Embotelladora Andina (AKO-B) 20-F 2022 FY Annual report (foreign)

0000925261akoa:IntangiblesMember2022-12-31

As filed with the Securities and Exchange Commission on April 26, 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

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

For the fiscal year ended December 31, 2022

Commission file number 001-13142

Embotelladora Andina S.A.

(Exact name of Registrant as specified in its charter)

Andina Bottling Company

(Translation of Registrant’s name into English)

Republic of Chile

(Jurisdiction of incorporation or organization)

Miraflores 9153, 7th Floor
Renca - Santiago, Chile

(Address of principal executive offices)

Paula Vicuña, Tel. (56-2) 2338-0520 E-mail: paula.vicuna@koandina.com

Miraflores 9153, 7th Floor- Renca - Santiago, Chile

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol	Name of each exchange on which registered
Series A Shares, Series B Shares of Registrant represented by American Depositary Shares	AKO.A AKO.B	New York Stock Exchange

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

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Series A Shares	473,289,301
Series B Shares	473,281,303

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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

⌧ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ⌧ Accelerated filer ◻ Non-accelerated filer ◻ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ◻

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

⌧ Yes ◻ No

If  securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

◻

Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant period pursuant to §240.10D-1(b).

◻

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ◻ International Financial Reporting Standards as issued by the International Accounting Standards Board ⌧ Other ◻

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

◻ Item 17 ◻ Item 18

If this is an annual report, 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

INTRODUCTION		2
PART I		5
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	5
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	5
ITEM 3.	KEY INFORMATION	5
ITEM 4.	INFORMATION ON THE COMPANY	27
ITEM 4A.	UNRESOLVED SECURITIES AND EXCHANGE COMMISSION STAFF COMMENTS	60
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	60
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	76
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	88
ITEM 8.	FINANCIAL INFORMATION	90
ITEM 9.	THE OFFER AND LISTING	91
ITEM 10.	ADDITIONAL INFORMATION	92
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	99
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	101
PART II		103
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	103
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	103
ITEM 15.	CONTROLS AND DISCLOSURE PROCEDURES	103
ITEM 16.	[Reserved]	104
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	104
ITEM 16B.	CODE OF ETHICS	104
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	104
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	105
ITEM 16E.	PURCHASERS OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	105
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	105
ITEM 16G.	CORPORATE GOVERNANCE	106
ITEM 16H.	MINE SAFETY DISCLOSURE	108
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	108
ITEM 16J.	INSIDER TRADING POLICIES	108
PART III		108
ITEM 17.	FINANCIAL STATEMENTS	108
ITEM 18.	FINANCIAL STATEMENTS	108
ITEM 19.	EXHIBITS	109

INTRODUCTION

Certain Definitions

Unless the context otherwise requires, as used in this annual report the following terms have the meanings set forth below:

● the “Company,” “we,” “our,” “Andina” and “Coca-Cola Andina” means Embotelladora Andina S.A. and its consolidated subsidiaries;

● “Andina Argentina” means our subsidiary, Embotelladora del Atlántico S.A., or EDASA;

● “Andina Brazil” means our subsidiary, Rio de Janeiro Refrescos Ltda. and its subsidiaries;

● “AEASA” means our subsidiary, Andina Empaques Argentina S.A.;

● “EDASA” means our subsidiary, Embotelladora del Atlántico S.A.;

● “PARESA” means our subsidiary, Paraguay Refrescos S.A.;

● “Envases CMF” means our affiliate, Envases CMF S.A.;

● “ECSA” means our subsidiary, Envases Central S.A.;

● “Re-Ciclar” means our subsidiary, Re-Ciclar S.A.;

● “Circular-Pet” means Circular-Pet S.A.;

● “Vital Jugos” means our subsidiary, VJ S.A., previously known as Vital S.A. and subsequently Vital Jugos S.A.;

● “VASA” means our subsidiary, Vital Aguas S.A.;

● “TAR” means our subsidiary, Transportes Andina Refrescos Ltda.;

● “The Coca-Cola Company” means The Coca-Cola Company and its subsidiaries, including without limitation Coca-Cola de Chile S.A. (“CC Chile”), which operates in Chile, Recofarma Industrias do Amazonas Ltda. (“CC Brazil”), which operates in Brazil, and Servicios y Productos para Bebidas Refrescantes S.R.L. (“CC Argentina”), which operates in Argentina;

● the “Chilean territory” means the regions of Antofagasta, Atacama, Coquimbo, Metropolitan Region of Santiago, Aysén and Magallanes and the Chilean Antartic and the provinces of Cachapoal and San Antonio;

● the “Brazilian territory” means the greater part of the State of Rio de Janeiro, the totality of the State of Espírito Santo and parts of the state of São Paulo and the state of Minas Gerais;

● the “Argentine territory” means the provinces of Córdoba, Mendoza, San Juan, San Luis, Santa Fe, Entre Ríos, La Pampa, Neuquén, Río Negro, Chubut, Santa Cruz, Tierra del Fuego as well as the western part of the province of Buenos Aires; and

● the “Paraguayan territory” means the country of Paraguay.

Presentation of Financial and Certain Other Information

Unless otherwise specified, references herein to “dollars”, “U.S. dollars” or “US$” are to United States dollars; references to “pesos”, “Chilean pesos”, “Ch$” or “ThCh$” are to Chilean pesos; references to “Argentine pesos” or “AR$” are to Argentine pesos; references to “real”, “reais” or “R$” are to Brazilian reais; and references to “guaraníes”, “guaraní” or “G$” are to Paraguayan guaraníes. References to “UF” are to Unidades de Fomento. The UF is an inflation-indexed Chilean monetary unit with a value in Chilean pesos that is adjusted daily to reflect changes in the official consumer price index of the Instituto Nacional de Estadísticas (the “Chilean National Institute of Statistics”). The UF is adjusted in monthly cycles. Each day in the period beginning on the tenth day of the current month through the ninth day of the succeeding month, the nominal peso value of the UF is indexed up (or down in the event of deflation) in order to reflect a proportionate amount of the change in the Chilean consumer price index during the prior calendar month. Certain percentages and amounts contained in this annual report have been rounded for ease of presentation.

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The Company’s consolidated financial statements for the years ended December 31, 2020, 2021 and 2022 were prepared in accordance with International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”).

Our consolidated financial statements are presented in Chilean pesos. Our consolidated financial statements reflect the results of our subsidiaries located in Brazil, Argentina and Paraguay, converted to Chilean pesos (our functional and presentation currency). IFRS requires assets and liabilities to be converted from the functional currency of our subsidiaries outside Chile to our reporting currency (Chilean peso) at the end of period exchange rates and income and expense accounts to be converted at the average monthly exchange rate for the month in which income or expense is recognized for subsidiaries that do not operate in hyperinflationary economies.

In the case of our Argentine subsidiaries, which have been operating in an environment that during 2020, 2021 and 2022 was classified as hyperinflationary, the conversion criteria from the functional currency of those subsidiaries to our presentation currency is the following:

● Statement of financial position (balance sheet): Non-monetary items are expressed in the current currency at the balance sheet date and translated to the presentation currency of the closing exchange rate. Losses and gains are included in net earnings (fiscal year income).

● Income statement: Income statement items are expressed in the current currency unit at the end of the reporting period, using the variation of the general price index from the date on which the expenses and revenues were accrued, and translated to the presentation currency at closing exchange rate.

● Cash flow statement: Cash flow statement items are expressed in the current currency unit at the end of the reporting period and translated to the presentation currency at closing exchange rate.

For more information on the effects of the hyperinflationary environment in Argentina see note 2.5 of our consolidated financial statements included herein.

Unless otherwise specified, our financial data is presented herein in Chilean pesos.

Forward-Looking Statements

This annual report includes forward looking statements, principally under the captions “Item 4. Information on the Company—Part B. Business Overview,” “Item 3. Key Information—Part D. Risk Factors,” and “Item 5. Operating and Financial Review and Prospects.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Examples of such forward-looking statements include:

● statements of our plans, objectives or goals, including those related to anticipated trends, competition or regulation;

● statements about our future economic performance and that of Chile or other countries in which we operate;

● statements about our exposure to market risks, including interest rate risks, foreign exchange risk and equity price risk; and

● statements of assumptions underlying such statements.

Words such as “believes,” “expects,” “anticipates,” “projects,” “intends,” “should,” “could,” “may,” “seeks,” “aim,” “combined,” “estimates,” “probability,” “risk,” “target,” “goal,” “objective,” “future” or similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially and adversely from those described in such forward-looking statements included in this annual report as a result of various factors (including, without limitation, the actions of competitors, future global economic conditions, market conditions, foreign exchange rates and operating and financial risks), many of which are beyond our control. The occurrence of any such factors not currently expected by us would significantly alter the results set forth in these statements.

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You should understand that the following important factors, in addition to those discussed elsewhere in this annual report, could affect our future results and could cause those results or other outcomes to differ materially and adversely from those expressed in our forward-looking statements:

● changes in general economic, business, political or other conditions in the regions where we operate;

● the impact of the COVID-19 pandemic and government measures aimed at limiting the spread of the virus;

● changes in the legal and regulatory framework of the beverage sector in the regions where we operate;

● the monetary and interest rate policies of the central banks of the countries in which we operate;

● unanticipated movements or volatility in interest rates, foreign exchange rates, inflation, equity prices or other rates or prices;

● changes in taxes;

● our inability to hedge certain risks economically;

● potential effects of weather conditions, earthquakes, tsunamis or other natural disasters;

● the outcome of litigation against us;

● the nature and extent of competition in the beverage industry in Latin America and the effect of competition on the prices we are able to charge for our products;

● volatility and fluctuations in demand for our products and the effect of such changes on the volume that we are able to sell and the price that we are able to charge for our products;

● capital and credit market conditions, including the availability of credit changes in interest rates;

● delays in the development of our projects, changes to our investment plans, due to changes in demand, authorizations, etc.; and

● the factors described under “Risk Factors.”

The forward-looking statements contained in this document speak only as of the date of this annual report, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law.

Market Data

We have computed the information contained in this annual report regarding annual volume and per capita growth rates and levels, and market share, product segment, and population data in our bottling territories, based upon accumulated statistics developed by us. Market share information presented with respect to soft drinks, juices, waters and beer is based on data supplied by A.C. Nielsen Company. For market share information, corresponding to years 2020 and 2021, note that A.C. Nielsen Company changed the methodology and sample in Argentina, Chile and Paraguay and figures for those periods were obtained using such methodology, however, 2022 figures presented herein were obtained from surveys carried out using the former methodology. Therefore, 2022 figures pertaining to market share information in those countries may not be fully comparable to those of previous periods.

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PART I

ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.KEY INFORMATION

A.[Reserved]

B.CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C.REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D.RISK FACTORS

Summary of Risk Factors

The following summarizes some, but not all, of the principal risks provided below. Please carefully consider all of the information discussed in this Item 3.D “Risk Factors” in this annual report on Form 20-F for a detailed description of these and other risks.

● We rely heavily on our relationship with The Coca-Cola Company, which has substantial influence over our business and operations; and changes in this relationship may adversely affect our business.

● The beverage business environment is changing rapidly, including as a result of increased health and environmental concerns, such as epidemic diseases, and if we do not address evolving consumer product and shopping preferences, our business could suffer.

● Increased concern about the health effects of sugar and other sweeteners in beverages could result in changes to the beverage business.

● Our business is highly competitive, including with respect to price competition, which may adversely affect our net profits and margins.

● If our raw material costs increase, including as a result of U.S. dollar/local currency exchange risk, price volatility and inflation, our profitability may be affected.

● Instability in the supply of utility services and oil prices may adversely impact our results of operations.

● Water scarcity, poor water quality and energy shortages could adversely impact our production costs and capacity.

● Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.

● Our ability to achieve our environmental, social and governmental goals are subject to risks, many of which are outside of our control and our reputation and brands could be harmed if we fail to meet such goals.

● Significant additional labeling or warning requirements may inhibit sales of our products.

● Our business may be adversely affected if we are unable to maintain brand image and product quality.

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● Trademark infringement could adversely impact our beverage business.

● Weather conditions or natural disasters may adversely affect our business.

● Our business is subject to risks arising from the COVID-19 pandemic.

● If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted.

● Perception of risk in emerging economies may impede our access to international capital markets, hinder our ability to finance our operations and adversely affect our financial performance.

● Our business may be adversely affected if we fail to renew collective bargaining labor agreements on satisfactory terms or experience strikes or other labor unrest.

● Our business is subject to regulation, which is complex and subject to change.

● Our business is subject to increasing environmental regulation, which may result in increases in our operating costs or adverse changes in consumer demand.

● The countries in which we operate may adopt new tax laws or modify existing laws to increase taxes applicable to our business or reduce existing tax incentives.

● A devaluation of the currencies of the countries where we have our operations, with regard to the Chilean peso, can negatively affect the results reported by the Company in Chilean pesos.

● The imposition of exchange controls could restrict the entry and exit of funds to and from the countries in which we operate, which could significantly limit our financial capacity.

You should carefully consider the following factors in addition to the other information set forth in this annual report on Form 20-F. Any of the following risks, if they materialize, could materially and adversely affect our business, results of operations, prospects and financial condition.

Risks Relating to our Company

We rely heavily on our relationship with The Coca-Cola Company, which has substantial influence over our business and operations; and changes in this relationship may adversely affect our business.

The Coca-Cola Company has substantial influence on the conduct of our business. The interests of The Coca-Cola Company may be different from the interests of our other shareholders. 61% and 64% of our net sales for 2021 and 2022, respectively, were derived from the distribution of soft drinks under The Coca-Cola Company trademarks, while 18% and 20% of our net sales for 2021 and 2022, respectively, were derived from the distribution of other beverages also bearing trademarks owned by The Coca-Cola Company. In addition, The Coca-Cola Company currently owns, directly or through its subsidiaries, 14.65% of our Series A shares (representing 7.33% of our total shares) and benefits from certain rights under a shareholders’ agreement. We produce, market and distribute Coca-Cola products through standard bottler agreements between our bottler subsidiaries and The Coca-Cola Company. The Coca-Cola Company has the ability to exert a substantial influence on the business of the Company through its rights under the bottler agreements. The Coca-Cola Company also monitors our prices and has the right to review and approve our marketing, operating and advertising plans. These factors may impact our profit margins, which could adversely affect our net income and results of operations.

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Our marketing campaigns for Coca-Cola products are designed and controlled by The Coca-Cola Company. The Coca-Cola Company also makes significant contributions to our marketing expenses, although it is not required to contribute a particular amount. Accordingly, The Coca-Cola Company may discontinue or reduce such contribution at any time. Pursuant to the bottler agreements, we are required to submit a business plan to The Coca-Cola Company for prior approval on a yearly basis. In accordance with our bottler agreements, The Coca-Cola Company may, among other things, require that we demonstrate the financial ability to meet our business plan, and if we are not able to demonstrate our financial capacity, The Coca-Cola Company may terminate our rights to produce, market and distribute Coca-Cola soft drinks or other Coca-Cola beverages in territories where we have such approval. Under these bottler agreements, we are prohibited from producing, bottling, distributing or selling any products that could be substituted for, be confused with or be considered an imitation of soft drinks or other beverages and products under the trademarks of The Coca-Cola Company.

We depend on The Coca-Cola Company to renew our bottler agreements, which are subject to termination by The Coca-Cola Company in the event we default or upon expiration of their respective terms. We currently are party to four bottler agreements: one agreement for Chile, which is currently under renewal, one agreement for Brazil, which expires in October 2027, one agreement for Argentina, which expires in September 2027, and one agreement for Paraguay, which expired in March 2023 and is currently under renewal. We cannot provide any assurance that our bottler agreements will be maintained or renewed upon their termination. Even if they are renewed, we cannot provide any assurance that renewal will be granted on the same terms as those currently in effect. Termination, non-extension or non-renewal of any of our bottler agreements would prevent us from selling Coca-Cola trademark beverages in the affected territory, which would have a material adverse effect on our business, financial condition and results of operation.

In addition, any acquisition we make of bottlers of Coca-Cola products in other territories may require, among other things, the consent of The Coca-Cola Company under bottler agreements to which such other bottlers are subject. We cannot assure you that The Coca-Cola Company will consent to any future geographic expansion of our Coca-Cola beverage business.

We cannot assure you that our relationship with The Coca-Cola Company will not deteriorate or otherwise undergo significant changes in the future. If such changes do occur, our operations and financial results and condition could be materially affected.

The beverage business environment is changing rapidly, including as a result of increased health and environmental concerns, such as epidemic diseases, and if we do not address evolving consumer product and shopping preferences, our business could suffer.

The beverage business environment in our territories is dynamic and constantly evolving rapidly as a result of, among other things, changes in consumer preferences, including changes based on health and nutrition considerations, obesity concerns and epidemic diseases such as the COVID-19 pandemic and related variants shifting consumer preferences and needs; changes in consumer lifestyles; concerns regarding location of origin or source of ingredients and raw materials, and the environmental and sustainability impact of the product manufacturing process; consumer shopping patterns that are changing with the digital revolution; consumer emphasis on transparency related to our products and packaging; and competitive product and pricing pressures. While we have been offering our products through online platforms and websites, if we do not adapt our product offer to the needs of our customers and changes in their lifestyles, our business could be affected. Also, while we have reduced the amounts of sugar in multiple beverages across our portfolio and increased availability of low or no-calorie soft drinks, if we are unable to successfully adapt in this environment, our participation in the sales of beverages and financial results in general would be negatively affected.

Increased concern about the health effects of sugar and other sweeteners in beverages could result in changes to the beverage business.

Consumers, public health officials and government agencies in the majority of our markets, are increasingly concerned with public health consequences associated with obesity, particularly among young people. Additionally, some researchers, health advocates and dietary guidelines are encouraging consumers to reduce consumption of sugar-sweetened beverages and beverages sweetened with nutritive or alternative sweeteners. Increasing public concern about these issues, the possibility of taxes on sugar-sweetened beverages or other sweeteners, additional governmental regulations concerning the marketing, labeling, packaging or sale of our beverages and any negative publicity resulting from actual or threatened legal actions against beverage companies relating to the marketing, labeling or sale of beverages may reduce demand for our products or increase the cost, which could adversely affect our profitability.

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Our business is highly competitive, including with respect to price competition, which may adversely affect our net profits and margins.

The beverage business is highly competitive in each of the territories in which we operate. We compete with bottlers of local and regional brands, including low cost beverages and Pepsi products. This competition in each of the regions where we operate is likely to continue, and we cannot assure you that it will not intensify in the future, which could materially and adversely affect our financial condition and results of operations. If we do not continuously strengthen our capabilities in marketing and innovation to maintain our brand loyalty and market share, our business and results of operations could be negatively affected.

If our raw material costs increase, including as a result of U.S. dollar/local currency exchange risk, price volatility and inflation, our profitability may be affected.

In addition to water, our most significant raw materials are (1) concentrate, which we acquire from affiliates of The Coca-Cola Company, (2) sweeteners and (3) packaging materials. Our most significant packaging raw material costs arise from the purchase of resin and plastic preforms to make plastic bottles and from the purchase of finished plastic bottles, the prices of which are related to crude oil prices and global resin supply. Prices for concentrate are determined by an agreement between the Company and The Coca-Cola Company. The prices for our remaining raw materials are driven by market prices and local availability, the imposition of import duties and restrictions, fluctuations in exchange rates and inflation. We may not be successful in negotiating or implementing measures to mitigate the negative effect that increased raw material costs may have in the pricing of our products or our results.

We purchase our raw materials from both domestic and international suppliers, some of which must be approved by The Coca-Cola Company, which may limit the number of suppliers available to us. Because the prices of our main raw materials –except for concentrate– are denominated in U.S. dollars, we are subject to local currency risk with respect to each of our operations. If any of the Chilean peso, Brazilian real, Argentine peso, or Paraguayan guaraní were to depreciate significantly against the U.S. dollar, the cost of certain raw materials in our respective territories could rise significantly, which could have an adverse effect on our financial condition and results of operations. We cannot assure you that these currencies will not lose value against the U.S. dollar in the future. Additionally, some raw material prices are subject to high volatility, which could also have a material adverse effect on our profitability. The supply or cost of specific raw materials could be adversely affected by domestic or global price changes, strikes, weather conditions, taxes, inflation, governmental controls, the COVID-19 pandemic, future variants thereof, or other factors. Any sustained interruption in the supply of these raw materials or any significant increase in their price could have a material adverse effect on our financial performance.

Instability in the supply of utility services and oil prices may adversely impact our results of operations.

Our operations depend on a stable supply of utilities and fuel in the countries where we operate. Electrical power outages could lead to increased energy prices and possible service interruptions. We cannot assure you that in the future we will not experience energy interruptions that could materially and adversely affect our business. In addition, a significant increase in energy prices would raise our costs, which could materially impact our results of operations. Fluctuations in oil prices have adversely affected our cost of energy and transportation in the regions where we operate, and we expect that they will continue to do so in the future. Recently, global fuel prices have increased significantly as a result of Russia’s invasion of Ukraine. We cannot assure you that fuel prices will not increase in the future, and that such an increase would not have a significant effect on our financial performance.

Water scarcity, poor water quality and energy shortages could adversely impact our production costs and capacity.

Water is the main ingredient in substantially all of our products. It is also a limited resource in many parts of the world, facing unprecedented challenges from overexploitation, increasing demand for food and other consumer and industrial products whose manufacturing processes require water, increasing pollution and poor management, lack of physical or financial access to water, sociopolitical tensions due to lack of public infrastructure in certain areas of the world and the effects of climate change. As demand for water continues to increase around the world, and as the quality of available water deteriorates, we may incur increasing production costs or face capacity constraints and the possibility of reputational damage, which could adversely affect our profitability. We obtain water from various sources in our territories, including springs, wells, rivers and municipal and state water companies pursuant to concessions granted by governments in our various territories. Water scarcity or changes in governmental regulations aimed at rationing water in the regions where we operate could affect our water supply and therefore our business.

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Some of the countries in which we operate have experienced prolonged periods of drought. For example, in 2021 Brazil we experienced periods of drought and water quality problems. In the event that these drought periods occur and are prolonged over time, the costs of our operations could be significantly affected due to water scarcity and consequent power shortages. Similarly, in the event that a drought situation worsens, the authorities could be forced to issue new laws and regulations that could limit or restrict the sale of our products, which could adversely affect our financial results.

We also anticipate future discussions on new regulations in Chile and other countries where we operate relating to future ownership of water resources, including possible nationalization, and stricter controls on water usage. In Chile particularly, discussions are beginning to take place relating to the framework on ownership of water resources. In the event that these discussions lead to relevant changes in regulations regarding the ownership or use of water resources, the costs of our operation could be significantly affected.

We cannot assure you that water will be available in sufficient quantities and/or quality to meet our future production needs or will prove sufficient to meet our current water supply needs.

Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.

There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere is causing significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of key agricultural commodities, such as sugarcane, and corn which are important sources of ingredients for our products. Climate change may also exacerbate extreme weather, resulting in water scarcity or flooding, and cause a further deterioration of water quality in affected regions, which could limit water availability for our operations. Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. Increasing concern over climate change also may result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment and/or may result in increased disclosure obligations. Increased energy or compliance costs and expenses due to increased legal or regulatory requirements may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our beverage products. The effects of climate change and legal or regulatory initiatives to address climate change could have an adverse impact on our business and results of operations.

Our ability to achieve our environmental, social and governance goals are subject to risks, many of which are outside of our control, and our reputation and brands could be harmed if we fail to meet such goals.

Companies across all industries are facing increasing scrutiny from stakeholders related to environmental, social and governance (“ESG”) matters, including practices and disclosures related to environmental stewardship; social responsibility; diversity, equity and inclusion; and workplace rights. Our ability to achieve our ESG goals and objectives and to accurately and transparently report our progress presents numerous operational, financial, legal and other risks. If we are unable to meet our ESG goals or evolving stakeholder expectations and industry standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, our reputation, and therefore our ability to sell products, could be negatively impacted.

In addition, in recent years, investor advocacy groups and certain institutional investors have placed increasing importance on ESG matters. If, as a result of their assessment of our ESG practices, certain investors are unsatisfied with our actions or progress, they may reconsider their investment in our Company.

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Significant additional labeling or warning requirements may inhibit sales of our products.

