The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("M,D&A") of Coca-Cola Bottling Co. Consolidated (the "Company") should be read in conjunction with the Company's consolidated financial statements and the accompanying notes to the consolidated financial statements. M,D&A includes the following sections:

• Our Business and the Nonalcoholic Beverage Industry - a general description of the Company's business and the nonalcoholic beverage industry.

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

• Overview of Operations and Financial Condition - a summary of key information and trends concerning the financial results for the third quarter of 2012 ("Q3 2012") and the first nine months of 2012 ("YTD 2012") and changes from the third quarter of 2011 ("Q3 2011") and the first nine months of 2011 ("YTD 2011").

• 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 2012 and YTD 2012 compared to Q3 2011 and YTD 2011, respectively.

• Financial Condition - an analysis of the Company's financial condition as of the end of Q3 2012 compared to year-end 2011 and the end of Q3 2011 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 primarily consists of The Coca-Cola Company's interest in Piedmont, which was 22.7% for all periods presented.

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 largest independent 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 full year net sales of $1.6 billion in 2011.

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. The sparkling beverage category (including energy products) represents 81% of the Company's YTD 2012 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 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 2012, the Company did not experience any triggering events or changes in circumstances that indicated the carrying amounts of the Company's franchise rights or goodwill exceeded fair values. As such, the Company 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                                  2012           2011            2012             2011
Bottle/can sales:
Sparkling beverages (including energy
products)                                   $ 271,279      $ 263,653      $   809,640      $   787,739
Still beverages                                68,256         65,327          186,067          177,668

Total bottle/can sales                        339,535        328,980          995,707          965,407
Other sales:
Sales to other Coca-Cola bottlers              39,160         38,447          111,855          116,545
Post-mix and other                             41,160         38,431          120,171          106,428

Total other sales                              80,320         76,878          232,026          222,973

Total net sales                             $ 419,855      $ 405,858      $ 1,227,733      $ 1,188,380

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 significant impact on the Company's results of operations.

Product Innovation and Beverage Portfolio Expansion

Innovation of both new brands and packages has been and will continue to be critical to the Company's overall revenue. During 2008, the Company tested the 16-ounce bottle/24-ounce bottle package for many of the Company's sparkling beverages in select convenience stores and introduced it companywide in 2009. New packaging introductions included the 1.25-liter bottle in 2011, the 7.5-ounce sleek can in 2010 and the 2-liter contour bottle for Coca-Cola products during 2009.

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, Bean & Body coffee beverages and Fuel in a Bottle power shots. 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 exclusively 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 $150.9 million and $144.5 million in YTD 2012 and YTD 2011, 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 an increasing number of products and packages. 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 its 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 selling, delivery and administrative ("S,D&A") expense management relates to ongoing improvements in labor productivity and asset productivity.

Overview of Operations and Financial Condition

The following items affect the comparability of the financial results presented below:

Q3 2012 and YTD 2012

• a $1.0 million pre-tax favorable mark-to-market adjustment to cost of sales related to the Company's 2013 aluminum hedging program in Q3 2012 and YTD 2012;

• a $.4 million and a $1.2 million additional income tax expense to increase the valuation allowance for certain deferred tax assets of the Company in Q3 2012 and YTD 2012, respectively; and

• a $.2 million credit to income tax expense related to the reduction of the liability for uncertain tax positions in Q3 2012 due mainly to the lapse of applicable statutes of limitations.

Q3 2011 and YTD 2011

• a $10,000 pre-tax favorable mark-to-market adjustment and a $.2 million pre-tax unfavorable mark-to-market adjustment to S,D&A expenses related to the Company's 2011 fuel hedging program in Q3 2011 and YTD 2011, respectively;

• a $1.8 million and a $4.1 million pre-tax unfavorable mark-to-market adjustment to cost of sales related to the Company's 2011 aluminum hedging program in Q3 2011 and YTD 2011, respectively; and

• a $.9 million credit to income tax expense related to the reduction of the liability for uncertain tax positions in Q3 2011 due mainly to the lapse of applicable statues of limitations.

The following overview provides a summary of key information concerning the Company's financial results for

Q3 2012 and YTD 2012 compared to Q3 2011 and YTD 2011.

