Please give a one to stack welcome for
our guest Mr John Prop two I have to.

Thank thanks to both of you for
those Conry marks it's great to be here

always really really love being back at
Georgia Tech and having a chance to talk

about my business and
to connect with Georgia Tech students and

faculty and friends so
it's really good being here today.

The title of what I'm going to talk
about is all about success and

go to the first live here success.

Across the Atlantic.

That's a second slide that's
all right we'll just.

Talk a little bit about why I thought we'd
talk about success across the Atlantic

because we're in a very unique position
it Coca-Cola Enterprises you heard we're

the bottling partner of the Coca-Cola
Company in Western Europe we're one of

only a handful of American
companies that are dumbest

headquartered in the United States traded
on the New York Stock Exchange and

don't have one single
solitary cent of sales

in the United States it's
all in Western Europe so

I think we're a particularly
good example of a company that

spans the transatlantic relationship here
to talk a little bit about today so.

It would be only appropriate to
start with our brands we live and

die by our brands we love them we
feed them we treat them with care and

they are the lifeblood of our
business Coca-Cola of course

the most iconic the most valuable
brand in the world red black and

silver as we said that's
Coke Zero Diet Coke and regular coke and

then a whole host of other brands that
I thought I'd just put up there so

as we go through this conversation
today you'll at least have a.

A bit of a framework the brands that drive
our business sprite Banta Powerade and

a whole host of other Some are unique to
Europe these are our brands in Europe and

I'll talk a little more about
some of those as we go forward

difference between the Coca-Cola Company
and the bottling system.

It is a unique partnership relationship
that spans really one hundred twenty five

years which is of course
the birthday of Coca-Cola this year

hundred twenty five years one year younger
than George that great combination.

The Coca-Cola Company owns the brand.

They on the intellectual property they
do the advertising they do the marketing

they connect their job principal job
is to connect with you consumers

they have the job of convincing
you that when you think

about it maybe even when you don't think
about but when you should think about

having a drink that you want one of our
brands that's their job advertising and

consumer pull we're all about
manufacturing distribution logistics and

selling selling to key customers so

they maintain the consumer piece of it we
focus on customer so Wal-Mart our customer

in Europe it's Tesco Sainsbury
in France it would be

Carrefour but
it's also Sally's pizza parlor or

Domino's anybody that selling the products
they are our customer so that's

the difference here in the United States
if you see a big red truck that belongs to

the bobber if you see a big manufacturing
facility that belongs to the bottom or

if you see an advertising meant on
television that's from the Coca-Cola

company Global sponsorship that's
a Coca-Cola company so it's interesting

relationship we could spend the rest
of the day talking about why it exists.

But it it really stems from one
hundred twenty five years ago when

the Coca-Cola Company begin
to expand their business

first in the United States and then
globally this franchise system that it's

called was the way it developed and if you
look at the map today around the world

you'll see there are big what I've
listed here are the big boppers.

Around the world you'll
see Coca-Cola Enterprises

sitting there in Western Europe will see
Coca-Cola refreshments sitting here in

North America I'll tell you a little
bit about that because up until October

the first of this year that was us
also cocoa enterprises some of you

might have heard of some of these other
Coca-Cola companies there's Coke fems

in Mexico there's Coke Hellenic in
Athens Greece or coke Amatil in

Australasia they're all publicly traded
companies big companies again just

to put it in perspective the Coke system
globally has about three quarters of

a million people who work in that
system and under fifty thousand of

those people are in the Coca-Cola company
some seven hundred thousand of them are in

the bottling business so you can see
the difference between the brand owner and

then the company that's
doing the manufacturing So

OK this is the territory we had up until
October the first of this year and

we sold it in a paradigm shifting
transaction to the Coca-Cola company.

This is me and the C.E.O.

of the Coca-Cola Company literally two
blocks down and four blocks across that's

where the Coca-Cola company headquartered
that's moved our Can't he and

I spent the better part of two years
as well as our teams negotiating this

transaction that actually under
which we sold our North American

business to the Coca-Cola company for
some fourteen billion dollars.

We did that.

Because the business in the United States
frankly needed restructuring

it needed stand standardizing and
simplifying it had a.

Twenty five years of heritage and culture
that wasn't quite right we were competing

with each other in certain channels if you
walked into a seven eleven and you bought.

