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Panamerican Beverages Inc · 10-K · For 12/31/00

Filed On 4/2/01 2:58pm ET · SEC File 1-12290 · Accession Number 950157-1-252

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 4/02/01  Panamerican Beverages Inc         10-K       12/31/00   23:631                                    Cravath Swaine &...01/FA

Annual Report · Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                        141    715K 
 2: EX-3.2      Restatement of Articles of Incorporation              19     76K 
 3: EX-3.2      Amended and Restated By-Laws                          16     63K 
 4: EX-10.27    Credit Agreement                                      44    221K 
 5: EX-10.28    Credit Agreement                                      46    242K 
 6: EX-10.29    Account Opening Agreement                              7     35K 
 7: EX-10.30    Confirmation of Account Opening Agreement             12     50K 
 8: EX-10.31    Amended and Restated Credit Agreement                121    392K 
 9: EX-10.32    Joinder Agreement                                      6     23K 
10: EX-10.33    Stock Purchase Agreement                               5     21K 
11: EX-10.34    Customer's Outsourcing Agreement                      20     81K 
12: EX-10.35    Customer's Outsourcing Agreement                      20     82K 
13: EX-10.36    Customer's Outsourcing Agreement                      20     80K 
14: EX-10.37    Customer's Outsourcing Agreement                      20     80K 
15: EX-10.38    Customer's Outsourcing Agreement                      21     83K 
16: EX-10.39    Customer's Outsourcing Agreement                      20     83K 
17: EX-10.40    Customer's Outsourcing Agreement                      20     82K 
18: EX-10.41    Customer's Outsourcing Agreement                      19     75K 
19: EX-10.42    Employment Agreement                                  21    112K 
20: EX-10.43    Employment Agreement                                  21    112K 
21: EX-10.44    Severance Agreement and Mutual Release                 9     34K 
22: EX-21.1     Subsidiaries of the Registrant                         2     13K 
23: EX-23.1     Consent of Independent Public Accountants              1      8K

10-K · Annual Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Business Capital Expenditures Cash and equivalents Certain Relationships and Related Transactions Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Colombia Consolidated Results of Operations Currency Devaluations and Fluctuations Directors and Executive Officers of the Registrant Earnings per Share Equity Incentive Plan Exchange Controls and Other Limitations Affecting Security Holders Executive Compensation Exhibits, Financial Statement Schedules, and Reports on Form 8-K Facilities reorganization charges Financial Statements and Supplementary Data Forward-Looking Statements Inflation Item 1 Item 10 Item 3 Item 5 Item 7 Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Marketing Panamco Panamco Brasil Panamco Central America Panamco Colombia Panamco Mexico Panamco Venezuela Passive Foreign Investment Company Production Properties Quantitative and Qualitative Disclosures About Market Risk Report of Independent Public Accountants Report of Independent Public Accountants on Schedule Revenue Recognition Schedule II - Valuation and Qualifying Accounts Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Series C Preferred Stock Signatures Stock Option Plan for Nonemployee Directors Submission of Matters to a Vote of Security Holders Summary Compensation Table U.S Voting Trust 1999 Compared to 1998
1	1st Page
2	Item 1
"	Item 1. Business
"	Item 5
"	Item 10
4	Panamco
"	Panamco Mexico
5	Colombia
10	Panamco Colombia
"	Panamco Venezuela
13	Marketing
17	Production
24	Currency Devaluations and Fluctuations
25	Item 2. Properties
26	Item 3. Legal Proceedings
"	Item 3
27	Item 4. Submission of Matters to a Vote of Security Holders
29	Exchange Controls and Other Limitations Affecting Security Holders
30	U.S
31	Passive Foreign Investment Company
34	Item 6. Selected Financial Data
36	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 7
"	Inflation
38	Forward-Looking Statements
39	Consolidated Results of Operations
42	Panamco Brasil
45	Panamco Central America
47	Facilities reorganization charges
52	1999 Compared to 1998
57	Capital Expenditures
60	Item 7A. Quantitative and Qualitative Disclosures About Market Risk
62	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
63	Item 10. Directors and Executive Officers of the Registrant
68	Item 11. Executive Compensation
"	Summary Compensation Table
70	Equity Incentive Plan
71	Stock Option Plan for Nonemployee Directors
73	Item 12. Security Ownership of Certain Beneficial Owners and Management
75	Series C Preferred Stock
76	Voting Trust
77	Item 13. Certain Relationships and Related Transactions
80	Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
84	Signatures
87	Report of Independent Public Accountants
100	Revenue Recognition
101	Cash and equivalents
107	Earnings per Share
140	Report of Independent Public Accountants on Schedule
141	Schedule II - Valuation and Qualifying Accounts

10-K 1st Page of 141 TOC Top Previous Next Bottom Just 1st
Sponsored Ads...

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________

COMMISSION FILE NUMBER 1-12290

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

Republic of Panama Not Applicable
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

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

33126
(Zip code)

Registrant's Telephone Number, including area code: (305) 856-7100

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class: on which registered:
-------------------- ---------------------
Class A Common Stock, $0.01 par value per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definite proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K [ ].

The aggregate market value of the voting and non-voting stock common stock
held by non-affiliates of the registrant was $2,038,757,633 (computed by
reference to the closing price as of March 26, 2001).

The number of shares outstanding of each of the registrant's classes of common
and preferred stock, par value $0.01 per share, as of March 26, 2001 were:

Class A Common Stock: 119,002,164
Class B Common Stock: 8,888,432
Class C Preferred Stock: 2

10-K 2nd Page of 141 TOC 1st Previous Next Bottom Just 2nd

TABLE OF CONTENTS

Page

Part I

Item 1. Business
o Overview..................................................... 1
o Corporate Structure.......................................... 2
o Our Franchise Territories.................................... 4
o Beverages and Packaging...................................... 5
o Soft Drink Sales Share....................................... 9
o Sales, Distribution and Marketing............................ 9
o Raw Materials and Supplies................................... 13
o Production................................................... 15
o Competition.................................................. 15
o Employees.................................................... 16
o Franchise Arrangements....................................... 17
o Government Regulation........................................ 18
o Political, Economic and Social Conditions in Latin America... 19
o Currency Devaluations and Fluctuations....................... 22

Item 2. Properties....................................................... 23
Item 3. Legal Proceedings................................................ 24
Item 4. Submission of Matters to a Vote of Security Holders.............. 25

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.......................................................... 26
Item 6. Selected Financial Data.......................................... 32
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation............................... 34
Item 7A. Quantitative and Qualitative Disclosures About Market Risk....... 58
Item 8. Financial Statements and Supplementary Data...................... 60
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........................... 60

Part III

Item 10. Directors and Executive Officers of the Registrant............... 61
Item 11. Executive Compensation........................................... 66
Item 12. Security Ownership of Certain Beneficial Owners and Management... 71
Item 13. Certain Relationships and Related Transactions................... 75

Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K..78

Signatures........................................................82

10-K 3rd Page of 141 TOC 1st Previous Next Bottom Just 3rd

PART I

ITEM 1. BUSINESS

OVERVIEW

Panamerican Beverages, Inc. ("Panamco" or the "Company") is the largest
soft drink bottler in Latin America and one of the world's largest bottlers of
the soft drink products of The Coca-Cola Company ("The Coca-Cola Company" or
"Coca-Cola"). In 2000, our sales accounted for approximately 5% of the
worldwide unit case volume of soft drink sales of The Coca-Cola Company, or
the equivalent of one bottle in every case. Our 2000 sales represented
approximately 21% of the Latin American unit case volume of The Coca-Cola
Company's soft drink products. Sales of products of The Coca-Cola Company
accounted for approximately 89% of our net sales in 2000.

We have almost a 60-year bottling relationship with The Coca-Cola
Company. On November 1, 1995, The Coca-Cola Company designated Panamco an
"anchor bottler", making us one of their strategic partners in The Coca-Cola
Company's worldwide bottling system. The Coca-Cola Company has been a
stockholder of our company since 1993 and today beneficially owns
approximately 24% of our common stock. The Coca-Cola Company has two
representatives on our Board of Directors.

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

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

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

o Colombia
Most of the Country,

o Costa Rica
All of the Country,

o Venezuela
All of the Country,

o Nicaragua
All of the Country, and

o Guatemala
Guatemala City and surrounding areas.

These territories have an aggregate population of approximately 122
million people, or about 24% of the total population of Latin America. Within
these territories, we have the exclusive right to produce and distribute
substantially all of The Coca-Cola Company's soft drink products. We also
produce and distribute a variety of flavored soft drinks and bottled water
products under licensed and proprietary trademarks in select territories,
including Canada Dry products in Costa Rica and Schweppes products in
Venezuela. We distribute Kaiser and Heineken beers in our franchise
territories in Brazil. We also have the right to distribute Regional beer
throughout most of Venezuela, which we began distributing in the northeast of
Venezuela in early 1999.

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

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

CORPORATE STRUCTURE

HOLDING COMPANY STRUCTURE

We are a holding company and conduct our operations through tiers of
subsidiaries. The following chart shows our corporate structure and ownership
interest in our country level holding companies and describes their interests
in their bottling subsidiaries as of December 31, 2000:

PANAMCO

[Enlarge/Download Table]

-------------------- ----------------- ----------------- ----------------- ---------------- ---------------- ----------------
98% 98% 97% 100% 70%* 100% 100%
Panamco Panamco Panamco Panamco Panamco Panamco Panamco
Mexico Brasil Colombia Venezuela Costa Rica Nicaragua Guatemala
-------------------- ----------------- ----------------- ----------------- ---------------- ---------------- ----------------

Panamco Mexico
owns between 86% Panamco Panamco
and 99% of its Brasil Colombia owns Panamco Panamco Costa Panamco Panamco
bottling effectively 65% of one and Venezuela owns Rica owns100% Nicaragua Guatemala
subsidiaries and owns100% of its 100% of four of 100% of its of its owns100% of owns100% of
also owns 30% of bottling its bottling bottling bottling its bottling its bottling
Panamco Costa Rica. subsidiary. subsidiaries. subsidiary. subsidiary. subsidiary. subsidiary.
-------------------- ----------------- ----------------- ----------------- ---------------- ---------------- ----------------

---------------------
* Panamco Mexico owns 30% of Panamco Costa Rica.

As a holding company, our ability to pay operating expenses, any debt
service obligations and dividends primarily depends upon receipt of sufficient
funds from our majority-owned subsidiaries, which are in turn dependent upon
receipt of funds from their majority-owned subsidiaries. See "Item 5. --
Market for Registrant's Common Equity and Related Stockholder Matters --
Exchange Controls and Other Limitations Affecting Security Holders" for a
discussion of limitations imposed by exchange control laws on the payment of
dividends. At present, Mexico (since the beginning of 1999) and Costa Rica
impose withholding taxes of approximately 7.6% and 15%, respectively, on
dividends paid to us by domestic subsidiaries. In addition, Brazil imposes a
basic withholding tax of 15% on dividends paid to us by domestic subsidiaries
that are derived from earnings generated prior to January 1, 1996. The payment
of dividends by our subsidiaries is also subject in certain instances to
statutory restrictions or restrictive covenants in debt instruments and is
contingent upon the earnings and cash flow of, and permitted borrowings by,
such subsidiaries. In addition,

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the minority shareholders in less than wholly owned subsidiaries receive a pro
rata portion of all dividends paid by those subsidiaries.

SUBSIDIARY OPERATIONS

MEXICO

We own approximately 98% of the capital stock of Panamco Mexico, S.A. de
C.V. ("Panamco Mexico"), a Mexican corporation that in turn owns interests
ranging from 86% to 99% in five bottling subsidiaries that own and operate
eight soft drink bottling plants and two water bottling plants in Mexico.
Panamco Mexico also owns majority and minority interests in companies that
produce materials and equipment used in the production and distribution of
soft drinks. Panamco Mexico and its consolidated subsidiaries are collectively
referred to herein as "Panamco Mexico". In December 2000, Panamco Mexico
acquired 29% of the capital stock of Embotelladora Panamco Costa Rica, S.A.
("Panamco Costa Rica"). Panamco Costa Rica produces, distributes and sells The
Coca-Cola Company's products and distributes and sells Canada Dry products in
Costa Rica. Panamco Costa Rica owns and operates one bottling plant. Panamco
Costa Rica also owns a plastics business.

BRAZIL

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

COLOMBIA

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

VENEZUELA

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

10-K 6th Page of 141 TOC 1st Previous Next Bottom Just 6th

CENTRAL AMERICA

Costa Rica. We own all the capital stock (71% directly and 29% indirectly
through Panamco Mexico) of Embotelladora Panamco Costa Rica, S.A. ("Panamco
Costa Rica"). Panamco Costa Rica produces, distributes and sells The Coca-Cola
Company's products and distributes and sells Canada Dry products in Costa
Rica. Panamco Costa Rica owns and operates one bottling plant. Panamco Costa
Rica also owns a plastics business. We acquired these operations in 1995 and
1996.

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

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

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

OUR FRANCHISE TERRITORIES

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

[MAP OMITTED]

10-K 7th Page of 141 TOC 1st Previous Next Bottom Just 7th

MEXICO

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

BRAZIL

Our Brazilian territories, with a population of approximately 27 million
people or about 16% of the total population of the country, consist of greater
Sao Paulo, the third largest metropolitan area in the world, the contiguous
area of greater Campinas, the adjacent coastal areas of Santos, and Mato
Grosso do Sul.

COLOMBIA

Our Colombian territory covers approximately 94% of the population of
that country with a population of approximately 40 million people, and
includes all major cities.

VENEZUELA

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

CENTRAL AMERICA

We are the only company that has the right to distribute The Coca-Cola
Company's products in Costa Rica, with a population of approximately 3.8
million people, and in Nicaragua with a population of approximately 4.8
million people. Our Guatemalan territory, which has a population of about 5.4
million people, covers 47% of the population of that country, which includes
Guatemala City.

BEVERAGES AND PACKAGING

OUR PRODUCTS

We produce or distribute colas, flavored soft drinks, non carbonated
flavored drinks, bottled drinking water and beer. We produce and distribute
Coca-Cola products and our own proprietary brands. In 2000, 88.8% of the
products we sold were products of The Coca-Cola Company.

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

In Brazil we distribute both Kaiser and Heineken beers and in Venezuela
the Regional trademark.

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

10-K 8th Page of 141 TOC 1st Previous Next Bottom Just 8th

The beverage products we produce or distribute and that accounted for
nearly all of our sales in the period ending December 31, 2000 are listed
below:

[Enlarge/Download Table]

----------------------------------------------------------------------------------------------------------------------------
PANAMCO MEXICO PANAMCO BRASIL PANAMCO COLOMBIA PANAMCO VENEZUELA PANAMCO PANAMCO NICARAGUA PANAMCO
COSTA RICA Guatemala
----------------------------------------------------------------------------------------------------------------------------

COCA-COLA SOFT COCA-COLA SOFT COCA-COLA SOFT COCA-COLA SOFT COCA-COLA SOFT COCA-COLA SOFT COCA-COLA SOFT
DRINK PRODUCTS: DRINK PRODUCTS: DRINK PRODUCTS: DRINK PRODUCTS: DRINK PRODUCTS: DRINK PRODUCTS: DRINK PRODUCTS:
Coca-Cola Coca-Cola Coca-Cola Coca-Cola Coca-Cola Coca-Cola Coca-Cola
Coca-Cola Light Coca-Cola Light Coca-Cola Light Coca-Cola Light Coca-Cola Light Coca-Cola Light Coca-Cola Light
Sprite Sprite Sprite Hit Naranja Sprite Sprite Fanta
Sprite Light Diet Sprite Fanta Hit Pina Fanta Fanta Sprite
Fanta Orange Fanta Quatro Hit Uva Fresca Fresca Lift
Fanta Diet Fanta Lift Hit Manzana Lift
Strawberry Simba Hit Kola BOTTLED WATER: BOTTLED WATER:
Fresca Tai OTHER SOFT Hit Parchita OTHER SOFT Kinley Soda Shangri-la*
Lift Diet Tai DRINKS: Grapette Uva DRINKS: Canada Dry
Delaware Punch Kuat Roman** Grapette Kola Canada Dry Club Soda OTHER PRODUCTS:
Kinley Tonic Premio* Grapete Ginger Ale** Alpina Hi-C
BOTTLED WATER: Water Club Soda* Naranja Super 12* Powerade
Risco* Kinley Club Soda Grapete Pina OTHER PRODUCTS:
Fanta Uva BOTTLED WATER: Quatro BOTTLED WATER: Hi-C
OTHER PRODUCTS: Manantial* Frescolita Canada Dry Kapo
Keloco* BOTTLED WATER: Club K* Chinotto Club Soda**
Beat Crystal* Soda Clausen* Chinotto Light Canada Dry
Santa Clara* Quinada**
BEER: OTHER SOFT Alpina*
Kaiser** DRINKS:
Kaiser Light** Soda Schweppes** OTHER PRODUCTS:
Kaiser Bock** Aguakina Powerade
Kaiser Gold** Schweppes**
Kaiser Summer
Draft** BOTTLED WATER:
Heineken** Nevada

OTHER PRODUCTS:
Malta Regional**
Nestea**

BEER:
Regional**

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

* Proprietary to Panamco
** Products licensed from third parties

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The following chart shows the allocation of our net sales during 2000 among
the products described above:

--------------------------------
[ ] Coca-Cola 61%
[ ] Other Coca-Cola Products 26%
[ ] Other Soft Drinks 2% [PIE CHART OMITTED]
[ ] Bottled Water 7%
[ ] Beer 3%
[ ] Other Products 1%
--------------------------------

The estimated annual per capita consumption for 2000, 1999 and 1998 for
our soft drinks in each of our franchise territories is as follows:

[Download Table]

PANAMCO PANAMCO PANAMCO PANAMCO PANAMCO PANAMCO PANAMCO
MEXICO BRASIL COLOMBIA VENEZUELA COSTA RICA NICARAGUA GUATEMALA
------ ------ -------- --------- ---------- --------- ---------

2000........ 369.0 207.0 91.0 154.0 174.0 112.0 86.0
1999........ 349.1 214.3 91.4 153.6 180.8 112.0 87.0
1998........ 340.4 213.5 113.0 202.3 186.6 112.1 79.2

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

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

[Enlarge/Download Table]

2000 1999 1998
--------------------------------------------------------------------------------
TOTAL PERCENTAGE TOTAL PERCENTAGE TOTAL PERCENTAGE
NET OF TOTAL NET OF TOTAL NET OF TOTAL
SALES (1) NET SALES SALES (1) NET SALES SALES (1) NET SALES
--------- --------- --------- ---------- --------- ----------

Panamco Mexico
Total products of
The Coca-Cola Company........ $ 872,336 33.6% $ 718,980 29.8% $ 586,964 21.2%
Total other soft drinks........ 10,540 0.4 7,842 0.3 4,306 0.1
Total bottled water............ 91,970 3.5 68,350 2.8 47,211 1.7
--------- ------ --------- ------ --------- -----
Total Panamco Mexico......... 974,846 37.5 794,812 32.9 638,481 23.0

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[Enlarge/Download Table]

2000 1999 1998
---------------------------------------------------------------------------------
TOTAL PERCENTAGE TOTAL PERCENTAGE TOTAL PERCENTAGE
NET OF TOTAL NET OF TOTAL NET OF TOTAL
SALES (1) NET SALES SALES (1) NET SALES SALES (1) NET SALES
----------- --------- --------- ---------- --------- ----------

Panamco Brasil (2)
Total products of
The Coca-Cola Company...... 403,098 15.5 389,449 16.1 653,738 23.6
Total bottled water........... 16,976 0.7 14,715 0.6 19,050 0.7
Total beer.................... 76,414 2.9 96,519 4.0 225,163 8.1
---------- ---- ---------- ------ ---------- -----
Total Panamco Brasil....... 496,488 19.1 500,683 20.7 897,951 32.4

Panamco Colombia
Total products of
The Coca-Cola Company...... 332,354 12.8 337,333 13.9 422,075 15.2
Total other soft drinks....... 25,051 1.0 26,224 1.1 31,763 1.1
Total bottled water........... 29,315 1.1 33,457 1.4 41,974 1.5
---------- ---- ---------- ----- ---------- -----
Total Panamco Colombia..... 386,720 14.9 397,014 16.4 495,812 17.8

Panamco Venezuela
Total products of
The Coca-Cola Company...... 457,839 17.6 493,671 20.4 536,322 19.3
Total other soft drinks....... 24,340 0.9 16,051 0.7 14,355 0.5
Total beer.................... 33,674 1.3 2,570 0.1 -- --
---------- ---- ---------- ----- ---------- -----
Total Panamco Venezuela 515,853 19.8 512,292 21.2 550,677 19.8

Panamco Central America (3)
Total products of
The Coca-Cola Company...... 203,401 7.8 193,102 8.0 173,672 6.3
Total other soft drinks....... 13,393 0.5 10,573 0.5 10,183 0.4
Total bottled water........... 8,708 0.4 8,399 0.3 6,500 0.2
---------- ---- ---------- ----- ---------- -----
Total Panamco
Central America......... 225,504 8.7 212,074 8.8 190,355 6.9

Total consolidated net sales.. $2,599,411 100.0% $2,415,817 100.0% $2,773,276 100.0%
========== ===== ========== ===== ========== =====

------------------------------------

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

PACKAGING

A majority of our sales are made in returnable glass or plastic bottles.
Recently, we have increased the distribution of nonreturnable presentations,
particularly in Mexico and Brazil. In 2000, 48.9% of our products were
packaged in nonreturnable presentations compared to 51.9% in 1999. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". Our beverages are available in returnable presentations in
different package types including returnable PET bottles and glass bottles.
Our nonreturnable presentations include cans, nonreturnable glass and plastic
bottles and plastic bags.