The countries in which we operate may adopt significant advertising restrictions as well as additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of certain of our Coca-Cola products or other products. The Chilean Congress passed Law No. 20,606 with respect to labeling of certain consumer products, including soft drinks and bottled juices and waters such as ours. The law became effective in June 2016 and its implementation has been carried out in stages, with labeling requirements becoming progressively stricter in June 2018 and June 2019. Furthermore, in Argentina, on November 12, 2021, the “Healthy Nutrition Law” (Law No. 27642), known as the “Food Labelling Law,” was published and became effective on November 21, 2021. This law mandates the display of warning labels on food and beverages containing an excess of critical ingredients shall bear the following warning labels: “excess of sugar,” “excess of sodium,” “excess of saturated fats” and “excess of total fats”.  Cautionary warnings on food and beverages containing artificial sweeteners and caffeine are required to read as follows: “Contains artificial sweeteners. Not recommendable for children” and “Contains caffeine. Avoid child consumption.” The regulation implementing this law was approved and published on March 23, 2022. We cannot predict at this time whether these requirements will have an impact on our sales in Argentina. Given the uncertainty surrounding the interpretation of the law, we may occasionally be subject to costs and penalties associated with non-compliance, which are difficult to predict. Also, these requirements may adversely affect sales of our products and our results of operations.

Our business may be adversely affected if we are unable to maintain brand image and product quality.

Our beverage business is highly dependent on maintaining the reputation of our products in the countries where we operate. If we fail to maintain high standards for product quality, our reputation and ability to remain a distributor of The Coca-Cola Company beverages in the countries where we operate could be jeopardized. Negative publicity or incidents related to our products may reduce their demand and could have a material adverse effect on our financial performance. If any of our products is defective or found to contain contaminants, or causes injury or illness, we may be subject to legal claims filed by consumers, product recalls, business interruptions and/or other liabilities.

We take significant precautions in order to minimize any risk of defects or contamination in our products. These precautions include quality-control programs for raw materials, the production process and our final products. We also have established procedures to correct as soon as practicable any problems that are detected. However, the precautions and procedures we implement may not be sufficient to protect us from potential incidents.

Trademark infringement could adversely impact our beverage business.

A significant portion of our sales derives from sales of beverages branded with trademarks of The Coca-Cola Company, as well as other trademarks. If other parties attempt to misappropriate trademarks we use, we may be unable to protect these trademarks. The maintenance of the reputation of these brands is essential for the future success of our beverage business. Misappropriation of trademarks we use, or challenges thereto, could have a material adverse effect on our financial performance.

We may not be able to successfully implement our expansion strategies or achieve the expected operational efficiencies or synergies from potential acquisitions.

We have, and we may continue to, acquire businesses and pursue other strategic transactions as part of our expansion strategies. We cannot assure you that we will be successful in identifying opportunities and consummating acquisitions and other strategic transactions on favorable terms or at all. These types of transactions may involve additional risks to our Company, including operating in geographic regions or with beverage categories in which we have less or no operating history. Depending on the size and timing of an acquisition or transaction, we may be required to raise future financing to consummate the acquisition or transaction. Moreover, even if we are able to consummate a transaction, acquisitions and other strategic opportunities may involve significant risks and uncertainties.

Key elements to achieving the benefits and expected synergies of our acquisitions are the integration of acquired businesses’ operations into our own in a timely and effective manner and the retention of qualified and experienced key personnel. We may incur in unforeseen liabilities in connection with acquiring, taking control of, or managing beverage operations and other businesses and may encounter difficulties and unforeseen or additional costs in restructuring and integrating them into our operating structure. These difficulties include distraction of management from current operations, difficulties in integration with our existing business and technology, greater than expected liabilities and expenses, inadequate return on capital, and unidentified issues not discovered in our pre-acquisition investigations and evaluations of those strategies and acquisitions. We cannot assure you that these efforts will be successful or completed as expected by us, and our business, financial condition, results of operations could be adversely affected if we are unable to do so.

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Weather conditions or natural disasters may adversely affect our business.

Lower temperatures and higher rainfall may negatively impact consumer patterns, which may result in lower per capita consumption of our beverages. Additionally, adverse weather conditions or natural disasters may affect road infrastructure in the countries in which we operate and limit our ability to sell and distribute our products. For example, in February of 2010 our business experienced a temporary interruption in our production as a result of the 8.8 magnitude earthquake in central Chile; and in March 2015, flash floods in the north of Chile interrupted our production and distribution in such territory.

Our business is subject to risks arising from the COVID-19 pandemic.

In early 2020, the outbreak of the Coronavirus 2019 (COVID-19) was declared by the World Health Organization to be a “public health emergency of international concern” and spread across most of the world. Since 2020, countries around the world have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions and bans, closing borders, establishing restrictions on public gatherings, instructing residents to practice social distancing, requiring closures of non-essential businesses, issuing stay-at-home advisories and orders, implementing quarantines and similar actions. Although most restrictions and measures have been lifted or relaxed by now, the impact of the COVID-19 pandemic on global economic conditions has significantly increased economic uncertainty. We cannot predict how long the COVID-19 pandemic will continue or for how long and to what extent current or future governments’ restrictions will remain in place or be imposed. Furthermore, even if the outbreaks of COVID-19 subside, we cannot predict whether subsequent outbreaks, including from new variants of the virus, will reoccur, or whether governments will implement longer-term measures that continue to affect industries.

Given uncertainties regarding the impact of the COVID-19 pandemic, we cannot predict accurately the extent to which the COVID-19 outbreak, any variants thereof and its related ongoing effects, could affect our business and results of operations. COVID-19 poses the risk that we or our employees, contractors, suppliers and other partners may be limited or prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. Additionally, we may experience raw material supply disruptions due to COVID-19 restrictions. While our operations have not been materially disrupted to date, the COVID-19 pandemic and government measures taken to contain the spread of the virus could disrupt our supply chain and the manufacture or shipment of our products, and adversely impact our business or results of operations.

Additionally, during 2020 and 2021 the COVID-19 pandemic and government measures disrupted certain of our sales channels, in particular as a result of the temporary mandatory closing of restaurants and bars and prohibition on social gathering events, which adversely affected our sales volumes to these channels. We cannot predict how much of an impact the COVID-19 pandemic and government measures will ultimately have on these sales channels, nor can we predict how much or for how long consumer spending patterns may change as a result of these developments.

The COVID-19 pandemic and government measures could in the future adversely affect our business and results of operations, potentially materially. In addition, an outbreak of other epidemics in the future, such as the bird flu, influenza, SARS, the Ebola virus and the Zika virus or any other unknown disease, could also result in a similar impact.

Our insurance coverage may not adequately cover losses resulting from the risks for which we are insured.

We maintain insurance for our principal facilities and other assets. Our insurance coverage protects us in the event we suffer certain losses resulting from fire, terrorism and natural disasters, such as earthquake and floods, or from business interruptions caused by such events. In addition, we maintain other insurance policies for general liability and product contamination. We cannot assure you that our insurance coverage will be sufficient or will provide adequate compensation for losses that we may incur.

If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted.

We are increasingly dependent on information technology networks and systems, including over the Internet, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for digital marketing activities and electronic communications among us and our clients, suppliers and also among our subsidiaries and facilities. Security breaches or infrastructure flaws can create system disruptions, shutdowns or unauthorized disclosure of confidential information. If we are unable to prevent such breaches or flaws, our operations could be disrupted, or we may suffer financial damage or loss because of lost or misappropriated information.

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Cyber threats are rapidly evolving and the means for obtaining access to information in digital and other storage media are becoming increasingly sophisticated. Coca-Cola Andina has recognized cyber risk as a threat to our business and to mitigate it, it has implemented a cybersecurity strategy which, through its regulations, processes and measures aims to increase the level of cyber resilience of the Company.

Despite the measures and systems that have been implemented by the Company, as cyber threats evolve, change and become more difficult to detect and successfully defend against, therefore one or more cyber-attacks might defeat our or a third-party service provider’s security measures in the future and obtain personal information of customers or employees. Employee error or other irregularities may also defeat of security measures and result in a breach of information systems. Because information systems are critical to many of the Company’s operating activities, our business may be impacted by system shutdowns, service disruptions or cybersecurity incidents. These incidents may be caused by failures during routine operations such as system upgrades or by user errors, as well as network or hardware failures, malicious or disruptive software, unintentional or malicious actions of employees or contractors, cyberattacks by hackers, criminal groups or nation-state organizations (which may include social engineering, business email compromise, cyber extortion, denial of service, or attempts to exploit vulnerabilities), geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic events. If our information systems or third-party information systems on which we rely suffer severe damage, disruption or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience delays in reporting our results, and we may lose revenue and profits as a result of our inability to timely manufacture, distribute, invoice and collect payments for finished products.

Moreover, hardware, software or applications we use may have inherent defects of design, manufacture or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise information security. A security breach and loss of information may not be discovered for a significant period of time after it occurs. While we have no knowledge of a material security breach to date, any compromise of data security could result in a violation of applicable privacy and other laws or standards, the loss of valuable business data, or a disruption of our business. A security breach involving the misappropriation, loss or other unauthorized disclosure of sensitive or confidential information could give rise to unwanted media attention, materially damage our customer relationships and reputation, and result in fines or liabilities, which may not be covered by our insurance policies.

If we fail to comply with personal data protection and privacy laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which could negatively affect our business and operating results.

In the ordinary course of our business, we receive, process, transmit and store information relating to identifiable individuals (“personal data”), primarily employees, former employees and consumers with whom we interact. As a result, we are subject to laws and regulations relating to personal data. These laws have been subject to frequent changes, and new legislation in this area may be enacted in other jurisdictions at any time. These laws impose operational requirements for companies receiving or processing personal data, and many provide for significant penalties for noncompliance. Also, new standards or regulations over data security or the handling of personal information, in the countries where we operate, may increase our costs in order to comply with those potential regulations and have required and may in the future require costly changes to our business practices and information security systems, policies, procedures and practices.

Perception of risk in emerging economies may impede our access to international capital markets, hinder our ability to finance our operations and adversely affect our financial performance.

International investors, as a general rule, consider the countries in which we operate to be emerging market economies. Consequently, economic conditions and the market for securities of emerging market countries influence investors’ perceptions of Chile, Brazil, Argentina and Paraguay and their evaluation of securities of companies located in these countries.

During periods of heightened investor concern regarding emerging market economies, in particular in recent years Argentina, the countries where we operate may experience significant outflows of U.S. dollars.

In addition, during these periods companies based in the countries where we operate have faced higher costs for raising funds, both domestically and abroad, as well as limited access to international capital markets, which have negatively affected the prices of the aforementioned countries’ securities. Although economic conditions are different in each of the emerging-market countries, investors’ reactions to developments in one of these countries may affect the securities of issuers in the others. For example, adverse developments in emerging market countries may lead to decreased investor interest in the securities of Chilean companies.

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Our business may be adversely affected if we fail to renew collective bargaining labor agreements on satisfactory terms or experience strikes or other labor unrest.

A substantial portion of our employees is covered by collective bargaining labor agreements. These agreements generally expire every year. Our inability to renegotiate these agreements on satisfactory terms could cause work stoppages and interruptions, which may adversely impact our operations. Changes to the terms and conditions of existing agreements could also increase our costs or otherwise have an adverse effect on our operational efficiency. We experience periodic strikes and other forms of labor unrest through the ordinary course of business. We cannot assure you labor interruptions or other labor unrest will not occur in the future. If we experience strikes, work stoppages or other forms of labor unrest at any of our production facilities, our ability to supply beverages to customers could be impaired, which would reduce our net operating revenues and could expose us to customer claims.

Our business is subject to regulation, which is complex and subject to change.

We are subject to local regulations in each of the territories in which we operate. The main areas of regulation are water, environment, labor, taxation, health, consumer protection, advertising and antitrust. Regulation could affect our ability to set prices for our products. The adoption of new laws or regulations or a stricter interpretation or enforcement thereof in the countries in which we operate may increase our operating costs or impose restrictions on our operations which, in turn, may adversely affect our financial condition, business and results. Further changes in current regulations may result in increased compliance costs, which may have an adverse effect on our results or financial condition.

In the past, voluntary price restraints or statutory price controls have been imposed in several of the countries in which we operate. Currently there are no restraints or price controls applicable to our products in any of the territories in which we operate, except with respect to a limited number of products in Argentina. However, we cannot assure you that government authorities in any country in which we operate will not impose statutory price controls, or that we will not be requested to impose voluntary price restraints in the future. The potential imposition of restraints or price controls in the future may have an adverse effect on our results and financial condition.

Our business is subject to increasing environmental regulation, which may result in increases in our operating costs or adverse changes in consumer demand.

We are subject to various environmental laws and regulations in the countries where we operate, which apply to our products, containers and activities. If these environmental laws and regulations are strengthened or newly established in jurisdictions in which we conduct our businesses, we may be required to incur considerable expenses in order to comply with such laws and regulations. We are also subject to uncertainty regarding the interpretation of the environmental laws and regulations of the countries in which we operate, and any ambiguity or uncertainty regarding the interpretation or application of regulations can result in increased production costs or penalties for non-compliance, which are difficult to predict. Such increased expenses may have a material adverse effect on our results of operations and financial position. To the extent we determine that it is not financially sound for us to continue to comply with such laws and regulations, we may have to curtail or discontinue our activities in the affected business areas.

In addition, concerns over the environmental impact of plastic may reduce the consumption of our products sold in plastic bottles or result in additional taxes that could adversely affect consumer demand. In Chile, in August 2021, Law No. 21,368 was enacted, establishing limits on the generation of disposable products and regulating the use of plastics. Additionally, Law No. 20,920 passed in 2016, sets the framework for waste management, the extended liability of the producer and the promotion of recycling, which aims to reduce waste generation and encourage reuse, recycling and other types of valorization, in order to protect people’s health and the environment.

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If we were to become subject to adverse judgments or determinations in legal proceedings to which we are, or may become, a party, our future profitability could suffer through significant liabilities, a reduction of sales, increased costs or damage to our reputation.

In the ordinary course of our business, we become involved in various claims, lawsuits, investigations and governmental and administrative proceedings, some of which are or may be significant. We are currently a party to certain legal proceedings. Adverse judgments or determinations in one or more of these proceedings could require us to change the way we do business or use substantial resources in adhering to the settlements. These could have a material adverse effect on our business, including, among other consequences, by significantly increasing the costs required to operate our business. Ineffective communications during or after these proceedings could amplify the negative effects, if any, of these proceedings on our reputation and may result in a negative market impact on the price of our securities. We evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and/or disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our current assessments and estimates.

In addition, during recent years, the Company has been subject to judicial proceedings and administrative investigations associated with alleged monopolistic practices. Although these proceedings and investigations have not resulted in any convictions or penalties for the Company, we cannot assure that this will not occur in the future. Antitrust complaints may be submitted in Chile without any prior admissibility test and, as a result, we cannot predict whether unsubstantiated claims against us will be filed. Possible sanctions in matters of competition could have an adverse effect on our business.

The countries in which we operate may adopt new tax laws or modify existing laws to increase taxes applicable to our business or reduce existing tax incentives.

We cannot assure you that any governmental authority in any country where we operate will not impose new taxes or increase the taxes on our products in the future. The imposition of new taxes, the increases in taxes or the reduction of tax incentives may have a material adverse effect on our business, financial condition and results.

For example, in Chile, for companies such as Andina, the latest reform introduced in Chile in February 2020 maintains corporate tax and withholding tax rates on dividends. In addition, the government of Mr. Gabriel Boric has made tax reform one of its priorities in order to have resources to finance changes promised during election campaign, aiming to increase tax revenues by 5.0% of Chile’s GDP in 4 years and up to 8.0% within an 8-year period. The reform may include a transition to a non-integrated tax system, which would imply that taxes paid at the corporate level cannot be used as a credit for taxes payable at the personal level, which would be offset in all cases by a decrease in the withholding rate on profit remittances abroad. In any event, the reform, as proposed, would not apply to shareholders residing in countries that have a double taxation avoidance treaty with Chile, as they would continue to use the current integrated system.

In Argentina, in June 2021, a new tax reform was enacted. Under this new tax reform, which became effective for the 2021 fiscal period, the most important consequence for the Company was the increase in the applicable income tax rate from 30% to 35%. Additionally, the Company has to pay income tax on dividends, the rate for which has remained at 7%. Municipal rates in 2022, and so far as of the date of this annual report, remain unchanged, with few insignificant exceptions. Andina Argentina enjoys the benefit of a zero-tax rate on gross income in the province of Córdoba until 2030 under a new industrial promotion granted on August 31, 2020.

For further information, see also “Risks Relating to Brazil – Changes in tax laws may increase our tax burden and reduce tax incentives and, as a result, negatively affect our profitability.”

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Brazilian tax proceedings may result in a significant tax liability.

Our subsidiary Rio de Janeiro Refrescos Ltda. is party in several tax proceedings in which the Brazilian federal tax authorities argue the alleged existence of liabilities associated with value added tax on industrialized products for an approximate total amount of R$2.82 billion (equivalent to approximately US$546.32 million). These proceedings are at different administrative as well as judicial procedural stages. We disagree with the Brazilian tax authorities’ position and believe that Rio de Janeiro Refrescos Ltda. is entitled to claim Imposto sobre Produtos Industrializados (IPI) tax credits in connection with its purchases of certain exempt raw materials from suppliers located in the Manaus Free Trade Zone. We believe that the Brazilian tax authorities’ claims are without merit. Our external Brazilian counsel has advised us that it believes that Rio de Janeiro Refrescos Ltda.’s likelihood of loss in most of these proceedings is classified as possible or remote. Despite the foregoing, the outcome of these claims is subject to uncertainty, and it is difficult to predict their final resolution or any other negative repercussions from this dispute with the Brazilian tax authorities to The Coca-Cola Company or its bottling companies in Brazil, including our Brazilian subsidiaries.

If we do not successfully comply with laws and regulations designed to combat corruption in countries in which we sell our products, we could become subject to fines, penalties or other regulatory sanctions, and our sales and profitability could suffer.

Although we are committed to conducting business in a legal and ethical manner in compliance with local and international statutory requirements and standards applicable to our business, there is a risk that our employees or representatives may take actions that violate applicable laws and regulations that generally prohibit the making of improper payments to foreign government officials for the purpose of obtaining or keeping business, including laws relating to the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or the U.S. Foreign Corrupt Practices Act.

We may not be able to recruit or retain key personnel.

The implementation of our strategic business plans could be undermined by a failure to recruit or retain key personnel or the unexpected loss of senior employees, including in acquired companies. We face various challenges inherent in the management of a large number of employees over diverse geographical regions. Key employees may choose to leave their employment for a variety of reasons, including reasons beyond our control. The impact of the departure of key employees cannot be determined and may depend on, among other things, our ability to recruit other individuals of similar experience and skill. It is not certain that we will be able to attract or retain key employees and successfully manage them, which could disrupt our business and have an unfavorable material effect on our financial position, income from operations and competitive position.

A devaluation of the currencies of the countries where we have our operations, with regard to the Chilean peso, can negatively affect the results reported by the Company in Chilean pesos.

The Company reports its results in Chilean pesos, while a large part of its revenues comes from countries that use other currencies. During 2021 and 2022, 24% and 24% of the Company’s net sales were generated in Brazil, 24% and 26% in Argentina, and 8% and 8% in Paraguay. If the currencies of these countries depreciate against the Chilean peso, this would have a negative effect on the results and financial condition of the Company, which are reported in Chilean pesos.

The imposition of exchange controls could restrict the entry and exit of funds to and from the countries in which we operate, which could significantly limit our financial capacity.

The imposition of exchange controls in the countries in which we operate could affect our ability to repatriate profits, which could significantly limit our ability to pay dividends to our shareholders. Additionally, it may limit the ability of our foreign subsidiaries to finance payments of U.S. dollar denominated liabilities required by foreign creditors.

Geopolitical and other challenges and uncertainties globally could have a material adverse effect on the global economy and our business.

In addition to the significant macroeconomic challenges posed by health concerns, such as the COVID-19 pandemic, which led to a fall in GDP in all of the countries where we operate, we could be exposed to experience negative impacts to our businesses, financial condition and results of operations as a result of geopolitical and other challenges and uncertainties globally, including inflation, increase in the interest rates, increased unemployment, foreign exchange rates and recession or economic slowdown, changing policy positions or priorities. Currently, the world economy is facing several exceptional challenges.

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Escalating tensions between Russia and Ukraine and massive military actions between Russia and Ukraine could adversely impact macroeconomic conditions, leading to significant disruption, instability and volatility in global markets, as well as higher inflation (including by contributing to further increases in the prices of energy, oil and other commodities and further disrupting supply chains) and lower or negative growth. The EU, UK, U.S. and other governments have imposed significant sanctions and export controls against Russia and Russian interests and threatened additional sanctions and controls. The impact of these measures, as well as potential responses to them by Russia, is currently unknown and, although we do not have direct exposure to Ukraine and Russia, they could adversely affect our business, financial condition and results of operations.

Geopolitical and economic risks have also increased over the past few years as a result of trade tensions between the United States and China, Brexit, and the rise of populism and tensions in South America and Middle East. Growing tensions may lead, among others, to a deglobalization of the world economy, an increase in protectionism or barriers to immigration, a general reduction of international trade in goods and services and a reduction in the integration of financial markets, any of which could materially and adversely affect our business, financial condition and results of operations.

Negative information on social media and similar platforms could adversely affect our reputation.

Negative or inaccurate information concerning us or The Coca-Cola trademarks may be posted on social media and similar platforms of Internet-based communications at any time. This information may affect our reputation, and adversely impact our business and results of operations.

Risks Relating to Chile

Our growth and profitability depend significantly on economic conditions in Chile.

Our operations in Chile represented 46.3% and 44.1% of our assets as of December 31, 2021 and 2022, respectively, and 44.0% and 42.3% of our net sales for 2021 and 2022, respectively. Accordingly, our business, financial condition, and results of operations depend, to a considerable extent, upon economic conditions in Chile.

International and local economic conditions may adversely affect the Chilean economy, and unfavorable general economic conditions could negatively affect the affordability of and demand for some of our products in the country. In difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of our products or buying low cost brands offered by competitors. Any of these events could have an adverse effect on our business, financial condition and results of operations.

According to data published by the Central Bank, the Chilean economy contracted by 5.8% in 2020, in 2021 it grew by 11.7%, and in 2022 the economy grew 2.4%.

Our financial condition and results of operations could also be adversely affected by changes over which we have no control, including, without limitation:

● political or economic developments in or affecting Chile;

● the economic or other policies of the Chilean government, which has a substantial influence over many aspects of the private sector;

● tax rates and policies;

● regulatory changes or administrative practices of Chilean authorities;

● energy or water shortages or rationalization;

● the Chilean constitutional process, and the impact of a new Chilean Constitution, if approved;

● government restrictions in response to the COVID-19 pandemic and authorities, capacity to keep the pandemic under control;

● inflation and governmental policies to combat inflation;

● currency exchange movements; and

● global and regional economic conditions.

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We cannot assure you that the future development of the Chilean economy will not impair our ability to successfully carry out our business plan or materially adversely affect our business, financial condition or results of operations.

Civil unrest in Chile, the process to draft a new constitution, and the health conditions resulting from COVID-19 have had and could have in the future a significant adverse effect on the general economic conditions in Chile and our business, results of operations and financial condition.

Currently, Chile is in a period of uncertainty generated by political and economic factors. Beginning in October 2019, widespread protests took place in Chile. Demonstrations spread across the country and resulted in violent and, sometimes, fatal acts, as well as significant damage to public and private property. While to date the riots and protests described above have decreased significantly in intensity and frequency, they are not completely over. There is currently a process of drafting a new constitution in Chile, which will be voted in December 2023. Any new constitution could alter the Chilean economy, political situation and therefore the business and outlook of the Company. In addition, a tax reform and a pension system reform are currently being discussed, adding to economic uncertainty.

We cannot predict the extent to which the economy of Chile will be affected by the political discussion regarding the new constitution and the tax and pension system reform, nor can we predict if government policies will have a negative impact on the Chilean economy. Changes in government policies may include higher tax rates and other changes in laws and policies that could result in a less favorable environment for private businesses. Thus, the long-term effects of the new constitution are hard to predict, but could include slower economic growth and higher taxes, which could adversely affect our business, financial condition and results of operation.

