Recoverability of Noncurrent Assets

Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries in which we operate, particularly in developing or emerging markets. Refer to the heading "Our Business - Challenges and Risks," and "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2007. As a result, management must make numerous assumptions which involve a significant amount of judgment when determining the recoverability of noncurrent assets in various regions around the world.

Equity Method and Cost Method Investments

We review our cost method and equity investments in every reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared to our cost basis in the investment. We also perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair value in the prior period. The fair values of most of our Company's investments in publicly traded companies are often readily available based on quoted market prices. For investments in nonpublicly traded companies, management's assessment of fair value is based on valuation methodologies including discounted cash flows, estimates of sales proceeds and appraisals, as appropriate. We consider the assumptions that we believe hypothetical marketplace participants would use in evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict future cash flows, especially in developing and unstable markets, may impact the determination of fair value.

In the event of a decline in fair value of an investment accounted for under the equity method or securities classified as available-for-sale, management is required to determine if the decline in fair value is other than temporary. Management's assessment as to the nature of a decline in fair value is based on the length of time and the extent to which the market value has been less than our cost basis, the financial condition and near-term prospects of the issuer, and our intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. If the fair value of an investment is less than our cost basis, and the decline in value is considered to be other than temporary, a write-down is recorded.

  September 26, 2008                               Fair     Cost Basis     Difference
                                                  Value

  Coca-Cola Hellenic Bottling Company S.A.     $  1,984        $ 1,667        $   317
  Coca-Cola FEMSA, S.A.B. de C.V.                 3,259          1,176          2,083
  Coca-Cola Amatil Limited                        1,625            786            839
  Coca-Cola Enterprises Inc.                      2,930            695          2,235
  Coca-Cola Embonor S.A.                            224            208             16
  Grupo Continental, S.A.B.                         352            186            166
  Coca-Cola Icecek A.S.                             445            174            271
  Coca-Cola Bottling Company Consolidated           108             79             29
  Embotelladoras Polar S.A.                         110             74             36

                                               $ 11,037        $ 5,045        $ 5,992

Among other things, the recent volatility in the global financial markets could negatively impact the fair value of our equity method investments and potentially result in an other than temporary decline in value. Management will continue to monitor these investments in future periods.

Unrealized losses on available-for-sale securities previously deferred in AOCI are reclassified to the consolidated income statement when the nature of the decline is determined to be other than temporary. As of September 26, 2008, unrealized gains and losses on available-for-sale securities were approximately $242 million and $60 million, respectively. Management has concluded that as of September 26, 2008, all unrealized losses related to available-for-sale securities were temporary in nature. We will continue to monitor these investments in future periods. Refer to Note F of Notes to Condensed Consolidated Financial Statements.

Goodwill, Trademarks and Other Intangible Assets

SFAS No. 142, "Goodwill and Other Intangible Assets," classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be performed at least annually or more frequently if events or circumstances indicate that assets might be impaired. Our equity method investees also perform such tests for impairment for intangible assets and/or goodwill. If an impairment charge was recorded by one of our equity method investees, the Company would record its proportionate share of such charge.

The fair values calculated in our impairment tests are determined using discounted cash flow models involving several assumptions. These assumptions include, but are not limited to, anticipated growth rates by geographic region, our long-term anticipated growth rate, the discount rate, foreign currency exchange rates and estimates of capital charges. These factors are often interdependent and therefore do not change in isolation. The carrying value of goodwill and intangible assets stemming from recently acquired businesses are determined using more recent operating plans and macroeconomic environmental conditions and therefore are more susceptible to impairment if business operating results and/or macroeconomic conditions deteriorate. As of our most recent annual SFAS No. 142 impairment review, the Company concluded there were no impairments of its intangible assets. However, in addition to other factors that could adversely impact the fair value of our intangible assets,

the deterioration of macroeconomic conditions could negatively impact a number of the assumptions used to calculate fair value. If macroeconomic conditions continue to worsen, it is possible we could have an impairment charge as a result. Management will continue to monitor these assets in future periods.

Sales of our ready-to-drink nonalcoholic beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes. The volume of sales in the beverages business may be affected by weather conditions.