One of these or one of these you
would have bought it from my company

if you bought a fountain
product in the cup and

by the way you might have paid
a dollar thirty nine for this and

if you'd twenty ounces and if you'd bought
thirty two ounces in a fountain Cup You

might have paid ninety nine cents and that
would have come in through the Coca-Cola

company we were literally competing with
each other lots of inefficiencies and so

after two years of negotiation we agreed
to sell our business in North America coke

and we also got them to sell us to more
countries in Western Europe Sweden and

Norway which they had known for a number
of years that's not the standard model is

Coke doesn't own bottlers but generally
from time to time they do buy them and

then they ultimately standard simplify and
spin them back out to one

of the bottling partners and
that was the case with Sweden and Norway

the deal was pretty pretty interesting
from a financial standpoint I know

many of you are management students and so
it's a bit intriguing when you look at it

because what they did is they took nine
billion dollars in debt that we had

they took it all they gave us
the thirty five percent equity

that they owned in Coca-Cola Enterprises
they owned a third of our shares and

on the day of the transaction those shares
were worth almost five billion dollars

they gave back to us we then gave them a
billion dollars for Norway and Sweden and

so that was essentially the transaction
and then current share owners old share

owners of C.C.A. got once year in U.C.C.
in a ten dollar check.

So they were happy so

that was the transaction this is what
our business today looks like it is

Great Britain Holland France Belgium
Morocco I'm not Morocco Monaco Luxembourg.

And then Sweden and Norway it's not
a shown on there but one of the things we

negotiated with Coke was the right of
first refusal in Germany they actually own

Germany and they've spent the past fifteen
years buying up all the family owned

bottlers in Germany and so we have the
right over the next two years to negotiate

with them to buy Germany which of course
is the biggest market in the E.U.

and one that we're very excited
about talking with them about that

this gives you the characteristics of our
business Germany is a business that works

the business model there is the way it
should be it's the way the coke business

model tends to work in the rest of the
world China Brazil India those are markets

where the model works very nicely in
Western Europe it does too which is why we

thought this rather novel transaction made
sense get bigger in Europe keep it and

I'll give you a few reasons why we want to
do that because it's a great business and

then sell North America and

let Coke restructure it over
the next several years and

then who knows what they'll
do they may well choose to

spin it back out at some point but
anyway this is the business they were in.

Let's take a look at the next slide one of
the things we did a joint C C E five years

ago and and
as you heard I had spent the ten

previous years in Europe
three of us spent as C.E.O.

of end which is the world's largest
brewer and while I was there we put

into a brew an amp from Brazil together
and after I left this one they bought and

Hauser Bush before that I was
a cabaret Schweppes as chief operating

officer in London for seven years and
one of the things that I had learned

really over a number of years
was if you got to be successful

in business you got to have a very clear
view of who you are where you're going and

how you're going to get there and you've
got to be able to put it all on a page and

you've really got to be able
to communicate it crisply and

Sassoon plea to everybody in your company
as well as to investors and that's what

this is we've only made a few minor
tweaks to this after doing it the purse.

Four months I was there it says who
we are we aim to be the world's

best beverage sales and customer service
company that's our lifeblood and

that's right across the top and there are
three things we have to do to do that and

to win every day we've got to
have the best brands we generally

depend on the Coca-Cola company to
supply those brands we want to be either

with the number one or strong number two
brand Caddick in every category in which

we compete we can't win and in our view
unless we have number one or stronger.

We want to be our customers most
valued supplier we want Tesco or

Sainsbury and Great Britain or
delays in Belgium.

Carrefour in France to say of all
the companies that supply us with

products Procter and Gamble General
Mills Unilever Nestle Coca-Cola system

Coca-Cola is the best that's what being
the most valued supplier is and you

have to do that through technology through
information through relationships and

through convincing them that our business
is their most valuable category and

then thirdly and just as importantly
is to have the best people in the right

jobs in a truly diverse and
inclusive culture the net result of all of

that is consistent predictable profitable
growth which is what Wall Street

which is one analyst love
the other thing that I could go

spend a lot of time on this chart I don't
have time to do that but what I would say

you will see one other thing superimposed
in the Coke bottle on the left.

And that is sustainability corporate
responsibility and sustainability is near

and dear to my heart personally as well as
to our company I'll chat about it a little

bit at the end but importantly it's not a
strategic pillar it's not one of the three

It's superimposed across everything
we do we don't think about anything.

A marketing investment a planned
investment nothing do we consider

without thinking about the sustainability
characteristics of that decision so

this is guided our thinking.

And with new C C E We have more
aggressive financial targets then we did

with legacy C.C. legacy here what I mean
it's the old combination North America and

Europe and you see C.E.
is our new Western European business and

you'll see numbers that
don't look that different.

But believe me to do this year after year.

And to do it consistently is
very difficult just to put it in

perspective if you look at those revenue
growth of four to six percent every year

operating income growth of sixty percent
high single digits earnings per share and

return on invested capital in improvement
in that which means how well we're using

our asset base at least twenty basis
points to put it in perspective if you

look at the Fortune five hundred companies
two percent of them two percent of them

have achieved those new numbers for any
five year period out of the last twenty.