Political developments in Chile could result in instability.

In December 2021, Chile elected a new President, Mr. Gabriel Boric, who took office on March 11, 2022. This is the first time that a representative of the Apruebo Dignidad coalition (made up of several political parties from Chilean left wing) assumes the executive power, through the appointment of his cabinet members, the coalition has enlarged to include the Socialist party, and the Partido por la Democracia, former members of the Concertación coalition, who had won 5 elections for president between 1989 and 2014. In addition, a new Congress was elected in November 2021, resulting in the Chamber of Deputies having a 44% representation from right-wing candidates, 5% independents, and the remaining 51% from center and left-wing candidates (24% of total deputies belong to Apruebo Dignidad). In the case of the Senate, 50% is represented by right-wing politics, and 50% from center and left-wing parties (10% of the Senate will belong to the next ruling coalition).

In this context, Chile has a relatively balanced Congress in terms of political representation, and as a result the probability of having extreme reforms seems more limited. However, we cannot assure that measures taken by the new government impacting private investment, such as higher taxation, will not be implemented, and we cannot assure whether the Chilean government will continue to pursue business-friendly and open-market economic policies that stimulate economic growth and stability. Further, there can be no assurance that future developments in or affecting the Chilean political landscape, including economic, social or political instability in Chile, will not materially and adversely affect our business, financial condition or results of operations.

The Chilean peso is subject to depreciation and volatility, which could adversely affect our business.

The Chilean peso has been subject to large nominal devaluations in the past and may be subject to significant fluctuations in the future. The main drivers of exchange rate volatility in past years were the significant fluctuations of commodity prices, as well as general uncertainty and trade imbalances in the global markets.

During 2022, the Chilean peso experienced high volatility, reaching $1.051 CH$/US$ during July, and ending the year at $856 CH$/US$.

A significant part of the raw materials used by the Company are in U.S. dollars, therefore a devaluation of the Chilean peso against the U.S. dollar can affect our costs and margins in a significant way.

In addition, as we report our results of operations in Chilean pesos, fluctuations in the value of the Chilean peso versus the Brazilian real, the Argentine peso and the Paraguayan guaraní could also impact our reported performance in Chilean pesos.

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Inflation in Chile and government measures to curb inflation may disrupt our business and have an adverse effect on our financial condition and results of operations.

Although Chilean inflation had remained relatively stable in recent years (3.0 % in 2019 and 3.0% in 2020), inflation in 2021 reached 7.2%, and 12.8% in 2022. The increase in inflation rates is mainly due to the COVID-19 economic and financial aid package promulgated by the Chilean Congress. Since July 30, 2020, three laws (Law No. 21,248; Law No. 21,295; and Law No. 21,330) have been passed to allow affiliates of the private pension system governed by Decree Law No. 3,500, to withdraw funds (up to 10% each time, subject to certain limitations) from their personal pension funds accounts. Also, the government distributed an Emergency Family Income (“IFE”) to 90% of Chilean households, monthly during most of 2021, thus increasing their disposable income significantly. These withdrawals and the IFE program had a significant effect on consumption, and as a consequence, have led to an increase in inflation. As a measure to control inflation, the Central Bank has made recurrent increases in the Monetary Policy Rate ranging from 0.5% in 2021 to 11.25% during 2022, aiming to achieve a significant decrease in consumption and thus in inflation.

The measures taken by the Central Bank in the past to control inflation have often included maintaining a conservative monetary policy with high interest rates, thereby restricting the availability of credit and economic growth. Inflation, measures to combat inflation, and public speculation about possible additional actions by the government have also contributed in the past to economic uncertainty in Chile and to heightened volatility in its securities markets. Periods of higher inflation may also slow the growth rate of the Chilean economy, which could lead to reduced demand for our products and decreased sales. Inflation is also likely to increase some of our costs and expenses, given that the majority of our supply contracts in Chile are UF-denominated or are indexed to the Chilean consumer price index. We cannot assure that, under competitive pressure, we will be able to carry out price increases, which could adversely impact our operating margins and operating income. Additionally, an important part of our financial debt in Chile is UF-denominated, and therefore the value of the debt reflects any increase of the inflation in Chile.

A severe earthquake or tsunami in Chile could adversely affect the Chilean economy and our network infrastructure.

Chile lies on the Nazca tectonic plate, one of the world’s most seismically active regions. Chile has been adversely affected by powerful earthquakes in the past, including an 8.0 magnitude earthquake that struck Santiago in 1985 and a 9.5 magnitude earthquake in 1960 which is the largest earthquake ever recorded.

In February 2010, an 8.8 magnitude earthquake struck the central and south-central regions of Chile. The quake epicenter was located 200 miles southwest of Santiago and 70 miles north of Concepción, Chile’s second largest city. The regions of Bío Bío and Maule were the most severely affected regions, especially the coastal area, which, shortly after the earthquake, was hit by a tsunami that significantly damaged cities and port facilities. The Valparaíso and Metropolitan regions were also severely affected. At least 1.5 million homes were damaged, and more than 500 people were killed. As a result of these developments, economic activity in Chile was adversely affected in March 2010. Legislation was passed to raise the corporate income tax rate in order to pay for reconstruction following the earthquake and tsunami, which had an adverse effect on our results.

A severe earthquake and/or tsunami in Chile in the future could have an adverse impact on the Chilean economy and on our business, financial condition and results of operation, including our production and logistics network.

Risks Relating to Brazil

Our business operations in Brazil are dependent on economic conditions in Brazil.

Our operations in Brazil represented 30.7% and 31.5% of our assets as of December 31, 2021 and 2022, respectively, and 24.3% and 24.0% of our net sales for 2021 and 2022, respectively. Because demand for soft drinks and beverage products is usually correlated to economic conditions prevailing in the relevant local market, developments in economic conditions in Brazil, and measures taken by the Brazilian government, have had and are expected to continue to have an impact on our business, results of operations and financial condition.

The Brazilian economy has historically been characterized by unstable economic cycles and interventions by the Brazilian government. Brazilian GDP contracted by 3.3% in 2020, grew by 5.0% in 2021 and grew 2.9% in 2022 according to the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatistica). The Brazilian government has often changed monetary, taxation and other policies to influence the course of Brazil’s economy. Our business, results of operations and financial condition may be adversely affected by, among others, the following factors:

● expansion or contraction of the Brazilian economy;

● exchange rate fluctuations;

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● high inflation rates;

● changes in fiscal or tax policies;

● changes in monetary policy, including an increase in interest rates;

● exchange control policies and restrictions on remittances abroad;

● investment levels;

● liquidity of domestic capital and credit markets;

● employment levels and labor and social security regulations;

● energy or water shortages or rationalization;

● changes in environmental regulation;

● government restrictions in response to the COVID-19 pandemic and the capacity of authorities to keep the pandemic under control;

● social and political instability;

● uncertainty related to the new Government and the policies it may adopt; and

● other developments in or affecting Brazil.

The Brazilian economy is also affected by international economic and market conditions in general, especially economic and market conditions in the United States, the European Union and China.

Historically volatile political, social and economic conditions in Brazil could adversely affect our business and results of operations.

Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration.

Luis Ignacio Lula da Silva was elected President of Brazil in October 2022 and assumed office in January 2023. A failure by the Brazilian government to implement necessary reforms may result in diminished confidence in the Brazilian government’s fiscal condition and budget, which could result in downgrades of Brazil’s sovereign foreign credit rating by credit rating agencies, negatively impact Brazil’s economy, lead to further depreciation of the real and an increase in inflation and interest rates, adversely affecting our business, financial condition and results of operations.

Inflation and the Brazilian government’s measures to curb inflation, including by increasing interest rates, may contribute to economic uncertainty in Brazil.

Brazil has historically experienced high rates of inflation, including periods of hyperinflation before 1995. Several measures have been implemented by the Brazilian government in an effort to curb rising inflation, but we cannot predict whether these policies will be effective. According to the National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or “IPCA”), published by the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística, or “IBGE”), Brazilian annual rates of inflation for consumer prices were 4.5% in 2020, 10.1% in 2021 and 5.8% in 2022.

Inflationary pressures may result in governmental interventions in the economy, including policies that could adversely affect the general performance of the Brazilian economy, which, in turn, could adversely affect our business operations in Brazil. Inflation may also increase our costs and expenses, and we may be unable to transfer such costs to our customers, reducing our profit margins and net income. In addition, inflation could also affect us indirectly, as our customers may also be affected and have their financial capacity reduced. Any decrease in our net sales or net income, as well as any reduction in our financial performance, may also result in a reduction in our net operating margin. Our customers and suppliers may be affected by high inflation rates and such effects on our customers and suppliers may adversely affect us.

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The Brazilian real is subject to depreciation and volatility, which could adversely affect our business, financial condition and results of operations.

The Brazilian currency has been subject to significant fluctuations over the past three decades. Throughout this period, the Brazilian government has implemented various economic plans and exchange rate policies, including sudden devaluations, periodic mini devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange market and floating exchange rate systems. Although long-term devaluation of the real is generally related to the rate of inflation in Brazil, the devaluation of the real over shorter periods has resulted in significant fluctuations in the exchange rate between the Brazilian currency, the U.S. dollar and other currencies. The Brazilian real depreciated 29% and 7% during 2020 and 2021 respectively and appreciated 7% in 2022 compared to the closing exchange rate as of the end of the prior period for the U.S. dollar in nominal terms.

A significant part of the raw materials we use in Brazil are priced in U.S. dollars, so a depreciation of the Brazilian real against the U.S. dollar has a significant adverse effect in our costs and margins.

Any depreciation of the real against the U.S. dollar could create additional inflationary pressure, which might result in the Brazilian government adopting restrictive policies to combat inflation. This could lead to increases in interest rates, which might negatively affect the Brazilian economy as a whole, as well as our results of operations, in addition to restricting our access to international financial markets. It also reduces the U.S. dollar value of our revenues. On the other hand, future appreciation of the real against the U.S. dollar might result in the deterioration of Brazil’s current and capital accounts, as well as a weakening of Brazilian GDP growth derived from exports. We cannot assure you that the real will not again fluctuate significantly against the U.S. dollar in the future and, as a result, have an adverse effect on our business, results of operations and financial condition.

Changes in tax laws may increase our tax burden and reduce tax incentives and, as a result, negatively affect our profitability.

The Brazilian government regularly implements changes to tax regimes that may increase our and our customers’ tax burdens. These changes include modifications in the tax rates and, on occasion, enactment of temporary taxes, the proceeds of which are earmarked for designated governmental purposes. In the past, the Brazilian government has presented certain tax reform proposals, which have been mainly designed to simplify the Brazilian tax system, to avoid internal disputes within and between the Brazilian states and municipalities, and to redistribute tax revenues. The tax reform proposals provide for changes in the rules governing the federal Social Integration Program (Programa de Integração Social, or “PIS”) and Social Security Contribution (Contribuição para o Financiamento da Seguridade Social, or “COFINS”) taxes, the state Tax on the Circulation of Goods and Services (Imposto Sobre a Circulação de Mercadorias e Serviços, or “ICMS”) and some other taxes, such as increases in payroll taxes. These proposals may not be approved and passed into law. The effects of these proposed tax reform measures and any other changes that result from the enactment of additional tax reforms have not been, and cannot be, quantified. However, some of these measures, if enacted, may result in increases in our overall tax burden, which could negatively affect our overall financial performance. In addition, the Brazilian beverage industry experiences unfair competition arising from tax evasion, which is primarily due to the high level of taxes on beverage products in Brazil. An increase in taxes may lead to an increase in tax evasion, which could result in unfair pricing practices in the industry.

Since 2018, the Brazilian government has gradually altered the value-added tax on industrialized products (Imposto sobre Produtos Industrializados or “IPI”) applicable to soft drinks concentrate. This measure has negatively affected our operations, since it significantly reduced the tax credit derived from the purchases of concentrate from the Manaus Free Trade Zone that currently benefits Rio de Janeiro Refrescos, and the soft drinks industry as a whole. Such alterations have been implemented gradually since 2018 and most recently as follows:

(1) 8% IPI rate from February 2021 to February 2022;

(2) 6% IPI rate from February to April 2022; and

(3) 8% IPI rate from May 2022 onwards.

Any further reductions of the IPI may adversely affect our financial condition and results of operations.

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Risks Relating to Argentina

Our business operations in Argentina are dependent on economic conditions in Argentina.

Our operations in Argentina represented 11.3% and 13.1% of our assets as of December 31, 2021 and 2022, respectively, and 24.2% and 25.9% of our net sales for 2021 and 2022, respectively. Developments in economic, political, regulatory and social conditions in Argentina, and measures taken by the Argentine government, have had and are expected to continue to have an impact on our business, results of operations and financial condition.

Historically, the Argentine economy has experienced periods of high levels of instability and volatility, low or negative economic growth and high and variable inflation and devaluation levels. According to the National Statistics and Census Institute (Instituto Nacional de Estadísticas y Censos, or “INDEC”), Argentine GDP in real terms, contracted by 9.9% in 2020 and grew 10.4% in 2021, compared to the previous year according to the INDEC. GDP in 2022 grew 5.2% according to the INDEC.

Argentine economic conditions are dependent on a variety of factors, including the following:

● domestic production, international demand and prices for Argentina’s principal commodity exports;

● the competitiveness and efficiency of domestic industries and services;

● the stability and competitiveness of the Argentine peso against foreign currencies;

● the rate of inflation;

● the government’s fiscal deficits;

● the government’s public debt levels;

● government restrictions in response to the COVID-19 pandemic and the capacity of authorities to keep the pandemic under control;

● foreign and domestic investment and financing; and

● governmental policies and the legal and regulatory environment.

Government policies and regulation—which at times have been implemented through informal measures and have been subject to radical shifts—that have had a significant impact on the Argentine economy in the past have included, among others: monetary policy, including exchange controls, capital controls, high interest rates and a variety of measures to curb inflation, restrictions on exports and imports, price controls, mandatory wage increases, taxation and government intervention in the private sector.

We cannot assure you that the future development of the Argentine economy will not impair our ability to successfully carry out our business plan or materially adversely affect our business, financial condition or results of operations.

Political and economic instability in Argentina may recur, which could have a material adverse effect on our Argentine operations and on our financial condition and results of operations.

Argentina has a history of political and economic instability that often results in abrupt changes in government policies. Argentine governments have pursued different, and often contradictory, policies to those of preceding administrations. In recent decades, succeeding administrations have implemented interventionist policies, which included nationalization, debt renegotiation, price controls, and exchange restrictions, as well as market-friendly policies, such as export tax reductions, elimination of currency controls, deregulation of utility prices, negotiation of free trade agreements and implementation of pro-investor initiatives.

The last presidential, legislative, and some provincial and municipal elections in Argentina were held in October 2019. As a result of such elections, Alberto Fernández was elected president. Some members of the current governing coalition, including President Alberto Fernandez and Vice President Cristina Fernandez de Kirchner, have previously served in administrations marked by high levels of government intervention and policies that were sometimes detrimental to investors and the private sector. The next general election is scheduled to take place on October 22, 2023. Given the foregoing, it is very likely that the current government will maintain price control policies throughout the current fiscal year, although this is not an absolute certainty.

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We cannot provide assurance that the Argentine government will not adopt policies, over which we have no control, that adversely affect the Argentine economy and impair our Argentine operations and our business, financial condition or results of operations.

Inflation in Argentina may adversely affect our operations, which could adversely impact our financial condition and results of operations.

Argentina has experienced high levels of inflation in recent decades. Argentina’s historically high rates of inflation resulted mainly from its lack of control over fiscal policy and the money supply. Argentina continues to face high inflationary pressures. In 2020, the INDEC registered an increase in the consumer price index (índice de precios al consumidor or “CPI”) of 36.1%, while the wholesale price index (índice de precios internos al por mayor or “WPI”) increased 35.4%. In 2021, INDEC recorded a CPI increase of 50.9%, while WPI increased 51.3%. In 2022, INDEC recorded a CPI increase of 94.79% while WPI increased 94.78%.

During 2020, 2021 and 2022, Argentina met the criteria to be considered a hyperinflationary economy as provided by IAS 29 guidelines, which include, among other characteristics, a cumulative inflation rate over three years that approaches or exceeds 100%. Accordingly, IAS 29 must be applied for financial statements for fiscal years ending on or after July 1, 2018. IAS 29 requires non-monetary assets and liabilities, shareholders’ equity and comprehensive income to be restated in terms of a measuring unit current at the period end. IAS 29 also requires the use of a general price index to reflect changes in purchasing power. As a result, since July 2018, we began to apply IAS 29 in the preparation of our financial statements and report the results of our operations in Argentina as if this economy were hyperinflationary from January 1, 2018. In addition, by application of IAS 29, we had to translate figures in Argentine pesos to Chilean pesos using the period closing exchange rate (and not the average exchange rate), thus reducing our results of operations and net earnings. We cannot predict for how long Argentina will be considered a hyperinflationary economy and we will have to apply IAS 29 to the preparation of our financial statements.

In the past, inflation has materially undermined the Argentine economy and the government’s ability to generate conditions that foster economic growth. High inflation or a high level of price instability may materially and adversely affect the business volume of the financial system. This result, in turn, could adversely affect the level of economic activity and employment in the country.

High inflation would also undermine Argentina’s foreign competitiveness and adversely affect economic activity, employment, real salaries, consumption and interest rates, thereby materially and adversely affecting economic activity and consumers’ income and their purchasing power, all of which could have a material adverse effect on our financial condition and operating results.

Between 2007 and 2015, the INDEC, which is the only institution in Argentina with the statutory authority to produce official national statistics, experienced significant institutional and methodological changes that gave rise to controversy regarding the reliability of the information that it produces, including inflation, GDP and unemployment data, resulting in allegations that the inflation rate in Argentina and the other rates calculated by INDEC could be substantially different than as indicated in official reports. While the previous administration undertook reforms and the credibility of the national statistics systems has since been restored, we cannot assure you that the new or future administrations will not implement policies that may affect the national statistics system undermining consumer and investor confidence, which ultimately could affect our business, results of operations and financial condition.

The Argentine peso is subject to depreciation and volatility, which could adversely affect our financial condition and results of operations.

Fluctuations in the value of the peso continue to affect the Argentine economy. Since January 2002, the peso has fluctuated significantly in value, often following periods of high inflation and currency controls that artificially appreciated the value of the currency. Frequent devaluations have had an adverse effect on the ability of the Argentine government and Argentine companies to make timely payments on their foreign currency denominated obligations, have significantly reduced wages in real terms, and have adversely impacted the stability of businesses whose success depends on the domestic market demand.

In an effort to reduce downward pressure on the value of the Argentine peso, the Argentine government has at times implemented policies aimed at maintaining the level of reserves of the Banco Central de la República Argentina (“BCRA”) that limit the purchase of foreign currency by private companies and individuals. Currently, access to the foreign exchange market is subject to several restrictions and governmental authorizations.

In 2020, 2021 and 2022, the Argentine peso depreciated 41%, 22% and 72%, respectively, compared to the closing exchange rate as of the end of the prior period for the U.S. dollar. A significant part of the raw materials used by the company in Argentina are in U.S. dollars, so a devaluation of the Argentine peso against the U.S. dollar can affect our costs and margins in a significant way.

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The depreciation of the Argentine peso may have a negative impact on the ability of certain Argentine businesses to service their foreign currency denominated debt, significantly reduce real wages and jeopardize the stability of businesses which success depends on domestic market demand. It may also, adversely affect the Argentine government’s ability to honor its foreign debt obligations. A significant appreciation of the Argentine peso against the U.S. dollar also presents risks for the Argentine economy, including the possibility of a reduction in exports as a consequence of the loss of external competitiveness. Any such appreciation could also have a negative effect on economic growth and employment, and reduce tax revenues.

Given the economic and political conditions in Argentina, we cannot predict whether, and to what extent, the value of the Argentine peso may depreciate or appreciate against the U.S. dollar, the euro or other foreign currencies. We cannot predict how these conditions will affect the consumption of our products. Moreover, we cannot predict whether the current Argentine government will continue its monetary, fiscal, and exchange rate policy and, if so, what impact any of these changes could have on the value of the Argentine peso and, accordingly, on our financial condition, results of operations and cash flows, and on our ability to transfer funds abroad in order to comply with commercial or financial obligations.

The Argentine government could impose certain restrictions on currency conversions and remittances abroad, which could affect the timing and amount of any dividends or other payment we receive from our Argentine subsidiary.

Beginning in December 2015, the Argentine government gradually eased restrictions which significantly curtailed access to the foreign exchange market by individuals and private sector entities and affected our ability to declare and distribute dividends with respect to our Argentine subsidiary. These measures included informal restrictions, which consisted of de facto measures restricting local residents and companies from purchasing foreign currency through the foreign exchange market to make payments abroad, such as dividends and payment for the importation of goods and services.

In September 2019, in a response to the weakening of the Argentine peso following the results of the primary elections, the Argentine government temporarily reinstated certain exchange restrictions. The new controls apply with respect to access to the foreign exchange market by residents (both companies and natural persons) for savings and investment purposes abroad, the payment of external financial debts abroad, the payment of dividends in foreign currency abroad, the payment of imports of goods and services, and the obligation to repatriate and settle for Argentine pesos the proceeds from exports of goods and services, among others. Under current Argentine law, we are restricted from accessing the official foreign exchange market to make dividend payments to us from our Argentine subsidiaries without prior approval from the Argentine Central Bank.

The Argentine government could maintain or impose new exchange control regulations, restrictions and adopt other measures to prevent capital flight or significant depreciation of the peso, which could limit access to international capital markets, adversely affecting Argentina’s economy, and further impair our ability to declare and distribute dividends from our Argentine subsidiaries.

The Argentine government’s ability to obtain financing from international capital markets may be limited or costly, which may impair its ability to implement reforms and foster economic growth.

At the end of 2001, the Argentine government defaulted in part of its sovereign debt. In 2005 and 2010, Argentina conducted exchange offers to restructure part of its sovereign debt that had been in default since the end of 2001. Through these exchange offers, Argentina restructured over 92% of its eligible defaulted debt. In April 2016, after a series of judicial actions by Argentina’s bondholders, the Argentine government settled substantially all of the remaining defaulted debt. Additionally, as a result partially of emergency measures undertaken by the government in response to the crisis of 2001 and 2002, foreign shareholders of several Argentine companies filed claims with the International Centre for Settlement of Investment Disputes (“ICSID”), alleging that those measures diverged from the just and equal treatment standards set forth in bilateral investment treaties to which Argentina is a party. The ICSID ruled against the Argentine government in a number of these proceedings, and the Argentine government has settled some but not all of these claims.

Between December 2019 and September 2020, the Argentine government agreed restrictions to its sovereign debt with international and local bondholders. In August and September 2020, the Argentine government restructured its sovereign bonds debt under foreign law in the amount of US$67 billion and under local law in the amount of US$45 billion, in both cases with an acceptance level of over 99%. During 2022, the Argentine government complied with all payments corresponding to the debt restructuring of its sovereign bonds (foreign law and local law) made during 2020. In March 2022, Argentina and the IMF ultimately signed an Extended Facilities agreement that provides for longer repayment terms for the loan received in 2018, but also provides increased obligations for Argentina.

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While Argentina had regained access to the international capital markets, actions by the Argentine government, or investor perceptions of the country’s creditworthiness, could curtail access in the future or could significantly increase borrowing costs, limiting the government’s ability to foster economic growth. Limited or costly access to international financing for the private sector could also affect our business, financial condition and results of operations.

The government may order salary increases to be paid to employees in the private sector, which could increase our operating costs and affect our results of operations.

In the past, the Argentine government has passed laws, regulations and decrees requiring companies in the private sector to increase wages and provide specified benefits to employees. On December 23, 2019, the Argentine government passed a law granting emergency powers to the executive branch which, among others, include the ability to mandate increases to private sector wages. Due to persistent high levels of inflation, labor organizations regularly demand significant wage increases. In 2020, 2021 and 2022 the increase in the federally-mandated minimum wage was 22%, 55% and 94%, respectively, and for these same years the market average salary increase for workers was 38%, 48% and 88%, respectively. In addition, the Argentine government has arranged various measures to mitigate the impact of inflation and exchange rate fluctuation in wages. Due to high levels of inflation, both public and private sector employers continue to experience significant pressure to further increase salaries.