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SOFT DRINK SALES SHARE

Soft drink sales represented 88.5% of our total 2000 sales. Soft drink
products are classified as either colas or other flavored soft drinks. Of our
total soft drink sales in 2000, the cola segment represented approximately
69.4% of our total soft drink sales.

SALES, DISTRIBUTION AND MARKETING

SALES

By selling our beverage products directly to 1,071,166 points of sale, we
believe we have one of the largest operations for the distribution of consumer
goods in Latin America. This network serves traditional small stores
(including small grocery stores, kiosks and roadside stands), supermarkets,
restaurants, bars, schools, businesses and distributors, with a total of
196,993 points of sale in Mexico, 147,562 in Brazil, 392,327 in Colombia,
208,237 in Venezuela, 34,278 in Costa Rica, 42,673 in Nicaragua and 49,096 in
Guatemala as of December 31, 2000. The mix of sales to these particular types
of outlets varies by country and is a function of the economics, demographics
and other characteristics of each franchise area.

The following table sets forth our sales volume as a percentage of
total sales volume of on- and off-premises consumption in each country
where we operate as of the end of 2000.

2000 PERCENTAGE 2000 PERCENTAGE
OF TOTAL OF TOTAL
SALES VOLUME SALES VOLUME
--------------- ---------------

PANAMCO MEXICO PANAMCO COSTA RICA

Off-premises sales....... 78.0% Off-premises sales....... 71.0%
On premises sales........ 22.0% On premises sales........ 29.0%
------ ------
Total................. 100.0% Total................. 100.0%

PANAMCO BRASIL PANAMCO NICARAGUA

Off-premises sales....... 81.5% Off-premises sales....... 88.9%
On premises sales........ 18.5% On premises sales........ 11.1%
------ ------
Total................. 100.0% Total................. 100.0%

PANAMCO COLOMBIA PANAMCO GUATEMALA

Off-premises sales....... 47.8% Off-premises sales....... 13.4%
On premises sales........ 52.2% On premises sales........ 86.6%
------ ------
Total................. 100.0% Total................. 100.0%

PANAMCO VENEZUELA

Off-premises sales....... 67.3%
On premises sales........ 32.7%
------
Total................. 100.0%

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

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

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

While most sales are on a cash basis, sales to certain customers such as
major supermarkets, fast food restaurants and convenience store chains, are
made on a credit basis with terms generally of 40 days on a consolidated
basis. Credit sales represented approximately 20% of total sales in 2000 and
1999. Credit sales are most significant in Brazil and Costa Rica, where they
represented 52.0% and 43.0%, respectively, of 2000 sales in each country.

DISTRIBUTION

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

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

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

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

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MARKETING

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

MEXICO

During 2000, Panamco Mexico continued its cold product equipment
placement program. At December 31, 2000, there were approximately 66.4 units
for every 10,000 people within our franchise territory. Panamco Mexico,
through its merchandizing club, provides training to its clients on its
merchandizing standards and display methods to ensure that our products
receive the best and most appropriate presentation.

During 2000, Panamco Mexico consolidated its "100 Meters Program", which
focuses on nontraditional, immediate consumption channels. Since the
initiation of the program in 1996, Panamco Mexico has increased its share of
sales by 9.0 basis points and has expanded its client base in urban centers.
Per capita consumption has increased 27.2%. As part of the "100 Meters
Program", Panamco Mexico created a number of parallel programs, including the
"Restaurant" plan, the "School" plan and the "Liquor Stores" plan. Under the
Restaurant plan, Panamco Mexico has been placing fountain equipment in local
traditional and fast-food restaurants. This gives our consumers immediate
access to our products. Under the School plan, Panamco Mexico provides our
products to young consumers in the schools creating brand preference at an
early age with innovative packaging. The Liquor Stores plan takes advantage of
the popularity of grapefruit-flavored soft drinks in the liquor stores segment
with strong merchandising and alluring point-of-sale material designed to
create preference for the Fresca brand.

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

In order to increase volume and perception of value among clients and
consumers, Panamco Mexico selectively provides particular brands, packages and
sizes and applies tailored pricing tactics in each of its channels based on
the preferences of the consumers in the area.

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

BRAZIL

In Brazil our marketing efforts were primarily focused on our "new
packages and presentations" programs that were introduced during the year. The
new presentations were strategically focused on certain trade channels and
points of sale supporting the consumer desire for new packages that appeal to
different

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consumption occasions. The most significant package launches were the 1.5
liter and the 2.5 liter presentations, as well as the multipacks for cans. Cold
equipment continued to support our ready-to drink program. The number of units
of cold product equipment we have in the Brazilian market are 31.7 units per
10,000 inhabitants in our franchise territory.

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

During the first half of 2000, the Company continued with its promotional
pricing strategy that alternated prices of our products every two weeks
depending on the channels or on the product (colas or flavors) for our 2 liter
PET presentation. The program came to an end in June and since then, thanks to
its packaging and product strategy, the Company has sustained its share of
sales at 55.7% of the soft drink market.

COLOMBIA

To ensure that both traditional and nontraditional outlets are able to
provide cold, ready-to-drink products, Panamco Colombia continues its cold
product equipment program. During 2000, Panamco Colombia reached a total of
45.2 coolers for every 10,000 people in our franchise territory. Panamco
Colombia currently provides cold products in 47% of its outlets.

As a result of our cold equipment strategy, our different marketing
promotions and a strong execution in the market place, our soft drink share of
sales increased to a new record of 68.5%, an increase of 1.8 points.

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

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

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

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

To maximize the efficiency of its distribution network, Panamco Colombia
continues to refine its distribution strategy by increasing the number of
presale and auto-sale clients and by significantly increasing distribution
through small shopkeepers. These measures have reduced the number of trucks
needed for each route and improved client satisfaction as well as truck
utilization.

VENEZUELA

As one of our newer subsidiaries, Panamco Venezuela continues to focus
its efforts on developing high-volume clients in traditional
channels--supermarkets, grocery stores, liquor stores and bakeries--through

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improved merchandising. Panamco Venezuela provides continuous support to these
clients to ensure our products are given the largest spaces, best positions
and appropriate point-of-sale material.

During 2000, Panamco Venezuela solidified its cold equipment program
achieving almost 58.0 units per 10,000 inhabitants in its franchise territory.
Marketing activities during the year included targeted local advertising,
consumer and trade promotions, and alluring events.

We continue our programs to develop high-volume clients in traditional
channels, and to provide retailers with cold product equipment. During the
year, we launched two new products, Quatro and Grapette. These products appeal
to the local taste of the Venezuelan consumer resulting in share of sales
gains in our flavor categories.

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

CENTRAL AMERICA

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

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

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

As a result of our programs in Central America, our share of sales has
increased by 2.3 percentage points in Costa Rica, 3.2 percentage points in
Nicaragua and 1.7 percentage point in Guatemala.

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

Raw Materials and Supplies

Soft drinks are produced by mixing water, concentrate and sweetener. We
process the water we use in our soft drinks to eliminate mineral salts and
disinfect it with chlorine. We then filter it to eliminate impurities,
chlorine taste, trace metals and odors. We combine the purified water with
processed sugar or high fructose (or artificial sweeteners in the case of diet
soft drinks) and concentrate. To produce

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carbonation we inject carbon dioxide gas into the mixture. Immediately
following carbonation, we bottle the mixture in pre-washed labeled bottles. We
maintain a quality control laboratory at each production facility where we
test raw materials and analyze samples of soft drink products. All our sources
of supply for raw materials are subject to the approval of The Coca-Cola
Company.

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

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

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

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

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

We have facilities in Mexico, Brazil, Colombia and Costa Rica, which
produce plastic cases for carrying bottles. The Costa Rican facility supplies
Panamco Nicaragua and Panamco Guatemala. Plastic is purchased locally or
imported when necessary. Plastic cases in Venezuela are purchased mainly from
Gaveras Plasticas Venezolanas, C.A., which are all 100% recycled materials.
Other local suppliers are also available.

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

Other. Many of the raw materials and supplies used in Venezuela are
purchased from companies owned by members of the Cisneros family, the former
owners of Panamco Venezuela. We believe the terms

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of such arrangements are no less favorable to us than those that could be
obtained from independent third parties.

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

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

PRODUCTION

Our subsidiaries own and operate a total of 47 bottling plants, with 10
in Mexico, 3 in Brazil, 18 in Colombia, 1 in Costa Rica, 13 in Venezuela, 1
in Nicaragua and 1 in Guatemala. The totals include 2 plants in Mexico,
1 plant in Brazil and 1 in Colombia, which we use exclusively to bottle
mineral water at the source. The plants have over 163 bottling lines with an
installed capacity of over 900 million physical cases a year (assuming 400
production hours per month for 11 months per year, with one month reserved for
maintenance). In order to increase production efficiency and reduce costs we
have implemented cost reduction plans at all of our subsidiaries.

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

COMPETITION

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

MEXICO

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

BRAZIL

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

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COLOMBIA

In Colombia our principal competitor is Postobon, a well-established
bottler of both nationally advertised flavored soft drink products and Pepsi.
The owners of Postobon hold other significant commercial interests in
Colombia.

VENEZUELA

The Venezuelan Bottlers until August 1996 were the authorized bottling
companies of products of Pepsi in Venezuela. In August of 1996 the Venezuelan
bottlers entered into a bottling agreement with The Coca-Cola Company and
became their authorized bottler in Venezuela. Subsequently, on November 2,
1996, Pepsi granted the franchise for its territories in Venezuela to Sopresa,
a joint venture formed between Pepsi and Empresas Polar S.A., the leading beer
distributor in Venezuela. Sopresa is our principal competitor in Venezuela.
Since December 1999, we also compete with the producers of Kola Real, a "B"
brand, in the central part of the country.

CENTRAL AMERICA

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

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

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

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

EMPLOYEES

At December 31, 2000, we employed approximately 28,300 people (including
temporary workers, but excluding independent distributors). Approximately 35%
of our employees are members of labor unions, most of whom are in Mexico. Most
of the employees in Colombia are covered by non-union collective bargaining
agreements. The collective bargaining agreements for both unionized and non-
unionized employees are negotiated separately for each bottling subsidiary, or
in some instances, for each plant. In Mexico, collective bargaining agreements
are renegotiated annually with respect to wages and biannually with respect to
benefits. In Colombia and Venezuela, all collective bargaining agreements are
negotiated biannually.

Panamco Mexico pays employees amounts usually equal to 10% of its taxable
income, adjusted in accordance with local labor laws. The Mexican government
also requires employers to set aside a percentage of employee wages in
retirement accounts. In addition, both employers and employees in Mexico must
contribute amounts to the national health care system and a workers' housing
fund. In Colombia, Brazil, Costa Rica and Nicaragua, employers and employees
contribute to employee retirement accounts and to their national health care
systems. A profit-sharing program has been implemented in

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Venezuela pursuant to which employees are entitled to receive an additional
payment equal to at least 15 days' wages (but not more than four months'
wages), and a profit-sharing program was established in Brazil in 1997. In
Mexico and Nicaragua, employees are entitled to a mandatory Christmas bonus in
an amount equal to 15 days and one month's salary, respectively. If an
employee has worked for a company less than one year, that employee's bonus is
reduced in proportion to the amount of time such employee was not employed. In
Guatemala, employees receive a mandatory bonus in the form of a three-month
payment based upon the salary paid during the preceding six months.

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

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

FRANCHISE ARRANGEMENTS

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

The Coca-Cola Company's Products. The Coca-Cola Company (or its
subsidiaries) has entered into exclusive bottling agreements (the "Bottling
Agreements") with each of our bottling subsidiaries (the "Bottlers"). The
Bottling Agreements expire on various dates. In 1995, we and The Coca-Cola
Company agreed that all bottling agreements of our Mexican subsidiaries will
have a uniform term ending in 2005, renewable for additional ten-year terms.
In 2000, The Coca-Cola Company entered into a bottling agreement with our
Guatemalan subsidiary for a five-year term. In general, the Brazilian,
Venezuelan, Nicaraguan, Costa Rican and Colombian agreements are for five-year
terms, renewable for additional five-year terms.

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

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

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

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purchases of concentrates by Panamco Venezuela, Panamco Nicaragua, Panamco
Colombia and Panamco Guatemala. Purchases by Panamco Mexico, Panamco Brasil
and Panamco Costa Rica are made in local currency. We pay no additional
compensation to The Coca-Cola Company under the licenses for the use of the
associated trade names and trademarks. Subject to local law, The Coca-Cola
Company has the right to limit the wholesale prices of its products.

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

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

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

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

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

GOVERNMENT REGULATION

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

Environmental Regulation. We spent $12 million each in 2000 and 1999 on
plant upgrades designed to meet environmental objectives. See "Item 7. --
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Capital Expenditures". We must comply with local permit
requirements for constructing and expanding facilities, drilling wells,
drawing water from rivers and discharging effluent.

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

See also "Item 5. -- "Market for Registrant's Common Equity and Related
Stockholder Matters -- Exchange Controls and Other Limitations Affecting
Security Holders."

POLITICAL, ECONOMIC AND SOCIAL CONDITIONS IN LATIN AMERICA

In addition to the governmental regulations that have been imposed on our
operations, the Latin American markets in which we operate are characterized
by volatile, and frequently unfavorable, political, economic and social
conditions. High inflation and, with it, high interest rates are common. In
2000, the per annum inflation rates were approximately 9% in Mexico, 10% in
Brazil, 9% in Colombia, 12% in Venezuela, 10% in Costa Rica, 10% in Nicaragua
and 5% in Guatemala. The governments in these countries have often responded
to high inflation by imposing price and wage controls or similar measures,
although currently there are no formal soft drink price controls in any of the
countries. These countries have also experienced significant currency
fluctuations. See "-- Currency Devaluations and Fluctuations".

The political, economic and social conditions in each of these countries
create a challenging environment for businesses, including ours. Our business,
earnings, asset values and prospects may be materially and adversely affected
by developments with respect to inflation, interest rates, currency
fluctuations, government policies, price and wage controls, exchange control
regulations, taxation, expropriation, social instability, and other political,
economic or social conditions or developments in or affecting Latin America.
Although we have been able to operate successfully in Latin America for over
50 years, we have no control over these conditions and developments, and can
provide no assurance that such conditions and developments will not adversely
affect our operations.

We can be adversely impacted by inflation in many ways. In particular,
when wages rise more slowly than prices, inflation can erode consumer
purchasing power and thereby adversely affect sales. Margins are diminished if
product prices fail to keep pace with increases in supply and material costs.
While we have been able in most recent years to increase prices in local
currency terms overall at least as much as inflation, net sales in local
currency terms may nevertheless remain flat or decrease if, among other
things, inflation or high unemployment diminishes consumer purchasing power,
as has been the case recently in Colombia and Venezuela. Although we expect
that prices will generally keep pace with inflation in the near term, sales
volume may decline and supply and material costs may rise more rapidly than
prices in the future. See "Item 7. -- Management's Discussion and Analysis of
Financial Condition and Results of Operations". See also the discussion under
"-- Currency Devaluations and Fluctuations" regarding the impact of
devaluations on net sales in dollars.

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

MEXICO

In Mexico, the early 1990s were marked by the economic reforms of the
Salinas administration and the passage of the North American Free Trade
Agreement. However, the Mexican government was not able to sustain this
progress, and a series of political and economic events created considerable
economic

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adversity, political instability and uncertainty. The peso was devalued
substantially in December 1994 and continued to depreciate in 1995. The
exchange rate increased from approximately 3.4 Mexican pesos per U.S. dollar
as of November 30, 1994 to approximately 7.7 Mexican pesos per U.S. dollar as
of December 31, 1995. The devaluation in 1995 was in part prompted and
aggravated by significant outflows of foreign capital, which in turn resulted
in a liquidity crisis for the Mexican government. Political events also
contributed to Mexico's economic problems, and have compounded the
difficulties facing the government in solving these problems. In July 2000,
the Institutional Revolutionary Party (the "PRI"), which has ruled Mexico
since 1929, lost the presidential election and transferred the presidential
powers to Vicente Fox, the leader of the opposition party "Partido de Accion
Nacional" ("PAN").

BRAZIL

In Brazil, the government has had some success in controlling inflation,
although there can be no assurance that this success will continue. In
addition, in recent years there have been allegations of government
improprieties, which have adversely affected its ability to implement a
successful economic program. Midway through 1994, the government of Brazil
launched an economic stabilization program, the Real Plan, which improved
economic conditions in Brazil. Inflation, which had been at double-digit
monthly rates, has decreased, purchasing power improved and the consumption of
goods and services began to increase. However, in January 1999, the Brazilian
government decided to modify its exchange policy, discontinuing its band
system and allowing the real to trade freely. As a result, the real has
experienced extreme volatility. On January 29, 1999, the real was trading at
2.20 reals per U.S. dollar, which represented an 80% devaluation in comparison
to the December 31, 1998 rate. On March 31, 1999, the real had revalued from
its lowest levels and was trading at 1.71 reals per U.S. dollar. On December
31, 1999, the real again devalued to 1.97 reals per dollar. During the first
quarter of 1999, the Brazilian Government sought the support of the
International Monetary Fund, which has authorized the use of previously
approved support funds in an aggregate amount of approximately $6.5 billion
for 1999. See "-- Currency Devaluations and Fluctuations". Although the
modification of the exchange policy did not significantly exacerbate inflation
during 1999, unemployment increased and wages in real terms fell. Lower wages
in real terms reduced consumer purchasing power in Brazil, which is reflected
in our lower sales for 1999. During 2000, the economy started to recover and
disposable income increase was reflected on the Company's revenue growth,
offset by the devaluation of the currency of 9.0%.

COLOMBIA

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

During 2000, the Colombian government received an assistance package from
the United States of America in order to fight illegal drug traffic under the
so called "Plan Colombia". This plan, among other things, included programs to
assist farmers and the population in rural areas.

VENEZUELA

In 1994, in response to large budget deficits and a crisis in the banking
sector, and pursuant to special authority granted by the Venezuelan Congress,
President Caldera's administration temporarily imposed controls on foreign
exchange transactions and on prices of consumer goods and services and

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required mandatory bonus payments be paid to workers to assist in covering
food and transportation costs. In addition, President Caldera's administration
was given full and direct control over the Venezuelan banking system. In April
1996, the Venezuelan government lifted the controls on foreign exchange
transactions and most of the controls on prices of consumer goods and
services, and in July 1996, the Venezuelan government lifted the suspension of
constitutional rights in all territorial areas except certain border areas. We
do not know if such controls or suspensions will be reimposed. Venezuela has
also experienced significant currency fluctuations. See "--Currency
Devaluations and Fluctuations". The Venezuelan government has exercised, and
continues to exercise, significant influence over many aspects of the
Venezuelan economy.

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

Pursuant to the approval of the new constitution, the President, state
governors and other executive and legislative powers were re-appointed by
public elections in May and December of 2000.

COSTA RICA

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

NICARAGUA

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

GUATEMALA

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

1998 marked the first anniversary of the signing of the final peace
accord between the Guatemalan government and the Unidad Revolucionaria
Nacional Guatemalteca (the "URNG"). Mr. Arzu was

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successful in demobilizing the guerrilla forces of the URNG, but made only
limited progress in the important areas of constitutional reforms
(particularly reforms designed to protect the rights of indigenous peoples),
settlement of land disputes and socio-economic improvements. The Arzu
administration and ruling political party, Partido de Avanzada, faced
opposition in Congress in their efforts to reform the Guatemalan tax system
and to increase the tax revenue received by the Guatemalan government, which
are conditions to the disbursement of loans and donations designated as "peace
funds" that have been pledged by the International Monetary Fund and other
donors.

The political, economic and social conditions in each of these countries
creates a challenging environment for business, including the Company.

The Company's business, earnings, asset values and prospects may be
materially and adversely affected by developments with respect to inflation,
interest rates, currency fluctuations, government policies, prices and wage
controls, exchange control regulations, taxation, expropriation, social
instability, and other political, economic or social conditions or
developments in or affecting Latin America. Although the Company has been able
to operate successfully in Latin America for over 50 years, it has no control
over such conditions and developments, and can provide no assurance that such
conditions and developments will not adversely affect the Company's
operations.