So it's tough it's really tough and we've
said that's what we're going to do and

that's not just internal we've
said that the Wall Street and

you know we've said we will do
that quarter after quarter.

And what's been the reaction like I know
you all know October two thousand and

eight was a fairly dark period of time the
market was cratering we were actually in

the middle of a really challenging
period of time in North America

many of you when you went in and
had to pay five dollars a gallon for

gasoline you weren't buying
a dollar forty nine coke and

we in North America make a lot of money on
this package you were going to Wal-Mart

buying for twelve packs for ten bucks and
we don't make much money when you do that.

So it was a dark time in in
our company's history since

then we've negotiated this transaction and
we've performed incredibly well in

the market and so to give you some sense
of what's happened the Dow and the S.

and P.
over that same two and

a half year period are up sixty two.

Percent and we were up three hundred
ninety percent so I would say we have some

very happy investors this transaction has
gone over incredibly well with them and

it's all because again Europe's
a great place for us to do business.

And we've delivered.

One of the things we've just done
which is kind of interesting again in

a transatlantic relationship is we just
announce that two weeks ago in fact I had

a meeting with the French finance minister
whose picture is here Christine Legarde

one smart and savvy person and

she is really excited that we
are announcing a secondary listing.

On the Paris Euro next
Stock Exchange what that will do is

it gives us greater visibility in Europe
but it also makes it a lot easier for

people in Europe particularly
individual investors like you or

like you might become two to invest in our
company obviously in today's world you can

virtually invest just about anywhere but
if you're an institution particularly but

if you're an individual
it'll be a lot easier and

so you see me here on C N B C The
gentleman that runs our European business

was on a French television station
interesting was very excited about it so

this will all happen some time in May so

I thought before any further edge are you
three European commercials one for

Coke one for Coke Zero which isn't
a huge success it's a big success or

in the United States it's an even
bigger success relative to Europe and

then finally for Banta So let's take
a look at these three commercials.

So hopefully.

Those three commercials I'll give
you some idea of the differences.

In positioning and
nuances between Europe and

the United Sates a lot more sharper
edges to advertising in Europe

which I'm sure many of you know
when you've spent time over there.

Before talking about why you're
such a great business model for

us just to comment on why we remain
headquartered here in Atlanta

because that's a fairly
obvious question Will G.

want to when you move everything to Europe
and the three reasons for that one is

our board really thought it was important
to have continuity of management the.

We're happy with the least for now with me
and with our senior management team and.

They wanted assurance that we
were not going to go anywhere so

we signed multi-year agreements that will
stay around because investors obviously

have gotten to know us and trust us and
so Continuity Management number one or

two we really like the idea of being
traded principally on the N.Y.S.E..

Generally speaking you get an extra
half to one point of multiple.

Terms of P.

E.
ratios being on the N.Y.S.E.

as opposed to European exchange and so
even though we are European business

we like staying on the N.Y.S.E. and
a lot of index funds would had would have

had to have traded out of us if we
no longer were a member of the S.

and P.
five hundred for example and

then thirdly the syntax issues so that's
the reason we're here we will be here

indefinitely we have small corporate team
of about one hundred here in Atlanta and

then we have the other thirteen
thousand employees in Europe and

we all spend a lot of time going back and
forth as you would

expect because the business over there
now our European business is to rivet and

you might say why well here are a whole
bunch of characteristics I'm going

to read through this list you can see them
what I'm going to do is take them kind of

wanted to time it just quickly flip
through the brands we have undeniably

the best beverage brand portfolio not
only in Europe but but in the world and

you look at these brands most of them are
coke brands we have a couple that aren't

Coca-Cola is not in the ocean spray space
nor are they in the Capri Sun space and

we have both of those brands we did street
view in Europe because they really feel

feet they fill important new shoes for
us so through if it brands.

Growth.

What's the best predictor and question

who is going to rise to the equation what
is the best predictor of the future.

Your media past you've got.

It's always true it's a life lesson best
predictor of the future is the past and

this is what we've done in terms of growth
in Europe over the last several years so

we've been growing it's a good thing to do
we ought to be able to continue doing that

operating profit growth very consistent.

This is all about market share and in the
world you know frankly it doesn't matter

whether you're talking about consumer
packaged goods like we are or

whether you're talking about any other
business market share is so important and

relative market share is even more
important because it gives you the ability

to control the store shelves to interface
with the retail trade to take pricing

activity before the competitors it's
a huge advantage and what you see here.

IS IN THE ENTIRE in a R.T.D.

category we've got nonalcoholic ready to
drink category so that includes everything

it's water you know it it's all
that stuff brand Coach as you can

see has a commanding sheer in each of the
markets and our principal competitor here

in the United States is only on the chart
in one of the markets and that's obviously

a very good thing relative market
share really a good place to be.

