3%      26.5%
Total Soft Drinks
   1997................   72.6%    56.5%     62.3%    82.1%    90.4%       75.4%      --
   1998................   78.0%    54.3%     61.2%    73.0%    87.9%       80.8%      40.9%
   1999................   80.2%    57.4%     66.7%    70.3%    93.3%       84.3%      43.1%
</TABLE>

[FN]
----------
Source: We have compiled the share of sales information contained herein based
upon several sources.  To determine the portion of a given market  represented
by our sales, we utilize, in certain instances, data supplied by A.C. Nielsen,
The Coca-Cola Company and other third-party  sources. In certain  territories,
we also  periodically  conduct our own surveys by sampling  retail  customers'
weekly purchases and inventory levels.  The methodologies of different surveys
are not identical and referenced  competitors'  franchise areas do not exactly
correspond to ours. Although  management believes the information  obtained in
this fashion is reliable,  we make no representation  or warranty,  express or
implied,  as to the accuracy or  completeness of the industry sales share data
and volume data, or per capita consumption data contained herein.
</FN>

     Data for each year are an  average  of  measurements  taken each month in
Mexico and every two months in all other countries.

Sales, Distribution and Marketing

Sales

     By selling our  beverage  products  directly to  approximately  1,040,350
points of sale,  we  believe  we have one of the  largest  operations  for the
distribution  of  consumer  goods  in  Latin  America.   This  network  serves
traditional small stores (including small grocery stores,  kiosks and roadside
stands),   supermarkets,    restaurants,   bars,   schools,   businesses   and
distributors,  with a total of 183,600  points of sale in  Mexico,  158,000 in
Brazil,  390,600 in  Colombia,  195,900 in  Venezuela,  36,100 in Costa  Rica,
37,250 in Nicaragua and 38,900 in Guatemala as of December 31, 1999. The mix


                                      10


<PAGE>


of sales to these  particular  types of  outlets  varies by  country  and is a
function of the  economics,  demographics  and other  characteristics  of each
franchise area.

     The following  table sets forth our sales volume as a percentage of total
sales volume of on- and  off-premises  consumption  in each  country  where we
operate for the end of 1999.

                     1999 Percentage
                       of Total
                     Sales Volume

Panamco Mexico
   Off-premises sales.............           85.7%
   On premises sales..............           14.3%
      Total Panamco Mexico........          100.0%

Panamco Brasil
   Off-premises sales.............           75.8%
   On premises sales..............           24.2%
      Total Panamco Brasil........          100.0%

Panamco Colombia
   Off-premises sales.............           66.5%
   On premises sales..............           33.5%
      Total Panamco Colombia......          100.0%

Panamco Venezuela
   Off-premises sales.............           59.1%
   On premises sales..............           40.9%
      Total Panamco Venezuela.....          100.0%

Panamco Costa Rica
   Off-premises sales.............           61.6%
   On premises sales..............           38.4%
      Total Panamco Costa Rica....          100.0%

Panamco Nicaragua
   Off-premises sales.............           89.0%
   On premises sales..............           11.0%
      Total Panamco Nicaragua.....          100.0%

Panamco Guatemala
   Off-premises sales.............           78.5%
   On premises sales..............           21.5%
      Total Panamco Guatemala.....          100.0%


     Most of our sales are made to four types of outlets:  Mom and Pop stores,
supermarkets,  restaurants  and bars as well as schools and  offices.  At such
outlets we generally  sell soft drinks,  bottled water and beer (in Brazil and
the  northeast  of  Venezuela)   for  either   on-premises   or   off-premises
consumption.  A majority of the products we sell are sold through  traditional
small  stores,  supermarkets  or  other  types  of  outlets  for  off-premises
consumption.  Products we sell for on-site  consumption at  traditional  small
stores,  restaurants,  bars, fast food outlets and similar locations represent
the balance of our sales volume.

     Consumers  typically  prefer  soft  drinks  served  cold for  on-premises
consumption.  In certain cases,  particularly in Mexico,  consumers  prefer to
purchase cold soft drinks for  off-premises  consumption as well. As described
below,  in each of our  franchise  territories  we have  programs to place our
beverage coolers,  post-mix  dispensers and vending machines at points of sale
for our products to make chilled products  available to the consumer.  We loan
or sell  and  provide  financing  for  such  merchandising  equipment.  Loaned
equipment must be used exclusively for Panamco products.


                                      11


<PAGE>


     In addition to bottled presentations, we sell soft drinks in both pre-mix
and post-mix  form.  Soft drinks sold in pre-mix form consist of syrup for use
in dispensers at retail outlets that add carbonated water. Soft drinks sold in
post-mix form consist of the final  carbonated  product in stainless steel and
other pressurized canisters for use in dispensers at retail outlets.

     While most sales are on a cash basis,  sales to certain customers such as
major  supermarkets,  fast food restaurants and convenience store chains,  are
made on a credit  basis  with  terms  generally  of 40 days on a  consolidated
basis.  Credit  sales  represented  25.4% and 20.1% of total sales in 1998 and
1999,  respectively.  Credit  sales are most  significant  in Brazil and Costa
Rica, where they represented 50.0% and 33.0%,  respectively,  of 1999 sales in
each country.

Distribution

     We have  developed  extensive  product  delivery and container  retrieval
systems to maintain  sales  levels at each of our points of sale.  By actively
managing our distribution  routes,  we seek to ensure that deliveries are made
when our clients  (retailers)  have the space and funds  available to purchase
our beverage products.  Distribution is also critical in Latin America because
the majority of soft drink  products are sold in returnable  bottles.  We must
regularly collect empty bottles from retailers and return them to our bottling
plants.  Primarily  distribution  is  carried  out  by  our  employees  and is
supplemented by a network of independent distributors.

     We have located and designed our production and  distribution  facilities
based upon  local  factors  including  population  concentration,  topography,
quality  of roads  and  availability  and  efficiency  of  communications.  In
territories  with large,  industrial  cities,  such as greater  Sao Paulo,  we
operate a smaller  number of large  distribution  centers and often  integrate
distribution and bottling  capabilities at the same facility.  In rural areas,
such as most of  Colombia  and  Venezuela  and parts of  Mexico,  Costa  Rica,
Nicaragua and Guatemala,  we use a larger number of small bottling  plants and
warehouses.

     We use two principal  delivery methods  depending upon local  conditions:
the traditional route truck system and the pre-sell method. In Mexico, most of
Colombia,  Venezuela and Nicaragua,  the route truck system is widely used, in
which  salesmen  drive  delivery  trucks on  pre-established  routes  and make
immediate sales from inventory  available on the route truck. For all sales in
Brazil,  most of  Costa  Rica  and in  certain  cities  in  Colombia,  Mexico,
Guatemala and Venezuela,  we utilize the pre-sell system,  in which a separate
staff of salesmen  obtains orders from customers prior to the time of delivery
by route trucks.  Use of the pre-sell  system  enables us to utilize our route
trucks more  efficiently,  delivering all of their freight capacity and at the
same  time  providing  us  real  time   information   about  the  product  and
presentation  needs of our clients.  The traditional system maximizes sales to
customers with less  sophisticated cash management  systems.  We also employ a
system of  bicycles,  carts and small  trucks for  smaller  clients to provide
flexible and fast deliveries within urban areas.

     In order to more  effectively  respond to the needs of our clients and to
help us better manage our  inventories  we have  computer  systems in place in
each of our franchise territories.  We have also equipped our sales force with
handheld  computers to provide us with real time information about the product
and presentation needs of our clients.

Marketing

     Market  segmentation  has  given  rise  to  preferences  on the  part  of
consumers for a variety of presentations.  Income level, substitutes,  pricing
and any other factors affect consumer  preferences.  In all our territories we
attempt to adapt our product presentations and distribution to each market and
to the individual clients and consumers within our territories in terms of the
space available for product display,  point-of-sale material,  advertising and
delivery methods. In order to maximize sales and per capita consumption of our
products,  we continually  examine sales data in an effort to develop a mix of
product presentations that will best satisfy consumers and provide our clients
with the most  effective  product  mix. We also employ a variety of  marketing
techniques  in each of our  franchise  territories  to  increase  our share of
sales, penetration and per capita consumption. The major programs and policies
in place at each of our subsidiaries are described below.


                                      12


<PAGE>


     Mexico

     During  1999,   Panamco  Mexico  continued  its  cold  product  equipment
placement  program.  At December 31, 1999, there were approximately 84.4 units
for every  10,000  people  within our  franchise  territory.  Panamco  Mexico,
through  its  merchandizing  club,  provides  training  to its  clients on its
merchandizing  standards  and  display  methods  to ensure  that our  products
receive the best and most appropriate presentation.

     Panamco  Mexico has continued  the roll-out of its "100 Meters  Program",
which focuses on nontraditional,  immediate  consumption  channels.  Since the
initiation of the program in 1996,  Panamco  Mexico has increased its share of
sales by 10.2 basis points and has expanded its client base in urban  centers.
Per  capita  consumption  has  increased  20.3%.  As part of the  "100  Meters
Program", Panamco Mexico created a number of parallel programs,  including the
"Restaurant"  plan, the "School" plan and the "Liquor Stores" plan.  Under the
Restaurant plan,  Panamco Mexico has been placing fountain  equipment in local
traditional  and fast-food  restaurants.  This gives our  consumers  immediate
access to our products.  Under the School plan,  Panamco  Mexico  provides our
products to young  consumers in the schools  creating  brand  preference at an
early age with innovative packaging. The Liquor Stores plan takes advantage of
the popularity of grapefruit-flavored soft drinks in the liquor stores segment
with strong  merchandising  and alluring  point-of-sale  material  designed to
create preference for the Fresca brand.

     Panamco Mexico continues to develop its marketing  through  "fondas",  or
traditional Mexican small family-run restaurants, by placing coolers, fountain
equipment and tailored point-of-sale  materials--menu  boards, napkin holders,
place  mats  and wall  mosaics--with  The  Coca-Cola  Company  logo to  entice
consumers to drink Coca-Cola soft drinks with their meals.

     In order to increase  volume and  perception  of value among  clients and
consumers, Panamco Mexico selectively provides particular brands, packages and
sizes and applies  tailored  pricing  tactics in each of its channels based on
the  preferences  of the consumers in the area.  Panamco  Mexico also sponsors
trade consumer promotions, such as the "Hielocos", "the Novelty Catalogue" and
the "Christmas Campaign" during 1999.

     To maintain the quality of its  distribution  system  reliability  of its
deliveries,  Panamco  Mexico  continues  to  modernize  its vehicle  fleet and
optimize delivery routes.

     Brazil

     In Brazil our marketing efforts were primarily focused on our "Coolers in
the Market" program and the installation of new coolers,  vending machines and
post-mix  fountains.  The number of units of cold product equipment we have in
the Brazilian  market are 35.0 units per 10,000  inhabitants  in our franchise
territory.

     As part of our "100  Meters  Program"  in  Brazil we have  developed  the
"At-Hand  Consumption"  and  "Closed  Market"  programs to  stimulate  impulse
consumption by maximizing  the  availability  of our cold products  everywhere
people gather. In accordance with these programs; Panamco Brasil is developing
new outlets and equipping them with the  appropriate  cold product  equipment,
point-of-sale  material and products to maximize  sales.  The "Closed  Market"
program  focuses  on  certain  "closed"  markets  such as  schools,  clubs and
factories.

     Panamco  Brasil   developed  the  "Anchor  Client"  program  designed  to
establish a baseline group of clients to define new pricing standards for each
of our  products  and  influence  neighboring  outlets  in terms of prices and
merchandising.  This  program,  targeted  to  traditional  channels,  involves
installing  display  equipment  and  point-of-sale  material,  and  conducting
extensive training on the correct presentation of products,  optimum placement
of display equipment, and maintenance of merchandising materials.

     During 1999 a special program  designed to get closer to the consumer was
put in place.  The program was a promotional  pricing strategy that alternated
prices of our products every two weeks depending on the channels or on


                                      13


<PAGE>


the product (colas or flavors) for our 2 liter pet  presentation.  The program
was successfully received by the consumer,  increasing our share of soft drink
sales in 5.2 points to 57.4%.

     Colombia

     To ensure both traditional and nontraditional outlets are able to provide
cold,  ready-to-drink  products,  Panamco Colombia  continues its cold product
equipment placement program. During 1999, Panamco Colombia installed more than
20,000 cold  product  units,  increasing  units in the market by almost 10% to
50.2% per 10,000  inhabitants  in our franchise  territory.  Panamco  Colombia
currently  provides  cold  products in 48% of its  outlets  compared to 46% in
1998.

     As a result  of our cold  equipment  strategy,  our  different  marketing
promotions  such as "Momentos  Coca-Cola"  or the Sprite NBA,  paired with the
launching  of two new  products  Coca-Cola  Light  and Lift (an  apple  flavor
product) our share of sales  increased to a new record of 66.7% an increase of
5.3 points.

     In  addition  to  our  marketing   programs,   Panamco   Colombia  has  a
distribution  strategy called the "Mini-Bodegas"  (small shopkeepers) program,
designed to supply our  products to  hard-to-reach  areas  without  increasing
distribution  costs.  Through  this  program,   Panamco  Colombia  distributes
products  to small  shopkeepers  who,  in turn,  deliver  products to crowded,
hard-to-reach neighborhoods.

     Panamco Colombia's "At-Hand  Consumption"  program  strategically  places
ambulatory vendors carrying cold Coca-Cola products everywhere people gather.

     The "School"  program is geared  towards  creating  brand  preference and
increased purchases in schools through innovative packaging and presentations.

     Panamco  Colombia  also trains its clients on how to use and maintain our
merchandizing  materials to increase  product sales.  To ensure  merchandizing
quality representatives of Panamco Colombia's sales force regularly visit with
clients and evaluate the effectiveness of their merchandising efforts.

     To maximize the efficiency of its distribution network,  Panamco Colombia
continues  to refine its  distribution  strategy by  increasing  the number of
presell and auto-sale  clients and by  significantly  increasing  distribution
through small  shopkeepers.  These  measures have reduced the number of trucks
needed  for each  route  and  improved  client  satisfaction  as well as truck
utilization.  Panamco Colombia also implemented a new plant design that allows
trucks to be unloaded and  reloaded  30% more rapidly than before,  permitting
more clients to be reached every day.

     Venezuela

     As one of our newer  subsidiaries,  Panamco Venezuela  continues to focus
its   efforts   on    developing    high-volume    clients   in    traditional
channels--supermarkets,   grocery  stores,  liquor  stores,  bakeries--through
improved merchandising. Panamco Venezuela provides continuous support to these
clients to ensure our products are given the largest  spaces,  best  positions
and appropriate point-of-sale material.

     During 1999, Panamco Venezuela  continued  equipping its existing outlets
with  appropriate cold product  equipment,  increasing the aggregate number of
units of cold  product  equipment  in the market by 18.9% to almost 69.1 units
per 10,000 inhabitants in the franchise territory. Marketing activities during
the year included targeted local  advertising,  consumer and trade promotions,
and alluring  events.  At December 31, 1999, the Coca-Cola brand led competing
brands by 15 percentage points.

     We continue our programs to develop  high-volume  clients in  traditional
channels, and to equip retailers with cold product equipment. During the year,
we installed  26,000 new cold product  units,  increasing  our coverage of the
market  from less than 60 units per  10,000  inhabitants  to over 68 units per
10,000 inhabitants.


                                      14


<PAGE>


     Our program to segment various  in-country markets led to the development
of a more focused  geographic  regional  targeting  program and  allocation of
resources,  as  well  as the  expansion  of new  nontraditional  channels.  In
Venezuela,  80% of the population is concentrated  in the lower  socioeconomic
strata,  and most of the  population  lives in the  neighborhoods  surrounding
urban areas. During the year, we developed new channels and increased our cold
product   availability  in,  as  well  as  improved   distribution  to,  these
neighborhoods.  As a result, sales to these areas increased significantly.  We
also began to service new neighborhoods.

     We look forward to continuing to further  refine our Venezuela  strategy,
as we believe significant opportunities remain in that country.

     Central America

     We  continue  the  rollout  of our core  initiatives  to boost per capita
consumption in Central America.  Efforts to bring Coca-Cola products closer to
the consumer  included  the  introduction  of the "100 Meters  Program" to the
Guatemalan  market  and its  expanded  rollout  to all areas of Costa Rica and
Nicaragua.

     We continue to focus on increasing take-home  consumption by implementing
initiatives to boost sales in mini markets and small grocery stores (the "Mini
Market"  project),  and continue our  development of high-volume  clients.  In
order to  increase  sales in these  channels,  we provide  consumer  and trade
promotions with aggressive pricing on selected presentations.

     We support these  initiatives with aggressive  strategic cooler placement
and merchandising.  We have also been making a concerted effort to upgrade the
presentation  of our  products in all  establishments,  both  traditional  and
nontraditional,   by  instituting  company-wide  merchandising  standards  and
supplying outlets with the appropriate equipment and point-of-sale materials.

     In response to the continued  shift toward  nonreturnable  presentations,
Panamco Central America  launched a number of new  presentations,  including a
1.5 liter non returnable  presentation in Guatemala and Nicaragua and a 600 ml
presentation in Costa Rica. As a result of our programs in Central America our
market  share  has  increased  by 6.2  percentage  points in Costa  Rica,  2.5
percentage points in Nicaragua and 1.0 percentage point in Guatemala.

     With the view of increasing  the  efficiency of our  distribution  in the
region and  improving  service to  clients,  we began  servicing  new  routes,
introduced mini-warehouses and upgraded the vehicle fleet.

Raw Materials and Supplies

     Soft drinks are produced by mixing water,  concentrate and sweetener.  We
process the water we use in our soft  drinks to  eliminate  mineral  salts and
disinfect  it  with  chlorine.  We then  filter  it to  eliminate  impurities,
chlorine  taste,  trace metals and odors.  We combine the purified  water with
processed sugar or high fructose (or artificial sweeteners in the case of diet
soft drinks) and concentrate.  To produce carbonation we inject carbon dioxide
gas into the mixture. Immediately following carbonation, we bottle the mixture
in pre-washed  labeled  bottles.  We maintain a quality control  laboratory at
each  production  facility where we test raw materials and analyze  samples of
soft drink  products.  All our sources of supply for raw materials are subject
to the approval of The Coca-Cola Company.

     Concentrates. We purchase concentrates from The Coca-Cola Company for all
Coca-Cola products, as well as from other sources for our other products.

     Water and sugar. We obtain water from various sources, including springs,
wells,  rivers and municipal  water systems.  Sugar is plentiful in all of our
territories  as each of  Mexico,  Brazil,  Colombia,  Costa  Rica,  Venezuela,
Nicaragua and Guatemala is a producer of sugar.  We purchase our  requirements
from various suppliers in each country.


                                      15


<PAGE>


     Carbon  dioxide.  We  purchase  all of our  supply of carbon  dioxide  in
Colombia,  Costa Rica and  Venezuela  and most of our  supply for Brazil  (the
balance being produced at our bottling plant in Brazil) from Praxair.  Panamco
Mexico  purchases  its  supply  of  carbon  dioxide  gas from two of the three
suppliers in Mexico.  Panamco Nicaragua and Panamco  Guatemala  purchase their
supply of carbon  dioxide  from  Carbox,  a  supplier  located  in  Guatemala.
Alternate suppliers are available in all the countries where we operate.

     Bottles,  caps and other packaging  materials.  We usually purchase glass
bottles, plastic soft drink containers,  plastic bottle caps, cans and general
packaging  materials  locally in each  country  from  various  suppliers.  Our
supplies of plastic bottles in all of our  territories  are generally  sourced
from single  suppliers of such  bottles in each  country,  although  there are
alternative  suppliers.  Panamco  Colombia has  facilities  to produce a small
portion of its own disposable plastic bottles and owns 20% of Comptec, S.A., a
joint  venture with a  subsidiary  of The  Coca-Cola  Company and other Andean
bottlers formed to produce returnable and disposable plastic bottles.  Panamco
Costa Rica owns a plastics business, which supplies plastic bottles for all of
Panamco Costa Rica's  requirements  and to other customers in Central America,
including Panamco Nicaragua and Panamco Guatemala.

     We  purchase  metal  bottle  caps  primarily  from  the  Zapata  group of
companies, which have manufacturing facilities in Mexico, Brazil and Colombia.
One of the  companies in the Zapata group owns 60%, and Panamco  Colombia owns
40%, of Tapon Corona,  S.A., a Colombian company that manufactures bottle caps
for Panamco  Colombia,  Panamco  Venezuela and other  customers.  Panamco Cost
Rica, Panamco Nicaragua and Panamco Guatemala  currently purchase their bottle
caps from H.C. Industries, a third-party supplier.

     We have  facilities  in Mexico,  Brazil,  Colombia and Costa Rica,  which
produce plastic cases for carrying bottles.  The Costa Rican facility supplies
Panamco  Nicaragua  and Panamco  Guatemala.  Plastic is  purchased  locally or
imported when necessary.  Plastic cases in Venezuela are purchased mainly from
Gaveras Plasticas Venezolanas, C.A. Other local suppliers are also available.

     In  addition  to its  bottling  operations,  Panamco  Brasil also has the
capacity to produce  cans for canned  soft drinks at its Jundiai  plant and to
produce  plastic  bottles at its  bottling  facility  in Matto  Grosso do Sul.
Panamco Mexico owns approximately 14.9% of Industria  Envasadora de Queretaro,
S.A. de C.V., a canning  cooperative  for products of The Coca Cola Company in
Mexico.  Panamco  Colombia  has the  capacity to produce  cans for canned soft
drinks at one of its Bogota plants, but currently imports cans because of cost
advantages. Panamco Venezuela has the capacity to produce cans for canned soft
drinks at three of its plants.  Panamco  Central America imports cans from The
Coca-Cola Company bottler in El Salvador, EMBOSALVA S.A.

     Other.  Many of the raw  materials  and supplies  used in  Venezuela  are
purchased from companies owned by members of the Cisneros  family,  the former
owners of Panamco Venezuela.  We believe the terms of such arrangements are no
less favorable to us than those that could be obtained from independent  third
parties.

     Panamco Colombia has its own facilities to manufacture  post- and pre-mix
dispensers (for on-premises preparation of soft drinks).  Panamco Colombia has
expanded this operation to manufacture its own beverage coolers, which it also
sells to our other operating subsidiaries.  In 1999, Panamco Colombia acquired
a minority  interest in Ingenio San Carlos,  a Colombian  sugar  producer.  In
connection  with  this  acquisition,  Panamco  Colombia  has  entered  into  a
long-term supply agreement with Ingenio San Carlos for sugar.

     Panamco  Mexico  and  Panamco  Cost Rica  manufacture  their own  racking
systems for their route trucks and freight vehicles.

Production

     Our subsidiaries own and operate a total of 48 bottling plants, with 10
in Mexico, three in Brazil, 18 in Colombia, one in Costa Rica, 14 in
Venezuela, 1 in Nicaragua and one in Guatemala. The totals include two plants
in Mexico, one plant in Brazil and one in Colombia, which we use exclusively
to bottle mineral water at the source. The plants have


                                      16


<PAGE>


over 158  bottling  lines  with an  installed  capacity  of over  880  million
physical cases a year  (assuming 400 production  hours per month for 11 months
per year,  with one month  reserved  for  maintenance).  In order to  increase
production  efficiency  and reduce costs we have  implemented  cost  reduction
plans at all of our subsidiaries.

     As part  of  Panamco  Mexico's  initiatives  to  reduce  costs,  increase
efficiency and maximize product quality,  in 1998 Panamco Mexico  instituted a
program of continuous audits designed to ensure that  manufacturing  equipment
and systems, as well as human capital, performed to the highest standards.

     Panamco  Brasil's  Jundiai  plant  is the  largest  and  one of the  most
sophisticated  manufacturing  complexes in The Coca-Cola  Company system.  Our
Jundiai plant has annual production capacity of 250 million unit cases and has
obtained  ISO  9002 and  14001  certificates  for  quality,  productivity  and
environmental safety.

Competition

     The beverage business in our franchise territories is highly competitive.
Our  principal  competitors  are  bottlers of Pepsi  products and bottlers and
distributors of nationally and regionally advertised and marketed soft drinks.
Our principal  competitions in each of our franchise territories are set forth
below.

Mexico

     Our principal competitors in Mexico are bottlers of Pepsi products, whose
territories  overlap, but do not precisely match ours. We compete with Geupec,
Group Regordosa and  Embotelladora  del Valle,  S.A. for share of sales in our
territories.

Brazil

     In Brazil our main competitors were Brahma and Antarctica,  both of which
were beer  bottlers  that offered  soft drinks as a  complement  to their beer
businesses.  Brahma is also the sole bottler of Pepsi in Brazil. In July 1999,
Brahma and Antarctica  announced a merger to form AmBev. In March 2000,  AmBev
received the necessary regulatory approval and assumed the bottling businesses
of both Brahma and Antarctica.  AmBev is our largest individual  competitor in
Brazil. We also compete with "tubainas",  which are small,  local,  lower cost
producers of flavored  soft drinks.  Tubainas are local shops that produce "no
frills" flavored soft drinks in 2-liter presentations for at home consumption.
They market their  products  primarily in  supermarkets.  Tubainas  have lower
overhead  and we believe  that they  often do not comply  with local tax laws,
which enables them to offer lower cost products.

Colombia

     In Colombia our  principal  competitor  is Postobon,  a  well-established
bottler of both nationally  advertised flavored soft drink products and Pepsi.
In response to the decision by Postobon to enter the beer market,  Bavaria,  a
large beer bottler,  entered the Colombian flavored soft drink market in 1994.
The owners of Postobon and Bavaria hold other significant commercial interests
in Colombia,  including  most of Colombia's  television and radio networks and
interests in manufacturers of glass bottles.

Venezuela

     The Venezuelan  Bottlers  until August 1996 were the authorized  bottling
companies of products of Pepsi in Venezuela.  In August of 1996 the Venezuelan
bottlers  entered into a bottling  agreement  with The  Coca-Cola  Company and
became their  authorized  bottler in Venezuela.  Subsequently,  on November 2,
1996, Pepsi granted the franchise for its territories in Venezuela to Sopresa,
a joint venture formed between Pepsi and Empresas Polar S.A., the leading beer
distributor in Venezuela. Sopresa is our principal competitor in Venezuela.


                                      17


<PAGE>


Central America

     Newport  Bottler  (Pepsi  bottler) is our  principal  competitor in Costa
Rica, and The Central  American  Bottling  Corporation  (Pepsi bottler) is our
principal competitor in Nicaragua and Guatemala.

     In addition to competition  from other soft drink  producers,  carbonated
soft drink products  compete with other major  commercial  beverages,  such as
coffee, tea, milk, beer and wine, as well as noncarbonated soft drinks, citrus
and noncitrus fruit juices and drinks and other beverages.

     Soft drink bottlers also compete for sales share through distribution and
availability  of  products,   pricing,  service  provided  to  retail  outlets
(including  merchandising  equipment,  maintenance  of bottle  inventories  at
appropriate levels and frequency of visits),  product packaging  presentations
and consumer promotions. In recent years, price discounting by our competitors
has been a means of  obtaining  sales  share in  Brazil,  Colombia  and,  more
recently, Venezuela. See "--Marketing" and "--Distribution".

     Our consumer promotions are guided primarily by The Coca-Cola Company and
take  the form of  contests,  television,  radio  and  billboard  advertising,
displays, merchandising and sampling.

Employees

     At December 31, 1999, we employed  approximately 30,700 people (including
temporary workers, but excluding independent distributors).  Approximately 35%
of our employees are members of labor unions, most of whom are in Mexico. Most
of the  employees in Colombia are covered by non-union  collective  bargaining
agreements.  The collective  bargaining agreements for both unionized and non-
unionized employees are negotiated separately for each bottling subsidiary, or
in some instances, for each plant. In Mexico, collective bargaining agreements
are renegotiated annually with respect to wages and biannually with respect to
benefits. In Colombia and Venezuela,  all collective bargaining agreements are
negotiated biannually.

     Panamco Mexico pays employees amounts usually equal to 10% of its taxable
income,  adjusted in accordance with local labor laws. The Mexican  government
also  requires  employers  to set  aside a  percentage  of  employee  wages in
retirement accounts. In addition,  both employers and employees in Mexico must
contribute  amounts to the national health care system and a workers'  housing
fund. In Colombia,  Brazil, Costa Rica and Nicaragua,  employers and employees
contribute to employee  retirement  accounts and to their national health care
systems.  A profit- sharing program has been implemented in Venezuela pursuant
to which  employees are entitled to receive an additional  payment equal to at
least  15  days'  wages  (but  not  more  than  four  months'  wages),  and  a
profit-sharing  program  was  established  in  Brazil in 1997.  In Mexico  and
Nicaragua,  employees are entitled to a mandatory Christmas bonus in an amount
equal to 15 days and one month's  salary,  respectively.  If an  employee  has
worked for a company less than one year, that  employee's  bonus is reduced in
proportion to the amount of time such employee was not employed. In Guatemala,
employees receive a mandatory bonus in the form of a three-month payment based
upon the salary paid during the preceding six months.

     We believe that our  relationship  with our  employees  is good.  We have
voluntarily  instituted  and  maintained  popular  benefits for our  employees
including housing loans.

     The labor laws in each of the seven countries in which we operate require
certain  severance  payments upon involuntary  termination of employment.  See
"Item 3.--Legal Proceedings".

Franchise Arrangements

     We have the right to sell The Coca-Cola Company's products, certain other
soft drinks and certain  bottled water products  pursuant to bottling or other
similar agreements described below.


                                      18


<PAGE>


     The  Coca-Cola  Company's   Products.   The  Coca-Cola  Company  (or  its
subsidiaries)  has entered into exclusive  bottling  agreements (the "Bottling
Agreements")  with each of our bottling  subsidiaries  (the  "Bottlers").  The
Bottling  Agreements  expire on various  dates.  In 1995, we and The Coca-Cola
Company agreed that all bottling  agreements of our Mexican  subsidiaries will
have a uniform term ending in 2005,  renewable for additional  ten-year terms.
In 1999,  The Coca-Cola  Company  entered into a bottling  agreement  with our
Colombian  subsidiary  for  a  five-year  term.  In  general,  the  Brazilian,
Venezuelan,   Nicaraguan,  Costa  Rican  and  Guatemalan  agreements  are  for
five-year terms, renewable for additional five-year terms.

     The  Bottling   Agreements   regulate  the   preparation,   bottling  and
distribution of beverages in the applicable franchise territory.  The Bottling
Agreements  authorize the Bottlers to use the concentrates  purchased from The
Coca-Cola Company to bottle,  distribute and sell a variety of beverages under
certain brand names and in certain approved  presentations  and to utilize the
trademarks of The Coca-Cola Company to promote such products.

     The  Coca-Cola  Company  reserves  the right to market  independently  or
license post-mix products, although we believe that The Coca-Cola Company will
not exercise these rights as long as we  aggressively  pursue the marketing of
their products in our territories.  The Bottlers must purchase the concentrate
from The  Coca-Cola  Company and follow The Coca-Cola  Company's  exact mixing
instructions.  Each Bottler may purchase only the  quantities of  concentrates
required in  connection  with its business and must use them  exclusively  for
preparation  of the beverages and for no other  purpose.  The Bottlers may not
sell concentrate to third parties without The Coca-Cola Company's consent.

     In the event of a problem with the quality of a beverage,  The  Coca-Cola
Company may require the Bottler to take all necessary measures to withdraw the
beverage from the market. The Coca-Cola Company must also approve the types of
container  used in bottling  and  controls  the design and  decoration  of the
bottles,  boxes, cartons,  stamps and other materials used in production.  The
agreements grant The Coca-Cola Company the right to inspect the products.

     The prices The Coca-Cola Company may charge us for concentrates are fixed
by The Coca-Cola  Company from time to time at its  discretion.  The Coca-Cola
Company  currently  charges us a percentage of the weighted average  wholesale
price  (net of  taxes)  of each  case  sold to  retailers  within  each of our
franchise territory.  At present, we make payments to The Coca-Cola Company in
U.S.  dollars for  purchases of  concentrates  by Panamco  Venezuela,  Panamco
Nicaragua,  Panamco  Colombia  and  Panamco  Guatemala.  Purchases  by Panamco
Mexico,  Panamco Brasil and Panamco Cost Rica are made in local  currency.  We
pay no additional compensation to The Coca-Cola Company under the licenses for
the use of the associated  trade names and  trademarks.  Subject to local law,
The  Coca-Cola  Company  has the  right to limit the  wholesale  prices of The
Coca-Cola Company's products.

     As it has in the past,  The  Coca-Cola  Company  may, in its  discretion,
contribute to our advertising and marketing  expenditures as well as undertake
independent  advertising  and market  activities.  The  Coca-Cola  Company has
routinely  established annual budgets with us for cooperative  advertising and
promotion programs.

     The  Bottling  Agreements  require  the  Bottlers  to  maintain  adequate
production and distribution  facilities,  quality control  standards and sound
financial  capacity and to meet certain reporting  requirements.  The Bottling
Agreements  also  prohibit  the  Bottlers  from   distributing  The  Coca-Cola
Company's products outside their territories and from producing any other cola
beverages.  In  addition,  the  Bottling  Agreements  require us to obtain The
Coca-Cola  Company's  approval  before  we can  produce  or  distribute  other
nonalcoholic beverages.

     The  Bottlers  may  not  assign,   transfer  or  pledge  their   Bottling
Agreements, or any interest therein, whether voluntarily,  involuntarily or by
operation  of  law,  without  the  prior  consent  of The  Coca-Cola  Company.
Moreover, the Bottlers may not enter into any contract or other arrangement to
manage or participate in the management of any other bottler without the prior
consent of The Coca-Cola  Company.  In addition,  we may not sell or otherwise
transfer ownership of any of the Bottlers.


                                      19


<PAGE>


     Either party may terminate a Bottling Agreement in the event of a breach
by the other party which remains uncured after 60 days. If a Bottler fails to
comply with its obligations, The Coca-Cola Company may prohibit the production
of The Coca-Cola Company's products until such noncompliance is corrected.

     Other Brands. The Bottlers in Colombia and Costa Rica have agreements
with companies other than The Coca-Cola Company for the sale of locally
recognized soft drink products and mineral water. These agreements contain
provisions governing the production, marketing and sale of the beverages that
are, in most instances, less stringent than the requirements contained in the
Bottling Agreements discussed above. Panamco Cost Rica also has the Canada Dry
franchise from a subsidiary of Cadbury Schweppes PLC for all of Costa Rica.
Panamco Venezuela has an agreement for the sale and distribution of Schweppes
soda and tonic water in Venezuela.

Government Regulation

     Controls on Pricing and Promotions. Although there are none currently in
effect, in the last ten years the governments of Mexico, Brazil and Colombia
have imposed formal price controls on soft drinks. Currently in Mexico and
Colombia, for soft drinks as well as for other goods, price increases proposed
by manufacturers are subject to the informal approval of the respective
government. Until recently, the Mexican government also limited the types of
presentations for soft drinks. In Brazil, the government is recommending that
manufacturers maintain price levels in line with a trailing four-month average
of their historic price increases. Each of the governments of the countries in
which we operate regulates some of our promotional activities such as cash
prize contests.

     Environmental Regulation. We spent $9 million in 1998 on plant upgrades
designed to meet environmental objectives. In 1999 we spent $12 million for
such purposes. See "Item 9.--Management's Discussion and Analysis of Financial
Condition and Results of Operations--Capital Expenditures". We must comply
with local permit requirements for constructing and expanding facilities,
drilling wells, drawing water from rivers and discharging effluent.

     Intellectual Property. The intellectual property laws of the countries in
which we operate require a proprietary owner of trademarks used in the
operation of franchises in the countries to make certain filings with the
government to protect the trademark. We have made all necessary filings to
protect our proprietary trademarks. To the best of our knowledge, The
Coca-Cola Company and the owners of the other trademarks we use have made the
necessary filings to protect their respective trademarks.

     See also "Item  6.--Exchange  Controls  and Other  Limitations  Affecting
Security Holders".

