Coca-Cola FEMSA, S.A.B. De C.V
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As filed with the Securities and Exchange Commission on June 25, 2007 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006 Commission file number 1-12260 Coca-Cola FEMSA, S.A.B. de C.V. (Exact name of registrant as specified in its charter) Not Applicable (Translation of registrant’s name into English) United Mexican States (Jurisdiction of incorporation or organization) Guillermo González Camarena No. 600 Centro de Ciudad Santa Fé 01210 México, D.F., México (Address of principal executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered American Depositary Shares, each representing 10 Series L Shares, without par value ................................................. New York Stock Exchange, Inc. Series L Shares, without par value............................................................. New York Stock Exchange, Inc. (not for trading, for listing purposes only) Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None The number of outstanding shares of each class of capital or common stock as of December 31, 2006 was: 992,078,519 Series A Shares, without par value 583,545,678 Series D Shares, without par value 270,906,004 Series L Shares, without par value Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No 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 No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated filer Accelerated filer Non-accelerated filer Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No TABLE OF CONTENTS Page Introduction......................................................................................................................................... 1 Item 1. Not Applicable .................................................................................................................................... 1 Item 2. Not Applicable .................................................................................................................................... 1 Item 3. Key Information.................................................................................................................................. 2 Selected Consolidated Financial Data................................................................................................. 2 Dividends and Dividend Policy........................................................................................................... 4 Exchange Rate Information................................................................................................................. 4 Risk Factors......................................................................................................................................... 6 Item 4. Information on the Company ............................................................................................................ 12 The Company.................................................................................................................................... 12 Regulation ......................................................................................................................................... 29 Bottler Agreements ........................................................................................................................... 32 Description of Property, Plant and Equipment.................................................................................. 34 Significant Subsidiaries..................................................................................................................... 37 Item 4A. Unresolved Staff Comments ............................................................................................................. 38 Item 5. Operating and Financial Review and Prospects ................................................................................ 39 Item 6. Directors, Senior Management and Employees ................................................................................ 61 Item 7. Major Shareholders and Related Party Transactions......................................................................... 75 Item 8. Financial Information........................................................................................................................ 81 Consolidated Statements and Other Financial Information............................................................... 81 Legal Proceedings ............................................................................................................................. 81 Item 9. The Offer and Listing........................................................................................................................ 84 Trading Markets................................................................................................................................ 84 Trading on the Mexican Stock Exchange.......................................................................................... 85 Item 10. Additional Information...................................................................................................................... 86 Bylaws............................................................................................................................................... 86 Material Agreements......................................................................................................................... 94 Exchange Controls ............................................................................................................................ 95 Documents on Display ...................................................................................................................... 99 Item 11. Quantitative and Qualitative Disclosures about Market Risk ......................................................... 100 Items 12-14. Not Applicable ................................................................................................................................ 104 Item 15. Controls and Procedures ................................................................................................................. 104 i Item 16A. Audit Committee Financial Expert.................................................................................................. 106 Item 16B. Code of Ethics................................................................................................................................. 106 Item 16C. Principal Accountant Fees and Services ......................................................................................... 106 Item 16D. Not Applicable ................................................................................................................................ 107 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.......................................... 108 Item 17. Not Applicable ................................................................................................................................ 108 Item 18. Financial Statements ....................................................................................................................... 108 Item 19. Exhibits ........................................................................................................................................... 109 ii INTRODUCTION References Unless the context otherwise requires, the terms “Coca-Cola FEMSA,” “our company,” “we,” “us” and “our” are used in this annual report to refer to Coca-Cola FEMSA, S.A.B. de C.V. and its subsidiaries on a consolidated basis. References herein to “U.S. dollars,” “US$,” “dollars” or “$” are to the lawful currency of the United States of America. References herein to “Mexican pesos” or “Ps.” are to the lawful currency of Mexico. “Soft drink” as used in this annual report refers generally to non-alcoholic beverages, including those carbonated or containing natural or artificial flavors and sweeteners. Currency Translations and Estimates This annual report contains translations of certain Mexican peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Mexican peso amounts actually represent such U.S. dollar amounts