CURRENCY DEVALUATIONS AND FLUCTUATIONS

In December 1994, the Bank of Mexico allowed the Mexican peso to float in
the free market, which resulted in an immediate and significant devaluation of
the peso. The exchange rate increased from approximately 3.4 Mexican pesos per
U.S. dollar as of November 30, 1994 to approximately 7.7 Mexican pesos per
U.S. dollar as of December 31, 1995. As of December 31, 2000, the exchange
rate was approximately 9.6 Mexican pesos per U.S. dollar.

The devaluation of the Mexican peso in 1995 and the related economic
conditions in Mexico had a significant adverse impact on the results of
operations and financial condition of Panamco Mexico in 1995 and,
consequently, on the results of operations and financial condition of the
Company in 1995. The carrying value of the assets of the Panamco Mexico
subsidiaries in our consolidated accounts was also adversely affected. During
2000 and 1998, the peso was devalued by 1% and 22%, respectively, and during
1999 the peso was revalued by 4%.

In January 1999, the Brazilian government decided to modify its exchange
policy, discontinuing its band system and allowing the real to trade freely.
As a result, the real has experienced extreme volatility. On January 29, 1999,
the real was trading at 2.05 reals per dollar, which represented an 80%
devaluation in comparison to the December 31, 1998 rate. On March 31, 1999,
the real had revalued from its lowest levels and was trading at 1.72 reals per
dollar. The Brazilian real exchange rate as of December 31, 1999 was 1.79
reals per U.S. dollar compared to 1.21 reals per U.S. dollar as of December
31, 1998 representing a 48% devaluation, between average exchange rate of 1999
and 1998 the devaluation was approximately 56%. The devaluation of the
Brazilian real adversely impacted the results of the operations of Panamco
Brasil by approximately $28 million in 1999. In 2000, the currency devaluation
rate in Brazil was approximately 9%.

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

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financial condition and results of operations. In 2000, the currency
devaluation rate in Venezuela was approximately 9%.

On June 29, 1999, in the face of economic pressures, the Colombian T
Central Bank lowered the band in which the Colombian peso trades by 9%, which
resulted in significant currency devaluations. On September 30, 1999 the
Colombian peso was trading at 2,017.27 Colombian pesos per dollar, which
represented a 31% devaluation in comparison to the December 31, 1998 rate. The
Colombian peso exchange rate as of December 31, 1999 was 1,873.77 Colombian
pesos per U.S. dollar compared to 1,542.11 Colombian pesos per U.S. dollar as
of December 31, 1998 representing a devaluation of approximately 22%. In 2000,
the Colombian peso was devalued by 19%.

As a general matter, because our consolidated cash flow from operations
is generated exclusively in the currencies of Mexico, Brazil, Colombia,
Venezuela, Costa Rica, Nicaragua and Guatemala, we are subject to the effects
of fluctuations in the value of these currencies. Each of these countries has
historically experienced significant currency devaluations relative to the
U.S. dollar. Such devaluations alone have generally not adversely affected the
profitability of our subsidiaries, measured in local currencies, as
substantially all costs of sales and expenses are incurred in local
currencies. However, in general, such devaluations are accompanied by high
inflation and declining purchasing power, which can adversely affect our sales
as well as income. Because our financial statements are prepared in U.S.
dollars, net sales (and other financial statement accounts, including net
income) tend to increase when the rate of inflation in each country exceeds
the rate of devaluation of such country's currency against the U.S. dollar.
Alternatively, net sales (and other financial statement accounts, including
net income) generally are adversely affected if and to the extent that the
rate of devaluation of each country's currency against the U.S. dollar exceeds
the rate of inflation in such country in any period. In addition, when
dividends are distributed to us by our foreign subsidiaries, the payments are
converted from local currencies to U.S. dollars, and any future devaluations
of local currencies relative to the U.S. dollar could result in a loss of
dividend income. For a discussion of devaluation rates in Mexico, Brazil,
Colombia, Venezuela, Costa Rica, Nicaragua and Guatemala, see "Item 7.--
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Inflation".

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

ITEM 2. PROPERTIES

PROPERTIES

Our properties consist primarily of bottling, distribution and office
facilities in Mexico, Brazil, Colombia, Venezuela, Costa Rica, Nicaragua and
Guatemala. Panamco Mexico, Panamco Brasil, Panamco Colombia, Panamco
Venezuela, Panamco Costa Rica, Panamco Nicaragua and Panamco Guatemala
currently own and operate 10, 3, 18, 13, 1, 1 and 1 bottling plants,
respectively. As of December 31, 2000, the Company owned or leased over 338
warehouse distribution centers in its territories. See "Item 1. -- Business --
Production" for additional information regarding our properties.

As of December 31, 2000, the consolidated net book value of all land,
buildings, machinery and equipment owned by the Company was approximately
$1,125.7 million. These assets were subject to liens

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and mortgages securing lines of credit and other indebtedness. The aggregate
amount of such indebtedness outstanding was approximately $68.2 million as of
December 31, 2000. The total annual rent paid by the Company in 2000 for its
leased distribution and office facilities was approximately $13.5 million.

ITEM 3. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS AND CLAIMS ASSOCIATED WITH THE VENEZUELA ACQUISITION

In connection with the Venezuela Acquisition, in 1999 we received notice
of certain tax claims asserted by the Venezuelan taxing authorities, which
mostly relate to fiscal periods prior to the Venezuela Acquisition. The claims
are in preliminary stages and current aggregate of approximately $48.2
million. We have certain rights to indemnification from Venbottling (a company
owned by the Cisneros family) and The Coca-Cola Company for a substantial
portion of such claims and intend to defend against them vigorously. Based on
the information currently available, we do not believe that the ultimate
disposition of these cases will have a material adverse affect on us. See
"Item 7. -- Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Forward-Looking Statements".

POTENTIAL IMPOSITION OF LIABILITIES UPON RESOLUTION OF CERTAIN BRAZILIAN
TAX MATTERS

Panamco Brasil has been the subject of administrative proceedings in the
Federal Revenue Office brought by Brazilian tax authorities seeking excise
taxes, interest and fines in an amount equivalent to $34.1 million as of
December 31, 1996. As of December 31, 2000, such amount had been reduced to an
amount equivalent to approximately $3.5 million. Issues raised by the
proceedings included whether freight costs should be included in the Brazilian
Tax on Manufactured Products (the "IPI") and the calculation of the IPI rates
on various beverages. In June 1997, the Brazilian Taxpayers' Council ruled
unanimously in favor of Panamco Brasil with respect to the period from January
1984 to December 1988, and this ruling is no longer subject to appeal. During
2000, the Brazilian Taxpayers' Council extended this period to June 30, 1989.
Because the Company believes it will ultimately not incur any liability, there
is no reserve in the Company's financial statements in respect of these
matters. The remaining proceeding was ruled favorably to Panamco Brasil in
2000 and there is no appeal pending to the proceeding. See Note 12 of "Notes
to Consolidated Financial Statements".

In addition, Panamco Brasil is the subject of administrative proceedings
in the Federal Reserve Office brought by Brazilian tax authorities seeking
income taxes, interest with respect to credits taken in current periods and
fines in an amount equivalent to $3.7 million as of December 31, 2000. Issues
raised by the tax authorities include the deductibility of certain
intercompany service payments. The Brazilian tax authorities prevailed at the
initial administrative proceeding in 1991 and at the appellate administrative
level in June 1993. Panamco Brasil has appealed the decision. In April 1998,
the Brazilian Taxpayers' Council ruled unanimously in favor of Panamco Brasil.
The amount in question represents approximately $1.8 million. This ruling is
not subject to appeal. The Brazilian Taxpayers' Council, however, issued a
ruling against a former subsidiary of Panamco Brasil. The amount in question
represents approximately $1.9 million. Panamco Brasil has appealed this
ruling. See Note 12 of "Notes to Consolidated Financial Statements".

Panamco Brasil is also the subject of administrative proceedings in the
Federal Reserve Office brought by Brazilian tax authorities seeking
assessments with respect to tax credits taken during 1995 and 1996 relating to
overpayments of certain value-added taxes in prior years. The assessments
involve an amount approximately equivalent to $32.8 million as of December 31,
2000 and relate to value-added taxes applied to samples, gratuities and credit
sales. The Company has appealed the assessments. See Note 12 of "Notes to
Consolidated Financial Statements".

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LEGAL PROCEEDING ASSOCIATED WITH THE SOLICITATION BY CERTAIN INDEPENDENT
DISTRIBUTORS IN VENEZUELA TO FORM A DISTRIBUTORS UNION.

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

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

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

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of stockholders, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal year
2000.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
MATTERS.

NATURE OF TRADING MARKET

As of March 26, 2001, we had approximately 9,850 holders of record of an
aggregate of approximately 119,002,164 shares of Class A Common Stock
outstanding. As of March 26, 2001, there were an estimated 1,227 holders of
record of the Class B Common Stock. As of March 26, 2001, to our knowledge
approximately 90.6% of the total outstanding Common Stock was held of record
by persons in the United States.

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

HIGH LOW
---- ---
2001:

First Quarter (through March 26) $19.110 $13.563

2000:

First Quarter $20.500 $16.063
Second Quarter $17.688 $14.938
Third Quarter $20.125 $15.063
Fourth Quarter $17.500 $13.138

1999:

First Quarter $21.750 $14.625
Second Quarter $27.063 $17.500
Third Quarter $24.250 $16.563
Fourth Quarter $23.438 $14.813

On March 26, 2001, the closing sale price of the Class A Common Stock on
the NYSE was $18.250 per share.

We declared quarterly cash dividends of $0.06 per share of common stock
during each of the years ended December 31, 2000 and 1999.

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

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

In addition, we are registered with the Panamanian National Securities
Commission and is subject to a Panamanian statute which prohibits acquisitions
of 5% or more of the outstanding voting securities of a

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Panama corporation without board of directors' review or shareholder
approval.

EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

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

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

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

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

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

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

In Guatemala there are no restrictions on the remittance of profits to
foreign investors. There is no obligation for foreign investors to register
their investments with any governmental office or to solicit any authorization
to participate in local businesses. On February 4, 1998, the Guatemalan
Congress enacted the Foreign Investment Law, which amended or, in some cases,
eliminated, restrictions created in the past that affected foreign

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investment. Since that date, the Guatemalan government treats national and
foreign investment under the same rules and conditions. There can be no
assurance that prior restrictions will not be reimposed in the future.

TAXATION

Introduction

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

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

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

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

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

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

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

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

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

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

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

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

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

Neither the Company nor any of its subsidiaries has been or is a PFIC,
and the Company intends to conduct its affairs so as to avoid the
classification of the Company and its subsidiaries as PFICs. However, if ever
applied to the Company, the PFIC rules could produce significant adverse tax
consequences for a U.S. Holder, including the imposition of the highest tax
rate on income or gains allocated to prior PFIC years and an interest charge
on U.S. Federal income taxes deemed to have been deferred.

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

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

Information Reporting and Backup Withholding Requirements with Respect to
U.S. Holders. United States information reporting requirements may apply with
respect to the payment of dividends on the Class A Common Stock. Under
recently finalized Treasury Regulations, effective as of January 1, 2001,
noncorporate U.S. Holders may be subject to backup withholding at the rate of
31% with respect to dividends paid by the Company after December 31, 2000 when
a U.S. Holder (i) fails to furnish or certify a correct taxpayer
identification number to the payor in the manner required, (ii) is notified by
the IRS that it has failed to report payments of interest or dividends
properly or (iii) fails, under certain circumstances, to certify that it has
not been notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest and dividend payments.

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

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

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

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

Distributions. Distributions by the Company to a Foreign Holder would be
subject to withholding of U.S. Federal income tax only if 25% or more of the
gross income of the Company (from all sources for the three-year period ending
with the close of the taxable year preceding the declaration of the dividend)
was effectively connected with the conduct of a trade or business in the
United States by the Company. The

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Company anticipates that it will recognize income that is effectively
connected with the conduct of a trade or business in the United States.
However, the income that is effectively connected with the conduct of a trade
or business in the United States should not represent 25% or more of the gross
income of the Company. Accordingly, dividends paid to Foreign Holders are not
expected to be subject to U.S. Federal income or withholding tax unless the
Company's sources of income significantly change.

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

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

Panamanian Taxation

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

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

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

Taxation of Capital Gains. There are no taxes on capital gains realized
by an individual or corporation regardless of its nationality or residency on
the sale or other disposition of Shares on the basis of the already mentioned
principles of territorial taxation, inasmuch as the value of such Shares is
ultimately determined upon assets and activities which are held or conducted
almost entirely outside of Panama.

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

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from Panama's income tax.

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

ITEM 6. SELECTED FINANCIAL DATA

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

The following table sets forth selected consolidated financial and
operating data for the Company. The selected financial data have been derived
from the consolidated financial statements of the Company. The audited
consolidated financial statements of the Company for the three years ended
December 31, 2000, are included elsewhere herein and have been audited by
Arthur Andersen, independent public accountants, whose audit report is also
included herein. All of the consolidated financial statements referred to
above have been prepared in accordance with U.S. GAAP and are stated in U.S.
dollars. The selected consolidated financial and operating data should be read
in conjunction with "Item 7.--Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and notes thereto included elsewhere herein.

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31, (1)
----------------------------------------------------------------------------
2000 1999 1998 (9) 1997 (8) 1996 (7)
---- ---- -------- -------- --------

STATEMENT OF OPERATIONS DATA:
Net sales.................................. $2,599,411 $2,415,817 $2,773,276 $2,510,210 $1,993,087
Cost of sales, excluding depreciation and
amortization............................. 1,243,485 1,191,883 1,425,246 1,327,443 1,152,021
----------- ----------- ----------- ----------- ----------
Gross profit.......................... 1,355,926 1,223,934 1,348,030 1,182,767 841,066
Operating expenses:
Selling and distribution................. 636,739 572,038 657,138 563,917 425,955
General and administrative............... 244,551 251,450 222,327 193,437 132,101
Depreciation and amortization (2)(4)..... 274,046 214,539 253,112 159,371 99,114
Amortization of goodwill................. 35,819 36,284 35,739 20,121 6,379
Facilities reorganization charges (10)... 503,659 35,172 - - -
----------- ----------- ----------- ----------- ----------
Total operating expenses.............. 1,694,814 1,109,483 1,168,316 936,846 663,549
----------- ----------- ----------- ----------- ----------
Operating income........................... (338,888) 114,451 179,714 245,921 177,517
Interest income ........................... 31,933 28,962 12,817 22,006 20,229
Interest expense........................... (142,299) (129,072) (98,152) (60,889) (43,844)
Other income (expense), net (3)............ (31,662) (39,296) 22,136 44,033 24,074
Nonrecurring income, net (4)............... - - 60,486 - 11,646
----------- ---------- ---------- ---------- ----------
Income (loss) before income taxes.......... (480,916) (24,955) 177,001 251,071 189,622
Provision for income taxes (4)............. 21,800 31,254 51,374 57,302 53,580
----------- ---------- ---------- ---------- ----------
Income (loss) before minority interest..... (502,716) (56,209) 125,627 193,769 136,042
Minority interest in earnings of
subsidiaries............................. 1,944 3,695 5,305 19,934 18,462
----------- ---------- ---------- ---------- ----------
Net income (loss)..................... $ (504,660) $ (59,905) $ 120,322 $ 173,835 $ 117,580
=========== ========== ========== ========== ==========
Basic earnings (loss) per share (5)........ $ (3.92) $ (0.46) $ 0.93 $ 1.44 $ 1.22
=========== ========== ========== ========== ==========
Diluted earnings (loss) per share (5)...... $ (3.92) $ (0.46) $ 0.92 $ 1.43 $ 1.21
=========== ========== ========== ========== ==========

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[Enlarge/Download Table]

YEAR ENDED DECEMBER 31, (1)
-----------------------------------------------------------------------------
2000 1999 1998 (9) 1997(8) 1996(7)
---- ---- -------- ------- -------

OTHER DATA:

Total product unit case volume............. 1,222,500 1,163,117 1,174,035 1,010,960 766,485
Dividends per share........................ $ 0.24 $ 0.24 $ 0.24 $ 0.21 $ 0.18
Weighted average shares outstanding
(basic) (5)............................. 128,833 129,683 129,538 120,841 96,522
Weighted average shares outstanding
(diluted) (5)........................... 128,833 129,683 130,792 121,969 97,065
Capital expenditures (6)................... $ 123,897 $ 163,203 $ 302,215 $ 208,669 $ 122,897
Cash Operating Profit...................... $ 386,064 $ 385,544 $ 468,565 $ 425,413 $ 283,010

AT DECEMBER 31, (1)
------------------------------------------------------------------------------
2000 1999 1998 (9) 1997(8) 1996(7)
---- ---- -------- ------- -------
BALANCE SHEET DATA (END OF PERIOD):
Cash and equivalents....................... $ 191,773 $ 152,648 $ 131,152 $ 332,995 $ 251,273
Property, plant and equipment, net ........ 1,125,719 1,218,383 1,307,590 1,119,515 684,050
Total assets .............................. 3,026,321 3,613,122 3,647,690 3,587,069 1,705,385
Total long-term liabilities................ 1,192,981 1,437,834 964,525 897,056 404,533
Minority interest.......................... 27,805 27,974 26,243 26,783 59,734
Shareholders' equity....................... 1,167,311 1,751,896 1,978,234 1,937,770 973,994

------------------------

(1) The results of the Colombian and Venezuelan subsidiaries for all periods,
the Mexican subsidiaries for 1997 and 1998 and the Brazilian subsidiaries
for 1996 and 1997, have been remeasured in U.S. dollars, the reporting
and functional currency, in accordance with Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation", as it
applies to highly inflationary economies such as those in which the
subsidiaries operate. See Note 1 of "Notes to Consolidated Financial
Statements".
(2) Includes breakage of bottles and cases and amortization expense related
to new introductions. See Note 1 of "Notes to Consolidated Financial
Statements".
(3) See Note 17 of "Notes to Consolidated Financial Statements".
(4) In the fourth quarter of 1995, a nonrecurring credit of $11.2 million
($6.6 million after taxes and minority interest) was recorded. This
credit consisted of a benefit related to the approval by the Brazilian
government of credits for sales taxes previously paid on product samples.
During 1996, three separate nonrecurring credits of $3.9, $3.2 and $4.5
million were recorded. These credits consisted of the recovery of
previously paid excise taxes on refillable plastic containers purchased
in prior periods, a net credit relating to the credits for previously
paid sales taxes on product samples, and a net credit due to the recovery
of previously paid excise taxes on interest charged to customers,
respectively. During 1998, Panamco Brasil conducted a study to evaluate
the expected future utilization of returnable product presentations in
the Brazilian market, having observed accelerated demand for, and
utilization of, nonreturnable presentations in the marketplace. The
results of this study show that the use of nonreturnable presentations
will continue to increase in the Brazilian market. Therefore, the Company
has adjusted the carrying value of bottles and cases to reflect their
estimated use in the marketplace by charging $36.5 million to the 1998
operating results, increasing total depreciation and amortization
expense, and reducing the current year tax provision by $12.1 million.
See Note 1 of "Notes to Consolidated Financial Statements". Additionally,
Panamco Brasil reversed a contingency reserve recorded in prior years for
excise tax credits taken on purchases of concentrate between February
1991 and February 1994. The Company had previously accrued this reserve
in the full amount of such credits. Panamco Brasil reversed this reserve
in 1998 because during 1998 the Brazilian Supreme Court resolved similar
claims of other bottlers in favor of the bottlers. The reversal of the
excise tax reserve amounted to $60.5 million and was credited to
Nonrecurring income, in the income statement. Income tax credits recorded
in this reserve, amounting to $20.0 million, were also reversed and
charged directly to income in the provision for income tax in 1998. See
Note 10 of "Notes to Consolidated Financial Statements".
(5) Dividends per share reflect the amounts declared and paid during the
applicable period. Earnings per share, dividends per share and shares
outstanding for all periods have been adjusted to give effect to the
two-for-one stock split effected on March 31, 1997.
(6) Does not include purchases of bottles and cases.
(7) Includes six months of net sales and net income of $7.1 million and $0.6
million, respectively, from the acquisition of additional franchises in
Costa Rica in 1996.
(8) Includes eight months of net sales and net income of $349.5 million and
$49.5 million, respectively, from Panamco Venezuela, and five months of

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net sales and net income of $18.6 million and $0.7 million, respectively,
from Panamco Nicaragua.
(9) Includes nine months of net sales and net income of $45.1 million and
$2.1 million, respectively, from the Panamco Guatemala, and four months
of net sales and net income of $4.2 million and $0.9 million,
respectively, from R.O.S.A.
(10) Facilities reorganization charges in 2000 are related to goodwill
impairment of $350.0 million in Venezuela, write-off of obsolete property,
plant, equipment, bottles and cases, charges related to plant closings and
disposal of property, plant and equipment, job terminations and severance
payments, and nonrecurring charges related to legal contingencies.
Facilities reorganization charges in 1999 are related to job terminations
and severance payments and write-off of obsolete property, plant, and
equipment. See Note 2 of "Notes to Consolidated Financial Statements".