Beverage Volume

We measure our sales volume in two ways: (1) unit cases of finished products and (2) concentrate sales. A "unit case" is a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings). Unit case volume represents the number of unit cases of Company beverage products directly or indirectly sold by the Company and its bottling partners ("Coca-Cola system") to customers. Unit case volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale of which we derive economic benefit. Such products licensed to, or distributed by, our Company or owned by Coca-Cola system bottlers account for a minimal portion of total unit case volume. In addition, unit case volume includes sales by joint ventures in which the Company is a partner. Unit case volume is derived based on estimates supplied by our bottling partners and distributors. Concentrate sales volume represents the amount of concentrates, syrups, beverage bases and powders (in all cases expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. Most of our revenues are based on concentrate sales, a primarily wholesale activity. Unit case volume and concentrate sales growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product introductions and changes in product mix can impact unit case volume and concentrate sales and can create differences between unit case volume and concentrate sales growth rates. In addition to the items mentioned above, the impact of unit case volume from certain joint ventures, in which the Company is a partner, but to which the Company does not sell concentrate may give rise to differences between unit case volume and concentrate sales growth rates.

                                                  Percentage Change
                                                 2008 versus 2007
                                 Third Quarter                       Year-to-Date
                           Unit Cases 1,2,3   Concentrate     Unit Cases 1,2,3   Concentrate
                                                    Sales                              Sales

Worldwide                           5 %                 3 %            4 %                 4 %
   Eurasia & Africa                 9                   8              7                  10
   Europe                           3                   -              2                   -
   Latin America                    8                   5              8                   5
   North America                   (2 )                (3 )           (1 )                (2 )
   Pacific                          7                   9              7                   7
Bottling Investments                7                 N/A             19                 N/A

1 Bottling Investments operating segment data reflect unit case volume growth for consolidated bottlers only.

2 Geographic segment data reflect unit case volume growth for all bottlers in the applicable geographic areas, both consolidated and unconsolidated.

3 Unit case volume percentage change is based on average daily sales. Unit case volume growth based on average daily sales is computed by comparing the average daily sales in each of the corresponding periods. Average daily sales for each quarter are the unit cases sold during the quarter divided by the number of days in the quarter.

Unit Case Volume

Although most of our Company's revenues are not based directly on unit case volume, we believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level.

In Eurasia and Africa, unit case volume increased 9 percent and 7 percent in the third quarter and for the nine months ended September 26, 2008, respectively, versus the comparable periods of the prior year. Double-digit growth in key markets, including Turkey, India, Southern Eurasia and Nigeria, as well as high single-digit growth in the Middle East and North and West Africa drove results for the quarter. South Africa's unit case volume increased 1 percent during the quarter. The current quarter unit case volume increases in the aforementioned key markets were partially offset by a 3 percent unit case volume decline in Russia, reflecting continued adverse weather conditions and a more challenging economic environment. Additionally, unit case volume growth for the nine months ended September 26, 2008, reflected the impact of a 3 percent volume decline in South Africa during the first nine months of 2008, primarily due to supply chain issues that were the result of carbon dioxide shortages. Our system has invested in manufacturing capabilities that allow us to produce our own supply of carbon dioxide to mitigate the risk of future shortages.

Unit case volume in Europe increased 3 percent and 2 percent for the three months and nine months ended September 26, 2008, respectively, versus the comparable periods of the prior year. The current quarter unit case volume increase was primarily the result of mid single-digit growth in Northwest Europe and high single-digit growth in Eastern Europe, partially offset by 1 percent volume declines in Iberia and Italy. The growth in Europe during the third quarter of 2008 reflects balanced growth, with unit case volume for sparkling beverages and still beverages up 3 percent and 9 percent, respectively. Double-digit unit case volume growth during the quarter for Coca-Cola Zero in the

Europe operating segment contributed significantly to the growth of sparkling beverages in the third quarter of 2008. The slowing Western European economy contributed to the unit case volume declines in Iberia and Italy. Additionally, unit case volume growth for the nine months ended September 26, 2008, included a mid single-digit decline in France and a low single-digit decline in Iberia during the second quarter of 2008. These declines during the second quarter of 2008 were primarily the result of a local CCE labor strike in France and the truckers' strike in Spain.

In Latin America, unit case volume increased 8 percent both in the third quarter and for the nine months ended September 26, 2008, versus the comparable periods of the prior year. The results for the quarter and for the first nine months of 2008 were primarily due to solid growth across the operating segment with high single-digit unit case volume growth in all business units during the third quarter, including the benefit of acquisitions. Acquisitions contributed 3 points of overall unit case volume growth in the quarter. Mexico, Brazil and Argentina achieved strong unit case volume growth of 7 percent, 7 percent and 5 percent, respectively, in the quarter. Sparkling beverages and still beverages unit case volume grew in the quarter by 3 percent and 38 percent, respectively. The unit case volume growth in still beverages is largely attributable to our successful integration of Jugos del Valle, S.A.B. de C.V. ("Jugos del Valle"). Unit case volume growth for the nine months ended September 26, 2008, also included the impact of 11 percent growth during the first quarter in Brazil, primarily due to solid growth in Trademark Coca-Cola and the impact of Leao Junior acquired at the end of the first quarter of 2007.