                                               Third Quarter                           %
 In Thousands (Except Per Share Data)       2012          2011         Change       Change
 Net sales                                $ 419,855     $ 405,858     $ 13,997          3.4
 Cost of sales                              248,927       243,142        5,785          2.4
 Gross margin                               170,928       162,716        8,212          5.0
 S,D&A expenses                             143,490       137,752        5,738          4.2
 Income from operations                      27,438        24,964        2,474          9.9
 Interest expense, net                        9,033         9,087          (54 )       (0.6 )
 Income before taxes                         18,405        15,877        2,528         15.9
 Income tax expense                           7,191         4,892        2,299         47.0
 Net income                                  11,214        10,985          229          2.1
 Net income attributable to the Company      10,079         9,768          311          3.2

 Basic net income per share:
 Common Stock                             $    1.09     $    1.06     $    .03          2.8
 Class B Common Stock                     $    1.09     $    1.06     $    .03          2.8

 Diluted net income per share:
 Common Stock                             $    1.09     $    1.06     $    .03          2.8
 Class B Common Stock                     $    1.08     $    1.05     $    .03          2.9

                                                     First Nine Months                           %
In Thousands (Except Per Share Data)               2012            2011          Change       Change
Net sales                                       $ 1,227,733     $ 1,188,380     $ 39,353          3.3
Cost of sales                                       727,798         710,930       16,868          2.4
Gross margin                                        499,935         477,450       22,485          4.7
S,D&A expenses                                      425,315         404,887       20,428          5.0
Income from operations                               74,620          72,563        2,057          2.8
Interest expense, net                                27,183          26,898          285          1.1
Income before taxes                                  47,437          45,665        1,772          3.9
Income tax expense                                   19,228          16,227        3,001         18.5
Net income                                           28,209          29,438       (1,229 )       (4.2 )
Net income attributable to the Company               25,391          26,782       (1,391 )       (5.2 )

Basic net income per share:
Common Stock                                    $      2.75     $      2.91     $  (0.16 )       (5.5 )
Class B Common Stock                            $      2.75     $      2.91     $  (0.16 )       (5.5 )

Diluted net income per share:
Common Stock                                    $      2.74     $      2.90     $  (0.16 )       (5.5 )
Class B Common Stock                            $      2.73     $      2.89     $  (0.16 )       (5.5 )

The Company's net sales increased 3.4% in Q3 2012 compared to Q3 2011. The Company's net sales increased 3.3% in YTD 2012 compared to YTD 2011. The increase in net sales in Q3 2012 compared to Q3 2011 was primarily due to a 2.6% increase in bottle/can volume to retail customers. The 2.6% increase was due to a 1.3% increase in sparkling beverages and an 8.2% increase in still beverages. Bottle/can sales price per unit increased .6% in Q3 2012 compared to Q3 2011. The increase in net sales in YTD 2012 compared to YTD 2011 was primarily due to a 1.7% increase in bottle/can sales price per unit and a 1.4% increase in bottle/can volume to retail customers. The increase in sales price per unit was primarily due to an increase in sales price per unit of sparkling beverages except energy products. The increase in bottle/can volume to retail customers was primarily due to an increase in still beverages. The increase in net sales in YTD 2012 compared to YTD 2011 was partially offset by a decrease in sales volume to other Coca-Cola bottlers. The decrease in sales volume to other Coca-Cola bottlers was primarily due to a decrease in sparkling beverages.

Gross margin dollars increased 5.0% in Q3 2012 compared to Q3 2011. The Company's gross margin percentage increased to 40.7% in Q3 2012 from 40.1% in Q3 2011. Gross margin dollars increased 4.7% in YTD 2012 compared to YTD 2011. The Company's gross margin percentage increased to 40.7% in YTD 2012 from 40.2% in YTD 2011. The increase in gross margin percentage in Q3 2012 compared to Q3 2011 was primarily due to higher bottle/can sales price per unit and lower aluminum hedging costs partially offset by lower marketing funding support. The increase in gross margin percentage in YTD 2012 compared to YTD 2011 was primarily due to higher sales price per unit for bottle/can volume and lower sales volume to other Coca-Cola bottlers which have a lower gross margin percentage partially offset by higher costs of raw materials and increased purchases of full goods.

The following inputs represent a substantial portion of the Company's total cost of goods sold: (1) sweeteners, (2) packaging materials, including plastic bottles and aluminum cans, and (3) full goods purchased from other vendors. The Company anticipates that the costs of some of the underlying commodities related to these inputs, particularly corn, will continue to face upward pressure and gross margins on all categories of products will be lower throughout the remainder of 2012 compared to 2011, unless rising commodity costs can be offset with price increases.

S,D&A expenses increased 4.2% in Q3 2012 from Q3 2011. The increase in S,D&A expenses in Q3 2012 from Q3 2011 was attributable primarily to increased employee payroll costs including benefit costs, increased property and casualty insurance and increased professional fees. S,D&A expenses increased 5.0% in YTD 2012 from YTD 2011. The increase in S,D&A expenses in YTD 2012 from YTD 2011 was attributable primarily to increased employee payroll costs including benefit costs, increased marketing expense, increased property and casualty insurance and increased professional fees.

Net interest expense increased 1.1% in YTD 2012 compared to YTD 2011. The increase was primarily due to the Company entering into two new capital leases in the first quarter of 2011. Net interest expense was unchanged from Q3 2011 to Q3 2012. The Company's overall weighted average interest rate on its debt and capital lease obligations increased to 6.1% during YTD 2012 from 6.0% during YTD 2011.