Political, Economic and Social Conditions in Latin America

     In addition to the governmental regulations that have been imposed on our
operations, the Latin American markets in which we operate are characterized
by volatile, and frequently unfavorable, political, economic and social
conditions. See "Risk Factors--Volatile and frequently unfavorable political,
economic and social conditions in the markets in which we operate could
adversely affect our business". High inflation and, with it, high interest
rates are common. In 1999, the per annum inflation rates were approximately
12% in Mexico, 8% in Brazil, 10% in Colombia, 20% in Venezuela, 10% in Costa
Rica, 7% in Nicaragua and 5% in Guatemala. The governments in these countries
have often responded to high inflation by imposing price and wage controls or
similar measures, although currently there are no formal soft drink price
controls in any of the countries. These countries have also experienced
significant currency fluctuations. See "--Currency Devaluations and
Fluctuations".

     The political, economic and social conditions in each of these countries
create a challenging environment for businesses, including ours. Our business,
earnings, asset values and prospects may be materially and adversely affected
by developments with respect to inflation, interest rates, currency
fluctuations, government policies, price and wage controls, exchange control
regulations, taxation, expropriation, social instability, and other political,
economic or social conditions or developments in or affecting Latin America.
Although we have been able to operate successfully in Latin


                                      20

<PAGE>
America for over 50 years, we have no control over these conditions and
developments, and can provide no assurance that such conditions and
developments will not adversely affect our operations.

     We can be adversely impacted by inflation in many ways. In particular,
when wages rise more slowly than prices, inflation can erode consumer
purchasing power and thereby adversely affect sales. Margins are diminished if
product prices fail to keep pace with increases in supply and material costs.
While we have been able in most recent years to increase prices in local
currency terms overall at least as much as inflation, net sales in local
currency terms may nevertheless remain flat or decrease if, among other
things, inflation or high unemployment diminishes consumer purchasing power,
as has been the case recently in Colombia and Venezuela. Although we expect
that prices will generally keep pace with inflation in the near term, sales
volume may decline and supply and material costs may rise more rapidly than
prices in the future. See "Item 9.--Management's Discussion and Analysis of
Financial Condition and Results of Operations". See also the discussion under
"--Currency Devaluations and Fluctuations" regarding the impact of
devaluations on net sales in dollars.

     The governments in the countries in which we operate have historically
exercised substantial influence over many aspects of their respective
economies. In recent years, these governments have implemented important
measures to improve their economies. The current political climate in these
countries may create significant uncertainty as to future economic, fiscal and
tax policies.

Mexico

     In Mexico, the early 1990s were marked by the economic reforms of the
Salinas administration and the passage of the North American Free Trade
Agreement. However, the Mexican government was not able to sustain this
progress, and a series of political and economic events created considerable
economic adversity, political instability and uncertainty. The peso was
devalued substantially in December 1994 and continued to depreciate in 1995.
The exchange rate increased from approximately 3.4 Mexican pesos per U.S.
dollar as of November 30, 1994 to approximately 7.7 Mexican pesos per U.S.
dollar as of December 31, 1995. The devaluation in 1995 was in part prompted
and aggravated by significant outflows of foreign capital, which in turn
resulted in a liquidity crisis for the Mexican government. Political events
also contributed to Mexico's economic problems, and have compounded the
difficulties facing the government in solving these problems. The original
presidential candidate of the ruling Institutional Revolutionary Party (the
"PRI"), Luis Donaldo Colosio, was assassinated on March 23, 1994. The PRI
Secretary General Jose Francisco Ruiz Massieu was assassinated on September
28, 1994. The brother of former President Carlos Salinas de Gortari was
arrested on charges of conspiracy in the assassination of Secretary General
Ruiz Massieu and has been under investigation in other criminal matters.
Controversy surrounded the investigations of such assassinations and the
ensuing legal proceedings and created strains within the PRI, which has
continued to decline in popular support. In July 1997, the PRI, which has
ruled Mexico since 1929, lost its absolute majority in the lower house of the
Mexican Congress. There has been uncertainty regarding the fairness of
elections, and the uprisings in the Chiapas region have contributed further to
Mexico's instability.

     In 1995, the United States, the International Monetary Fund and other
entities put together a $52 billion credit package for Mexico, which Mexico
repaid in early January of 1997. In addition, the Mexican government
implemented various emergency measures, including restrictive monetary
policies and fiscal reforms aimed at increasing public revenues and reducing
public sector expenditures. Presidential elections are scheduled to take place
in 2000 in Mexico.

Brazil

     In Brazil, the government has had some success in controlling inflation,
although there can be no assurance that this success will continue. In
addition, in recent years there have been allegations of government
improprieties, which have adversely affected its ability to implement a
successful economic program. Midway through 1994, the government of Brazil
launched an economic stabilization program, the Real Plan, which improved
economic conditions in Brazil. Inflation, which had been at double-digit
monthly rates, has decreased, purchasing power improved and the consumption of
goods and services began to increase. However, in January 1999, the Brazilian
government decided to modify its

                                      22
<PAGE>

exchange policy, discontinuing its band system and allowing the real to trade
freely. As a result, the real has experienced extreme volatility. On January
29, 1999, the real was trading at 2.20 reals per U.S. dollar, which
represented an 80% devaluation in comparison to the December 31, 1998 rate. On
March 31, 1999, the real had revalued from its lowest levels and was trading
at 1.71 reals per U.S. dollar. On December 31, 1999, the real again devalued
to 1.97 reals per dollar. During the first quarter of 1999, the Brazilian
Government sought the support of the International Monetary Fund, which has
authorized the use of previously approved support funds in an aggregate amount
of approximately $6.5 billion for 1999. See "--Currency Devaluations and
Fluctuations". Although the modification of the exchange policy did not
significantly exacerbate inflation during 1999, unemployment increased and
wages in real terms fell. Lower wages in real terms reduced consumer
purchasing power in Brazil, which is reflected in our lower sales for 1999. We
are not able to predict the long-term effects any of these conditions on the
Brazilian real/U.S. dollar exchange rate or the Brazilian economy and
financial markets, in general, or upon us, in particular.

Colombia

     In Colombia,  Andres Pastrana Arango,  leader of the Conservative  Party,
was elected to the office of the  presidency in July 1998,  ending 12 years of
control  by the  Liberal  Party.  Mr.  Pastrana's  pledge to seek  peace  with
revolutionary  guerilla forces,  halt traffic in narcotics and improve general
economic conditions has not been successful and guerilla violence escalated in
1999.  Violence  resulting  from  guerilla  movements and traffic in narcotics
continues.  Many  businesses,  including  ours,  have been the victims of such
violence  on  occasion.  All such  losses  suffered  by us in 1999 were  fully
covered by insurance. On June 29, 1999, in the face of economic pressures, the
Colombian  Central Bank lowered the band in which the Colombia  peso trades by
9%, which resulted in a significant devaluation.  See "--Currency Devaluations
and Fluctuations--Colombia." Currently Colombia is in a recession.

Venezuela

     In  Venezuela,  in February  1992 and November  1992,  military  officers
unsuccessfully  tried to overthrow the  government of President  Carlos Andres
Perez,  and certain  constitutional  rights and  guarantees  were  temporarily
suspended.  In 1993, impeachment  proceedings were initiated against President
Perez on charges of embezzlement and misappropriation of government funds, and
Ramon J. Valasquez was elected to serve for the remainder of President Perez's
term. Rafael Caldera was elected President on December 5, 1993, and he assumed
office on February 2, 1994. In 1994, in response to large budget  deficits and
a crisis in the banking sector,  and pursuant to special  authority granted by
the  Venezuelan  Congress,   President  Caldera's  administration  temporarily
imposed  controls on foreign  exchange  transactions and on prices of consumer
goods and services and required mandatory bonus payments be paid to workers to
assist in covering  food and  transportation  costs.  In  addition,  President
Caldera's administration was given full and direct control over the Venezuelan
banking system.  In April 1996, the Venezuelan  government lifted the controls
on  foreign  exchange  transactions  and most of the  controls  on  prices  of
consumer  goods and  services,  and in July 1996,  the  Venezuelan  government
lifted the suspension of constitutional rights in all territorial areas except
certain border areas.  We do not know if such controls or suspensions  will be
reimposed.  Venezuela has also experienced  significant currency fluctuations.
See "--Currency Devaluations and Fluctuations".  The Venezuelan government has
exercised, and continues to exercise,  significant influence over many aspects
of the Venezuelan economy.

     On December 6, 1998,  Hugo Chavez  Frias was elected to the office of the
presidency  with 56% of the vote (the largest margin in a democratic  election
in Venezuela).  Mr. Chavez was inaugurated in February 1999. Mr. Chavez's main
reform and action  plans  include  the  opening of the  Venezuelan  economy to
foreign investment,  the privatization of certain state-owned  utilities,  the
reform of the tax system and the  implementation of a Constitutional  Assembly
in order to rewrite the Venezuelan Constitution.

                                      23

<PAGE>


     The final draft of the new  Constitution  was completed in November 1999,
and was  approved  by  referendum  in  December  1999.  The  new  Constitution
provides, among other things:

    (a)   A new name for the country, to be named the Bolivarian Republic of
          Venezuela;

    (b)   The allowance for military personnel to participate in the election
          of public powers;

    (c)   Presidential term of six (6) years with the option to seek immediate
          reelection for one (1) additional term;

    (d)   The creation of a one (1) chamber congress;

    (e)   The  ratification  of the oil  industry  as a  strategic  source  of
          sovereignty and economic policy, allowing joint ventures and private
          capital investments in some areas;

    (f)   The  creation of two (2) new public  powers  besides the  executive,
          legislative  and  judicial to be named the  electoral  power and the
          citizens power.

     In December of 1999,  the northern  part of Venezuela  was  devastated by
severe flooding, causing losses to the company of approximately $3.6 million.

Costa Rica

     In Costa Rica,  Miguel Angel  Rodriguez  was elected to the office of the
presidency in 1998 by a narrow margin,  and faces  considerable  opposition in
Congress.  Attempts by Mr. Rodriquez and his  administration  to build support
for their  economic  liberalization  policies  have been  limited in  success.
Although inflation,  interest rates and the exchange rate have been relatively
stable,  low  coffee  and  banana  prices in the  international  markets  have
adversely  impacted  the Costa Rican  economy,  which is heavily  dependent on
coffee and banana exports. In addition, tourism, an important source of income
in Costa Rica,  has declined as a result of relatively  high consumer  prices,
security problems and competition from other tourist areas.

Nicaragua

     In Nicaragua,  President  Arnoldo  Aleman  Lacayo,  who assumed office in
January 1997, has publicly declared his intentions to work for  reconciliation
among the dominant political factions in Nicaragua,  but it is unclear whether
he will be able to do so. Mr.  Aleman's  success has been limited by splits in
his  political  party,  Partido  Liberal   Constitutucionalista   ("PLC").  In
addition, conflicts over the ownership of properties previously confiscated by
the  Sandinista  government  and  redistributed  during the  recent  period of
agrarian reform have not been completely resolved.  The planned  privatization
of certain state-owned utilities, which has been undertaken to satisfy certain
conditions to continued  financial aid imposed by the  International  Monetary
Fund,  has  been  delayed,  and  Nicaragua  continues  to face a large  fiscal
deficit. The aftermath of Hurricane Mitch in 1998 has also hurt Nicaragua.

Guatemala

     In Guatemala,  Alfonso Portillo,  of the right wing opposition party, won
the December 1999 presidential  election.  The December election was the first
election in Guatemala  since the end of its 36 year civil war. Mr.  Portillo's
has  indicated  that  his top  priorities  will be  stabilizing  the  economy,
combating high crime rates and advancing  privatizations,  which were begun by
the administration of Alvaro Arzu.

     1998  marked the first  anniversary  of the  signing  of the final  peace
accord  between  the  Guatemalan  government  and  the  Unidad  Revolucionaria
Nacional  Guatemalteca  (the "URNG").  Mr. Arzu was successful in demobilizing
the  guerrilla  forces of the  URNG,  but made only  limited  progress  in the
important areas of constitutional  reforms  (particularly  reforms designed to
protect the rights of indigenous peoples), settlement of land disputes and


                                      24


<PAGE>
socio-economic  improvements.  The Arzu  administration  and ruling  political
party,  Partido de Avanzada,  faced opposition in Congress in their efforts to
reform the Guatemalan  tax system and to increase the tax revenue  received by
the Guatemalan  government,  which are conditions to the disbursement of loans
and  donations  designated  as "peace  funds"  that have been  pledged  by the
International Monetary Fund and other donors.

Currency Devaluations and Fluctuations

     In December 1994, the Bank of Mexico allowed the Mexican peso to float in
the free market, which resulted in an immediate and significant devaluation of
the peso. The exchange rate increased from approximately 3.4 Mexican pesos per
U.S.  dollar as of November 30, 1994 to  approximately  7.7 Mexican  pesos per
U.S.  dollar as of December  31, 1995.  As of December 31, 1996,  the exchange
rate was  approximately  7.8 Mexican pesos per U.S. dollar; as of December 31,
1997, the exchange rate was  approximately  8.1 Mexican pesos per U.S. dollar;
as of December 31, 1998, the exchange rate was approximately 9.9 Mexican pesos
per  U.S.  dollar;  and  as  of  December  31,  1999  the  exchange  rate  was
approximately 9.5 Mexican pesos per U.S. dollar.

     The  devaluation  of the Mexican  peso in 1995 and the  related  economic
conditions  in Mexico  had a  significant  adverse  impact on the  results  of
operations   and   financial   condition  of  Panamco   Mexico  in  1995  and,
consequently,  on the results of  operations  and  financial  condition of the
Company  in 1995.  The  carrying  value of the  assets of the  Panamco  Mexico
subsidiaries in our consolidated accounts was also adversely affected.  During
1996,  1997 and 1998,  the peso was devalued by 2%, 3% and 22%,  respectively,
and during 1999 was revalued by 4%.

     In January 1999, the Brazilian  government decided to modify its exchange
policy,  discontinuing  its band system and allowing the real to trade freely.
As a result, the real has experienced extreme volatility. On January 29, 1999,
the real was  trading  at 2.05  reals per  dollar,  which  represented  an 80%
devaluation  in  comparison  to the December 31, 1998 rate. On March 31, 1999,
the real had revalued from its lowest levels and was trading at 1.72 reals per
dollar.  The  Brazilian  real  exchange  rate as of December 31, 1999 was 1.79
reals per U.S.  dollar  compared to 1.21 reals per U.S.  dollar as of December
31, 1998 representing a 48% devaluation, between average exchange rate of 1999
and 1998  the  devaluation  was  approximately  56%.  The  devaluation  of the
Brazilian  real  adversely  impacted the results of the  operations of Panamco
Brasil by approximately $28 million in 1999.

     On June 27, 1994, the Venezuelan  government  established certain foreign
currency  exchange  controls and soon thereafter  fixed the official  exchange
rate  between the  Venezuelan  bolivar  and the U.S.  dollar.  Currently,  the
Central Bank of Venezuela  intervenes  in the market to maintain such exchange
rate within a range that is 7.5% above and 7.5% below a reference rate that it
sets.  There can be no  assurance  that the  Central  Bank of  Venezuela  will
continue its current  exchange rate policy or that the  Venezuelan  government
will not  impose  foreign  exchange  restrictions  in the  future  or that the
bolivar will not continue to decline in value with respect to the U.S. dollar.
Any such imposition or decline could adversely affect our financial  condition
and results of operations. In 1999, the currency devaluation rate in Venezuela
was approximately 15%.

     On June  29,  1999,  in the face of  economic  pressures,  the  Columbian
Central Bank lowered the band in which the Colombian  peso trades by 9%, which
resulted in  significant  currency  devaluations.  On  September  30, 1999 the
Columbian  peso was trading at  2,017.27  Colombian  pesos per  dollar,  which
represented  an 31%  devaluation  in comparison to the December 31, 1998 rate.
The  Colombian  peso  exchange  rate as of  December  31,  1999  was  1,873.77
Colombian pesos per U.S. dollar compared to 1,542.11  Colombian pesos per U.S.
dollar as of December 31, 1998  representing  a devaluation  of  approximately
22%.

     As a general matter,  because our consolidated  cash flow from operations
is  generated  exclusively  in the  currencies  of Mexico,  Brazil,  Colombia,
Venezuela,  Costa Rica, Nicaragua and Guatemala, we are subject to the effects
of fluctuations in the value of these currencies.  Each of these countries has
historically  experienced  significant currency  devaluations  relative to the
U.S. dollar. Such devaluations alone have generally not adversely affected the
profitability  of  our  subsidiaries,   measured  in  local   currencies,   as
substantially   all  costs  of  sales  and  expenses  are  incurred  in  local
currencies.  However,  in general,  such  devaluations are accompanied by high
inflation and declining purchasing power,


                                      25


<PAGE>


     which can adversely affect our sales as well as income. Because our
financial statements are prepared in U.S. dollars, net sales (and other
financial statement accounts, including net income) tend to increase when the
rate of inflation in each country exceeds the rate of devaluation of such
country's currency against the U.S. dollar. Alternatively, net sales (and
other financial statement accounts, including net income) generally are
adversely affected if and to the extent that the rate of devaluation of each
country's currency against the U.S. dollar exceeds the rate of inflation in
such country in any period. In addition, when dividends are distributed to us
by our foreign subsidiaries, the payments are converted from local currencies
to U.S. dollars, and any future devaluations of local currencies relative to
the U.S. dollar could result in a loss of dividend income. For a discussion of
devaluation rates in Mexico, Brazil, Colombia, Venezuela, Costa Rica,
Nicaragua and Guatemala since 1996, see "Item 9.--Management's Discussion and
Analysis of Financial Condition and Results of Operations--Inflation".

     In periods of high inflation and high interest rates, borrowings
denominated in local currencies are more costly, while borrowings indexed to
the U.S. dollar or other foreign currencies place the risk of devaluation on
the borrower. In periods of devaluation, U.S. dollar denominated borrowings
can generate income statement losses or charges against shareholders' equity,
as occurred in 1995 as a result of the Mexican peso devaluation. We could be
adversely affected by a devaluation of the Mexican peso, as in 1995, or
similar conditions in other countries, if it becomes necessary to increase
indebtedness in order to finance capital expenditures or for other purposes.

ITEM 2. DESCRIPTION OF PROPERTY

Properties

     Our properties consist primarily of bottling, distribution and office
facilities in Mexico, Brazil, Colombia, Venezuela, Costa Rica, Nicaragua and
Guatemala. Panamco Mexico, Panamco Brasil, Panamco Colombia, Panamco
Venezuela, Panamco Costa Rica, Panamco Nicaragua and Panamco Guatemala
currently own and operate 10, 3, 18, 14, 1, 1 and 1 bottling plants,
respectively. As of December 31, 1999, the Company owned or leased over 375
warehouse distribution centers in its territories. See "Item 1.--Description
of Business--Production" for additional information regarding our properties.

     As of December 31, 1999, the consolidated net book value of all land,
buildings, machinery and equipment owned by the Company was approximately
$1,218.4 million. These assets were subject to liens and mortgages securing
lines of credit and other indebtedness. The aggregate amount of such
indebtedness outstanding was $175.8 million as of December 31, 1999. The total
annual rent paid by the Company in 1999 for its leased distribution and office
facilities was approximately $8.9 million.

ITEM 3. LEGAL PROCEEDINGS

Legal Proceedings and Claims Associated with the Venezuela Acquisition

     In connection with the Venezuela Acquisition, in 1999, we received notice
of certain tax claims asserted by the Venezuelan taxing authorities, which
mostly relate to fiscal periods prior to the Venezuela Acquisition. The claims
are in preliminary stages and current aggregate of approximately $48.2
million. We have certain rights to indemnification from Venbottling (a company
owned by the Cisneros family) and The Coca-Cola Company for a substantial
portion of such claims and intend to defend against them vigorously. Based on
the information currently available, we do not believe that the ultimate
disposition of these cases will have a material adverse affect on us. See
"Items 9.--Management's Discussion and Analysis of Financial Condition and
Results of Operations--Forward-Looking Statements".


                                      26


<PAGE>


Potential  Imposition of Liabilities upon Resolution of Certain  Brazilian Tax
Matters

     Panamco Brasil has been the subject of administrative proceedings in the
Federal Revenue Office brought by Brazilian tax authorities seeking excise
taxes, interest and fines in an amount equivalent to $34.1 million as of
December 31, 1996. As of December 31, 1999, such amount had been reduced to an
amount equivalent to approximately $3.5 million. Issues raised by the
proceedings included whether freight costs should be included in the Brazilian
Tax on Manufactured Products (the "IPI") and the calculation of the IPI rates
on various beverages. In June 1997, the Brazilian Taxpayers' Council ruled
unanimously in favor of Panamco Brasil with respect to the period from January
1984 to December 1988, and this ruling is no longer subject to appeal. As a
result, only proceedings related to the claim in respect of the six-month
period ended June 30, 1989 remain pending. Because the Company believes it
will ultimately not incur any liability, there is no reserve in the Company's
financial statements in respect of these matters. The remaining proceedings
are ongoing, and there can be no assurance as to the final outcome or, if such
outcome is unfavorable, as to the amount of liability to be borne by the
Company, which could be material. See Note 10 of "Notes to Consolidated
Financial Statements".

     In addition, Panamco Brasil is the subject of administrative proceedings
in the Federal Reserve Office brought by Brazilian tax authorities seeking
income taxes, interest with respect to credits taken in current periods and
fines in an amount equivalent to $3.7 million as of December 31, 1999. Issues
raised by the tax authorities include the deductibility of certain
intercompany service payments. The Brazilian tax authorities prevailed at the
initial administrative proceeding in 1991 and at the appellate administrative
level in June 1993. Panamco Brasil has appealed the decision. In April 1998,
the Brazilian Taxpayers' Council ruled unanimously in favor of Panamco Brasil.
The amount in question represents approximately $1.8 million. This ruling is
not subject to appeal. The Brazilian Taxpayers' Council, however, issued a
ruling against a former subsidiary of Panamco Brasil. The amount in question
represents approximately $1.9 million. Panamco Brasil has appealed this
ruling. See Note 10 of "Notes to Consolidated Financial Statements".

     Panamco Brasil is also the subject of administrative proceedings in the
Federal Reserve Office brought by Brazilian tax authorities seeking
assessments with respect to tax credits taken during 1995 and 1996 relating to
overpayments of certain value-added taxes in prior years. The assessments
involve an amount approximately equivalent to $32.8 million as of December 31,
1998 and relate to value-added taxes applied to samples, gratuities and credit
sales. The Company has appealed the assessments. See Note 10 of "Notes to
Consolidated Financial Statements".

     In 1998, Panamco Brasil reversed an excise tax reserve recorded in prior
years for credits taken on purchases of concentrate from the Amazon region, in
the northern part of Brazil. Those credits had been accrued for the period
between February 1991 and February 1994. Although the Brazilian subsidiaries
do not pay excise taxes on concentrate purchases from the Amazon region
because it is a tax-free zone, the bottlers have claimed that they are
nevertheless entitled to a corresponding credit against excise taxes payable
upon all of the final products. The government disputed the claim and said a
credit should exist only if the materials used in the production of the
concentrate were entirely from the tax-free region. On August 15, 1991, the
Brazilian Coca-Cola bottlers association, of which Panamco Brasil is a member,
obtained a preliminary injunction against the Brazilian tax authorities
permitting the bottlers to take credits against such excise taxes. Based on
the injunction, Panamco Brasil had not been required to make payment of taxes
in an amount equal to such credits, but had accrued a reserve for financial
reporting purposes in the full amount of such credits. The injunction was
lifted in May 1995 and the Brazilian Coca-Cola bottlers association appealed
the decision.



                                      27


<PAGE>


     During November 1999 the Brazilian Coca-Cola bottlers association
obtained a favorable judgment by the highest Brazilian appellate court.
Pursuant to this decision the matters related to excise taxes were resolved in
our favor.

Legal Proceeding Associated with the Solicitation by Certain Independent
Distributors in Venezuela to Form a Distributors Union.

     During 1999, a group of  independent  distributors  of Panamco  Venezuela
commenced a proceeding to incorporate an union of distributors. If this effort
is successful,  these  distributors  could,  among other things,  demand on an
individual   basis,   certain  labor  and  severance  rights  against  Panamco
Venezuela.

     Since the incorporation  process began,  Panamco Venezuela has vigorously
opposed its formation through all available legal channels.  On February 2000,
Panamco Venezuela presented a nullity recourse against the union incorporation
solicitation,  as well as an injunction  request before the Venezuelan Supreme
Court.  A decision on the  injunction  request  should be obtained  during the
coming weeks and a final decision on the nullity  recourse should be issued by
the Supreme Court within the next 12 to 16 months.

     At this  point,  the  Company  believes  that it will  obtain a favorable
outcome on the recourses presented to the Supreme Court, and that the ultimate
disposition  of this  case  will not have a  material  adverse  effect  on the
Company.

     In addition,  other legal  proceedings are pending against or involve the
Company and its  subsidiaries,  which are  incidental  to the conduct of their
businesses.  The  Company  believes  the  ultimate  disposition  of such other
proceedings  will not  have a  material  adverse  effect  on its  consolidated
financial condition.

ITEM 4. CONTROL OF REGISTRANT

General

     We are not directly or indirectly owned or controlled by another
corporation or by any foreign government.

     We have two classes of Common  Stock and one series of  Preferred  Stock:
the Class A Common Stock,  which  currently has no voting rights,  the Class B
Common  Stock,  which  is  entitled  to one vote per  share  and the  Series C
Preferred Stock,  par value $0.01 per share (the "Series C Preferred  Stock"),
which currently has voting rights as described in detail below. The holders of
Class B Common Stock have the exclusive  power to elect the Board of Directors
and to  determine  the  outcome of all  matters to be decided by a vote of the
shareholders.  Class A Common Stock will not have voting rights unless certain
events occur which will cause all  outstanding  shares of Class B Common Stock
to be converted into shares of Class A Common Stock, at which point each share
of Class A Common  Stock will  carry one vote.  Such  events,  which may never
occur,  are specified in the our Articles of  Incorporation.  Coca-Cola is the
sole holder of the Series C Preferred Stock.

     Members of the Board of Directors,  the advisory  board and the executive
officers of the Company  beneficially  own 8,181,009  shares of Class B Common
Stock or approximately 91.2% of the outstanding shares of such class as of May
11,  2000,  of which  5,155,052  shares are  subject  to the Voting  Trust (as
defined below).


                                      28


<PAGE>


     The following table sets forth beneficial ownership of the Class B Common
Stock as of May 11, 2000 with  respect to each person  known by the Company to
own  beneficially  more than 10% of the  outstanding  shares of Class B Common
Stock:

                                            Shares of Class B     Percent of
Owner                                         Common Stock          Class

Lt. Gen. Donald Colin Mackenzie,
  Mr. James M. Gwynn, Mr. Woods W. Staton
  Welten and Mr. Stuart A. Staton in then
  capacities as Voting Trustees under the
  Voting Trust Agreement*...............        5,155,052           57.5%

Coca-Cola...............................        2,247,113           25.0%

---------
*    Except as otherwise  indicated  above,  each of the persons  named in the
     table has sole  voting and  investment  power with  respect to the shares
     beneficially owned as set forth opposite such person's name.


     The holder of the Series C Preferred Stock (the "Holder") is not entitled
to receive any dividends  with respect to the Series C Preferred  Stock and is
entitled to a preference on the liquidation,  dissolution or winding-up of the
Company of $1.00.  Pursuant to the Certificate of Designation for the Series C
Preferred  Stock,  we have  agreed not to take  certain  actions  without  the
approval  of  the  Holder,   including,   but  not  limited  to:  (i)  certain
consolidations, mergers and sales of substantially all of our assets; (ii) any
acquisition  or sale of a  business  (or an equity  interest  therein)  if the
purchase price or sales price thereof,  as the case may be, exceeds a material
amount (as  defined  therein);  (iii) entry into any new  significant  line of
business or termination  of any existing  significant  line of business;  (iv)
certain  capital  expenditures  and  acquisitions  and  dispositions  of fixed
assets;  (v) certain  transactions with affiliates (as defined);  (vi) certain
changes  in  our  policy  with  respect  to  dividends  or   distributions  to
shareholders;  and (vii) certain changes to our Articles of  Incorporation  or
By-laws. These rights are subject to certain exceptions and qualifications and
may be suspended or terminated in certain circumstances.

     The Holder has no voting  rights  except as provided for above and except
for any voting rights provided by law. The Holder is entitled to designate for
election to the Board of Directors a certain number of designees  depending on
the percentage of the outstanding capital stock beneficially owned by it.

     The Holder of the Series C Preferred Stock has certain rights to purchase
additional  shares of common  stock  issued by the  Company  to  maintain  its
proportionate interest, subject to certain exceptions and limitations.

     The Series C Preferred  Stock may not be  transferred to any person other
than Coca-Cola or a corporation 100% of the capital stock of which (other than
directors'  qualifying  shares or shares  held by persons to comply with local
law) is owned,  directly or  indirectly,  by Coca-Cola;  provided that if such
subsidiary is a person other than the Coca-Cola Export Corporation ("Export"),
such  subsidiary  shall  have  agreed  to be  bound by the  provisions  of the
Investment  Agreement  (as defined  below).  Upon any transfer in violation of
such restrictions, the Series C Preferred Stock shall convert automatically to
a share of Class A Common Stock.

     Pursuant to the investment  agreement (the "Investment  Agreement") dated
November  1,  1995,  between  us and  Export,  a wholly  owned  subsidiary  of
Coca-Cola, for so long as Export is entitled to delegate


                                      29


<PAGE>


one or more  individuals for election to our Board of Directors,  in the event
of certain  subsequent  new issues of Common  Stock,  Coca-Cola  will have the
right to  purchase  shares of Common  Stock  from us (on the terms of such new
issue) in order to maintain its economic and voting interest in Panamco. Under
certain  circumstances  (but not  currently),  Export has the right to request
that we file a  registration  statement so as to permit or facilitate the sale
or  distribution  of  shares  of Class A Common  Stock  beneficially  owned by
Coca-Cola.  In addition,  in certain  instances (but not  currently),  when we
propose to  register  under the  Securities  Act of 1933  shares of our Common
Stock in connection  with an underwritten  offer for our own account,  we must
offer Export the opportunity to include in such registration  statement shares
of Common Stock beneficially owned by Coca-Cola.

Voting Trust

     The beneficial  owners of 5,155,052  shares of Class B Common Stock,  who
are no longer the holders of record of such shares, representing approximately
58% of the shares of such class,  have entered into a Voting Trust  Agreement,
amended and  restated as of April 20, 1993,  as amended (the "Voting  Trust"),
among such beneficial owners and Lt. Gen. Donald Colin Mackenzie, Mr. James M.
Gwynn,  Mr. Woods W. Staton  Welten and Mr.  Stuart A.  Staton,  as the voting
trustees (the "Voting Trustees").  The Voting Trust will expire on January 11,
2013.  The Voting  Trust may be  amended at any time by the  holders of voting
trust certificates representing 70% of the shares subject to the Voting Trust.
Under the terms of the Voting Trust,  the Voting Trustees may vote as they, in
their sole discretion,  deem to be in the best interests of the holders of the
voting trust certificates.  However,  the Voting Trustees are not permitted to
vote on any proposal for a merger,  consolidation or certain other significant
transactions  involving  the  Company,  except as directed  by the  individual
holders  of the  voting  trust  certificates  (or,  if no  such  direction  is
received,  in accordance with the  recommendation  of our Board of Directors).
The Voting  Trustees  also  agreed with  Coca-Cola  and Export (i) to vote for
Coca-Cola's  designees  for election to our Board of Directors and (ii) not to
take any  action or cause us to take any  action  the  effect  of which  would
circumvent or adversely affect or be inconsistent with any of the terms of the
Series  C  Preferred   Stock.  The  Voting  Trustees  have  also  agreed  with
Venbottling to vote for  Venbottling's  designees for election to our Board of
Directors.  The  Voting  Trustees  are  directors  of the  Company.  See "Item
10.--Directors and Officers of Registrants".

     The  Voting  Trustees  will serve for  five-year  terms,  unless  earlier
removed by the holders of voting trust  certificates  representing  70% of the
shares  subject to the Voting  Trust.  Effective  January  11,  1998,  Messrs.
Mackenzie,  Gwynn and Staton Welten were  reelected as Trustees and Mr. Stuart
A. Staton was elected  Trustee and also a member of our Board of Directors for
the first time.  The Voting  Trustees are not permitted to transfer the shares
of Class B Common  Stock or any other voting  securities  which may be held in
the  Voting  Trust.  The  Voting  Trust is on file at our  registered  office,
Dresdner Bank, Seventh Floor, 50th Street, City of Panama, Republic of Panama,
and is  available  on  request  of the  Secretary.  No holder of voting  trust
certificates  issued pursuant to the Voting Trust  beneficially owns more than
10% of the Class B Common Stock.

ITEM 5. NATURE OF TRADING MARKET

     As of April May 11, 2000, we had approximately 1,562 holders of record of
an  aggregate  of  approximately  119,761,806  shares of Class A Common  Stock
outstanding.  As of May 11, 2000,  there were an estimated 310 U.S. holders of
record of the Class A Common Stock. As of May 11, 2000, to our


                                      30


<PAGE>


knowledge  approximately 91.4 % of the total outstanding Common Stock was held
of record by persons in the United States.

     The Class A Common Stock has been listed and traded on the NYSE under the
symbol "PB" since September 21, 1993. The following table sets forth the range
of high and low closing sale prices of the Class A Common Stock as reported on
the NYSE during the periods shown:

                                                High            Low
1998:
       First Quarter......................     $40.125        $35.068
       Second Quarter.....................     $41.375        $31.375
       Third Quarter......................     $34.563        $15.000
       Fourth Quarter.....................     $24.313        $16.500
1999:
       First Quarter......................     $21.750        $14.625
       Second Quarter.....................     $27.063        $17.500
       Third Quarter......................     $24.250        $16.563
       Fourth Quarter.....................     $23.438        $14.813

2000:  First Quarter......................     $20.500        $16.063


     On May 11, 2000, the closing sale price of the Class A Common Stock on
the NYSE was $17.437 per share.

     Certain Restrictions on Transfer.  Our Articles of Incorporation prohibit
the  transfer  of shares of Class A Common  Stock if the  proposed  transferee
would become the beneficial  owner of 10% or more of the Class A Common Stock,
unless such  transfer is approved by the Board of  Directors or the holders of
at least 80% of the shares entitled to vote. Such  restriction also applies to
any transfer of shares of Class B Common Stock which are then  converted  into
Class A Common Stock.

     Our Articles of Incorporation  also provide that shares of Class B Common
Stock  automatically  convert  into a like  number of shares of Class A Common
Stock if transferred to any person who is not a Qualifying  Transferee,  or an
Additional Qualifying Transferee, as defined therein.

     In addition,  we are registered with the Panamanian  National  Securities
Commission and is subject to a Panamanian statute which prohibits acquisitions
of 5% or more of the  outstanding  voting  securities of a Panama  corporation
without board of directors' review or shareholder approval.

ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

     None of the  countries  in  which  we  operate  currently  restricts  the
remittance of dividends paid by  subsidiaries  to us, although Brazil has laws
in effect that  impose  limitations  on the  exchange  of local  currency  for
foreign  currency at official rates of exchange.  Panama does not restrict the
payment of  dividends by us to our  shareholders.  Mexico,  Brazil,  Colombia,
Venezuela,  Costa Rica,  Nicaragua and Guatemala have imposed more restrictive
exchange  controls  in the  past,  and no  assurance  can be given  that  more
restrictive  exchange control policies,  which could affect the ability of the
subsidiaries  to pay dividends to Panamco,  will not be imposed in the future.
The payment of dividends  by such  subsidiaries  is also in certain  instances
subject to statutory restrictions and is contingent upon the earnings and cash
flow of and permitted


                                   31


<PAGE>


borrowings  by  such  subsidiaries.  In  addition,  payment  of  dividends  by
majority-owned  subsidiaries  necessitates  pro  rata  dividends  to  minority
shareholders.