Unit case volume in North America decreased 2 percent and 1 percent for the three months and nine months ended September 26, 2008, respectively, versus the comparable periods of the prior year, reflecting a continued difficult U.S. economic environment. For the third quarter, Retail unit case volume declined 1 percent, while Foodservice and Hospitality declined 3 percent, reflecting the softness of our Foodservice business and other on-premise channels, both of which are being negatively impacted by the current economic conditions. Unit case volume for sparkling beverages declined 2 percent during the quarter; however, Coca-Cola Zero delivered a strong performance, increasing unit case volume 30 percent during the quarter. Still beverages unit case volume was even in the quarter, reflecting double-digit growth in glacéau, the strong performance of Fuze, and double-digit growth in Trademark Simply and Minute Maid Enhanced Juices. Also impacting still beverages unit case volume for the three and nine months ended September 26, 2008, were unit case volume declines in Trademark Dasani and Trademark Powerade during the quarter and for the first nine months of 2008, primarily as a result of the slowing water and sports drink category.

In Pacific, unit case volume increased 7 percent both in the third quarter and for the nine months ended September 26, 2008, versus the comparable periods of the prior year. Unit case volume in Japan increased 1 percent for the third quarter partially due to 6 percent unit case volume growth in Trademark Coca-Cola and the continued success of Coca-Cola Zero, both of which were driven by the successful execution of the three-cola strategy (focusing on driving unit case volume growth for Coca-Cola, Coca-Cola Zero and Diet Coke or Coca-Cola light). Georgia Coffee unit case volume increased 4 percent for the quarter and 3 percent for the first nine months of 2008, achieving its fourth consecutive quarter of growth. These increases were partially offset by unit case volume declines during the quarter and for the first nine months of 2008 in Sokenbicha and Aquarius, primarily related to unfavorable weather. The growth for the quarter in Pacific also included 17 percent unit case volume growth in China, led by double-digit volume growth in Trademark Coca-Cola, Trademark Sprite and Minute Maid. Also contributing to the unit case volume growth in China was the impact of Yuan Ye, an original green leaf tea, which was successfully launched earlier in the year. Sparkling beverages and still beverages increased 13 percent and 27 percent, respectively, in China during the third quarter. The strong performance in China across our brands is partly attributable to our successful activation of the Beijing Olympic Games. The growth in Japan and China was partially offset by a 9 percent unit case volume decline in the Philippines in the third quarter, which reflected the continued pressure from the

impact of food and fuel inflation on discretionary income. Unit case volume growth for the nine months ended September 26, 2008, also included the impact of 20 percent and 13 percent growth in China during the first and second quarters of 2008, respectively. Additionally, the first nine months included the impact of 21 percent growth in the Philippines during the first quarter of 2008.

Unit case volume for Bottling Investments increased 7 percent and 19 percent for the three months and nine months ended September 26, 2008, respectively, versus the comparable periods of the prior year. The third quarter growth reflects growth across most of the operating segment, partially offset by the divestiture of Remil during the second quarter of 2008. The growth for the first nine months of 2008 is primarily due to the prior year acquisitions of certain bottlers, including, but not limited to, 18 bottling and distribution operations in Germany, a controlling interest in NORSA and CCBPI, which was acquired toward the end of the first quarter of 2007. Additionally, the unit case volume growth during the quarter and for the first nine months of 2008 reflected the overall improving health of the Company's consolidated bottling operations.

Concentrate Sales Volume

For the three months ended September 26, 2008, differences between unit case volume and concentrate sales volume growth rates for all segments were primarily due to timing of concentrate shipments and the impact of unit case volume from certain joint ventures, in which the Company is a partner, but to which the Company does not sell concentrate.

Net Operating Revenues

    Net operating revenues were $8,393 million for the three months ended
September 26, 2008, compared to $7,690 million for the three months ended
September 28, 2007, an increase of $703 million, or 9 percent. The following
table indicates, on a percentage basis, the estimated impact of key factors
resulting in increases in net operating revenues for the three months ended
September 26, 2008, versus the comparable period in 2007:

                                                              Percentage Change
                                                               2008 versus 2007

   Increase in concentrate sales volume                                       3 %
   Structural changes                                                        (2 )
   Price and product/geographic mix                                           2
   Impact of currency fluctuations versus the U.S. dollar                     6

   Total percentage increase                                                  9 %

Refer to the heading "Beverage Volume" for a discussion of concentrate sales volume.