Labor relations in Argentina are governed by specific legislation, such as Labor Law No. 20,744 and Law No. 14,250 on Collective Bargaining Agreements, which, among other things, dictate how salary and other labor negotiations are to be conducted. In the future, the government could take new measures requiring salary increases or additional benefits for workers, and the labor force and labor unions may apply pressure in support of such measures. Any such increase in wages or worker benefit could result in added costs and reduced results of operations for Argentine companies, including us.

Government measures to preempt or respond to social unrest may adversely affect the Argentine economy and our business.

In recent decades, Argentina has experienced significant social and political turmoil, including civil unrest, riots, looting, nationwide protests, strikes and street demonstrations. Social and political tension and high levels of poverty and unemployment continue. Unions frequently stage nationwide strikes and protests, and riots and lootings of shops and supermarkets in cities around the country have taken place at times of social turmoil.

Future government policies to preempt, or in response to, social unrest may include expropriation, nationalization, forced renegotiation or modification of existing contracts, suspension of the enforcement of creditors’ rights, new taxation policies and changes in laws and policies affecting foreign trade and investment. Such policies could destabilize the country and adversely and materially affect the Argentine economy, and thereby our business, results of operations and financial condition.

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Price control policies in Argentina may be accentuated, which may have a material and adverse effect on the results of our Argentine operations.

The Argentine government has from time to time established price controls on consumer products. To the extent that the price of our products in Argentina is restricted by government imposed price controls the results of our Argentine operations may be materially affected. As of 2020, with the change of administration, the Argentine government re-established its “Precios Cuidados” price-watch program with new products including 93 new items from different categories of the mass consumption basket with price revisions on a quarterly basis or every four months. In March 2020, with the implementation of the COVID-19 pandemic health measures, through a resolution issued by the Secretariat of Commerce presidential decree the “Precios Máximos de Referencia” (Maximum Reference Prices) program was created, freezing prices of 2,300 products from 50 basic consumer categories (in force for hypermarkets, supermarkets, mom & pops, self-service, mini markets and wholesale supermarkets and their respective products suppliers throughout the country). Price increases for the products involved in the new program were subsequently authorized in July and October. In line with price control policies, in March 2021 the Secretariat of Commerce created a new reporting regime known as the “System for the Implementation of Economic Reactivation Policies” (SIPRE for its acronym in Spanish) to prevent arbitrary price increases and product shortages. The SIPRE requires large commercial and industrial companies, including beverage manufacturers, to report on a monthly basis the price, production and sales, and inventory stocks of their products. The obligation to report to SIPRE will remain in force for the duration of the emergency declared by Law No. 27,541 (at least until December 31, 2023). Likewise, the Secretariat of Commerce announced, during April 2021, the creation of the Monitoring Center for the Price and Availability of Inputs, Goods and Services, with the purpose of monitoring, surveying and systematizing the prices and availability of all inputs, goods and services that are produced, traded and rendered in Argentina. The extension and validity of this program will depend on the Argentine government’s policy based on the evolution of the health crisis and inflation. In this regard, the “Precios Cuidados” program was extended through 2022, with a quarterly review of prices ordered by the Secretary of Commerce to protect consumers, and the list was expanded to include over 1,300 products. In addition, in October 2022, it was decided to extend the program’s validity until January 7, 2023. Finally, and within this framework, the Ministry of Economy of Argentina established the “Precios Justos” program on November 10, 2022, with the goal of guaranteeing the sale to the final consumer of certain products either at a fixed price or with a constant and previously agreed variation for a specific period of time. This Program applies to manufacturing companies, wholesale supermarkets, and retailers who voluntarily subscribe to the pre-established agreement, under which prices of products included in the Program could not be modified during November and December 2022 and January and February 2023, while prices of products not included in the Program could only be increased by 4% per month during November and December 2022 and January and February 2023. By virtue of the agreement signed by the companies, the average supply level of the last 12 months must be guaranteed and respected. This program will remain in effect until December 31, 2023, provided that new restrictions may be imposed within its framework. Within the scope of its control authority, the Commerce Secretariat may enter into agreements with municipalities to aid in the control of program compliance.

The participation of Coca-Cola products in the “Precios Cuidados” price-watch program as referential products involved one product from the soft drinks’ category, which was temporarily extended to three in sugar-free variants during 2021, where some new categories were incorporated into the program. During 2022, number of Coca-Cola products in the program increased and more packaging, flavors and juices, such as Cepita and Ades, were included as reference products.

We cannot assure that price controls in Argentina will not continue or be expected to include additional consumer products. Nor can we assure you the affect to which government imposed price control will affect the profitability of our Argentina operations.

Risks Relating to Paraguay

Our business operations in Paraguay are dependent on economic conditions in Paraguay.

Our operations in Paraguay represented 11.7% and 11.3% of our assets as of December 31, 2021 and December 31, 2022, respectively, and 7.6% and 8.0% of our net sales for 2021 and 2022, respectively. Because demand for soft drinks and beverage products is generally related to the economic conditions prevailing in the local market which, in turn, depend on the macroeconomic and political conditions of the country, our financial situation and our results of operations could be adversely affected by changes in these factors over which we have no control.

Paraguay has a history of economic and political stability, exchange controls, frequent changes in regulatory policies, corruption and weak judicial security. Paraguayan GDP contracted 1% in 2020, grew 4% in 2021, and in 2022 it grew 0.1%, according to the Paraguayan Central Bank. Paraguayan GDP is closely tied to the performance of Paraguay’s agricultural sector, which can be volatile.

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The situation of the Paraguayan economy is also strongly influenced by the economic situation in Argentina and Brazil. A deterioration in the economic situation of these countries could adversely affect the Paraguayan economy and, in turn, our financial condition and operating results.

Inflation in Paraguay may adversely affect our financial condition and results of operations.

Although inflation in Paraguay has remained stable at around 4.6% over the last five years, we cannot assure that inflation in Paraguay will not increase significantly. An increase in inflation in Paraguay could decrease the purchasing power of our consumers in the country, which could adversely affect our volumes and impact our sales income.

The Paraguayan guaraní is subject to depreciation and volatility, which could adversely affect our financial condition and results of operations.

The exchange rate of Paraguay is free and floating and the Paraguay Central Bank, actively participates in the exchange market in order to reduce volatility. Since a portion of our total costs (35)% in Paraguay for raw material and supplies are denominated in U.S. dollars, a significant depreciation of the local currency could adversely affect our financial situation and results.

The Paraguayan guaraní depreciated by 7% in 2020, appreciated 0.2% in 2021 and in 2022 it depreciated by 7%, in each case compared to the closing exchange rate as of the end of the prior period of the U.S. dollar.

The local currency follows regional and global trends. When the U.S. dollar’s value increases, and raw materials lose value in Paraguay, this directly impacts Paraguay’s generation of foreign exchange which occurs mainly through the export of raw materials. A deterioration in the economic growth of Paraguay as result of a significant depreciation of the Paraguayan guaraní could have an effect on our business, financial condition and results of operations.

Risk Factors Relating to the ADRs and Common Stock

Preemptive rights may be unavailable to ADR holders.

According to the Ley de Sociedades Anónimas No. 18,046 and the Reglamento de Sociedades Anónimas (collectively, the “Chilean Companies Law”), whenever we issue new shares for cash, we are required to grant preemptive rights to holders of our shares (including shares represented by ADRs), giving them the right to purchase a sufficient number of shares to maintain their existing ownership percentage. However, we may not be able to offer shares to United States holders of ADRs pursuant to preemptive rights granted to our shareholders in connection with any future issuance of shares unless a registration statement under the U.S. Securities Act of 1933, as amended, is effective with respect to such rights and shares, or an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, is available.

Under the procedure established by the Central Bank of Chile, the foreign investment agreement of a Chilean company with an existing ADR program will become subject to an amendment (which will also be deemed to incorporate all laws and regulations applicable to international offerings in effect as of the date of the amendment) that will extend the benefits of such contract to new shares issued pursuant to a preemptive rights offering to existing ADR owners and to other persons residing and domiciled outside of Chile that exercise preemptive rights, upon request to the Central Bank of Chile. We intend to evaluate at the time of any rights offering the costs and potential liabilities associated with any such registration statement as well as the indirect benefits to us of enabling United States ADR holders to exercise preemptive rights and any other factors that we consider appropriate at the time, and then make a decision as to whether to file such registration statement.

We cannot assure you that any registration statement would be filed. To the extent ADR holders are unable to exercise such rights because a registration statement has not been filed, the depositary will attempt to sell such holders’ preemptive rights and distribute the net proceeds thereof if a secondary market for such rights exists and a premium can be recognized over the cost of any such sale. If such rights cannot be sold, they will expire, and ADR holders will not realize any value from the grant of such preemptive rights. In any such case, such holder’s equity interest in the Company would be diluted proportionately.

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Shareholders’ rights are less well-defined in Chile than in other jurisdictions, including the United States.

Under the United States federal securities laws, as a foreign private issuer, we are exempt from certain rules that apply to domestic United States issuers with equity securities registered under the United States Securities Exchange Act of 1934, as amended, including the proxy solicitation rules, the rules requiring disclosure of share ownership by directors, officers and certain shareholders. We are also exempt from certain of the corporate governance requirements of the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange, Inc., including the requirements concerning independent directors.

Our corporate affairs are governed by the laws of Chile and our estatutos or bylaws. Under such laws, our shareholders may have fewer or less well-defined rights than they might have as shareholders of a corporation incorporated in a U.S. jurisdiction.

Pursuant to Law No. 19,705, enacted in December 2000, the controlling shareholders of an open stock corporation can only sell their controlling shares through a tender offer to all shareholders in which the bidder would have to buy all of the offered shares up to the percentage determined by it, where the price paid is substantially higher than the market price (i.e., when the price paid was higher than the average market price for a period starting 90 days before the proposed transaction and ending 30 days before such proposed transaction, plus 10%).

The market for our shares may be volatile and illiquid.

The Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. The Bolsa de Comercio de Santiago (the “Santiago Stock Exchange”), which is Chile’s principal securities exchange, had a market capitalization of approximately US$170,480 million as of December 31, 2022 and an average monthly trading volume of approximately US$3,330 million for the year. The lack of liquidity is owed, in part, to the relatively small size of the Chilean securities markets and may have a material adverse effect on the trading prices of our shares. Because the market for our ADRs depends, in part, on investors’ perception of the value of our underlying shares, this lack of liquidity for our shares in Chile may have a significant effect on the trading prices of our ADRs.

ITEM 4.INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

Overview

Our legal name is Embotelladora Andina S.A., and our commercial name is Coca-Cola Andina. We were incorporated and organized under Chilean law as a sociedad anónima on February 7, 1946. An abstract of our bylaws is registered in the Registro de Comercio del Conservador de Bienes Raíces de Santiago (Public Registry of Commerce of the Real Estate Commission Administrator of the City of Santiago) under No. 581 of the year 1946. Pursuant to our bylaws, our term of duration is indefinite.

Our common shares are listed and traded on the Santiago Stock Exchange and on the Bolsa Electrónica de Chile (the Chilean Electronic Stock Exchange) and, until October 2018, were listed on the Bolsa de Corredores de Valparaiso (the Valparaiso Brokers Stock Exchange), which closed operations in October 2018. Our Series A and Series B ADRs representing our Series A and Series B shares, respectively, are listed on the New York Stock Exchange.

Our principal executive offices are located at Avenida Miraflores 9153, Floor 7, Renca, Santiago, Chile. Our telephone number is +562-2338-0520 and our website is www.koandina.com.

Our depositary agent for the ADRs in the United States is The Bank of New York Mellon Corporation, located at 240 Greenwich Street, New York, New York 10286. Our depositary agent’s telephone number is +1 888 269 2377 (toll free number for U.S. calls) and +1 201 680 6825 (for international calls). Our authorized representative in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711-7144, United States, and its phone number is (302) 738-6680.

History

Chile

In 1941, The Coca-Cola Company licensed a private Chilean company to produce Coca-Cola soft drinks in Chile and production began in 1943. In 1946, the original licensee withdrew from the license arrangement and a group of U.S. and Chilean investors formed Andina, which became The Coca-Cola Company’s sole licensee in Chile.

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Between 1946 and the early 1980s, Andina developed the Chilean market for Coca-Cola soft drinks with a system of production and distribution facilities covering the central and southern regions of Chile. In the early 1980s, Andina sold its Coca-Cola licenses for most areas outside the Santiago metropolitan region and concentrated on the development of its soft drink business in the Santiago metropolitan area. Although we are no longer the sole Coca-Cola bottler in Chile, we have been the principal manufacturer of Coca-Cola products in Chile for an uninterrupted period since 1946.

In 1998, we purchased a 49% stake in Vital S.A. from The Coca-Cola Company. Concurrently, The Coca-Cola Company purchased Vital S.A. mineral water springs located in Chanqueahue, 80 miles south of Santiago. As part of the transaction, the Vital bottler agreement was replaced with a Minute Maid International Inc. juice bottler agreement and a new mineral water bottling agreement with The Coca-Cola Company.

The production and packaging business of water, juices and non-carbonated beverages licensed by The Coca-Cola Company in Chile was restructured in 2005. Vital Aguas S.A. (“VASA”) was created in 2005 in order to develop the processing, production and packaging of mineral water and other waters by Agua Mineral de Chanqueahue Vital. Andina and Embonor S.A. continued the development of juices and non-carbonated beverages through their ownership stakes in Vital S.A., holding 66.5% and 33.5%, respectively. In January 2011, the juice production business was restructured to incorporate other Coca-Cola bottlers in Chile as shareholders of Vital S.A., which changed its name initially to Vital Jugos S.A. and then to VJ S.A. in 2019. Andina and Embonor hold 65% and 35% stakes in VJ S.A., respectively.

In 2001, we entered into a joint venture with Cristalerías de Chile to produce PET bottles. On January 27, 2012, Coca-Cola Embonor through its subsidiary, Embonor Empaques S.A., acquired Cristalerías de Chile’s stake equivalent to a 50% ownership interest in Envases CMF.

In 2012, in order to reinforce our leadership position among Coca-Cola bottlers in South America, the Company completed its merger with Embotelladoras Coca-Cola Polar S.A. (“Polar”). Polar was a Coca-Cola bottler with operations in Chile, where it serviced territories in the II, III, IV, XI and XII regions, as well as parts of Argentina, as described below, and all of Paraguay. The merger granted former shareholders of Polar a 19.68% ownership interest in the merged entity, however the Company controls its day to day operations. As a result of the transaction, we also acquired additional indirect ownership interests in Vital Jugos, Vital Aguas and ECSA.

In January 2016, the Company incorporated a closed joint-stock company called Coca-Cola Del Valle New Ventures S.A. (“Coca-Cola Del Valle”). Embotelladora Andina S.A. contributed 35% of the capital of Coca-Cola Del Valle, with Embonor S.A. and Coca-Cola de Chile S.A. contributing the remaining 15% and 50%, respectively. The main corporate purpose of Coca-Cola Del Valle is the development and production of juices, waters and non-carbonated beverages under brands owned by The Coca-Cola Company that Andina and Coca-Cola Embonor S.A. are authorized to commercialize and distribute in their respective franchise territories.

In August 2016, the Company signed an agreement with Monster Energy Company for the distribution of Monster Energy products in the Chilean territory covered by Andina, which we began distributing in September 2016.

In March 2017, The Coca-Cola Company, together with its bottlers in Latin America, announced the closing of the acquisition from Unilever of the AdeS vegetable protein-based beverage business. Andina began distributing AdeS products in Chile in July 2017.

In January 2018, the Company, Embonor S.A., Coca-Cola del Valle New Ventures S.A., and Coca-Cola de Chile S.A., as buyers, and Inversiones Siemel S.A. as seller, entered into a stock purchase agreement under which the parties agreed to transfer 100% ownership of the shares of Comercializadora Novaverde S.A. (“Novaverde”), a Chilean company dedicated to the production and distribution of juices, ice cream, and other food, mainly under the brand “Guallarauco”. The transaction did not include the acquisition of the avocado sales business line and the General Mills brand representation. In October 2018, the purchase of 100% of the shares of Novaverde was completed.

In May 2018, Diageo Chile Ltda., Embonor S.A. and Embotelladora Andina S.A. signed an agreement for the distribution in Chile of the brands belonging to Diageo, including Johnnie Walker, Baileys, Smirnoff, Guinness, Pampero, among others.

In October 2019, Cooperativa Agrícola Pisquera Elqui Ltda. (“Capel”), Embonor S.A. and Andina, signed an agreement for the distribution in Chile of products bearing the brands belonging to Capel, including Capel (brand), Alto del Carmen, Monte Fraile, Brujas de Salamanca, Artesanos del Cochiguaz, among others.

In August 2020, Cervecería Chile S.A. and Andina signed an agreement for the distribution in Chile of the brands belonging to AB InBev, including Corona, Becker, Báltica, Budweiser, Stella Artois, Cusqueña, among others.

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In August 2021, Viña Santa Rita and Andina signed an agreement for the distribution in Chile of wine products under the brands belonging to Santa Rita, including Doña Paula, 120 Tres Medallas, Casa Real, Medalla Real, Carmen, Santa Rita, among others.

In August 2021, Andina together with Embonor Empaques S.A. incorporated a company named Re-Ciclar S.A. The main purpose of this company is to produce recycled resin for the Coca-Cola system and third parties.

Brazil

Andina Brazil, our Brazilian subsidiary, began production and distribution of Coca-Cola soft drinks in Rio de Janeiro in 1942. In 1994, we acquired 100% of the capital stock of Andina Brazil. In 2000, we purchased a Coca-Cola franchise licensee NVG through Andina Brazil for a territory in Brazil comprising the State of Espírito Santo and part of the States of Rio de Janeiro and Minas Gerais.

In 2004, Andina Brazil entered into a franchise swap agreement with the Brazilian subsidiary of The Coca-Cola Company, Recofarma Indústria do Amazonas Ltda., for an exchange of franchising rights, goods and other assets of Andina Brazil in the territory of Governador Valadares in the State of Minas Gerais, and other franchise rights of The Coca-Cola Company in the territories of Nova Iguaçu in the state of Rio de Janeiro, which were previously owned by Companhia Mineira de Refrescos S.A.

In 2007, The Coca-Cola Company along with the Coca-Cola bottlers in Brazil created a joint venture, Mais Indústria de Alimentos, in order to enhance the non-carbonated business for the entire system in that country, and in 2008 The Coca-Cola system acquired a second company that produces non-carbonated beverages called Sucos del Valle do Brasil Ltda. These two companies merged in 2011 and SABB (Sistema de Alimentos y Bebidas do Brasil) was created.

In 2010, The Coca-Cola Company along with its bottlers, acquired in a joint venture the company Leão Junior S.A. (currently Leão Alimentos e Bebidas Ltda.) with a consolidated presence and market share in Andina Brazil’s region in the category of iced tea. Leão Alimentos e Bebidas Ltda. commercializes the Matte Leão brand, among others. Andina Brazil held a 10.26% ownership interest in Leão Alimentos e Bebidas Ltda.

In 2012, Andina Brazil acquired a 40% stake in Sorocaba Refrescos S.A., a Coca-Cola bottler located in the state of São Paulo.

In 2013, Andina Brazil, acquired 100% of the capital stock of Companhia de Bebidas Ipiranga (“Ipiranga”) in an all-cash transaction. Ipiranga is also a Coca-Cola bottler with operations in part of the States of São Paulo and part of the State of Minas Gerais. This acquisition was previously arranged between the parties through an agreement signed on July 10, 2013.

During 2013, there was a restructuring of the juice and mate herb (“yerba mate”) business, pursuant to which the companies in which Andina Brazil held an interest were merged. As a result of the restructuring, Andina Brazil ended up with a 9.57% ownership interest in Leão Alimentos y Bebidas Ltda., the legal successor of these companies. This percentage increased to 10.87% as a result of our acquisition of, and subsequent merger with, Compañía de Bebidas Ipiranga that held an ownership interest in Leão Alimentos y Bebidas Ltda.

During 2016, Andina Brazil, along with Coca-Cola Brazil and the other bottlers in Brazil, acquired Laticinios Verde Campo Ltda. The purchase was made through Trop Frutas do Brasil Ltda. a subsidiary of Leão Alimentos e Bebidas Ltda. Andina Brazil acquired 7.5% of Laticinios Verde Campo Ltda.

In 2016, Andina Brazil signed an agreement with Monster Energy Company for the distribution of Monster Energy products in Andina Brazil’s territory. These products began being distributed in November 2016.

In 2016, Andina Brazil closed its production facility in Cariacica, state of Espírito Santo, leaving only two production facilities, in the States of Rio de Janeiro and São Paulo.

In 2017, Andina Brazil bought, together with Coca-Cola Brazil and the other Coca-Cola bottlers in Brazil, the company UBI 3 Participações Ltda. The operation was carried out to make the distribution and marketing of AdeS products in Brazil viable. Andina Brazil bought 8.50% of UBI 3 Participações Ltda. Andina Brazil began distributing AdeS products in June 2017.

In August 2017, Andina Brazil increased its ownership interest in Leão Alimentos e Bebidas Ltda. from 8.8% to 10.26%.

In March 2018, Andina Brazil started the production of soft drinks at the new Duque de Caxias plant in the state of Rio de Janeiro, and in January 2019, the production of mineral waters started in the same plant.

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In September 2021, the distribution agreement under which our subsidiary Rio de Janeiro Refrescos Ltda commercialized and distributed Heineken and Amstel branded beers in Brazil was terminated. On the same date, our subsidiary Rio de Janeiro Refrescos Ltda and Heineken agreed a new distribution agreement, pursuant to which Rio de Janeiro Refrescos Ltda began to market and distribute Eisenbahn and Tiger branded beers, and continued to market and distribute beers from the Sol Premium, Kaiser and Bavaria branded beers, within its franchise territories in Brazil.

In September 2021, Andina Brazil acquired 50% of the Therezópolis beer brands from the company Greenday Natural Products Gestão de Ativos Ltda., for R$35 million.

In September 2021, the Coca-Cola Brazil System, including Andina Brazil, signed a Master Agreement and Distribution Agreement with Estrella de Galicia Importação e Comercialização de Bebidas e Alimentos Ltda, with a term of 12 years, for the distribution of branded beers Estrella Galicia throughout the Brazilian territory with exclusivity.

In April 2022, the Coca-Cola Brazil System, including Andina Brazil, signed a Master Agreement and Distribution Agreement with Campari, with an expiration date of December 31, 2026, for the exclusive distribution of Campari-branded beverages throughout the Brazilian territory.

In November 2022, Andina Brazil, signed a Copacking Agreement with Monster, with a term of 10 years.

Argentina

Production of Coca-Cola soft drinks in Argentina began in 1943 with operations in the province of Córdoba, Argentina, through Inti S.A.I.C., (“INTI”). In 1995, we, through an investment company incorporated in Argentina called Inversiones del Atlántico S.A., (“IASA”), acquired a 59% interest in Embotelladoras del Atlántico S.A. (“EDASA”, the parent company of Rosario Refrescos S.A. and Mendoza Refrescos S.A.). These entities were subsequently merged to create Rosario Mendoza Refrescos S.A., (“ROMESA”). In 1996, we acquired an additional 35.9% interest in EDASA, an additional 78.7% interest in INTI, a 100% interest in CIPET (a PET plastic bottle and packaging business located in Buenos Aires) and a 15.2% interest in Cican S.A. During 1997, the operations of ROMESA were merged with INTI. In 1999, EDASA was merged into IASA. In 2000, IASA was merged into INTI, forming Embotelladora del Atlántico S.A. (“EDASA”). In 2002, CIPET merged into EDASA. During 2007, EDASA’s ownership interest in Cican S.A. was sold to FEMSA.

In 2011, EDASA’s shareholders resolved to form Andina Empaques Argentina S.A., through a spin-off of all of EDASA’s Packaging Division, including all tangible and intangible assets related thereto. Subsequently, EDASA absorbed Coca-Cola Polar Argentina S.A.

Additionally, as a result of the Company’s merger with Polar which was completed in October 2012, the Company gained territory serviced by Polar in Argentina, consisting of territories in Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western part of the province of Buenos Aires.