     The Mexican Government has not restricted the conversion of the peso into
other currencies to pay dividends except during brief periods.  However, other
types  of  transactions  have  been  subject  to  exchange  controls  and less
favorable official rates of exchange as recently as 1991.

     Brazil  currently  restricts the ability of nationals  and  foreigners to
convert the local  currency  into  dollars or other  currencies  other than in
connection with certain authorized transactions,  which include, among others,
payment of  dividends  in  compliance  with  foreign  investment  registration
regulations.  In Brazil,  all foreign  investments must be registered with the
Central  Bank,  which  issues a  certificate  of  registration  of the foreign
currency value of such investment.  Without such registration,  no remittances
of dividends  or profits may be made abroad,  nor may any part of the original
investment be  repatriated  in foreign  currency.  The Central Bank has issued
certificates  to  the  Company  and  its  subsidiaries  with  respect  to  its
investment in Panamco  Brasil.  We must obtain an amendment to our Certificate
of  Registration  from the Central Bank upon any change in our  investment  in
Brazil.

     In Colombia,  there are no  restrictions  on the remittance of profits to
foreign  investors as long as the investment is registered  with the Colombian
Central  Bank and the  proper  tax has been  withheld.  The  Central  Bank has
registered  the Company as a foreign  investor in each of the  directly  owned
Colombian  subsidiaries,  and these  registrations  allow Panamco to remit all
dividends  received  from its  Colombian  subsidiaries,  subject to payment of
applicable  taxes.  However,  under current  Colombian law,  whenever  foreign
reserve  levels  fall  below  the  equivalent  of  three  months  of  imports,
repatriation and remittance rights may be temporarily modified.

     In April  1994 the  Venezuelan  government  imposed  controls  on foreign
exchange  transactions.  These  controls  were lifted in April 1996;  however,
there  can be no  assurance  that such  controls  or  regulations  will not be
reimposed.

     Since 1996, no substantial  restrictions  on the foreign  exchange system
remain in force in Nicaragua.  Although the 1991 Foreign Investment Law, which
was created to guarantee  foreign investors the right to remit 100% of profits
through the  official  exchange  market,  is still  formally in effect,  it no
longer has any practical application.  Since it is not mandatory, most foreign
investors  do not seek  registration  under the 1991 Foreign  Investment  Law.
Investors,  whether  registered under the 1991 Foreign  Investment Law or not,
can freely  repatriate  their  profits  through  the  banking  system.  Profit
repatriation has not been a problem in Nicaragua in recent years.

     In Guatemala  there are no  restrictions  on the remittance of profits to
foreign  investors.  There is no obligation for foreign  investors to register
their investments with any governmental office or to solicit any authorization
to  participate  in local  businesses.  On  February 4, 1998,  the  Guatemalan
Congress enacted the Foreign  Investment Law, which amended or, in some cases,
eliminated, restrictions created in the past that affected foreign investment.
Since that  date,  the  Guatemalan  government  treats  national  and  foreign
investment under the same rules and conditions. There can be no assurance that
prior restrictions will not be reimposed in the future.


                                      32


<PAGE>


ITEM 7. TAXATION

Introduction

     The following discussion summarizes the principal U.S. Federal income tax
consequences  of acquiring,  holding and  disposing of the  Company's  Class A
Common Stock.  The following  discussion is not intended to be exhaustive  and
does not consider the  specific  circumstances  of any owner of Class A Common
Stock.

     The  discussion is based on currently  existing  provisions of the United
States  Internal  Revenue Code of 1986, as amended (the "Code"),  existing and
proposed Treasury Regulations  thereunder,  and current administrative rulings
and court decisions, all of which are subject to change (which change could be
retroactive).  The  discussion is limited to United States  Federal income tax
matters and does not address  other U.S.  Federal taxes (such as estate taxes)
or the state, local or foreign tax aspects of acquiring, holding and disposing
of Class A Common Stock.

     The  discussion is limited to holders of Class A Common Stock that do not
currently  own and have not  owned  any  stock in the  Company  (or any of its
subsidiaries)  other than Class A Common  Stock and that hold such shares as a
capital asset (within the meaning of Section 1221 of the Code).

     There is no reciprocal  tax treaty  between  Panama and the United States
regarding withholding.

U.S. Federal Income Tax Consequences to U.S. Holders.

     The following  discussion applies to a holder of Class A Common Stock who
is an  individual  citizen or resident  of the United  States,  a  corporation
created or organized in the United States or any other person  subject to U.S.
Federal income taxation on its worldwide income and gain ("U.S. Holders").

     Distributions  by the Company.  Distributions by the Company with respect
to Class A Common Stock will be taxable to U.S.  Holders as ordinary  dividend
income to the extent of the  Company's  current and  accumulated  earnings and
profits.  Distributions,  if any,  in  excess  of the  Company's  current  and
accumulated  earnings  and profits  will  constitute  a  nontaxable  return of
capital to a U.S. Holder to the extent of the U.S. Holder's adjusted tax basis
in the Class A Common  Stock and will be applied  against  and reduce the U.S.
Holder's  tax basis in such  Class A Common  Stock.  To the  extent  that such
distributions  are in  excess  of the U.S.  Holder's  tax basis in its Class A
Common Stock, the distributions  will constitute  capital gain.  Distributions
with  respect to Class A Common Stock  generally  will not be eligible for the
dividends-received deduction.

     Foreign  Personal  Holding  Company.  The  Company  and  several  of  its
subsidiaries may be "foreign personal holding companies"  ("FPHC").  A foreign
corporation  is classified as an FPHC for a taxable year during which at least
60% of its gross  income for the taxable  year is "FPHC  income" and more than
50% of the voting  power or value of all stock in such  corporation  is owned,
directly or indirectly (including shares owned through  attribution),  by five
or fewer  individuals  who are United States  persons.  FPHC income  generally
includes royalties,  annuities, proceeds from the sale of stock or securities,
gains  from  futures  transactions  in any  commodities,  rents,  income  from
personal  services,  dividends and interest (other than certain  dividends and
interest paid by a qualifying related company that is incorporated in the same
country


                                      33


<PAGE>


as  the  recipient  corporation).  After  its  initial  year  as  an  FPHC,  a
corporation  may  remain an FPHC even if only 50% of its gross  income is FPHC
income.

     All United States Holders that are  shareholders  of an FPHC are required
to include in their taxable  income a deemed  dividend equal to their share of
the corporation's  "undistributed  FPHC income".  In general,  a corporation's
undistributed FPHC income is the corporation's  total taxable income (which is
gross  income  minus  allowable  deductions  such as  ordinary  and  necessary
business  expenses),  with certain  adjustments,  less  dividends  paid by the
corporation. Such a deemed dividend is recognized by all U.S. Holders that are
shareholders of an FPHC with  undistributed  FPHC income,  regardless of their
percentage  ownership  in the  corporation,  and  regardless  of whether  they
actually receive a dividend from the FPHC.

     Because the Company  intends to  distribute  sufficient  dividends and to
cause each of its FPHC subsidiaries to distribute sufficient dividends so that
no FPHC will have  undistributed  FPHC income,  it is not  expected  that U.S.
Holders will  receive  deemed  dividend  income as a result of the FPHC rules.
Nevertheless,  if the  Company  or  certain  of  its  FPHC  subsidiaries  have
undistributed FPHC income,  U.S. Holders will recognize deemed dividend income
regardless of whether they receive cash distributions from the Company.

     Controlled  Foreign  Corporation.  Panamco  and its  subsidiaries  may be
"controlled foreign corporations" ("CFC"). A corporation is a CFC if more than
50% of the shares of the corporation, by vote or value, are owned, directly or
indirectly  (including  shares  owned  through  attribution,   which  requires
treating   Warrants  and  Securities   convertible  into  shares  actually  or
constructively owned by a U.S. Holder as exercised or converted),  by "10% CFC
Shareholders".  The  term  CFC  Shareholder  means  a U.S.  person  (including
citizens  and  residents  of the United  States,  corporations,  partnerships,
associations,  trusts,  and estates created or organized in the United States)
who owns, or is considered as owning through  attribution,  10% or more of the
total  combined  voting power of all classes of stock entitled to vote of such
foreign corporation.  Each 10% CFC Shareholder in a CFC is required to include
in its  gross  income  for a  taxable  year  its pro rata  share of the  CFC's
earnings and profits for that year  attributable to certain types of income or
investments.  It  should  be  noted  that  income  recognized  by  a  10%  CFC
Shareholder  under the CFC rules would not also be recognized as undistributed
FPHC income.

     A U.S. Holder will not be a "10% CFC Shareholder" and will not be subject
to the CFC rules unless in the case of the Company the U.S. Holder owns 10% of
the Class B Common Stock or in the case of any CFC  Subsidiary of the Company,
at least 10% of the value of the Company's  outstanding shares or at least 10%
of the voting stock in one or more of the Company's CFC subsidiaries), in each
case directly or indirectly (including shares owned through attribution).

     Passive  Foreign  Investment   Company.  A  "passive  foreign  investment
company" ("PFIC") is defined as any foreign  corporation at least 75% of whose
consolidated  gross income for the taxable year is passive income, or at least
50% of the value of whose  consolidated  assets is attributable to assets that
produce or are held for the  production of passive  income.  For this purpose,
passive income  generally  includes  dividends,  interest,  royalties,  rents,
annuities and the excess of gains over losses from the  disposition  of assets
which produce passive income.  However,  a corporation that is a CFC shall not
be  treated  as a  PFIC  with  respect  to a  shareholder  who  is a  10%  CFC
shareholder.

     Neither the Company  nor any of its  subsidiaries  has been or is a PFIC,
and  the  Company   intends  to  conduct  its  affairs  so  as  to  avoid  the
classification of the Company and its subsidiaries as PFICs. However,


                                      34


<PAGE>


if ever  applied to the  Company,  the PFIC rules  could  produce  significant
adverse tax consequences  for a U.S.  Holder,  including the imposition of the
highest  tax rate on  income or gains  allocated  to prior  PFIC  years and an
interest charge on U.S. Federal income taxes deemed to have been deferred.

     Foreign Tax Credits.  Dividends  received from the Company generally will
be  characterized  as  passive  income,  and any  U.S.  tax  imposed  on these
dividends  cannot be offset by excess  foreign tax credits that a U.S.  Holder
may have from foreign-source income not qualifying as passive income.

     Dispositions  of  Stock.  In  general,  any  gain or loss on the  sale or
exchange of Class A Common Stock by a U.S. Holder will be capital gain or loss
and will be  long-term  capital  gain or loss if the U.S.  Holder has held the
Class A Common Stock for more than 12 months.  For noncorporate  U.S. Holders,
long-term capital gain generally will be subject to U.S. Federal income tax at
a maximum rate of 20% if the underlying Class A Common Stock has been held for
more than 12 months. There are limits on the deductibility of capital losses.

     Information Reporting and Backup Withholding Requirements with Respect to
U.S. Holders.  United States information reporting requirements may apply with
respect  to the  payment  of  dividends  on the  Class A Common  Stock.  Under
Treasury  Regulations  currently in effect, no backup withholding is generally
required for dividend payments by the Company to U.S. Holders.  Under recently
finalized  Treasury  Regulations,  however,  noncorporate  U.S. Holders may be
subject to backup  withholding  at the rate of 31% with  respect to  dividends
paid by the Company  after  December 31, 2000 when a U.S.  Holder (i) fails to
furnish or certify a correct  taxpayer  identification  number to the payor in
the manner required,  (ii) is notified by the IRS that it has failed to report
payments of interest or  dividends  properly  or (iii)  fails,  under  certain
circumstances,  to  certify  that it has not  been  notified  by the  Internal
Revenue Service that it is subject to backup withholding for failure to report
interest and dividend payments.

     Form 5471 Reporting  Requirements.  U.S.  Holders may be required to file
IRS Form 5471 under  certain  circumstances.  A U.S.  Holder is not subject to
Form 5471 filing  requirements  unless (after the  application of the relevant
attribution  rules) the U.S. Holder:  (i) owns 10% or more of the value of the
outstanding  stock of the Company or a subsidiary  that is an FPHC; (ii) meets
the 10% stock  ownership  requirements  with  respect to the Company or one or
more of its  subsidiaries  when such  corporation is  "reorganized",  acquires
stock in the Company or one of its subsidiaries which, when added to any stock
owned on the date of acquisition,  meets the 10% stock ownership  requirement,
acquires  stock  (without  regard  to  stock  already  owned  on the  date  of
acquisition)  that meets the 10% stock ownership  requirement,  or disposes of
sufficient  stock to reduce its ownership  interest to less than the 10% stock
ownership  requirement;  (iii) is a person  who owns any  shares  in a captive
insurance  company which is owned 25% or more by U.S.  persons;  (iv) is a 10%
CFC shareholder of the Company or one or more of its  subsidiaries;  (v) is an
officer or director of the Company or one or more of its subsidiaries; or (vi)
owns more than 50% of the total combined  voting power of all classes of stock
entitled  to vote,  or more than 50% of the total value of all shares of stock
in the  Company or one or more of its  subsidiaries.  For  purposes of section
(ii)  above,  the term  "10%  stock  ownership  requirement"  means  direct or
indirect  ownership  of 10% or more of the  total  value of the  corporation's
stock,  or 10% or more of the total  combined  voting  power of all classes of
stock with voting rights.  A United States person required to file a Form 5471
to report its  ownership  of Class A Common Stock may also be required to file
one or more Forms 5471 for various subsidiaries of the Company. As long as the
reporting  requirements above have been met, no U.S. Income Withholding Tax is
required on dividends paid.


                                      35


<PAGE>


     Failure to provide  the  information  required by Form 5471 may result in
substantial civil and criminal penalties.  Each prospective shareholder should
consult its own tax advisor  with  respect to the  specific  requirements  for
filing Forms 5471.

U.S. Federal Income Tax Consequences to Non-U.S. Holders.

     The  following   discussion   summarizes  the  U.S.  Federal  income  tax
consequences of acquiring,  holding and disposing of Class A Common Stock by a
holder of Class A Common Stock that is not a U.S. Holder (a "Foreign Holder"),
is not engaged in the conduct of a trade or business in the United  States and
is not  present in the United  States for 183 days or more  during the taxable
year.

     Distributions.  Distributions by the Company to a Foreign Holder would be
subject to withholding  of U.S.  Federal income tax only if 25% or more of the
gross income of the Company (from all sources for the three-year period ending
with the close of the taxable year preceding the  declaration of the dividend)
was  effectively  connected  with the  conduct of a trade or  business  in the
United States by the Company.  The Company  anticipates that it will recognize
income that is  effectively  connected with the conduct of a trade or business
in the United States.  However, the income that is effectively  connected with
the conduct of a trade or business in the United  States  should not represent
25% or more of the gross income of the Company. Accordingly, dividends paid to
Foreign  Holders  are not  expected  to be subject to U.S.  Federal  income or
withholding tax unless the Company's sources of income significantly change.

     Dispositions of Shares. A Foreign Holder generally will not be subject to
United States Federal income or withholding  tax in respect of gain recognized
on the disposition of Class A Common Stock.

     Information Reporting and Backup Withholding Requirements with Respect to
Foreign Holders. Currently, U.S. information reporting requirements and backup
withholding  will not apply to  dividends  on the Class A Common Stock paid to
Foreign  Holders at an address  outside the United States  (provided  that the
payor  does not have  definite  knowledge  that the  payee is a United  States
person).  After December 31, 2000,  Foreign  Holders may be required to comply
with certification and identification procedures to prove their exemption from
information  reporting  and  backup  withholding  requirements.  As a  general
matter,  information  reporting  and  backup  withholding  will not apply to a
payment of proceeds from a sale of the Class A Common Stock  effected  outside
the  United  States  by  a  foreign  office  of  a  foreign  broker.  However,
information reporting  requirements (but not backup withholding) will apply to
a payment of the proceeds of a sale effected  outside the United States of the
Class  A  Common  Stock  through  a  "U.S.  Broker",  unless  the  broker  has
documentary  evidence  in its records  that the holder is not a United  States
person and has no actual knowledge that such evidence is false, or the Foreign
Holder  otherwise  establishes  an  exemption.  For purposes of the  preceding
sentence,  a U.S.  Broker is a broker  that is a United  States  person or has
certain other  connections  to the United  States.  Payment by a broker of the
proceeds  of a sale of the Class A Common  Stock  effected  inside  the United
States is subject to both backup withholding and information  reporting unless
the Foreign  Holder  certifies  under  penalties  of perjury  that he is not a
United States  person and provides his name and address or the Foreign  Holder
otherwise  establishes  an exemption.  Any amounts  withheld  under the backup
withholding  rules  from a payment  to a Foreign  Holder  will be allowed as a
refund or a credit against such Foreign  Holder's United States Federal income
tax,  provided that the required  information is furnished to the IRS. As long
as the reporting  requirements above have been met, no U.S. Income Withholding
Tax is required on dividends paid.


                                      36


<PAGE>


Panamanian Taxation

     The principal  Panamanian tax  consequences of ownership of Shares are as
follows.  The  following  discussion  is based  upon  advice of the  Company's
Panamanian counsel Arias, Fabrega & Fabrega.

     General.  Panama's  income tax is  exclusively  territorial.  Only income
actually  earned from sources  within  Panama is subject to  taxation.  Income
earned by Panamanian  corporations from offshore  operations is not taxable in
Panama. The territorial principle of taxation has been in force throughout the
history  of  the  country  and is  supported  by  legislation,  administrative
regulations and court decisions.

     The Company is not subject to taxes in Panama  because  almost all of its
income  arises from the  activities  of its  subsidiaries  which are  conduced
entirely  offshore  from  Panama.  This is the case even  though  the  Company
maintains  its  registered  office  and  permanently  employs   administrative
personnel in Panama.

     Taxation of Capital  Gains.  There are no taxes on capital gains realized
by an individual or corporation  regardless of its nationality or residency on
the sale or other  disposition of Shares since the Company has been registered
with Panama's National Securities  Commission ("PNSC").  However,  even if the
Company were not  registered  with the PNSC, any gain arising from the sale or
disposition  of shares should not be deemed  taxable in Panama on the basis of
the already-  mentioned  principles of territorial  taxation,  inasmuch as the
value of such Shares is ultimately determined upon assets and activities which
are held or conducted almost entirely outside of Panama.

     Taxation of Distributions.  Dividends and similar  distributions  paid by
the  Company  in  respect to Shares are also  exempted  from  dividend  taxes,
otherwise  payable  by  withholding  at  source  on  such  income,  under  the
aforementioned  territorial  principles of taxation since Panamanian  dividend
taxes do not arise on dividends and similar  distributions  of  non-Panamanian
source income or on income which is exempt from Panama's income tax.

     The preceding summary of certain Panamanian tax matters is based upon the
tax laws of Panama  and  regulations  thereunder  currently  in effect  and is
subject to any subsequent  change in Panamanian laws and regulations which may
come into effect.


                                      37


<PAGE>


ITEM 8. SELECTED FINANCIAL DATA

                    SELECTED CONSOLIDATED FINANCIAL DATA(1)
               (Amounts in thousands, except per share amounts)


     The  following  table  sets forth  selected  consolidated  financial  and
operating data for the Company.  The selected financial data have been derived
from  the  consolidated  financial  statements  of the  Company.  The  audited
consolidated  financial  statements  of the  Company for the three years ended
December 31,  1999,  are  included  elsewhere  herein and have been audited by
Arthur Andersen,  independent public  accountants,  whose audit report is also
included herein.  All of the  consolidated  financial  statements  referred to
above have been prepared in  accordance  with U.S. GAAP and are stated in U.S.
dollars. The selected consolidated financial and operating data should be read
in  conjunction  with  "Item  9.--Management's   Discussion  and  Analysis  of
Financial Condition and Results of Operations" and the consolidated  financial
statements and notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,(1)
                                                                  --------------------------
                                                1995(7)        1996(8)       1997(9)       1998(10)          1999
                                                -------        -------       -------       --------          ----
Statement of Operations Data:
<S>                                           <C>            <C>           <C>            <C>            <C>
Net sales................................     $1,609,437     $1,993,087    $2,510,210     $2,773,276     $2,415,817
Cost of sales, excluding depre-
 ciation and amortization................        903,763      1,152,021     1,327,443      1,425,246      1,191,883
                                              ----------    -----------   -----------    -----------    -----------
Gross profit.............................        705,674        841,066     1,182,767      1,348,030      1,223,934
Operating expenses:
 Selling and distribution................        361,142        425,955       563,917        657,138        572,038
 General and administrative..............        109,393        132,101       193,437        222,327        251,450
 Depreciation and amortization,
     excluding goodwill(2)(4)............         74,125         99,114       159,371        253,112        214,539
 Amortization of goodwill................          7,036          6,379        20,121         35,739         36,284
 Facilities reorganization

     charges(11).........................              -              -             -              -         35,172
                                             -----------    -----------   -----------      ---------      ---------
     Total operating expenses............        551,696        663,549       936,846      1,168,316      1,109,483
                                             -----------    -----------   -----------      ---------      ---------
Operating income.........................        153,978        177,517       245,921        179,714        114,451
Interest income .........................          4,839         20,229        22,006         12,817         28,962
Interest expense.........................        (41,792)       (43,844)      (60,889)       (98,152)      (129,072)
Other income (expense), net(3)...........          2,798         24,074        44,033         22,136        (39,296)
Nonrecurring income, net(4)..............         11,177         11,646             -         60,486              -
                                             -----------    -----------   -----------      ---------      ---------
Income (loss) before income taxes........        131,000        189,622       251,071        177,001        (24,955)
Income taxes (4).........................         44,999         53,580        57,302         51,374         31,254
                                             -----------    -----------   -----------      ---------      ---------
Income (loss) before minority
interest.................................         86,001        136,042       193,769        125,627        (56,209)
Minority interest in earnings of

 subsidiaries............................         15,427         18,462        19,934          5,305          3,695
                                             -----------    -----------   -----------     ----------      ---------

Net income (loss)........................    $    70,574    $   117,580   $   173,835     $  120,322    $   (59,905)
                                             ===========    ===========   ===========     ==========    ===========
Basic earnings (loss) per share(5).......    $      0.88    $      1.22   $      1.44     $     0.93    $     (0.46)
                                             ===========    ===========   ===========     ==========    ===========
Diluted earnings (loss) per share (5)....    $      0.87    $      1.21   $      1.43     $     0.92    $     (0.46)
                                             ===========    ===========   ===========     ==========    ===========

Other Data:

Total product unit case volume...........        675,560        766,485     1,010,960      1,174,035      1,163,117
Dividends per share......................    $        16    $        18   $        21     $       24    $        24
Weighted average shares outstanding (basic)(5)    80,726         96,522       120,841        129,538        129,683

</TABLE>

                                      38


<PAGE>


<TABLE>
<CAPTION>
                                                          Year Ended December 31,(1)
                                                          --------------------------
                                          1995(7)      1996(8)       1997(9)      1998(10)         1999
                                          -------      -------       ------       --------         ----
<S>                                    <C>          <C>           <C>           <C>           <C>
Weighted average shares outstanding
 (diluted)(5).......................       80,806       97,065       121,969       130,792       130,005
Capital expenditures(6).............   $  217,843   $  122,897    $  208,669    $  302,215    $  163,203
Cash Operating Profit...............   $  235,139   $  283,010    $  425,413    $  468,565    $  385,544
Balance Sheet Data (end of period):
Cash and equivalents................   $   42,684   $  251,273    $  332,995    $  131,152    $  152,648
Property, plant and equipment, net..      633,435      684,050     1,119,515     1,307,590     1,218,383
Total assets........................    1,397,668    1,705,385     3,587,069     3,647,690     3,613,122
Total long-term obligations.........      322,103      404,533       897,056       964,525     1,437,834
Minority interest...................       67,310       59,734        26,783        26,243        27,974
Shareholders' equity................      609,079      973,994     1,937,770     1,978,234     1,751,896
</TABLE>

[FN]
     ------------
(1)  The results of the Colombian and Venezuelan subsidiaries for all periods,
     the Mexican subsidiaries for 1997 and 1998 and the Brazilian subsidiaries
     for 1996 and 1997,  have been remeasured in U.S.  dollars,  the reporting
     and  functional  currency,  in  accordance  with  Statement  of Financial
     Accounting  Standards  No.  52,  "Foreign  Currency  Translation",  as it
     applies  to  highly  inflationary  economies  such as those in which  the
     subsidiaries  operate.  See Note 1 of  "Notes to  Consolidated  Financial
     Statements".
(2)  Includes  breakage of bottles and cases and amortization  expense related
     to new  introductions.  See Note 1 of  "Notes to  Consolidated  Financial
     Statements".
(3)  See Note 13 of "Notes to Consolidated Financial Statements".
(4)  In the fourth  quarter of 1995, a  nonrecurring  credit of $11.2  million
     ($6.6  million  after taxes and minority  interest)  was  recorded.  This
     credit  consisted of a benefit  related to the approval by the  Brazilian
     government of credits for sales taxes previously paid on product samples.
     During 1996, three separate  nonrecurring  credits of $3.9, $3.2 and $4.5
     million  were  recorded.  These  credits  consisted  of the  recovery  of
     previously paid excise taxes on refillable plastic  containers  purchased
     in prior  periods,  a net credit  relating to the credits for  previously
     paid sales taxes on product samples, and a net credit due to the recovery
     of  previously  paid  excise  taxes on  interest  charged  to  customers,
     respectively.

     During 1998,  Panamco  Brasil  conducted a study to evaluate the expected
     future utilization of returnable  product  presentations in the Brazilian
     market,  having  observed  accelerated  demand for, and  utilization  of,
     nonreturnable presentations in the marketplace. The results of this study
     show  that  the  use of  nonreturnable  presentations  will  continue  to
     increase in the Brazilian market. Therefore, the Company has adjusted the
     carrying value of bottles and cases to reflect their estimated use in the
     marketplace  by charging  $36.5  million to the 1998  operating  results,
     increasing total depreciation and amortization  expense, and reducing the
     current  year tax  provision  by $12.1  million.  See Note 1 of "Notes to
     Consolidated Financial Statements".

     Additionally,  Panamco Brasil reversed a contingency  reserve recorded in
     prior  years for excise tax credits  taken on  purchases  of  concentrate
     between  February  1991 and  February  1994.  The Company had  previously
     accrued this reserve in the full amount of such credits.  Panamco  Brasil
     reversed this reserve in 1998 because  during 1998 the Brazilian  Supreme
     Court resolved similar claims of other bottlers in favor of the bottlers.

     The reversal of the excise tax reserve  amounted to $60.5 million and was
     credited to  Nonrecurring  income,  in the income  statement.  Income tax
     credits recorded in this reserve,  amounting to $20.0 million,  were also
     reversed and charged  directly to income in the  provision for income tax
     in 1998. See Note 10 of "Notes to Consolidated Financial Statements".
(5)  Dividends  per share  reflect  the amounts  declared  and paid during the
     applicable  period.  Earnings per share,  dividends  per share and shares
     outstanding  for all  periods  have been  adjusted  to give effect to the
     two-for-one stock split effected on March 31, 1997.
(6)  Does not include purchases of bottles and cases.


                                      39

<PAGE>


(7)  Includes  three  months of net sales and net income of $18.4  million and
     $2.2 million, respectively, from the acquisition of Panamco Costa Rica in
     1995.
(8)  Includes  six months of net sales and net income of $7.1 million and $0.6
     million,  respectively,  from the acquisition of additional franchises in
     Costa Rica in 1996.
(9)  Includes  eight months of net sales and net income of $349.5  million and
     $49.5 million,  respectively,  from Panamco Venezuela, and five months of
     net sales and net income of $18.6 million and $0.7 million, respectively,
     from Panamco Nicaragua.
(10) Includes  nine  months of net sales and net income of $45.1  million  and
     $2.1 million,  respectively,  from the Panamco Guatemala, and four months
     of  net  sales  and  net  income  of  $4.2  million  and  $0.9   million,
     respectively, from R.O.S.A.
(11) Facilities  reorganization  charges in 1999 are  related  to a  workforce
     reduction in Brazil and  Venezuela,  and write-off of physical  assets in
     Venezuela and Colombia.  See Note 1 of "Notes to  Consolidated  Financial
     Statements".
</FN>



ITEM 9.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND
         RESULTS OF OPERATIONS

General

     The following discussion addresses the financial condition and results of
operations  of Panamco  and its  consolidated  subsidiaries.  This  discussion
should  be  read  in  conjunction  with  our  audited  consolidated  financial
statements as of December 31, 1998 and 1999 and for each of the three years in
the period ended  December 31, 1999 and the notes thereto  included  elsewhere
herein.

     In March 1998, we completed the acquisition of our Guatemalan subsidiary,
Panamco Guatemala.  We began consolidating the results of Panamco Guatemala as
of April 1, 1998.  In September  1998,  we acquired  all the capital  stock of
Refrigerantes  do  Oeste,  S.A.  ("R.O.S.A."),   which  produces,   sells  and
distributes  Coca-Cola  products in the western part of Brazil in the state of
Matto  Grosso do Sul. We began  consolidating  the  results of R.O.S.A.  as of
September 1, 1998.

     In 1998, we created a "Panamco Central America" group,  which consists of
Panamco Costa Rica,  Panamco  Nicaragua and Panamco  Guatemala.  The financial
condition  and  results  of  operations  of these  three  companies  have been
reported together in the financial statements of Panamco Central America.

     In February  1999,  we formed the North Latin  American  Division,  which
consists of Panamco Mexico and Panamco  Central  America.  We will continue to
report these results of operations separately.

     Unit case means 192 ounces of finished  beverage  product (24 eight-ounce
servings).  Average sales prices per unit case means net sales in U.S. dollars
for the  period  divided  by the  number of unit  cases  sold  during the same
period.  Cash operating  profit means operating  income plus  depreciation and
amortization of goodwill and noncash facilities reorganization charges.

Inflation

Effect of Inflation on Financial Information

     Our net sales, and almost all operating costs, in each of Mexico, Brazil,
Colombia,  Venezuela,  Costa Rica, Nicaragua and Guatemala, are denominated in
the currency of such country. In accordance with


                                      40


<PAGE>


Statement  of  Financial   Accounting  Standards  No.  52,  "Foreign  Currency
Translation"  ("SFAS 52"), the financial  statements of our  subsidiaries  are
remeasured or translated into U.S.  dollars for purposes of the preparation of
the consolidated  financial statements.  (See Note 1 of "Notes to Consolidated
Financial  Statements").  Borrowings  and purchases of machinery and equipment
are often made in U.S.  dollars.  During any period when the rate of inflation
in a particular  country exceeds the rate of devaluation of the local currency
against the U.S. dollar,  all income statement  amounts tend to be higher when
translated into U.S.  dollars than would be the case in the absence of such an
excess. Conversely, if devaluation exceeds inflation, income statement amounts
tend to be lower when translated into U.S. dollars.

     The  following  table  compares  the rate of  inflation,  as  measured by
certain national consumer price indices in the seven countries,  with the rate
of devaluation for the periods shown:

                                         Year Ended December 31,(1)
                                         -------------------------
                                           1997    1998      1999
                                         -------  -------  -------

Mexico
  Inflation...........................     16%      19%      12%
  Currency Devaluation (Revaluation)..      3%      22%      (4%)

Brazil
  Inflation...........................      4%       2%       8%
  Currency Devaluation................      7%       8%      48%

Colombia
  Inflation...........................     18%      18%      10%
  Currency Devaluation................     29%      19%      22%

Venezuela
  Inflation...........................     38%      30%      20%
  Currency Devaluation................      6%      12%      15%

Costa Rica
  Inflation...........................     11%      11%      10%
  Currency Devaluation................     11%      11%      10%

Nicaragua
  Inflation...........................      8%      18%       7%
  Currency Devaluation................     12%      12%      10%

Guatemala
  Inflation...........................       -       8%       5%
  Currency Devaluation................       -      11%      15%


(1) Inflation  figures are based on the  applicable  Consumer  Price Index and
currency  devaluation figures are based on official U.S. dollar exchange rates
at year-end.


     In  addition,  the level of inflation  has a direct  impact on the method
used to translate  the  financial  statements  from the local  currency to the
reporting currency.  SFAS 52 provides that, in a highly  inflationary  economy
(defined as having  cumulative  inflation for the three-year  period preceding
the balance sheet date of approximately  100% or more), the effect of exchange
rate  fluctuations on the translation is included in the  determination of net
income  for the period and is  distributed  as gains or losses to the  related
income


                                      41


<PAGE>


statement  accounts.  Such gains and losses do not affect the income statement
of  companies   operating  in  economies  which  are  not  considered   highly
inflationary  but  are  instead  included  as part  of the  accumulated  other
comprehensive income as a component of shareholders' equity.

     Beginning  in  1998,  we  discontinued  classifying  Brazil  as a  highly
inflationary economy and accordingly, the functional currency of our Brazilian
operations is the Brazilian real.

     Costa  Rica,  Nicaragua  and  Guatemala  are  not  classified  as  highly
inflationary  economies and the functional  currencies for financial reporting
purposes under accounting  principles  generally accepted in the United States
are the colon, cordoba and quetzal, respectively.

     Colombia and Venezuela are  currently  classified as highly  inflationary
economies and accordingly their financial statements have been remeasured into
U.S.  dollars in accordance  with SFAS 52.  Venezuela was not  classified as a
highly inflationary economy in 1997.

     In 1997 and 1998 Mexico was classified as a highly inflationary  economy.
Since 1999,  Mexico has not been classified as a highly  inflationary  economy
and as a result the  functional  reporting  currency for Mexico since 1999 has
been the Mexican peso.

Effect of Inflation and Changing Prices on Operations

     In  addition  to  high  inflation,  our  operations  are  carried  out in
countries  which in the past  experienced,  and may in the future  experience,
government  price controls.  While price controls have been a limiting factor,
we have been  generally  effective in the recent past in increasing  prices in
local currency  terms at least at the rate of inflation.  All of our costs are
affected by the high rates of inflation in the  countries in which we operate.
In general,  transactions in these countries are effectively tied to inflation
either through pricing, contract indexing, statute or informal practice.

     Although  currently  there are no formal price controls on soft drinks in
our franchise territories,  price and wage controls remain in effect in Mexico
and Brazil for certain other  products and services,  and price  increases for
soft drinks in Mexico and Colombia are subject to the informal approval of the
respective governments.

     Our sales also have been,  and may in the future be,  adversely  affected
when wages rise more slowly than the rate of inflation, resulting in a loss of
consumer  purchasing power. This has been the case in Brazil,  Venezuela,  and
Colombia recently as a result of the devaluations as discussed above.

     In Mexico, Brazil, Colombia,  Venezuela, Costa Rica and Nicaragua, income
taxes are indexed to reflect the effects of inflation; however, the effects of
inflation  are  calculated  differently  for  purposes of local  taxation  and
financial reporting.

Seasonality

     Soft drink sales are generally  higher  during the December  holidays and
during the hottest and driest  periods  (with  rainfall  varying  from year to
year). For this reason, we typically experience our best results of operations
in the second and fourth quarters. However, the seasonality effect is tempered
in our case because of the  difference  in the timing of the summer  months in
the countries in which we operate. In


                                      42


<PAGE>


Brazil,  summer occurs  during  November,  December and January,  while summer
occurs in Mexico,  Colombia,  Venezuela,  Costa Rica,  Guatemala and Nicaragua
during the months of June, July and August.

Forward-Looking Statements

     The  nature of our  operations  and the  environment  in which we operate
subject us to changing  economic,  competitive,  regulatory and  technological
conditions,  risks  and  uncertainties.  In  connection  with the safe  harbor
provisions of the Private  Securities  Litigation  Reform Act of 1995, we note
the following facts which, among others,  could cause future results to differ
materially from the forward-looking  statements,  expectations and assumptions
expressed or implied in this document.

