• Areas of Emphasis - a summary of the Company's key priorities.

• Overview of Operations and Financial Condition - a summary of key information and trends concerning the financial results for the third quarter of 2009 ("Q3 2009") and the first nine months of 2009 ("YTD 2009") and changes from the third quarter of 2008 ("Q3 2008") and the first nine months of 2008 ("YTD 2008").

• Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements - a discussion of accounting policies that are most important to the portrayal of the Company's financial condition and results of operations and that require critical judgments and estimates and the expected impact of new accounting pronouncements.

• Results of Operations - an analysis of the Company's results of operations for Q3 2009 and YTD 2009 compared to Q3 2008 and YTD 2008.

• Financial Condition - an analysis of the Company's financial condition as of the end of Q3 2009 compared to year-end 2008 and the end of Q3 2008 as presented in the consolidated financial statements.

• Liquidity and Capital Resources - an analysis of capital resources, cash sources and uses, investing activities, financing activities, off-balance sheet arrangements, aggregate contractual obligations and hedging activities.

• Cautionary Information Regarding Forward-Looking Statements.

The consolidated financial statements include the consolidated operations of the Company and its majority-owned subsidiaries including Piedmont Coca-Cola Bottling Partnership ("Piedmont"). The noncontrolling interest consists of The Coca-Cola Company's interest in Piedmont, which was 22.7% for all periods presented.
In December 2007, the Financial Accounting Standards Board ("FASB") issued new guidance on accounting for the noncontrolling interest in the consolidated financial statements. The Company implemented the new guidance effective December 29, 2008, the beginning of the first quarter of 2009 ("Q1 2009"). The new guidance changes the accounting and reporting standards for the noncontrolling interest in a subsidiary (commonly referred to previously as minority interest). Piedmont is the Company's only subsidiary that has a noncontrolling interest. Noncontrolling interest income of $1.0 million in Q3 2009, $2.0 million in YTD 2009, $.7 million in Q3 2008 and $1.7 million in YTD 2008 have been reclassified to be included in net income on the Company's consolidated statements of operations. In addition, the amount of consolidated net income attributable to both the Company and the noncontrolling interest are shown on the Company's consolidated statements of operations. Noncontrolling interest related to Piedmont totaled $52.4 million, $50.4 million and $49.7 million at September 27, 2009, December 28, 2008 and September 28, 2008, respectively. These amounts have been reclassified as noncontrolling interest in the equity section of the Company's consolidated balance sheets.

Our Business and the Nonalcoholic Beverage Industry The Company produces, markets and distributes nonalcoholic beverages, primarily products of The Coca-Cola Company, which include some of the most recognized and popular beverage brands in the world. The Company is the second largest bottler of products of The Coca-Cola Company in the United States, distributing these products in eleven states primarily in the Southeast. The Company also distributes several other beverage brands. These product offerings include both sparkling and still beverages. Sparkling beverages are carbonated beverages including energy products. Still beverages are noncarbonated beverages such as bottled water, tea, ready to drink coffee, enhanced water, juices and sports drinks. The Company had net sales of approximately $1.5 billion in 2008. The nonalcoholic beverage market is highly competitive. The Company's competitors include bottlers and distributors of nationally and regionally advertised and marketed products and private label products. In each region in which the Company operates, between 85% and 95% of sparkling beverage sales in bottles, cans and other containers are accounted for by the Company and its principal competitors, which in each region includes the local bottler of Pepsi-Cola and, in some regions, the local bottler of Dr Pepper, Royal Crown and/or 7-Up products. During the last several years, industry sales of sugar sparkling beverages, other than energy products, have declined. The decline in sugar sparkling beverages has generally been offset by sales growth in other nonalcoholic product categories. The sparkling beverage category (including energy products) represents 82% of the Company's YTD 2009 bottle/can net sales. The principal methods of competition in the nonalcoholic beverage industry are point-of-sale merchandising, new product introductions, new vending and dispensing equipment, packaging changes, pricing, price promotions, product quality, retail space management, customer service, frequency of distribution and merchandising, and advertising. The Company believes it is competitive in its territories with respect to each of these methods.
Historically, operating results for the third quarter and the first nine months of the fiscal year have not been representative of results for the entire fiscal year. Business seasonality results primarily from higher unit sales of the Company's products in the second and third quarters versus the first and fourth quarters of the fiscal year. Fixed costs, such as depreciation expense, are not significantly impacted by business seasonality.
The Company performs its annual impairment test of franchise rights and goodwill as of the first day of the fourth quarter. During YTD 2009, the Company believes it has not experienced any events or changes in circumstances that indicate the carrying amounts of the Company's franchise rights or goodwill exceeded fair values. As such, the Company has not performed an interim impairment test during YTD 2009 and has not recognized any impairments of franchise rights or goodwill.