Per capita consumption we look at
this chart as a glass half full

charge per capita consumption
is how many servings per person

per year they have Coke products and
you can see in the United States and

Mexico are really high Europe on average
is half half of the United States

which says the opportunity to
share grow is is much higher and.

I mentioned about being the most
valued supplier here's where we

are this is a completely.

Independent study done
by an independent group

where retailers Tesco Sainsbury care for
the.

Right how we do versus Procter and Gamble
versus other companies Unilever Nestle and

you can see we're number one
in three of our countries and

number two in the other and Sweden and
Norway are new and we haven't rated

the we don't have the writing for them but
we will next year this is so important

because that's who we really are competing
against for sure mine and share of space.

And the other thing in Europe
that's really good is we have

a distribution system which
which can be hybridized and

optimized by market we don't have that
in the United States here if you buy.

This product wherever you buy it it is
going to it is going to have come to that

particular store on a truck
own by the bottom or

and in Europe that's and that's part of
the reason this whole market here needs to

be streamlined and standardized in Europe
that's not the case that's called a D S D

system it's incredibly powerful but
it's also incredibly expensive and

in Europe the good news is we can optimize
that by channel by customer by package and

so is you'll see we have some markets
like Belgium like Norway like Sweden

which have a relatively
high percentage of D.S.D.

but we have another set of markets like
France and Holland where we don't use it

at all we use third party carriers and
that's a lot less expensive.

And here's another relative consumption
chart in the United States total

in A R T D per capita consumption
is twenty five percent higher than

it is in the whole of Western Europe what
that means is Americans are consuming

a lot more purchased beverages Europeans
are consuming a lot more tap water and

that means we've got an opportunity with
this kind of a difference to go in and

actually convince a lot of them to buy
beverages as opposed to tap water.

This shows how much of
the category growth we're cap.

We're capturing it last
year the in a R.T.D.

market in the whole of our business
grew four percent which by the way

again is a pretty good growth rate
to have one billion dollars is

the total category we capture half of
that so half the total category we got

everybody else is in the beverage
business out there got the other half and

if you look at the sparkling business
which is where we really shine we captured

three quarters of the entire category
growth that's a great place to be.

Now what are we doing in two thousand and
eleven and two thousand and

twelve to really drive our business will
to I mean there are a lot of things but

I thought I would mention two of them I've
already mentioned the coke hundred twenty

twenty fifth anniversary you're going to
begin seeing in the next two weeks if you

haven't already all kinds of activities
around one hundred twenty fifth birthday

it's going to be awesome and it's going
to be exciting and it's going to really

drive our business in Europe and it's
really going to drive our business here so

I won't go through all the activities but
it is going to be a very exciting time

the other thing is if you haven't made
plans yet to go to the two thousand and

twelve Summer Olympics in London
which is obviously our territory

I was just there two weeks ago they
just put the final piece of sod

in the stadium that's how on
track this whole experience is or

they're ahead of schedule it's
going to be the best summer

Olympics ever it's going to be very
different than Beijing you have when you

scattered all over Great Britain
the hardest ticket right now I don't

know what the hardest ticket to get is.

What it is now now now.

Big volleyball women's beach
volleyball which will be played

in Hyde Park I mean this is
nothing short of amazing so

then you is all over Great Britain
it's going to be incredible.

It's also going to be the most sustainable
the greenest while it'll be red on one

hand it's going to be green on the other
hand it'll be the greenest Olympics in

history by a long shot all over the cooler
is that or there will be a gypsy free

will have our new energy management system
all the products that are produced will be

from plants that have zero
waste zero landfill will be

using uniforms for all of the torchbearers
have forty five hundred torchbearers and

they will be running in uniforms that are
made completely of recycled plastic and

it will be quite a quite
an expanded look just like normal

clothes by the way we did the same thing
in Vancouver so they were terrific Now

those are the two activities I thought I'm
mentioning closing out how to just talk

about sustainability it's near and dear
to everything we do these are our seven

C R S focus areas three of
them are environmental.

Four of them are social and
just to give you some examples

of some of the commitments we've made as
part of what we call commitment twenty

twenty We've said that by two thousand and
twenty we will either reuse or

recycle one hundred percent of every
package every product that we make and

that's a pretty awesome challenge
considering that we've got a long way to

go we think it's our responsibility to
guide the industry and to get us there we

have said to our stakeholders that we
will use only one liter of water for

every one leader we sell which means
not only can we not waste anything but

we're going to have to engage in some
pretty serious for replenishment

projects to get the last twenty percent or
so which is impossible to.

Totally capture and then finally we've
said we're going to reduce our carbon

footprint by two thousand and
twenty by at least fifteen percent and

that's an absolute number that's in
spite of the fact that we intend to be

selling twice as many things twice as much
product and so an absolute reduction of

fifteen percent would mean a reduction
of about eighty or eighty five or so.