     Forward-looking statements, contained in this document include the amount
of future  capital  expenditures  and the possible  uses of proceeds  from any
future  borrowings.  The  words  believes,   intends,  expects,   anticipates,
projects,  estimates,  predicts,  and similar expressions are also intended to
identify   forward-looking   statements.   Such  statements,   estimates,  and
projections  reflect  various   assumptions  by  our  management,   concerning
anticipated  results and are subject to  significant  business,  economic  and
competitive  uncertainties  and  contingencies,  many of which are  beyond our
control.  Factors  that could  cause  results to differ  include,  but are not
limited to, changes in the soft drink business environment,  including actions
of competitors  and changes in consumer  performance,  changes in governmental
laws and  regulations,  including  income  taxes,  market  demand  for new and
existing products and raw material prices.  Accordingly,  we cannot assure you
that  such  statements,  estimates  and  projections  will  be  realized.  The
forecasts  and actual  results  will likely vary and those  variations  may be
material.  We  make  no  representation  or  warranty  as to the  accuracy  or
completeness of such  statements,  estimates or projections  contained in this
document or that any forecast contained herein will be achieved.

Consolidated Results of Operations

     The following table sets forth our selected  consolidated  financial data
for the periods indicated, expressed as a percentage of net sales:

                                          Year Ended December 31,
                                       -----------------------------
                                        1997       1998        1999
                                       ------     ------      ------
Statement of Operations Data:

Net sales                               100.0%     100.0%     100.0%
Cost of sales                            52.9       51.4       49.3
                                       ------     ------     ------
Gross profit                             47.1       48.6       50.7
Operating expenses:
  Selling and distribution               22.5       23.7       23.7
  General and administrative              7.7        8.0       10.4
  Depreciation and amortization,
  excluding goodwill                      6.3        9.1        8.9
  Amortization of goodwill                0.8        1.3        1.5
  Facilities reorganization charges        -          -         1.5
                                       ------     ------     ------
    Total                                37.3       42.1       46.0
                                       ------     ------     ------
Operating income                          9.8        6.5        4.7
Interest (expense), net                  (1.5)      (3.1)      (4.1)
Other income (expense), net               1.8        0.8       (1.6)
Nonrecurring income, net                   -         2.2         -
                                       ------     ------     ------
Income (loss) before income taxes        10.1        6.4       (1.0)


                                      43


<PAGE>

                                          Year Ended December 31,
                                       -----------------------------
                                        1997       1998        1999
                                       ------     ------      ------

Income taxes                              2.3        1.9        1.3
                                       ------     ------      ------
Income (loss) before minority
  interest                                7.8        4.5       (2.3)
Minority interest                         0.9        0.2        0.2
                                       ------     ------      ------
Net income (loss)                         6.9%       4.3%      (2.5)%
                                       ======     ======      ======



Minority Interests in Results of Operations

     We conduct our operations through tiers of subsidiaries in which, in some
cases, minority shareholders hold interests.

     The aggregate  minority  interest in our income before minority  interest
during  a fiscal  period  is a  function  of the  relative  levels  of  income
generated by each of the consolidated  subsidiaries and the percentage of each
subsidiary's capital stock owned by minority shareholders.  As of December 31,
1999, our ownership interests in our Mexican,  Brazilian and Colombian holding
companies were  approximately  98%, 98% and 97%,  respectively.  This includes
acquisitions  made in 1997 and 1998 that  increased  our  effective  ownership
interest in Panamco Mexico,  from 74% to 98% and in Panamco Brasil from 96% to
98%. We own 100% of our  operations  in Costa Rica,  Venezuela,  Nicaragua and
Guatemala.  Our country level holding companies own interests ranging from 50%
to 100% in our approximately 60 consolidated subsidiaries.

     As a result of the net loss at certain of our  subsidiaries  for the year
ended  December  31,  1999,   minority   shareholdings   in  our  consolidated
subsidiaries represented an interest in the aggregate of approximately 6.6% of
consolidated  net loss  before  minority  interest.  Because  we have  varying
percentage   ownership   interests  in  our   approximately  100  consolidated
subsidiaries,  the amount of the  minority  interest  in income or loss before
minority  interest  during a period  depends upon the revenues and expenses of
each  of the  consolidated  subsidiaries  and the  percentage  of each of such
subsidiary's capital stock owned by minority shareholders during such period.

     Income  statement  and balance  sheet data for our  subsidiaries  Panamco
Mexico,  Panamco  Brasil,  Panamco  Colombia,  Panamco  Venezuela  and Panamco
Central  America,  are presented on the following pages. The data presented as
of and for each of the three years in the period ended  December 31, 1999 have
been derived from the audited  consolidated  financial  statements  of Panamco
Mexico,  Panamco  Colombia,  Panamco  Venezuela,  Panamco Costa Rica,  Panamco
Nicaragua and Panamco Guatemala, and the audited combined financial statements
of Panamco  Brasil,  as the case may be, which  financial  statements  are not
included herein. As set forth in such income statement and balance sheet data,
minority  interest in the Panamco Mexico,  Panamco Brasil and Panamco Colombia
subsidiaries and net income attributable to the Panamco Mexico, Panamco Brasil
and Panamco Colombia holding  companies give effect to minority  shareholdings
below the country  holding  company  level.  Minority  interest in the Panamco
Mexico,  Panamco Brasil and Panamco Colombia  holding  companies refers to the
aggregate  minority interest in the net income of the respective country level
holding  company.  Net  income  attributable  to Panamco  gives  effect to the
deduction from net income of the minority  interests at both the country level
holding company and the subsidiary levels.


                                      44


<PAGE>

<TABLE>
<CAPTION>

                                Panamco Mexico
              (U.S. dollars in thousands, except for unit cases)

                                                                    Year Ended December 31,
                                                             -----------------------------------
                                                                1997         1998         1999
                                                             ----------   ---------    ---------
Statements of Operations Data:
<S>                                                          <C>          <C>          <C>

     Net sales                                               $ 546,772    $ 638,481    $ 794,812
     Cost of sales, excluding depreciation and amortization    267,341      306,124      374,506
     Operating expenses                                        196,260      237,070      287,118
                                                             ---------    ---------    ---------
     Operating income                                           83,171       95,287      133,188
     Interest (expense), net                                    (6,846)      (9,984)     (11,849)
     Other income, net                                           9,569       10,768        7,589
                                                             ---------    ---------    ---------
     Income before income taxes                                 85,894       96,071      128,928
     Income taxes                                               31,187       30,517       41,849
                                                             ---------    ---------    ---------
     Income before minority interest                            54,707       65,554       87,079
     Minority interest in Panamco Mexico subsidiaries            4,083        2,476        3,288
                                                             ---------    ---------    ---------
     Net income attributable to Panamco Mexico holding
     company                                                    50,624       63,078       83,791
     Minority interest in Panamco Mexico holding company        11,423        1,172        1,556
                                                             ---------    ---------    ---------
     Net income attributable to Panamco                      $  39,201    $  61,906    $  82,235
                                                             =========    =========    =========


Margin Analysis (as a percent of net sales):
     Operating income                                            15.2%        14.9%        16.8%
     Income before minority interest                             10.0%        10.3%        11.0%
     Net income attributable to Panamco Mexico holding
     company                                                      9.3%         9.9%        10.5%
     Net income attributable to Panamco                           7.2%         9.7%        10.3%
     Cash Operating Profit                                       19.3%        20.7%        21.8%

Unit Case Sales Data (in millions):
     Soft drinks                                                 230.5        256.7        270.0
     Water                                                        73.4        110.6        136.4
     Other products                                                1.1          1.4          2.3

Other Data:
     Depreciation and amortization                           $  22,254    $  37,132    $  40,356
     Capital expenditures                                    $  52,972    $  64,047    $  57,919
     Cash Operating Profit                                   $ 105,425    $ 132,419    $ 173,544


                                                                    Year Ended December 31,
                                                             -----------------------------------
                                                                1997         1998         1999
                                                             ----------   ---------    ---------
Balance Sheet Data:
     Cash and equivalents                                    $  18,903    $  10,727    $  38,937
     Property, plant and equipment, net                        207,851      258,856      299,856
     Total assets                                              412,169      459,778      572,359
     Total debt                                                 17,470       15,842      107,418
     Total liabilities                                         209,388      206,486      243,088
     Minority interest in Panamco Mexico subsidiaries               72        2,180        5,217
     Shareholders' equity                                      202,709      251,112      324,054
</TABLE>

                                      45

<PAGE>
                                Panamco Brasil
              (U.S. dollars in thousands, except for unit cases)
<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                          -----------------------------------
                                                            1997           1998        1999
                                                          --------      ---------    --------
Statement of Operations Data:
<S>                                                      <C>            <C>         <C>
     Net sales                                           $ 969,094      $ 897,951    500,683
     Cost of sales, excluding depreciation and
     amortization                                          608,122        546,289    305,935
     Operating expenses, excluding facilities
     reorganization charges                                293,407        341,222    187,099
     Facilities reorganization charges                           -              -      5,142
                                                         ---------      ---------   --------
     Operating income                                       67,565         10,440      2,507
     Interest (expense), net                               (19,303)       (21,717)   (14,743)
     Other income (expense), net                             7,513        (10,839)   (36,570)
     Nonrecurring income, net                                    -         60,486          -
                                                         ---------      ---------   --------
     Income (loss) before income taxes                      55,775         38,370    (48,806)
     Income tax                                             (3,661)         2,693    (31,765)
                                                         ---------      ---------   --------
     Income (loss) before minority interest                 59,436         35,677    (17,041)
     Minority interest in Panamco Brasil holding company     2,219            812       (299)
                                                         ---------      ---------   --------
     Net income (loss) attributable to Panamco           $  57,217      $  34,865   $(16,742)
                                                         =========      =========   ========
    Margin Analysis (as a percent of net sales):
     Operating income                                         7.0%        1.2%         0.5%
     Income (loss) before minority interest                   6.1%        4.0%       (3.4)%
     Net income (loss) attributable to Panamco                5.9%        3.9%       (3.3)%
     Cash Operating Profit                                   11.9%       10.5%         7.0%

Unit Case Sales Data (in millions):
     Soft drinks                                             213.7       219.4        235.9
     Beer                                                     63.9        62.2         63.3
     Water                                                     8.8        11.1         12.7

Other Data:
     Depreciation and amortization                       $  47,828   $  83,612    $  32,763
     Capital expenditures                                $  52,134   $  62,051    $  22,686
     Cash Operating Profit                               $ 115,393   $  94,052    $  35,270


                                                               Year Ended December 31,
                                                        -----------------------------------
                                                           1997         1998(1)       1999
                                                        ----------   ---------    ---------
Balance Sheet Data:
     Cash and equivalents                               $  13,919    $   5,885    $   8,563
     Property, plant and equipment, net                   274,988      298,023      195,387
     Total assets                                         673,541      709,176      487,374
     Total debt                                            79,224      119,295       79,279
     Total liabilities                                    273,373      320,400      188,663
     Minority interest in Panamco Brasil subsidiaries      15,005        5,038        3,167
     Shareholders' equity                                 385,163      383,738      295,544
</TABLE>
[FN]
-----------------------
(1)   Includes only four months of R.O.S.A.
</FN>


                                      46


<PAGE>


                               Panamco Colombia
              (U.S. dollars in thousands, except for unit cases)
<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                        -----------------------------------
                                                           1997          1998        1999
                                                        ----------    ---------   ---------
Statement of Operations Data:
<S>                                                      <C>          <C>         <C>
     Net sales                                           $ 537,987    $ 495,812   $ 397,014
     Cost of sales, excluding depreciation and
       amortization                                        232,271      217,817     175,522
     Operating expenses, excluding facilities
       reorganization charges                              233,719      215,467     207,032
     Facilities reorganization charges                           -            -       1,370
                                                         ---------     --------    --------
     Operating income                                       71,997       62,528      13,090
     Interest (expense), net                               (2,408)       (5,328)     (6,753)
     Other income, net                                      10,008        5,311       2,824
                                                         ---------     --------    --------
     Income before income taxes                             79,597       62,511       9,161
     Income taxes                                           18,385          796         966
                                                         ---------     --------    --------
     Income before minority interest                        61,212       61,715       8,195
     Minority interest in Panamco Colombia holding
       company                                                 515          137         107
                                                         ---------     --------    --------
     Net income attributable to Panamco Colombia
       holding company
                                                            60,697       61,578       8,088
     Minority interest in Panamco Colombia                   1,694        1,698         223
                                                         ---------     --------    --------
     Net income attributable to Panamco                  $  59,003     $ 59,880    $  7,865
                                                         =========     ========    ========

Margin Analysis (as a percent of net sales):
     Operating income:                                       13.4%        12.6%        3.3%
     Income before minority interest                         11.4%        12.4%        2.1%
     Net income attributable to Panamco Colombia
       holding company                                       11.3%        12.4%        2.0%
     Net income attributable to Panamco                      11.0%        12.1%        2.0%
     Cash Operating Profit                                   22.5%        24.4%       18.5%

Unit Case Sales Data (in millions):
     Soft drinks                                            190.8        186.9        153.9
     Water                                                   40.7         44.0         37.2

Other Data:
     Depreciation and amortization                      $  49,305    $  58,510    $  60,548
     Capital expenditures                               $  62,922    $  69,216    $  28,276
     Cash Operating Profit                               $121,302     $121,038    $  73,638


                                                                   At December 31,
                                                        -----------------------------------
                                                           1997         1998         1999
                                                        ----------   ---------    ---------
Balance Sheet Data:
     Cash and equivalents                               $  46,776    $  62,886    $   7,396
     Property, plant and equipment, net                   254,952      297,874      292,915
     Total assets                                         481,776      576,191      516,327
     Total debt                                            71,616      123,200       87,145
     Total liabilities                                    159,873      211,516      154,852
     Minority interest in Panamco Colombia
       subsidiaries                                         1,720        1,548        1,568
     Shareholders' equity                                 320,183      363,127      359,907
</TABLE>


                                      47


<PAGE>
                               Panamco Venezuela
              (U.S. dollars in thousands, except for unit cases)
<TABLE>
<CAPTION>
                                                         Eight Months
                                                            Ended            Year Ended
                                                         December 31,       December 31,
                                                        -----------------------------------
                                                           1997         1998         1999
                                                        ----------   ---------    ---------
Statement of Operations Data:
<S>                                                     <C>          <C>          <C>
     Net Sales                                          $  349,519   $ 550,677    $ 512,292
     Cost of sales, excluding depreciation and
       amortization                                        170,761     264,187      236,197
     Operating expenses, excluding facilities
       reorganization charges                              143,048     263,168      267,691
     Facilities reorganization charges                           -           -       28,660
                                                        ----------   ---------    ---------
     Operating income (loss)                                35,710      23,322      (20,256)
     Interest (expense), net                                (4,448)     (9,801)     (18,028)
     Other income (expense), net                            17,880      17,760       (3,337)
                                                        ----------   ---------    ----------
     Income (loss) before income taxes                      49,142      31,281      (41,621)
     Income taxes                                             (319)      2,930        8,353
                                                        ----------   ---------    ---------
     Net income (loss) attributable to Panamco          $   49,461   $  28,351    $ (49,974)
                                                        ==========   =========    =========


Margin Analysis (as a percent of net sales):
     Operating income (loss)                                 10.2%         4.2%        (4.0)%
     Net income (loss) attributable to Panamco               14.2%         5.1%        (9.8)%
     Cash Operating Profit                                   20.1%        16.1%        13.6%

Unit Cases Sales Data (in millions):
     Soft drinks                                            143.0        195.9        151.7
     Water                                                    6.1         14.3         18.4
     Beer                                                       -            -          0.5
     Other products                                           4.3          6.3          6.8

Other Data:
     Depreciation and amortization                      $  34,606    $  65,099    $  71,156
     Capital expenditures                               $  27,832    $  68,361    $  33,183
     Cash Operating Profit                              $  70,316    $  88,421    $  69,800


                                                                   At December 31,
                                                        -----------------------------------
                                                           1997         1998         1999
                                                        ----------   ---------    ---------
Balance Sheet Data:
     Cash and equivalents                               $  28,151    $  31,211    $  35,872
     Property, plant and equipment, net                   321,484      355,054      339,417
     Total assets                                         527,104      589,543      566,371
     Total debt                                           111,558       16,065      188,000
     Total liabilities                                    283,358      330,366      364,259
     Shareholders' equity                                 243,746      259,177      202,112
</TABLE>


                                      48


<PAGE>




                            Panamco Central America
                     (Costa Rica, Nicaragua and Guatemala)
              (U.S. dollars in thousands, except for unit cases)
<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                         ----------------------------------
                                                          1997(1)     1998(2)        1999
                                                         ---------   ---------    ---------
Statement of Operations Data:
<S>                                                       <C>        <C>           <C>

     Net sales                                           $ 106,838   $ 190,355     $212,074
     Cost of sales, excluding depreciation and
       amortization                                         48,948      90,829      100,781
     Operating expenses                                     41,432      76,593       84,261
                                                         ---------   ---------     --------
     Operating income                                       16,458      22,933       27,032
     Interest income (expense), net                             96      (4,292)      (1,843)
     Other income (expense), net                              (937)      2,505       (5,692)
                                                         ---------   ---------     --------
     Income before income taxes                             15,617      21,146       19,497
     Income taxes                                            3,911       5,661        5,468
                                                         ---------   ---------     --------
     Net income attributable to Panamco                  $  11,706   $  15,485     $ 14,029
                                                         =========   =========     ========

Margin Analysis (as a percent of net sales):
     Operating income                                        15.4%       12.0%         12.7%
     Net income attributable to Panamco                      11.0%        8.1%          6.6%
     Cash Operating Profit                                   23.1%       19.9%         21.2%

Unit Case Sales Data (in millions):
     Soft drinks                                              33.3        63.0         69.7
     Water                                                     1.2         2.2          3.6
     Other products                                            0.2         0.6          0.6

Other Data:
     Depreciation and amortization                      $    8,186   $  15,039    $  17,990
     Capital expenditures                               $   11,104   $  38,540    $  21,139
     Cash Operating Profit                              $   24,644   $  37,972    $  45,022


                                                                   At December 31,
                                                        -----------------------------------
                                                           1997         1998         1999
                                                        ----------   ---------    ---------
Balance Sheet Data:
     Cash and equivalents                               $  13,211    $   9,603    $   8,496
     Property, plant and equipment, net                    68,174      105,925      104,478
     Total assets                                         120,089      174,710      181,255
     Total debt                                            15,269       44,260       16,299
     Total liabilities                                     41,028       86,917       67,861
     Shareholders' equity                                  79,061       87,793      113,394
</TABLE>
[FN]
----------------------
(1) Includes only five months of Panamco Nicaragua.
(2) Includes only nine months of Panamco Guatemala.
</FN>


                                      49


<PAGE>


1999 Compared to 1998

Consolidated Results of Operations

     Consolidated  net sales decreased 12.9% to $2.4 billion in 1999 from $2.8
billion in 1998,  mainly due to the  effect of the poor  economies  in Brazil,
Colombia, and Venezuela, resulting in decreased sales volume in soft drinks in
Colombia  and  Venezuela,  offset by  increased  volumes in Mexico and Central
America and increased sales volume of water in all countries  except Colombia.
Increased  sales volumes in these  countries  were due to strategic  marketing
initiatives.  Unit case volume also  increased in Brazil,  although sales were
lower compared to 1998 due to Panamco  Brasil's  promotional  pricing strategy
and the  devaluation of the Brazilian  real.  Soft drink sales volumes in 1999
were up 5.2% in Mexico, 7.5% in Brazil and 11.1% in Central America, but 17.7%
and 22.6% lower in Colombia  and  Venezuela,  respectively.  As a result,  net
consolidated  sales volume decreased 4.4%. Beer sales volume, now sold in both
Brazil and Venezuela, increased 2.6% to 63.8 million unit cases (including 0.5
million unit cases from  Venezuela).  Bottled water volume  increased 23.8% in
Mexico,  14.3% in Brazil, 28.6% in Venezuela and 61.0% in Central America, and
dropped 15.4% in Colombia, resulting in a net consolidated increase of bottled
water volume of 14.6%. Overall unit case volume dropped by 0.9%.

     The cost of sales as a  percentage  of net  sales  decreased  to 49.3% in
1999,  from 51.4% in 1998.  This resulted  primarily  from cost savings in raw
materials  and  packaging  in several  countries  due to improved  procurement
contracts and production efficiencies.

     Operating  expenses as a  percentage  of net sales  increased to 45.9% in
1999  from  42.1% in  1998,  as a  result  of  higher  sales  expenses  in all
franchises due to increased sales promotion  activities,  as well as increased
depreciation  and  amortization  expenses due to Panamco's  continued  capital
expenditure program, goodwill charges generated by the acquisition of R.O.S.A.
and of  minority  interests  in Brazil  during the second  quarter of 1998 and
facilities  reorganization  charges of $35.2  million  related to a  workforce
reduction of 3,050 people in Brazil and  Venezuela,  together with the closing
of five soft drink  bottling  plants in Venezuela.  Facilities  reorganization
charges of $20.3  million  were  noncash  items  related to the  write-off  of
physical  assets  and the  remaining  $14.9  were cash  items  related  to the
severance  payments.  During  1999 we  spent  $163.2  million  on our  capital
expenditure  program,  which  includes  approximately  $49.0  million  for the
placement of cold equipment in all countries.

     Operating income decreased 36.3% to $114.5 million from $179.7 million in
1998.  Cash  operating  profit  decreased  17.7% in 1999 to $385.5 from $468.6
million in 1998.

     Net  interest  expense  increased  to $100.1  million  in 1999 from $85.3
million in 1998 due to increased  indebtedness resulting from our $300 million
syndicated loan entered into during the first quarter of 1999.  Total net debt
increased  to  $1,011.0  million at December  31, 1999 from $997.5  million at
December 31, 1998.

     Other expense,  net increased to $39.3 million in 1999 from other income,
net of $22.1 million in 1998,  driven  primarily by foreign exchange losses in
Brazil of $27.8  million  due to a 48.0%  devaluation  of the  Brazilian  real
during the year,  decreased equity in earnings at Cervejarias Kaiser in Brazil
and lower  contributions for capital  expenditures from The Coca-Cola Company.
Additionally,  during the second quarter of 1999,  Coca-Cola  changed its cold
equipment  capital  participation  program  so that any funds  received  by us
during 1999 and future years will be recognized as income in installments over
a 60-month


                                      50


<PAGE>


period.  Our  ability to include  such  amounts as income  will also depend on
whether we meet certain  conditions in the future.  Prior to the change,  such
amounts were included as income upon  receipt,  as no future  conditions  were
required to be met.

     The  consolidated  effective  income tax rate increased to 125.2% in 1999
from 29.0% in 1998.  The increase was due to tax benefits  recorded in 1998 in
Brazil and Colombia, which were not repeated in the 1999 period, the effect of
the asset tax (minimum tax) in Venezuela and our decision not to recognize the
benefit of tax loss carryforwards from prior years in Venezuela because of our
uncertainty  that we will have  sufficient  taxable income in the near-term to
offset against such benefits.

     As a result of the foregoing, net loss in 1999 was $59.9 million compared
to net income of $120.3 million in 1998.

     Regarding  the year 2000  issue,  to date,  there  have  been no  adverse
effects on the Company's  systems or operations,  including the ability of any
significant  customer,  vendor or service  provider  to do  business  with the
Company,   and  we  have  complied  with  all   regulatory   and   contractual
requirements.

     The Company does not expect any contingencies regarding this issue.

Mexico

     Panamco Mexico, which operates in central Mexico,  excluding Mexico City,
reported net sales of $794.8 million in 1999, an increase of 24.5% from $638.5
million  in 1998,  resulting  from  increased  sales  volume in water and soft
drinks due to the continued  growth in sales of non returnable  presentations.
Soft drink sales volume  increased 5.2%  representing  an increase in share of
sales from 78.2% to 80.2%, and sales volume for bottled water increased 23.8%.
The sales volume growth in water was mainly due to the  continued  increase in
water jug sales volume due to increased  coverage of the  Company's  franchise
territories.

     The cost of sales  as a  percentage  of net  sales  was  47.1% in 1999 as
compared  to  47.9%  in 1998 as a  result  of  decreased  raw  material  costs
partially  offset by an increase in packaging  costs  related to the growth in
sales of non returnable presentations.

     Operating  expenses as a  percentage  of net sales  decreased to 36.1% in
1999 from 37.1%.  Although there was an increase in net sales, this was offset
by higher selling and administrative  costs,  mainly attributable to increases
in  sales  commissions  and  distribution  and  promotional  expenses  due  to
increased  competition  and  increased  depreciation  expenses  related to our
continued  capital  expenditure  program in Mexico.  In 1999,  we spent  $57.9
million   related   mainly  to   strategic   programs.   Higher   selling  and
administrative  costs  were due to the  continued  expansion  of our 100 meter
program and cold equipment placement program.

     Operating income increased by 39.8% to $133.2 million and as a percentage
of net sales  was  16.8% in 1999  compared  to 14.9% in 1998.  Cash  operating
profit increased 31.0% to $173.5 million in 1999 from $132.4 million in 1998.

     Net interest  expense in 1999  increased  by 18.7% to $11.8  million from
$10.0  million in 1998 due to the  issuance of an aggregate of $106 million in
unsecured peso denominated promissory notes in November of


                                      51


<PAGE>


1999 in a local debt offering. Net debt was $68.5 million at December 31, 1999
compared to $5.1  million at December  31, 1998  primarily  as a result of the
local debt offering.

     Other income, net was $7.6 million in 1999,  compared to $10.8 million in
1998, due to a decrease in contributions  received from The Coca-Cola  Company
for capital expenditures and changes in The Coca-Cola Company's cold equipment
capital participation program discussed above.

     The  effective  income  tax rate in 1999 was 32.5%  compared  to 31.8% in
1998.

     As a result of the foregoing, net income contributed by Panamco Mexico to
the Company increased 32.8% to $82.2 million during 1999 from $61.9 million in
1998.

     Beginning  in  1999,  we  discontinued  classifying  Mexico  as a  highly
inflationary  economy.  Accordingly,  the  functional  currency of our Mexican
operations was changed from the U.S. dollar to the Mexican peso.

Brazil

     Panamco  Brasil,  which operates in the Sao Paulo,  Campinas,  Santos and
Matto Grosso do Sul regions of Brazil, reported net sales of $500.7 million in
1999, a decrease of 44.2% from $898.0 in 1998,  attributable to local currency
devaluation of 48% and price  discounting in connection  with our  promotional
pricing  strategy.  Total sales volume  increased  6.6% to 311.9  million unit
cases, as a result of Panamco's  promotional  pricing strategy in place during
1999,  which was  implemented to respond to  competition  from the "B" brands.
Higher  sales  volumes  were  offset by lower  per unit  prices.  Beer  volume
increased  1.8% to 63.3 million unit cases from 62.2 million unit cases in the
prior year.  Water volume  increased 14.3% to 12.7 million unit cases and soft
drink sales volume increased 7.5% to 235.9 million unit cases.  Panamco Brasil
increased  its share of sales by 5.2  points  over 1998 and 7.3  points  since
launching its promotional  pricing strategy in March of 1999, reaching a total
soft drink share of sales of 57.4% by year-end in its franchise territories.

     Cost of sales as a  percentage  of net sales  increased  to 61.1% in 1999
from 60.8% in 1998. The increase is primarily  attributable to the devaluation
of the Brazilian real discussed  above,  slightly  offset by reductions in the
cost  of  raw  materials  and  increased   direct  sales  to  supermarkets  by
Cervejerias Kaiser in Panamco Brasil territories. While Panamco Brasil records
the  commissions  from the  direct  sales  made by  Cervejarias  Kaiser to the
supermarkets as net sales, this amount affects the percentage of cost of sales
as a percentage of total sales.

     Operating expenses,  including  facilities  reorganization  charges, as a
percentage of net sales  increased to 38.4% in 1999 from 38.0% in 1998, due to
higher  promotional  expenses related to the promotional  pricing strategy put
into effect during 1999.  The facilities  reorganization  charges were related
mainly to a  workforce  reduction  of  approximately  1,400  people due to the
partial  shut down of one of our  bottling  plants  during  the year,  and the
streamlining of our operations.

     Operating income decreased by 76.0% to $2.5 million from $10.4 million in
1998  due to lower  sales.  Cash  operating  profit  decreased  62.5% to $35.3
million in 1999 from $94.1 million in 1998.


                                      52

<PAGE>


     Net interest  expense  decreased  by 32.1% to $14.7  million in 1999 from
$21.7 million in 1998 as a result of improved financing  conditions  resulting
in lower interest  costs and repayment of short-term  debt. Net debt was $70.7
million at December 31, 1999 compared to $113.4 million at December 31, 1998.

     Other expense,  net increased to $36.6 million from $10.8 million in 1998
as a result of a $27.8 million foreign exchange loss due to the devaluation of
the Brazilian  real,  lower equity in earnings of  Cervejarias  Kaiser,  lower
contributions for capital  expenditures from The Coca-Cola Company and changes
in The  Coca-Cola  Company's  cold  equipment  capital  participation  program
discussed above.

     The effective  income tax rate decreased to a negative 65.1% from 7.0% in
1998, as a result of tax benefits  used in 1999  including the reversal of the
valuation allowance of $14 million provided in 1998 (see nonrecurring items in
the explanation of 1998 vs. 1997) which  represented a credit to the statement
of operations of 1999 of $9.5 million at the current exchange rate.

     As a result of the above,  the net loss contributed to Panamco by Panamco
Brasil  increased  148.0% to ($16.7)  million in 1999 from net income of $34.9
million in 1998.

Colombia

     Panamco Colombia, which operates throughout Colombia,  reported net sales
of $397.0  million in 1999, a 19.9%  decrease from $495.8 million in 1998. The
decrease is mainly due to lower total unit case volume of 17.2% resulting from
a decrease  in soft drink  volume of 17.7% and a decrease  in water  volume of
15.4%. In dollar terms,  average soft drink prices  decreased 2.8% compared to
1998,  as a result of a 21.8%  devaluation  of the  Colombian  peso  partially
offset by a price increase of 18.0% in local  currency.  The decrease in sales
volume is due to the devaluation of the Colombian peso, economic recession and
political turmoil. Panamco Colombia's share of sales for soft drinks increased
5.3 points during 1999 to reach a record high 66.7% in December.

     Cost of sales as a  percentage  of net sales  increased  to 44.2% in 1999
from 43.9% in 1998, as a result of higher costs  associated  with the increase
in sales of nonreturnable presentations.

     Operating expenses,  including  facilities  reorganization  charges, as a
percentage of net sales increased to 52.5% in 1999 from 43.5% in 1998,  mainly
due to higher  depreciation  expenses  related to  Panamco's  ongoing  capital
expenditure  program,  higher  selling  and  distribution  expenses  due to an
increase in  promotional  activities  and  facilities  reorganization  charges
related with write-off of some fixed assets amounting to $1.4 million.

     Operating  income  dropped to $13.1 million in 1999 from $62.5 million in
1998,  a  decrease  of  79.1%,  primarily  as a result  of lower  sales.  Cash
operating  profit decreased 39.2% to $73.6 million in 1999 from $121.0 million
in 1998.

     Net interest expense  increased to $6.8 million in 1999 from $5.3 million
in 1998, due mainly to a new governmental tax on financial transactions, which
came into effect in the fourth  quarter of 1998. Net debt was $42.2 million at
December 31, 1999 compared to $60.3 million at December 31, 1998.


                                      53


<PAGE>


     Other  income,  net  decreased  46.8% to $2.8  million  in 1999 from $5.3
million  in 1998  primarily  due to lower  contributions  from  The  Coca-Cola
Company for capital  expenditures and changes in The Coca-Cola  Company's cold
equipment capital participation program discussed above.

     The  effective  income tax rate  increased  to 10.5% in 1999 from 1.3% in
1998 primarily due to the recognition of tax credits recorded during the first
quarter of 1998, which were not available in 1999.

     As a result of the above,  net income  contributed by Panamco Colombia to
the  Company  decreased  86.9% to $7.9  million in 1999 from $59.9  million in
1998.

Venezuela

     Panamco  Venezuela  reported  net  sales of  $512.3  million  in 1999,  a
decrease of 7.0% from $550.7  million in 1998.  The decrease was mainly due to
lower total unit case volume of 18.0% attributable to a decrease in soft drink
volume of 22.6%,  which was  partially  offset by  increased  water  volume of
28.6%.  Beer,  which  we began  selling  during  the  second  quarter  of 1999
contributed  0.5  million  unit  cases to our  total  unit case  volume.  This
significant  drop in sales volume is attributable to poor economic  conditions
in Venezuela and a highly  competitive  environment.  Panamco's share of sales
for soft drinks increased 1.3 points during 1999 to 70.3%.

     Cost of sales as a  percentage  of net sales  decreased  to 46.1% in 1999
from 48.0% in 1998,  as a result of a 17.0%  increase in  salaries,  offset by
cost-reduction  programs  implemented  throughout the first six months of 1999
and a drop in soft drink volume, which resulted in lower production costs.

     Operating expenses,  including  facilities  reorganization  charges, as a
percentage of net sales increased to 57.8% in 1999 from 47.8% in 1998,  mainly
due to higher  depreciation  expenses  related to  Panamco's  ongoing  capital
expenditure program,  along with increased marketing expenses.  The facilities
reorganization  charges of $28.7 million were related to a workforce reduction
of more than 1,650 people  amounting to $9.8 million (cash) resulting from the
closing  of five soft drink  bottling  plants and the  write-off  of  physical
assets of these plants amounting to $18.9 million (noncash) during the year.

     Operating loss  increased  187.1% to $20.3 million in 1999 from operating
income of $23.3 million in 1998  primarily as a result of decreased  sales and
the facilities  reorganization  charges. Cash operating profit decreased 21.1%
to $69.8 million in 1999 from $88.4 million in 1998.

     Net interest expense increased to $18.0 million in 1999 from $9.8 million
in 1998,  due mainly to increased  net debt  position  over the twelve  months
ended December 31, 1999 as a result of increased  short-term  working  capital
needs.  Net debt was $152.1  million at December  31, 1999  compared to $109.9
million at December 31, 1998, which includes $125.0 million of an intercompany
debt that was transferred to Panamco Venezuela in January of 1999.

     Other  expense,  net increased  118.8% to $3.3 million from other income,
net of $17.7  million in 1998 as a result of lower  contributions  for capital
expenditures from The Coca-Cola  Company,  changes in The Coca-Cola  Company's
cold equipment capital  participation  program discussed above and a charge of
$3.6 million resulting from asset damage due to severe floods that occurred in
December 1999.


                                      54


<PAGE>


     The  effective  income tax rate  increased  to 20.1% in 1999 from 9.4% in
1998  primarily  due to the asset tax or minimum  tax paid in  Venezuela  as a
result of a net loss position before income taxes of $38.0 million in 1999 and
our decision not to recognize the benefit of tax loss carryforwards from prior
years,  because of our uncertainty  that we will generate  sufficient  taxable
income in the near term to offset against such benefits.

     As a result of the  above,  net loss  attributable  to the  Company  from
Panamco Venezuela increased 276.3% to $50.0 million in 1999 from net income of
$28.4 million in 1998.

Central America

     Panamco's  Central  American  region  includes  franchises in Costa Rica,
Nicaragua and  Guatemala.  The region  reported net sales of $212.1 million in
1999, a 11.4% increase from $190.4 million in 1998,  resulting  primarily from
increases  in soft  drink  and  bottled  water  volume  of  11.1%  and  61.0%,
respectively,  partially  offset  by a  15.1%  devaluation  of the  Guatemalan
quetzal.  Panamco Guatemala  accounted for almost all of the soft drink volume
increase in the region, which sold 19.5 million unit cases versus 13.3 million
in the prior year period.  Sales volume in  Nicaragua  increased  2.5% to 21.4
million  unit cases  versus 20.8  million  unit cases in the prior year.  Soft
drink sales volume in Costa Rica was up 0.7% to 28.7  million unit cases.  The
increase in water volume resulted from increases at all franchises.  Panamco's
share of sales increased to 93.3% in Costa Rica,  43.1% in Guatemala and 84.3%
in Nicaragua.

     Cost of sales as a  percentage  of net sales  decreased  to 47.5% in 1999
from 47.7% in 1998, due mainly to cost  efficiencies  in the region,  slightly
offset by an increase in raw material and labor costs.

     Operating  expenses as a percentage of net sales  decreased to 39.7% from
40.2% in 1998, as a result of the tight  expense  controls and the increase in
sales, slightly offset by increase in depreciation expenses.