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

GENERAL

The following discussion addresses the financial condition and results of
operations of Panamco and its consolidated subsidiaries. This discussion
should be read in conjunction with our audited consolidated financial
statements, including the notes to the consolidated financial statements, as
of December 31, 2000 and 1999 and for each of the three years in the period
ended December 31, 2000 and the notes thereto included elsewhere herein.

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

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

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

INFLATION

EFFECT OF INFLATION ON FINANCIAL INFORMATION

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

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

Year Ended December 31, (1)
-------------------------------
2000 1999 1998
---- ---- ----
Mexico
Inflation.............................. 9% 12% 19%
Currency devaluation (revaluation) .... 1% (4%) 22%
Brazil
Inflation.............................. 10% 8% 2%
Currency devaluation................... 9% 48% 8%
Colombia
Inflation.............................. 9% 10% 18%
Currency devaluation................... 19% 22% 19%
Venezuela
Inflation.............................. 12% 20% 30%
Currency devaluation................... 9% 15% 12%
Costa Rica
Inflation.............................. 10% 10% 11%
Currency devaluation................... 7% 10% 11%
Nicaragua
Inflation.............................. 10% 7% 18%
Currency devaluation................... 6% 10% 12%
Guatemala
Inflation.............................. 5% 5% 8%
Currency devaluation (revaluation)..... (1%) 15% 11%

(1) Inflation figures are based on the applicable Consumer Price Index
obtained from official local sources from each respective country and
currency devaluation figures are based on official U.S. dollar exchange
rates at year-end.

The level of inflation has a direct impact on the method used to
translate the financial statements from the local currency to the reporting
currency. SFAS 52 provides that, in a highly inflationary economy (defined as
having cumulative inflation for the three-year period preceding the balance
sheet date of approximately 100% or more), the effect of exchange rate
fluctuations on the translation is included in the determination of net income
for the period and is distributed as gains or losses to the related income
statement accounts. Such gains and losses do not affect the income statement
of companies operating in economies which are not considered highly
inflationary but are instead included as part of the accumulated other
comprehensive income as a component of shareholders' equity.

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

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

Colombia and Venezuela are currently classified as highly inflationary
economies and accordingly their financial statements have been remeasured into
U.S. dollars in accordance with SFAS 52.

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

EFFECT OF INFLATION AND CHANGING PRICES ON OPERATIONS

In addition to high inflation, our operations are carried out in
countries which in the past experienced, and may in the future experience,
government price controls. While price controls have been a limiting factor,
we have been generally effective in the recent past in increasing prices in
local currency terms at least at the rate of inflation. All of our costs are
affected by inflation rates in the countries in which we

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operate. In general, transactions in these countries are effectively tied to
inflation either through pricing, contract indexing, statute or informal
practice.

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

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

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

SEASONALITY

All product sales are generally higher during the December holidays and
during the hottest and driest periods (with rainfall varying from year to
year). For this reason, we typically experience our best results of operations
in the second and fourth quarters. However, the seasonality effect is tempered
in our case because of the difference in the timing of the summer months in
the countries in which we operate. In Brazil, summer occurs during November,
December and January, while summer occurs in Mexico, Colombia, Venezuela,
Costa Rica, Guatemala and Nicaragua during the months of June, July and
August.

FORWARD-LOOKING STATEMENTS

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

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

10-K 39th Page of 141 TOC 1st Previous Next Bottom Just 39th

CONSOLIDATED RESULTS OF OPERATIONS

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

Year Ended December 31,
-------------------------------
2000 1999 1998
---- ---- ----
Statement of Operations Data:
Net sales 100.0% 100.0% 100.0%
Cost of sales 47.8 49.3 51.4
----- ----- -----
Gross profit 52.2 50.7 48.6
Operating expenses:
Selling and distribution 24.5 23.7 23.7
General and administrative 9.4 10.4 8.0
Depreciation and amortization 10.5 8.9 9.1
Amortization of goodwill 1.4 1.5 1.3
Facilities reorganization charges 19.4 1.5 -
---- ---- ---
Total 65.2 46.0 42.1
---- ---- ---
Operating income (loss) (13.0) 4.7 6.5
Interest expense, net (4.3) (4.1) (3.1)
Other income (expense), net (1.2) (1.6) 0.8
Nonrecurring income, net - - 2.2
---- ---- ---
Income (loss) before income taxe (18.5) (1.0) 6.4
Income taxes 0.8 1.3 1.9
---- ---- ---
Income (loss) before minority interest (19.3) (2.3) 4.5
Minority interest 0.1 0.2 0.2
---- ---- ---
Net income (loss) (19.4)% (2.5)% 4.3%
===== ===== ====

MINORITY INTERESTS IN RESULTS OF OPERATIONS

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

The aggregate minority interest in our income before minority interest
during a fiscal period is a function of the relative levels of income
generated by each of the consolidated subsidiaries and the percentage of each
subsidiary's capital stock owned by minority shareholders. As of December 31,
2000, our ownership interests in our Mexican, Brazilian and Colombian holding
companies were approximately 98%, 98% and 97%, respectively. Our ownership
interests include acquisitions made in 1997 and 1998 that increased our
effective ownership interest in Panamco Mexico, from 74% to 98% and in Panamco
Brasil from 96% to 98%. We own 100% of our operations in Costa Rica,
Venezuela, Nicaragua and Guatemala. Our country level holding companies own
interests ranging from 50% to 100% in our approximately 60 consolidated
subsidiaries.

As a result of the net loss at certain of our subsidiaries for the year
ended December 31, 2000, minority shareholdings in our consolidated
subsidiaries represented an interest in the aggregate of approximately 0.4% of
consolidated net loss before minority interest. Because we have varying
percentage ownership interests in our approximately 60 consolidated
subsidiaries, the amount of the minority interest in income or loss before
minority interest during a period depends upon the revenues and expenses of
each of the consolidated subsidiaries and the percentage of each of such
subsidiary's capital stock owned by

10-K 40th Page of 141 TOC 1st Previous Next Bottom Just 40th

minority shareholders during such period.

Income statement and balance sheet data for our subsidiaries Panamco
Mexico, Panamco Brasil, Panamco Colombia, Panamco Venezuela and Panamco
Central America, are presented on the following pages. The data presented as
of and for each of the three years in the period ended December 31, 2000 have
been derived from the audited consolidated financial statements of Panamco
Mexico, Panamco Colombia, Panamco Venezuela, Panamco Costa Rica, Panamco
Nicaragua and Panamco Guatemala, and the audited combined financial statements
of Panamco Brasil, as the case may be, which financial statements are not
included herein. As set forth in such income statement and balance sheet data,
minority interest in the Panamco Mexico, Panamco Brasil and Panamco Colombia
subsidiaries and net income attributable to the Panamco Mexico, Panamco Brasil
and Panamco Colombia holding companies give effect to minority shareholdings
below the country holding company level. Minority interest in the Panamco
Mexico, Panamco Brasil and Panamco Colombia holding companies refers to the
aggregate minority interest in the net income of the respective country level
holding company. Net income attributable to Panamco gives effect to the
deduction from net income of the minority interests at both the country level
holding company and the subsidiary levels.

10-K 41st Page of 141 TOC 1st Previous Next Bottom Just 41st

PANAMCO MEXICO
(STATED IN THOUSANDS OF U.S. DOLLARS, EXCEPT FOR UNIT CASES)

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
----------------------------------------
2000 1999 1998
------------ ------------ ------------

STATEMENTS OF OPERATIONS DATA:
Net sales $ 974,846 $ 794,812 $ 638,481
Cost of sales, excluding depreciation and amortization 431,138 374,506 306,124
Operating expenses, excluding facilities
reorganization charges 393,599 287,118 237,070
Facilities reorganization charges 30,454 - -
--------- --------- ---------
Operating income 119,655 133,188 95,287
Interest expense, net (12,361) (11,849) (9,984)
Other income, net 967 7,589 10,768
--------- --------- ---------
Income before income taxes 108,261 128,928 96,071
Provision for income tax 41,127 41,849 30,517
--------- --------- ---------
Income before minority interest 67,134 87,079 65,554
Minority interest in Panamco Mexico subsidiaries 2,528 3,288 2,476
--------- --------- ---------
Net income attributable to Panamco Mexico
holding company 64,606 83,791 63,078
Minority interest in Panamco Mexico
holding company 1,202 1,556 1,172
--------- --------- ----------
Net income attributable to Panamco $ 63,404 $ 82,235 $ 61,906
========= ========= ==========
UNIT CASE SALES DATA (IN MILLIONS):
Soft drinks 285.8 270.0 256.7
Water 164.2 136.4 110.6
Other products 2.6 2.3 1.4

OTHER DATA:
Depreciation and amortization $ 71,336 $ 40,356 $ 37,132
Capital expenditures $ 57,296 $ 57,919 $ 64,047
Cash operating profit $ 200,663 $ 173,544 $ 132,419

AT DECEMBER 31,
---------------------------------------
2000 1999 1998
------------ ------------ -----------
BALANCE SHEET DATA:
Cash and equivalents $ 58,394 $ 38,937 $ 10,727
Property, plant and equipment, net 320,618 299,856 258,856
Total assets 617,281 572,359 459,778
Total debt 120,440 107,418 15,842
Total liabilities 291,020 243,088 206,486
Minority interest in Panamco Mexico subsidiaries 6,682 5,217 2,180
Shareholders' equity 319,579 324,054 251,112

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PANAMCO BRASIL
(Stated in thousands of U.S. dollars, except for unit cases)

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
---------------------------------------
2000 1999 1998(1)
------------ ------------ -----------

STATEMENT OF OPERATIONS DATA:
Net sales $ 496,488 $ 500,683 $ 897,951
Cost of sales, excluding depreciation and amortization 305,967 305,935 546,289
Operating expenses, excluding facilities
reorganization charges 169,711 187,099 341,222
Facilities reorganization charges 23,651 5,142 -
---------- ---------- ----------
Operating income (loss) (2,841) 2,507 10,440
Interest expense, net (12,238) (14,743) (21,717)
Other expense, net (16,565) (36,570) (10,839)
Nonrecurring income, net - - 60,486
---------- ---------- ----------
Income (loss) before income taxes (31,644) (48,806) 38,370
Provision (benefit) for income tax (15,020) (31,765) 2,693
---------- ---------- ----------
Income (loss) before minority interest (16,624) (17,041) 35,677
Minority interest in Panamco Brasil holding company (202) (299) 812
---------- ---------- ----------
Net income (loss) attributable to Panamco $ (16,422) $ (16,742) $ 34,865
========== ========== ==========
UNIT CASE SALES DATA (IN MILLIONS):
Soft drinks 236.9 235.9 219.4
Beer 67.5 63.3 62.2
Water 14.6 12.7 11.1

OTHER DATA:
Depreciation and amortization $ 30,246 $ 32,763 $ 83,612
Capital expenditures $ 7,596 $ 22,686 $ 62,051
Cash operating profit $ 42,243 $ 35,270 $ 94,052

AT DECEMBER 31,
---------------------------------------
2000 1999 1998
------------ ------------ -----------
BALANCE SHEET DATA:
Cash and equivalents $ 6,323 $ 8,563 $ 5,885
Property, plant and equipment, net 149,110 195,387 298,023
Total assets 424,806 487,374 709,176
Total debt 58,586 79,279 119,295
Total liabilities 178,547 188,663 320,400
Minority interest in Panamco Brasil subsidiaries 2,711 3,167 5,038
Shareholders' equity 243,548 295,544 383,738

------------------------------------
(1) Includes only four months of R.O.S.A.

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PANAMCO COLOMBIA
(Stated in thousands of U.S. dollars, except for unit cases)

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
----------------------------------------
2000 1999 1998
------------ ------------ ------------

STATEMENT OF OPERATIONS DATA:
Net sales $ 386,720 $ 397,014 $ 495,812
Cost of sales, excluding depreciation and amortization 166,110 175,522 217,817
Operating expenses, excluding facilities
reorganization charges 201,040 207,032 215,467
Facilities reorganization charges 40,114 1,370 -
---------- --------- -----------
Operating income (loss) (20,544) 13,090 62,528
Interest expense, net (4,486) (6,753) (5,328)
Other income (expense), net (10,852) 2,824 5,311
----------
Income (loss) before income taxes (35,882) 9,161 62,511
Provision (benefit) for income tax (8,277) 966 796
---------- --------- -----------
Income (loss) before minority interest (27,605) 8,195 61,715
Minority interest in Panamco Colombia
subsidiaries holding company 187 107 137
---------- --------- -----------
Net income (loss) attributable to Panamco Colombia
holding company (27,792) 8,088 61,578
Minority interest in Panamco Colombia (764) 223 1,698
---------- --------- -----------
Net income (loss) attributable to Panamco $ (27,028) $ 7,865 $ 59,880
========== ========== ==========
UNIT CASE SALES DATA (IN MILLIONS):
Soft drinks 155.7 153.9 186.9
Water 34.4 37.2 44.0

OTHER DATA:
Depreciation and amortization $ 64,597 $ 60,548 $ 58,510
Capital expenditures $ 9,104 $ 28,276 $ 69,216
Cash operating profit $ 56,688 $ 73,638 $ 121,038

AT DECEMBER 31,
---------------------------------------
2000 1999 1998
------------ ------------ -----------
BALANCE SHEET DATA:
Cash and equivalents $ 42,456 $ 7,396 $ 62,886
Property, plant and equipment, net 259,889 292,915 297,874
Total assets 459,409 516,327 576,191
Total debt 53,816 87,145 123,200
Total liabilities 135,249 154,852 211,516
Minority interest in Panamco Colombia subsidiaries 1,668 1,568 1,548
Shareholders' equity 322,492 359,907 363,127

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PANAMCO VENEZUELA
(Stated in thousands of U.S. dollars, except for unit cases)

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
----------------------------------------
2000 1999 1998
------------ ------------ ------------

STATEMENT OF OPERATIONS DATA:
Net sales $ 515,853 $ 512,292 $ 550,677
Cost of sales, excluding depreciation and amortization 240,204 236,197 264,187
Operating expenses, excluding facilities
reorganization charges 292,239 267,691 263,168
Facilities reorganization charges 49,483 28,660 -
---------- --------- ----------
Operating income (loss) (66,073) (20,256) 23,322
Interest expense, net (24,816) (18,028) (9,801)
Other income (expense), net 1,002 (3,337) 17,760
---------- --------- -----------
Income (loss) before income taxes (89,887) (41,621) 31,281
Provision (benefit) for income tax (8,173) 8,353 2,930
---------- --------- -----------
Net income (loss) attributable to Panamco $ (81,714) (49,974) $ 28,351
========== ========= ===========
UNIT CASES SALES DATA (IN MILLIONS):
Soft drinks 156.5 151.7 195.9
Water 22.6 18.4 14.3
Beer 1.9 0.5 -
Other products 6.3 6.8 6.3

OTHER DATA:
Depreciation and amortization $ 96,804 $ 71,156 $ 65,099
Capital expenditures $ 30,408 $ 33,183 $ 68,361
Cash operating profit $ 53,568 $ 69,800 $ 88,421

AT DECEMBER 31,
---------------------------------------
2000 1999 1998
------------ ------------ -----------
BALANCE SHEET DATA:
Cash and equivalents $ 21,575 $ 35,872 $ 31,211
Property, plant and equipment, net 305,017 339,417 355,054
Total assets 469,278 566,371 589,543
Total debt 182,137 188,000 16,065
Total liabilities 354,129 364,259 330,366
Shareholders' equity 115,149 202,112 259,177

10-K 45th Page of 141 TOC 1st Previous Next Bottom Just 45th

PANAMCO CENTRAL AMERICA
(COSTA RICA, NICARAGUA AND GUATEMALA)
(Stated in thousands of U.S. dollars, except for unit cases)

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
----------------------------------------
2000 1999 1998
------------ ------------ ------------

STATEMENT OF OPERATIONS DATA:
Net sales $ 225,504 $ 212,074 $ 190,355
Cost of sales, excluding depreciation and amortization 103,069 100,781 90,829
Operating expenses, excluding facilities
reorganization charges 92,804 84,261 76,593
Facilities reorganization charges 6,598 - -
---------- ---------- -----------
Operating income 23,033 27,032 22,933
Interest expense, net (729) (1,843) (4,292)
Other income (expense), net (2,595) (5,692) 2,505
---------- ---------- -----------
Income before income taxes 19,709 19,497 21,146
Provision for income tax 4,021 5,468 5,661
---------- ---------- -----------
Net income attributable to Panamco $ 15,688 $ 14,029 $ 15,485
========== ========== ===========
UNIT CASE SALES DATA (IN MILLIONS):
Soft drinks 70.2 69.7 63.0
Water 2.7 3.6 2.2
Other products 0.6 0.6 0.6

OTHER DATA:
Depreciation and amortization $ 17,652 $ 17,990 $ 15,039
Capital expenditures $ 17,363 $ 21,139 $ 38,540
Cash operating profit $ 43,790 $ 45,022 $ 37,972

AT DECEMBER 31,
---------------------------------------
2000 1999 1998
------------ ------------ -----------
BALANCE SHEET DATA:
Cash and equivalents $ 15,742 $ 8,496 $ 9,603
Property, plant and equipment, net 104,803 104,478 105,925
Total assets 192,628 181,255 174,710
Total debt 13,780 16,299 44,260
Total liabilities 80,683 67,861 86,917
Shareholders' equity 111,945 113,394 87,793

------------------------------
Includes only nine months of Panamco Guatemala.

10-K 46th Page of 141 TOC 1st Previous Next Bottom Just 46th

2000 COMPARED TO 1999

CONSOLIDATED RESULTS OF OPERATIONS

Net sales increased 7.6% to $2.6 billion in 2000 from $2.4 billion in
1999, mainly due to an increase of 5.1% in consolidated unit case sales
volume. Total unit cases sales increased to 1,222.5 million cases from 1,163.1
million unit cases in the 1999. Soft drink sales volume for the period
increased by 2.7%, reflecting increases of 5.9% in Mexico, 3.2% in Venezuela,
0.7% in the Central American Region, 1.1% in Colombia and 0.4% in Brazil. Unit
case sales volume of bottled water increased 14.4% to 238.4 million, and beer,
sold in Brazil and Venezuela, increased 8.8% to 69.4 million unit cases.

The cost of sales as a percentage of net sales decreased to 47.8% in
2000, from 49.3% in 1999. This decrease resulted primarily from cost savings
in raw materials and packaging in several countries due to improved
procurement contracts.

The following comments reflect the consolidated results of operations
excluding the recording of facilities reorganization charges, asset
write-downs presented as part of depreciation, and nonoperating charges
totaling $494.2 million ($27.7 million in 1999), net of the related tax
benefit of $46.5 million ($11.9 million in 1999):

Operating expenses as a percentage of net sales increased slightly to
44.6% in 2000 from 44.5% in 1999, mainly as a result of the corporate office
move to Miami and a one-time charge of $4.0 million related to senior
management changes.

Operating income increased 30.9% to $195.9 million from $149.6 million in
1999, primarily as a result of the initial benefits of the reorganization
program. Cash operating profit increased 18.5% to $474.6 million in 2000 from
$400.4 million in 1999.

Net interest expense increased to $110.4 million in 2000 from $100.1
million in 1999, due primarily to an increase in the average variable London
Inter-Bank Offered Rate ("LIBOR") interest rate. Total net debt decreased to
$1,062.0 million at December 31, 2000 from $1,195.5 million at December 31,
1999.

Other expense, net decreased to $25.7 million in 2000 from $34.9 million
in 1999, primarily caused by a $22.5 decrease in foreign exchange losses in
Brazil due to a 48.0% devaluation of the Brazilian real during 1999, partially
offset by a loss in sale of investments of $4.8 million, a $4.7 million
decrease in operating income from non-bottling subsidiaries, and a $3.2
million decrease in capital expenditure incentives from The Coca-Cola Company.

The consolidated effective income tax rate decreased to 114.2% in 2000
from 295.2% in 1999, as a result of the effect of the asset tax (minimum tax)
in Venezuela and our decision to establish a valuation allowance on benefits
of tax loss carry-forwards from prior years in Venezuela because of the
uncertainty that we would have sufficient taxable income in the near term to
offset against such benefits in 1999.

As a result of the foregoing, Panamco had a net loss in 2000 of $10.5
million, or $0.08 per share (basic and diluted), compared to a net loss of
$32.2 million, or $0.25 per share (basic and diluted), during 1999.

10-K 47th Page of 141 TOC 1st Previous Next Bottom Just 47th

Facilities reorganization charges

During the first quarter of 2000, Panamco began a company-wide reorganization
program designed to improve productivity and strengthen the Company's
competitive position in the beverage industry. The program includes
productivity initiatives to streamline Panamco's manufacturing infrastructure,
consolidation of distribution centers and warehouses, and the termination of
approximately 10,000 jobs across all levels of the Company.

During the fourth quarter of 2000, Panamco performed an analysis of the
Company's growth opportunities, cost structure and asset valuation. This
resulted in several new steps to further position the Company for improved
financial performance and future growth. These steps include additional
restructuring of the distribution system in Brazil and Venezuela, plant
closings and related disposal of property, plant and equipment, write-down of
goodwill in the Venezuelan operating unit, write-off of obsolete fixed assets,
bottles and cases, and asset write-downs related to coolers.