And we're looking right now at whether
those goals are aggressive enough we

we got them a year and a half ago and

frankly we're we're thinking that maybe
they need to be even more aggressive.

We've been pretty successful these
are some of the awards we've

received in the sustainability
area it is I think fair to say

that sustainability is a journey you
know it's a it's not a destination

all these are our indications about
how well we're performing but

let me give you a couple of examples we've
been rated by Newsweek magazine they

they're one of the foremost writers of
green companies as the number one food and

beverage company in the Fortune
five hundred in sustainability for

the past two years in a row you see
a number of others on your Marian

doors leading award in France Sunday Times
is one of the ten best green companies in

the U.K. We're one of the global one
hundred on most sustainable company so

a lot of lot of awards but
at the end of the day

they're just an indication about how
serious we are on sustainability.

If you want more information on our
company like most companies today we have

lots of different media sources for you to
go to let me just wrap it up and say that

what we really focus on more importantly
than anything is our employees and

getting our employees engaged in doing
what we're doing we do an employee

engagement survey or every two years
we did one in zero five zero seven and

nine will do another one in eleven
the change we made between seven and

nine a seven and nine in the fall
was nothing short incredible and

sustainability was a big part of
it obviously career options career

developments a big part of it pride
in your company's big part of it but

sustainability was the number two
driver in employee engagement again

you probably know this but
if you don't there is a huge correlation.

Between business performance and employee
engagement how your employees feel.

About the company so we're doing it again
this fall and honestly we think we'll

have moved right up into the top tier of
companies with top levels of engagement

and that's what it's all about it's having
pride it's having commitment it's having

intensity it's recognising that in
business just like in sports frankly just

like in life coming in second is losing
it's clearly my view that's my team's view

we set out to when we set out to do
it the right way with integrity but

we aim to win and everything we do in our
employees understand that so thank you so

much to all of you for having me here
today it's been a real pleasure thank you

Arthel.

Frederic.

You should see commercials and I was
wondering where do you think these the.

Need for c c e to advertise if D.C.

C actually contains a brand do you
have actually marketing budgets and

do you have responsibly to advertise
in the markets where your you so well

the question is What about advertising
since we are not responsible for

consumer connection and
the Coca-Cola company is and

it's a good question what we do is we
have what I would call a and inextricably

linked relationship with the Coca-Cola
company it's somewhere between eighty and

ninety percent positive and probably ten
to twenty percent confrontational which

is good it's the it's the dynamic
that makes our business and

our business relationship so good.

It was just in Brussels last week in our
Brussels headquarters we have the Coke

probably have one hundred
fifty Coke employees and

probably five hundred of our employees
are all in the same building and

we work seamlessly together so
day to day our employees don't think about

which company they're part of the
advertising is from Coke they did that but

we were very involved in in thoughts and
ideas and.

Gesture and just like they're very
involved in what kinds of programs and

consumer promotions should we be running
with Wal-Mart So it's a very dynamic and

collegial kind of situation so
you're right that they pay for

those advertisements on television
we don't just like we pay for

building the display
in Carrefour in Paris.

You see sixty you walk through a care for
and I was just in.

Fontainebleau recently and went to.

Kara Cora C O R A which is
a big big store in France and

we had sixty two we called sixty two
points of interruption in that store and

that means our products are available at
sixty that's a hyper markets a big store

but again that's our job the Coca-Cola
company cares though when when I go on

tours and I probably go with Moto our Kent
and his team at least four times a year

in different you know one or two day
market visits we look at stores and

he's as concerned about what kinds of
displays we have and what the pricing we

have as we are so again it's a very
dynamic and collegial relationship.

Yes sir with all your operations now
in Europe is there any do you see any

chance down the line that you would move
the C C headquarters over there as well or

alternatively D.C. yourself trying to get
back into the North American market and

has good question what about moving the
headquarters to Europe what about coming

back into North America both
are possible I think the first one is in

in terms of the total headquarters moving
to Europe unlikely because of the reasons

I mentioned I think there will be
a migration you know and we've been very

upfront with our people the hundred people
who are in our corporate headquarters I

think over the next three to five years
that number's going to go down we already

have about ten of them who are slated to
move to Europe or whose jobs ultimately

will move to Europe and so I think over
time that will come down there's nothing

to print on second question there's
nothing to preclude us from come.

Back into North America that
was part of the contract and

frankly we could come back in as a Coke
bottle or we could you know come back in

in another business area we constantly
from a strategic standpoint are looking at

where do we want to go we have a massive.