     Operating  income  increased  17.9% to $27.0  million  in 1999 from $22.9
million in the 1998,  primarily as a result of increased sales. Cash operating
profit increased 18.6% to $45.0 million in 1999 from $38.0 million in 1998.

     Net interest  expense  decreased  57.1% to $1.8 million in 1999 from $4.3
million  in 1998,  due to a  decrease  in net debt as a result of  payment  of
short-term  debt with cash  contributed  by the Company to its  Nicaraguan and
Guatemala  franchises  and improved  financing  conditions.  Net debt was $7.8
million at December 31, 1999 compared to $34.7 million at December 31, 1998.

     Other  expense,  net increased to $5.7 million in 1999 from other income,
net of $2.5 million in 1998.  This increase is attributable to the devaluation
of the  Guatemalan  quetzal  of 15.1% and  Nicaraguan  cordoba  of 10.0%  that
affected  the  1999  financial  results  by  $2.2  million  and  $1.6  million
respectively,  and changes in The Coca-Cola  Company's cold equipment  capital
participation program discussed above.

     Effective income tax rates were 25.9%, 26.4% and 0.0% in 1999 for Panamco
Costa Rica, Nicaragua and Guatemala  respectively compared to 27.8%, 45.3% and
1.1% in 1998.

     As a result of the above,  net  income  contributed  by  Panamco  Central
America  to the  Company  decreased  9.4% to $14.0  million in 1999 from $15.5
million in 1998.


                                      55


<PAGE>



1998 Compared to 1997

     Net sales  increased  10.5% to $2.8  billion from $2.5 billion in 1997 on
consolidated  unit case sales  volume  growth of 16.1% to a record 1.2 billion
cases.  By country,  sales  volume grew 20.7% in Mexico,  and 88.6% in Central
America, including 13.8% volume growth in Costa Rica and contributions of 21.1
million and 13.9 million unit cases by Nicaragua and  Guatemala,  and was flat
in Brazil and  Colombia.  In  Venezuela,  volume grew 41.2%  during the twelve
months of 1998, compared with eight months of operations in 1997.

     The cost of sales as a  percentage  of net  sales  decreased  to 51.4% in
1998,  from 52.9% in 1997,  driven by continued  cost savings in raw materials
and increased productivity that resulted in higher margins in all countries.

     The following  discussions are after the recording of nonrecurring  items
(explained below).

     Operating  expenses as a  percentage  of net sales  increased to 42.1% in
1998 from 37.3% in 1997,  as a result of a  significant  increase  in goodwill
amortization  related to the purchase of Panamco  Venezuela  and the Company's
continued  increase in its  investment  program which reached  $302.2  million
during 1998.

     Operating  income  dropped  to $179.7  million  in 1998,  down 26.9% from
$245.9  million  in  1997.  Cash  operating  profit   (operating  income  plus
depreciation and  amortization)  increased 10.1% to $468.6 million compared to
$425.4 million in 1997.

     Net  interest  expense  increased  to $85.3  million  in 1998 from  $38.9
million in 1997, due to increased  indebtedness following the offering in July
1997 of $300  million  aggregate  principal  amount of 7 1/4% Senior Notes due
2009,  increased debt related to the purchase of minority interests in Panamco
Mexico  during  December  1997  and  increased  indebtedness  related  to  the
acquisition of R.O.S.A.  Total net debt reached $998 million from $412 million
in 1997.

     Other income, net decreased to $22.1 million, from $44.0 million in 1997,
primarily due to lower equity in the earnings of Cervejarias  Kaiser in Brazil
and increased exchange losses in Brazil partially offset by higher grants from
Coca-Cola.

     Our  consolidated  effective  income tax rate for 1998 increased to 29.0%
from 22.8% in 1997,  mainly as tax credits obtained in 1997 in Brazil,  Mexico
and Venezuela were not obtained in 1998.

     As a result of the above,  income before minority  interest dropped 35.2%
to $125.6  million,  from $193.8  million  1997.  Minority  interest in income
declined to 4.2% in 1998 from 10.3% in 1997.  In December  1997,  we increased
our ownership in our Mexican subsidiary,  Panamco Mexico, to 98% from 74%, and
in Panamco Mexico's principal  subsidiaries to 96% from 93%, paying a total of
$277 million and recognizing $228 million of goodwill for this acquisition. As
a result, we now have a 95% effective interest in its Mexican  operations,  up
from 69%. This  acquisition  added $11.8 million to our net income in 1998. In
addition,  during 1998 we increased  our  ownership  interest in our Brazilian
subsidiary,  Panamco Brasil, to 98% from 96%, paying a total of $28.1 million.
These  acquisitions  nearly  complete  a  program  started  five  years ago to
purchase minority interest in our subsidiaries in Mexico, Brazil and Colombia.
Panamco  Venezuela and Panamco  Nicaragua  acquired  during 1997,  and Panamco
Guatemala, acquired in early 1998, contributed $28.4 million, $1.1 million and
$2.1 million, respectively, to net income.


                                      56


<PAGE>


     As a result  of the  above,  1998 net  income  was down  30.8% to  $120.3
million  from  $173.8  million  in 1997.  In 1998,  basic  earnings  per share
("BEPS") was $0.93 based on 129.5 million weighted average shares  outstanding
compared  to BEPS of $1.44  based on 120.8  million  weighted  average  shares
outstanding  in 1997. In 1998,  diluted  earnings per share ("DEPS") was $0.92
based on 130.8 million weighted average shares outstanding compared to DEPS of
$1.43 based on 122.0 million weighted average shares outstanding in 1997.

     Nonrecurring  Items - During 1998,  Panamco  Brasil  conducted a study to
evaluate the expected future utilization of returnable  product  presentations
in  the  Brazilian  market,   having  observed  accelerated  demand  for,  and
utilization of, nonreturnable presentations in the marketplace. The results of
this study show that the use of nonreturnable  presentations  will continue to
increase in the  Brazilian  market.  Therefore,  we have adjusted the carrying
value of bottles and cases to reflect their  estimated use in the  marketplace
by  charging  $36.5  million  to  1998  operating  results,  increasing  total
depreciation and amortization  expense,  and reducing the provision for income
tax by $12.1 million.

     Additionally,  we reversed a contingency  reserve recorded in prior years
for excise tax  credits  (IPI) taken on  purchases  of raw  materials  between
February 1991 and February  1994. We have  previously  accrued this reserve in
the full amount of such  credits.  We reversed  this reserve based on the fact
that,  during 1998,  the Brazilian  Supreme Court  resolved  similar claims of
other bottlers in favor of the bottlers.

     The reversal of the excise tax reserve  amounted to $60.5 million and was
credited to other income, in the income statement. Income tax credits recorded
in this reserve,  amounting to $20.0  million,  were also reversed and charged
directly to income in the provision for income tax.

     At the end of 1998,  some Brazilian tax rules were changed as part of the
Brazilian  government's  reform of the tax system.  For example,  the "Cofins"
tax,  which is assessed on sales  revenues,  was increased  from 2.0% to 3.0%.
One-third of the Cofins tax paid may be offset against the social contribution
tax calculated for the year, which is reported together with the provision for
income tax.  Amounts not offset during the year may not be carried  forward to
future  periods.  This change reduces  significantly  the ability of Brazilian
companies,  including  Panamco Brasil,  to fully recover credits deriving from
social contribution tax loss carryforwards. Therefore, we recorded a valuation
allowance on  previously  recorded  deferred  income tax credits  amounting to
$14.0  million,  charging it to income in the  provision for income tax in the
fourth quarter of 1998.  Management is currently analyzing what actions can be
taken to enable  Panamco to recover  the  deferred  income tax  credits in the
future.

     The net impact of these  nonrecurring  (noncash) items was an increase in
net income of $2.0  million,  or $0.02 per share  (basic)  and $0.01 per share
(diluted).

Mexico

     Panamco Mexico  reported 1998 net sales of $638.5  million,  16.8% higher
than the  previous  year's  net  sales of  $546.8  million.  This rise was due
primarily  to a  year-over-year  increase of 20.7% in unit case sales  volume,
from 305.1 million unit cases to 368.3 million unit cases,  reflecting a 11.3%
increase in soft drink volume and a 50.2%  increase in bottled  water  volume.
The increase in soft drink volume resulted from significant growth in sales of
nonreturnable  presentations  and the  continued  rollout of the new 1.5-liter
nonreturnable  bottles.  Bottled water volume growth was  attributable  to the
continued  success  of Risco  purified  and  mineral  water in single  serving
presentations and the expansion of the 19-liter jugs coverage.


                                      57


<PAGE>


     The cost of sales as a percentage of net sales decreased to 47.9% in 1998
from 48.9% in 1997,  primarily due to the continued  reduction in raw material
and freight costs,  slightly offset by higher costs  attributable to increased
sales of nonreturnable presentations.

     Operating  expenses as a  percentage  of net sales  increased to 37.1% in
1998 from 35.9% in 1997 due to  increases  in  depreciation  and  amortization
expenses  related to the purchase of minority  interests in the fourth quarter
of 1997, slightly offset by tight expense controls.

     Operating income grew 14.6% to $95.3 million,  and as a percentage of net
sales was  14.9% in 1998  compared  to 15.2% in 1997.  Cash  operating  profit
increased 25.6% to $132.4 million from $105.4 million in 1997.

     Net interest  expense  increased 45.8% to $10.0 million in 1998 from $6.8
million in 1997, primarily as a result of increased  intercompany debt related
to the purchase of minority interests. Other income, net increased slightly to
$10.8  million  during 1998 from $9.6 million in 1997.  The effective tax rate
decreased to 31.8% in 1998 from 36.3% in 1997.

     As a result of the above, income before minority interest increased 19.8%
to $65.6 million in 1998 from $54.7 million. Minority interest as a percent of
sales was reduced to 0.6% in 1998 from 2.8% in 1997, mainly as a result of the
1997 fourth quarter purchase of minority interests totaling $277 million.  Net
income  attributable  to Panamco  increased  57.9% to $61.9 million from $39.2
million in 1997.

Brazil

     Panamco  Brasil  reported net sales of $898.0 million in 1998, a decrease
of 7.3% from $969.1 million in 1997. This drop reflects a 9.4% decrease in the
average price per unit case, due mainly to a decline in the effective price of
beer,  attributable  to increased  direct sales to supermarkets by Cervejarias
Kaiser in Panamco Brasil territories.  While Panamco Brasil records the entire
volume sold by Kaiser,  only the commissions  from the sales are posted to net
sales,  affecting  the  calculation  of  average  price  per unit  case.  Also
impacting the average  price was the fact that overall  sales to  supermarkets
increased as a percentage  of total sales.  The decrease in the average  price
per unit case was offset  slightly by a 2.2% increase in total unit case sales
volume,  from  286.3  million  cases in 1997 to 292.7  million  cases in 1998,
reflecting  the  addition of 3.4 million  unit cases from the  acquisition  of
R.O.S.A.,  which  was in turn  offset  by a 2.3%  drop in beer  sales  volume.
Separately, in November 1998, Panamco Brasil increased soft drink prices by 5%
and was able to maintain its leadership, with a market share of 53.0%.

     Cost of sales as a  percentage  of net sales  decreased  to 60.8% in 1998
from 62.8% in 1997, due primarily to a continued reduction in raw material and
production  costs,  which  resulted  from improved  procurement  and operating
efficiencies.

     Operating  expenses as a  percentage  of net sales  increased to 38.0% in
1998  from  30.3% in 1997,  primarily  as a result of  increased  depreciation
expense related to capital expenditures of $62.1 million during 1998.


                                      58


<PAGE>


     Operating  income  decreased 84.5% to $10.4 million in 1998,  compared to
$67.6  million  in  1997,  mainly  due to the  nonrecurring  items  previously
discussed. Cash operating profit decreased 18.5% to $94.1 million in 1998 from
$115.4 million in 1997.

     Net interest expense  increased 12.5% to $21.7 million in 1998 from $19.3
million in 1997, due primarily to higher  interest rates on local debt.  Other
income,  net  decreased to a loss of $10.8 million in 1998 from income of $7.5
million in 1997,  mainly due to lower  equity in the  earnings of  Cervejarias
Kaiser.  The effective tax rate increased to 7.0% in 1998 from a negative 6.6%
in 1997 as a result of the nonrecurring items previously  described,  slightly
offset by continual tax planning.

     As a result of the foregoing,  income before minority interest  decreased
40.0% to $35.7 million.  Net income attributable to Panamco decreased 39.1% to
$34.9 million, or 3.9% of net sales, from $57.2 million, or 5.9% of net sales,
in 1997.

     Beginning  in  1998,  we  discontinued  classifying  Brazil  as a  highly
inflationary  economy.  Accordingly,  the functional currency of our Brazilian
operations  was  changed  from the U.S.  dollar to the  Brazilian  real.  This
resulted  in a change in the method of  translating  the  Brazilian  financial
statements  from the  remeasurement  process to the current  rate  translation
method,  which,  in turn,  resulted in a decrease in the  deferred  income tax
balance and shareholders' equity in the amount of $7.7 million.

     In September  1998,  we acquired  R.O.S.A.  for $47.9 million in cash. As
part of this transaction, we also acquired R.O.S.A.'s plastic bottle business,
Supripack  Industria de  Embalagens,  S.A.  (Supripack),  for $10.0 million in
cash,  bringing the total  acquisition  price to $57.9  million,  for which we
entered  into a $70.0  million  financing  agreement.  We began  consolidating
R.O.S.A.'s results as of September 1, 1998, and registered  estimated goodwill
of $37.4 million in connection with this acquisition.  In addition, during the
year we increased  our ownership  interest in Panamco  Brasil to 98% from 96%,
paying a total of $28.1 million.

Colombia

     Panamco  Colombia  reported  net sales of $496  million  in 1998,  a 7.8%
decrease from $538 million in 1997. This is due in part to the effect of a 25%
devaluation of the Colombian peso during 1998,  which was partially  offset by
two price  increases  effected  during  the year.  The drop in net sales  also
reflects a 2.0%  decrease in soft drink sales  volume from 190.8  million unit
cases in 1997 to 186.9 million in 1998.  Bottled water sales volume  increased
to 44.0  million  unit  cases in 1998,  from 40.8  million  cases in 1997 as a
result of the  continued  success of Santa Clara brand  purified  water in the
19-liter jug presentation.

     Cost of sales as a  percentage  of sales  increased to 43.9% in 1998 from
43.2% in 1997, as a result of slightly higher costs  associated with increased
sales of nonreturnable presentations.

     Operating expenses as a percentage of net sales remained flat at 43.5% in
1998  compared  with 43.4% in 1997.  In  absolute  terms,  operating  expenses
decreased  7.8% to $215.5  million in 1998 from $233.7 million in 1997, due to
currency devaluation,  offset by higher depreciation and amortization expenses
resulting from the continued capital expenditures program and the introduction
of new bottles, jugs and cases into the marketplace.


                                      59


<PAGE>


     As a result,  operating  income decreased 13.2% to $62.5 million in 1998,
and as a  percentage  of net sales was 12.6% in 1998,  compared  with 13.4% in
1997.  Cash operating  profit remained flat at $121.0 million in 1998 compared
with $121.3 million in 1997.

     Net interest  expense was $5.3  million in 1998  compared to net interest
expense  of $2.4  million in 1997 as a result of  increased  net debt of $51.6
million.

     Other  income,  net  decreased  46.9% to $5.3  million in 1998 from $10.0
million, mainly due to fewer grants received from The Coca-Cola Company.

     The  effective  tax rate  decreased  to 1.3% in 1998 from  23.1% in 1997,
primarily  due to tax  benefits  received  in  December  1998 as a  result  of
investment in Friomix del Cauca, our Colombian cooler production business.

     As a result of the foregoing,  income before minority interest  increased
0.8% to  $61.7  million  during  1998.  Net  income  attributable  to  Panamco
increased  1.5% to $59.9  million  in 1998 or 12.1% of net  sales,  from $59.0
million, or 11.0% of net sales.

Venezuela

     Panamco Venezuela  reported net sales of $550.7 million for the full year
ended December 31, 1998 on unit case sales volume of 216.5 million,  including
195.9,  14.3 and 6.3  million  unit  cases of soft  drinks,  water  and  malt,
respectively.

     Cost of sales was $264.2 million or 48.0% of net sales,  while  operating
expenses  were  $263.2  million  or 47.8%  of net  sales.  Operating  expenses
included depreciation and amortization of $65.1 million. Cash operating profit
was $88.4 million, or 16.1% of net sales for 1998.

     Interest expense was $9.8 million or 1.8% of net sales. Other income, net
remained flat at $17.8 million but dropped to 3.2% of net sales from 5.1%. The
effective tax rate for the year was 9.4%.

     Net income for 1998 was $28.4 million or 5.1% of net sales.

Central America

     Costa  Rica.  Net sales  grew  10.8% to $97.7  million in 1998 from $88.2
million in 1997,  resulting  primarily  from an 11.9%  increase  in unit cases
sales volume of soft drinks and a 48.4%  increase in volume of bottled  water.
The increase in soft drink volume resulted from growth in sales of the 2-liter
Refillable Pet ("REF-PET") and 6.5-oz.  glass returnable  presentations,  as a
well as promotional events and merchandising programs.

     Cost of sales as a percentage of net sales decreased slightly to 44.0% in
1998  compared  with 44.4% in 1997,  due to  production  efficiencies  and raw
material cost improvements.

     Operating  expenses as a  percentage  of net sales  increased to 39.2% in
1998 from 38.7% in 1997, due to an increase in depreciation expenses resulting
from our continued capital  expenditure  program,  which in 1998 reached $17.3
million, up from $12.0 million in 1997.


                                      60


<PAGE>


     Operating  income  increased to $16.4  million,  or 16.8% of net sales in
1998,  from  $14.9  million  in  1997,  or 16.9%  of net  sales in 1997.  Cash
operating  profit  increased 11.5% to $24.2 million in 1998 from $21.7 million
in 1997.

     Net interest  income was $1.0 million in 1998,  flat from $1.1 million in
1997. Other income,  net increased by $1.1 million during 1998,  mainly driven
by increased grants from The Coca-Cola Company.

     Net income  increased  12.5% to $12.4 million,  or 12.7% of net sales, in
1998 from $11.0 million, or 12.5% of net sales, in 1997.

     Nicaragua.  Net sales were $47.6  million  in 1998 on 21.1  million  unit
cases sales. The overall gross margin was 45.8%.

     Operating  expenses as a  percentage  of net sales were 39.6%,  including
depreciation expenses of $4.2 million, or 22.5% of total operating expenses.

     Operating  income was $3.0 million,  or 6.2% as a percentage of net sales
in 1998 and cash operating profit was $7.2 million, or 15.1% of net sales.

     The  effective  income tax rate for the period was 45.3%.  Net income for
the period was $1.1 million, or 2.2% of net sales.

     Guatemala.  Net sales for the nine months  ended  December  31, 1998 were
$45.1  million on unit cases sales of 13.9  million.  The overall gross margin
was 51.1%.

     Operating  expenses as a  percentage  of net sales were 43.1%,  including
depreciation expenses amounting to 15.6% of total operating expenses.

     Operating income was $3.6 million,  or 7.9% as a percentage of net sales.
Cash operating profit was $6.6 million, or 14.6% of net sales.

     Net income for the nine months  ended  December 31, 1998 was $2.1 million
or 4.6% of net sales.

Capital Expenditures

     Total  capital  expenditures  were $209  million,  $302  million and $163
million  in 1997,  1998 and 1999,  respectively.  During  1999,  approximately
35.5%, 13.9%, 17.3%, 3.8%, 20.3%, 3.2% and 6.0% of such expenditures were made
by Panamco  Mexico,  Panamco  Brasil,  Panamco  Colombia,  Panamco Costa Rica,
Panamco Venezuela, Panamco Nicaragua and Panamco Guatemala,  respectively. The
principal components of such capital expenditures during 1999 were:

     o    $24 million for increasing production capacity

     o    $28 million in Company's fleet of vehicles

     o    $49 million for coolers, vending and post-mix equipment.


                                      61


<PAGE>


     o    $12 million in environmental expenses.

     o    $50 million in operational and other purposes.

     Our  Board  of  Directors  has  established   various  criteria  for  the
allocation of capital  resources.  The factors that  management must review in
proposing  three-year  capital budgets include  anticipated  internal rates of
return,  pay-back  periods  and  EVA(R)  analysis  from  various  investments,
corresponding  plans  of The  Coca-Cola  Company  and  anticipated  levels  of
earnings and debt in the country in which such expenditures are proposed to be
made.

     During 2000 we estimate that we will have aggregate capital  expenditures
of approximately $149 million. Of our estimated total capital expenditures for
2000, we expect to spend approximately:

     o    $56 million in Mexico to continue our program of strategic placement
          of cold storage equipment and to upgrade our operating facilities,

     o    $14  million  in  Brazil   mainly  for   production   capacity   and
          distribution fleet,

     o    $24   million  in   Colombia   mainly  for   marketing   assets  and
          environmental purposes,

     o    $29  million in  Venezuela  to  continue  our  program of  strategic
          placement of cold storage equipment, and

     o    $26 million in our Panamco  Central  American  franchises to upgrade
          production capacity, fleet and marketing assets.

     The foregoing estimates of capital  expenditures are based on our current
expectations  and are subject to change.  Actual costs may exceed estimates or
we  may  reallocate  or  alter  our  capital  budget.   See   "Forward-Looking
Statements".

     We  intend to fund our  capital  expenditure  program  with cash on hand,
consolidated cash flow from operations and borrowings at the subsidiary level.

     The  Coca-Cola  Company  from time to time  provides  incentives  for its
bottlers to make particular types of capital  expenditures.  During 1997, 1998
and 1999,  such  incentives  consisted  of grants  which are included as other
income in "Other income (expense)" in the consolidated  financial  statements,
and loans included in the  indebtedness  referred to above.  During the second
quarter of 1999,  The Coca-Cola  Company  changed its cold  equipment  capital
participation  program so that any funds received by us during 1999 and future
years will be recognized as income in installments over a 60-month period. Our
ability to include  such amounts as income will also depend on whether we meet
certain  conditions  in the future.  Prior to the change,  such  amounts  were
included as income upon receipt,  as no future  conditions were required to be
met,   without   regard   to   our   earnings.   See   "--1999   Compared   to
1998--Consolidated   Results  of   Operations"   and  Note  13  of  "Notes  to
Consolidated  Financial  Statements".  The  Coca-Cola  Company  also  provides
cooperative advertising support to us.


                                      62


<PAGE>


Liquidity and Capital Resources

     At December 31, 1999, we had  consolidated  cash and cash  equivalents of
$152.6 million, an increase of 16.5% compared to $131.0 million as of December
31, 1998.  This increase is as a result of increased  debt from the syndicated
loan  issued  during  the  first  quarter  of  1999.  Our  total  consolidated
indebtedness was $1,348.1 million at December 31, 1999.

     Consolidated  cash flow  provided by operations  was $439  million,  $270
million and $226 million in 1997, 1998 and 1999, respectively.

     Uses of funds for 1997,  1998 and 1999  included  purchases  of  minority
interests,  capital  expenditures,  bottling and  packaging  expenditures  and
payment of shareholder  dividends.  Purchases of minority  interests were $289
million  and  $28.0  million  in 1997 and 1998  respectively.  We did not make
purchases of minority  interests in 1999. No minority interests were purchased
in 1999. Capital expenditures, as noted above, were $209 million, $302 million
and $163 million in 1997,  1998 and 1999,  respectively.  In addition,  we had
expenditures for bottles and cases, net, of $123 million, $124 million and $75
million  in 1997,  1998 and 1999,  respectively.  We paid  dividends  of $25.9
million,  $31.1  million  and  $31.1  million  during  1997,  1998  and  1999,
respectively.   Dividends  to  minority   shareholders  in  the   consolidated
subsidiaries paid during such periods were $4.7 million, $0.7 million and $0.5
million, respectively.

     As a holding  company,  our principal  sources of cash are dividends from
our subsidiaries and sales of our securities.  The amount of dividends payable
by the  subsidiaries  to us is subject to general  limitations  imposed by the
corporate  laws  of the  respective  jurisdictions  of  incorporation  of such
subsidiaries.  Dividends  paid to us and  other  foreign  shareholders  by the
subsidiaries   are  subject  to  investment   registration   requirements  and
withholding  taxes.  Withholding  tax rates on dividends are currently 7.6% in
Mexico,  7% in Colombia and 15% in Costa Rica. There are no withholding  taxes
on dividends  paid by Panamco Brasil to the Company out of income earned after
December  31, 1995,  and no  withholding  taxes on  dividends  paid by Panamco
Venezuela, Panamco Nicaragua and Panamco Guatemala.

     Dividends  from earnings  generated  until 1998 are not subject to income
taxes in Mexico,  as long as they are paid from "net taxed  income"  ("UFIN").
Dividends  not paid from UFIN are  subject  to a 35%  income  tax.  Since 1999
dividends paid to  individuals or foreign  residents are subject to income tax
withholding of an effective tax rate of  approximately  7.6%. In addition,  if
earnings  generated  after 1998 for which no  corporate  tax has been paid are
distributed,  the  tax  must  be  paid  upon  distribution  of the  dividends.
Consequently, we must keep a record of earnings subject to each tax rate.

     In the past,  we have paid  substantially  all cash received as dividends
from our subsidiaries,  net of holding company  expenses,  to our shareholders
and have not used such  funds to make  investments,  primarily  so as to avoid
having  undistributed  foreign  personal holding company income which would be
includable in the income of our shareholders who are United States persons. We
may,  therefore,  be  substantially  dependent  in the  future on  sources  of
financing other than dividends from subsidiaries,  including external sources,
to finance holding company investments such as acquiring minority interests in
our subsidiaries or acquiring additional bottling enterprises.

     Total  consolidated  indebtedness was $1,348.1 million as of December 31,
1999,  consisting  of $870.0  million at the holding  company level and $478.1
million of subsidiary indebtedness.


                                      63


<PAGE>


     Substantially  all of our  total  indebtedness  is  denominated  in  U.S.
dollars.  Our  policy is to enter  into  arrangements  to hedge  interest  and
currency  exchange  rate  exposure  where the terms of such  arrangements  are
reasonable in relation to the exposure risks.  During 1999,  Panamco Venezuela
entered into hedging  contracts  for the payment of $12.4  million of interest
related to its  financial  debt as well as dividends  payments to the Company.
Such  contracts  will end by June 30, 2000.  Therefore,  we remain  subject to
exchange rate fluctuations between the U.S. dollar and the local currencies of
the Latin American countries in which we operate.

     In May 1997, in connection with our acquisition of Panamco Venezuela,  we
acquired all the capital stock of Panamco  Venezuela.  The purchase  price for
the  acquisition  was  approximately  30.6 million  shares of our common stock
(having  a market  value at such  time of $902.7  million)  and  approximately
$100.3 million in cash. In addition,  we assumed  approximately $107.7 million
of debt owed by  Panamco  Venezuela,  which was  repaid  with a portion of the
proceeds of the issuance of $300.0  million of 7-1/4% senior notes due 2009 in
a notes offering in 1997.

     In August 1997, in connection with our acquisition of Panamco  Nicaragua,
we acquired all the capital stock of three Panamanian  companies which own all
the capital stock of Panamco Nicaragua. The purchase price for the acquisition
was  approximately  0.4 million  shares of our common  stock  (having a market
value at such time of  approximately  $13.4 million) and  approximately  $19.1
million in cash. In addition,  we assumed  approximately  $9.9 million of debt
owed by Panamco Nicaragua.

     In December  1997, we increased our ownership in our Mexican  subsidiary,
Panamco Mexico,  to 98% from 74%, and in Panamco Mexico's  subsidiaries to 96%
from 93%, paying a total of $277 million.

     In March 1998, we acquired all the capital stock of Panamco Guatemala for
$38.8  million  in cash and  assumed  $23.5  million  of debt owed by  Panamco
Guatemala.  During 1998, we also  increased our ownership in Panamco Brasil to
98% from 96%, paying a total of $28 million.

     In September  1998, we acquired  R.O.S.A.  and R.O.S.A.'s  plastic bottle
business,  Supripack,  for a total purchase price in cash of $57.9 million. In
connection  with the  acquisition,  we entered into a $70.0 million  financing
agreement.  On December 23, 1998,  we borrowed $200 million from The Coca-Cola
Financial Corporation ("CCFC").  The proceeds from the loan were used to repay
the $70 million loan  borrowed  for the  acquisition  of R.O.S.A.,  and to pay
maturing debt of Panamco  Venezuela,  which  amounted to $125 million.  During
November  1999,  $80  million of this loan was repaid  prior to the  scheduled
repayment date.

     On March 18, 1999 we borrowed  $300  million from a syndicate of banks to
repay an existing  loan for $160 million and for general  corporate  purposes.
This  syndicated  loan for a three  years term  accrues  interest at a rate of
LIBOR + 31/8%,  plus or minus the average change in the J.P. Morgan Latin Euro
Index in the  previous  quarter,  with a cap of plus 162.5 basis  points and a
floor of minus 75 basis points.

     On November  12,  1999,  our Mexican  subsidiary  placed 1 billion  pesos
(approximately  $106  million)  of  seven-year  Notes in the  Mexican  capital
markets. The issue is denominated in UDIs, an inflation-linked instrument, and
will pay a coupon of 8.65% over the principal balance,  which will be adjusted
periodically for inflation.  The proceeds from the debt issue were mainly used
to pay an $80  million  intercompany  loan with the  company  and for  general
corporate purposes.


                                      64


<PAGE>


     On December 9, 1999, the Board of Directors  approved a share  repurchase
program for up to $100  million of the  company's  Class A common  stock.  The
Company  may  repurchase  shares in the open  market  as well as in  privately
negotiated  transactions  based on prevailing market  conditions.  The Company
repurchased  368,584  shares for $7. 6 million during 1999 at an average price
per share of $20.53.

     We have  investments  in bank  deposits for $150  million and  marketable
bonds  amounting  to $34.5  million  which  guarantee  bank loans  obtained by
subsidiaries and are therefore classified as noncurrent investments.

ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our  business  exposes  us  to  many  different  market  risks,  such  as
fluctuations in interest rates,  currency exchange rates and commodity prices.
Consequently,  we consider  risk  management  as an essential  activity in the
course of our business. We utilize hedging strategies to mitigate those risks.
Our hedging strategies may include the use of derivative instruments,  such as
forwards,  futures and options,  generally  with terms not exceeding one year.
All  financial  and hedging  instruments  held by the Company are for purposes
other than trading.

          (1) Interest Rate Risk. Our interest rate exposure generally relates
     to our debt obligations.  We manage our interest rate exposure by using a
     combination of fixed and floating rate debt instruments.  Therefore,  our
     exposure to an increase in interest  rates results from our floating rate
     debt.


                                      65


<PAGE>


          The  following  table  shows  our  financial  instruments  that  are
     sensitive to changes in interest rates. In this table,  the fair value of
     long-term debt shown is based on the quoted market prices,  as well as on
     the present value of future cash flows:
<TABLE>
<CAPTION>

                                                   Expected Maturity Date                   1999                1998
                                       -------------------------------------------------   -----  -------     -----      ----
                                        2000    2001     2002    2003    2004  Thereafter  Total  F.V.(3)     Total      F.V.
                                        ----    ----     ----    ----    ----  ----------  -----  -------     -----      ----
<S>                                     <C>     <C>      <C>     <C>     <C>   <C>         <C>    <C>         <C>      <C>
Interest Rate Risk
(Amounts in equivalent millions of US
dollars)
  Fixed Rate Debt (1)

  - In US Dollars..................    $21.3   $39.7     $4.6  $152.9    $0.2     $300.0  $518.7   $504.8    $529.0    $547.9
    Weighted Average Interest Rate.      8.8%    9.5%    10.3%    8.2%    0.1%       7.2%
  - In Brazilian Reals.............      -       -        -       -       -          -       -        -       $23.5     $24.4
    Weighted Average Interest Rate.      -       -        -       -       -          -
  -  In Costa Rican Colons.........     $2.2     -        -       -       -          -      $2.2     $2.3      $4.4      $4.5
    Weighted Average Interest Rate.     20.5%    -        -       -       -          -
  - In Guatemalan Quetzals.........     $3.9    $0.9     $0.5    $0.3                       $5.6     $6.1      $7.7      $7.9
    Weighted Average Interest Rate.     21.2%   23.3%    20.0%   20.0%

  Floating Rate Debt (2)
  - In US Dollars (4)..............    $35.6  $240.6   $367.9           $23.2             $667.3   $716.4    $510.1    $533.8
    Weighted Average Interest Rate.      7.8%   10.4%    10.8%           11.0%
  - In Colombian Pesos (5).........    $25.3     -       $1.6                              $26.9    $27.8     $17.0     $17.3
    Weighted Average Interest Rate.     18.3%            22.0%
  - In Brazilian Reals (5).........     $9.9    $8.7     $1.5    $0.8                      $20.9    $19.7     $35.8     $38.1
    Weighted Average Interest Rate.     16.7%   16.9%    13.9%   10.1%
  - In Venezuelan Bolivars (2).....                                                          -        -        $1.1      $1.1
    Weighted Average Interest Rate.
  - In Mexican Pesos (5)...........                                              $106.5   $106.5   $120.0       -         -
                                                                                   22.0%

    Weighted Average Interest Rate.
                                                                                        ======== ========  ========  ========
        Total debt.................                                                     $1,348.1 $1,397.1  $1,128.6  $1,175.0
                                                                                        ======== ========  ========  ========

</TABLE>
--------------------
[FN]
(1)  Fixed interest rates are weighted averages as contracted by us.
(2)  Floating  interest  rates are based on market  rates as of  December  31,
     1999, plus the weighted average spread for us.
(3)  F.V. = Fair Value
(4)  Market interest rates are based on the U.S. dollar LIBOR curve.
(5)  Market rates are based on one year  federal  funds rate and assume a flat
     yield curve.
</FN>
          (2) Foreign  Exchange Risk. Our currency  exchange risk is generally
     related to the potential devaluation of the U.S. dollar against the Latin
     American currencies used in the countries in which we have operations. In
     each country where we operate,  our sales are in local currencies,  while
     our debt is mostly in U.S. dollars. Therefore,  foreign currency exchange
     exposure relates primarily to our debt obligations in U.S. dollars, which
     are shown in the previous interest rate risk table.

          To mitigate the impact of currency exchange rates  fluctuations,  we
     may  enter  into  foreign  exchange  forward   contracts  with  financial
     institutions  in  order to lock in the  exchange  rates  for  anticipated
     transactions.


                                      66


<PAGE>




          The table below provides information related to our foreign exchange
     forward contracts as of December 31, 1999, aimed to hedge the devaluation
     of the Venezuelan  bolivar against the U.S. dollar.  The contracts expire
     over the period from January to June of 2000.

                                               Weighted Average
                              Notional Amount    Contract Rate     Fair Value

Foreign Currency Forward
Contracts
(Amounts in US dollars)

   Venezuelan Bolivars          $12,400,000      683.38 Bs./USD    $(385,880)

          (3) Commodity  Price Risk. Our largest  exposure to commodity  price
     fluctuations is for sugar.  As a risk management  practice we may utilize
     both futures and options  contracts  to hedge  against an increase in the
     price of sugar.  As of  December  31,  1999,  we did not hold any hedging
     position for sugar.

          Because  inventories  of sugar have a very short term,  they are not
     included in this market risk disclosure.

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT

     Our Board of Directors presently consists of 15 members,  whose terms are
divided into three  classes as set forth below.  Coca-Cola  currently  has the
contractual  right to  designate  three  nominees  for  election to the Board.
Venbottling  presently has contractual rights to designate Gustavo A. Cisneros
and Oswaldo J.  Cisneros for election to the Board.  All directors are elected
for three-year terms.