In March 2017, EDASA acquired 13.0% of the shares of the company Alimentos de Soja S.A.U., dedicated to the production of vegetable protein-based beverages marketed under the brand “AdeS.” The sale of Alimentos de Soja S.A.U. shares was carried out within the framework of a global transaction under the terms of which The Coca-Cola Company and certain Coca-Cola bottlers acquired the “AdeS” liquid soy-based food business from the Unilever Group in Brazil, Mexico, Argentina, Colombia, Paraguay, Uruguay, Bolivia and Chile. EDASA began distributing AdeS products in July 2017. In 2018, EDASA acquired shares of Alimentos de Soja S.A.U. (currently Alimentos de Soja S.A.), increasing its ownership interest to 14.3%. As of the date of this annual report, EDASA’s interest in Alimentos de Soja S.A. is equivalent to 14.82%. The amount of shares transferred was sufficient to provide EDASA a percentage of shares approximately proportional to its market share in the territory.

In December 2017, EDASA, together with Monster Energy Company, entered into an agreement in which Monster Energy Company named Embotelladora del Atlántico S.A. as distributor in the franchise territory of Andina Argentina of the products bearing the “Monster” brand for an initial period of 10 years. In February 2018, we began commercializing and distributing Monster products entering the category for energy drinks. Also, in April 2021 EDASA, together with Monster Energy Company, entered into an agreement whereby Monster Energy Company appointed Embotelladora del Atlántico S.A. as the manufacturer of products bearing the “Monster” brand for an initial term of 5 years.

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Paraguay

PARESA is the first authorized Coca-Cola Bottler Company in Paraguay, which started its operations in 1965. In 1967, Plant 1 was opened with a capacity of 400,000 annual unit cases. In 1980, the Barcequillo Plant - located on Km 3.5 Barcequillo of the Ñemby route, in the City of San Lorenzo- was opened, reaffirming and applying the concept of the highest end technology of bottling. Beginning in 2004, PARESA became property of the Grupo Polar from Chile, continuing its operations in the Paraguayan market. In 2012, PARESA became part of Grupo Coca-Cola Andina due to the merger of Embotelladoras Coca-Cola Polar S.A. into Embotelladora Andina S.A.

In March 2017, The Coca-Cola Company, together with its bottlers in Latin America, announced the closing of the acquisition from Unilever of the AdeS vegetable protein-based beverage business.

PARESA began distributing AdeS and Monster products in July 2017 and May 2019, respectively.

In February 2021, PARESA together with local partners incorporated a company named Circular-PET S.A. The main activity of this company is the manufacturing and commercialization of post-consumer recycled PET resins, coming from the transformation of PET flakes.

Capital Expenditures

The following table sets forth our capital expenditures by country for the 2020-2022 period:

	Year ended December 31,
	2020	2021	2022
	(in millions of Ch$)
Chile	26,488	57,245	70,395
Brazil	19,138	30,882	44,611
Argentina	16,508	31,723	37,757
Paraguay	20,519	22,102	20,912
Total	82,653	141,952	173,675

Our total capital expenditures were Ch$82,653 in 2020, Ch$141,952 in 2021 and Ch$173,675 million in 2022. The increase in 2022 was mainly due to new projects.

In 2022, capital expenditures were principally related to the following:

Argentina

● Returnable containers (glass and PET bottles) and cases for bottles,

● Coolers y postmix- Cold Equipment,

● RefPET Returnable Labeling (Monte Cristo plant, set-up 2L and start-up 2.5L),

● Returnable Glass Labeling (Monte Cristo plant),

● Monster Products production (Monte Cristo Plant, fine-tuning)

● Sugar reduction in carbonated products,

● Adaptation of Effluents’ process (Monte Cristo plant),

● Seed-based products production project (Monte Cristo Plant),

● “Front Office Project” (project completion),

● Purchase of forklifts and transpallets, and

● Hardware technology upgrade and software development for productivity and management improvement.

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Brazil

● Production lines and equipment for the Andina’s plants,

● Returnable containers (Ref PET and glass bottles) and plastic bottle cases,

● Cold equipment and other equipment for the point of sale,

● Improvements in the management systems,

● Machinery to increase efficiency and productive capacity, and

● Renewal of part of the trucks and forklifts for industrial and logistics areas.

Chile

● Implementation of a new OW bottling line for CSD products, waters and preserved cold fill (line 12),

● Washing machine line 2, change of equipment in the production line, reducing steam and water consumption,

● Generation of a new B2B platform for interaction with traditional customers, which catalyzes a new way of selling at the point of sale; and

● New miCoca-Cola distribution center, increasing logistics and distribution capacity to support channel growth.

Paraguay

● Supplementary machinery, buildings and others for the start-up of the new line of still products,

● Improved depot infrastructure,

● Returnable bottles and plastic cases, and

● Coolers - Cold equipment.

We have budgeted US$250 million for our capital expenditures in 2023, which is expected to be mainly destined to:

● Machinery and infrastructure at the Duque de Caxias plant in Brazil, to start producing part of the beer portfolio;

● Machinery and infrastructure in Argentina, to expand the capacity of returnable beverages;

● Machinery and infrastructure in our subsidiary Re-Ciclar in Chile, to continue with the construction of a plant that will produce recycled PET resin, which we will use in our bottles;

● New beverage production line in Chile;

● Compliance with regulations regarding industrial water treatment in Chile with a new effluent treatment plant (US$2 million) and the expansion of the existing one in Argentina;

● Improve water use efficiency by reusing effluent water in Argentina and Brazil;

● Continue with the returnable bottle labeling plan in Paraguay;

● Promote the use of recycled PET resin (new line of PET flakes in Brazil);

● Renewal of the truck fleet in Chile and Brazil; and

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● Improve our information technologies in our relationship with clients, consumers and internal processes, accelerating digitization with the incorporation of more technological solutions, artificial intelligence and machine learning.

For 2023, we estimate that internally generated funds will finance a large part of our budgeted capital expenditure. Our capital expenditure plan for 2023 may change based on market conditions and how the economy evolves in the countries where we operate. We believe the uncertainty regarding the COVID-19 pandemic has diminished, but our capital expenditures plans are dynamic and subject to change if the conditions require it.

B. BUSINESS OVERVIEW

We are the third largest bottler of Coca-Cola trademark beverages in Latin America in terms of sales volume. We are the largest bottler of Coca-Cola trademark beverages in Chile and Argentina and the third largest in Brazil, in each case in terms of sales volume. We are also the only bottler of Coca-Cola trademark beverages in Paraguay.

In 2022, we had consolidated net sales of Ch$2,656,878 million and total sales volume of 873.6 million unit cases of beverages.

In addition to our soft drinks business, which accounted for 64% of our consolidated net sales during 2022, we also:

● produce, sell and distribute fruit juices, other fruit-flavored beverages, sport drinks, mineral and purified water in Chile, Argentina, Brazil and Paraguay under trademarks owned by The Coca-Cola Company, and flavored waters in Chile, Argentina and Paraguay;

● produce, sell and distribute iced tea, mate beverages in Brazil;

● produce, sell and distribute seed-based beverages in Argentina under trademarks owned by The Coca-Cola Company, and sell and distribute these products in Brazil, Chile and Paraguay;

● produce, sell and distribute energy drinks in Argentina, Brazil and Chile under trademarks owned by Monster Energy Company, and sell and distribute these products in Paraguay;

● produce, sell and distribute pre-mixed cocktails in Argentina;

● manufacture polyethylene terephthalate (“PET”) bottles and preforms, returnable PET bottles, cases and plastic caps, primarily for our own use in the packaging of our beverages in Chile and Argentina;

● sell and distribute beer in Brazil under the brands Bavaria, Kaiser, Sol, Therezópolis, Tiger, Eisenbahn and Estrella Galicia;

● sell and distribute alcoholic beverages in Brazil under the brands Campari, Aperol, Sagatiba, Dreher, Old Eight, Drury´s, Skyy, Bulldog, Cinzano, Cynar and Liebfraulmilch;

● sell and distribute beer, sparkling wine, spirits, wine, cider and other alcoholic products in Argentina;

● sell and distribute beer, spirits and wine in Chile;

● sell and distribute hard seltzers under the brand Topo Chico in Brazil and Chile; and

● distribute ice cream and other frozen products under the Guallarauco brand in Chile.

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Our Territories

The following map shows our territories, estimates of the population to which we offer products, the number of retailers of our beverages and the per capita consumption of our beverages as of December 31, 2022.

Per capita consumption data for a territory is determined by dividing total beverage sales volume, excluding the sales to other Coca-Cola bottlers within the territory by the estimated population within such territory, and is expressed on the basis of the number of eight-ounce servings of our products. One of the factors we use to evaluate the development of local volume sales in our territories and to determine product potential is the per capita consumption of our beverages.

Our Product Overview

We produce, market and distribute the following Coca-Cola trademark beverages and brands licensed from third parties throughout our franchise territories.

We produce, market and distribute Coca-Cola products in our franchise territories through standard bottler agreements between our bottler subsidiaries and the local subsidiary in each jurisdiction of The Coca-Cola Company. We consider our relationship with The Coca-Cola Company to be an integral part of our business strategy.

The following table sets forth the brands of the non-alcoholic beverages that we distribute by country as of December 31, 2022:

	Argentina		Brazil		Chile		Paraguay
Soft drinks
Cantarina					ü	PR
Coca-Cola	ü	PR	ü	PR	ü	PR/PU	ü	PR
Coca-Cola Light	ü	PR			ü	PR/PU
Coca-Cola Plus Café	ü	PR	ü	PR	ü	PR/PU
Coca-Cola Zero/Sin azúcar	ü	PR	ü	PR	ü	PR/PU	ü	PR
Crush Light/Zero/Sin azúcar	ü	PR					ü	PR
Fanta	ü	PR	ü	PR	ü	PR/PU	ü	PR
Fanta Zero/Sin azúcar	ü	PR	ü	PR	ü	PR/PU
Inca Kola					ü	PR/PU
Inca Kola Zero					ü	PR/PU
Kuat			ü	PR
Nordic					ü	PR/PU
Nordic Agua Tónica					ü	PR/PU
Nordic Zero					ü	PR/PU
Quatro Light/Liviana/zero/Sin azúcar					ü	PR/PU
Schweppes	ü	PR			ü	PU	ü	PR
Schweppes Light/Zero/Sin azúcar	ü	PR	ü	PR	ü	PU
Schweppes Tónica	ü	PR	ü	PR	ü	PU	ü	PR
Schweppes Tónica Light			ü	PR	ü	PU
Sprite	ü	PR	ü	PR	ü	PR/PU	ü	PR
Sprite Zero/ Sin azúcar	ü	PR	ü	PR	ü	PR/PU	ü	PR

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	Argentina		Brazil		Chile		Paraguay
Juices
Andina Del Valle					ü	PU	ü	PR
Andina Del Valle Light					ü	PU
Cepita	ü	PR			ü	PU
Cepita Fresh	ü	PR
Cepita Nutridefensas	ü	PR
Del Valle 100%			ü	PU
Del Valle Fresh			ü	PR	ü	PU	ü	PR
Del Valle Frut			ü	PR
Del Valle Mais			ü	PU
Del Valle Mais Light			ü	PU
Frugos Light/Sin azúcar/0%							ü	PR
Guallarauco Aloe Vera					ü	PU
Guallarauco Jugo					ü	PU
Guallarauco Limonada					ü	PU
Guallarauco Néctar					ü	PU
Kapo			ü	PR	ü	PU
Waters
Aquarius	ü	PR			ü	PR	ü	PR
Aquarius Zero	ü	PR
Benedictino	ü	PR			ü	PR	ü	PR
Benedictino Sabores					ü	PR
Bonaqua	ü	PR
Crystal			ü	PR
Dasani							ü	PR
Glaceau Smart Water			ü	PU	ü	PU
Glaceau Vitamin Water					ü	PU
Guallarauco Agua de Fruta					ü	PU
Vital					ü	PU
Other non-alcoholic beverages
AdeS Frutales	ü	PR	ü	PU	ü	PU	ü	PU
AdeS Leches	ü	PR	ü	PU	ü	PU	ü	PU
Burn			ü	PR
Guaraná Power			ü	PR
I9 Isotónico			ü	PR
Leão Ice Tea			ü	PR
Leão Ice Tea Light/Zero/sin azúcar			ü	PR
Matte Leão			ü	PR
Matte Leão Zero			ü	PR
Monster	ü	PR	ü	PR/PU	ü	PU	ü	PU
Monster Zero/Light/Sin azúcar	ü	PR	ü	PU	ü	PU	ü	PU
Powerade	ü	PR	ü	PR	ü	PU	ü	PR
Powerade Zero/Light/Sin azúcar					ü	PU
Reign			ü	PU	ü	PU

Symbology
PR	Produced
PU	Purchased
PR/PU	Produced and Purchased

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In addition to non-alcoholic beverages portfolio, we sell and distribute beer, spirits and wine in Chile, sell and distribute beer and other alcoholic beverages in Brazil; produce, sell and distribute pre-mixed cocktails in Argentina and sell and distribute beer, wine and other alcoholic beverages in Argentina.

In Argentina we distribute beers of the brands Amstel, Heineken, Sol, Imperial, Palermo, Schneider, Kunstmann, Isenbeck, Miller, Blue Moon, Grolsch, Warsteiner, Iguana, Salta Cautiva, Santa Fe and Antares; Wines and sparkling wines of the brands Colón, La Celia, Eugenio Bustos, Graffigna, Alaris, Alma Mora, Colección Privada, Dadá, Dolores, Don David, El Bautismo, Elementos, Fair for Life, Finca Las Moras, Fond de Cave, Los Árboles, Los Intocables, Navarro Correas, Paz, San Telmo, Suter, Termidor and Trapiche; Baileys liqueurs, Tanqueray Gin, Smirnoff Vodka, J&B Whisky, Johnnie Walker Whisky, Old Parr Whisky, Vat-69 Whisky, White Horse Whisky and Legui, and other alcoholic products of the brands Schweppes, 1888 Cider, Real Cider, Pehuenia Cider and Frizze.

In Brazil, we distribute beers of the brands Bavaria, Kaiser, Sol, Therezópolis, Estrella Galicia, Eisenbahn and Tiger; spirits of the brands Aperol, Bulldog, Campari, Cinzano, Cynar, Dreher, Drury’S, Old Eight, Sagatiba and Skyy; wines and sparkling wines of the brands Liebfraulmilch and Cinzano, and other alcoholic products of the brands Topo Chico and Schweppes.

In Chile, we distribute beers of the brands Budweiser, Corona, Stella Artois, Becker, Becks, Cusqueña, Báltica, Kilómetro 24.7, Quilmes, Bud light, Michelob Ultra, Modelo, Pilsen del Sur, Malta del Sur, Leffe, Goose Island, Hoegaarden; we also distribute Baileys, Bourbon Bulleit, Gin Gordon, Gin Tanqueray, Ron Cacique, Ron Pampero, Ron Zacapa, Sheridan’s, Tequila Don Julio, Vodka Ciroc, Vodka Smirnoff, Whisky Bell’s, Whisky Buchanan’s, Whisky J&B, Whisky Johnnie Walker, Whisky Old Parr, Whisky Sandy Mac, Whisky Singleton, Whisky Vat-69, Whisky White Horse, Pisco Monte Fraile, Pisco Hacienda La Torre, Pisco Alto del Carmen/Alto del Carmen Ice, Pisco Capel/Capel Ice, Pisco Brujas de Salamanca, Pisco Artesanos del Cochiguaz, Ron Maddero. We also distribute wines and sparkling wines of the brands Prologo Late Harvest, Vino Grosso, Vino Huancara, Vino Carbonatado Pkador, Espumante Francisco de Aguirre, Espumante Sensus, Espumante Nola Zero, Espumante Myla, 120, Amaranta/Amaranta Spritz, Bodega Uno, Cabernario, Carmen, Casa Real, Cavanza, Doña Paula, Floresta, Hermanos Carrera, Heroes, Invictas, Los Cardos, Medalla Real, Rita, Sangria Guay, Santa Rita, Stellar-Ice, Terra Andina, and other alcoholic products of the brands Sour Inca de Oro, Topo Chico and Schweppes.

All the alcoholic products we commercialize are purchased from our commercial partners, except for the pre-mixed cocktails produced in Argentina.

We seek to enhance our business throughout the franchise territories by developing existing markets, penetrating other soft drink, waters and juices markets, and also alcoholic beverages markets, forming strategic alliances with retailers to increase consumer demand for our products, increasing productivity, and by further internationalizing our operations.

Reporting Segments

The following discussion analyzes our product sales and customers by reporting segments.

Chile

In Chile, we produce, market and distribute our beverages under The Coca-Cola Company trademarks in the metropolitan region of Santiago and the provinces of Cachapoal and San Antonio, as well as the regions of Antofagasta, Atacama, Coquimbo, Aysén and Magallanes.

During 2022, Chile accounted for 36.6% and 42.3% of our volume and consolidated net sales, respectively.

Soft Drinks: Our Chilean soft drink operations accounted for net sales in 2022 of Ch$539,334 million. We measure sales volume in terms of unit cases (UCs). The following table highlights historical sales and volume of Coca-Cola soft drinks sold in Chile for the periods indicated:

	Year ended December 31,
	2020		2021		2022
	(in millions)
	Ch$	UCs	Ch$	UCs	Ch$	UCs
Colas	319,811	120.5	380,542	133.8	430,436	133.4
Flavored soft drinks	87,380	33.2	99,616	34.8	108,898	32.8
Total	407,191	153.8	480,158	168.6	539,334	166.1

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As of December 31, 2022, we sold our products to approximately 70,000 customers in Chile. The following table highlights the type of customer in Chile for our products:

	Year ended December 31,
	2020	2021	2022
	(%)
Mom & Pops (1)	54	50	46
Supermarkets	25	26	28
On premise	10	10	13
Wholesale distributors	12	14	13
Total	100	100	100

(1) Mom & Pops are neighborhood stores (grocery stores, minimarkets, kiosks, liquor stores, bakeries, etc.) characterized by providing daily shopping needs, and differentiated because they are nearby, and products are available in smaller formats.

Other Beverages: Coca-Cola Andina, through VJ S.A., produces and sells juices, fruit flavored beverages and sports drinks. Juices are manufactured and commercialized under the brands Andina del Valle (juices and fruit nectars), Kapo (juice drink), Glaceau Vitamin Water (water with added vitamins and minerals), Powerade (isotonic), Ades (soy juice) and Guallarauco (fruit waters and nectars). Vital Aguas S.A. is in charge of bottling mineral and mineralized water under the brand Vital. Also, Andina (in Chile) produces purified water under the brand Benedictino.

In September 2016 and July 2017, the Company began the distribution in Chile of products under the trademarks of Monster and AdeS, respectively. In 2018, the Company began selling and distributing certain Guallarauco products and also spirits from the company Diageo, and in 2019 the Company began with the sale and distribution of liquors and wine of the company Capel.

In 2020, the Company began selling and distributing AB InBev beer in Chile, under the following brands: Corona, Becker, Báltica, Budweiser, Stella Artois, Cusqueña, among others.

In May 2020, the Company began the production of Monster in Chile, trough Envases Central S.A.

In 2021 the Company began selling and distributing Viña Santa Rita wines under the following brands: Doña Paula, 120 Tres Medallas, Casa Real, Carmen, Santa Rita, among others.

In 2022, net sales of waters, juices, seed-based beverages, sports drinks and energy drinks in Chile were Ch$313,074 million, and net sales of beer and spirits were Ch$271,257 million.

Brazil

In Brazil, we produce, market and distribute our beverages under The Coca-Cola Company trademarks in the majority of the State of Rio de Janeiro and the entirety of the State of Espírito Santo and since October 1, 2013 in part of the state of São Paulo and part of the state of Minas Gerais, as a consequence of the Ipiranga acquisition on October 1, 2013.

During 2022, Brazil accounted for 31.8% and 24.0% of our volume and consolidated net sales, respectively.

Soft Drinks: The Brazilian soft drink operations accounted for net sales of Ch$472,404 million. The following table highlights historical sales and volume of Coca-Cola soft drinks sold in Brazil for the periods indicated:

	Year ended December 31,
	2020		2021		2022
	(in millions)
	Ch$	UCs	Ch$	UCs	Ch$	UCs
Colas	262,741	163.7	260,157	163.1	395,211	181.3
Flavored soft drinks	54,972	41.8	52,991	41.2	77,193	43.2
Total	317,713	205.5	313,148	204.3	472,404	224.5

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As of December 31, 2022, we sold our products to approximately 84,000 customers in Brazil. The following table highlights the type of customer in Brazil for our products:

	Year ended December 31,
	2020	2021	2022
	(%)
Mom & Pops (1)	34	33	33
Supermarkets	33	33	33
On premise	12	13	13
Wholesale distributors	22	22	22
Total	100	100	100

(1) Mom & Pops are neighborhood stores (grocery stores, minimarkets, kiosks, liquor stores, bakeries, etc.) characterized by providing daily shopping needs, and differentiated because they are nearby, and products are available in smaller formats.

Other Beverages: from September 2021, we sell and distribute beer under the Therezópolis, Estrella Galicia, Eisenbahn, Tiger, Sol Premium, Kaiser and Bavária brands. As of November 2021 we started to distribute Topo Chico and Schweppes with alcohol. We sell and distribute water under the labels Crystal and SmartWater, ready-to-drink juices under the labels Del Valle Mais, Del Valle Fresh, Del Valle Frut, Del Valle 100%, and Kapo, energy drinks under the brand names Monster, Burn and Reign, isotonic drinks under Powerade brand and Matte Leão, Leão Ice Tea and Guaraná Power ready-to-drink teas. We also sell and distribute seed-based beverages, AdeS Juice and AdeS Milk, under the brand name AdeS. From May 2022 we started to distribute alcoholic beverages from Campari´s portfolio under the brand names Campari, Aperol, Sagatiba, Dreher, Old Eight, Drury´s, Skyy, Bulldog, Cinzano, Cynar and Liebfraulmilch.

In 2022, net sales of waters, juices, ready-to-drink teas, seed-based beverages, sports drinks and energy drinks in Brazil were Ch$133,138 million, and net sales of beer and other alcoholic products were Ch$31,318 million.

Argentina

In Argentina, we produce, market and distribute our beverages under The Coca-Cola Company trademarks in the entirety of the provinces of Córdoba, Mendoza, San Juan, San Luis, Entre Ríos, western part of the province of Buenos Aires and most of Santa Fe, as well as La Pampa, Neuquén, Río Negro, Chubut, Santa Cruz, and Tierra del Fuego.

During 2022, Argentina accounted for 23.1% and 25.9% of our sales volume and consolidated net sales, respectively.

Soft Drinks: The Argentine soft drink operations accounted for net sales of Ch$523,908 million in 2022. The following table highlights historical sales and volume of Coca-Cola soft drinks sold in Argentina for the periods indicated:

	Year ended December 31,
	2020		2021		2022
	(in millions)
	Ch$	UCs	Ch$	UCs	Ch$	UCs
Colas	194,621	111.6	316,587	121.3	393,145	130.0
Flavored soft drinks	65,497	33.6	103,137	36.1	130,763	39.8
Total	260,118	145.2	419,724	157.4	523,908	169.8

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As of December 31, 2022, we sold our products to approximately 68,000 clients in Argentina. The following table highlights the type of client in Argentina for our products:

	Year ended December 31,
	2020	2021	2022
	(%)
Mom & Pops (1)	36	34	35
Supermarkets	23	27	26
On premise	4	6	7
Wholesale distributors	36	33	32
Total	100	100	100

(1) Mom & Pops are neighborhood stores (grocery stores, minimarkets, kiosks, liquor stores, bakeries, etc.) characterized by providing daily shopping needs, and differentiated because they are nearby, and products are available in smaller formats.