Predictable cash generating machine
when you look at our economic model and

we're I didn't go through it but we're in
the middle right now of a billion dollar

share buyback program which against one of
the reasons or shares share price has done

as well as it has and
as we think to the future we can continue

buying back shares and spinning cash
off in a fairly aggressive fashion but

we'd like to do some more acquisitions
as long as they create value Germany I

mentioned is one we have that on the table
there are other markets in Europe we don't

own Italy Spain Ireland
Switzerland Austria

all of those are owned by different
bottlers and we're they interested in

talking with us about them selling we'd be
interested in talking about buying as long

as we created value relative to our base
business model coming back into the U.S.

would be a lower priority than any of
those but not out of the question just

just as a follow up to that what about
India and China were the real growth Bork

really or well you know again what about
India and China is the question and

I would say again it is I get asked
this question all the time and

one of the things you have to keep
in mind Coca-Cola does business

in more countries today than there
are countries in the United Nations so

any country you want to think
that the U.S. trades with.

There's a Coca-Cola bottle or
there in fact most of

the ones we don't trade with
there's not necessarily bother but

you can still buy Coke somebody
gets it in there somehow.

Which means if you're going to
think about India or China or

Brazil it's all about working and

they go shooting with the guy that are the
God of the or the people who are there

because they would have to want to sell
for us to buy wood would we like to

have some diversification to our portfolio
it would investors like to see the.

That probably.

And would that be a good thing
again at the right price yes but

our core competency as
a company is North America and

Western Europe so and
having run businesses when I

was it in Bevan Cadbury I was I was in
Brazil eight times my last year with and

because the beer business is
such a big part of the business.

And the core competencies you
need to run a developing market

business are very different then
you need in Western markets and

in the United States we
have to think carefully.

Got one right here in the we've
got a mike over here that we.

Could you talk a little bit
more about your goals for

sustainability you mentioned that
you wanted to get down to a one

to one leader ratio which
is very aggressive and so

could you speak about the innovation that
will need to go into that to make that

go happen yeah the question is what it
would kind of innovations are are needed.

Particularly as they go about our
environmental sustainability goals and

specifically the question was on water
we're already the best at c c In Europe

we have the best system for
water management

in the Coca-Cola world we have over the
last five years brought our water usage

ratio from about one point six down to
about one point three five we've done that

by replacing all of the water renters in
our plants by putting in water collection

cisterns by doing a whole host of
activities most of which actually pay for

themselves we've got a couple plants in
France that are down at one point two

We think that's about as low as you can go
I mean we're not wasting anything and so

I think we're going to you're going to
see as we get down to one point two And

that final twenty percent the only way
we're going to get there is to actually

invest money in replenishment projects
maybe even in other parts of the world

to be able to say that we actually
got the water neutrality so

I think that's what will the.

Have to do recycling and
reusability is different we've got

very good recycling programs in place
in Belgium and Holland we don't do so

well in Great Britain France is halfway
in between Great Britain's a lot like

the United States to throw away society
and we've got to do a much much

better job we just invested seven and
a half million dollars in a plastics

reprocessing plant in Great Britain so
we think that's a big first step but

again we can get there and in recycling
and in reusing it in terms of energy.

Interestingly.

We've calculated our carbon footprint
we know what contributes to its plants

vehicles packaging and coolers and
I don't know what you'd guess this or

not but of all those four the one that is
the biggest challenge for us is coolers

we have six hundred thousand pieces
of cooling equipment in Europe and

a lot of those are open door coolers and a
lot of them are older style from an energy

standpoint and so we're going in with
much more energy efficient coolers in

the process of putting doors on all of our
Coors putting in light saving techniques

that turn the lights off and consumers not
around so major energy saving opportunity

there I guess the final comment you
know I remember when we get started on

this whole sustainability journey five
years ago a couple my board members said

who's going to pay for all of this
how do you justify doing it and

I said then well I think it's
the right thing to do so

we're going to do it anyway but honestly I
think what's going to happen is when you

put smart bright creative people to
work on something that's as important

as sustainability they're going to figure
out ways of making the economics work

when you save water when you
reduce energy consumption when you

recycle packaging all of those
things save money and so and

that's what's happened I would say
somewhere between ninety five ninety seven

ninety percent of all the projects we've
done in the name of sustainability

have been economically justified with
a hurdle rate above twelve percent.

So that's a good.

QUESTION Right in the middle.

You just focus a lot on the environmental
aspects of your current

social responsibility could you focus
on me and give examples if you're.

Where the social side and

maybe in the health concerns
that have come up recently.

What was the last thing I mean some of
the health concerns health care recent.

We've got a variety of different social.

Goals one is the community which
we think is very important for

us to be involved in Coca-Cola
is synonymous with community and

whether it's sponsoring education or
the arts or helping with sports

we think community involvement on a very
local basis is critically important.