"Structural changes" refers to acquisitions or dispositions of bottling, distribution or canning operations and consolidation or deconsolidation of bottling or distribution entities for accounting purposes. Structural changes decreased net operating revenues by 2 percent for the three months ended September 26, 2008, versus the comparable period in the prior year. The decrease was primarily due to the sale of certain bottlers during 2008, partially offset by the acquisitions of 18 German bottling and distribution operations and a controlling interest in NORSA during the third quarter of 2007. Refer to Note I and Note L of Notes to Condensed Consolidated Financial Statements.

Price and product/geographic mix increased net operating revenues by 2 percent for the three months ended September 26, 2008, versus the comparable period in the prior year, primarily due to favorable pricing and product/package mix across the segments.

Net operating revenues were $24,818 million for the nine months ended September 26, 2008, compared to $21,526 million for the nine months ended September 28, 2007, an increase of $3,292 million, or 15 percent. The following table indicates, on a percentage basis, the estimated impact of key factors resulting in increases in net operating revenues for the nine months ended September 26, 2008, versus the comparable period in 2007:

                                                              Percentage Change
                                                               2008 versus 2007

   Increase in concentrate sales volume                                       4 %
   Structural changes                                                         1
   Price and product/geographic mix                                           2
   Impact of currency fluctuations versus the U.S. dollar                     8

   Total percentage increase                                                 15 %

Refer to the heading "Beverage Volume" for a discussion of concentrate sales volume. Also included in concentrate sales volume is the impact of acquired beverage companies, including, among others, glacéau, and the acquisition of trademarks.

Structural changes increased net operating revenues by 1 percent for the nine months ended September 26, 2008, versus the comparable period in the prior year, primarily due to the acquisition of CCBPI toward the end of the first quarter of 2007, and the acquisitions of 18 German bottling and distribution operations and a controlling interest in NORSA during the third quarter of 2007. The increase in net operating revenues for the first nine months of 2008 related to these acquisitions was partially offset by the sale of certain bottlers during 2008. Refer to Note I and Note L of Notes to Condensed Consolidated Financial Statements.

Price and product/geographic mix increased net operating revenues by 2 percent for the nine months ended September 26, 2008, versus the comparable period in the prior year, primarily due to favorable pricing and product/package mix across the segments.

The favorable impact of currency fluctuations for the nine months ended September 26, 2008, versus the comparable period in the prior year was driven primarily by a stronger euro, Japanese yen and Brazilian real, which favorably impacted the Europe, Pacific, Latin America and Bottling Investments operating segments.

Gross Profit

Our gross profit margin increased to 64.0 percent for the three months ended September 26, 2008, from 62.5 percent for the three months ended September 28, 2007. The increase in our gross profit margin was primarily the result of favorable price and product mix and the sale of certain bottlers. Generally, bottling and finished product operations produce higher net revenues but lower gross profit margins compared to concentrate and syrup operations. Our gross profit margin was also unfavorably impacted by increases in the cost of raw materials and freight.

Our gross profit margin increased to 64.5 percent for the nine months ended September 26, 2008, from 63.9 percent for the nine months ended September 28, 2007. This increase was primarily the result of favorable price and product mix and the sale of certain bottlers, partially offset by the impact of the acquisitions of CCBPI and Leao Junior during the first quarter of 2007; the acquisition of

Selling, General and Administrative Expenses

    The following table sets forth the significant components of selling,
general and administrative expenses (in millions):

                             Three Months Ended                   Nine Months Ended
                         September 26,     September 28,     September 26,     September 28,
                                  2008              2007              2008              2007

Selling and
advertising expenses           $ 2,404           $ 2,131           $ 6,831           $ 5,694
General and
administrative
expenses                           664               679             1,976             1,971
Stock-based
compensation expense                71                86               223               241

Selling, general and
administrative
expenses                       $ 3,139           $ 2,896           $ 9,030           $ 7,906

Selling, general and administrative expenses increased $243 million, or 8 percent, for the three months ended September 26, 2008, versus the comparable period in the prior year. Selling, general and administrative expenses increased $1,124 million, or 14 percent, for the nine months ended September 26, 2008, as compared to the same period in the prior year. Approximately 6 percent of the increase during the quarter, and 7 percent of the increase for the first nine months of 2008, was attributable to the impact of foreign currency. We also . . .