During the year ended December 31, 2000, Panamco recorded charges of $540.7
million, which was comprised of $503.6 million of facilities reorganization
charges, $31.1 million of asset write-downs presented as part of depreciation
and amortization expenses, and $6.0 million of charges related to the disposal
of nonoperating assets presented in other income (expense). The following is a
detail of the aforementioned items:

I. Facilities reorganization charges of $503.6 million consist of:

1. Restructuring charges totaling $111.5 million consist of:

o Cash restructuring charges totaling approximately $86.7 million,
which include $77.3 million related to job terminations and $9.4
million related to the restructuring of our distribution system in
Brazil and Venezuela; and

o Noncash restructuring charges totaling approximately $24.8 million,
which result from plant closings and the related disposal of
property, plant and equipment.

2. Asset write-offs totaling $383.5 million consist of:

o $350 million write-down of goodwill reflecting the recognition of
impairment of the cost in excess of net assets acquired in the
Venezuelan operating unit;

o $23.8 million of obsolete property, plant and equipment in all
operating units;

o $7.8 million of obsolete bottles and cases, mainly in the Venezuelan
unit's water jug business; and

o $1.9 million of cash charges related to the disposal of property,
plant and equipment.

3. Nonrecurring charges totaling $8.6 million related to legal
contingencies mostly pertaining to tax matters.

II. Asset write-downs totaling $31.1 million presented as part of
depreciation and amortization expenses consist of:

o $11.0 million from an increase in provision related to changing the
useful lives of coolers; and

o $20.1 million resulting from the write-down of bottles and cases due
to loss in market value.

III. Nonoperating asset charges totaling $6.0 million related to the disposal
of nonoperating assets, including the sale of affiliated companies and
land in some of the operating units.

As a result of the above, Panamco's income for the year 2000 was impacted
by facilities reorganization charges, asset write-downs and nonoperating charges
totaling $494.2 million, net of the

10-K 48th Page of 141 TOC 1st Previous Next Bottom Just 48th

related tax benefit of approximately $46.5 million, compared to facilities
reorganization charges totaling $27.7 million, net of the related tax benefit
of $11.9 million in 1999.

The following table shows a summary of the net charges and benefits
recorded in the consolidated statements of operations for the year ended
December 31, 2000 and 1999:

[Download Table]

2000 1999
---------------------------------- ---------
FOURTH FIRST
TOTAL QUARTER QUARTER TOTAL
---------------------------------- ---------

<Depreciation and amortization,
excluding goodwill:
Asset write-downs $ 31,079 $ 31,079 $ - $ -
--------- --------- --------- ---------
Facilities reorganization charges:
Cash 88,572 48,226 40,346 14,902
Noncash 415,087 375,555 39,532 20,270
--------- --------- --------- ---------
503,659 423,781 79,878 35,172
Other income (expense), net:
Nonoperating charges 5,976 590 5,386 4,391
--------- --------- --------- ---------
Gross charges 540,714 455,450 85,264 39,563

Tax benefit (46,516) (23,111) (23,405) (11,869)
--------- --------- --------- ---------
Net charges $494,198 $432,339 $ 61,859 $ 27,694
========= ========= ========== =========

The Company believes that the expected effects on future earnings and
cash flows resulting from the facilities reorganization program are as
follows:

o New cost savings initiatives are expected to yield annual savings of
approximately $45.0 million, or $0.35 per share, after tax beginning
in 2001;
o Free cash flow is expected to increase to approximately $200.0
million in 2001;
o Cash operating profit is expected to grow 11%-14% annually; and
o Net income is expected to increase in the 15%-20% range for 2002 and
2003.

MEXICO

Panamco Mexico, which operates in central Mexico, excluding Mexico City,
reported net sales of $974.8 million in 2000, an increase of 22.7% from $794.8
million in 1999. Soft drink sales increased 21.3% on volume growth of 5.9% to
285.8 million unit cases and a 14.7% price increase in dollar terms. Water
volume grew 20.3% to 164.2 million unit cases, mainly due to the continued
increase in water jug sales volume due to increased coverage of the Company's
franchise territories.

Cost of sales as a percentage of net sales was 44.2% in 2000 as compared
to 47.1% in 1999, mainly due to continued cost savings in raw materials.

The following comments reflect the results of Panamco Mexico excluding
the recording of facilities reorganization charges, asset write-downs
presented as part of depreciation, and nonoperating charges totaling $24.9
million, net of the related tax benefit of $12.9 million in 2000 (no expenses
of this nature were recorded during 1999):

10-K 49th Page of 141 TOC 1st Previous Next Bottom Just 49th

Operating expenses as a percentage of net sales increased to 39.8% in
2000 from 36.1% in 1999, mainly due to increased selling, general and
administrative expenses as a result of higher sales commissions and increased
administrative wages and benefits and higher depreciation expenses.

Operating income increased by 17.0% to $155.8 million and as a percentage
of net sales was 16.0% in 2000 compared to 16.8% in 1999. Cash operating
profit increased 27.6% to $221.4 million in 2000 from $173.5 million in 1999.

Net interest expense in 2000 increased by 4.3% to $12.4 million from
$11.8 million in 1999, due to the issuance of an aggregate of $106 million in
unsecured Mexican peso denominated promissory notes in November of 1999 in a
local debt offering. Net debt was $62.0 million at December 31, 2000 compared
to $68.5 million at December 31, 1999 primarily as a result of the local debt
offering.

Other income, net was $2.6 million in 2000, compared to $7.6 million in
1999, mainly due to a decrease in operating income from non-bottling
subsidiaries of $4.5 million.

The effective income tax rate in 2000 was 37.0% compared to 32.5% in
1999, primarily due to the recognition of tax credits related to tax losses in
some companies merged in 1999, which were not available in 2000.

As a result of the foregoing, net income contributed by Panamco Mexico to
the Company increased 7.4% to $88.3 million during 2000 from $82.2 million in
1999.

BRAZIL

Panamco Brasil, which operates in the Sao Paulo, Campinas, Santos and
Mato Grosso do Sul regions of Brazil, reported net sales of $496.5 million in
2000, a decrease of 0.8% from $500.7 million in 1999, attributable to a lower
average price per beer sold, as a result of increased direct sales made by
Cervejarias Kaiser to the supermarkets, for which Panamco Brasil records only
the commissions as sales. Sales volume of soft drinks increased by 0.4%, to
236.9 million unit cases. Beer volume increased by 6.7% to 67.5 million unit
cases and bottled water volume increased 14.4% to 14.5 million unit cases.

Cost of sales as a percentage of net sales increased slightly to 61.6% in
2000 from 61.1% in 1999. The increase is primarily attributable to an increase
in the cost of sugar of 20.0%, partially offset by reductions in other raw
materials and production labor and increased direct sales to supermarkets by
Cervejerias Kaiser in Panamco Brasil territories.

The following comments reflect the results of Panamco Brasil excluding
the recording of facilities reorganization charges, asset write-downs
presented as part of depreciation, and nonoperating charges totaling $19.3
million ($3.6 million in 1999), net of the related tax benefit of $5.7 million
($1.5 million in 1999):

Operating expenses as a percentage of net sales decreased to 34.1% in
2000 from 37.4% in 1999, due to cost and expense reductions resulting from the
Company's reorganization program.

Operating income increased 175.9% to $21.1 million from $7.6 million in
1999, primarily as a result of the initial benefits of the reorganization
program. Cash operating profit increased 26.3% to $51.1 million in 2000 from
$40.4 million in 1999.

Net interest expense decreased 17.0% to $12.2 million in 2000 from $14.7
million in 1999 as a result of improved financing conditions from the hedging
contract entered into on May 25, 2000 and lower interest

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costs resulting from debt reduction. Net debt was $52.3 million at December
31, 2000 compared to $70.7 million at December 31, 1999.

Other expense, net decreased to $15.5 million from $36.6 million in 1999,
mainly as a result of a decrease in foreign exchange loss, which was $5.4
million in 2000 due to a 9.3% devaluation of the Brazilian real versus a $27.9
million foreign exchange loss in 1999 due to a 48.0% devaluation.

The effective income tax benefit increased to 140.0% from 69.2% in 1999,
mainly due to favorable tax planning strategies.

As a result of the above, net income contributed to Panamco by Panamco
Brasil increased 121.8% to $2.9 million in 2000 from a net loss of $13.1
million in 1999.

COLOMBIA

Panamco Colombia, which operates throughout Colombia, reported net sales
of $386.7 million in 2000, a 2.6% decrease from $397.0 million in 1999. The
revenue decline was mainly due to the devaluation of the Colombian peso and to
a 7.5% decrease in water volume to 34.5 million unit cases, partially offset
by a 1.1% increase in soft drink volume to 155.7 million unit cases. The water
volume decrease was attributable to economic recession and price increases
mainly in individual-size presentations.

Cost of sales as a percentage of net sales decreased to 43.0% in 2000
from 44.2% in 1999, as a result of cost savings in raw materials.

The following comments reflect the results of Panamco Colombia excluding
the recording of facilities reorganization charges, asset write-downs
presented as part of depreciation, and nonoperating charges totaling $31.5
million ($1.0 million in 1999), net of the related tax benefit of $13.2
million ($0.4 million in 1999):

Operating expenses as a percentage of net sales decreased to 51.4% in
2000 from 52.1% in 1999, mainly due to cost and expense reductions resulting
from the Company's reorganization program.

Operating income increased 50.0% to $21.7 million from $14.5 million in
1999, primarily as a result of the initial benefits of the reorganization
program. Cash operating profit increased 14.3% to $84.2 million in 2000 from
$73.6 million in 1999.

Net interest expense decreased to $4.5 million in 2000 from $6.8 million
in 1999, caused by less interest paid resulting from debt reduction. Net debt
was $11.4 million at December 31, 2000 compared to $79.7 million at December
31, 1999.

Other expense, net increased to $8.4 million in 2000 from income of $2.8
million in 1999, primarily due to a loss in sale of investments of $4.8
million, a $2.5 million provision for legal contingencies, and a $3.2 million
reduction in capital expenditure grants from The Coca-Cola Company.

The effective income tax rate increased to 55.5% in 2000 from 13.1% in
1999, primarily due to the recognition of tax credits recorded in 1999, which
were not available in 2000.

As a result of the above, net income attributable to the Company from
Panamco Colombia decreased 48.9% to $4.5 million in 2000 from $8.8 million in
1999.

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VENEZUELA

Panamco Venezuela reported net sales of $515.9 million in 2000, an
increase of 0.7% from $512.3 million in 1999. The increase was mainly due to
higher total unit case volume of 5.5% offset by price decreases in dollar
terms attributable to devaluation of the Venezuelan bolivar, which was not
fully offset by price increases in local currency. Sales volume of soft drinks
increased by 3.2%, to 156.5 million unit cases and water volume increased
22.3% to 22.6 million unit cases. Beer, which we began selling during the
second quarter of 1999, increased in volume by 284.3%, contributing 1.9
million unit cases to our total unit case volume.

Cost of sales as a percentage of net sales increased slightly to 46.6% in
2000 from 46.1% in 1999, as a result of higher costs associated with the
increase in sales of non-returnable presentations.

The following comments reflect the results of Panamco Venezuela
excluding the recording of facilities reorganization charges, asset
write-downs presented as part of depreciation, and nonoperating charges
totaling $58.9 million ($23.1 million in 1999), net of the related tax
benefit of $13.6 million ($9.9 million in 1999):

Operating expenses as a percentage of net sales remained flat at 52.3% in
2000 and 1999.

Operating income decreased 33.3% to $5.6 million in 2000 from $8.4
million in 1999, primarily as a result of higher depreciation costs. Cash
operating profit increased slightly by 0.8% to $80.2 million in 2000 from
$79.6 million in 1999.

Net interest expense increased to $24.8 million in 2000 from $18.0
million in 1999, mainly due to an increase in the average net debt position,
$2.0 million in costs incurred in a $120.0 million hedging contract entered
into on July 18, 2000 and an increase in the average variable (LIBOR) interest
rate. Net debt was $160.5 million at December 31, 2000 compared to $152.1
million at December 31, 1999.

Other income, net decreased 79.1% to $0.2 million from $1.1 million in
1999.

The effective income tax benefit increased to 31.0% in 2000 from income
tax of 213.2% in 1999. The increased rate of 1999 was primarily due to the
asset tax or minimum tax paid in Venezuela as a result of a net loss position
before income taxes and our decision to establish a valuation allowance on
benefits of tax loss carry-forwards from prior years, because of the
uncertainty that we would generate sufficient taxable income in the near term
to offset against such benefits.

As a result of the above, the net loss attributable to the Company from
Panamco Venezuela decreased 14.9% to $22.8 million in 2000 from $26.8 million
in 1999.

CENTRAL AMERICA

Panamco's Central American region includes franchises in Costa Rica,
Nicaragua and Guatemala. The region reported net sales of $225.5 million in
2000, a 6.3% increase from $212.1 million in 1999. The increase was
attributable to price increases in dollar terms of approximately 7.0%,
partially offset by volume decline of 0.5% to 73.5 million unit cases. Soft
drink volume increased 0.7% to 70.2 million unit cases and water volume was
down 25.1% to 2.7 million unit cases, due to a change in selling strategy for
jug presentations mainly in Costa Rica.

Cost of sales as a percentage of net sales decreased to 45.7% in 2000
from 47.5% in 1999, as a result of cost savings in raw materials.

The following comments reflect the results of Panamco Central America
excluding the recording of

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facilities reorganization charges, asset write-downs presented as part of
depreciation, and nonoperating charges totaling $6.2 million, net of the
related tax benefit of $1.2 million (no expenses of this nature were recorded
during 1999):

Operating expenses as a percentage of net sales increased to 40.8% in
2000 from 39.7% in 1999, primarily as a result of higher sales and
distribution expenses.

Operating income increased 12.5% to $30.4 million in 2000 from $27.0
million in 1999, primarily as a result of higher sales. Cash operating profit
increased 5.0% to $47.3 million in 2000 from $45.0 million in 1999.

Net interest expense decreased 60.4% to $0.7 million in 2000 from $1.8
million in 1999, due to a decrease in net debt and improved financing
conditions. Net cash was $2.0 million at December 31, 2000 compared to net
debt of $7.8 million at December 31, 1999.

Other expense, net decreased to $2.6 million in 2000 from $5.7 million in
1999, mainly as a result of lower foreign exchange losses in Nicaragua and
Guatemala.

As a result of the above, net income contributed by Panamco Central
America to the Company increased 56.1% to $21.9 million in 2000 from $14.0
million in 1999.

1999 COMPARED TO 1998

CONSOLIDATED RESULTS OF OPERATIONS

Net sales decreased 12.9% to $2.4 billion in 1999 from $2.8 billion in
1998, mainly due to the effect of the poor economies in Brazil, Colombia, and
Venezuela, resulting in decreased sales volume in soft drinks in Colombia and
Venezuela, offset by increased volumes in Mexico and Central America and
increased sales volume of water in all countries except Colombia. Increased
sales volumes in these countries were due to strategic marketing initiatives.
Unit case volume also increased in Brazil, although sales were lower compared
to 1998 due to Panamco Brasil's promotional pricing strategy and the
devaluation of the Brazilian real. Soft drink sales volumes in 1999 increased
5.2% in Mexico, 7.5% in Brazil and 10.6% in Central America, but were 17.7%
and 22.6% lower in Colombia and Venezuela, respectively. As a result, net
consolidated sales volume decreased 4.4%. Beer, which we began selling in both
Brazil and Venezuela, contributed an increase of 2.6% in sales volume to 63.8
million unit cases (including 0.5 million unit cases from Venezuela). Bottled
water volume increased 23.3% in Mexico, 14.3% in Brazil, 28.6% in Venezuela
and 63.6% in Central America, and decreased 15.4% in Colombia, resulting in a
net consolidated increase of bottled water volume of 14.3%. Overall unit case
volume decreased by 0.9%.

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

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

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During 1999, we spent $163.2 million on our capital expenditure program, which
includes approximately $49.0 million for the placement of cold equipment in
all countries.

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

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

Other expense, net increased to $39.3 million in 1999 from other income,
net of $22.1 million in 1998, driven primarily by foreign exchange losses in
Brazil of $27.8 million due to a 48.0% devaluation of the Brazilian real
during the year, decreased equity in earnings at Cervejarias Kaiser in Brazil
and lower contributions for capital expenditures from The Coca-Cola Company.
Additionally, during the second quarter of 1999, The Coca-Cola Company changed
its cold equipment capital participation program to ensure that any funds
received by us during 1999 and future years be recognized as income in
installments over a 60-month period. Our ability to include such amounts as
income will also depend on whether we meet certain conditions in the future.
Prior to the change, such amounts were included as income upon receipt, as no
future conditions were required to be met.

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

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

MEXICO

Panamco Mexico, which operates in central Mexico, excluding Mexico City,
reported net sales of $794.8 million in 1999, an increase of 24.5% from $638.5
million in 1998, resulting from increased sales volume in water and soft
drinks due to the continued growth in sales of nonreturnable presentations.
Soft drink sales volume increased 5.2% and sales volume for bottled water
increased 23.3%. The sales volume growth in water was mainly due to the
continued increase in water jug sales volume due to increased coverage of the
Company's franchise territories.

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

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

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

Net interest expense in 1999 increased by 18.7% to $11.8 million from
$10.0 million in 1998 due to the issuance of an aggregate of $106 million in
unsecured peso denominated promissory notes in November of 1999 in a local
debt offering. Net debt was $68.5 million at December 31, 1999 compared to
$5.1 million at December 31, 1998 primarily as a result of the local debt
offering.

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

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

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

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

BRAZIL

Panamco Brasil, which operates in the Sao Paulo, Campinas, Santos and
Mato Grosso do Sul regions of Brazil, reported net sales of $500.7 million in
1999, a decrease of 44.2% from $898.0 in 1998, attributable to local currency
devaluation of 48.0% and price discounting in connection with our promotional
pricing strategy. Total sales volume increased 6.6% to 311.9 million unit
cases, as a result of Panamco's promotional pricing strategy in place during
1999, which was implemented to respond to competition from the "B" brands.
Higher sales volumes were offset by lower per unit prices. Beer volume
increased 1.8% to 63.3 million unit cases from 62.2 million unit cases in the
prior year. Water volume increased 14.3% to 12.7 million unit cases and soft
drink sales volume increased 7.5% to 235.9 million unit cases.

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

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

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

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

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

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

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

COLOMBIA

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

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

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

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

Net interest expense increased to $6.8 million in 1999 from $5.3
million in 1998, due mainly to a new governmental tax on financial
transactions, which came into effect in the fourth quarter of 1998. Net
debt was $79.7 million at December 31, 1999 compared to $60.3 million at
December 31, 1998.

Other income, net decreased 47.2% to $2.8 million in 1999 from $5.3
million in 1998 primarily due to lower contributions from The Coca-Cola
Company for capital expenditures and changes in The Coca- Cola Company's cold
equipment capital participation program as discussed above.

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

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

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VENEZUELA

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

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

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

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

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

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

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

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

CENTRAL AMERICA

Panamco's Central American region includes franchises in Costa Rica,
Nicaragua and Guatemala. The region reported net sales of $212.1 million in
1999, an 11.4% increase from $190.4 million in 1998, resulting primarily from
increases in soft drink and bottled water volume of 10.6% and 63.6%,
respectively, partially offset by a 15.1% devaluation of the Guatemalan
quetzal. Panamco Guatemala accounted for almost all of the soft drink volume
increase in the region, which sold 19.5 million unit cases versus 13.3

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million in the prior year period. Sales volume in Nicaragua increased 2.9% to
21.4 million unit cases versus 20.8 million unit cases in the prior year. Soft
drink sales volume in Costa Rica was up 0.7% to 28.7 million unit cases. The
increase in water volume resulted from increases at all franchises.

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

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

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

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

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

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

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

CAPITAL EXPENDITURES

Total capital expenditures were $124 million, $163 million and $302
million in 2000, 1999 and 1998, respectively. During 2000, approximately 46%,
6%, 7%, 6%, 25%, 5% and 4% of such expenditures were made by Panamco Mexico,
Panamco Brasil, Panamco Colombia, Panamco Costa Rica, Panamco Venezuela,
Panamco Nicaragua and Panamco Guatemala, respectively. The principal
components of such capital expenditures during 2000 were:

o $40 million for increasing production capacity,

o $22 million in Company's fleet of vehicles,

o $12 million for coolers, vending and post-mix equipment,

o $12 million in environmental facilities, and

o $38 million for operational and other purposes.

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

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are proposed to be made.

During 2001, we estimate that we will have aggregate capital expenditures
of approximately $87 million. Of our estimated total capital expenditures for
2001, we expect to spend approximately:

o $39 million in Mexico to upgrade our operating facilities,

o $9 million in Brazil mainly for operational and replacement purposes,

o $9 million in Colombia mainly for equipment used for marketing and
environmental facilities,

o $13 million in Venezuela to continue our program of strategic
placement of cold storage equipment, and

o $17 million in our Panamco Central American franchises for equipment
used for marketing and environmental facilities.