Product portfolio is the place where
we think that it's very important for

us to have consumer choice so
that consumers can make the right decision

where one of the few categories frankly
if you think about it that actually

offer low calorie and no calorie versions
that actually taste very good and

in fact if you look at caloric
consumption from our brands today and

compare it to in years ago in our markets
it's actually on a per capita basis

down and that's because
Diet Coke Coke Light in Europe.

Coke Zero Vitamin Water zero and
waters all of those brands are growing and

so the other thing we think it's
really important for consumers to make

informed educated decisions we now put
caloric content on the front of every

principle display panel so they can see
how many calories are in this product and

can make an informed
decision we in Europe and

in the United States have taken every
full calorie soft drink out of every K.

through twelve school in the country we
did that voluntarily we and our principal

competitors working together we thought it
was the right thing to do and in fact you

can't buy any carbonated soft drinks in
any schools except in high schools and

those are going to be diet products so
again.

And you know we we knew there was a huge
groundswell of concern about that and so

we've we've responded appropriately I
think in days to come what you're going to

see are major advances in sweetener
technology so it will be even more

low calorie and no calorie products out
there which is which is a good thing.

I guess a final comment is we think
positively which is again one of our

social goals is really important and
so we're going to be investing

lots of money along with the Coca-Cola
company to try to get people moving again

when you look at what's going on in
our society in the in the health and

wellness issues that we're dealing with so
much of it is all about simple caloric

content calories in calories out and we
have people sitting in front of T.V.'s or

computers or P A's and not moving around
not going out and playing football or

kick the can like kids
thirty years ago did and

we've got to get people moving so and
we've also got to get healthy eating and

drinking as a part of it so we understand
we have a huge responsibility there we

think we're a part of the solution
not a part of the problem and

we aim to be a very significant
part of the solution going forward.

And this is our own this question
also US do with the sustainability

I know that some consumers will base their
products selections on whether a company

is doing good things for the environment
do you see the companies that you sell to

since you don't so directly you consumers
deciding to choose your product because of

the impact you're making Yeah the question
here is what about the companies to whom

we're selling our products how do they
care about sustainability in the answer is

they care a lot and if we don't do
what they want us to do we won't

be able to supply them we will be able
to sell to them if you look in the U.K.

there are two companies that
are absolutely the forefront

of sustainability Tesco which is
the biggest retailer in the U.K.

and then Marks and Spencer which
some of you may know about but

historically has been a total private
label their own brand company.

Those two companies or absolutely at
the vanguard of sustainability just

like Wal-Mart is here in the United States
and again to give you an example of

four years ago when we Scott was a C.E.O.

at Wal-Mart before Mike Duke of course
was a friend of the Georgia Tech grad but

when when when Lee was there he got really
focused on sustainability early on and

I think you all know that it
had on the back to Wal-Mart but

he decided about three weeks in advance of

an event that he wanted his top three
hundred suppliers their C.E.O.'s and

their chief sustainability officers to
come in to Bentonville Arkansas for

a meeting well two hundred fifty of
the three hundred of us showed up

because Wal-Mart told us in that meeting
what we had to do to help them reach their

sustainability go in the same things true
in Europe so the answer is yes yes yes and

just to make it clear we do the same
thing now with our suppliers so

whether they're glass of pliers or
ingredient suppliers can suppliers you

know the historic procurement model was
you know Jack if you're going to sell me

a glass I got three things I want to talk
about the price of quality and service.

Therefore today it's price quality
service and sustainability and

if you don't talk with us about
sustainability if you don't

do the kind of things that we want you
to help us do in terms of you know for

example this this package has thirty
five percent less plastic in it

today than it did just eight years ago our
suppliers worked with us on getting there

we said you to figure out how to do that
or we're going to go to somebody else so

it is sustainability and if anybody
doubts it it is not nice anymore it is

absolutely mainstream in those companies
out there that are still thinking of it as

nice there be out of business because it
is so important and particular the bigger

companies all recognize just how critical
it is the future of our our planet.

Yes of the.

Operation.

Derby question is all about currency
commodities do we had to do we cover do we

engage in arbitrage and the answer to
both of the let me start with currency.

On a trend what we call a translation
basis we don't do any hedging or

covering every month we have results in
pounds in pounds sterling in the U.K.

U.K. We have Korea uro's And then of
course in Sweden in Norway we have their

UK currencies every month we translate
translate those back into dollars and

are investing groups don't want us to
hedge on that we just translate it and

for example we're going to go out
with an earnings release next.

Not next week but the next week and

we will say what we think the anticipation
of currency benefit or negative result for

the balance of the year would be relative
to budget rights and December thirty first

based on where they are now and if they
were to continue where they are and

as most of you know right now the euro's
actually strengthened over the years so

there's a very significant
positive translation impact for

us assuming right stay the same
which you never know so

translation don't hedge in terms of
commodities we cover a lot so aluminum.