Other Beverages: in Argentina we produce, sell and distribute flavored waters under the brand name Aquarius, and mineral and drinking water under the brands Bonaqua and Benedictino. In addition, we produce, sell and distribute ready to drink juices under the Cepita brand name, and fruit and vegetable seed based drinks under the brand name AdeS (which in 2017 was incorporated into the portfolio through a joint venture between The Coca-Cola Company and other Coca-Cola bottlers, including Andina). We also produce, sell and distribute sport drinks under the Powerade brand name, and produce, sell and distribute energy drinks under the Monster brand name (which was incorporated into the portfolio in 2018). We also produce, sell and distribute ARTD’s (alcoholic ready-to-drink beverages) under the Schweppes brand. We distribute beers of the brands Amstel, Heineken, Sol, Imperial, Palermo, Schneider, Kunstmann, Isenbeck, Miller, Blue Moon, Grolsch, Warsteiner, Iguana, Salta Cautiva, Santa Fe and Antares; Wines and sparkling wines of the brands Colón, La Celia, Eugenio Bustos, Graffigna, Alaris, Alma Mora, Colección Privada, Dadá, Dolores, Don David, El Bautismo, Elementos, Fair for Life, Finca Las Moras, Fond de Cave, Los Árboles, Los Intocables, Navarro Correas, Paz, San Telmo, Suter, Termidor and Trapiche; Baileys liqueurs, Tanqueray Gin, Smirnoff Vodka, J&B Whisky, Johnnie Walker Whisky, Old Parr Whisky, Vat-69 Whisky, White Horse Whisky and Legui, and other alcoholic products such as, 1888 Cider, Real Cider, Pehuenia Cider and Frizze.

In 2022, net sales of juices, waters, seed-based beverages, sports and energy drinks in Argentina were Ch$140,095 million. These values also consider the commission for distribution of beer, wine and cider.

Paraguay

In Paraguay, we produce, market and distribute our beverages under The Coca-Cola Company trademarks in the entire country.

During 2022, Paraguay accounted for 8.5% and 8.0% of our volume and consolidated net sales, respectively.

Soft Drinks: The Paraguayan soft drinks operations accounted for net sales of Ch$166,489 million. The following table highlights historical sales and volume of Coca-Cola soft drinks sold in Paraguay for the periods indicated:

	Year ended December 31,
	2020		2021(1)		2022
	(in millions)
	Ch$	UCs	Ch$	UCs	Ch$	UCs
Colas	58,597	30.1	84,555	33.9	107,150	33.7
Flavored soft drinks	67,460	25.0	49,729	23.6	59,339	26.2
Total	126,058	55.1	134,284	57.6	166,489	59.9

(1) 2021 net sales were redistributed among flavors; the total values did not change.

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As of December 31, 2022, we sold our products to approximately 52,000 customers in Paraguay. The following table highlights the type of customer in Paraguay for our products:

	Year ended December 31,
	2020	2021	2022
	(%)
Mom & Pops (1)	42	41	38
Supermarkets	12	12	13
On premise	9	11	12
Wholesale distributors	36	37	36
Total	100	100	100

(1) Mom & Pops are neighborhood stores (grocery stores, minimarkets, kiosks, liquor stores, bakeries, etc.) characterized by providing daily shopping needs, and differentiated because they are nearby, and products are available in smaller formats.

Other Beverages: in Paraguay, we produce and distribute juices ready to drink under the trademark Del Valle and we import and distribute seed-based drinks under the AdeS trademark. We also manufacture and sell water under the trademarks Dasani (purified water), Aquarius (flavored water), Benedictino (mineral water) and Powerade (sports drinks). We also import and distribute energy drinks under the trademark Monster (since May 2019).

In 2022, net sales of juices, waters, seed-based beverages, sports and energy drinks in Paraguay were Ch$45,850 million.

Distribution

Chile

Soft Drinks, Juices, Waters and Other Beverages: In Chile, we distribute our products through a distribution system that includes: (i) trucks owned by third parties (539 trucks) which provide exclusive distribution service, and (ii) our own trucks (264 trucks). In 2022, 90% of our distribution was carried out by exclusive third-party trucking companies and 10% by Andina group companies. Distribution of all Andina beverages in Chile is carried out from distribution centers and production facilities. In most cases, the transportation company collects payment in cash or checks from the customer. In some cases, the driver also collects empty returnable glass containers or PET bottles of the same type and quantity as those delivered or collects cash deposits for net returnable bottles delivered. This task is particularly significant in the Chilean territory where returnable containers accounted for approximately 29,5% of the total volume sold of non-alcoholic beverages in 2022. Certain important customers (such as supermarkets) maintain accounts receivable with us, which are settled on average every 45 days after invoices are issued.

Beer and other Alcoholic Beverages: Andina in Chile uses its distribution system to distribute beer, and other alcoholic beverages in its franchise territories. Since 2018 it has developed a portfolio expansion strategy to become a total beverage company. To this end, the Company has entered into agreements with different strategic partners that have transformed its value proposition towards the customers of the different channels it serves in each category. Since 2018 it has been distributing Diageo’s complete distilled spirits portfolio, brands such as Johnnie Walker, Vat-69, Sandy Mac (whiskey), Cacique and Zacapa (rum), Smirnoff and Ciroc (vodka), Tanqueray and Gordon’s (gin), Bailey’s liqueur, among others, in the traditional channel, on-premise channel, convenience stores and B2C digital channel. In the third quarter of 2019, distribution of the complete product portfolio of the Capel Cooperative (Alto del Carmen and Capel piscos, among other brands, and wines from Viña Francisco de Aguirre) began in all channels in the territory. In 2020, a commercialization and distribution agreement was signed, with which most of the AB InBev brands in Chile were added to our portfolio, as part of the agreement, the products of said multinational are commercialized in the different channels in most of our territory. Finally, in 2021 a distribution agreement was signed with “Viña Santa Rita” to commercialize and distribute its main brands (as of November 2021) throughout Chile, such as wines, sparkling wines and cocktails. Andina in Chile buys the different alcoholic products from commercial partners (Diageo, Cooperativa Capel, AB InBev and Viña Santa Rita) at a price determined by those partners and sells them to its customers with a margin previously agreed by category and channel, to which different variables are added for the achievement of goals. The discount scheme is different in each category, but as a common rule the discounts approved by the commercial partners are paid by those partners and do not affect Andina’s margin in Chile.

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Brazil

Soft Drinks, Juices, Waters and Other Non-alcoholic Beverages: In Brazil, we generally distribute Coca-Cola products through a distribution system that includes: (i) own trucks (ii) trucks operated by independent distributors pursuant to non-exclusive distribution arrangements, and (iii) trucks operated by independent transport companies on an exclusive basis with us. In 2022, 12.8% was distributed by exclusive distributors, 3.1% by independent transport companies and 84.1% by our own trucks. Distribution of all of Andina Brazil’s beverages takes place from distribution centers and production facilities.

Other Beverages: Andina Brazil uses its distribution system to distribute beer in the Brazilian territory. Andina Brazil started distributing beer in the 1980s as a result of the acquisition of Cervejarias Kaiser S.A. (“Kaiser”) by a consortium of Coca-Cola bottlers (including Andina Brazil) in Brazil. In March 2002, the Canadian brewing company Molson Inc. acquired Kaiser. In 2006, FEMSA acquired from Molson a controlling ownership interest in Kaiser and in 2010, Heineken acquired a controlling interest in FEMSA’s beer operation. Andina Brazil buys beer from Heineken at a price determined by Heineken and sells it to its customers with a fixed margin. In the case of certain discount sales that have been approved by Heineken, Heineken shares between 50% and 100% of the cost of such discounts. In 2022, Andina Brazil’s net sales of beer were Ch$31,318 million.

In 2002, the Coca-Cola Company and the Brazilian Association of Coca-Cola Manufacturers entered into an agreement regarding the distribution through the Coca-Cola system of beer produced and imported by what is now Heineken. In July 2017 Heineken Brazil notified us of the termination of the agreement by virtue of which Andina Brazil commercialized and distributed Heineken-branded beers in Brazil, which was effective in March 2022. During 2020, the Coca-Cola system in Brazil and Heineken reached a new agreement to redesign their distribution partnership in Brazil. As per the agreement, which became effective as of September 2021 and has an initial five year term of duration, the Coca-Cola system in Brazil will continue to offer the Kaiser, Bavaria and Sol brands, and will complement this portfolio with the Eisenbahn and Tiger. Additionally, as part of the redesign of the distribution partnership, the agreement allows the Coca-Cola system bottlers in Brazil to distribute and produce other national or international brands, in certain percentages and under certain conditions. In 2016, Andina Brazil signed an agreement with Monster Energy Company for the distribution of Monster Energy products in Andina Brazil’s territory. These products began being distributed in November 2016.

In September 2021, the Coca-Cola Brazil System, including Andina Brazil, signed a Master Agreement and Distribution Agreement with Estrella de Galicia Importação e Comercialização de Bebidas e Alimentos Ltda, with a term of 12 years, for the distribution of branded beers Estrella Galicia throughout the Brazilian territory with exclusivity.

In April 2022, the Coca-Cola Brazil System, including Andina Brazil, signed a Master Agreement and Distribution Agreement with Campari, with an expiration date of December 31, 2026, for the exclusive distribution of Campari-branded beverages throughout the Brazilian territory.

In November 2022, Andina Brazil, signed a Copacking Agreement with Monster, with a term of 10 years.

Argentina

Soft Drinks, Juices and Waters: in 2022, 67.4% of EDASA’s Coca-Cola NARTD volume were distributed by direct distribution and 32.6% by other distributors and wholesale distribution (indirect distribution). The direct distribution is done by a group of independent transport companies, on an exclusive basis.

Other Beverages: Andina Argentina uses its distribution system to distribute beer in the territory composed by the provinces of La Pampa, Neuquén, Río Negro, Chubut, Santa Cruz, Tierra del Fuego and the following parts of the Province of Buenos Aires: Bahía Blanca, Tornquist, Coronel M.L.Rosales, Coronel Dorrego, Villarino, Daireaux, Guamini, Adolfo Alsina, Coronel Suarez, Coronel Pringles, Saavedra, Puán, Saliqueló, Municipio Urbano de Monte Hermoso, Benito Juárez, Gonzalez Chávez, Tres Arroyos, Carmen de Patagones, Olavarría, Azul, Tapalqué, Laprida, Lamadrid, Arrecifes, Chacabuco, Colón, Pergamino, Rojas, Salto, Bartolomé Mitre, Capitán Sarmiento, 9 de Julio, 25 de Mayo, General Alvear, Chivilcoy, Alberti, Bragado, Junín, Viamonte, Arenales, L.N.Alem, Lincoln, General Pinto, Ameghino, Tres Lomas, Pehuajó, Carlos Casares, Hipólito Yrigoyen, Bolívar, Carlos Pellegrini, Trenque Lauquen, Rivadavia, Carlos Tejedor, General Villegas. Andina Argentina began distributing beer in 2012 due to the merger with Coca-Cola Polar. Since mid-2019, wine and cider have been added to the business. Andina Argentina distributes on behalf of and according to an order by CICSA (Compañía Industrial Cervecera S.A.) at a set price which is segmented for each of the regions where the contract operates, and for which Andina Argentina receives a commission.

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The Coca-Cola Company and two bottlers (ex-Coca-Cola Polar Argentina S.A., today Andina Argentina, and ex Juan Bautista Guerrero S.A., today Salta Refrescos S.A. of the Arca group) executed a master agreement regarding the distribution of beer manufactured or imported by CICSA, through the Coca-Cola distribution system. The distribution master agreement was executed in 2003 for an initial period of five years, with successive extensions every three years, and the last one agreed in November 2017 for a new five-year term expiring on June 12, 2022. In 2019, an addendum to this agreement was signed to amend the commissions and include wine and cider within the scope of the distribution agreement. Also, on June 21, 2022, the parties agreed to extend the master distribution agreement for a one-year term until June 12, 2023. Lastly, on June 28, 2022, Andina Argentina and Grupo Peñaflor S.A. entered into a distribution agreement for alcoholic beverages manufactured or imported by Grupo Peñaflor S.A. in the territory of the Provinces of Mendoza, San Juan and San Luis.

In addition, in December 2017, EDASA executed an agreement with Monster Energy Company for the distribution and commercialization of energy drinks of the “Monster” trademark for an initial period of 10 years in the territory within the franchise of Andina Argentina, with the consent of The Coca-Cola Company. Also, in April 2021 EDASA, together with Monster Energy Company, entered into an agreement whereby Monster Energy Company appointed Embotelladora del Atlántico S.A. as the manufacturer of products bearing the “Monster” brand for an initial term of 5 years.

Paraguay

Soft Drinks, Juices and Waters: In 2022, PARESA distributed 89.2% of its products through direct distribution (independent transport companies), and 10.8% through wholesale distributors.

Competition

We face intense competition throughout the franchise territories principally from bottlers of competing soft drink brands. See “Item 3. Key Information — Risk Factors — Risks Related to our Company—Our Business is highly competitive including with respect to price competition which may adversely affect our net profits and margins.” Our business is highly competitive including with respect to price competition which may adversely affect our net profits and margins. As a result of restrictions related to COVID-19, for years 2020 and 2021, A.C. Nielsen changed the methodology and sample in Argentina, Chile and Paraguay and figures for those periods were obtained using such methodology, however, 2022 figures presented herein were obtained from surveys carried out using the former methodology. Therefore, 2022 figures in those countries may not be fully comparable to those of previous periods. The following table presents the market share of Coca-Cola and other soft drinks in Chile, Brazil, Argentina and Paraguay for the periods indicated:

	2020				2021				2022
	Chile	Brazil	Argentina	Paraguay	Chile	Brazil	Argentina	Paraguay	Chile	Brazil	Argentina	Paraguay
	(%)
Coca-Cola soft drinks	65	62	61	76	64	62	59	76	64	63	59	75
Pepsi Bottler soft drinks	31	18	14	7	33	16	15	7	32	19	15	6
Other soft drinks	4	20	25	17	3	22	26	17	4	18	25	19
Total	100	100	100	100	100	100	100	100	100	100	100	100

Source: A.C. Nielsen. During 2022, in Argentina, Nielsen conducted a reprocessing of data from 2020 and 2021. This reprocessing resulted from a quality review conducted jointly by Nielsen and The Coca-Cola Company teams, based on the detection of certain opportunities for improvement on the data collection that was carried out during 2020 and 2021 in times of the COVID-19 pandemic. This reprocessing was carried out at country level, so data from all bottlers in Argentina were reprocessed.

Chile

Soft Drinks: the soft drink segment of the Chilean beverage industry is highly competitive. The most important areas of competition are product image, pricing, advertising, ability to deliver product in popular bottle sizes, distribution capacity, and the number of returnable bottles held by retailers or by consumers. Returnable bottles can be exchanged at the time of new purchases in lieu of paying a bottle deposit, thereby decreasing the purchase price. Our main competitor in the Chilean franchise territory is Embotelladora Chilenas Unidas (ECUSA), a subsidiary of Compañía Cervecerías Unidas S.A. (CCU), the largest brewer in Chile. ECUSA produces and distributes Pepsi-Cola products and its own soft drinks brands (e.g., Bilz and Pap). Based on reports by A.C. Nielsen, we estimate that in 2022, our average soft drink market share within our franchise territories was 64.4%.

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Other beverages: our main competitor in the water market is CCU, which has its own brand (Cachantun), where there is also competition from other low-priced brands (“B-Brands”). Our main competitors in the juice segment are the Watt’s-CCU joint venture, Córpora Tres Montes and three of the main milk producers in Chile: Soprole S.A., Nestlé Chile S.A. and Loncoleche. The market for fruit-flavored beverages in Chile also includes lower-cost concentrates of lower quality and artificially flavored powdered soft drink mixes. We do not consider these products to compete with our water and juice business as we believe these products are of lower quality and value. Based on reports by A.C. Nielsen, we estimate that in 2022, our average market share within our Chilean franchise territories reached approximately 39.5% for juices and others segment and approximately 44.4% for waters.

In the different alcoholic categories, Andina’s main competitor in Chile is CCU, which through different business models distributes beers (its main brands are Escudo, Cristal, Kunstmann and Heineken), spirits (brands from the Pernod Ricard portfolio), piscos (Control and Mistral brands, among others) and wines (Viña San Pedro brands such as Castillo de Molina, among others).

Brazil

Soft Drinks: the soft drink segment of the Brazilian beverage industry is highly competitive. The most important areas of competition are product image, pricing, advertising and distribution capacity (including the number and location of sales outlets). According to A.C. Nielsen, our main soft drink competitor in the Brazilian territory is American Beverage Company or AmBev, the largest beer producer and distributor in Brazil and also produces soft drinks, including Pepsi-Cola products. Based on reports by A.C. Nielsen, we estimate that in 2022, our average soft drink market share within our Brazilian franchise territories was approximately 63.3%.

Other Beverages: in the beer sector, Andina Brazil’s main competitor is AmBev which during 2022 had a very dominant position in the Brazilian market. AmBev stands out in the advancement of digital platforms, both in B2B (Bees) and D2C (Zé Delivery) Based on reports by A.C. Nielsen, we estimate that in 2022, our average market share for waters reached 28.8%, where we distribute under the Crystal and Glaceau SmartWater brands. In the segment of juices and others, based on reports by A.C. Nielsen, we estimate that in 2022, our average market share was 52.1%.

Argentina

Soft Drinks: the soft drink segment of the Argentine beverage industry is highly competitive. The most important areas of competition are product image, pricing, advertising, ability to produce bottles in popular sizes and distribution capacity. Our greatest competitor in Argentina is Pepsi, commercialized by InBev. The most significant B-brands competitors are: Refres Now (Manaos), Pritty and Produnoa (Secco). Based on reports by A.C. Nielsen, we estimate that in 2022, our average soft drink market share within our Argentine franchise territories reached approximately 59.2%.

Other Beverages: we service the market of flavored and plain waters with the brands Aquarius, Bonaqua and Benedictino. Based on reports by A.C. Nielsen, we estimate that in 2022, our average market share was 15.5%. In addition, the juices and others market is serviced by the Cepita, AdeS and Powerade brands. Based on reports by A.C. Nielsen, we estimate that in 2022, our average market share was 47.3%. Our biggest competitor in the water category is Danone, RPB (Baggio) in juices and InBev in sports drinks.

Paraguay

Soft Drinks: the soft drink segment of the Paraguayan beverage industry is highly competitive. The most important areas of competition are product image, pricing, advertising, ability to produce bottles in popular sizes and the number of returnable bottles held by retailers or by consumers.

Our greatest competitor, local brand “Niko/De La Costa,” is produced and bottled by Embotelladora Central S.A., which had a 10% market share in 2022. B-brands in Paraguay represented 24.2% of the soft drink industry. In 2022, Pepsi had a market share of 6.1%, and is produced and marketed by Vierci Group, a local franchisee. Based on reports by A.C. Nielsen, we estimate that in 2022, our average soft drinks market share within our Paraguayan franchise territories was approximately 75.3%.

Other Beverages: we are leaders in all non-carbonated categories. In waters, based on reports by A.C. Nielsen, we estimate that in 2022, our average market share was 55.0% with our Dasani, Aquarius, Tropical and Benedictino brands. The market for juices and others is serviced through the Del Valle and AdeS brands, Powerade in sport drinks, and Monster in energy drinks. Based on reports by A.C. Nielsen, we estimate that in 2022, our average market share was 63.2%.

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Seasonality

Each of our lines of business are seasonal. Most of our beverage products have their highest sales volumes during the South American spring and summer (October through March), with the exception of nectar products, which have a slightly higher sales volume during the South American winter and autumn (April through September).

Packaging

Overview

Through Envases CMF S.A. in Chile (50% owned by Andina and 50% owned by Embonor), and Andina Empaques Argentina S.A. (“AEASA”) in Argentina we produce PET bottles in both returnable and non-returnable formats, preforms and plastic caps. On average, returnable PET bottles can be used up to 12 times. Non-returnable PET bottles are produced in various sizes and are used by a variety of soft drink producers and, in Chile, also by producers of food, wine, home care and personal hygiene products.

Sales

In 2022, total sales of AEASA reached Ch$37,915 million, of which Ch$13,213 million corresponded to sales to EDASA, Ch$3,635 million corresponded to sales to other related companies of the group and Ch$21,067 million corresponded to sales to third parties.

Competition

AEASA is the supplier of returnable bottles, preforms, plastic caps and cases for Coca-Cola Bottlers in Argentina, also supplying some formats to Coca-Cola bottlers in Chile, Bolivia and Paraguay. In Argentina, we compete principally with Alpla S.A. and Amcor.

CMF is the exclusive supplier of PET resin raw materials, returnable and preform packaging, as well as a main supplier in caps, cases and other plastic resin inputs. There are few suppliers in Chile for these inputs; the other supplier with similar productive capacities is Plasco S.A., which manufactures mainly for ECUSA, Pepsi’s bottling company in Chile.

Raw Materials and Supplies

The main raw materials used in the production of Coca-Cola soft drinks are concentrate, sweetener, water and carbon dioxide gas. Production also requires glass and plastic bottles, bottle caps and labels. Water used in soft drink production is treated for impurities and adjusted for taste reasons. All raw materials, especially water, are subjected to continuous quality control.

Chile

Soft Drinks: Main suppliers of raw materials for the production of soft drinks:

● Concentrate: Coca-Cola de Chile S.A.

● Sweeteners (Sugar/Fructose): Iansa Ingredientes S.A., Sucden Chile S.A. and Comercializadora de Productos Panor Ltda.

● Preform plastic containers: Envases CMF S.A.

● Glass containers: Cristalerías de Chile S.A. and Cristalerías Toro S.P.A.

● Caps: Sinea S.A.

● Cardboard: Corrupac S.A. and Envases Impresos S.A.

● Caps and preforms: Syphon S.A.

● Thermo-contractible: Plásticos Arpoli S.P.A.

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In 2022, 89% of the variable cost of sales of soft drinks corresponded to the main raw materials and finished products purchased by Andina in Chile. The cost of each raw material within the total of main raw materials is the following: concentrate represents 69%, sweeteners 13%, non-returnable bottles 11%, bottle caps 3%, carbon dioxide 1% and other raw materials 3%. Water is not an important raw material cost. Additionally, the cost of finished products acquired from our subsidiaries, such as ECSA, is included in the cost of soft drink sales. These costs represent 17% of total soft drink cost of sales and correspond mainly to cans, PET bottles and sweeteners.

Other Beverages: the main raw materials used by Vital Jugos in the production of juices and as a percentage of total raw material costs, are sweeteners 3.2%, fruit pulp and juices 11%, concentrate 27.3%, containers 22.3%, wrapping material 4.6%, caps 4.3%, and other raw material 2.7% all of which during 2022 accounted for 75.4% of total costs for sales of juice, including packaging. Additionally, AdeS finished product represented 3.2% of total costs for sales of juices.

The principal raw materials used by Vital Aguas in the production of still and sparkling mineral water and as a percentage of total raw material costs are: packaging 35.5%, concentrate 24.9%, caps 6.5%, wrapping material 6.6%, carbonation 0.9%, and other raw materials 2%, all of which during 2022 accounted for 76.4% of total costs for sales of water, including packaging.

Brazil

Soft Drinks: main suppliers of raw materials for the production of soft drinks:

● Concentrate: Recofarma Industria do Amazonas Ltda.

● Sweeteners (Sugar/Fructose): Usina Alta Mogiana S.A. Açúcar e Alcool.

● Preform plastic containers: Valgroup Rj Industria De Embalagens Rigidas Ltda.

● Returnable plastic containers: RioPet Embalagens S.A.

● Cans: Crown Embalagem Metalica Da Amazonia As.

● Caps: Bericap do Brasil Ltda.

● Cardboard: Tetra Pak Ltda.

● Labels: Pp Print Embalagens S.A.

● Electricity/Gas: Ecogen Rio Soluções Energéticas S.A.

● Water: Igua Rio De Janeiro S.A.

● Thermo-contractible: Valgroup Ba Industria De Embalagens Flexiveis Ltda.

In 2022, 78.4% of the variable cost of sales for soft drinks produced by Andina Brazil corresponded to main raw materials. The cost of each raw material within the total of main raw materials is the following: concentrate (including juice used for some flavors) represents 44.9%; sugar and artificial sweeteners 16.9%; non-returnable bottles 16.8%; cans 12.8%; bottle caps 3.2%; carbon dioxide 1.8% and other raw materials 3.6%.

Argentina

Soft Drinks: main suppliers of raw materials for the production of soft drinks:

● Concentrate: Servicios y Productos para Bebidas Refrescantes S.R.L.

● Sweeteners (Sugar/Fructose): Ingrecor S.A. and Complejo Aliment. San Salvador S.A.

● Returnable plastic containers: Andina Empaques Argentina S.A. and Vinisa Fueguina S.R.L.

● Resin containers: Alpek Polyester Argentina S.A.