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

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

The Coca-Cola Company from time to time provides incentives for its
bottlers to make particular types of capital expenditures. During 2000, 1999
and 1998, such incentives consisted of grants which are included as other
income in "Other income (expense)" in the consolidated financial statements,
and loans included in the indebtedness referred to above. During the second
quarter of 1999, The Coca-Cola Company changed its cold equipment capital
participation program to ensure that any funds received by us during 1999 and
future years will be recognized as income in installments over a 60-month
period. Our ability to include such amounts as income will also depend on
whether we meet certain conditions in the future. Prior to the change, such
amounts were included as income upon receipt, as no future conditions were
required to be met, without regard to our earnings. See "--1999 Compared to
1998--Consolidated Results of Operations" and Note 17 of "Notes to
Consolidated Financial Statements". The Coca-Cola Company also provides
cooperative advertising support to us.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2000, we had consolidated cash and cash equivalents of
$191.8 million, an increase of 25.6% compared to $152.6 million as of December
31, 1999. Our total consolidated indebtedness was $1,253.8 million at December
31, 2000 compared to $1,348.1 million at December 31, 1999. We have
investments in bank deposits for $126.4 million, which guarantee bank loans
obtained by subsidiaries and are therefore classified as non-current
investments.

Consolidated cash flow provided by operations was $300.0 million, $226.0
million and $270.0 million in 2000, 1999 and 1998, respectively.

Uses of funds for 2000, 1999 and 1998 included purchases of minority
interests, capital expenditures, bottling and packaging expenditures and
payment of shareholder dividends. Purchases of minority interests were $28
million in 1998. No material minority interests were purchased in 2000 and
1999. Capital expenditures, as noted above, were $124.0 million, $163.0
million and $302.0 million in 2000, 1999 and 1998, respectively. We had
expenditures for bottles and cases of $74.0 million, $75.0 million and

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$124.0 million in 2000, 1999 and 1998, respectively. We paid dividends of
$30.9 million during 2000 and $31.1 million during 1999 and 1998. Dividends to
minority shareholders in the consolidated subsidiaries paid during 2000, 1999
and 1998 were $1.0 million, $0.5 million and $0.7 million, respectively.

As a holding company, our principal sources of cash are dividends from our
subsidiaries and sales of our securities. The amount of dividends payable by the
subsidiaries to us is subject to general limitations imposed by the corporate
laws of the respective jurisdictions of incorporation of such subsidiaries.
Dividends paid to us and other foreign shareholders by the subsidiaries are
subject to investment registration requirements and withholding taxes.
Withholding tax rates on dividends are currently 7.69% in Mexico, 7% in Colombia
and 15% in Costa Rica. There are no withholding taxes on dividends paid by
Panamco Brasil to the Company out of income earned after December 31, 1995, and
no withholding taxes on dividends paid by Panamco Nicaragua and Panamco
Guatemala. Effective January 1, 2001, Venezuela imposed a 34% withholding tax on
dividends that arose from earnings that have not been subject to the payment of
income tax.

Dividends from earnings generated until 1998 are not subject to income
taxes in Mexico, as long as they are paid from "net taxed income" ("UFIN").
Dividends not paid from UFIN are subject to a 35.0% income tax. Since 1999,
dividends paid to individuals or foreign residents are subject to income tax
withholding of an effective tax rate of approximately 7.6%. If earnings
generated after 1998 for which no corporate tax has been paid are distributed,
the tax must be paid upon distribution of the dividends. Consequently, we must
keep a record of earnings subject to each tax rate.

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

Total consolidated indebtedness was $1,253.8 million as of
December 31, 2000, consisting of $825.0 million at the holding company level
and $428.8 million of subsidiary indebtedness.

Substantially all of our total indebtedness is denominated in U.S.
dollars. Our practice is to enter into arrangements to hedge interest and
currency exchange rate exposure where the terms of such arrangements are
reasonable in relation to the exposure risks.

On May 25, 2000, Panamco Brasil entered into a $30.0 million interest
rate swap hedging contract with Citibank, N.A. The contract includes a $10.0
million annual interest rate swap at 19.7% with a one year expiration date and
a $20.0 million annual interest rate swap at 19.7% with a one and a half year
expiration date.

On July 18, 2000, Panamco Venezuela entered into a $120.0 million
cross-currency swap hedging contract with Citibank, N.A. The contract includes
a three year $120.0 million currency swap, at an annual rate of U.S. LIBOR
plus 4.05%, from the Japanese yen to the U.S. dollar, out of which $50.0
million was converted into Venezuelan bolivar, bearing interest at 29.5%, with
a repricing option every six months.

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On March 18, 1999, we borrowed $300.0 million from a syndicate of banks
to repay an existing loan for $160.0 million and for general corporate
purposes. This syndicated loan for a three years term accrued interest at an
average annual interest rate of three-month LIBOR plus 3.5%. During November
1999, $80.0 million of this loan was repaid prior to scheduled repayment date.
During 2000, the Company refinanced the remaining $220.0 million of the loan,
resulting in a new $275.0 million loan agreement with quarterly interest
payments at an average interest rate of three-month LIBOR plus 1.5% (7.9% at
December 31, 2000). For the year ended December 31, 2000, the loan agreement
establishes, among other restrictions, a minimum consolidated equity of
$1,000.0 million and other covenants and ratios.

As of December 31, 2000, the Company had repaid prior to the scheduled
repayment date $100.0 million out of a $200.0 million loan obtained on December
23, 1998 from Coca-Cola Financial Corporation ("CCFC"). On February 28, 2001,
the Company repaid the total outstanding amount of the loan with CCFC.

On November 12, 1999, our Mexican subsidiary placed 1 billion pesos
(approximately $106.0 million) of seven-year Notes in the Mexican capital
markets. The issue is denominated in UDIs (unit of real constant value, in
Mexican pesos, whose value is calculated by Bank of Mexico), an inflation-
linked instrument, and will pay a coupon of 8.65% over the principal balance,
which will be adjusted periodically for inflation. The proceeds from the debt
issue were mainly used to pay an $80.0 million inter-company loan with the
Company and for general corporate purposes.

In July 2000, Panamco Colombia issued unsecured promissory notes in local
currency equivalent to $32.0 million. These notes include a $15.0 million
issuance with a five year maturity and bearing interest at DTF (Colombian
borrowing rate) plus 2.75% and a $17.0 million issuance with a seven year
maturity and bearing interest at DTF plus 2.90%, of which both issuances pay
interest quarterly. The proceeds from the debt issue were used to pay U.S.
dollar denominated debt.

On December 9, 1999, the Board of Directors approved a share repurchase
program for up to $100.0 million of the company's Class A common stock. We may
repurchase shares in the open market as well as in privately negotiated
transactions based on prevailing market conditions and other factors. We have
repurchased 1,153,879 shares for $21.2 million at an average price per share
of $18.41 since the beginning of the program in December 1999. During the year
ended December 31, 2000, we repurchased 785,295 shares for an aggregate of
$13.7 million at an average price per share of $17.41.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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The following table shows our financial instruments that are sensitive to
changes in interest rates. In this table, the fair value of long-term debt shown
is based on the quoted market prices, or, when quoted market prices were not
available, the present value of future cash flows:

[Enlarge/Download Table]

Expected Maturity Date 2000 1999
------------------------------------------- ------------------------------ ----------------
There-
2001 2002 2003 2004 2005 after Total F.V. (3) Total F.V. (3)
---- ---- ---- ---- ---- ----- ----- -------- ----- --------

Interest Rate Risk
(Amounts in equivalent millions
of U.S. dollars)
Fixed Rate Debt (1)
-------------------
- In US Dollars $ 50.6 $ 1.3 $155.8 $ 3.4 $ 1.3 $ 300.0 $ 512.4 $ 513.9 $ 518.7 $ 504.8
Weighted Average Interest Rate 9.0% 9.1% 8.1% 10.3% 8.9% 7.3%
- In Brazilian Reals - $ 0.7 $ 1.6 - - - $ 2.3 $ 2.1 - -
Weighted Average Interest Rate - 10.0% 10.1% - - -
- In Guatemalan Quetzals $ 2.2 $ 0.8 $ 0.8 $0.8 $ 0.6 - $ 5.2 $ 5.1 $ 5.6 $ 6.1
Weighted Average Interest Rate 20.8% 19.0% 19.0% 19.0% 19.0% -
- In Costa Rican Colons - - - - - - - - $ 2.2 $ 2.3
Weighted Average Interest Rate - - - - - -
Floating Rate Debt (2)
----------------------
- In US Dollars (4) $164.7 - - $298.0 - - $ 462.7 $ 464.6 $ 667.3 $ 716.4
Weighted Average Interest Rate 7.0% - - 8.0% - -
- In Colombian Pesos (5) - - - - $ 13.8 $ 15.3 $ 29.1 $ 29.1 $ 26.9 $ 27.8
Weighted Average Interest Rate - - - - 15.5% 15.6%
- In Brazilian Reals (5) $ 7.8 - - - - - $ 7.8 $ 7.8 $ 20.9 $ 19.7
Weighted Average Interest Rate 13.0% - - - - -
- In Japanese Yen (5) - - $119.1 - - - $ 119.1 $ 119.1 - -
Weighted Average Interest Rate - - 4.1% - - -
- In Mexican Pesos (5) - - - - - $ 115.2 $ 115.2 $ 115.2 $ 106.5 $ 120.0
Weighted Average Interest Rate - - - - - 8.7%
------- ------- ------- ------- ------- -------- -------- -------- -------- ---------
Total debt $225.3 $ 2.8 $277.3 $302.2 $ 15.7 $ 430.5 $1,253.8 $1,256.9 $1,348.1 $1,397.1
======== ======== ======== ========
Less bank loans $ 40.3
-------
Total 2001 long-term debt $185.0
=======

--------------------------------------

(1) Fixed interest rates are weighted averages as contracted by us.
(2) Floating interest rates are based on market rates as of December 31,
2000, plus the weighted-average spread for us.
(3) F.V. = Fair Value
(4) Market interest rates are based on the U.S. dollar LIBOR curve.
(5) Market rates are based on the country benchmark or LIBOR and assume a flat
yield curve.

(2) Foreign Exchange Risk. Our currency exchange risk is generally related to
the potential devaluation of the U.S. dollar against the Latin American
currencies used in the countries in which we have operations. In each country
where we operate, our sales are in local currencies, while our debt is mostly
in U.S. dollars. Therefore, foreign currency exchange exposure relates
primarily to our debt obligations in U.S. dollars, which are shown in the
previous interest rate risk table.

To mitigate the impact of currency exchange rates fluctuations, we may
enter into foreign exchange forward contracts with financial institutions in
order to lock in the exchange rates for anticipated transactions. As of
December 31, 2000, the Company had no foreign exchange forward contracts.

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

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attached hereto beginning at page F-1 and filed as a part of this Form
10-K are the financial statements required by Regulation S-X and the
supplementary data required by Regulation S-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

No disagreements with accountants on any matter of accounting principles
or practices or financial statement disclosure have been reported on a Form
8-K within the twenty-four months prior to the date of the most recent
financial statement.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Our Board of Directors presently consists of 14 members, whose terms are
divided into three classes as set forth below. Coca-Cola currently has the
contractual right to designate three nominees for election to the Board.
Venbottling presently has contractual rights to designate Gustavo A. Cisneros
and Oswaldo J. Cisneros for election to the Board. All directors are elected
for three-year terms.

The following table sets forth at March 26, 2001, the names and
country of citizenship of the members of our Board, their tenure as
directors and the year in which their next term will expire:

COUNTRY OF DIRECTOR TERM
NAME CITIZENSHIP SINCE EXPIRES
---- ----------- -------- -------

Gustavo A. Cisneros.................. Venezuela 1997 2003
Oswaldo J. Cisneros.................. Venezuela 1997 2003
William G. Cooling................... Canada 1994 2001
Gary P. Fayard....................... U.S.A. 2001 2002
Luiz Fernando Furlan................. Brazil 1994 2003
James M. Gwynn....................... U.S.A. 1997 2003
Alejandro Jimenez.................... Costa Rica 1997 2001
Lt. Gen. Donald Colin Mackenzie...... Canada 1989 2001
Wade T. Mitchell..................... U.S.A. 1986 2001
James J. Postl....................... Canada 2000 2002
Henry A. Schimberg................... U.S.A. 2000 2002
Houston Staton....................... Colombia 1997 2002
Stuart A. Staton..................... U.S.A. 1997 2001
Woods W. Staton Welten............... Colombia 1982 2003

The following table sets forth the names, ages and tenures of our
executive officers:

[Enlarge/Download Table]

Years with
NAME AGE POSITION SINCE PANAMCO
---- --- -------- ----- ----------

Albert H. Staton, Jr............ 79 Chairman of the Board Emeritus 1993 49
William G. Cooling.............. 56 Chairman of the Board and Chief Executive 2000 7
Officer

Henry A. Schimberg.............. 68 Vice Chairman of the Board 2000 1
Alejandro Jimenez............... 50 President and Chief Operating Officer 1994 10
Paulo J. Sacchi................. 54 Senior Vice President, Chief Financial 1998 10
Officer and Treasurer

Jose Ignacio Huerta Gonzalez.... 47 Vice President--North Latin American 1999 21
Division (Mexico and Central America)
(President of Panamco Mexico and Panamco
Central America)*

Jorge Giganti................... 57 Vice President--Brazilian Operations 1996 5
(President of Panamco Brasil)

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[Enlarge/Download Table]

Years with
NAME AGE POSITION SINCE PANAMCO
---- --- -------- ----- ----------

Roberto Ortiz................... 45 Vice President--Colombian Operations 1998 7
(President of Panamco Colombia)

Moises Morales.................. 41 Vice President--Venezuelan Operations 1999 5
(President of Panamco Venezuela)

Carlos Hernandez-Artigas........ 37 Vice President--Legal and Secretary 1994 7

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

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

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

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

Mr. Oswaldo J. Cisneros was elected a director of the Company in June
1997. Until late 2000, he was President of Telcel Cellular, C.A., the largest
private cellular communications company in Venezuela, a company that he
founded in partnership with Bellsouth International. He was the Chairman of
Panamco Venezuela until May 1997. Mr. Cisneros is President and owner of
Central Azucarero Portuguesa, a modern and productive sugar mill, President of
Puerto Viejo Marina & Yacht Club and Director of Produvisa (Glass
Manufacturing Co.). Mr. Cisneros is the cousin of Gustavo A. Cisneros.

Mr. William G. Cooling was elected Chairman of the Board and Chief
Executive Officer in October 2000. Mr. Cooling was first elected as a director
of the Company in January 1994. He was Senior Executive Vice President of The
Colgate-Palmolive Company and Chief of Operations, Specialty Marketing and
International Business Development, from 1992 to 1996. For five years prior to
1992, Mr. Cooling served as Executive Vice President and Chief Technological
Officer of The Colgate-Palmolive Company. Mr. Cooling is a partner in Atlantic
Capital Partners LLC, a venture capital company.

Mr. Gary P. Fayard was elected a director of the Company in February 2001
in replacement of Mr. Timothy J. Haas who resigned in January 2001. Mr. Fayard
is Senior Vice President and Chief Financial Officer of The Coca-Cola Company.
Mr. Fayard joined The Coca-Cola Company in April 1994 as Deputy Controller and
was elected Vice President and Controller in July 1994. He was elected to his
current

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position in December 1999. Prior to joining The Coca-Cola Company Mr. Fayard
served 19 year with Ernst & Young, concluding his service there as a partner.

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

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

Mr. Alejandro Jimenez was elected President and Chief Operating Officer
of the Company in April 1994 and was elected a director of the Company in
1997. He served as Vice President-Mexican Operations and President of Panamco
Mexico from March 1992 to April 1994. From July 1991 until March 1992, Mr.
Jimenez was Vice President of the Company. From June 1990 until June 1991, he
was Vice President of the Latin American Division of Coca-Cola. From June 1989
until May 1990, he was the Marketing Director of the Latin American Division
of Coca-Cola.

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

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

Mr. James J. Postl was elected a director of the Company in July 2000 in
replacement of Mr. Weldon H. Johnson who passed away in May 2000. Mr. Postl is
President and Chief Executive Officer of Pennzoil-Quaker State Company. Mr.
Postl joined Pennzoil-Quaker State Company in October 1998 as President and
Chief Operating Officer. He was elected to his current position in May 2000.
Prior to joining Pennzoil-Quaker State Company Mr. Postl served as President
of Nabisco Biscuit Company from 1996 to 1998. Prior to joining Nabisco Mr.
Postl held a variety management positions with PepsiCo, Inc. over a 19-year
period.

Mr. Henry A. Schimberg was elected a director of the Company in May 2000.
Until the end of 1999 Mr. Schimberg served as President and Chief Executive
Officer of Coca-Cola Enterprises Inc. Mr. Schimberg served as President and a
director of Coca-Cola Enterprises Inc. since December 1991. He served as Chief
Operating Officer from December 1991 until April 1998, when he became Chief
Executive Officer. Mr. Schimberg has served on the board of Coca-Cola
Enterprises as well as the boards of numerous state soft drink associations
and the Canada-United States Fulbright program. Mr. Schimberg replaced former
board member Mr. Charles S. Frenette, who resigned from Panamco in 2000.

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

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

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

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

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

Mr. Francisco Sanchez-Loaeza retired from the Company in October 2000. He
was elected Chairman of the Board in April 1994. He served as Chief Executive
Officer since June 1992 and served as President of the Company from June 1992
to April 1994. He was first elected a director of the Company in 1992. From
June 1990 to June 1992, Mr. Sanchez-Loaeza served as Executive Vice President
of Panamco. For more than three years prior to June 1990, Mr. Sanchez-Loaeza
served as Vice President-Finance of the Company and Panamco Mexico.

Mr. Paulo J. Sacchi has been with Panamco for over ten years. Before
becoming Chief Financial Officer in 1998, he was Vice-President-Operations of
Panamco Brasil. He previously served as Vice President- Strategic Planning and
Vice President-Operations at Panamco's corporate offices in Mexico City.

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

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

Mr. Jorge Giganti was elected Vice President-Brazilian Operations and
President of Panamco Brasil in May of 1996. From April 1995 to April 1996, Mr.
Giganti served as president of the Biagi Group, a Brazilian bottler of
Coca-Cola. From August 1994 to March 1995, he served as president of the Rio
de la Plata Division (Argentina, Uruguay, and Paraguay) of The Coca-Cola
Company. Prior to August 1994, he served as President of the North-Latin
American Division of The Coca-Cola Company.

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

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

Directors' Fees. Directors of the Company who are not employed by us or
our subsidiaries receive directors' fees of $20,000 per year and $1,000 per
diem for attendance at Board of Directors and committee meetings. Committee
chairmen also receive $3,000 per year. We pay equivalent fees to the members
of our advisory board, which, as of March 2001, is composed of two members.
Directors' fees for 2000 were paid in Company stock for a total number of
38,159 shares valued at $13.627 per share on the close of business on December
16, 2000.

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ITEM 11. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following table summarizes for the fiscal years ended December 31,
2000, 1999 and 1998, all compensation awarded to, earned by, or paid to (i)
the Chief Executive Officer, (ii) the four most highly compensated
executive officers other than the Chief Executive Officer of the Company
who were serving in executive officer capacities at the end of December
2000, and (iii) the former Chief Executive Officer and Chairman of the
Board of Directors of the Company.