Net sales by product category were as follows:

                                                        Third Quarter                         First Nine Months
In Thousands                                       2009               2008                2009                 2008

Bottle/can sales:
Sparkling beverages (including energy
products)                                       $ 257,289          $ 258,200          $   749,488          $   762,741
Still beverages                                    59,694             66,160              166,629              186,020

Total bottle/can sales                            316,983            324,360              916,117              948,761

Other sales:
Sales to other Coca-Cola bottlers                  31,822             31,231               98,433               94,356
Post-mix and other                                 25,751             25,972               74,016               72,123

Total other sales                                  57,573             57,203              172,449              166,479


Total net sales                                 $ 374,556          $ 381,563          $ 1,088,566          $ 1,115,240

Areas of Emphasis
Key priorities for the Company include revenue management, product innovation and beverage portfolio expansion, distribution cost management and productivity. Revenue Management
Revenue management requires a strategy which reflects consideration for pricing of brands and packages within product categories and channels, highly effective working relationships with customers and disciplined fact-based decision-making. Revenue management has been and continues to be a key performance driver which has a significant impact on the Company's results of operations. Product Innovation and Beverage Portfolio Expansion Sparkling beverages volume, other than energy products, has declined over the past several years. Innovation of both new brands and packages has been and will continue to be critical to the Company's overall revenue. The Company began distributing Monster Energy® drinks in certain of the Company's territories beginning in November 2008. The Company introduced the following new products during 2007: smartwater®, vitaminwater®, vitaminenergy™, Gold Peak™ and Country Breeze tea products, juice products from FUZE® (a subsidiary of The Coca-Cola Company) and V8® juice products from the Campbell Soup Company. The Company also modified its energy product portfolio in 2007 with the addition of NOS® products from FUZE®.
In October 2008, the Company entered into a distribution agreement with Hansen Beverage Company ("Hansen"), the developer, marketer, seller and distributor of Monster Energy® drinks, the leading volume brand in the United States energy category. Under this agreement, the Company has the right to distribute Monster Energy® drinks in certain of the Company's territories. The agreement has a term of 20 years and can be terminated by either party under certain circumstances, subject to a termination penalty in certain cases. In conjunction with the execution of this agreement, the Company was required to pay Hansen $2.3 million. This amount equals the amount that Hansen was required to pay to the distributors of Monster Energy®drinks to terminate the prior distribution agreements. The Company has recorded the payment to Hansen as distribution rights and will amortize the amount on a straight-line basis to selling, delivery and administrative ("S,D&A") expenses over the 20-year term of the agreement.