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● Cardboard: Tetra Pak S.R.L.

● Glass containers: Cattorini Hnos. S.A.C.I.F.E I.

● Cans: Ball Beverage Can South America S.A.

● Cardboard / Pallet / Chapadur: Fiplasto S.A. and Repallets S.A.

● Thermo-contractible: Rio Chico S.A.

In 2022, 62.9% of the variable cost of sales for soft drinks produced by Andina Argentina corresponded to main raw materials. The cost of each raw material as a percentage of the total cost of raw materials is as follows: concentrate 61.7%, sugar and artificial sweeteners 14.4%, non-returnable bottles 14.1%, bottle caps 3.2%, carbon dioxide 0.7%, cans and caps 3.6%, and other raw materials 2.4%. Additionally, the cost of finished products purchased from third parties is included within the cost of sales of soft drinks. These costs represent 1.5% of the total costs of sales of soft drinks and correspond to can formats and other formats of soft drinks which are not produced by Andina Argentina during 2022.

PET Packaging: The principal raw material required for production of PET bottles is PET resin. During 2022, this raw material was mainly purchased from Alpek Polyester Argentina S.A. and Ecopek S.A. In the case of plastic caps and cases, the main raw material required for their production is HDPE resin (high density polyethylene), which during the year 2022 was bought mainly from PBB Polisur S.A. and GC Marketing Solution CO.

In 2022, AEASA’s costs for PET resin accounted for 48% of the total variable cost of its sales.

Paraguay

Soft Drinks: main suppliers of raw materials for the production of soft drinks:

● Concentrate: Recofarma Indústria do Amazonas Ltda. and Servicios y Productos para Bebidas.

● Sweeteners (Sugar/Fructose): Inpasa del Paraguay S.A., Alcotec Sociedad Anónima, and Azucarera Paraguaya S.A.

● Preforms: Industrias PET S.A.E.C.A.

● Caps/Preforms: Andina Empaques Argentina S.A.

● Coil: Tetra Pak Global Distribution S.A.

● Labels: Bolsi Plast S.A.

● Film: Petropack S.A.

● Juices: Fenix S.A.

● Caustic soda: Grupo Bio S.A.C.I.

During 2022, 68% of the variable cost of sales for beverages produced by PARESA corresponded to our main raw materials. The composition of this raw material cost is as follows: concentrate represents 53%, sugar and artificial sweeteners 17%, non-returnable bottles 18%, bottle caps 5%, carbon dioxide 1% and other raw materials 6%. Additionally, AdeS finished products for the sale of juices and soft drink cans purchased from third parties represented 4% and 3% of total variable costs, respectively.

Marketing

We and The Coca-Cola Company jointly promote and market Coca-Cola products in our franchise territories, in accordance with the terms of our respective bottler agreements. We advertise in major communications media. We focus our advertising efforts on increasing brand recognition by consumers and improving our customer relations. National advertising campaigns are designed and proposed by The Coca-Cola Company’s local affiliates, with our input at the local or regional level.

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Generally, we pay approximately 50% of the advertising and promotional expenses incurred by The Coca-Cola Company in our franchise territories. Nearly all media advertising and promotional materials for Coca-Cola soft drinks are produced and distributed by The Coca-Cola Company. See “Item 4. Information on the Company —Bottler Agreements.” Marketing and promotional programs, including television, radio and print advertising, point-of-sale advertising, sales promotions, social media and entertainment are developed by The Coca-Cola Company for all Vital Jugos’ and Vital Aguas’ products.

Pursuant to the existing distribution agreements with Heineken, Estrella Galicia, Monster and Campari, these companies are responsible for planning and managing advertising, marketing and promotional activities related to beer, energy drinks and alcoholic beverages, respectively. Andina Brazil, however, is free to undertake marketing or promotional activities with Heineken’s, Estrella Galicia, Monster’s and Campari´s prior approval. The parties have agreed to assume jointly the costs of certain promotional activities (radio or television) and for certain outdoor events which take place in the Rio de Janeiro, Espírito Santo and Ribeirão Preto regions.

In Argentina, in accordance with the existing distribution agreement with CICSA, CICSA is responsible for planning and managing advertising, marketing and promotional activities related to beer, wine and cider. Andina Argentina, however, is free to undertake marketing or promotional activities with CICSA’s prior approval. The parties have agreed that CICSA will assume the costs of promotional activities (radio, television, outdoor advertising and media) in the region.

In Chile, pursuant to existing distribution agreements with Diageo, Cooperativa Capel, AB InBev and Viña Santa Rita, these companies are responsible for the planning and administration of advertising, commercialization and promotional activities related to their respective products. Coca-Cola Andina Chile may, however, engage in promotional or commercialization activities in the categories and channels in which it is authorized to operate with the prior approval of the company that owns the brand. In all cases the parties have agreed that the costs of advertising activities (including radio, television, street advertising and media in general) as well as the materials used in executing promotions in each channel will be borne by the companies that own the brands.

In September 2016, November 2016, February 2018 and May 2019, Andina (Chile), Andina Brazil, Andina Argentina and Paraguay Refrescos, respectively, began to commercialize the Monster Energy energy drink. This brand is part of the collaboration agreement entered into during 2015 by The Coca-Cola Company and Monster Energy, which included the distribution of its products in the territories of the Coca-Cola System, such as Chile, Brazil, Argentina and Paraguay.

Channel Marketing

In order to provide more dynamic and specialized marketing of our products, our strategy is to divide our market into distribution channels. Our main channels are “mom and pops” which are small retailers, “on premise” consumption such as restaurants and bars, “supermarkets” and “wholesale distributors”. Presence in these channels entails a comprehensive and detailed analysis of the purchasing patterns and preferences of various groups of soft drinks and other beverages consumers in each type of location or distribution channel. In response to this analysis, we seek to tailor our product, price, packaging and distribution strategies to meet the particular needs of and exploit the potential of each channel.

We believe that the implementation of our channel marketing strategy also enables us to respond to competitive initiatives with channel-specific responses. This focused response capability isolates the effects of competitive pressure in a specific channel, thereby avoiding costlier market-wide responses. Our channel marketing activities are facilitated by our management information systems. We have invested significantly in creating such systems, including providing hand-held computer and data gathering equipment to support the gathering of product, consumer and delivery information, as well as applications that may be used on smartphones enabled to use these applications. All of which is required to implement our channel marketing strategies effectively for most of our sales routes in Chile, Brazil, Argentina and Paraguay. We will continue investing to increase pre-sale coverage in our territories.

Bottler Agreements

General

Our status as a The Coca-Cola Company franchisee is based on the bottler agreements that the Company has entered into with The Coca-Cola Company by which it has the license to produce and distribute Coca-Cola brand products within its operating franchise territories in Chile, Brazil, Argentina and Paraguay. The Company’s operations are highly dependent on maintaining and renewing the bottler agreements which provide for the production and distribution of Coca-Cola brand products under certain terms and provisions.

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The bottler agreements are international standard contracts. The Coca-Cola Company enters into with bottlers outside the United States for the sale of concentrates and beverage basis for certain Coca-Cola soft drinks and non-soft drink beverages. These are renewable upon request by the bottler and at the sole discretion of The Coca-Cola Company. We cannot assure you that the bottler agreements will be renewed upon their expiration or that they will be renewed upon the same or better terms.

Concentrates and beverage basis

The bottler agreements provide that we will purchase our entire requirement of concentrates and beverage basis for Coca-Cola soft drinks and other Coca-Cola beverages from The Coca-Cola Company and other authorized suppliers. Concentrate prices for Coca-Cola trademark beverages are a percentage of the weighted average retail price in local currency net of applicable taxes, and are determined by an agreement between the Company and The Coca-Cola Company. We set the price of products sold to retailers at our discretion, subject only to certain price restrictions.

As of the date of this annual report, we are the sole producer of Coca-Cola soft drinks and other Coca-Cola beverages in our franchise territories. Although this right is not exclusive, The Coca-Cola Company even though it has the ability to do so, has never authorized any other entity to produce or distribute Coca-Cola soft drinks or other Coca-Cola beverages in such territories, although we cannot assure you that in the future it will not do so. In the case of post-mix soft drinks, the bottler agreements explicitly establish such non-exclusive rights.

The bottler agreements include an acknowledgment by us that The Coca-Cola Company is the sole owner of the trademarks that identify the Coca-Cola soft drinks and other Coca-Cola beverages and of any secret formula used in concentrates.

Production and Distribution

All distribution must be in authorized containers. The Coca-Cola Company has the right to approve, at its sole discretion, any and all kinds of packages and containers for beverages, including their size, shape and any of their attributes. The Coca-Cola Company has the authority at its sole discretion to redesign or discontinue any package of any of the Coca-Cola products, subject to certain limitations, so long as Coca-Cola soft drinks and other Coca-Cola beverages are not all discontinued at the same time. We are prohibited from producing or handling any other beverage products, other than those of The Coca-Cola Company or other products or packages that would imitate, infringe or cause confusion with the products, trade dress, containers or trademarks of The Coca-Cola Company, or from acquiring or holding an interest in a party that engages in such activities. The bottler agreements also impose restrictions concerning the use of certain trademarks, authorized containers, packaging and labeling of The Coca-Cola Company and prohibit bottlers from distributing Coca-Cola soft drinks or other Coca-Cola beverages outside their designated territories.

The bottler agreements require us to maintain adequate production and distribution facilities; inventories of bottles, caps, boxes, cartons and other exterior packaging or materials; to undertake adequate quality control measures prescribed by The Coca-Cola Company; to develop, stimulate, and fully satisfy the demand for Coca-Cola soft drinks and other Coca-Cola beverages and that we use all approved means, and spend such funds on advertising and other forms of marketing, as may be reasonably required to meet that objective; and to maintain financial capacity as may be reasonably necessary to assure performance by us and our affiliates of our obligations before to The Coca-Cola Company. All bottler agreements require us to submit, on an annually basis, our business plans for such franchise territories to The Coca-Cola Company, including without limitation, marketing, management and promotional and advertising plans for the following year.

Advertising and marketing

The Coca-Cola Company has no obligation to contribute to our expenditures for advertising and marketing, but it may, at its discretion, contribute to such expenditures and perform independent advertising and marketing activities, as well as cooperative advertising and sales promotion that would require our cooperation and support. In each of the franchise territories, The Coca-Cola Company has been contributing approximately 50% of our advertising and marketing expenses, but no assurances can be given that equivalent contributions or any contributions at all will be made in the future.

Assignments and other provisions

Each bottler is prohibited from, directly or indirectly, assigning, transferring or pledging its bottler agreement, or any interest therein, whether voluntarily, involuntarily or by operation of law, without the prior consent of The Coca-Cola Company, and each bottler agreement is subject to termination by The Coca-Cola Company in the event of default by us. Moreover, no material change of ownership or control in the bottler may occur without the prior consent of The Coca-Cola Company.

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Termination

The Coca-Cola Company may terminate a bottler agreement immediately by written notice to the bottler in the event that, among other events, (i) the bottler suspends payments to creditors, declares bankruptcy, is declared bankrupt, is expropriated or nationalized, is liquidated, dissolved, changes its legal structure, or pledges or mortgages its assets; (ii) the bottler does not comply with instructions and standards established by The Coca-Cola Company relating to the production of its authorized soft drink products; (iii) the bottler ceases to be controlled by its controlling shareholders (without the prior consent of The Coca-Cola Company); or (iv) the terms of the bottler agreement become contrary to the applicable law.

Either party to any bottler agreement may, within 60 days’ notice thereof to the other party, terminate the bottler agreement in case of default of the other party, provided that such default is not remedied during such period.

In addition, if a bottler does not wish to pay the required price for concentrate for any Coca-Cola products, it must notify The Coca-Cola Company within 30 days of receipt of The Coca-Cola Company’s new prices. In the case of any Coca-Cola soft drink or other Coca-Cola beverages other than Coca-Cola concentrate, the franchise regarding such product shall be deemed automatically canceled three months after The Coca-Cola Company’s receipt of the bottler’s notice of refusal. In the case of Coca-Cola concentrate, the bottler agreements shall be deemed terminated three months after The Coca-Cola Company’s receipt of the bottler’s notice of refusal.

The Coca-Cola Company may also terminate the bottler agreements if the bottler or any individual or legal entity that controls it, engages in the production of any non-Coca-Cola beverage, whether through direct ownership of such operations or through control or administration thereof, provided that, upon request, the bottler shall be given six months to remedy such situation.

Chile

Our licenses for the territories in Chile are currently under renewal process.

In 2005 VJ S.A. and The Coca-Cola Company entered into a Juice Bottler Agreement by which The Coca-Cola Company authorized VJ S.A. to produce, prepare and bottle in packaging previously approved by The Coca-Cola Company the previously mentioned trademarks.

Andina and Embonor S.A. have the right to purchase products from VJ S.A. This contract is currently under renewal process. Additionally, Andina, VJ S.A. and Embonor S.A. have agreed with The Coca-Cola Company to produce, bottle and commercialize these products at their respective plants.

In 2005, Vital Aguas and The Coca-Cola Company entered into a Water Manufacturing and Packaging Agreement for the preparation and packaging of beverages in connection with the Vital, Chanqueahue, Vital de Chanqueahue, and Dasani brands incorporating at the beginning of 2008 the Benedictino brand to the product portfolio manufactured by Vital Aguas under the agreement. This contract is currently under renewal process.

Brazil

Our licenses for the territories in Brazil expire in October 2027.

Argentina

Our licenses for the territories in Argentina expire in September 2027.

Paraguay

Our licenses for the territories in Paraguay expired in March 2023 and are currently under renewal.

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Regulation

General

We are subject to a full range of government regulations generally applicable to companies engaged in business in our franchise territories, including but not limited to labor, social security, public health, consumer protection, environmental, sanitation, employee safety, securities and anti-trust laws. Currently, no material legal or administrative proceedings are pending against us with respect to any regulatory matter in any of our franchise territories except those listed as such in “Item 3. Key Information—Risk Factors” and “Item 8. Financial Information—Contingencies.”

We believe that, to the best of our knowledge we are in compliance in all material respects with applicable statutory and administrative regulations relating to our business in each of our franchise territories.

Chile: There are no special licenses or permits specifically required to manufacture and distribute soft drinks and juices in the Chilean territory. Food and beverage producers in Chile, however, must obtain authorization from, and are supervised by the Health Ministry’s respective regional offices (Secretaría Regional Ministerial de Salud), which inspects production facilities and takes liquid samples for analysis on a regular basis. Our main plant in Renca obtained its permit to operate on October 6, 2011 which has been granted for an indefinite period. Likewise, the permits we have to operate our other plants in Chile, have also been granted for an indefinite period. In addition, production and distribution of mineral water is subject to special regulations such that mineral water may be drawn only from sources designated for such purpose by supreme decree. Certification of compliance with such decree is provided by the National Health Service, the Undersecretary’s Office of the Ministry of Health (Servicio de Salud Metropolitano del Ambiente). Our mineral water production facilities have received the required certification.

With regard to the storage and distribution of alcoholic beverages, these activities are governed by the rules of Laws No. 18,455 and No. 19,925, which regulate the production, processing, commercialization, sale and consumption of alcoholic beverages.

Brazil: Labor laws, in addition to mandating employee benefits, include regulations to ensure sanitary and safe working conditions in our production facilities located in Brazil. Food and beverage producers in Brazil must register their products with and receive a ten-year permit from the Ministry of Agriculture and Provisioning and the Ministry of Health. Our permits from said Ministries are valid and in force for a term of ten years for each product we produce. Although we cannot assure you that they will be renewed, we have not experienced any material difficulties in renewing our permits in the past nor do we expect to experience any difficulties in the future. The Ministries do not regularly inspect facilities, but they do send inspectors to investigate any complaints it receives.

Argentina: While most laws applicable to EDASA are enforced at the federal level, some, such as sanitary and environmental regulations, are primarily enforced by provincial and municipal governments. Licenses or permits are required for the manufacture or distribution of beverages in the Argentine territory, which are evidenced through national records of food establishment and food products. Additionally, our production facilities are subject to registration with federal and provincial authorities and to supervision by municipal health agencies, which certify compliance with applicable laws.

Paraguay: PARESA is registered with the Ministry of Industry and Trade in Paraguay, which issues and renews the industrial registry. Food and beverage producers in Paraguay must register with the Ministry of Health, which performs inspections of plants and monitors products in the market. Industries must also have an environmental license issued by the Ministry of Environment and Sustainable Development, which is the main body responsible for monitoring compliance with environmental laws. In addition to establishing the mandatory employee benefits, include safe working and sanitary conditions at industrial installations within Paraguay. PARESA maintains all of its licenses, permits and registrations issued by these institutions and ensures compliance with the regulations and ordinances of the municipalities where its plant is located.

Environmental Matters

It is our policy to conduct environmentally sound operations on a basis consistent with applicable laws and within criteria established by The Coca-Cola Company. Although regulation of matters relating to the protection of the environment is not as well-developed in the franchise territories as in the United States and other industrialized countries, we expect that additional laws and regulations may be enacted in the future with respect to environmental matters that may impose additional restrictions on us which could materially or adversely affect our results of operations in the future. There are no material legal or administrative proceedings pending against us in any of the franchise territories with respect to environmental matters, and we believe that, to the best of our knowledge, we are in compliance in all material respects with all environmental regulations applicable to us.

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Chile

The Chilean government has several regulations governing environmental matters relating to our operations.

Law N° 19,300 addressing general environmental concerns, passed in March 1994, regulates general environmental issues and fundamental aspects applicable to our activities and that could require the hiring of independent experts to conduct studies or environmental impact statements of any future project or activity that may be affected by the provisions of Law N° 19,300. In January 2010, the aforementioned law was amended by Law N° 20,417, which created a new environmental agency, the Environment Ministry, the Environmental Assessment Service and the Environment Superintendence. In January 2012, Law N° 20,600 was published which created the Environmental Tribunals (3), which came into operation on December 2012.

Law N° 20,920 passed in June 2016, sets the framework for waste management, the extended liability of the producer and the promotion of recycling, which aims to reduce waste generation and encourage reuse, recycling and other types of valorization, in order to protect people’s health and the environment. Law 21,368 was published on August 13, 2021, which requires that the composition of disposable plastic bottles must contain a percentage of plastic that has been collected and recycled within the country.

Brazil

Our Brazilian operations are subject to several environmental laws, none of which currently impose substantial restrictions on us. The Brazilian Constitution establishes the broad guidelines for the new treatment of environmental concerns. Environmental issues are regulated at federal, state and municipal levels. The Brazilian Constitution empowers the public authorities to develop regulations designed to preserve and restore the environment and to control industrial processes that affect human life. Violations of these regulations are subject to criminal, civil and administrative penalties.

In addition, Law N° 6,938 of 1981, known as the Brazilian Environmental Policy, introduced an environmental regime under which no environmental damage is exempt from coverage. This legislation is based on the idea that even a polluting waste tolerated under the established standards could cause environmental damage, and therefore subjects the party causing such damage to the payment of an indemnity. Moreover, as mentioned above, activities damaging to the environment lead to criminal and administrative penalties, provided for in Law N° 9,605 of 1998 or the Environmental Crimes Act.

Numerous governmental bodies have jurisdiction over environmental matters. At the federal level, the Ministério do Meio Ambiente (Brazilian Ministry of Environment) and the Conselho Nacional do Meio-Ambiente or CONAMA dictate environmental policy, including, without limitation, initiating environmental improvement projects, establishing a system of fines and administrative penalties and reaching agreements on environmental matters with offending industries. The Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis or IBAMA, enforces environmental regulations set by CONAMA, through the development of several activities for the preservation and conservation of natural heritage and controlling and supervising the use of natural resources. In addition, various federal authorities have jurisdiction over specific industrial sectors, all aspects listed by these government bodies are fully met by Andina Brazil.

Finally, various state and local authorities regulate environmental matters in the Brazilian territory including the Instituto Estadual do Ambiente or INEA, the main environmental authority in Rio de Janeiro, the Instituto Estadual de Medio Ambiente e Recursos Hídricos (“IEMA”), the main authority on environmental issues in Espírito Santo, the Companhia de Tecnologia de Saneamento Ambiental - CETESB, the main environmental authority in São Paulo and the Secretaria de Estado de Meio Ambiente e Desenvolvimento Susutentável (SEMAD), the main environmental authority in Minas Gerais. INEA, IEMA, CETESB and SEMAD periodically inspect industrial sites. We believe that we are in compliance in all material respects with the standards established by all the governmental authorities applicable to our operations in Brazil. We cannot assure you, however, that additional regulations will not be enacted in the future, and that such restrictions would not have a material adverse effect on our results or operations. The operation in Brazil as that of Chile counts with all certifications mentioned in terms of Quality, Environment and Occupational Health and Safety and those associated with Food Safety and Best Practices in Food Processing.

Argentina

The Argentine Constitution, as amended in 1994, allows any individual who believes a third party may be damaging the environment to initiate an action against it. No action of this nature has been initiated against EDASA, but we cannot ensure that it will not be initiated in the future. Though provincial governments have primary regulatory authority over environmental matters, municipal and federal authorities also have authority competent to enact decrees and laws on environmental issues. Thus, municipalities can set policy on local environmental matters, such as waste management, while the federal government regulates inter-province environmental issues, such as transport of hazardous waste or environmental matters covered by international treaties.

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In 2002, the National Congress approved federal Law N° 25,612, Comprehensive Management of Industrial Residues and Service Activities (Gestión Integral de Residuos Industriales y de Actividades de Servicios) and Law N° 25,675, General Environmental Law (Ley General del Ambiente) establishing minimum guidelines for the protection of the sustainable environmental management and the protection of biodiversity, applicable throughout Argentina. The law establishes the purposes, principles and instruments of the national environmental policy, the concept of “minimum guidelines,” the judicial purview and the rules governing environmental education and information, citizens’ participation and self-management, among other provisions.

Provincial governments within the Argentine territory have enacted laws establishing a framework for the preservation of the environment. Provincial laws that are applicable to industrial facilities at EDASA, among others are Law N° 7,343 of the Province of Córdoba and its supplemental N° 10,208 since 2014, Law N° 11,459 of the Province of Buenos Aires and Environmental Code N° 5,439 of the Chubut province. These laws contain principles on environmental policy and management, as well as rules on environmental impact assessment. They also give certain agencies jurisdiction over environmental issues.

Almost all provinces as well as many municipalities have established rules regarding the use of water, the sewage system and the disposal of liquids into underground flows of water or rivers. There are currently no claims pending against EDASA related to these rules, whose violation normally results in a fine.

Paraguay

The environmental framework comprises several national and local environmental regulations. The Paraguayan Constitution of 1992 states that everyone has the right to live in a healthy and ecologically balanced environment and has the obligation to preserve it. All damage caused to the environment will carry the obligation to repair and compensate.

Law 1561/00 chartered the three primary environmental agencies in Paraguay. These are: The Ministry of the Environment and Sustainable Development of Paraguay (Ministerio del Ambiente y Desarrollo Sostenible or “MADES”), National Environmental Council (Consejo Nacional del Ambiente or “CONAM”), and National Environmental System (Sistema Nacional del Ambiente or “SISNAM”). The Law establishes the authority and responsibility of these agencies to develop and oversee the national environmental policy.

The Ministry of the Environment and Sustainable Development is the main environmental body responsible for the development and implementation of national environmental laws and it is also the authority responsible for implementing most of the national environmental regulations and for monitoring their compliance. The CONAM is responsible for investigating and establishing the main goals in the environmental policies, which the MADES must then implement. The SISNAM is integrated by several bodies, including governmental and municipal agencies and private sector stakeholders, all interested in solving environmental issues. The SISNAM provides a discussion forum for the public and private sectors to work together collectively, developing ideas and plans to promote a sustainable development.

Environmental Impact: Law 294/93 states the rights and obligations that will be triggered by any damage caused to the environment and provides the obligation to restore the environment to its previous state or, if that is technically impossible, to make a payment or provide compensation.