Sweetener sugar and in Europe we don't
use high fructose corn syrup we use

beach sugar and cane sugar steel.

We cover and we are about eighty
five between eighty five and

ninety percent covered for

everything for the balance of this year
which is why we said at a recent investor

conference that we're very confident we
can bring in our total commodity cost

this year in the three a three to three
and a half percent range even though

some of our competitors are talking about
much higher numbers we're already began.

To layer on coverage in two thousand and
twelve.

Probably twenty percent two thousand and
twelve P.

The biggest problem we have with
commodity costs is P.T. and P.T.

is a direct rivet of oil and so I am and

it's not a very hedge will it's not a cut
you can go out and buy cover on plastic

Very well you can use oil as a surrogate
but it's not particularly good and so

are one of the things we're doing here
which are very excited about you seeing

these bottles I have a green cap it means
it's a plant bottle it's thirty percent

non fossil fuel based it's
going to be from molasses and

our hope is over time that it will
become one hundred percent non petroleum

based and we can totally get ourselves
plastic and plastic not from oil and

is totally regrettable and so
recyclable so we're very excited about.

That as your question it's a complex
subject as you probably know but

we engage in the bottom line is very
sophisticated hedging techniques covering

techniques but what we never take
risks on speculating on currencies.

Out.

There.

You know this is my question was about the
leadership and how do you become a global

elite or how do you go from different
cultures and succeed as a leader.

Present about leadership.

And I love to talk to leaders and

we didn't in the interest of time have
time to do that today I don't think.

Frankly that even though you've got to
be very sensitive to differences in

culture styles.

And political situations my sense
is leadership is pretty basic stuff

that is it's pretty easy to to learn and
very important.

Leadership in a simple
word is is the ability.

Convince a fairly ordinary group of people
to go off and do some very extraordinary

things and to do it through things
that they would not normally do.

That's what leadership in my view
is all about if you say one of

the characteristics of great leaders you
could list a few one of them is being able

to lay out a compelling vision
of where you want to go.

Truly really important to
be able to do that and

how you're going to get there
the second one is to manage and

to lead with empathy transparency
integrity and honesty.

Thirdly it would be to communicate
communicate communicate there's no

such thing as over communicating.

You may think you're over communicating
you're not you've got to communicate every

day every place in every conceivable form
whether it's digital technology whether

it's television whether it's an e-mail
you've got are walking up down the hall.

Fourth is you've got to reinforce
positive behavior when it happens then

you've got to deal with negative behavior
and the consequences there too when that

happens and finally and very importantly
you've got to walk the talk you've got to

model the behavior that you want to see
in your people you do those things and

EULA you'll be pretty successful and

the final thing is is to tell people
what you're going to do go do it and

occasionally hit them
with a modest positive

surprise that's the reason our share
price chart is where is because now for

fourteen quarters that's precisely
what we've done one more yes yes.

I would like to know what is the biggest
challenge you feel your company faces and

how do you then inspire your employees to
meet that challenge Yes that's a tough one

the biggest challenge that we
face it's a really good question.

And there are whole variety of
things that you know we could and

I don't think there is just one I think

Western Europe right now is obviously
in a bit of a precarious position.

In terms of sovereign debt
levels in certain countries

most notably Greece Ireland Spain and
Portugal.

Where's all that going to
go I don't have a clue and

you know obviously we don't have any
control over that but that's a risk and

word that I mean if you think of a very.

Very difficult situation if
the euro were to were to fall apart

that would not be good for anybody so
I don't I don't think France and

Germany are going to let that happen.

But I guess if you think about
nightmare scenarios that

would be about as nightmarish
a scenario as you could come up with.

Commodity cost have spiraled very high but

frankly a guy just explained
our whole hedging technique and

I think we're about as good as anybody
to manage that and the other thing we're

very good at is when they do spiral out of
control we really know how to go in and

talk to the retailers about just how
important it is for us to raise prices

to cover those commodity cost because of
the value add we bring to the party so

again that one doesn't keep me awake
even though it it's a bit of a risk

taxation on beverages is an issue we talk
about the health wellness issues there

are a lot of people out there who
believe you can raise taxes on various

product categories and cure social
ills I say history is littered with

situations where that broadly never
happened and so you know we think it's

as I said far better for us to be part
of the solution than the problem but

that to get out of control I mean we've
had a few cities here in the United States

who passed acts as Detroit's a late
latest one that could happen but

again I think we'll we'll
manage through that.

And you know that those are the the kinds
of really tough situations I mean you

could think about other kinds of
health scares that could come about.

But we do a lot of job on risk
management and and I think we

we squeeze been a lot of time trying to
figure out what what the risks are and how

we're going to mitigate them and I've just
given you examples of the of the ones that

we have at the top of the list John thanks
for coming Georgia Tech today thank you.