In August 2007, the Company entered into a distribution agreement with Energy Brands Inc. ("Energy Brands"), a wholly-owned subsidiary of The Coca-Cola Company. Energy Brands, also known as glacéau, is a producer and distributor of branded enhanced beverages including vitaminwater®, smartwater® and vitaminenergy™. The distribution agreement was effective November 1, 2007 for a period of ten years and, unless earlier terminated, will be automatically renewed for succeeding ten-year terms, subject to a one year non-renewal notification by the Company. In conjunction with the execution of the distribution agreement, the Company entered into an agreement with The Coca-Cola Company whereby the Company agreed not to introduce new third party brands or certain third party brand extensions in the United States through August 31, 2010 unless mutually agreed to by the Company and The Coca-Cola Company. The Company has invested in its own brand portfolio with products such as Tum-E Yummies™, a vitamin C enhanced flavored drink, Country Breeze tea and diet Country Breeze tea and is the exclusive licensee of Cinnabon Premium Coffee Lattes. These brands enable the Company to participate in strong growth categories and capitalize on distribution channels that may include the Company's traditional Coca-Cola franchise territory as well as third party distributors outside the Company's traditional Coca-Cola franchise territory. While the growth prospects of Company-owned or exclusive licensed brands appear promising, the cost of developing, marketing and distributing these brands is anticipated to be significant as well.
Distribution Cost Management
Distribution costs represent the costs of transporting finished goods from Company locations to customer outlets. Total distribution costs amounted to $138.7 million and $152.5 million in YTD 2009 and YTD 2008, respectively. Over the past several years, the Company has focused on converting its distribution system from a conventional routing system to a predictive system. This conversion to a predictive system has allowed the Company to more efficiently handle increasing numbers of products. In addition, the Company has closed a number of smaller sales distribution centers over the past several years reducing its fixed warehouse-related costs.
The Company has three primary delivery systems for its current business:
• bulk delivery for large supermarkets, mass merchandisers and club stores;

• advanced sales delivery for convenience stores, drug stores, small supermarkets and certain on-premise accounts; and

• full service delivery for full service vending customers.

Distribution cost management will continue to be a key area of emphasis for the Company.
Productivity
A key driver in the Company's S,D&A expense management relates to ongoing improvements in labor productivity and asset productivity. The Company continues to focus on its supply chain and distribution functions for ongoing opportunities to improve productivity.

Overview of Operations and Financial Condition The following items affect the comparability of the financial results presented below:
Q3 2009 and YTD 2009

• a $1.4 million and $5.3 million pre-tax favorable mark-to-market adjustment to cost of sales related to the Company's 2010 and 2011 aluminum hedging programs in Q3 2009 and YTD 2009, respectively;

• a $1.7 million credit to income tax expense related to the agreement with a state tax authority to settle certain prior tax positions in Q1 2009;

• a $5.4 million credit to income tax expense related to the reduction of the liability for uncertain tax positions in Q3 2009 due mainly to the lapse of applicable statutes of limitations;

• a $.9 million and $2.9 million pre-tax favorable impact to S,D&A expenses in Q3 2009 and YTD 2009, respectively, due to a change in the estimate of the useful lives of certain cold drink dispensing equipment in Q1 2009;

• a $.1 million pre-tax unfavorable mark-to-market adjustment and $.9 million pre-tax favorable mark-to-market adjustment to S,D&A expenses related to the Company's 2009 fuel hedging program in Q3 2009 and YTD 2009, respectively;

• a $.6 million pre-tax favorable adjustment to S,D&A expenses related to the gain on the termination of a capital lease related to an operating facility in Q1 2009; and

• a $.5 million pre-tax unfavorable mark-to-market adjustment and $1.1 million pre-tax favorable mark-to-market adjustment to S,D&A expenses related to the Company's 2010 fuel hedging program in Q3 2009 and YTD 2009, respectively.

Q3 2008 and YTD 2008

• a $13.8 million pre-tax charge to freeze the Company's liability to the Central States, Southeast and Southwest Areas Pension Fund ("Central States"), a multi-employer pension fund effective in Q3 2008, while preserving the pension benefits previously earned by Company employees covered by the plan;

• a $4.0 million pre-tax charge for restructuring expense related to the Company's plan initiated in Q3 2008 to reorganize the structure of its operating units and support services, which resulted in the elimination of approximately 350 positions;

• a $2.6 million adjustment to increase equity investment in a plastic bottle cooperative in YTD 2008; and

• a $.6 million pre-tax unfavorable mark-to-market adjustment and $1.2 million pre-tax favorable mark-to-market adjustment to S,D&A expenses related to the Company's 2008 fuel hedging program in Q3 2008 and YTD 2008, respectively.