     The following  table sets forth at May 10, 2000, the names and country of
citizenship  of the members of our Board,  their tenure as  directors  and the
year in which their next term will expire:

                                        Country of    Director     Term
                  Name                  Citizenship     Since     Expires

Gustavo A. Cisneros..................   Venezuela       1997       2000
Oswaldo J. Cisneros..................   Venezuela       1997       2000
William G. Cooling...................   Canada          1994       2001
Luiz Fernando Furlan.................   Brazil          1994       2000
James M. Gwynn.......................   U.S.A.          1997       2000
Timothy J. Haas......................   U.S.A.          1996       2002
Alejandro Jimenez....................   Costa Rica      1997       2001
Weldon H. Johnson....................   U.S.A.          1993       2002
Lt. Gen. Donald Colin Mackenzie......   Canada          1989       2001
Wade T. Mitchell.....................   U.S.A.          1986       2001
Francisco Sanchez-Loaeza.............   Mexico          1992       2002
Houston Staton.......................   Colombia        1997       2002
Stuart A. Staton.....................   U.S.A.          1997       2001
Woods W. Staton Welten...............   Columbia        1982       2000


                                      67


<PAGE>


     The  following  table  sets  forth the  names,  ages and  tenures  of our
executive  officers  (and,  where  noted,  certain  other  members  of  senior
management):


<TABLE>
<CAPTION>

                                                                                         Years with
Name                            Age               Position                       Since     Panamco
<S>                              <C>  <C>                                        <C>     <C>

Albert H. Staton, Jr..........   77   Chairman of the Board Emeritus              1993        48
Francisco Sanchez-Loaeza......   54   Chairman of the Board and Chief             1992        19
                                        Executive Officer
Alejandro Jimenez.............   49   President and Chief Operating Officer       1994         9
Paulo J. Sacchi...............   53   Senior Vice President, Chief Financial      1998        10
                                        Officer and Treasurer
Jose Ignacio Huerta Gonzalez..   46   Vice President--North Latin American        1999        20
                                        Division (Mexico and Central
                                        America) (President of Panamco
                                        Mexico and Panamco Central
                                        America)*
Jorge Giganti.................   56   Vice President--Brailian Operations         1996         4
                                        (President of Panamco Brasil)
Roberto Ortiz.................   44   Vice President--Colombian Operations        1998         6
                                        (President of Panamco Colombia)
Moises Morales................   40   Vice President--Venezuelan Operations       1999         4
                                        (President of Panamco Venezuela)
Carlos Hernandez-Artigas......   36   Vice President--Legal and Secretary         1994         7
</TABLE>


Officers  are  elected by our Board of  Directors  annually,  and serve at the
pleasure of the Board of Directors.

*The North Latin American Division incorporates Mexico,  Guatemala,  Nicaragua
and Costa Rica operations. It was created in February 1999.

     The backgrounds of the directors,  the executive  officers and such other
members of management of the Company are described below:

     Mr.  Gustavo A.  Cisneros  was  elected a director of the Company in June
1997.  Mr.  Cisneros is Chairman and Chief  Executive  Officer of the Cisneros
Group of Companies,  an  organization  that includes more than 50 companies in
Latin America,  Europe and the United  States.  Companies in the group include
television and radio networks,  broadcasting and telecommunications operations
and  various  consumer  product  companies,   including   supermarket  chains,
beverages,  soft drinks, beer, fast food franchises and music production.  Mr.
Cisneros  is a  founding  member of the  International  Advisory  Board of the
Council  on  Foreign   Relations  in  New  York,  a  former  director  of  the
International Advisory Committee of The Chase Manhattan Bank and a director of
the  Chairman's  Council  of the  Americas  Society as well as a member of the
International  Advisory Council of the United States  Information  Agency, the
Board of  Overseers  of the  International  Center for  Economic  Growth,  the
International   Advisory  Board  of  Power   Corporation  of  Canada  and  the
International Advisory Board of Gulfstream Aerospace Corporation. Mr. Cisneros
sits on the Board of Directors of Georgetown  University and the International
Advisory  Board of  Columbia  University  and is a Trustee of The  Rockefeller
University in New York. Mr. Cisneros is the cousin of Oswaldo J. Cisneros.

     Mr.  Oswaldo J.  Cisneros  was  elected a director of the Company in June
1997. He is President of Telcel  Cellular,  C.A., the largest private cellular
communications  company in Venezuela, a company that he founded in partnership
with Bellsouth International. He was the Chairman of Panamco Venezuela until


                                      68


<PAGE>


May 1997. Mr. Cisneros is president and owner of Central Azucarero Portuguesa,
a modern and productive  sugar mill,  President of Puerto Viejo Marina & Yacht
Club and Director of Produvisa (Glass  Manufacturing Co.). Mr. Cisneros is the
cousin of Gustavo A. Cisneros.

     Mr.  William G.  Cooling was elected a director of the Company in January
1994.   Mr.   Cooling  was  a  Senior   Executive   Vice   President   of  The
Colgate-Palmolive  Company and Chief of  Operations,  Specialty  Marketing and
International Business Development, from 1992 to 1996. For five years prior to
1992, Mr.  Cooling served as Executive Vice President and Chief  Technological
Officer of The Colgate-Palmolive Company.

     Mr.  Luiz  Fernando  Furlan was  elected a director of the Company in May
1994.  Mr.  Furlan has been  Chairman  of Sadia  Concordia  S.A.  Industria  e
Comercio, the largest Brazilian food processing conglomerate,  since 1993. For
more than five  years  prior to 1993,  Mr.  Furlan  served as  Executive  Vice
President, director and secretary of the board of directors of Sadia Concordia
S.A.  Industria e Comercio.  He is also the  President  of the ABEF  Brazilian
Chicken Producers and Exporters  Association  Companies and Vice President and
head of the foreign trade  department  of the  Federation of Industries in the
State of Sao Paulo.

     Mr.  James M. Gwynn has been  associated  with the  Company  through  its
Mexican  subsidiary,  Panamco Mexico,  since 1956, having served in management
for over 18 years. In Panamco, he served first as an alternate director,  then
as a director of the Company from 1989 to 1993,  member of the Advisory  Board
of  Panamco  until  1997 and a  director  of the  Company  from 1997 until the
present.

     Mr.  Timothy J. Haas was  elected a director  of the  Company at the 1996
annual  meeting of  shareholders.  Since July 1995, he has served as Executive
Vice President of Coca-Cola's  Latin American  Group.  Mr. Haas is Senior Vice
President of The Coca-Cola Company and President of its Latin America Group, a
position he assumed on January 1, 1997.

     Mr. Alejandro  Jimenez was elected  President and Chief Operating Officer
of the Company in April 1994. He served as Vice  President-Mexican  Operations
and President of Panamco Mexico from March 1992 to April 1994.  From July 1991
until March 1992,  Mr.  Jimenez was Vice  President of the Company.  From June
1990 until June 1991, he was Vice President of the Latin American  Division of
Coca-Cola. From June 1989 until May 1990, he was the Marketing Director of the
Latin American Division of Coca-Cola.

     Mr. Weldon H. Johnson is retired.  Prior to his  retirement,  Mr. Johnson
served for 10 years as Senior Vice President of Coca-Cola and Group  President
of Coca-Cola's Latin American Group.

     Lt.  General  Donald Colin  Mackenzie was first elected a director of the
Company in June 1989.  From June 1988 to June 1989,  he served as an alternate
director of the Company. From February 1987 to September 1988, he was a Senior
Consultant,   government  relations,  with  Public  Affairs  International,  a
Canadian company providing consulting services to private industry, located in
Ottawa,  Canada. In 1986, he retired from the Canadian Forces Air Element (the
Canadian Air Force) with the rank of Lieutenant General.

     Mr. Wade T.  Mitchell was first elected a director of the Company in June
1986. Mr. Mitchell is retired. Prior to January 1994, he was an Executive Vice
President of Trust Company Bank, Atlanta, Georgia, for more than five years.


                                      69


<PAGE>


     Mr. Davis L. Rianhard  served as Chairman of the Board from April 1993 to
April 1994 and was first elected a director of the Company in 1981.  From June
1990 to June 1992, Mr. Rianhard served as President of Panamco.  For more than
three years prior to June 1990,  Mr.  Rianhard  served as President of Panamco
Mexico.  He  retired  as a  director  of the  Company in May 1999 and became a
member of the Advisory Board.

     Mr. Francisco  Sanchez-Loaeza  was elected Chairman of the Board in April
1994. He has served as Chief  Executive  Officer since June 1992 and served as
President of the Company from June 1992 to April 1994.  He was first elected a
director  of  the  Company  in  1992.   From  June  1990  to  June  1992,  Mr.
Sanchez-Loaeza  served as Executive Vice  President of Panamco.  For more than
three  years  prior  to  June  1990,   Mr.   Sanchez-Loaeza   served  as  Vice
President-Finance of the Company and Panamco Mexico.

     Mr. Albert H. Staton, Jr., is Chairman Emeritus of the Board of Directors
and Chairman of the Advisory Board of Panamco.  Mr. Staton was first elected a
director  of the  Company in 1980.  He retired as a director of the Company in
1997 and is still an active member of the Advisory Board. Mr. Staton served as
Chairman of the Board from July 1988 to April 1993. He is the father of Stuart
A. Staton and the uncle of Houston Staton and Woods W. Staton Welten.

     Mr.  Houston  Staton was elected a director  of the Company in 1997.  For
more than four years prior to April 1997,  he served on the Advisory  Board of
Panamco.  He has been a director of 3 Points Technology,  Inc. since May 1996.
From  1992  through  September  1995,  Mr.  Staton  was an  owner-operator  of
McDonald's in Caracas,  Venezuela.  He is the nephew of Albert H. Staton, Jr.,
the brother of Woods W. Staton Welten and the cousin of Stuart A. Staton.

     Mr.  Stuart A. Staton was  elected a director of the Company in 1997.  He
has  previously  served as Vice  President-Investor  Relations  and  Executive
Assistant to the  President of the Company.  In addition,  for more than three
years prior to June 1990,  Mr.  Staton  served as  Executive  Assistant to the
President  of Panamco  Brasil,  and,  from 1980 to 1986,  he served in various
capacities in Panamco Mexico.  He is the son of Albert H. Staton,  Jr. and the
cousin of Houston Staton and Woods W. Staton Welten.

     Mr. Woods W. Staton Welten was first elected a director of the Company in
1982.  Mr.  Staton  Welten was the Vice  President  of  Marketing  for Panamco
Colombia  from 1980 to 1982 and has been the  President of Arcos Dorados S.A.,
the Argentinean joint venture of McDonald's Corporation, since 1984. He is the
nephew of Albert H. Staton,  Jr., the brother of Houston Staton and the cousin
of Stuart A. Staton.

     Mr.  Paulo J. Sacchi has been with  Panamco  for over nine years.  Before
becoming Chief Financial Officer, he was Vice-President- Operations of Panamco
Brasil.  He previously served as Vice President-  Strategic  Planning and Vice
President-Operations at Panamco's corporate offices in Mexico City.

     Mr. Jose Ignacio Huerta Gonzalez was elected Vice  President-North  Latin
American Division Operations and President of North Latin American Division in
February 1999. From April 1994 to February 1999, he was Vice President-Mexican
Operations and President of Panamco Mexico. From August 1992 to April 1994, he
served as Vice  President-Operations  of Panamco Mexico. From November 1990 to
July 1992, Mr. Huerta served as Finance Vice President of Panamco Mexico.  For
more than three years prior to November 1990, he served as Finance Director of
Panamco Mexico.

     Mr. Jorge  Giganti was elected Vice  President-Brazilian  Operations  and
President of Panamco Brasil in May of 1996. From April 1995 to April 1996, Mr.
Giganti served as president of the Biagi Group, a


                                      70


<PAGE>


Brazilian  bottler of Coca-Cola.  From August 1994 to March 1995, he served as
president of the Rio de la Plata Division  (Argentina,  Uruguay, and Paraguay)
of Coca-Cola.  Prior to August 1994, he served as President of the North-Latin
American Division of Coca-Cola.

     Mr. Moises Morales was appointed Vice President-Venezuela  Operations and
President  of  Panamco  Venezuela  in  January  1999.  From  December  1996 to
September  1998 he was President of Panamco Costa Rica and from September 1998
to  January  1999  he was  President  of  Panamco  Central  America  and  Vice
President-Central  America Operations. He has over 15 years' experience in the
Coca-Cola  system in Mexico.  Most recently,  he was a regional manager in the
Panamco Colombia operations.

     Mr.  Carlos  Hernandez-Artigas  was elected  Secretary  of the Company in
November 1993 and Vice  President-Legal  in January 1994. From 1992 to October
1993,  he was an associate  at the law firm Fried,  Frank,  Harris,  Shriver &
Jacobson in New York City.

     Mr.  Roberto Ortiz was elected Vice  President-Colombian  Operations  and
President of Panamco Colombia in September 1998. From September 1993 until May
1997 he  served  as Vice  President-Operations  of  Panamco  Colombia.  Before
joining  Panamco  Colombia,  he served in  Coca-Cola  de Colombia as Marketing
Operations Manager and Director for more than 15 years.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS

     Directors'  Fees.  Directors of the Company who are not employed by us or
our  subsidiaries  receive  directors' fees of $20,000 per year and $1,000 per
diem for  attendance at Board of Directors and committee  meetings.  Committee
chairmen also receive $3,000 per year. We pay  equivalent  fees to the members
of our advisory board, which, as of April 2000, is composed of two members.

     Executive  Compensation.  During the fiscal year ended December 31, 1999,
we set aside $0.2 million in the aggregate to provide  pension,  retirement or
similar  benefits for our  directors and officers  pursuant to existing  plans
provided  or  contributed  to  by  the  Company.   The  aggregate   amount  of
compensation  paid by us during 1999 to the directors  and executive  officers
listed above as a group for services in all capacities was approximately  $4.7
million exclusive of options described below.

     Restricted  Stock  Grants.  In  February  1993,  the  Board of  Directors
established  a Trust  and  Bonus  Plan for  certain  of our  employees,  which
distributed  3,000  shares  of Class A Common  Stock  free of  charge to 3,000
employees of our subsidiaries at a rate of one share each.

     Cash Bonus Plan. We have adopted a short-term  incentive plan (the "Bonus
Plan"),  pursuant to which key executives of the Company and  subsidiaries may
receive bonus  compensation  based on individual and Company  performance,  as
determined  by the  Compensation  Committee  of the  Board of  Directors  (the
"Committee").  The Bonus Plan was implemented for Brazilian  executives during
1992  and was  extended  to  Mexican  and  Colombian  as  well as the  Company
executives during 1993, Panamco Costa Rica in 1996 and Panamco Venezuela,  and
Panamco Nicaragua in 1997, and Panamco Guatemala in 1998.

     Under the  Bonus  Plan,  each  participant  is  assigned  a target  award
expressed as a percentage of base salary in varying  amounts (which  currently
do not  exceed  60% of base  salary).  The  actual  award  will be  based on a
composite   of   individual   and  Company   performance,   depending  on  the
participant's position with


                                      71


<PAGE>


the Company.  The individual portion of the participant's award will vary from
0% to  200% of the  target  award,  on the  basis  of  certain  objective  and
subjective criteria to be established by the Committee. The Company portion of
the participant's award will also vary from 0% to 200% of the target award, on
the basis of the relationship  between actual performance of the participant's
"Economic  Unit" (that is, the Company or Panamco  Mexico,  Panamco  Colombia,
Panamco Brasil,  Panamco Venezuela,  Panamco Costa Rica, Panamco Nicaragua and
Panamco  Guatemala)  and  projected  performance.  For purposes of  evaluating
Economic Unit  performance,  the Committee  will compare actual cash operating
profit and market share of the  participant's  Economic Unit against projected
performance  levels.  In the  case of cash  operating  profit,  the  Committee
established  minimum  performance  levels  for each  Economic  Unit for  1999.
Benefits are payable annually.

     The Committee has the authority to select  participants  and to establish
target awards and performance  measures.  The Committee may amend,  suspend or
terminate the Bonus Plan at any time.

     Equity  Incentive  Plan.  We have an Equity  Incentive  Plan (the "Equity
Incentive Plan"),  the purpose of which is to further the growth,  development
and  financial  success of the  Company by  providing  incentives  to selected
employees. Pursuant to the Equity Incentive Plan, options (including incentive
stock options) to purchase shares of Class A Common Stock and restricted stock
awards  with  respect  to  Class A Common  Stock  may be  granted.  A total of
9,000,000  shares of Class A Common Stock (subject to adjustment  upon certain
events) is available for grant although no individual  may receive  options to
purchase more than 200,000  shares of Class A Common Stock within any calendar
year.  The  Equity  Incentive  Plan  is  administered  by the  Committee.  The
Committee  determines  the terms and  conditions  of all  grants,  subject  to
certain limitations set forth in the plan.

     In November 1995, we granted options to purchase  720,000 shares of Class
A Common Stock under the Equity Incentive Plan at an exercise price of $14.375
per share,  the closing price on the day prior to the grant. In November 1996,
we granted  options to purchase  443,000  shares of Class A Common Stock under
the Equity  Incentive  Plan, at an exercise  price of $23.4375 per share,  the
closing  price on the day prior to the grant.  In  November  1997,  we granted
options to purchase  720,000  shares of Class A Common  Stock under the Equity
Incentive Plan, at an exercise price of $29.9375 per share,  the closing price
on the day prior to the  grant.  In  November  1998,  we  granted  options  to
purchase  1,379,200  shares of Class A Common Stock under its Equity Incentive
Plan at an exercise  price of $21.125 per share,  the closing price on the day
prior to the grant. In November 1999, we granted options to purchase 1,560,000
shares of Class A Common Stock under the Equity  Incentive Plan at an exercise
price of $15.61 per share.

     Options  granted  under the Equity  Incentive  Plan in 1995 and 1996 vest
over a period of five years and  options  granted in 1997,  1998 and 1999 vest
over a period of three years.  All options granted under the Equity  Incentive
Plan expire ten years from the date of issuance.

     Stock Option Plan for Nonemployee Directors.  We have a Stock Option Plan
for Nonemployee Directors (the "Stock Option Plan for Nonemployee Directors"),
which was  implemented to attract and retain the services of  experienced  and
knowledgeable  nonemployee  directors and nonemployee  members of the advisory
board of the Company. The Stock Option Plan for Nonemployee Directors provides
each nonemployee  director and each nonemployee  advisory board member with an
option to purchase a  specified  number of shares of Class A Common  Stock.  A
total of 100,000  shares of Class A Common Stock is available  for grant.  The
Stock Option Plan for  Nonemployee  Directors is  administered by the Board of
Directors or a subcommittee thereof. The Board of Directors has the discretion
to amend, terminate or


                                      72


<PAGE>


suspend the Stock Option Plan for Nonemployee  Directors at any time. Pursuant
to the  Stock  Option  Plan for  Nonemployee  Directors,  on April 7,  1995 we
granted to each  nonemployee  director and  nonemployee  advisory board member
options to purchase  1,670 shares of Class A Common Stock at an exercise price
of $17.50  per  share.  On April 19,  1996,  we  granted  to each  nonemployee
director and nonemployee  advisory board member options to purchase 948 shares
of Class A Common Stock at an exercise price of $19.62 per share.  On November
13, 1997, we granted to each  nonemployee  director and  nonemployee  advisory
board  member  (Mr.  Gustavo A.  Cisneros  and Mr.  Oswaldo J.  Cisneros  each
received  options  to  purchase  642  shares at an  exercise  price of $29.00)
options to purchase 680 shares of Class A Common Stock at an exercise price of
$29.9375 per share. In November 1998, we granted to each nonemployee  director
or advisory  board member  options to purchase  1,616 shares of Class A Common
Stock at an exercise  price of $21.125 per share.  Options  granted  under the
Stock  Option  Plan for  Nonemployee  Directors  in 1995 and 1996  vest over a
period of four years and  options  granted in 1997 and 1998 vest over a period
of three years.  In 1999 the Company did not grant options to its  nonemployee
directors  or advisory  board  members.  All options  granted  under the Stock
Option  Plan  for  Nonemployee  Directors  expire  10  years  from the date of
issuance.

     As of December  31,  1999,  the total  number of shares of Class A Common
Stock underlying  outstanding  options granted under the Equity Incentive Plan
and under the Stock Option Plan for Nonemployee Directors (after giving effect
to the  two-for-one  stock split  effected on March 31, 1997) was 4,104,314
shares.

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

     See "Item  11.--Compensation of Directors and Officers--Equity  Incentive
Plan" and "Item 11.--  Compensation  of Directors and  Officers--Stock  Option
Plan for Nonemployee Directors".

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

     Not applicable.


                                   PART III

ITEM 15. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.


ITEM 16.  CHANGES  IN  SECURITIES  AND  CHANGES  IN  SECURITY  FOR  REGISTERED
          SECURITIES

     Not applicable.


                                      73


<PAGE>


                                    PART IV

ITEM 17. FINANCIAL STATEMENTS

     Not applicable.


ITEM 18. FINANCIAL STATEMENTS

     Reference  is made to Item 19(a) for a list of all  financial  statements
filed as part of this Annual Report.

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS

(a) List of Financial Statements

                                                                         Page

     Report of Independent Public Accountants............................ F-1
     Consolidated Balance Sheets at December 31, 1998 and 1999........... F-2
     Consolidated Statements of Operations for each of the
       three years in the period ended December 31, 1999................. F-3
     Consolidated Statements of Shareholders' Equity for each of
       the three years in the period ended December 31, 1999............. F-4
     Consolidated Statements of Cash Flows for each of the three
       years in the period ended December 31, 1999....................... F-6
     Notes to Consolidated Financial Statements.......................... F-8

(b)  List of Exhibits

     10.1   Amendment No. 2 to the $300 Million Credit Agreement
     23.1   Consent of Independent Public Accountants



                                      74


<PAGE>


                             REPORT OF INDEPENDENT
                              PUBLIC ACCOUNTANTS



To the Shareholders of
Panamerican Beverages, Inc.:


     We  have  audited  the  accompanying   consolidated   balance  sheets  of
PANAMERICAN  BEVERAGES,  INC. (a  Panamanian  corporation)  AND  SUBSIDIARIES,
stated in U.S.  dollars,  as of December  31,  1998 and 1999,  and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1999. These financial
statements  are  the   responsibility   of  the  Company's   management.   Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing  standards  generally
accepted  in the  United  States.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes  assessing the accounting  principles used
and  significant  estimates  made by  management,  as well as  evaluating  the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our  opinion,  the  financial  statements  referred  to above  present
fairly,  in all  material  respects,  the  financial  position of  Panamerican
Beverages,  Inc. and  subsidiaries  as of December 31, 1998 and 1999,  and the
results of their  operations  and their cash flows for each of the three years
in  the  period  ended  December  31,  1999,  in  conformity  with  accounting
principles generally accepted in the United States.

Arthur Andersen



Mexico, D.F.
February 1, 2000


                                      F-1

<PAGE>


                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                     (Stated in Thousands of U.S. dollars)


                                                            December 31,
                                                    -------------------------
                                                       1998           1999
                                                    ----------     ----------
ASSETS
Current assets:
     Cash and equivalents                         $    131,152   $    152,648
     Accounts receivable, net                          175,008        133,776
     Inventories, net                                  149,387        122,978
     Prepaid expenses                                   28,993         17,648
                                                    ----------     ----------
         Total current assets                          484,540        427,050

Investments                                             43,990        215,129
Long-term receivables                                   27,518         17,050
Property, plant and equipment, net                   1,307,590      1,218,383
Bottles and cases, net                                 337,609        310,856
Deferred income taxes                                   74,653         89,203
Goodwill, net                                        1,347,446      1,292,414
Other assets                                            24,344         43,037
                                                    ----------     ----------

                                                   $ 3,647,690    $ 3,613,122
                                                    ==========     ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Bank loans                                   $    302,063         33,529
     Current portion of long-term debt                  55,332         64,640
     Accounts payable                                  207,217        152,230
     Income taxes                                        9,967         29,626
     Deferred income taxes                              15,904         22,459
     Sales and other taxes payable                      40,122         41,435
     Current portion of employee severance
     payments                                            5,910          5,586
     Employee profit sharing                            11,680         11,360
     Other accrued liabilities                          30,493         34,553
                                                    ----------     ----------
         Total long-term liabilities                   678,688        395,418

Long-term liabilities
     Long-term                                         771,267      1,249,972
     Pensions and employee severance payments           28,975         28,659
     Deferred income taxes                             144,349        133,656
     Other accrued liabilities                          19,934         25,547
                                                    ----------     ----------
         Total long-term liabilities                   964,525      1,437,834

Minority interest in consolidated subsidiaries          26,243         27,974
Shareholders' equity:
     Common stock                                        1,481          1,481
     Capital in excess of par value                  1,583,758      1,584,787
     Retained earnings                                 677,229        586,196
     Accumulated other comprehensive loss             (234,290)      (363,269)
                                                    ----------     ----------
                                                     2,028,178      1,809,195
     Treasury shares, at cost                          (49,944)       (57,299)
Total shareholders' equity                         $ 1,978,234    $ 1,751,896
                                                    ----------     ----------
                                                   $ 3,647,690    $ 3,613,122
                                                    ==========     ==========



The accompanying notes are an integral part of these consolidated statements.


                                      F-2

<PAGE>



<TABLE>
<CAPTION>


                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Stated in thousands of U.S. dollars, except per share amounts)


                                                                                Year Ended December 31,
                                                               1997                      1998                       1999
                                                          --------------            --------------             ------------

<S>                                                    <C>                           <C>                       <C>
Net sales                                                    $  2,510,210           $   2,773,276              $  2,415,817
Cost of sales, excluding depreciation and amortization          1,327,443               1,425,246                 1,191,883
                                                              -----------             -----------                 ---------
     Gross profit                                               1,182,767               1,348,030                 1,223,934
Operating expenses:
     Selling and distribution                                     563,917                 657,138                   572,038
     General and administrative                                   193,437                 222,327                   251,450
     Depreciation and amortization, excluding goodwill            159,371                 253,112                   214,539
     Amortization and goodwill                                     20,121                  35,739                    36,284
     Facilities reorganization charges                                  -                       -                    35,172
                                                             ------------             -----------                 ---------
                                                                  936,846               1,168,316                 1,109,483
                                                             ------------             -----------                 ---------
     Operating income                                             245,921                 179,714                   114,451
Other income (expense):
     Interest income                                               22,006                  12,817                    28,962
     Interest expense                                             (60,889)                (98,152)                 (129,072)
     Other, net                                                    44,033                  22,136                   (39,296)
     Nonrecurring, net                                                  -                  60,486                        -
                                                             ------------             -----------                ----------
                                                                    5,150                  (2,713)                 (139,406)
                                                             ------------             -----------                ----------
         Income (loss) before income taxes                        251,071                 177,001                   (24,955)
Income taxes                                                       57,302                  51,374                    31,254
                                                             ------------             -----------                ----------
         Income (loss) before minority interest                   193,769                 125,627                   (56,209)
Minority interest in earnings of subsidiaries                      19,934                   5,305                     3,695
                                                             ------------             -----------                ----------
         Net income (loss)                                   $    173,835           $     120,322              $    (59,904)
                                                             ------------             -----------                ----------
Basic earnings (loss) per share                              $       0.93           $        0.93              $      (0.46)
                                                             ============             ===========                ==========
Weighted average shares outstanding,
     in thousands                                                 120,841                 129,538                   129,683
                                                             ============             ===========                ==========

Diluted earnings (loss) per share                            $       1.43           $        0.92              $      (0.46)
                                                             ============             ===========                ===========
Weighted average shares outstanding,
            in thousands                                          121,969                 130,792                   129,683
                                                             ============             ===========                ===========

</TABLE>







 The accompanying notes are an integral part of these consolidated statements.


                                      F-3

<PAGE>


<TABLE>
<CAPTION>

                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                     (Stated in thousands of U.S. dollars, except share amounts)

                                          Shares                                              Amount
                                    -----------------------------------------------------------------------------------------------

                                                                                             Accumulated
                                                                      Capital in                Other       Treasury      Total
                                                            Common    Excess of   Retained   Comprehensive   Shares,   Shareholders'
                                  Issued       Treasury      Stock    Par Value   Earnings       Loss        At Cost     Equity
<S>                               <C>          <C>          <C>       <C>         <C>        <C>            <C>        <C>
Balance, December 31, 1996        132,511,864  31,574,200     $1,326  $  758,430  $440,102     $(171,420)   $(54,444)   $   973,994
 Comprehensive income:
  Net income                                -           -          -           -   173,835             -           -        173,835
  Translation adjustments                   -           -          -           -         -       (10,510)          -        (10,510)
  Pension Plan                              -           -          -           -         -           (49)          -            (49)
                                                                                                                         ----------
  Total comprehensive income                                                                                                163,276
                                                                                                                         ----------
 Compensation expense from
  equity incentive plan                     -            -         -         546         -             -           -            546
 Share repurchase                           -      605,112         -           -         -             -     (19,487)       (19,487)
 Stock options exercised                    -      (34,400)        -         345         -             -          91            436
                                               (15,100,000)
 Venezuela acquisition             15,500,000                    155     823,027         -             -      22,722        845,904
 Nicaragua acquisition                      -     (407,236)        -      12,696         -             -         702         13,398
 Increase in the market value
   of puttable common stock                 -    1,928,400         -     (14,367)        -             -           -        (14,367)
 Dividends declared ($0.21 per
     share)                                 -            -         -           -   (25,930)            -           -        (25,930)
                                  -----------   ----------     ------ ----------  --------     ---------    --------     ----------
Balance, December 31, 1997        148,011,864   18,566,076     1,481   1,580,677   588,007      (181,979)    (50,416)     1,937,770
 Comprehensive income:
  Net income                                -            -                     -   120,322             -           -        120,322
  Initial effect on deferred
    taxes relating to the change
    in functional currency in
    the Brazilian subsidiaries              -            -                     -         -        (7,660)          -         (7,660)
  Translation adjustments
     (including $(1,108) from
     intercompany balances and
     $366 from taxes)                       -            -                     -         -       (43,702)          -        (43,702)
  Pension Plan                              -            -                     -         -          (949)          -           (949)
                                                                                                                         ----------
  Total comprehensive income                                                                                                 68,011
                                                                                                                         ----------
 Comprehensive expense from
    equity incentive plan                   -            -           -       546         -             -           -            546
 Share repurchase                           -        4,356           -         -         -             -         (81)           (81)
 Stock options exercised                    -     (203,809)          -     2,535         -             -         553          3,088

 Dividends declared ($0.24 per                           -
    share)                                               -         -           -   (31,100)            -           -        (31,100)
                                  -----------   ------------   ------  ---------   -------     ---------   ---------     ----------
Balance, December 31, 1998        148,011,864   18,366,623     1,481   1,583,758   677,229      (234,290)    (49,944)     1,978,234
</TABLE>

The accompanying notes are an integral part of these consolidated statements.


                                                                 F-4

<PAGE>


<TABLE>
<CAPTION>

                                              PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                     (Stated in thousands of U.S. dollars, except share amounts)

                                          Shares                                              Amount
                                   ------------------------------------------------------------------------------------------------

                                                                                                Accumulated
                                                                       Capital in                   Other      Treasury    Total
                                                             Common    Excess of     Retained  Comprehensive   Shares, Shareholders'
                                       Issued     Treasury    Stock    Par Value     Earnings       Loss       At Cost     Equity
<S>                                    <C>        <C>        <C>       <C>           <C>       <C>             <C>     <C>
Comprehensive loss:
  Net loss                                  -            -        -            -     (59,904)            -           -     (59,904)
  Initial effect on deferred taxes
    relating to the change in
    functional currency in the
    Mexican subsidiaries                    -            -        -            -           -        (4,937)          -      (4,937)
  Translation adjustments
    (including $(15,527) from
    intercompany balances and
    $7,005 from taxes)                      -            -        -            -           -      (125,566)          -    (125,566)
  Pension Plan                              -            -        -            -           -         1,524           -       1,524
                                                                                                                          ---------
  Total comprehensive loss                                                                                                (188,883)
                                                                                                                          ---------
Share repurchase                            -      368,584        -            -           -             -      (7,568)     (7,568)
Stock options exercised                     -      (76,500)       -        1,029           -             -         213       1,242
Dividends declared ($0.24 per                            -
  share)                                    -            -        -     (31,129)           -             -           -     (31,129)
                                  -----------   ----------   ------   ----------    --------     ---------    --------  ----------

Balance, December 31, 1999        148,011,864   18,658,707   $1,481   $1,584,787    $586,196     $(363,269)   $(57,299) $1,751,896
                                  ===========   ==========   ======   ==========    ========     =========    ======== ===========
</TABLE>


 The accompanying notes are an integral part of these consolidated statements.


                                      F-5

<PAGE>




<TABLE>
<CAPTION>

                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Stated in thousands of U.S. dollars)

                                                                                          Year Ended December 31,
                                                                           ------------------------------------------------------
                                                                               1997                 1998                 1999
                                                                           -------------        -------------        ------------
<S>                                                                        <C>                  <C>                  <C>
Cash flows from operating activities:
    Net income (loss)                                                      $     173,835         $    120,322         $  (59,904)
    Adjustments to reconcile net income (loss) to cash
        provided by operating activities--
           Depreciation and amortization                                         179,492              288,851            250,823
           Gain on translation from non-operating activities                     (14,159)              (4,607)           (14,785)
           Minority interest in earnings of subsidiaries                          19,934                5,305              3,695
           Deferred income taxes                                                 (24,012)              (5,898)           (39,401)
           Reserve for contingencies                                                 876              (57,884)             2,295
           Pensions                                                               14,968               11,203              5,760
           Loss (gain) on property, plant and equipment and
             investment disposals                                                  4,523                6,738             (1,714)
           Equity in earnings of unconsolidated
              companies, net                                                      (6,569)               3,550              4,371
           Non-cash facilities reorganization charges                                  -                    -             20,270
           Other                                                                     546                5,198             12,903
           (Increase) decrease in assets--
               Accounts receivable                                                28,814              (60,546)            55,441
               Inventories                                                        (7,959)             (37,673)            24,135
               Prepaid expenses                                                   (8,877)              (9,499)            11,283
               Additions to long-term receivables                                (12,403)             (12,712)            (2,452)
               Collections of long-term receivables                                3,242                4,403              1,082
           Increase (decrease) in liabilities--
               Accounts payable                                                   97,270               28,571            (71,714)
               Income taxes and employee profit sharing                           20,091              (22,356)            42,563
               Sales and other taxes payable                                       2,569               (6,279)             2,303
               Employee severance payments                                       (19,188)              (1,245)            (3,962)
               Other                                                             (13,808)              14,818            (16,846)
                                                                           -------------         -------------        ------------
           Net cash provided by operating activities                             439,185              270,260            226,146

Cash flows from investing activities:
        Capital expenditures                                                    (208,669)            (302,215)          (163,203)
        Purchases of bottles and cases, net                                     (123,370)            (124,438)           (74,591)
        Purchases of investments                                                (184,864)             (97,388)          (190,409)
        Proceeds from sale of investments                                          3,220                    -                  -
        Proceeds from sale of property, plant and equipment                        4,303                5,872              2,760
        Acquisition of minority interest                                        (289,365)             (28,310)                  -
        Other                                                                     10,251               (2,663)            (1,739)
                                                                           --------------        -------------        -------------
           Net cash used in investing activities                               (788,494)            (549,142)           (427,182)
</TABLE>

The accompanying notes are an integral part of these consolidated statements.