Net debt and capital lease obligations were summarized as follows:

                                                   Sept. 30,       Jan. 1,       Oct. 2,
In Thousands                                          2012          2012          2011
Debt                                               $  523,344     $ 523,219     $ 523,179
Capital lease obligations                              70,802        74,054        75,018

Total debt and capital lease obligations              594,146       597,273       598,197
Less: Cash and cash equivalents                       112,661        93,758        71,549

Total net debt and capital lease obligations (1)   $  481,485     $ 503,515     $ 526,648

(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. This non-GAAP financial information is not presented elsewhere in this report and may not be comparable to the similarly titled measures used by other companies. Additionally, this information should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Discussion of Critical Accounting Policies, Estimates and New Accounting Pronouncements

Critical Accounting Policies and Estimates

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 January 1, 2012 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 2012. 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.

New Accounting Pronouncements

Recently Adopted Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The Company elected to report components of comprehensive income in two separate but consecutive statements. The new guidance was effective for the quarter ended April 1, 2012 and was applied retrospectively. The Company's adoption of the new guidance resulted in a change in the presentation of the Company's consolidated financial statements but did not have any impact on the Company's results of operations, financial position or liquidity.

In September 2011, the FASB issued new guidance relative to the test for goodwill impairment. The new guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The new guidance was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company does not expect the requirements of this new guidance to have a material impact on the Company's consolidated financial statements.

Recently Issued Pronouncements

In December 2011, the FASB issued new guidance that is intended to enhance current disclosures on offsetting financial assets and liabilities. The new guidance requires an entity to disclose both gross and net information about financial instruments eligible for offset on the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. The provisions of the new guidance are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The Company does not expect the requirements of this new guidance to have a material impact on the Company's consolidated financial statements.

In July 2012, the FASB issued new guidance relative to the test for indefinite-lived intangibles impairment. The new guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The new guidance is effective for annual and interim indefinite-lived intangibles impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

Results of Operations

Q3 2012 Compared to Q3 2011 and YTD 2012 Compared to YTD 2011

Net Sales

Net sales increased $14.0 million, or 3.4%, to $419.9 million in Q3 2012 compared to $405.9 million in Q3 2011. Net sales increased $39.4 million, or 3.3%, to $1,227.7 million in YTD 2012 compared to $1,188.3 million in YTD 2011.

The increase in net sales for Q3 2012 compared to Q3 2011 was principally attributable to the following:

    Q3 2012           Attributable to:
 (In Millions)
$           8.6       2.6% increase in bottle/can volume to retail customers primarily
                      due to a volume increase in all products
            2.0       .6% increase in bottle/can sales price per unit primarily due to
                      an increase in sales price per unit in sparkling products except
                      energy products
            0.8       3.8% increase in post-mix sales price per unit
            0.6       1.5% increase in sales price per unit of sales to other
                      Coca-Cola bottlers primarily due to an increase in sales price
                      per unit in all product categories except energy products
            0.6       Increase in the sales of the Company's own brand portfolio
                      (primarily Tum-E Yummies)
            0.6       Increase in data analysis and consulting services provided
            0.4       Increase in supply chain and logistics solutions consulting
                      provided
            0.3       1.2% increase in post-mix sales volume
            0.1       Other

$          14.0       Total increase in net sales

The increase in net sales for YTD 2012 compared to YTD 2011 was principally attributable to the following:

   YTD 2012            Attributable to:
 (In Millions)
$          17.0        1.7% increase in bottle/can sales price per unit primarily due
                       to an increase in sales price per unit in sparkling beverages
                       except energy products
           13.3        1.4% increase in bottle/can volume to retail customers
                       primarily due to a volume increase in still beverages
          (10.3 )      8.9% decrease in sales volume to other Coca-Cola bottlers
                       primarily due to volume decreases in sparkling beverages
            5.7        5.3% increase in sale price per unit of sales to other
                       Coca-Cola bottlers primarily due to an increase in sales price
                       per unit in all product categories except energy products
            4.9        Increase in the sales of the Company's own brand portfolio
                       (primarily Tum-E Yummies)
            2.4        3.8% increase in post-mix sales price per unit
            1.9        Increase in data analysis and consulting services provided
            1.7        Increase in supply chain and logistics solutions consulting
                       provided
            1.4        2.2% increase in post-mix sales volume
            1.4        Other

$          39.4        Total increase in net sales

In YTD 2012, the Company's bottle/can sales to retail customers accounted for 81.1% of the Company's total net sales. Bottle/can net pricing is based on the invoice price charged to customers reduced by promotional allowances. Bottle/can net pricing per unit is impacted by the price charged per package, the volume . . .