The following overview provides a summary of key information concerning the Company's financial results for Q3 2009 and YTD 2009 compared to Q3 2008 and YTD 2008.

                                                            Third Quarter                                        %
In Thousands (Except Per Share Data)                   2009               2008              Change            Change

Net sales                                           $ 374,556          $ 381,563          $  (7,007 )           (1.8 )
Gross margin                                          157,320            155,827              1,493              1.0
S,D&A expenses                                        131,024            149,384            (18,360 )          (12.3 )
Income from operations                                 26,296              6,443             19,853             NM*
Interest expense                                        8,866              9,406               (540 )           (5.7 )
Income (loss) before income taxes                      17,430             (2,963 )           20,393             NM*
Income tax provision (benefit)                          1,043               (523 )            1,566             NM*
Net income (loss)                                      16,387             (2,440 )           18,827             NM*
Net income (loss) attributable to the Company          15,428             (3,145 )           18,573             NM*
Basic net income (loss) per share:
Common Stock                                        $    1.68          $    (.34 )        $    2.02             NM*
Class B Common Stock                                $    1.68          $    (.34 )        $    2.02             NM*
Diluted net income (loss) per share:
Common Stock                                        $    1.68          $    (.34 )        $    2.02             NM*
Class B Common Stock                                $    1.67          $    (.34 )        $    2.01             NM*

* Not Meaningful

                                               First Nine Months                          %
In Thousands (Except Per Share Data)         2009            2008          Change       Change

Net sales                                $ 1,088,566     $ 1,115,240     $ (26,674 )     (2.4 )
Gross margin                                 464,576         467,625        (3,049 )     (0.7 )
S,D&A expenses                               386,461         421,300       (34,839 )     (8.3 )
Income from operations                        78,115          46,325        31,790       68.6
Interest expense                              28,059          29,789        (1,730 )     (5.8 )
Income before income taxes                    50,056          16,536        33,520       NM*
Income tax provision                          11,928           7,135         4,793       67.2
Net income                                    38,128           9,401        28,727       NM*
Net income attributable to the Company        36,146           7,675        28,471       NM*
Basic net income per share:
Common Stock                             $      3.94     $      0.84     $    3.10       NM*
Class B Common Stock                     $      3.94     $      0.84     $    3.10       NM*
Diluted net income per share:
Common Stock                             $      3.93     $      0.84     $    3.09       NM*
Class B Common Stock                     $      3.92     $      0.83     $    3.09       NM*

* Not Meaningful

The Company's net sales decreased 1.8% in Q3 2009 compared to Q3 2008. The decrease in net sales was primarily due to a 1.2% decrease in bottle/can volume and a 1.8% decrease in average sales price per bottle/can unit. The decrease in bottle/can volume was primarily due to a volume decrease in bottled water. The decrease in average sales price per bottle/can unit was primarily due to lower per unit prices in sparkling products except energy products partially offset by higher per unit prices in energy products. The Company's net sales decreased 2.4% in YTD 2009 compared to YTD 2008. The decrease in net sales was primarily due to a 6.0% decrease in