                                                                 F-6

<PAGE>

<TABLE>
<CAPTION>

                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Stated in thousands of U.S. dollars)

                                                                                          Year Ended December 31,
                                                                           ------------------------------------------------------
                                                                               1997                 1998                 1999
                                                                           -------------        -------------        ------------

<S>                                                                        <C>                  <C>                  <C>
    Payment of bank loans and other                                              (337,515)            (495,001)           (395,836)
    Proceeds from bank loans, other and other long term
       borrowings                                                                 825,902              606,002             633,706
    Issuance of capital stock                                                         436                3,088               1,242
    Acquisition of capital stock                                                  (19,487)                 (81)             (7,568)
    Increase in the market value of puttable common stock                         (14,367)                   -                   -
    Payment of dividends to minority interest                                      (4,653)                (654)               (499)
    Payment of dividends to shareholders                                          (25,930)             (31,100)            (31,129)
    Other                                                                           6,260                  749              (1,657)
                                                                               ----------------      ---------------     ----------
        Net cash provided by financing activities                                 430,646               83,003             198,259
Effect of exchange rate changes on cash                                               385              (5,964)              24,273
                                                                               ----------------      ---------------     ----------

        Net increase (decrease) in cash and equivalents                            81,722            (201,843)              21,496
Cash and equivalents at beginning of year                                         251,273             332,995              131,152
                                                                               -------------         ------------         ---------
Cash and equivalents at end of year                                            $  332,995           $ 131,152            $ 152,648
                                                                                ============        ============        ===========
Supplemental cash flow disclosures:
    Cash paid during the year for--
        Interest                                                               $  49,719            $ 108,827            $ 109,444
                                                                                ============        =============       ===========
        Income taxes                                                           $  69,040            $  80,515            $  36,880
                                                                                ============        =============       ===========

</TABLE>


The accompanying notes are an integral part of these consolidated statements.


                                      F-7

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(1)  Operations and summary of significant accounting policies

     Description of operations

     The primary activity of the subsidiaries of Panamerican Beverages, Inc.
     (the "Company") is the production and sale of Coca-Cola products and
     other beverages. The Company operates in Mexico, Brazil, Colombia,
     Venezuela and Central America (Costa Rica, Nicaragua and Guatemala).
     Bottler agreements with Coca-Cola expire during the years 2000-2005 and
     are expected to be renewed upon expiration.

     Approximately 88% of the Company's 1999 net sales were derived from the
     distribution of Coca-Cola products. Coca-Cola may be able to exercise
     influence over the conduct of the Company's business through rights
     maintained under bottler agreements with the Company and otherwise.

     On November 1, 1995, the Coca-Cola Export Corporation ("Export"), a
     wholly owned subsidiary of Coca-Cola, Coca-Cola and the Company entered
     into an Amended and Restated Investment Agreement ("Agreement") pursuant
     to which Coca-Cola designated the Company as an anchor bottler and agreed
     to increase its equity interest in the Company. Coca-Cola also acquired
     the right to approve certain major corporate actions taken by the
     Company. Subject to satisfaction of certain conditions, the Agreement
     calls for Coca-Cola to purchase Company capital stock in amounts equal to
     the purchase price of bottling acquisitions to be made by the Company
     from time to time, up to a maximum voting interest of 25%. The price per
     share in any such acquisition of additional capital stock will be the
     average closing price on the New York Stock Exchange during a period
     preceding the announcement of the related bottling acquisition. The
     Agreement does not obligate the Company to finance an acquisition by
     selling stock to Export.

     The designation of the Company as an anchor bottler means that the
     Company will be one of Coca-Cola's strategic partners in the worldwide
     Coca-Cola bottling system. Although it does not guarantee that the
     Company will be able to acquire any particular franchise or renew
     existing bottler agreements, the Company believes (along with Coca-Cola's
     other anchor bottlers) it will be looked upon favorably by Coca-Cola in
     these situations.

     As of December 31, 1999 Coca-Cola beneficially owned 30,625,692 shares
     representing approximately 24% of the Company's shares outstanding.

     The significant accounting policies of the Company and its subsidiaries
     are as follows:

     New Pronouncements

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards No. 133, "Accounting for
     Derivative Instruments and Hedging Activities" ("SFAS-133"), which
     revises the accounting and related disclosures for derivative financial
     instruments. The Company does not believe the adoption of this standard,
     which will be implemented in the first quarter of 2001, will have a
     material effect on financial position or results of operations.

     In March 1998, the American Institute of Certified Public Accountants
     issued Statement of Position No. 98-1, "Accounting for the Costs of
     Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"),
     which provides guidance on the accounting for software development costs
     and requires the capitalization of certain costs which the Company had
     historically expensed. As required, beginning 1999 the Company adopted
     SOP 98-1, which did not have a material impact on the Company's financial
     position, results of operations or cash flows.


                                      F-8

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(1)  Operations and summary of significant accounting policies (Continued)

     Basis of consolidation

     The consolidated financial statements include the accounts and operations
     of the Company and its subsidiaries in Mexico, Brazil, Colombia,
     Venezuela and Central America. All material intercompany accounts and
     transactions have been eliminated in consolidation. Minority interest in
     majority owned subsidiaries has been recorded in the Company's
     consolidated financial statements representing their share of subsidiary
     earnings.

     The equity in earnings and the changes in equity of subsidiaries that are
     acquired or sold during the period are included in the financial
     statements until or from the date of the transaction.

     Basis for translation

     The accounts of the Company are maintained in U.S. dollars. The accounts
     of the subsidiaries are maintained in the currencies of the respective
     countries.

     The financial statements of the Colombian and Venezuelan subsidiaries for
     all periods, the Mexican subsidiaries for 1997 and 1998 and the Brazilian
     subsidiaries for 1997, have been remeasured into U.S. dollars, the
     reporting and functional currency, in accordance with Statement of
     Financial Accounting Standards No. 52, "Foreign Currency Translation"
     ("SFAS-52"), as it applies to highly inflationary economies such as those
     in which the subsidiaries operate, as follows:

          a.   Quoted year-end rates of exchange are used to remeasure
               monetary assets and liabilities.

          b.   All other assets and shareholders' equity accounts are
               remeasured at the rates of exchange in effect at the time the
               items were originally recorded.

          c.   Revenues and expenses are remeasured on a monthly basis at the
               average rates of exchange in effect during the period, except
               for depreciation, amortization and materials consumed from
               inventories, which are translated at the rates of exchange in
               effect when the respective assets were acquired.

          d.   Translation gains and losses arising from the remeasurement are
               included in the determination of net income (loss) in the
               period such gains and losses arise and have been distributed to
               the related income statement accounts.


                                      F-9

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)

     Foreign currency translation gains (losses) on monetary assets and
     liabilities for Colombia, Venezuela, Mexico (1997 and 1998) and Brazil
     (1997) have been included in the income statement accounts to which such
     items relate as shown below:

                                            Year Ended December 31,
                       --------------------------------------------------------
                                    1997             1998              1999
                                   ------           ------            ------
Net sales                        $ (3,211)        $   628          $    (313)
Cost of sales and operating
     expenses                       9,125          (2,007)            12,152
Interest and other income
     (expense)                      2,174           1,849              1,446
Provision for income taxes          2,243          (1,441)             1,500
                                 ---------       ---------         ----------

Net translation gains (losses)   $ 10,331         $  (971)         $  14,785
                                 ========        =========         ==========



     The translation gains (losses) allocated to net sales are attributable to
     translation losses on accounts receivable. The translation gains (losses)
     allocated to cost of sales and operating expenses are attributable to
     translation gains (losses) on accounts payable and certain accrued
     liabilities. The translation gains (losses) allocated to other income
     (expense) are attributable primarily to accrued excise taxes and certain
     other accrued liabilities.

     Beginning 1998, the Company discontinued classifying Brazil as a highly
     inflationary economy, and accordingly, the functional currency of the
     Brazilian operations was changed from the U.S. dollar to the Brazilian
     real. This change resulted in a change in the method of translating the
     Brazilian financial statements from the remeasurement process to the
     current rate translation method and the deferred income tax asset balance
     and shareholders' equity each decreased by $7,660, in 1998.

     Beginning 1999, the Company discontinued classifying Mexico as a highly
     inflationary economy, and, accordingly, the functional currency of the
     Mexican operations was changed from the U.S. dollar to the Mexican peso.
     The effect of the change represented a decrease in both the deferred
     income tax balance and shareholders' equity of $4,937 in 1999.

     The current rate translation method is used for the Brazilian (1998 and
     1999), Mexican (1999), Costa Rican, Nicaraguan and Guatemalan
     subsidiaries, where the functional currency is the Brazilian Real, the
     Mexican Peso, the Costa Rican Colon, the Nicaraguan Cordoba and the
     Guatemalan Quetzal, respectively. Under this method all assets and
     liabilities (except minority interests) are translated on a monthly basis
     using the quoted year-end exchange rate, and all revenues and expenses
     are translated on a monthly basis at the average rate of exchange in
     effect during the period. The resulting translation adjustments are
     included in the accumulated and other comprehensive income (loss), which
     is a component of shareholders' equity.

     Latin America

     The Latin American markets in which the Company operates are
     characterized by volatile and frequently unfavorable economic, political
     and social conditions. High inflation, and with it high interest rates,
     are


                                     F-10

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)


     common. The governments in the countries where the Company operates have
     responded in the past to high inflation by imposing price and wage
     controls or similar measures, although formal soft drink price controls
     in each country have been lifted or phased out. These countries have also
     experienced significant currency fluctuations. Since the Company's
     consolidated cash flows from operations is generated exclusively in the
     currencies of the subsidiaries, the Company is subject to the effect of
     fluctuations in the value of those currencies.

     During January 1999, the Brazilian Government changed its local currency
     exchange policy in relation to the U.S. dollar to be determined by the
     market without establishment of a trading band. During 1999, the local
     currency decreased in value in relation to the U.S. dollar by 48% and the
     related exchange loss amounted to $27,850, which was recorded in other
     income (expense). As of December 31, 1999 the Brazilian subsidiaries have
     net liabilities denominated in U.S. dollars subject to translation
     exchange gain or losses in the amount of $83,260 and net assets subject
     to translation effect in the amount of $3,709. At February 1, 2000 the
     unaudited foreign exchange position was similar to that at year-end, and
     there has been no significant change in the exchange rates.

     Use of estimates

     The preparation of financial statements requires management to make
     estimates and assumptions that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the
     date of the financial statements and the reported amounts of revenues and
     expenses during the reporting period. Actual results could differ from
     those estimates. The most significant estimates with regard to these
     financial statements are related to accounts receivable, inventory, taxes
     and pensions as discussed in Notes 2, 3, 6 and 8, respectively.

     Revenue recognition

     Revenues from sales are recorded at the time products are delivered to
     trade customers. Net sales reflect units delivered at selling list prices
     reduced by known promotion allowances.

     Vulnerability due to concentration

     The Company's primary raw material supplier is Coca-Cola. Transactions
     with Coca-Cola are subject to maintenance provisions under existing
     bottler agreements.

     The Company's other raw materials are sourced from multiple vendors and
     the Company believes additional supply sources exist for all these raw
     materials.

     Adjustments to conform with accounting principles generally accepted
     in the United States

     Certain accounting policies applied by the subsidiaries in their accounts
     (and in their financial statements prepared for use in the respective
     country) conform with the accounting principles generally accepted


                                     F-11

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)

     in the respective country but do not conform with the accounting
     principles generally accepted in the United States. The accompanying
     financial statements have been prepared for use primarily in the United
     States and reflect certain adjustments required to conform them with the
     accounting principles generally accepted in the United States.

     Cash and equivalents

     Cash and equivalents include cash on hand and in banks and certificates
     of deposit stated at cost plus income accrued to the balance sheet date,
     which have an original maturity of three months or less.

     Inventories

     Inventories are stated at the lower of average cost or market.

     Investments

     The investment in Tapon Corona de Colombia, S.A., equivalent to 40% of
     the outstanding shares of that Colombian company, the investment in
     Cervejarias Kaiser, S.A., a Brazilian brewery (in which the company
     increased its interest from 11.4% to 11.6% in 1998 as a result of the
     acquisition of Refrigerantes do Oeste, S.A. ("R.O.S.A.") described in
     Note 12) and investments in other companies in which the Company holds at
     least 20% of the outstanding shares are accounted for using the equity
     method, wherein the Company's participation in the earnings of those
     subsidiaries are recorded in income as earned, and dividends received in
     cash are applied to reduce the related investment.

     The Company has investments in bank deposits and marketable bonds
     amounting to $184,500 which guarantee bank loans obtained by subsidiaries
     and are therefore classified as noncurrent (see Note 7). Bank deposits
     are valued at fair value.

     All other investments are valued at cost, which approximates market or
     net realizable value. The equity in earnings and the changes in equity of
     subsidiaries that are acquired or sold during the period are included in
     the financial statements until or from the date of the transaction.

     Property, plant and equipment

     Property includes the cost of land, buildings, equipment and significant
     improvements to existing property. Additions, improvements and
     expenditures for repairs and maintenance that significantly add to the
     productive capacity or extend the life of an asset are capitalized; other
     expenditures for repairs and maintenance are charged to operating results
     as incurred.

     Interest incurred with respect to long-term capital projects is
     capitalized and reflected as a reduction of interest expense. Such amount
     was $175, $346 and $73 in 1997, 1998 and 1999, respectively.


                                     F-12

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)

     When an asset is sold or retired, the cost and related accumulated
     depreciation are removed from the respective accounts and any gain or
     loss is included in results of operations for that year.

     Depreciation is calculated under the straight-line method for all
     subsidiaries over the estimated remaining useful lives of the assets.

     Bottles and cases

     The Company utilizes the lower of FIFO cost or market method for valuing
     bottles and cases on hand. Breakage of bottles and cases on hand is
     included in depreciation and amortization expense. For the years ended
     December 31, 1997, 1998 and 1999, breakage expense amounted to $32,814,
     $44,980 and $37,373, respectively.

     Bottles and cases, net include the cost of bottles and cases on hand and
     the unamortized portion of the capitalized cost of new introductions, net
     of any amounts collected for bottles and cases. The cost of new
     introductions is amortized over estimated useful lives ranging from three
     to six years for bottles and six to ten years for cases, and amortization
     expense of $32,865, $49,100 and $57,228 has been recorded in 1997, 1998
     and 1999, respectively.

     A certain level of bottles and cases are always in circulation in the
     marketplace. The Company's practice is to accept returnable bottles and
     cases in lieu of deposits on new sales, and, in practice, the Company's
     customers generally do not return bottles and cases for refunds.
     Accordingly, monies received by the Company from customers for bottles
     and cases are netted against the Company's cost of acquiring bottles and
     cases.

     Goodwill

     Goodwill represents the excess of the cost of acquisitions over the fair
     value of the net assets acquired, and is being amortized on a
     straight-line basis over the estimated periods to be benefited, not to
     exceed 40 years.

     Impairment

     The Company periodically evaluates whether events or circumstances have
     occurred indicating that the carrying amount of the long-lived assets,
     including goodwill, may not be recoverable. When factors indicate
     possible impairment, the Company uses an estimate of undiscounted future
     cash flows to determine if any impairment has occurred.

     Marketing expense

     The Company expenses broadcast advertising costs when invoiced, which
     generally coincides with the broadcast of the related advertisement.
     Other marketing and advertising costs are expensed as incurred.


                                     F-13

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(1)  Operations and summary of significant accounting policies (Continued)

     Marketing expense, net of Coca-Cola reimbursements in 1997, 1998 and 1999
     was $96,299, $119,986 and $90,240, respectively.

     Franchisor incentives

     Coca-Cola, at its sole discretion, provides the Company with various
     benefits and incentives, including capital expenditure incentives,
     promotional programs and advertising support. In 1999, Coca-Cola modified
     the terms and conditions of its franchisor incentive arrangements. As a
     result, reimbursements are now based on meeting certain conditions. Until
     1998 there were no conditions required for franchisor incentives.
     Prior to 1999, capital expenditure incentives are recorded as other
     income when Coca-Cola confirmed its commitment to the related incentive.
     Beginning 1999, incentives are recorded as liabilities when received and
     are amortized to other income on a straight-line basis over 60 months
     beginning the next month after Coca-Cola confirms its commitment to the
     related incentive (see Note 13). Payments are related to the increase in
     volume of Coca-Cola products that result from such expenditures and are
     viewed by the Company as an offset against the costs of concentrates paid
     by the Company to Coca-Cola. Advertising and promotional incentives are
     treated as reductions of the marketing expense when known.

     Employee Profit Sharing

     Mexican, Brazilian and Venezuelan laws require the payment to employees
     of employee profit sharing. These amounts are treated as compensation
     expense and are reflected in the appropriate income statement captions in
     the accompanying financial statements. The employee profit sharing
     expense was as follows:

                                          Year Ended
                                        December 31,
                                        ------------
                                           1997             $   14,460
                                           1998             $   20,877
                                           1999             $   27,078


     Pensions and other employee benefits

     Pension plans are computed in accordance with Statement of Financial
     Accounting Standards No. 87, "Employers' Accounting for Pensions"
     ("SFAS-87"), determined under the projected unit credit method. The
     Mexican, Brazilian, Colombian, Nicaraguan and Guatemalan subsidiaries
     have pension plans, which cover all their employees except for the
     Mexican plan which covers only nonunion employees. The other subsidiaries
     do not have pension plans.

     The Mexican and Brazilian pension plans are funded and the contributions
     are based on actuarial valuations. In 1998 and 1999 the contributions
     amounted to $2,374 and $1,932, respectively. The


                                     F-14

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)

     Colombian plan is unfunded and shared with a government agency. The
     Nicaraguan and Guatemalan plans are unfunded. The labor laws in each of
     the countries in which the Company operates require severance payments
     upon involuntary termination. The Company accrues for such costs when
     known.

     The Company has no other post-retirement or post-employment benefits
     which would require adjustment under Statement of Financial Accounting
     Standards No. 106, "Employers' Accounting for Post-retirement Benefits
     other than Pensions" or Statement of Financial Accounting Standards No.
     112, "Employers' Accounting for Post-employment Benefits".

     Nonrecurring income (expenses)

     During 1998, the Brazilian subsidiaries conducted a study to evaluate the
     expected future utilization of returnable product presentations in the
     Brazilian market, having observed accelerated demand for, and utilization
     of, non-returnable presentations in the marketplace. The results of this
     study indicated that the use of non-returnable presentations will
     continue to increase in the Brazilian market. Therefore, the Company
     adjusted the carrying value of bottles and cases to reflect their
     estimated use in the marketplace by charging $36,544 to the 1998
     operating results, increasing total depreciation and amortization expense
     and reducing the provision for income tax by $12,060.

     Additionally in 1998 the Brazilian subsidiaries reversed a contingency
     reserve recorded in prior years for excise tax credits taken on purchases
     of concentrate between February 1991 and February 1994. The Company had
     previously accrued this reserve in the full amount of such credits. The
     Company reversed this reserve based on the fact that during 1998 the
     Brazilian Supreme Court resolved similar claims of other bottlers in
     favor of the bottlers (see Note 10).

     The reversal of the excise tax reserve amounted to $60,486 and was
     credited to other nonrecurring income in the income statement. Income tax
     credits related to this reserve, amounting to $19,960, were also reversed
     and charged in 1998 directly to income in the provision for income tax.

     Facilities reorganization charges

     During 1999, the Company recorded $35,172 of charges primarily as a
     result of the write-off of non cash items amounting to $20,270 relating
     to physical assets in Venezuela and Colombia and $14,902 cash items
     relating to severances in Brazil and Venezuela that have been recorded as
     facilities reorganization charges.

     Income taxes

     Deferred income taxes are provided by the balance sheet method for
     temporary differences between amounts of assets and liabilities for
     financial and tax reporting purposes.


                                     F-15

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(1)  Operations and summary of significant accounting policies (Continued)

     At December 31, 1999, accumulated undistributed retained earnings subject
     to withholding taxes of foreign subsidiaries in Mexico, Colombia and
     Costa Rica, amounted to approximately $138,803, $269,573, and $14,101. No
     provision for withholding tax is made on foreign earnings because they
     are considered by management to be permanently invested in those
     subsidiaries and, under the tax laws, are not subject to such taxes until
     distributed as dividends. If the earnings were not considered permanently
     invested, approximately $10,410, 18,870 and $2,115 of deferred taxes
     would have been provided for subsidiaries in Mexico, Colombia and Costa
     Rica, respectively, at December 31, 1999. This assumes a withholding tax
     rate of 7.5% for Mexico, 7% for Colombia and 15% for Costa Rica (see Note
     9). Dividends paid for distribution of earnings in Mexico were not
     subject to withholdings taxes until December 31, 1998. Effective January
     1, 1999, dividends are subject to withholdings taxes (see Note 9). No
     withholding taxes are generally paid for distribution of earnings in
     Venezuela, Nicaragua or Guatemala.

     Financial instruments

     The Company has considered the disclosure provisions of Statement of
     Financial Accounting Standards No. 105, "Disclosure of Information about
     Financial Instruments with Off-Balance-Sheet Risk and Financial
     Instruments with Concentration of Credit Risk," as well as the provisions
     of Statement of Financial Accounting Standards No. 107, "Disclosures
     about Fair Value of Financial Instruments". The Company does not have any
     financial instruments which would call for any additional disclosures
     under Statements 105 and 107.

     The carrying amounts and fair values of the Company's financial
     instruments as of December 31, are summarized as follows:


<TABLE>
<CAPTION>

                                                          1998                                  1999
                                           ----------------------------------    -----------------------------------
                                            Carrying Amount    Fair Value         Carrying Amount     Fair Value

<S>                                         <C>                <C>                <C>                 <C>
Long-term bank investments and marketable
bonds                                         $      -         $      -           $  187,500        $  195,692
                                              ==========       ==========         ==========         =========
Bank loans and long-term debt (including      $1,128,661       $1,175,000         $1,348,141        $1,397,100
current portion)                              ==========       ==========         ==========        ==========


</TABLE>


    Earnings per share

     Basic earnings per share have been calculated based on the weighted
     average number of common shares outstanding.

     Diluted earnings per share have been calculated similar to the basic
     earnings per share, except that the weighted average number of shares
     includes the number of additional common shares that would have been
     outstanding, if the dilutive potential common shares of the stock option
     plans had been issued under the treasury stock method.


                                     F-16

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(2)  Accounts receivable

     Short-term accounts receivable consist of:

                                                              December 31,
                                                       ------------------------
                                                         1998            1999
                                                      --------        --------
Customers and distributors                           $ 103,243      $   89,637
Employees                                                8,403           5,501
Subsidiaries of Coca-Cola and related companies         22,570          13,479
Sales and income taxes receivable                       20,572          10,606
Other                                                   30,647          26,087
                                                      --------        --------
                                                       185,435         145,310
Less-Allowance for doubtful accounts                    10,427          11,534
                                                      --------        --------

                                                     $ 175,008       $ 133,776
                                                      ========        ========


     Long-term accounts receivable consist of:

                                                              December 31,
                                                        -----------------------
                                                         1998            1999
                                                       -------        --------
Judicial deposits                                    $   1,401       $   1,401
Notes from distributors                                 22,849          11,227
Employee housing loan fund                               1,749           1,271
Other                                                    1,519           3,151
                                                      --------        --------
                                                     $  27,518       $  17,050
                                                      ========        ========


     The judicial deposits primarily represent amounts deposited by the
     Brazilian subsidiaries to cover certain local taxes, all of which have
     been accrued. Notes from distributors relate to financing provided by the
     Company to distributors to acquire vehicles with maturities ranging from
     three to five years.


                                     F-17

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(3)  Inventories

     Inventories consist of:


                                                    December 31,
                                  --------------------------------------------
                                             1998                     1999
                                           -------                  --------
Bottled beverages                        $  47,309                $   32,683
Raw materials                               51,703                    49,341
Spare parts and supplies                    51,861                    45,018
                                          --------                  --------
                                           150,873                   127,042
Less- Allowance for obsolete and slow
     moving items                            1,486                     4,064
                                          --------                  --------
                                         $ 149,387                 $ 122,978
                                          ========                  ========


(4)  Property, plant and equipment

     Property, plant and equipment consist of:


                                                  December 31,
                                    -----------------------------------------
                                                                Estimated useful
                                        1998          1999            lives
                                     ---------     ---------   ---------------
Land                                $  122,910   $   114,588          -
Buildings                              319,804       303,959    20 to 40 years
Machinery and equipment, furniture
     and fixtures                    1,245,751     1,180,304     4 to 20 years
Vehicles                               384,576       376,481     4 to 10 years
Construction in progress                51,653        59,290          -
                                     ---------     ---------
                                     2,124,694     2,034,622
Less-Accumulated depreciation          817,104       816,239
                                     ---------     ---------
                                    $1,307,590    $1,218,383
                                     =========     =========





                                     F-18

<PAGE>




                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(5)  Related party transactions

     The Company had the following significant transactions with related
parties:

                                              Year Ended December 31,
                                 -----------------------------------------------
                                           1997          1998             1999
                                        ---------      -------           ------
Income -
     Kaiser beer distribution fees     $    9,117    $   7,850        $   5,658
     Marketing expense support             65,475       81,701           59,279
                                        ---------      -------          -------
                                       $   74,592    $  89,551        $  64,937
                                        =========      =======          =======
Expenses -
     Purchases of concentrate          $  288,708    $ 322,426        $ 266,215
     Purchases of beer                    254,083      179,457           74,020
     Purchases of other inventories       154,579      165,599          106,712
                                        ---------      -------          -------
                                       $  697,370    $ 667,482        $ 446,947
                                        =========      =======          =======

Capital expenditure incentives         $   26,780    $  40,791        $   9,833
received in cash                        =========      =======          =======


(6)  Income taxes

     The Company is exempt from Panamanian income tax, but the operations of
     the subsidiaries are subject to income taxes at the applicable local
     rates.

     Income taxes are computed taking into consideration the taxable and
     deductible effects of inflation in each of the countries in which the
     Company operates.

     The provisions for income taxes have been determined on the basis of the
     taxable income of each individual company and not on a consolidated
     basis.

     During 1997, the Brazilian subsidiaries chose to replace the payment of
     dividends for the payment of "interest on shareholders' equity".
     According to Brazilian legislation, companies may pay to their
     shareholders a calculated interest amount based on the companies'
     shareholders' equity, and the Brazilian long-term interest rate. This
     interest is limited to half of the companies' net income for the year or
     half of the companies' retained earnings, whichever is higher. The
     payment of such amounts allows companies the benefit of interest
     deductibility in the calculation of the income taxes. The tax benefit due
     to the deductibility of this interest for purposes of the computation of
     the income taxes, amounting to $11,540, $10,485 and $951, were credited
     to income taxes, in the income statement in 1997, 1998 and 1999,
     respectively.

     At the end of 1998, some of the Brazilian tax rules were changed as part
     of the federal government's reform of the tax system. For example, the
     "Cofins" tax, which is assessed on sales revenues, was increased from
     2.0% to 3.0%, beginning February 1999. One third of the Cofins tax paid
     may be offset against the social contribution tax calculated for the
     year, which is reported together with the provision for income tax.
     Amounts not offset during the year may not be carried forward to future
     periods. This change reduces the ability of Brazilian companies to fully
     recover credits derived from social contribution tax loss carryforwards,
     as in the case of the Brazilian subsidiaries.


                                     F-19

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(6)  Income taxes (Continued)

     Accordingly, the Company recorded a valuation allowance on previously
     recorded deferred income tax assets amounting to $14,072 by charging the
     provision for income taxes in the fourth quarter of 1998. As a result of
     tax legislative changes during 1999, Cofins can no longer be offset
     against social contribution tax. The Company reversed the aforementioned
     valuation allowance of $9,507 at the current exchange rate which
     corresponds to the $14,072 as of December 31, 1998, and resumed recording
     assets corresponding to the social contribution tax loss carryforwards.

     As of December 31, 1999, the Company had $127,874 of tax loss
     carryforwards available from its subsidiaries to offset future taxable
     income. The Company has provided a valuation allowance of $59,510 against
     tax loss carryforwards from its subsidiaries.

     Mexican and Venezuelan subsidiaries are subject to an asset tax, to the
     extent that such exceeds the income tax of the period, at an annual rate
     of 1.8% and 1%, respectively. Any required payment of asset taxes is
     refundable against the excess of income taxes over asset taxes for the
     following ten and three years in the case of Mexico and Venezuela,
     respectively.

     The income tax expense for the years ended December 31, 1997, 1998 and
     1999 consists of the following:


<TABLE>
<CAPTION>
                                                                                       Valuation
                                               Current             Deferred             Allowance             Total
                                               Expense              Expense             Increase             Expense
                                              (Benefit)            (Benefit)           (Decrease)           (Benefit)

1997:
<S>                                           <C>               <C>                <C>                  <C>

     Mexico                                   $  11,447         $   19,740         $        -            $  31,187
     Brazil                                      56,238            (52,944)                 -                3,294
     Colombia                                    14,409              4,520                  -               18,929
     Venezuela                                    2,774            (51,264)            48,171                 (319)
     Central America                              4,083                128                  -                4,211
                                              ----------        -----------        -----------           ----------
         Total                                $  88,951         $  (79,820)        $   48,171            $  57,302
                                              ==========        ===========        ===========           ==========

1998:

     Mexico                                   $  17,371         $   16,661         $        -            $  34,032
     Brazil                                      25,094            (31,311)            14,072                7,855
     Colombia                                      (721)             1,617                  -                  896
     Venezuela                                   10,935            (12,314)             4,309                2,930
     Central America                              4,593              1,068                  -                5,661
                                              ----------        -----------        -----------           ----------
         Total                                $  57,272         $  (24,279)        $   18,381            $  51,374
                                              ==========        ===========        ===========           ==========
1999:

     Mexico                                   $  41,966              $5,063        $        -           $   47,029
     Brazil                                       2,341             (24,158)           (9,507)             (31,324)
     Colombia                                    11,589             (10,311)                -                1,278
     Venezuela                                    9,196             (15,892)           15,049                8,353
     Central America                              5,563                 355                 -                5,918
                                              ----------        -----------        -----------          -----------
         Total                                $  70,655         $   (44,943)       $    5,542           $   31,254
                                              ==========        =============      ===========          ===========
</TABLE>

                                                                F-20

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(6)  Income taxes (Continued)

     The provisions for income taxes computed by applying the local statutory
     rates to income before taxes, as reconciled to the actual provisions, are
     as follows for the years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>

                                                                            1997

                                                                                                Central
                                        Mexico        Brazil       Colombia     Venezuela       America         Total

<S>                                     <C>           <C>          <C>          <C>             <C>              <C>
Tax at local country statutory
     rate                                  34%           33%          35%          34%            30%            40%
Add (deduct)--
     Tax inflation adjustments, net         2%            -           (1%)        (21%)           (1%)           (5%)
     Indexed tax depreciation             (11%)          (9%)          -           (9%)           (1%)           (8%)
     Employee profit sharing                1%            -            -            -              -              -
     Tax credits relating to the
         deduction of interest on
         shareholders' equity and
         other                              -           (31%)          -            -              -             (6%)
     Other                                 11%           14%         (10%)         (4%)           (1%)            2%
                                           ---           ---          ---           ---            ---           ---
Tax at effective tax rate                  37%            7%          24%           -             27%            23%
                                           ===           ===          ===           ===           ===            ===



                                                                            1998

                                                                                                Central
                                        Mexico        Brazil       Colombia     Venezuela       America         Total
                                        ------        ------       --------     ---------       -------        -------
Tax at local country statutory
     rate                                  34%           33%         35%             34%          29%            48%
Add (deduct)--
     Tax inflation adjustments, net         6%            -          (7%)           (10%)          -             (1%)
     Indexed tax depreciation             (20%)           3%           -             (6%)          -            (12%)
     Employee profit sharing                2%            -            -               -           -              1%
     Prospective change in
     statutory rate                         2%            -            -               -           -              1%
                                            --            -            -               -           -              --
     Tax credits relating to the
         deduction of interest on
         shareholders' equity and
         other                               -          (56%)        (17%)             -           -            (18%)
    Provision for valuation
        allowance                            -           37%            -              -           -              8%
    Other                                   8%          (10%)         (9%)           (9%)         (2%)            2%
                                        ------          -----        -----          -----        -----          ----
Tax at effective tax rate                  32%            7%           2%             9%          27%            29%
                                        ======          =====        =====          =====        =====          ====
</TABLE>





                                                                F-21

<PAGE>

<TABLE>
<CAPTION>


                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    (Stated in thousands of U.S. dollars, except for share data)


(6)  Income taxes (Continued)

                                                                            1999

                                                                                                  Central
                                           Mexico        Brazil      Colombia     Venezuela       America         Total
<S>                                        <C>           <C>         <C>          <C>             <C>             <C>
Tax (benefit) at local country
     statutory rate                         35%          (33%)        35%           (34%)           28%            97%
Add (deduct)--
    Tax inflation adjustments, net           3%             -        (23%)           12%              -             6%
    Indexed tax depreciation                 -             1%          -            (14%)             -             2%
Employee profit sharing                      3%             -          -              -               -            13%
Asset tax                                    -              -          -             12%              -            20%
Tax credits relating to the
   deduction of interest on
   shareholders' equity and                  -           (10%)         -              -               -           (18%)
   other
Provision for valuation
   allowance                                 -             -           -            36%              -            60%
Reversal of valuation
   allowance                                 -          (19%)          -              -              -           (18%)
Other                                      (9%)         ( 4%)         (2%)           8%             (2%)         (37%)
                                          -----         -----        -----         -----            ----         -----
Tax at effective tax rate                  32%           65%          10%           20%             26%          125%
                                          =====         =====        =====         =====            ====         =====
</TABLE>



     Beginning in 1999, the income tax rate in Mexico increased from 34% to
     35%, with the obligation to pay this tax each year at a rate of 30%
     (transitorily 32% in 1999), with the remainder payable upon distribution
     of earnings.

     The components of the net deferred income tax liability (asset) as of
     December 31, 1998 and 1999 are as follows:

                                                     December 31,
                                                  -------------------
                                                  1998           1999
                                                  ----           ----
Current:
    Inventories                              $   13,490     $    16,799
    Nondeductible reserves                         (309)           (403)


    Other                                         2,723           6,063
                                               --------        --------
           Total current                         15,904          22,459
    Bottles and cases                            45,313          37,047
    Property, plant and equipment               103,011          94,473
    Nondeductible reserves                      (12,598)         (8,152)
    Tax loss carryforwards                     (120,443)       (127,874)
    Valuation allowance                          57,636          59,510
    Other                                        (3,223)        (10,551)
                                               ---------       ---------
        Total long-term, net                     69,696          44,453
                                               ---------       ---------
        Total                                $   85,600      $   66,912
                                               =========       =========


                                     F-22

<PAGE>


(6)     Income taxes (Continued)

        The components of the deferred income tax provision (benefit) for the
        years ended December 31, 1997, 1998 and 1999 are as follows:

                                               Year Ended December 31,
                                    -----------------------------------------
                                     1997               1998              1999
                                     ----
Inventories                       $  2,593           $  1,863          $  2,870
Property, plant and equipment       20,777              1,845           (18,688)
Bottles and cases                   (2,464)           (13,092)           (7,682)
Investments                              -             (1,115)           (4,338)
Nondeductible reserves              (8,524)            14,700            (1,906)
Tax loss carryforwards             (58,522)           (29,340)          (24,579)
Valuation allowance                 13,329             18,381             5,542
Other                                1,162                860             9,380
                                   --------           --------          -------
                                  $(31,649)          $ (5,898)         $(39,401)
                                   ========           ========          ========

(7)  Bank loans and long-term debt

    At December 31, 1999 the Company and its subsidiaries had direct unsecured
    bank loans denominated in U.S. dollars, with between 1- and 8-month
    maturities. The average annual interest rate for the majority of the loans
    as of December 31, 1999 was LIBOR (6.09) + 1%.

    At December 31, 1999 the majority of long-term debt bears fixed interest
    rates ranging from 5.75% to 10.75%, and the remaining long-term debt has
    variable interest rates ranging from LIBOR + 1.25% to 4.25%, the Mexican
    rate for units of real constant value (UDIS) plus 9.75% and the Brazilian
    long-term interest rate (TJLP) plus 5.08% to 6.60%. A summary of long-term
    debt by country is as follows:

                                                   December 31,
                                               1998               1999
                                               -----             -----

Corporate                                    $  650,000       $  870,000
Mexico                                            2,042            107,418
Brazil                                           70,825             76,069
Colombia                                         63,843             61,542
Venezuela                                             -            188,000
Central America                                  39,889             11,583
                                                -------          ---------
                                                826,599          1,314,612
Less - Current portion of long-term debt         55,332             64,640
                                                -------          ---------
Total                                        $  771,267       $  1,249,972
                                                =======          =========

Maturities of long-term debt at December 31, 1999 are as follows:

2001                                                  $   289,890
2002                                                      376,182
2003                                                      154,067
2004                                                       23,299
2005 and thereafter                                       406,534
                                                      ------------
                                                       $1,249,972


                                     F-23


<PAGE>


(7)  Bank loans and long-term debt (Continued)

    Corporate

    In March 1996, the Company issued $150,000 aggregate principal amount of
    8-1/8% Senior Notes Due 2003. In addition, in July 1997, the Company
    issued $300,000 aggregate principal amount of 7-1/4% Senior Notes Due 2009
    (see Note 12).