[Enlarge/Download Table]

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- -----------------------------------------
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPEN- STOCK OPTIONS/SAR LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) AWARDS($) AWARDS PAYOUTS($) SATION($)
----------------------------------- --------------------------------------- ----------------------------------------------------

William G. Cooling 2000 $ - $ - $ - $ -(7) 350,000(8) $ - $ -
Chairman of the Board and
Chief Executive Officer(1)

Henry A. Schimberg 2000 - - - -(7) 250,000(8) - -
Vice Chairman of the
Board (2)

Alejandro Jimenez 2000 600,000 76,500 251,512(4) - 115,200 - 38,582(5)
President and 1999 600,000 224,000 - - 130,000 - 39,397(5)
Chief Operating Officer 1998 544,000 157,488 - - 120,000 - 35,468(5)

Paulo J. Sacchi 2000 325,000 27,600 224,600(4) - 64,320 - 17,994(5)
Senior Vice President, 1999 325,000 76,500 - - 74,400 - 21,654(5)
Chief Financial Officer 1998 325,000 57,169 - - 35,200 - -
and Treasurer

Carlos Hernandez-Artigas 2000 228,000 13,600 226,033(4) - 25,900 - 12,154(5)
Vice President - Legal and 1999 228,000 51,700 - - 25,000 - 11,762(5)
Secretary 1998 207,000 22,977 - - 17,600 - 9,544(5)

Francisco Sanchez-Loaeza 2000 645,833 90,556 262,534(4) - - - 5,443,782(6)
Former Chairman of the 1999 775,000 333,000 - - 150,000 - 53,648(5)
Board and Chief Executive 1998 650,000 244,869 - - 140,000 - 48,690(5)
Officer (3)

--------------------------------

(1) Mr. Cooling became Chairman of the board of directors and Chief Executive
Officer of the Company on October 6, 2000.
(2) Mr. Schimberg became Vice Chairman of the board of directors on October 6,
2000.
(3) Mr. Sanchez-Loaeza retired as Chairman of the board of directors and Chief
Executive Officer of the Company on October 5, 2000.
(4) Other Annual Compensation includes allowances for automobile and relocation
package.
(5) All Other Compensation includes a matching pension contribution by the
Company to the Company's non-qualified pension plan.
(6) All Other Compensation for Mr. Sanchez-Loaeza includes $3,731,904 for
severance payments and $1,711,878 for pension distribution including a
matching pension contribution by the Company of $38,812.
(7) On November 10, 2000, when the closing price of the Class A Common Stock on
the New York Stock Exchange was $14.25 per share, the Company granted
350,000 and 250,000 shares of nonvested stock to the Chairman and CEO and
the Vice Chairman, respectively. The terms of the restricted stock are as
follows: one-third of the shares shall vest in the event that the share
price equals or exceeds the grant date share price by $5.00 or more on or
before the second anniversary of the grant date; two-thirds of the shares
(reduced by one-third if shares already vested) shall vest if the share
price exceeds the grant date share price by $10.00 or more on or before the
third anniversary of the grant date; and all the unvested shares shall vest
in the event that the share price equals or exceeds the grant date share
price by $15.00 or more on or before the fourth anniversary of the grant
date. Non-vested shares shall be forfeited to the extent that they do not
vest on or before the fourth anniversary of the grant date. Due to the

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uncertainty of the future market price of the stock, we cannot make a
reasonable estimate as to what the compensation expense may be or if the
restricted stock will vest. As of December 31, 2000, the nonvested stock
granted had not been issued.
(8) On November 10, 2000, when the closing price of the Class A Common Stock
on the New York Stock Exchange was $14.25 per share, the Company granted
350,000 and 250,000 options, respectively, to the Chairman and CEO and
the Vice Chairman at an exercise price of $14.25 per share. These options
vest 50% upon issuance and 50% after one year. Since the grant of the
stock options was at an exercise price equal to that of the quoted market
price on the date of the grant, no compensation expense was recorded by
the Company related to these options.

OPTION GRANTS

The table below sets forth information concerning stock options granted
to the executive officers named in the "Summary Compensation Table" during the
year ended December 31, 2000:

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OPTION/SAR GRANTS IN 2000

NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE VALUE($)(3)
--------------------------- ------------------------------------------------------------------- --------------

William G. Cooling 350,000(1) 20.3% $ 14.2500 11/10/2010 $ 2,341,500

Henry A. Schimberg 250,000(1) 14.5% 14.2500 11/10/2010 1,672,500

Alejandro Jimenez 115,200(2) 6.7% 14.6875 11/10/2010 770,688

Paulo J. Sacchi 64,320(2) 3.7% 14.6875 11/10/2010 430,301

Carlos Hernandez-Artigas 25,900(2) 1.5% 14.6875 11/10/2010 173,271

-----------------------------

(1) The Company granted these options to Mr. Cooling and Mr. Schimberg on
November 10, 2000 at an exercise price of $14.25 per share. These options
vest 50% upon issuance and 50% after one year.
(2) These options were made pursuant to the "Employee Stock Option Plan"
under which the options vest over a five-year period for the options
granted until 1996 and over a three-year period for options granted
beginning in 1997. Options expire ten years from the date of issuance.
(3) The present value of the options are based on the Black-Scholes option
valuation model, whereby the weighted-average fair value at date of grant
for stock options granted during 2000 was $6.69. The weighted-average
assumptions for stock options granted during 2000 using the Black-Scholes
option valuation model were: (i) risk-free interest rate of 5.78%, (ii)
dividend yield of 1.30%, (iii) expected volatility of 42.0%, and (iv)
expected option term life of 6.7 years.

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OPTION EXERCISES AND YEAR-END VALUES

The table below sets forth information concerning the exercise of stock
options by the executive officers named in the "Summary Compensation Table"
during the year ended December 31, 2000 and the value of unexercised options
as of December 31, 2000:

[Enlarge/Download Table]

AGGREGATE OPTION/SAR EXERCISES IN 2000
AND FY-END OPTION/SAR VALUES
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FY-END ($) (BASED
SHARES FY-END (#) ON $14.1875 PER SHARE)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------------------------------------------

William G. Cooling 0 0 179,375 / 177,449 $ 0 / $ 0

Henry A. Schimberg 0 0 125,000 / 126,910 0 / 0

Alejandro Jimenez 0 0 489,333 / 255,867 35,000 / 0

Paulo J. Sacchi 0 0 95,067 / 127,853 1,575 / 0

Carlos Hernandez-Artigas 0 0 59,867 / 49,633 0 / 0

Francisco Sanchez-Loaeza 0 0 800,000 / 0 52,500 / 0

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

Cash Bonus Plan. We have adopted a short-term incentive plan (the "Bonus
Plan"), pursuant to which key executives of the Company and subsidiaries may
receive bonus compensation based on individual and Company performance, as
determined by the Compensation Committee of the Board of Directors (the
"Committee"). The Bonus Plan was implemented for Brazilian executives during
1992 and was extended to Mexican and Colombian as well as the Company
executives during 1993, Panamco Costa Rica in 1996 and Panamco Venezuela, and
Panamco Nicaragua in 1997, and Panamco Guatemala in 1998. During 2000, the
Bonus Plan was amended.

Under the amended Bonus Plan, effective as of January 1, 2001, each
participant is assigned a target award expressed as a percentage of base
salary in varying amounts (which do not exceed 75% of base salary). The actual
award will be based on Company performance, depending on the participant's
position with the Company. The individual portion of the participant's award
will vary from 0% to 300% of the target award, on the basis of certain
objective criteria established by the Committee. The Company portion of the
participant's award will also vary from 0% to 300% of the target award, on the
basis of the relationship between actual performance of the participant's
"Economic Unit" (that is, the Company or Panamco Mexico, Panamco Colombia,
Panamco Brasil, Panamco Venezuela, Panamco Costa Rica, Panamco Nicaragua and
Panamco Guatemala) and projected performance. For purposes of evaluating
Economic Unit performance, the Committee will compare actual revenues, net
income, free cash flow and quarterly profits. Benefits are payable annually.

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

Equity Incentive Plan. We have an Equity Incentive Plan (the "Equity
Incentive Plan"), the purpose of which is to further the growth, development
and financial success of the Company by providing incentives to

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

In November 1995, we granted options to purchase 720,000 shares of Class
A Common Stock under the Equity Incentive Plan at an exercise price of $14.375
per share, the closing price on the day prior to the grant. In November 1996,
we granted options to purchase 443,000 shares of Class A Common Stock under
the Equity Incentive Plan, at an exercise price of $23.4375 per share, the
closing price on the day prior to the grant. In November 1997, we granted
options to purchase 698,500 shares of Class A Common Stock under the Equity
Incentive Plan, at an exercise price of $29.9375 per share, the closing price
on the day prior to the grant. In November 1998, we granted options to
purchase 1,379,200 shares of Class A Common Stock under its Equity Incentive
Plan at an exercise price of $21.125 per share, the closing price on the day
prior to the grant. In November 1999, we granted options to purchase 1,560,000
shares of Class A Common Stock under the Equity Incentive Plan at an exercise
price of $15.61 per share. In November 2000, we granted options to purchase
1,121,460 shares of Class A Common Stock under the Equity Incentive Plan at an
exercise price of $14.6875 per share. In addition, in November 2000, we
granted options to purchase 350,000 and 250,000 shares of Class A Common Stock
to Mr. Cooling and Mr. Schimberg, respectively, at an exercise price of $14.25
per share.

Options granted under the Equity Incentive Plan in 1995 and 1996 vest
over a period of five years and options granted in 1997, 1998 and 1999 vest
over a period of three years. The options granted to Mr. Cooling and Mr.
Schimberg on November 10, 2000, vest 50% upon issuance and 50% after one year.
All options granted under the Equity Incentive Plan expire ten years from the
date of issuance. As of December 31, 2000, the number of options available for
grants was 1,644,540.

Stock Option Plan for Nonemployee Directors. We have a Stock Option Plan
for Nonemployee Directors (the "Stock Option Plan for Nonemployee Directors"),
which was implemented to attract and retain the services of experienced and
knowledgeable nonemployee directors and nonemployee members of the advisory
board of the Company. The Stock Option Plan for Nonemployee Directors provides
each nonemployee director and each nonemployee advisory board member with an
option to purchase a specified number of shares of Class A Common Stock. A
total of 100,000 shares of Class A Common Stock is available for grant. The
Stock Option Plan for Nonemployee Directors is administered by the Board of
Directors or a subcommittee thereof. The Board of Directors has the discretion
to amend, terminate or suspend the Stock Option Plan for Nonemployee Directors
at any time. Pursuant to the Stock Option Plan for Nonemployee Directors, on
April 7, 1995 we granted to each nonemployee director and nonemployee advisory
board member options to purchase 1,670 shares of Class A Common Stock at an
exercise price of $17.50 per share. On April 19, 1996, we granted to each
nonemployee director and nonemployee advisory board member options to purchase
948 shares of Class A Common Stock at an exercise price of $19.62 per share.
On November 13, 1997, we granted to each nonemployee director and nonemployee
advisory board member (Mr. Gustavo A. Cisneros and Mr. Oswaldo J. Cisneros
each received options to purchase 642 shares at an exercise price of $29.00)
options to purchase 680 shares of Class A Common Stock at an exercise price of
$29.9375 per share. In November 1998, we granted to each nonemployee director
or advisory board member options to purchase 1,616 shares of Class A Common
Stock at an exercise price of $21.125 per share. In November 2000, we granted
to each nonemployee director or advisory board member options to purchase
1,910 shares of Class A Common Stock at an exercise price of $14.6875 per
share. Options granted under the Stock Option Plan for Nonemployee Directors
in 1995 and 1996 vest over a period of four years and options granted in 1997,
1998 and 2000 vest over a period of three years. In 1999, the Company did not
grant options to its nonemployee directors or advisory board members. All

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options granted under the Stock Option Plan for Nonemployee Directors expire
10 years from the date of issuance.

As of December 31, 2000, the total number of shares of Class A Common
Stock underlying outstanding options granted under the Equity Incentive Plan
and under the Stock Option Plan for Nonemployee Directors (after giving effect
to the two-for-one stock split effected on March 31, 1997) was 7,003,224
shares.

EMPLOYMENT AGREEMENTS

The Company has compensation arrangements or employment agreements with
each of its current executive officers named in the "Summary Compensation
Table".

MESSRS. COOLING AND SCHIMBERG:

On November 10, 2000, the Compensation Committee of the Company adopted
certain resolutions with respect to the compensation of Mr. Cooling and Mr.
Schimberg, which were later approved and ratified by the board of directors.

Pursuant to the resolutions, the executives were granted equity awards in
amounts, and subject to the terms, previously described in the "Summary
Compensation Table" and "Options/SAR Grants in 2000" table.

Messrs. Jimenez, Sacchi and Hernandez-Artigas:

The employment agreements for Messrs. Jimenez, Sacchi and
Hernandez-Artigas provide for:

o A three-year term commencing October 1, 1999, with automatic one-year
renewal;
o An annual salary and an annual bonus at the discretion of the
Company's board of directors; and
o Participation in any pension, profit-sharing, vacation, insurance,
hospitalization, medical health, disability and other employee
benefit or welfare plan, program or policy that the Company may
adopt, subject to eligibility and participation provisions set forth
in the plan or program.

The minimum annual salaries under the agreements are $600,000 for Mr.
Jimenez; $325,000 for Mr. Sacchi; and $228,000 for Mr. Hernandez-Artigas.

If an executive's employment agreement is terminated for cause (as
defined in the agreement), the executive will only receive earned and unpaid
base salary and incentive compensation accrued through such date of
termination.

The agreements contain provisions for severance payments and benefits if
the Company terminates the executive's employment for reasons other than cause
(as defined in the agreements), or if the executive terminates his employment
for "good reason" (as defined in the agreements). In the event of termination
for cause or in the event the employee terminate his employment for other than
"good reason," the Company's obligations under the employment agreements cease
and no special severance benefits will be paid.

The agreements also contain provisions for severance payments and
benefits if, after a change in control of the Company, the executive's
employment is terminated other than for cause or if the executive
terminates his employment for good reason. The agreements define change of
control to mean:

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o Approval by the Company's shareholders of:

1. A corporate transaction which results in the Company's
shareholders owning 50.1% or less of the combined voting power
of the resulting company;
2. A liquidation or dissolution of the Company; or
3. The sale of all or substantially all of the assets of the
Company;

o That individuals constituting the incumbent board of directors (as
defined in the agreements) cease to constitute at least a majority
of the Company's board of directors; or

o That another person or group has become the beneficial owner of more
than 20% of the total voting power of the Company's voting
interests.

Each agreement has a clause which prohibits the executive, for two years
following the termination of employment other than by the Company without
cause or by the executive for good reason, from competing directly or
indirectly with the Company or disclosing proprietary or confidential
information.

SEVERANCE AGREEMENT

Pursuant to Mr. Sanchez-Loaeza's retirement as Chairman of the Board of
Directors and Chief Executive Officer of the Company on October 5, 2000, Mr.
Sanchez-Loaeza and the Company entered into a Severance Agreement and Mutual
Release. Under the terms of the Severance Agreement, and pursuant to Mr.
Sanchez-Loaeza's employment agreement with the Company, the Company paid Mr.
Sanchez-Loaeza a lump sum equivalent to two and one-half times his base
salary, plus two and one-half times his target bonus for the year 2000. The
Company also paid a pro rata portion of Mr. Sanchez-Loaeza's incentive
compensation for the year 2000. The Company will continue to provide the
individual benefit programs described in the employment agreement for a period
of 18 months following the end of Mr. Sanchez-Loaeza's employment with the
Company. In addition, all stock options granted during the term of Mr.
Sanchez-Loaeza's employment became fully vested.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee during 2000 were Mr. Wade T.
Mitchell (Chairman), Mr. Woods W. Staton Welten, Lt. Gen. Donald Colin
Mackenzie, Mr. Gustavo A. Cisneros, Mr. Luiz Fernando Furlan and Mr. Henry A.
Schimberg. There were no relationships with respect to Compensation Committee
interlocks and insider participation in compensation decisions during 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

GENERAL

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

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

Members of the Board of Directors, the advisory board and the executive
officers of the Company beneficially own 8,181,009 shares of Class B Common
Stock or approximately 92.0% of the outstanding shares of such class as of
March 26, 2001, of which 5,155,052 shares are subject to the Voting Trust (as
defined below).

The following table sets forth beneficial ownership of the Class B Common
Stock as of March 26, 2001 with respect to each person known by the Company to
own beneficially more than 5% of the outstanding shares of Class B Common
Stock:

SHARES OF CLASS B
OWNER COMMON STOCK PERCENT OF CLASS
----- ----------------- ----------------

Lt. Gen. Donald Colin Mackenzie,
Mr. James M. Gwynn,
Mr. Woods W. Staton Welten and
Mr. Stuart A. Staton in the
capacities as Voting Trustees
under the Voting Trust Agreement* 5,155,052 58.0%

The Coca-Cola Company 2,247,113 25.3%

Venbottling Holdings, Inc. 778,844 8.8%

--------------------------------

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

The following table shows the number of shares of the Company Class A and
Class B Common Stock beneficially owned on December 31, 2000, by the
directors, the individuals named in the "Summary Compensation Table" and all
directors and current executive officers as a group.

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STOCK OWNERSHIP TABLE

-------------------------------------------------------------------------------
PERCENT OF SHARES
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED OUTSTANDING
------------------------- ------------------------- -----------------

Gustavo A. Cisneros 3,863,607 3.0%
Oswaldo J. Cisneros 3,772,059 2.9%
William G. Cooling 103,429 *
Luiz Fernando Furlan 27,303 *
James M. Gwynn 356,604 *
Alejandro Jimenez 12,012 *
Lt. Gen. Donald Colin Mackenzie 73,658 *
Wade T. Mitchell 172,482 *
James J. Postl 1,834 *
Henry A. Schimberg 2,642 *
Houston Staton 4,033,867 3.1%
Stuart A. Staton 222,948 *
Woods W. Staton Welten 4,268,247 3.3%
Paulo J. Sacchi 10 *
Carlos Hernandez-Artigas 300 *
Jose Ignacio Huerta Gonzalez 10 *
Jorge Giganti 6,970 *
Moises Morales - -
Roberto Ortiz 300 *
Francisco Sanchez-Loaeza 90,210 *
---------- -----

Directors and Executive Officers
as a Group (19 persons) 16,918,282 13.2%
========== =====

---------------------------------
* Less than 1% of the outstanding shares of Class A and Class B Common Stock.

SERIES C PREFERRED STOCK

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

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

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

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

Pursuant to the investment agreement (the "Investment Agreement") dated
November 1, 1995, between us and Export, a wholly owned subsidiary of
Coca-Cola, for so long as Export is entitled to delegate one or more
individuals for election to our Board of Directors, in the event of certain
subsequent new issues of Common Stock, Coca-Cola will have the right to
purchase shares of Common Stock from us (on the terms of such new issue) in
order to maintain its economic and voting interest in Panamco. Under certain
circumstances (but not currently), Export has the right to request that we
file a registration statement so as to permit or facilitate the sale or
distribution of shares of Class A Common Stock beneficially owned by
Coca-Cola. In addition, in certain instances (but not currently), when we
propose to register under the Securities Act of 1933 shares of our Common
Stock in connection with an underwritten offer for our own account, we must
offer Export the opportunity to include in such registration statement shares
of Common Stock beneficially owned by Coca-Cola.

VOTING TRUST

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

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

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Supply of Raw Materials

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

FRANCHISE ARRANGEMENTS

The Coca-Cola Company (or its subsidiaries) has entered into exclusive
Bottling Agreements with each of our Bottlers. The Bottling Agreements expire
on various dates. In 1995, we and The Coca-Cola Company agreed that all
bottling agreements of our Mexican subsidiaries will have a uniform term
ending in 2005, renewable for additional ten-year terms. In 2000, The
Coca-Cola Company entered into a bottling agreement with our Guatemalan
subsidiary for a five-year term. In general, the Brazilian, Venezuelan,
Nicaraguan, Costa Rican and Colombian agreements are for five-year terms,
renewable for additional five-year terms.

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

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

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The Bottling Agreements also prohibit the Bottlers from distributing The
Coca-Cola Company's products outside their territories and from producing any
other cola beverages. In addition, the Bottling Agreements require us to
obtain The Coca-Cola Company's approval before we can produce or distribute
other nonalcoholic beverages.

SERIES C PREFERRED STOCK

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

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

Pursuant to the Investment Agreement dated November 1, 1995, between us
and Export, for so long as Export is entitled to delegate one or more
individuals for election to our Board of Directors, in the event of certain
subsequent new issues of Common Stock, Coca-Cola will have the right to
purchase shares of Common Stock from us (on the terms of such new issue) in
order to maintain its economic and voting interest in Panamco. Under certain
circumstances (but not currently), Export has the right to request that we
file a registration statement so as to permit or facilitate the sale or
distribution of shares of Class A Common Stock beneficially owned by
Coca-Cola. In addition, in certain instances (but not currently), when we

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propose to register under the Securities Act of 1933 shares of our Common
Stock in connection with an underwritten offer for our own account, we must
offer Export the opportunity to include in such registration statement shares
of Common Stock beneficially owned by Coca-Cola.

SHAREHOLDER AGREEMENT WITH VENBOTTLING HOLDINGS, INC.

Pursuant to a Shareholder Agreement (the "Shareholder Agreement"), dated
May 9, 1997, entered by us and Venbottling Holdings, Inc. ("Venbottling")
Gustavo A. Cisneros and Oswaldo J. Cisneros have the right to be appointed to
our board of directors. If Venbottling ownership of the total outstanding
Common Stock of the Company decreases below 7.5%, Venbottling shall cause one
of its representatives to resign from the board of directors and if its
ownership decreases below 5% of the total outstanding Common Stock of the
Company, Venbottling shall cause its representatives to resign from the board
of directors. In addition, Venbottling has the right to request that we file a
registration statement so as to permit or facilitate the sale or distribution
of shares beneficially owned by it. Also, in certain circumstances when we
propose to register under the Securities Act of 1933 shares of our Common
Stock in connection with an underwritten offer for our own account we must
offer Venbottling the opportunity to include in such registration statement
shares of Common Stock beneficially owned by it.

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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1),(2) The Financial Statements and Schedule II--Valuation and
Qualifying Accounts listed on the index on Page F-1 following
are included herein by reference. All other schedules are
omitted, either because they are not applicable or because the
required information is shown in the financial statements or
the notes thereto.