bottle/can volume partially offset by a 2.3% increase in average sales price per bottle/can unit. The decrease in bottle/can volume was primarily due to a decrease in volume in all product categories except energy products. The increase in average sales price per bottle/can unit was primarily due to increased sales prices in all product categories except enhanced water products. Gross margin dollars increased 1.0% in Q3 2009 compared to Q3 2008. The Company's gross margin percentage increased to 42.0% for Q3 2009 from 40.8% for Q3 2008. The increase in gross margin dollars and gross margin percentage was primarily due to an increase in marketing funding support received primarily from The Coca-Cola Company partially offset by lower bottle/can sales price per unit. Gross margin dollars decreased .7% in YTD 2009 compared to YTD 2008. The Company's gross margin percentage increased to 42.7% for YTD 2009 from 41.9% for YTD 2008. The decrease in gross margin dollars was primarily due to lower bottle/can volume and increases in raw material costs partially offset by higher average sales price per bottle/can unit. The increase in gross margin percentage in YTD 2009 compared to YTD 2008 was primarily due to higher sales prices per unit and a decrease in cost of sales due to the Company's aluminum hedging program partially offset by higher raw material costs.
S,D&A expenses decreased 12.3% in Q3 2009 from Q3 2008 and 8.3% in YTD 2009 from YTD 2008. The decreases in S,D&A expenses in Q3 2009 from Q3 2008 and YTD 2009 from YTD 2008 were primarily attributable to decreases in salaries and wages, decreases in fuel costs and decreased depreciation expense offset by increased employee benefit costs and increased bonus expense. During Q3 2008, the Company recorded a charge that resulted from a new collective bargaining agreement that allowed the Company to freeze its liability for the union pension plan. During Q3 2008, the Company also recorded restructuring expense related to the Company's plan to reorganize the structure of its operating units and support services.
Net interest expense decreased 5.7% in Q3 2009 compared to Q3 2008 and decreased 5.8% in YTD 2009 compared to YTD 2008. The decrease in YTD 2009 compared to YTD 2008 was primarily due to lower debt. The Company's overall weighted average interest rate was 5.7% during both YTD 2009 and YTD 2008. Net debt and capital lease obligations were summarized as follows:

                                                           Sept. 27,          December 28,          Sept. 28,
In Thousands                                                 2009                 2008                2008

Debt                                                      $ 552,882          $    591,450          $ 591,450
Capital lease obligations                                    64,006                77,614             78,280

Total debt and capital lease obligations                    616,888               669,064            669,730
Less: Cash and cash equivalents                              25,062                45,407             20,583

Total net debt and capital lease obligations (1)          $ 591,826          $    623,657          $ 649,147

(1) The non-GAAP measure "Total net debt and capital lease obligations" is used to provide investors with additional information which management believes is helpful in the evaluation of the Company's capital structure and financial leverage.

Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements
Critical Accounting Policies
In the ordinary course of business, the Company has made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company included in its Annual Report on Form 10-K for the year ended December 28, 2008 a discussion of the Company's most critical accounting policies, which are those most important to the portrayal of the Company's financial condition and results of operations and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
The Company did not make changes in any critical accounting policies during YTD 2009. Any changes in critical accounting policies and estimates are discussed with the Audit Committee of the Board of Directors of the Company during the quarter in which a change is made.
Recently Adopted Pronouncements
In September 2006, the FASB issued new guidance which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. The new guidance does not require any new fair value measurements but could change the Company's current practices in measuring fair value. The new guidance was effective at the beginning of the first quarter of 2008 for all financial assets and liabilities and for nonfinancial assets and liabilities recognized or disclosed at fair value on a recurring basis. In February 2008, the FASB issued additional guidance which deferred the application date of the provisions of new guidance for all nonfinancial assets and liabilities until Q1 2009 except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of this new guidance did not have a material impact on the Company's consolidated financial statements as of YTD 2009, but could have a material effect in the future. See Note 12 to the consolidated financial statements for additional information.
In December 2007, the FASB issued new guidance which established principles and requirements for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed and any noncontrolling interest in an acquisition, at their fair values as of the acquisition date. The new guidance was effective for Q1 2009. The impact on the Company of adopting this new guidance will depend on the nature, terms and size of business combinations completed after the effective date.
In December 2007, the FASB issued new guidance to establish new accounting and new reporting standards for the noncontrolling interest in a subsidiary (commonly referred to previously as minority interest) and for the deconsolidation of a subsidiary. This new guidance was effective for the Company as of the beginning of Q1 2009 and is being applied prospectively, except for the presentation and disclosure requirements, which have been applied retrospectively. The adoption of this new guidance did not have a significant impact on the Company's consolidated financial statements.
In March 2008, the FASB issued new guidance which amends and expands the disclosure requirements relative to derivative instruments to provide an enhanced understanding of why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how they . . .