    On December 22, 1998, the Company entered into an agreement with Coca-Cola
    Financial Corporation (U.S.), as arranger and administrative agent, to
    obtain a three-year loan in the amount of $200,000 with quarterly interest
    payments. The proceeds were used to repay short-term bank loans of the
    Company and the Venezuelan subsidiaries.

    On March 18, 1999, the Company entered into an agreement with ING Baring
    U.S. Capital, LLC, as arranger and administrative agent, for a three-year
    loan in the amount of $300,000 with quarterly interest payments at an
    average interest rate of LIBOR + 3.5%. The proceeds were used to repay
    short-term bank loans of the Company and guarantee bank loans of the
    Venezuelan subsidiaries with investments made by the Company. The loan
    agreement establishes certain restrictions including a minimum
    consolidated equity of $1,750,000 and other covenants and ratios. During
    November 1999, $80,000 of this loan was repaid prior to scheduled
    repayment date.

    Mexico

    On November 12, 1999 the Mexican subsidiaries issued unsecured promissory
    notes for 1,001,705,080 Mexican pesos equivalent to 380,000,000 UDI's
    (unit of real constant value, in Mexican pesos, whose value is calculated
    by Bank of Mexico), payable semiannually with a seven year maturity and
    bearing interest ranging from 8.65% to 9.75% (including withholding). As
    of December 31, 1999 the amount of this debt is $106,534.

    The other Mexican loans of $884 are denominated in U.S. dollars and are
    payable in semiannual installments through 2001, guaranteed by the
    equipment acquired with the proceeds. The loan agreements establish
    certain restrictions including minimum capital stock, acquisition
    limitations and dividend restrictions.

    Brazil

    The Brazilian loans consist of $55,339 denominated in U.S. dollars at a
    fixed average rate of 9.8%; and $20,730 denominated in local currency with
    the majority bearing variable interest rates ranging from the Brazilian
    long-term interest rate plus 5.08% to 6.6%, and the remaining loans have
    fixed interest rates at an average of 9.8%. These loans are guaranteed by
    mortgages on land, buildings and by the machinery, equipment and vehicles
    acquired.


                                     F-24

<PAGE>



                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)

(7)  Bank loans and long-term debt (Continued)


    Colombia

    The Colombian loans are basically denominated in U.S. dollars with average
    annual interest rates ranging from LIBOR + 1% to 4.25%. The loan
    agreements establish certain restrictions including an equity minimum of
    U.S. $230,000. One of the loans is guaranteed by Colombian Yankee Bonds
    presented as long-term investments in the accompanying 1999 balance sheet,
    amounting to $34,500.

    Venezuela

    The Venezuelan loans consist of bank loans, which are denominated in U.S.
    dollars at a rate of LIBOR + 2.00% to 4.00%, with interest payable in
    quarterly installments. Loans in the amount of $150,000 are guaranteed by
    deposits amounting to $150,000 of the parent company presented as
    long-term investments in the accompanying 1999 balance sheet.

    Central America

    The Costa Rican, and Guatemalan loans are denominated in local currency
    and the Nicaraguan loans are denominated in U.S. dollars. Nicaraguan loans
    are guaranteed by the equipment acquired with the proceeds.

    As of December 31, 1999 the Company and the subsidiaries have complied
    with all the terms and conditions established in the loan agreements.

(8)  Pensions

     The status of the pension plans are presented in accordance with
     Statement of Financial Accounting Standards No. 132 "Employers'
     Disclosures about Pensions and Other Postretirement Benefits":



<TABLE>
<CAPTION>

                                                                         December 31,

                                                              1998                         1999
                                                   ----------------------------------------------------
                                                     Unfunded       Funded       Unfunded        Funded

<S>                                                  <C>            <C>          <C>             <C>
Change in benefit obligation
Benefit obligation at beginning of year              $  10,159      $  18,533    $  12,337       $ 23,281
Service cost                                               231          1,861          589          1,811
Interest cost, net                                       2,335          1,767        3,124          2,340
Participants' contributions                                  -            198            -            192
Amendments                                                   -            448            -              -
Actuarial loss (gain)                                    2,666          2,641       (1,944)         3,519
Benefit payments                                        (1,184)          (375)      (2,687)        (3,697)
Translation gain                                        (1,870)        (1,792)       3,494         (3,988)
                                                     ----------     ----------   -----------     ---------
Benefit obligation at end of year                       12,337         23,281       14,913         23,458
                                                     ----------     ----------   -----------     ---------
</TABLE>


                                                           F-25

<PAGE>




<TABLE>
<CAPTION>

                                            PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    (Stated in thousands of U.S. dollars, except for share data)


(8) Pensions (Continued)
                                                                           December 31,
                                                   ----------------------------------------------------
                                                                  1988                    1999
                                                   ----------------------------------------------------
                                                     Unfunded      Funded       Unfunded        Funded
<S>                                                  <C>           <C>          <C>             <C>
Change in plan assets
Fair value of plan assets at beginning of year             -       16,463             -         14,961
Actual return on plan assets                               -       (2,283)            -          5,020
Employer contributions                                     -        2,434             -            602
Participants' contributions                                -          198             -            192
Benefit payments                                           -         (375)            -         (3,697)
Translation gain                                           -       (1,476)            -         (4,137)
                                                     --------    --------      ---------       --------
Fair value of plan assets at end of year                   -       14,961             -         12,941
                                                     --------    --------      ---------       --------
Funded status
Benefit obligation in excess of fair value
  of plan assets                                       12,337       8,320         14,913        10,517
Unrecognized net actuarial loss                            -       (6,821)           352        (2,821)
Unrecognized prior service cost                          (498)       (969)          (174)       (5,172)
Unrecognized net transition Obligation                     -          419         (6,466)          168
                                                    ----------  ----------     ----------     ---------
 Net amounts recognized                             $  11,839   $     949      $   8,625      $  2,692
                                                    =========   ==========     ==========     =========
</TABLE>

The net periodic pension cost consists of the following:

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                  --------------------------------------------
                                                         1997          1998          1999
                                                  --------------------------------------------
<S>                                               <C>            <C>             <C>
          Service cost                            $  1,987       $    2,092      $   2,400
          Interest cost, net                         4,030            4,102          5,464
          Expected return on plan assets            (1,731)          (1,009)        (1,333)
          Amortization of prior service cost         1,077              316            272
          Recognized net actuarial loss                 83              111              -
          Transition obligation                       (102)             (83)             -
                                                  ---------      -----------     ---------
           Net periodic pension costs             $  5,344       $    5,529      $   6,803
                                                  =========      ===========     ===========
</TABLE>

     The economic assumptions in 1997, 1998 and 1999, net of inflation, which
     reflect the local economic conditions and particular circumstances of
     each of the subsidiaries, are as follows:

<TABLE>
<CAPTION>

                                                                     1997

                                             ----------------------------------------------------
                                                 Mexico            Brazil            Colombia
                                             ----------------------------------------------------
<S>                                              <C>               <C>               <C>
Discount rate                                      4.5%               6%                 5%
Expected return on plan assets                       6%               6%                  *
Rate of compensation increase                        1%               2%                 1%
</TABLE>


                                     F-26


<PAGE>



                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(8) Pensions (Continued)

<TABLE>
<CAPTION>

                                                                     1998
                                             --------------------------------------------------------
                                                Mexico        Brazil       Colombia      Guatemala
                                             --------------------------------------------------------
<S>                                             <C>           <C>          <C>           <C>
Discount rate                                     4.5%           6%            8%             5%
Expected return on plan assets                      6%           6%            *              *
Rate of compensation increase                       1%           2%            4%             2%


                                                                     1999
                                             --------------------------------------------------------
                                                Mexico        Brazil       Colombia      Guatemala
                                             --------------------------------------------------------

Discount rate                                     4.5%           6%            7%             8%
Expected return on plan assets                      6%           6%            *              *
Rate of compensation increase                       1%           2%            1%             3%
</TABLE>

*Not applicable, as the benefits are not funded.

(9)  Retained earnings

     Certain of the Company's subsidiaries are required by law to appropriate
     a portion of their annual net income to legal reserves until such
     reserves equal prescribed percentages of outstanding capital stock. These
     legal reserves, which aggregated $32,045 and $33,140 at December 31, 1998
     and 1999, respectively, are generally not available for distribution to
     shareholders until the liquidation of the individual companies, except in
     the form of stock dividends in the Mexican subsidiaries.

     The Brazilian companies' statutes require minimum dividend distributions
     representing 25% of net income (after deducting reserves provided by law
     or by the shareholders) for the year. This dividend requirement may be
     waived by the unanimous vote of shareholders at a meeting where a quorum
     (consisting of the holders of a majority of the shares) is present.

     At present, Colombia and Costa Rica impose withholding taxes of 7% and
     15%, respectively, on dividends paid by domestic subsidiaries to the
     Company. In addition, Brazil imposes a withholding tax of 15% on
     dividends paid by domestic subsidiaries to the Company that are derived
     from earnings generated prior to January 1, 1996.

     Dividends from earnings generated until 1998 are not subject to income
     taxes in Mexico, as long as they are paid from "net taxed income" (UFIN).
     Dividends not paid from UFIN are subject to a 35% income tax. During 1999
     and 2000, dividends paid to individuals or foreign residents are subject
     to income tax withholding of an effective tax rate of approximately 7.5%
     and 7.7%, respectively. In addition, if earnings generated after 1998 for
     which no corporate tax has been paid are distributed, the tax must be
     paid upon distribution of the dividends. Consequently, the Company must
     keep a record of earnings subject to each tax rate.

     Dividends are not subject to withholding taxes in Venezuela, Nicaragua
     and Guatemala.


                                     F-27

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(10) Contingencies

     Service Fees

     The Company is appealing a decision by the Brazilian tax authorities
     imposing income taxes, interest and fines in an amount equivalent to
     $5,020 and $3,741 as of December 31, 1998 and 1999, respectively,
     relating primarily to the deductibility of certain intercompany service
     payments.

     Tax Credits

     The Brazilian subsidiaries are also being assessed by the tax authorities
     for tax credits taken during 1995 and 1996, relating to overpayments of
     the value-added tax in previous years. Such overpayments related to
     value-added tax applied to samples, products given for free to customers
     and to credit sales. These assessments amount to approximately $32,768
     and $25,370 as of December 31, 1998 and 1999, respectively, and the
     Company has appealed the assessments at the administrative level. The
     Company and its legal counsel believe that in view of the legal basis
     adopted for the use of such credits, no significant liability should
     result from this issue and therefore no provision for this matter has
     been recorded in the accompanying financial statements.

     Administrative Proceedings

     Certain of the Brazilian subsidiaries were subject of administrative
     proceedings in the Federal Revenue Office brought by the Brazilian tax
     authorities. Issues raised by the tax authorities include whether freight
     costs should be included in the Brazilian Tax on Manufactured Products
     (the IPI) and the calculation of IPI rates on various beverages. During
     1997, the Taxpayers' Counsel decided unanimously in favor of the
     Brazilian subsidiaries on this issue relating to the period January 1984
     to December 1988. This judgment is no longer subject to any appeal and
     the Brazilian subsidiaries together with legal counsel believe that this
     decision will be extended to the six-month period ended June 30, 1989,
     which contingency amounted to approximately $3,522 and $2,633 as of
     December 31, 1998 and 1999, respectively.

     Because the Company believes it will ultimately not incur any liability,
     there is no reserve in the Company's financial statements with respect to
     these service fees, tax credits or administrative proceedings. However,
     each such proceeding is ongoing, and there can be no assurance as to its
     final outcome or, if such outcome is unfavorable, as to the amount of any
     liability, which could be material. Due to the preliminary nature of
     these proceedings, the Company does not have adequate information
     regarding these matters to reasonably estimate the amount of the
     potential loss, if any, it may ultimately incur.


                                     F-28

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(10) Contingencies (Continued)

     Amazon Region

     In 1998, the Brazilian subsidiaries reversed an excise tax reserve
     recorded in prior years for credits taken on purchases of concentrate
     from the Amazon region, in the northern part of Brazil. Those credits had
     been accrued for the period between February 1991 and February 1994.
     Although the Brazilian subsidiaries do not pay excise taxes on
     concentrate purchases from the Amazon region because it is a tax free
     zone, the bottlers have claimed that they are nevertheless entitled to a
     corresponding credit against excise taxes payable upon sale of the final
     products. The government disputed the claim and said a credit should
     exist only if the materials used in the production of the concentrate
     were entirely from the tax-free region. On August 15, 1991, the Brazilian
     Coca-Cola bottlers association, of which the Brazilian subsidiaries are
     members, obtained a preliminary injunction against the Brazilian tax
     authorities permitting the bottlers to take credits against such excise
     taxes. Based on the injunction, the Brazilian subsidiaries had not been
     required to make payment of taxes in an amount equal to such credits, but
     had accrued a reserve for financial reporting purposes in the full amount
     of such credits. The injunction was lifted in May 1995 and the Brazilian
     Coca-Cola bottlers association appealed the decision, which was later
     judged in its favor.

     In 1998, the Brazilian subsidiaries reversed such reserve based on the
     development during 1998 of similar claims of other bottlers, which were
     resolved in their favor by the highest Brazilian courts of appeals.
     During 1999, the Brazilian Coca-Cola bottlers association, including
     our Brazilian subsidiaries, obtained final favorable decisions on their
     claims which no longer can be appealed by the Government.

     The reserve for the excise tax contingency amounted to $64,103 as of
     December 31, 1997 and the corresponding income tax credit on it, recorded
     as deferred income tax assets in the Brazilian subsidiaries balance sheet
     as of that date, amounted to $21,154. The reserve and the deferred income
     tax credit balances were not monetarily adjusted either for inflation or
     for the appreciation of the U.S. dollar in comparison to the Brazilian
     currency during 1998. Therefore, the reversal of the excise tax reserve
     amounted to $60,486 and was credited to other nonrecurring income, in the
     consolidated statement of operations of 1998. Income tax credits recorded
     on this reserve, amounting to $19,960, were also reversed and charged
     directly to the income tax provision in 1998.

     Other Contingencies

     The Brazilian subsidiaries are currently claiming payments of value-added
     tax of previous years. The Company's outside legal advisors assessment of
     this matter indicates that the outcome of these lawsuits is expected to
     be favorable to the Company. The Company took credits of this tax in 1999
     in the amount of $11,739. Because a decision on these claims is still
     pending, the


                                     F-29


<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(10) Contingencies (Continued)

     Company recorded a reserve for such matter in their financial statements
     as of December 31, 1999.

     In addition, the Company's subsidiaries are parties to other lawsuits and
     administrative proceedings arising in the ordinary course of business
     involving environmental, tax, civil and labor matters, for which a
     provision of $17,547 and $23,339 have been recorded as other accrued
     liabilities in the accompanying financial statements as of December 31,
     1998 and 1999, respectively.

(11) Equity incentive plan

     The Board of Directors resolved to establish a Stock Option Plan for
     Employees (with a maximum of 9,000,000 shares of Class A Common Stock).
     Under this plan, the options vest over a five-year period for the options
     granted until 1996 and over a three-year period for options granted
     beginning in 1997.

     On November 17, 1993, when the previous day's closing price of the Class
     A Common Stock on the New York Stock Exchange was $17-6/11 per share, the
     Company granted the initial 800,000 options under the plan at an exercise
     price of $13.75 per share, the closing price of the Class A Common Stock
     on the first day of trading on the New York Stock Exchange; therefore,
     the Company recognized a compensation expense associated with such
     options each month from 1993 to 1998. However, since the following grants
     were at an exercise price equal to the market price at the date of grant,
     there is no compensation expense related to such options.

     Under this plan, the Company has granted 6,404,700 options as of December
     31, 1999, 417,700 options had been exercised and 581,400 options had been
     cancelled.

     The Company also has a Stock Option Plan for Nonemployee Directors, which
     was implemented to attract and retain the services of experienced and
     knowledgeable nonemployee directors and nonemployee members of the
     advisory board of the Company. The Stock Option Plan for Nonemployee


                                     F-30


<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)




(11) Equity incentive plan (Continued)

     Directors provides each nonemployee director and each nonemployee
     advisory board member with an option to purchase a specified number of
     shares of Class A Common Stock. A total of 100,000 shares of Class A
     Common Stock is available for grants. The Stock Option Plan for
     Nonemployee Directors is administered by the Board of Directors or a
     subcommittee thereof. The Board of Directors has the discretion to amend,
     terminate or suspend the Stock Option Plan for Nonemployee Directors at
     any time. The options vest over a four-year period for the options
     granted until 1996 and over a three-year period for the options granted
     beginning in 1997. As of December 31, 1999 the Company has granted 76,500
     and all options were granted at an exercise price equal to the market
     price at the date of grant, and no options had been exercised or
     cancelled.

     In October 1995, the Financial Accounting Standards Board issued
     Statement No. 123, "Accounting for Stock-Based Compensation"
     ("SFAS-123"). This Statement was effective beginning in 1996. Although
     the statement encourages entities to adopt the fair value based method of
     accounting for employee stock options, the Company continues to measure
     compensation cost for those plans using the intrinsic value based method
     of accounting prescribed by APB Opinion No. 25, "Accounting for Stock
     Issued to Employees". Had compensation cost for the Company's stock
     option plans been determined based on the fair value at the grant dates
     for awards under the plans consistent with the method of SFAS-123, the
     Company's net income (loss) and earnings (loss) per share would have been
     reduced to the pro forma amounts indicated below:

                                                 December 31,
                                   --------------------------------------------
                                      1997           1998              1999
                                   ---------      ----------        ---------
Net income (loss):

   As reported                   $   173,835     $   120,322     $   (59,904)
                                 ===========     ===========     ============
   Pro forma                     $   170,017     $   116,305     $   (69,017)
                                 ===========     ===========     ============

Net income (loss) per share:
   As reported:

        Basic                   $       1.44     $      0.93     $     (0.46)
                                ============     ===========     ============
        Diluted                 $       1.43     $      0.92     $     (0.46)
                                ============     ===========     ============

   Pro forma:

        Basic                   $       1.41     $      0.90     $     (0.53)
                                ============     ===========     ============
        Diluted                 $       1.39     $      0.89     $     (0.53)
                                ============     ===========     ============






                                     F-31

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(11) Equity incentive plan (Continued)

     The fair value of each option grant is estimated on the date of grant
     using a Black-Scholes option-pricing model with the following
     weighted-average assumptions used for grants of both plans:

                                                   December 31,
                                       ----------------------------------------
                                            1997          1998          1999
                                       ----------------------------------------

Risk-free interest rate                     5.83%         4.55%         5.82%
Dividend yield                              0.59%         1.59%         1.11%
Expected volatility                        35.90%        52.60%        59.20%
Expected option term lives                 3 years       3 years      3 years


(12) Capital and other transactions

     At the time of the signing of the agreement mentioned in Note 1, and in
     connection with the acquisition of a Costa Rican franchise, Export
     acquired additional shares of Class A and B Common Stock and 2 shares of
     a new Series C Preferred Stock of the Company. The holder of the Series C
     Shares (the "Holder") is not entitled to receive any dividends with
     respect to the Series C Stock and is only entitled to a preference on the
     liquidation, dissolution or winding up of the Company of $1.00. Pursuant
     to the Certificate of Designation for the Series C Shares, the Company
     has agreed with the Holder not to take certain actions without the
     approval of the Holder, including, but not limited to: (i) certain
     consolidations, mergers and sales of substantially all of the Company's
     assets; (ii) any acquisition or sale of a business (or an equity interest
     therein) if the purchase price or sales price thereof, as the case may
     be, exceeds a material amount (as defined therein); (iii) entry into any
     new significant line of business or termination of any existing
     significant line of business; (iv) certain capital expenditures and
     acquisitions and dispositions of fixed assets; (v) certain transactions
     with affiliates (as defined); (vi) certain changes in the Company's
     policy with respect to dividends or distributions to shareholders and
     (vii) certain changes to the Company's Articles or By-laws. These rights
     are subject to certain exceptions and qualifications and may be suspended
     or terminated in certain circumstances.

     Pursuant to an agreement dated as of May 9, 1997 (the "Exchange
     Agreement"), the Company acquired all the capital stock of Embotelladora
     Coca-Cola y Hit de Venezuela, S.A. ("Coca-Cola y Hit"), which, through
     its subsidiaries, produces, sells and distributes Coca-Cola products
     throughout Venezuela. The purchase price for the acquisition was
     approximately 30.6 million shares of the Company's common stock (having a
     market value at such time of $902,700) and approximately $100,300 in
     cash. In addition, the Company assumed approximately $107,700 of debt
     owed by Coca-Cola y Hit, which was repaid with a portion of the proceeds
     of the 1997 Debt Offering (as described below). In addition, pursuant to
     a shareholder agreement which the Company entered into at the time of the
     Venezuela acquisition, the Cisneros Group received certain registration
     and other rights, including the right to require a subsidiary of
     Coca-Cola to purchase by November 5, 1997 up to $20.0 million in shares
     of Class A Common Stock at the then current market price and, to the
     extent not so purchased, to require the Company to purchase up to
     2,370,266 shares of Class A Common Stock (less the amount purchased by
     the subsidiary of Coca-Cola) and 179,734 shares of Class B Common Stock
     (in amounts proportionate to its holdings of each class of stock) at the
     then


                                     F-32

<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(12) Capital and other transactions (Continued)

     current market price for shares of Class A Common Stock (whether such
     shares are shares of Class A Common Stock or shares of Class B Common
     Stock). On August 1, 1997, the Cisneros Group exercised its rights and
     sold 621,600 shares of Class A Common Stock to a subsidiary of Coca-Cola,
     and on October 27, 1997, the Cisneros Group exercised its right to
     require the Company to purchase 1,748,666 shares of Class A Common Stock
     and 179,734 shares of Class B Common Stock at a price of $36.90 per
     share.

     Total audited tangible assets and liabilities of Coca-Cola y Hit included
     in the Company's statements at the date of acquisition which includes the
     consideration of the final amount of goodwill determined of $816.1
     million was as follows:

     Inventories                                            $  34,981
     Property, plant and equipment, net                       314,103
     Bottles and cases, net                                    97,972
     Other assets                                              72,211
     Total liabilities                                       (324,982)
                                                             --------
                                                            $ 194,285
                                                             ========

     On July 8, 1997 the Company issued $300,000 aggregate principal amount of
     7-1/4% Senior Notes Due 2009 (the "1997 Debt Offering"). The proceeds to
     the Company, net of underwriting discount commissions and expenses, were
     approximately $298,000. Substantially all of the proceeds of the 1997
     Debt Offering were applied to repay indebtedness assumed in connection
     with the Venezuela acquisition and to purchase minority interest in the
     Mexican subsidiaries, and the remainder was used for general corporate
     purposes.

     Pursuant to an agreement dated as of August 14, 1997, the Company
     acquired all the capital stock of three Panamanian companies which own
     all the capital stock of Embotelladora Milca, S.A. ("Panamco Nicaragua"),
     which produces, sells and distributes Coca-Cola products throughout
     Nicaragua. The purchase price for the acquisition was 407,236 shares of
     the Company's common stock (valued at $13,333) and approximately $19,140
     in cash. In addition, the Company assumed approximately $9,863 of debt
     owed by the Nicaraguan Company and recorded $22,143 of goodwill.

     In 1997 the Company repurchased 605,112 shares at the average market
     value of $32.20 per share. In December 1997, the Company increased its
     ownership in the Mexican holding subsidiary to 98% from 74% and in the
     Mexicans' principal subsidiaries to 96% from 93%, paying a total of
     $277,000 and recognizing $228,000 of goodwill for these acquisitions. As
     a result, the Company now has a 95% effective interest in its Mexican
     operations. During January 1998 the Company paid all the existent
     liabilities due to the acquisition to the minority interest.

     Pursuant to an agreement dated as of March 25, 1998, the Company acquired
     all the capital stock of Embotelladora Central, S.A. ("Panamco
     Guatemala"), which produces, sells and distributes Coca-Cola products in
     Guatemala City and surrounding areas. The purchase price for the
     acquisition


                                     F-33


<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(12) Capital and other transactions (Continued)

     was approximately $38,801 in cash. In addition, the Company assumed
     approximately $23,499 of debt owned by Panamco Guatemala, and recorded
     $45,364 of goodwill.

     In 1998, the Brazilian subsidiaries acquired certain shares held by
     minority investors in Brazil for an aggregate of $28,068, which increased
     the Company's ownership of the capital stock of such entities from 96% to
     98%.

     In September 1998, the Company expanded its Brazilian presence by
     acquiring Brazilian bottler R.O.S.A. for $47,999 in cash (including
     shares of Cervejarias Kaiser, S.A.). As part of this transaction, Panamco
     also acquired R.O.S.A.'s plastic bottle business, Supripack Industria de
     Embalagens, S.A. (Supripack), for $9,900 in cash, bringing the total
     acquisition price to $57,900, for which the company entered into a
     $70,000 financing agreement. The Company began consolidating R.O.S.A.'s
     results as of September 1, 1998, and recorded $37,400 of goodwill in
     connection with this acquisition.

     On December 9, 1999, the Board of Directors authorized a repurchase
     shares program of its Class A Common Stock in an amount not to exceed
     $100,000 in the aggregate. The shares could be purchased in the open
     market or in privately negotiated transactions, depending on market
     conditions and other factors. The Company repurchased 368,584 shares
     amounting to $7,568 during 1999.

     If the Venezuela acquisition and the 1997 Debt Offering were all given
     pro forma effect as if they had occurred on January 1, 1997, the
     unaudited pro forma consolidated net sales, net income and earnings per
     share for the year ended December 31, 1997 would have been as follows:

                                                    1997
                                                  ---------
                                                  Unaudited
                                                  ---------

               Net sales                       $  2,633,708
                                                ===========

               Net income                      $    142,526
                                               ============

               Basic earnings per share        $       1.08
                                               ============

               Diluted earnings per share      $       1.07
                                               ============






                                     F-34


<PAGE>

                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)


(12) Capital and other transactions (Continued)

    As of December 31, 1999 the capital stock of the Company is as follows:



                                    Common Stock              Series C
                             --------------------------       Preferred
                               Class A         Class B         Stock
                             -----------     ----------      ----------
    Authorized               500,000,000     50,000,000      50,000,000
                             ===========     ==========      ==========

    Issued                   136,662,871     11,348,991               2

    Less - Treasury           16,281,271      2,377,436               -
                             -----------     ----------      ----------

    Outstanding              120,381,600      8,971,555               2
                             ===========     ==========      ==========
    Par value per share      $      0.01     $     0.01      $     0.01
                             ===========     ==========      ==========


     In general, with the exception of voting rights and certain conversion
     rights, the Class A Common Stock and the Class B Common Stock have the
     same rights and privileges. Each share of Class B Common Stock entitles
     the holder to one vote on all matters as to which the shareholders are
     entitled to vote. The Class A Common Stock is non-voting and does not
     entitle the holder thereof to vote, on any matter.

     In 1998, the Company adopted Statement of Financial Accounting Standards
     No. 130, "Reporting Comprehensive Income" ("SFAS-130"). This statement
     establishes rules for the reporting of comprehensive income and its
     components. Comprehensive income consists of net income, foreign currency
     translation adjustments and pension liability adjustments, and is
     presented in the Consolidated Statement of Shareholders' Equity. The
     adoption of SFAS-130 had no impact on total shareholders' equity. Prior
     year financial statements have been reclassified to conform to the
     SFAS-130 requirements.

(13) Other income (expense), net

     Other income (expense), net for the three years ended December 31, 1997,
     1998 and 1999 is as follows:

                                       1997            1998            1999
                                    ---------       ----------      ----------

     Provision for contingencies    $  (2,387)      $  (6,885)     $   (5,270)
     Exchange (losses) gain, net          301          (3,967)        (32,701)
     Gain (loss) on sale of fixed
          assets and investments        4,020           3,932           2,760
     Equity in earnings of uncon-
          solidated companies, net      6,569          (3,550)         (4,371)
     Capital expenditure incentives    26,780          40,791           5,115
     Operating income from
          non-bottling subsidiaries     1,222             643           3,950
     Other, net                         7,528          (8,828)         (8,779)
                                     --------        ----------      ---------

                                     $ 44,033        $  22,136       $(39,296)
                                     ========        =========       =========

                                     F-35


<PAGE>

                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)

(14) Segments and related information

     Relevant information concerning the geographic areas in which the Company
     operates in accordance with Statement of Financial Accounting Standards
     No. 131 "Disclosures about Segments of an Enterprise and Related
     Information" is as follows:
                                                                  1997
                                                                  ----
<TABLE>
<CAPTION>
                                                                                Central
                              Brazil     Colombia      Mexico     Venezuela     America        Corporate       Total
                            ---------   ----------   ---------    ----------   ----------    ------------   -----------
<S>                         <C>         <C>          <C>          <C>          <C>           <C>            <C>
                            $ 969,094   $ 537,987    $ 546,772    $ 349,519    $ 1 06,838    $      -       $ 2,510,210
     Net sales              ==========  ==========   ==========   ==========   ==========    ============   ===========

     Operating income       $  67,565   $  71,997    $  83,171    $  35,710    $   16,458    $   (28,980)   $   245,921
     (loss)                 ==========  ==========   ==========   ==========   ==========    ============   ===========

     Interest income        $ (19,303)  $  (2,408)   $  (6,846)   $  (4,448)   $       96    $    (5,974)   $   (38,883)
     (expense) net          ==========  ==========   ==========   ==========   ==========    ============   ============

     Depreciation and       $  47,828   $  49,305    $  22,254    $  34,606    $    8,186    $    17,313    $   179,492
     amortization           ==========  ==========   ==========    =========   ==========    ============   ===========
                            $  52,134   $  62,922    $  52,972    $  27,832    $   12,809    $      -       $   208,669
     Capital expenditures   ==========  ==========   ==========   ==========   ==========    ============   ===========

                            $ 444,541   $ 398,148    $ 344,289    $ 437,530    $   89,782    $ 1,150,633    $ 2,864,923
     Long-lived assets      ==========  ==========   ==========   ==========   ==========    ============   ===========

                            $ 673,541   $ 481,776    $ 412,169    $ 527,104    $  120,089    $ 1,372,390    $ 3,587,069
     Total assets           ==========  ==========   ==========   ==========   ==========    ============   ===========

                                                                  1998
                                                                  ----
                                                                                Central
                              Brazil     Colombia     Mexico      Venezuela     America        Corporate        Total
                            ---------   ----------   ---------    ----------   ----------    ------------    -----------

                            $ 897,951   $ 495,812    $ 638,481    $ 550,677    $  190,355    $      -        $ 2,773,276
     Net sales              ==========  ==========   ==========   ==========   ===========   ============    ===========

     Operating income       $  10,440   $  62,528    $  95,287    $  23,322    $   22,933    $   (34,796)    $   179,714
     (loss)                 ==========  ==========   ==========   ==========   ===========   ============    ===========

     Interest expense,      $ (21,717)  $  (5,328)   $  (9,984)   $  (9,801)   $   (4,292)   $   (34,213)    $  (85,335)
     net                    ==========  ==========   ==========   ==========   ===========   ============    ============

     Depreciation and       $  83,612   $  58,510    $  37,132    $  65,099    $   15,039    $    29,459     $   288,851
     amortization           ==========  ==========   ==========   ==========   ===========   ============    ============

                            $  62,051   $  69,216    $  64,047    $  68,361    $   38,540    $      -        $   302,215
     Capital expenditures   ==========  ==========   ==========   ==========   ===========   ============    ============

     Long-lived assets      $ 471,970   $ 437,683    $ 387,394    $ 487,878    $  137,333    $ 1,166,239     $ 3,088,497
                            ==========  ==========   ==========   ==========   ===========   ============    ============
     Total assets           $ 709,176   $ 576,191    $ 459,778    $ 589,543    $  173,320    $ 1,139,682     $ 3,647,690
                            ==========  ==========   ==========   ==========   ===========   ============    ============
</TABLE>

                                     F-36
 <PAGE>

(14) Segments and related information (Continued)
                                                                  1999
                                                                  ----
<TABLE>
<CAPTION>
                             Brazil     Colombia      Mexico      Venezuela     America        Corporate       Total
                            ---------   ----------   ---------    ----------   ----------    ------------   -----------
<S>                         <C>         <C>          <C>          <C>          <C>           <C>            <C>
     Net Sales              $ 500,683   $ 397,014    $ 794,812    $ 512,292    $  211,016    $      -        $ 2,415,817
                            ==========  ==========   ==========   ==========   ===========   ============    ============
     Operating income       $   2,507   $  13,090    $ 133,188    $ (20,256)   $   27,032    $   (41,110)    $   114,451
     (loss)                 ==========  ==========   ==========   ==========   ===========   ============    ============

     Interest expense,      $ (14,743)  $  (6,753)   $ (11,849)   $ (18,028)   $   (1,843)   $   (46,894)    $  (100,110)
     net                    ==========  ==========   ==========   ==========   ===========   ============    ============

     Depreciation and       $  32,763   $  59,178    $  40,356    $  71,156    $   17,990    $    29,380     $   250,823
     amortization           ==========  ==========   ==========   ==========   ===========   ============    ============

     Capital expenditures   $  22,686   $  28,275    $  57,919    $  33,184    $   21,139    $       -       $   163,203
                            ==========  ==========   ==========   ==========   ===========   ============    ============

     Long-lived assets      $ 309,441   $ 445,428    $ 448,196    $ 466,846    $  133,080    $ 1,293,878     $ 3,096,869
                            ==========  ==========   ==========   ==========   ===========   ============    ============
     Total assets           $ 486,198   $ 498,005    $ 549,420    $ 556,696    $  171,174    $ 1,351,629     $ 3,613,122
                            ==========  ==========   ==========   ==========   ===========   ============    ============
</TABLE>

                                     F-37


<PAGE>





                 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Stated in thousands of U.S. dollars, except for share data)



(15) Valuation and qualifying accounts

     The following is an analysis of the valuation and qualifying accounts for
     the three years ended December 31, 1997, 1998 and 1999:
<TABLE>
<CAPTION>

                                                                        Additions
                                                       -----------------------------------------
                                        Balance at     Charged to     Charged to                    Balance at
                                         Beginning      Cost and         Other       Deductions-      End of
              Description                 of Year       Expenses       Accounts     Applications       Year
              -----------               ----------     ----------     ----------    ------------    ----------
<S>                                    <C>             <C>            <C>           <C>             <C>
    1997-

     Allowance for doubtful accounts    $   6,075         7,665          1,295           4,442      $  10,593
     Allowance for obsolete and slow-
        moving inventory                $     976           311          2,091           2,802      $     576

     1998-

     Allowance for doubtful accounts    $  10,593         7,544          1,730            9,440     $  10,427
     Allowance for obsolete and slow-
        moving inventory                $     576           472          1,835            1,397     $   1,486

     1999-

     Allowance for doubtful accounts    $  10,427         3,049            204            2,146     $  11,534
     Allowance for obsolete and slow-
     moving inventory                   $   1,486         2,664              -               86     $   4,064

</TABLE>



                                     F-38


<PAGE>




                                  SIGNATURES

          Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this annual report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                   PANAMERICAN BEVERAGES, INC.,
                                   (Registrant)



                                   By

                                   /s/ Paulo J. Sacchi
                                   -----------------------------------------
                                   Name:   Paulo J. Sacchi
                                   Title:  Senior Vice President, Chief
                                           Financial Officer and Treasurer

Date:  May 15, 2000
       ------------


<PAGE>



                                 EXHIBIT INDEX

Exhibit                                                               Page
Number                Description
------                -----------

10.1                  Amendment No. 2 to the
                      $300 Million Credit Agreement

23.1                  Consent of Independent Public Accountants