(a)(3) Exhibits:

Exhibit No. Description of Exhibit
----------- ----------------------

3.1 Restatement of Articles of Incorporation of the Company.

3.2 Amended and Restated By-laws of the Company.

4.1 Indenture dated as of July 11, 1997, by and between the Company
and The Chase Manhattan Bank, as Trustee (incorporated herein
by reference to Exhibit 4.1 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

4.2 Registration Rights Agreement dated as of July 11, 1997, by and
between the Company and Lazard Freres & Co. LLC (incorporated
herein by reference to Exhibit 4.2 of the Company's
Registration Statement on Form F-4, File No. 333-7918).

9.1 Voting Trust Agreement as amended and restated as of July 15,
1993 (incorporated herein by reference to Exhibit 9.1 of the
Company's Registration Statement on Form F-1, File No.
33-67978).

10.1 Purchase Agreement dated July 8, 1997, between the Company and
Lazard Freres & Co. LLC (incorporated herein by reference to
Exhibit 10.1 of the Company's Registration Statement on Form
F-4, File No. 333-7918).

10.2 Exchange Agreement dated as of May 9, 1997, by and among the
Company, Venbottling Holdings, Inc., Atlantic Industries and
Embotelladora Coca-Cola y Hit de Venezuela, S.A. (incorporated
herein by reference to Exhibit 10.2 of the Company's
Registration Statement on Form F-4, File No. 333-7918).

10.3 Escrow Agreement dated as of May 9, 1997, by and among the
Company, Venbottling Holdings, Inc., Atlantic Industries and
Swiss Bank Corporation (Overseas), S.A. (incorporated herein by
reference to Exhibit 10.3 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

10.4 Shareholder Agreement dated as of May 9, 1997, by and among the
Company and Venbottling Holdings, Inc. (incorporated herein by
reference to Exhibit 10.4 of the Company's Registration
Statement on Form F-4, File No. 333-7918)

10.5 Voting Agreement dated as of May 9, 1997, by and among
Venbottling Holdings, Inc., Lt. Gen. Donald Colin Mackenzie,
James M. Gwynn and Woods W. Staton II, in their capacity as
voting trustees, and the Voting Trust created pursuant to the
Voting Trust Agreement (incorporated herein by reference to
Exhibit 10.5 of the Company's Registration Statement on Form
F-4, File No. 333-7918).

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10.6 Voting Agreement dated August 10, 1993, among The Coca-Cola
Company and Lt. Gen. Donald Colin Mackenzie, James M. Gwynn and
Woods W. Staton Welton, in their capacity as voting trustees
(incorporated herein by reference to the Company's Registration
Statement on Form F-1, File No. 33-67978).

10.7 Supplement No. 1 dated as of May 9, 1997, by and among the
Company, The Coca-Cola Company and The Coca-Cola Export
Corporation in respect of the Amended and Restated Investment
Agreement dated as of November 1, 1995, by and among the
Company, The Coca-Cola Company and The Coca-Cola Export
Corporation (incorporated herein by reference to Exhibit 10.7
of the Company's Registration Statement on Form F-4, File No.
333-7918).

10.8 Amended and Restated Investment Agreement dated as of November
1, 1995, by and among the Company, The Coca-Cola Company and
The Coca-Cola Export Corporation (incorporated herein by
reference to Exhibit 10.8 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

10.9 Investment Agreement dated August 10, 1993, among the Company,
The Coca-Cola Company and The Coca-Cola Export Corporation
(incorporated herein by reference to Exhibit 10.7 to the
Company's Registration Statement on Form F-1, File No.
33-67978).

10.10 Stock Subscription Agreement dated August 10, 1993, between the
Company and The Coca-Cola Export Corporation (incorporated
herein by reference to Exhibit 10.6 of the Company's
Registration Statement on Form F-1, File No. 33-67978).

10.11 Stock Purchase Agreement dated June 8, 1993, among the Company
and the several shareholders described therein (incorporated
herein by reference to the Company's Registration Statement on
Form F-1, File No. 33-67978).

10.12 Letter Agreement dated May 9, 1997, among Atlantic Industries,
Venbottling Holdings, Inc. and the Company (incorporated herein
by reference to Exhibit 10.12 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

10.13 Letter Agreement dated May 9, 1997, between The Coca-Cola
Company and the Company (incorporated herein by reference to
Exhibit 10.13 of the Company's Registration Statement on Form
F-4, File No. 333-7918).

10.14 Letter Agreement dated May 9, 1997, among Oswaldo Cisneros
Fajardo, Gustavo Cisneros Rendiles, Ricardo Cisneros Rendiles,
the Company and The Coca-Cola Company (incorporated herein by
reference to Exhibit 10.14 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

10.15 Letter Agreement dated May 9, 1997, between The Coca-Cola
Company and Embotelladora Coca-Cola y Hit de Venezuela, S.A.
(incorporated herein by reference to Exhibit 10.15 of the
Company's Registration Statement on Form F-4, File No. 333-7918).

10.16 Letter Agreement dated May 9, 1997, among Oswaldo Cisneros
Fajardo, Gustavo Cisneros Rendiles, Ricardo Cisneros Rendiles
and the Company (incorporated herein by reference to Exhibit
10.16 of the Company's Registration Statement on Form F-4, File
No. 333-7918).

10.17 Indenture dated as of March 1, 1996, between the Company and
Chemical Bank, as Trustee, in respect of the Company's 8.125%
Senior Notes due 2003 (incorporated herein by reference to
Exhibit 10.17 of the Company's Registration Statement on Form
F-4, File No. 333-7918).

10.18 Supplemental Indenture dated as of March 27, 1996, between the
Company and Chemical Bank, as Trustee, in respect of the
Company's 8.125% Senior Notes due 2003 (incorporated herein by
reference to Exhibit 10.18 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

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10.19 Stock Purchase and Sale Agreement dated August 14, 1997 among
Maria Rosario Lacayo Gil de Graziano, Maria Gabriela Cardenal
Lacayo, Manuel Ignacio Lacayo Gil and the Company (incorporated
herein by reference to Exhibit 10.19 of the Company's
Registration Statement on Form F-4, File No. 333-7918).

10.20 Credit Agreement dated as of December 29, 1997, among the
Company, the financial institutions identified therein as
"Lenders" and ING Baring (U.S.) Capital Corporation, as Agent
(incorporated herein by reference to Exhibit 10.20 of the
Company's Registration Statement on Form F-4, File No. 333-7918).

10.21 Stock Purchase Agreement dated March 25, 1998, among
Interamerican Financial Corporation, the Company, Charver
Incorporated and Carlos Humberto Gonzalez (incorporated herein
by reference to Exhibit 10.21 of the Company's Registration
Statement on Form F-4, File No. 333-7918).

10.22 Deposit Agreement dated March 25, 1998, between Charver
Incorporated and the Company (incorporated herein by reference
to Exhibit 10.22 of the Company's Registration Statement on
Form F-4, File No. 333-7918).

10.23 Stock Purchase Agreement for Shares dated as of September 15,
1998, among Diecity, S.A., Dixer Distribuidora de Bebidas, S.A.
and Refrigerantes Do Oeste, S.A. (incorporated herein by
reference to Exhibit 10.1 of the Company's Form 20-F, File No.
1-12290).

10.24 Credit Agreement dated as of September 9, 1998, among
Panamerican Beverages, Inc., Certain Financial Institutions ING
Baring (U.S.) Capital Corporation, Inc. and Bank of America
National Trust & Savings Association (incorporated herein by
reference to Exhibit 10.2 of the Company's Form 20-F, File No.
333-7918).

10.25 Escrow Agreement dated as of September 30, 1998, by and among
Dixer Distribuidora de Bebidas, S.A., Yetready S.A. and
Discount Bank and Trust Company (incorporated herein by
reference to Exhibit 10.3 of the Company's Form 20-F, File No.
1-12290).

10.26 Loan Agreement dated as of December 23, 1998, between
Panamerican Beverages, Inc. and Coca-Cola Financial Corporation
(incorporated herein by reference to Exhibit 10.4 of the
Company's Form 20-F, File No. 1-12290).

10.27 Credit Agreement, dated July 18, 2000, between Panamco de
Venezuela, S.A. and Inarco International Bank, N.V.

10.28 Credit Agreement, dated July 18, 2000, among Panamco de
Venezuela, S.A., Panamerican Beverages, Inc. and Inarco
International Bank, N.V.

10.29 Account Opening Agreement, dated July 18, 2000, between
Panamerican Beverages, Inc. and Citibank, N.A.

10.30 Confirmation of Account Opening Agreement, dated July 18, 2000,
between Panamerican Beverages, Inc. and Citibank, N.A.

10.31 Amended and Restated Credit Agreement, dated November 21, 2000,
among Panamerican Beverages, Inc., the Lenders listed therein
and ING Baring (U.S.) Capital LLC.

10.32 Joinder Agreement, dated November 24, 2000, among Panamerican
Beverages, Inc, ING Baring (U.S.) Capital LLC, and Hua Nan
Commercial Bank Ltd.

10.33 Stock Purchase Agreement, dated December 15, 2000, between
Panamerican Beverages, Inc. and Panamco Mexico S.A. de C.V.

10.34 Customer's Outsourcing Agreement, dated December 1, 2000,
between Administracion S.A. de C.V. and E.D.S. de Mexico S.A.
de C.V.

10.35 Customer's Outsourcing Agreement, dated December 1, 2000,
between Spal Industria Brasilera de Bebidas, S.A. and
Electronic Data Systems do Brasil Ltda.

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10.36 Customer's Outsourcing Agreement, dated December 1, 2000
between Panamco Colombia, S.A. and Electronic Data Systems
Colombia S.A.

10.37 Customer's Outsourcing Agreement, dated December 1, 2000,
between Panamco de Venezuela, S.A. and Electronic Data Systems
de Venezuela "EDS" C.A.

10.38 Customer's Outsourcing Agreement, dated December 1, 2000,
between Embotelladora Panamco Tica, S.A. and Electronic Data
Systems (EDS) de Costa Rica S.A.

10.39 Customer's Outsourcing Agreement, dated December 1, 2000,
between Panamco de Nicaragua, S.A. and Electronic Data Systems
(EDS) de Nicaragua y Cia. Ltda.

10.40 Customer's Outsourcing Agreement, dated December 1, 2000,
between Embotelladora Central, S.A. and Electronic Data Systems
(EDS) de Guatemala S.A.

10.41 Customer's Outsourcing Agreement, dated December 1, 2000,
between Panamco L.L.C. Electronic Data Systems Corporation.

10.42 Employment Agreement between the Company and Alejandro Jimenez.

10.43 Employment Agreement between the Company and Carlos
Hernandez-Artigas.

10.44 Severance Agreement and Mutual Release between the Company and
Francisco Sanchez-Loaeza.

21.1 Subsidiaries of the Registrant.

23.1 Consent of Independent Public Accountants.

(b) The Company filed a Current Report on Form 8-K (File No. 001-12290) on
October 12, 2000.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

PANAMERICAN BEVERAGES, INC.

Dated: March 28, 2001 By: /s/ Paulo J. Sacchi
-----------------------------------------
Paulo J. Sacchi, Senior Vice President,
Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Dated: March 28, 2001 By: /s/ William G. Cooling
-----------------------------------------
William G. Cooling, Director, Chairman of
the Board and Chief Executive Officer

Dated: March 28, 2001 By: /s/ Henry A. Schimberg
-----------------------------------------
Henry A. Schimberg, Director,
Vice Chairman of the Board

Dated: March 28, 2001 By: /s/ Alejandro Jimenez
-----------------------------------------
Alejandro Jimenez, Director, President
and Chief Operating Officer

Dated: March 28, 2001 By: /s/ Gustavo A. Cisneros
-----------------------------------------
Gustavo A. Cisneros, Director

Dated: March 28, 2001 By:
-----------------------------------------
Oswaldo J. Cisneros, Director

Dated: March 28, 2001 By:
-----------------------------------------
Gary P. Fayard, Director

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Dated: March 28, 2001 By:
-----------------------------------------
Luis Fernando Furlan, Director

Dated: March 28, 2001 By: /s/ James M. Gwynn
-----------------------------------------
James M. Gwynn, Director

Dated: March 28, 2001 By: /s/ Lt. Gen. Donald Colin Mackenzie
-----------------------------------------
Lt. Gen. Donald Colin Mackenzie, Director

Dated: March 28, 2001 By: /s/ Wade T. Mitchell
-----------------------------------------
Wade T. Mitchell, Director

Dated: March 28, 2001 By:
-----------------------------------------
James J. Postl, Director

Dated: March 28, 2001 By: /s/ Houston Staton
-----------------------------------------
Houston Staton, Director

Dated: March 28, 2001 By: Stuart A. Staton
-----------------------------------------
Stuart A. Staton, Director

Dated: March 28, 2001 By: /s/ Woods W. Staton Welten
-----------------------------------------
Woods W. Staton Welten, Director

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGE

Report of Independent Public Accountants..................................F-2

Consolidated Balance Sheets at December 31, 2000 and 1999.................F-3

Consolidated Statements of Operations for the Years
Ended December 31, 2000, 1999 and 1998..................................F-6

Consolidated Statements of Shareholders' Equity for Years
Ended December 31, 2000, 1999 and 1998..................................F-7

Consolidated Statements of Cash Flows for Years
Ended December 31, 2000, 1999 and 1998..................................F-9

Notes to Consolidated Financial Statements................................F-12

Report of Independent Public Accountants on Schedule......................F-55

Schedule II - Valuation and Qualifying Accounts...........................F-56

F-1

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Panamerican Beverages, Inc.:

We have audited the accompanying consolidated balance sheets of Panamerican
Beverages, Inc. (a Panamanian corporation) and subsidiaries as of December 31,
2000 and 1999 and the related consolidated statements of operations,
shareholders' equity and comprehensive income and cash flows for each of the
three years in the period ended December 31, 2000. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Panamerican Beverages, Inc.
and subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.

Arthur Andersen LLP

Miami, Florida,
January 31, 2001 (except with respect to
the matters discussed in Note 20,
as to which the date is February 28, 2001).

F-2

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PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Stated in thousands of United States of America ("U.S.") dollars,
except per share amounts)

[Download Table]

DECEMBER 31,
---------------------------------
2000 1999
----------------- ---------------

ASSETS

Current Assets:
Cash and equivalents $ 191,773 $ 152,648
Accounts receivable, net 138,473 133,776
Inventories, net 105,439 122,978
Other current assets 30,268 17,648
----------- -----------
Total Current Assets 465,953 427,050

Investments 158,006 215,129
Long-term receivables 7,204 17,050
Property, plant and equipment, net 1,125,719 1,218,383
Bottles and cases, net 236,527 310,856
Deferred income taxes 99,165 89,203
Cost in excess of net assets acquired, net 903,683 1,292,414
Other assets 30,064 43,037
----------- -----------

Total Assets $ 3,026,321 $ 3,613,122
=========== ===========

(Continued)

F-3

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PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Stated in thousands of U.S. dollars, except per share amounts)

(Continued)

December 31,
---------------------------------
2000 1999
----------------- ---------------

LIABILITIES

Current Liabilities:
Accounts payable $ 171,239 $ 152,230
Current portion of long-term obligations 184,889 64,640
Bank loans 40,295 33,529
Income taxes payable 40,760 29,626
Deferred income taxes 19,258 22,459
Sales and other taxes payable 58,007 41,435
Current portion of employee severance payments 12,335 5,586
Employee profit sharing 16,405 11,360
Accrued facility reorganization costs 47,875 -
Other accrued liabilities 47,161 34,553
----------- -----------
Total Current Liabilities 638,224 395,418
----------- -----------
Long-term Liabilities:
Long-term obligations, net of current portion 1,028,575 1,249,972
Pensions and employee severance payments 17,144 28,659
Deferred income taxes 92,706 133,656
Other liabilities 54,556 25,547
----------- -----------
Total Long-term Liabilities 1,192,981 1,437,834
----------- -----------

Total Liabilities 1,831,205 1,833,252
----------- -----------

(Continued)

F-4

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

(Continued)

[Enlarge/Download Table]

DECEMBER 31,
-----------------------------------------
2000 1999
-------------------- --------------------

Commitments and contingencies (Notes 12, 13 and 14)

Minority interest in consolidated subsidiaries 27,805 27,974
------ ------
SHAREHOLDERS' EQUITY

Class C preferred stock, $0.01 par value;
50,000 shares authorized; 2 shares issued
and outstanding at December 31, 2000 and
1999, respectively - -

Class A common stock, $0.01 par value;
136,745,820 and 136,662,871 shares issued
and 119,742,584 and 120,381,600 shares outstanding
at December 31, 2000 and 1999, respectively 1,367 1,367

Class B common stock, $0.01 par value;
11,266,042 and 11,348,991 shares issued
and 8,888,435 and 8,971,555 shares outstanding
at December 31, 2000 and 1999, respectively 113 113

Capital in excess of par value 1,585,498 1,584,788
Retained earnings 50,632 586,196
Accumulated other comprehensive loss (399,541) (363,269)
----------- -----------
1,238,069 1,809,195
Less 19,380,843 and 18,658,707 treasury
shares held at December 31, 2000 and 1999,
respectively, at cost (70,758) (57,299)
----------- -----------
Total Shareholders' Equity 1,167,311 1,751,896
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,026,321 $ 3,613,122
=========== ===========

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

F-5

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

[Enlarge/Download Table]

Year Ended December 31,
-------------------------------------------------------
2000 1999 1998
----------------- ----------------- -----------------

Net sales $ 2,599,411 $ 2,415,817 $ 2,773,276
Cost of sales, excluding depreciation
and amortization 1,243,485 1,191,883 1,425,246
----------- ------------ ------------
Gross profit 1,355,926 1,223,934 1,348,030
----------- ------------ ------------
Operating expenses:
Selling and distribution 636,739 572,038 657,138
General and administrative 244,551 251,450 222,327
Depreciation and amortization 274,046 214,539 253,112
Amortization of goodwill 35,819 36,284 35,739
Facilities reorganization charges 503,659 35,172 -
----------- ------------ -----------
1,694,814 1,109,483 1,168,316
----------- ------------ -----------

Operating income (loss) (338,888) 114,451 179,714
----------- ------------ -----------
Other income (expense):
Interest income 31,933 28,962 12,817
Interest expense (142,299) (129,072) (98,152)
Other income (expense), net (31,662) (39,296) 22,136
Nonrecurring income, net - - 60,486
----------- ------------ -----------
(142,028) (139,406) (2,713)
----------- ------------ -----------

Income (loss) before income taxes (480,916) (24,955) 177,001
Provision for income taxes 21,800 31,254 51,374
----------- ------------ -----------

Income (loss) before minority interest (502,716) (56,209) 125,627
Minority interest in earnings of subsidiaries 1,944 3,695 5,305
----------- ------------ -----------

Net income (loss) $ (504,660) $ (59,904) $ 120,322
============ ============ ===========

Basic earnings (loss) per share $ (3.92) $ (0.46) $ 0.93
=========== ============ ===========
Basic weighted average shares outstanding 128,833 129,683 129,538
=========== ============ ===========

Diluted earnings (loss) per share $ (3.92) $ (0.46) $ 0.92
=========== ============ ===========
Diluted weighted average shares outstanding 128,833 129,683 130,792
=========== ============ ===========

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

F-6

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

[Enlarge/Download Table]

Shares Amounts
------------------------ -------------------------------------------------------------------

Issued Held in Common Capital in Retained Accumu- Treasury Total
Treasury Stock, Excess of Earnings lated Shares, Share-
$0.01 Par Value Other At Cost holders'
Par Value Compre- Equity
hensive
Loss

Balance, December 31, 1997 148,011,864 18,566,076 $ 1,480 $1,580,678 $588,007 $(181,979) $ (50,416) $1,937,770
Comprehensive income:
Net income - - - - 120,322 - - 120,322
Initial effect on deferred taxes
relating to the change in
functional currency in the
Brazilian subsidiaries - - - - - (7,660) - (7,660)
Translation adjustments
(including $(1,108) from
intercompany balances and
$366 from taxes) - - - - - (43,702) - (43,702)
Pension plan - - - - - (949) - (949)
------------
Total comprehensive income 68,011
------------
Compensation expense from
equity incentive plan - - - 546 - - - 546
Share repurchase - 4,356 - - - - (81) (81)
Stock options exercised - (203,809) - 2,535 - - 553 3,088
Dividends declared
($0.24 per share) - - - - (31,100) - - (31,100)
---------------------------------------------------------- -------------------------------------
Balance, December 31, 1998 148,011,864 18,366,623 1,480 1,583,759 677,229 (234,290) (49,944) 1,978,234
Comprehensive loss:
Net loss - - - - (59,904) - - (59,904)
Initial effect on deferred taxes
relating to the change in
functional currency in the
Mexican subsidiaries - - - - - (4,937) - (4,937)
Translation adjustments
(including $(15,527) from
intercompany balances and
$7,005 from taxes) - - - - - (125,566) - (125,566)
Pension plan - - - -

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Panamerican Beverages Inc · 10-K · For 12/31/00

Filed On 4/2/01 2:58pm ET · SEC File 1-12290 · Accession Number 950157-1-252

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