Water Resources Act of Paraguay: Law 3239/07 on water resources establishes the sustainable management of all waters (superficial, ground, atmospheric) and the territories that generate such waters, regardless of their location, physical condition or natural occurrence within the Paraguayan territory, in order to make it socially, economically and environmentally sustainable for the people living in the territory of Paraguay. The supervising agency is the Ministry of Environment and Sustainable Development. Superficial and ground waters are property of the State’s public domain. The law establishes the following order of priority for the use of water: i) fulfillment of the needs of aquatic ecosystems; ii) social use within the home environment; iii) use and enjoyment for agricultural activities, including aquaculture; iv) use and utilization for power generation; v) use and enjoyment for other industrial activities and vi) use and enjoyment for other activities. The use of water for productive purposes is subject to the authorization granted by the State through a permit (for the use of small amounts of water) or through concessions (prior public bidding process), in both cases after the payment of applicable fees. Authorizations may be revoked based on the occurrence of situations contemplated under the law. Concessions may be expropriated for public benefit or be terminated in certain situations established by the law. In addition, a National Registry of Water Resources has been created to keep record of all individuals or legal entities that utilize water resources or engage in activities related to them.

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Cyber Security Policies

Cyber risk is managed through a corporate program based on a comprehensive strategy that aims to identify the context, protect systems and assets, detect deviations, respond to incidents and recover those business operations that have been subject to cyber-attacks. Our cybersecurity system integrates people, processes and technology in order to achieve an efficient risk management. To prevent cyber risk, the Company applies a set of practices and procedures, among others, a comprehensive framework that incorporates the highest industry standards and which also addresses the actions of Business Continuity (BC) and Disaster Recovery (DR) through a model of BIA (Business Impact Analysis) and its associated Technology RIA (Risk Impact Analysis) where critical processes are subjected to an analysis methodology in 20 risk categories (including cybersecurity) with a review of 222 potential vulnerabilities analyzed in accordance with probability and impact. The specific control framework Business Resiliency Framework (BRF) establishes a set of controls validated by international entities and high market standards, mainly from the standards: CIS (CSC 71), COBIT 5, ISO (ISO 27001 / 27002:2013), NIST (NIST SP 800-53 Rev. 4 / NIST 800-82 rev2 and NIST CSF v1.1.

The Company has a master cybersecurity plan, to which new controls and systems are constantly being added, such as those related to business continuity and protection of digital assets. All actions aim to increase cyber resilience under the concept of a “Zero Trust” model. This set of solutions, controls and measurements is supported by a corporate governance model based on the Corporate Cybersecurity Policy, which provides a framework for action and enables the definition of effective management processes in terms of security for information technology systems and the assets involved. In this way, a control model is generated to safeguard the confidentiality, integrity and availability of the information systems, in accordance with the laws and regulations in force in the countries in which we operate. In addition, we have a set of standards and procedures for logical and physical cybersecurity, secure development, cybersecurity monitoring and authoring, cyber-resilience assessment for suppliers and a manual for the use of digital information assets, applications and technological devices, among others, which establishes the specific security guidelines for the protection and acceptable use that each employee is responsible for applying to digital information assets, applications and technological devices provided by the Company, such as e-mail, videoconferencing, instant messaging, computers, notebooks, cell phones, mobile devices and their access to the Internet for digital information exchange, etc.

Cybersecurity management is carried out through different roles and functions in the organization, such as:

●the Chief Information Security Officer (CISO), who is responsible for ensuring the management and control of the Company’s information security and cybersecurity matters, supervising the risk position through controls that emanate from the criteria established in the procedures and available technology,

●the Audit Committee is responsible for establishing the strategy, policies and guidelines, in accordance with national and international standards on information security risks. This committee is also responsible for evaluating the scope and effectiveness of the security measures to safeguard the information and cybersecurity systems established by management, and

●the Cybersecurity Committee, coordinated by the Technology Security Management area, whose role is to review and approve the direction and strategy on cybersecurity and contingency issues presented by the Technology Security Management, as well as to define the level of cybersecurity that the Company must have, and the standards and/or procedures that are published from time to time. This committee is composed by the Chief Human Resources Officer, Chief Legal Officer, Chief Technology Officer, Corporate Manager of Management Control, Risk and Sustainability, Corporate Internal Audit Management Representative and Technology Security Manager.

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C. ORGANIZATIONAL STRUCTURE

The following chart presents a summary of our direct and indirect ownership interests in our subsidiaries and associated companies:

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The following table presents information relating to the main activities of our subsidiaries and associated companies, as well as our direct and indirect ownership interests in them as of the date of this document:

Subsidiary	Activity	Country of Incorporation	Percentage  of direct and  indirect  ownership
Embotelladora Andina Chile S.A.	Manufacture, bottle, distribute, and commercialize non-alcoholic beverages.	Chile	99.99
VJ S.A.	Manufacture, distribute, and commercialize all kinds of food products, juices, and beverages.	Chile	65.00
Vital Aguas S.A.	Manufacture, distribute, and commercialize all kinds of waters and beverages in general.	Chile	66.50
Servicios Multivending Ltda.	Commercialize products through equipment and vending machines.	Chile	99.99
Transportes Andina Refrescos Ltda.	Provide administrative services and management of domestic and foreign ground transportation.	Chile	99.99
Transporte Polar S.A.	Provide administrative services and management of domestic and foreign ground transportation.	Chile	99.99
Envases Central S.A.	Manufacture and packaging of all kinds of beverages and commercialize all kinds of packaging.	Chile	59.27
Andina Bottling Investments S.A.	Manufacture, bottle and commercialize beverages and food in general. Invest in other companies.	Chile	99.99
Andina Bottling Investments Dos S.A (2)	Carry out exclusively foreign permanent investments and lease all kinds of real estate.	Chile	99.99
Andina Inversiones Societarias S.A.	Invest in all types of companies and commercialize food products in general.	Chile	99.99
Comercializadora Novaverde S.A.	Process and commercialize fruits, ice cream, vegetables and food in general, under the Guallarauco trademark.	Chile	35.00
Re-Ciclar S.A. (3).	Produce recycled resin for the Coca-Cola system and third parties.	Chile	60.00
Rio de Janeiro Refrescos Ltda.	Manufacture and commercialize beverages in general, powdered juices and other related semi-processed products.	Brazil	99.99
Embotelladora del Atlántico S.A.	Manufacture, bottle, distribute, and commercialize non-alcoholic beverages.	Argentina	99.99
Andina Empaques S.A.	Design, produce, and commercialize plastic products mainly packaging.	Argentina	99.98
Alimentos de SOJA S.A.	Manufacture, commercialize, import, export, transformation, fraction, package and distribute food products and beverages in general, and their raw materials and related products and by-products.	Argentina	14.82
Paraguay Refrescos S.A.	Manufacture, bottle, distribute, and commercialize non-alcoholic beverages.	Paraguay	97.83
Circular-Pet S.A. (4)	Produce recycled resin for the Coca-Cola system and third parties.	Paraguay	33.33
Red de Transportes Comerciales Ltda.	Provide administrative services and management of domestic and foreign ground transportation.	Chile	99.99
Envases CMF S.A.	Manufacture, acquire and commercialize all types of containers and packaging; and provide bottling services.	Chile	50.00
Coca-Cola del Valle New Ventures S.A.	Manufacture, distribute and commercialize all kinds of juices, waters and beverages in general.	Chile	35.00
Leão Alimentos e Bebidas Ltda.	Manufacture, bottle and commercialize beverages and food in general. Invest in other companies.	Brazil	10.26
Trop Frutas do Brasil Ltda.	Manufacture, commercialize and export natural fruit pulp and coconut water.	Brazil	7.52
Sorocaba Refrescos S.A.(1)	Manufacture, bottle and commercialize beverages and food in general. Invest in other companies.	Brazil	40.00
SRSA Participações Ltda.	Purchase and sale of real estate investments and property management.	Brazil	40.00
Kaik Participações Ltda.	Invest in other companies with own resources.	Brazil	11.32
UBI 3 Participações Ltda.	Invest in other companies with own resources. Purchase and sale of real estate investments and property management.	Brazil	8.50

(1) In 2012, 40% of the Brazilian company Sociedad Brasilera Sorocaba Refrescos S.A. was acquired for a total price of R$146.9 million.

(2) In November 2021, Abisa Corp and Aconcagua Investing Ltda. were merged into Andina Bottling Investments Dos S.A. (ABISA DOS) for corporate reorganization purposes. As a consequence of the merger, Abisa Corp and Aconcagua Investing Ltda. were absorbed by ABISA DOS, which became the owner of the shares issued by Andina Inversiones Societarias S.A, previously held by Aconcagua Investing Ltda. Abisa Corp had no investment in any entity.

(3) During 2021, Embotelladora Andina S.A. held an interest in Re-Ciclar, a company whose purpose is to produce recycled resin for the Coca-Cola system and third parties. Non-controlling interest reaches 40.0%.

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(4) In February 2021, the subsidiary Paraguay Refrescos S.A. together with INPET S.A.E.C.A and CORESA incorporated and executed a shareholders’ agreement for a company named Circular-Pet. Each of these companies will own 33.3% Circular-Pet share capital. The main activity of Circular-Pet will be the manufacture and commercialization of post-consumer recycled PET resins, coming from the transformation of PET flakes.

D. PROPERTY, PLANTS AND EQUIPMENT

We own production plants in each of the principal population centers that comprise the franchise territories. In addition, we own distribution centers and administrative offices in each of the franchise territories. We also use (i) facilities owned by third parties through lease agreements and (ii) facilities owned by third parties through contracts other than lease agreements, such as distribution contracts. The following table sets forth our principal real property (in square meters) and other facilities that we use in each of the franchise territories:

	MAIN USE	Square meters	Property
ARGENTINA
Embotelladora del Atlántico S.A.
Azul	Distribution Center / Warehouses	600	Third Parties
Bahía Blanca*	Offices / Production of Soft Drinks / Distribution Center / Warehouses	102,708	Own
Bahía Blanca	Warehouses (Don Pedro)	6,000	Leased
Bahía Blanca	Commercial Office	903	Leased
Bahía Blanca*	Real Estate (parking lot)	73,150	Own
Bahía Blanca	Warehouses (M&F Palletizer -EDF deposit)	1,400	Leased
Bariloche	Offices / Distribution Center / Warehouses	1,870	Leased
Bialet Masse*	Real Estate**	880	Own
Bragado	Commercial Office	38	Leased
Carlos Paz	Commercial Office	270	Leased
Carmen de Patagones	Commercial Office / Warehouses / Crossdocking	1,600	Leased
Chacabuco*	Offices / Distribution Center / Warehouses	25,798	Own
Chivilcoy	Distribution Center / Warehouses	1,350	Third Parties
Chivilcoy	Commercial Office	72	Leased
Comodoro Rivadavia	Offices / Distribution Center / Warehouses	7,500	Leased
Concepcion del Uruguay	Commercial Office	118	Leased
Concordia	Commercial Office / Third party Distribution Center / Warehouses	1,214	Leased
Córdoba*	Offices /Production of soft drinks and other still beverages / Distribution Center / Warehouses / Real estate	959,585	Own
Córdoba (San Isidro)*	Deposit and Offices	8,808	Own
Córdoba	Deposit (Rigar)	6,270	Leased
Córdoba	Deposit (Ricardo Balbín)	2,500	Leased
Córdoba	Commercial Office (Dinosaurio Mall Alto Verde)	357	Leased
Córdoba	Logat Deposit – Raw materials	2,800	Leased
Córdoba	Logat Deposit – Finished products	8,400	Leased
Coronel Suarez	Offices / Third party Distribution Center / Warehouses / Deposit	1,000	Leased
General Pico*	Offices / Distribution Center / Warehouses	15,525	Own
General Roca	Distribution Center / Warehouses	2,800	Third Parties
Gualeguaychu	Commercial Office / Warehouses	2,392	Leased
Junin (Buenos Aires)	Cross Docking	995	Third Parties
Junin (Buenos Aires)	Commercial Office	108	Leased
Mendoza*	Offices / Distribution Center / Warehouses	36,452	Own
Monte Hermoso*	Real Estate**	300	Own
Neuquén*	Offices / Distribution Center / Warehouses	10,157	Own
Olavarria	Offices / Distribution Center / Warehouses	3,065	Leased
Paraná	Commercial Office	318	Leased
Pehuajo	Offices / Distribution Center / Warehouses	1,060	Leased
Pergamino*	Offices / Cross Docking	15,700	Own
Rio Gallegos	Distribution Center / Warehouses	937	Leased
Rio Gallegos	Distribution Center / Warehouses	2,491	Leased
Rio Grande	Offices / Distribution Center / Warehouses	2,460	Leased
Río IV*	Cross Docking	7,482	Own
Río IV	Commercial Office	93	Leased
Rivadavia (Mendoza)*	Deposit**	800	Own
Rosario*	Offices / Distribution Center / Warehouses / Parking Lot / Real Estate	27,814	Own
San Francisco	Commercial Office	63	Leased
San Juan*	Offices / Distribution Center / Warehouses	48,036	Own
San Luis*	Commercial Office / Distribution Center / Warehouses	5,205	Own
San Nicolas	Commercial Office	50	Leased
San Rafael	Commercial Office	58	Leased
Santa Fe (Casilda)	Commercial Office	40	Leased

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	MAIN USE	Square meters	Property
Santa Fe	Commercial Office	238	Leased
Santa Rosa	Distribution Center / Warehouses	1,200	Third Parties
Santo Tomé*	Administrative Office / Distribution Center / Warehouses / Deposit	75,000	Own
Trelew*	Offices / Production of Soft Drinks / Distribution Center / Warehouses	51,000	Own
Trelew	Warehouses	1,500	Leased
Tres Arroyos	Offices / Crossdocking / Warehouses	1,548	Leased
Ushuaia	Offices / Distribution Center / Warehouses	1,360	Leased
Ushuaia	Commercial Office	94	Leased
Venado Tuerto	Commercial Office / Distribution Center / Warehouses	2,449	Third Parties
Villa Maria	Commercial Office	125	Leased
Villa Mercedes	Commercial Office	70	Leased
Andina Empaques Argentina S.A.
Buenos Aires*	Production of bottles, PET Preforms, Plastic Caps and Cases	27,520	Own
Buenos Aires	Deposit adjoining the production plant	1,041	Leased
Buenos Aires	Deposit adjoining the production plant	940	Leased
BRAZIL
Rio de Janeiro Refrescos Ltda.
Jacarepaguá	Offices / Production of Soft Drinks / Distribution Center / Warehouses	249,470	Own
Duque de Caxias*	Offices / Production of Soft Drinks / Distribution Center / Warehouses	2,243,953	Own
Nova Iguaçu*	Distribution Center / Warehouses	82,618	Own
Bangu*	Distribution Center	44,389	Own
Campos dos Goytacazes*	Distribution Center	36,083	Own
Cabo Frio*	Distribution Center**	1,985	Own
São Pedro da Aldeia 1*	Distribution Center	10,139	Concession
Itaperuna*	Cross Docking	2,500	Leased
Caju 1*	Distribution Center	4,866	Own
Caju 2*	Distribution Center	8,058	Own
Caju 3*	Parking Lot	7,400	Leased
Vitória (Cariacica)*	Distribution Center	93,320	Own
Cachoeiro do Itapemirim*	Cross Docking	8,000	Leased
Ribeirão Preto	Offices / Production of Soft Drinks / Distribution Center / Warehouses	238,096	Own
Ribeirão Preto*	Real Estate	279,557	Own
Franca*	Distribution Center	32,500	Own
Mococa*	Distribution Center	33,669	Leased
Araraquara*	Distribution Center	11,658	Own
São Paulo*	Apartment	69	Own
São Joao da Boa Vista*	Cross Docking	20,773	Own
São Pedro da Aldeia 2*	Parking Lot	6,400	Concession
Nova Friburgo*	Commercial Office / Cross Docking	350	Leased
Guarapari*	Commercial Office	218	Leased
Colatina*	Commercial Office / Cross Docking	3,840	Leased
São Mateus*	Commercial Office / Cross Docking	2,007	Leased
Rio das Ostras*	Commercial Office	527	Leased
Passos*	Distribution Center	8,500	Leased
CHILE
Embotelladora Andina S.A.
Renca*	Offices / Production of Soft Drinks / Distribution Center / Warehouses	415,517	Own
Renca*	Warehouses	55,562	Own
Renca*	Warehouses	11,211	Own
Renca*	Warehouses	46,965	Own
Carlos Valdovinos*	Distribution Center / Warehouses	106,820	Own
Puente Alto *	Distribution Center / Warehouses	68,682	Own
Maipú*	Distribution Center / Warehouses	45,833	Own
Bodega MiCoca-Cola	Distribution Center / Warehouses	9,280	Leased
Colina	Distribution Center / Warehouses	6,550	Leased
Chimba	Distribution Center / Warehouses	1,000	Leased
Demetrop (Metropolitan Region)	Warehouses	n/a	Leased
Trailerlogistic (Metropolitan Region)	Warehouses	n/a	Leased
Monster (Metropolitan Region)	Warehouses	n/a	Leased
Rancagua*	Distribution Center / Warehouses	25,920	Own
San Antonio*	Distribution Center / Warehouses	19,809	Own
Antofagasta *	Offices / Production of Soft Drinks / Distribution Center / Warehouses	34,729	Own
Antofagasta *	Warehouses	8,028	Own
Calama*	Distribution Center / Warehouses	10,700	Own
Tocopilla*	Distribution Center / Warehouses	562	Own
Coquimbo*	Offices / Distribution Center / Warehouses	31,383	Own
Copiapó*	Distribution Center / Warehouses	26,800	Own
Ovalle*	Distribution Center / Warehouses	6,223	Own
Vallenar*	Distribution Center / Warehouses	5,000	Own

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	MAIN USE	Square meters	Property
Illapel	Distribution Center / Warehouses	n/a	Leased
Punta Arenas*	Offices / Production of Soft Drinks / Distribution Center / Warehouses	109,517	Own
Coyhaique*	Distribution Center / Warehouses	5,093	Own
Puerto Natales	Distribution Center / Warehouses	850	Leased
VJ S.A.
Renca*	Offices / Production of Juices	40,000	Own
Vital Aguas S.A.
Rengo*	Offices / Production of Waters	346,532	Own
Envases Central S.A.
Renca*	Offices / Production of Soft Drinks	51,907	Own
PARAGUAY
Paraguay Refrescos S.A.
San Lorenzo*	Offices / Production of Soft Drinks / Warehouses	275,292	Own
Coronel Oviedo*	Offices / Warehouses	32,911	Own
Encarnación*	Offices / Warehouses	12,744	Own
Ciudad del Este*	Offices / Warehouses	14,620	Own

* Free of encumbrance properties.

** Inactive: facilities that are not being use currently by the Company.

Leased: facilities owned by third parties, used by the Company through a lease agreement.

Third Parties: facilities owned by third parties, used by the Company through contracts other than lease agreements, such as distribution contracts.

Own: facilities owned by the Company.

Capacity by Line of Business

Set forth below is certain information concerning the installed capacity and approximate average utilization of our production facilities, by line of business.

	Year Ended December 31,
	2021			2022
			Capacity			Capacity
	Annual	Average	Utilization	Annual	Average	Utilization
	Total	Capacity	During	Total	Capacity	During
	Installed	Utilization	Peak Month	Installed	Utilization	Peak Month
	Capacity(1)	(%)	(%)	Capacity(1)	(%)	(%)
Soft drinks (millions of UCs):
Andina Chile	328	53	67	323	53	71
Andina Brazil	404	58	66	403	64	69
Andina Argentina	368	43	59	365	48	56
Paraguay Refrescos	128	45	52	142	40	60
Other beverages (millions of UCs)
Andina Chile	20	66	73	23	51	74
Andina Brazil	58	49	60	57	66	71
Andina Argentina	127	18	12	123	22	30
Paraguay Refrescos	34	33	44	48	28	37
ECSA/VJSA/VASA	136	51	81	136	69	82
PET packaging (millions of bottles) (2)	46	38	48	46	49	79
Preforms (millions of preforms) (2)	900	77	98	900	88	99
Plastic caps (millions of caps) (2)	1,000	48	74	1,000	53	76
Cases (millons of cases) (2)	1.0	75	100	0.7	75	100

(1) Annual Total Installed Capacity assumes production of the mix of products and containers produced in 2021 and 2022.

(2) Andina Empaques Argentina only.

In 2022, we continued to modernize and renovate our production plants in order to maximize efficiency and productivity.

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In Chile, during 2022, we continued with the installation of a hybrid bottling line to fill 20-liter returnable water bottles and 6.5-liter non-returnable bottles, with the capacity to blow both sizes and, therefore, allowing the use of level 1 recyclable returnable bottles. Another relevant investment in 2022 was the expansion of the continuous mixers to increase capacity for new soft drink recipes. In order to improve our water use ratio, we continued with our ambitious plan, and in 2022 we worked on recovering reject water from the filtration plant in Renca and recovering water from the bottle washer in Antofagasta. This plan will continue in 2023 with adaptations to our filtration system, in order to robustly improve the water ratio. Additionally, in 2023 we will build a new line of non-returnable bottles, which will allow us to grow our annual OW volume by 35%, thereby expanding the spectrum of containers and flavors in our bottling lines.

In Brazil, 2022 was a landmark year for Andina since its production center in Ribeirão Preto for Monster Products, became the supplier of more than 2.3 MM UC to meet Energy Drink demand nationwide. The Company also made a significant progress by enabling Ribeirão Preto Plant to become an Alcoholic Ready to Drink (ARTD) production center, which required a significant investment in adaptations and infrastructure. Production began in March-2023. Additionally, Duque de Caxias Plant has been approved as a future multi-category facility. A transformational 2-year project that reinforces the role of Andina as a strategical hub for a wide range of products, strengthening its role as a production center for Andina and the Coca-Cola System in Brazil. Also worth mentioning, several upgrades made in our Light Fleet, by expanding the motorcycle fleet in 174 vehicles, while 161 cars have been renewed. On our heavy fleet side, 150 new trucks were incorporated, of which 12 are T1 vehicles.

In Argentina, investments for the production of Coca-Cola reduced in sugar continued in 2022. We also purchased equipment and made the necessary adjustments to have single returnable bottles in 2.5-liter ref pet and 0.35-liter glass bottles, replacing the ACL label (permanent) with the OW label, optimizing the number of bottles and allowing greater flexibility to change formulas, expand the flavor portfolio and comply with the new regulations of the Labeling Law. The processes and line were fine-tuned to incorporate the production of the Monster brand in the can line at the Córdoba Plant. In addition, equipment was purchased and installed, as well as the necessary adjustments and building works were carried out for the production of seed-based products, which started operating at the end of 2022.

In Paraguay, in 2022, we consolidated the operation of the new line of sensitive products plus its new manufacturing room, capitalizing on the 25% increase in capacity of sensitive products produced by the Paraguayan operation. Additionally, in the last quarter of the year we began to blow and fill bottles with 100% recycled resin, producing 90% of our portfolio of sensitive products (Water, Aquarius, Isotonic) with said resin.

As of December 31, 2022, we had total installed annual production capacity, including soft drinks, fruit juices, water and other beverages, of 1,620 million unit cases. Our primary facilities include:

● through Coca-Cola Andina, in the Chilean territory, 3 soft drink and other beverages production facilities with 20 production lines, with total installed annual capacity of 346 million unit cases (21.4% of our total installed annual capacity);

● through Vital Jugos in the Chilean territory, one fruit juice production facility, with 12 production lines, with total installed annual capacity of 40.3 million unit cases (2.5% of our total installed annual capacity);

● through ECSA in the Chilean territory, one soft drink and other beverages production facility, with 3 production lines, with total installed annual capacity of 65.4 million unit cases (4.0% of our total installed annual capacity);

● through Vital Aguas in the Chilean territory, one mineral water production facility, with 2 production lines, with total installed annual capacity of 30.4 million unit cases (1.9% of our total installed annual capacity);

● through Rio de Janeiro Refrescos in the Brazilian territory, 3 soft drink and other beverages production facilities with 17 production lines for soft drinks with total installed annual capacity of 403 million unit cases (24.9% of our total installed annual capacity); and 16 production lines for juices, tea, water and other non-alcoholic beverages which satisfy the franchise’s needs and re-sales to other bottlers in Brazil, with total installed annual capacity of 57 million unit cases (3.5% of our total installed annual capacity);

● through Embotelladora del Atlántico in the Argentine territory, 3 soft drink and other beverages production facilities with 17 production lines for soft drinks with a total installed annual capacity of 365 million unit cases (22.5% of our total installed annual capacity); 4 production lines for juices that covers the needs of our franchise, and one production line for waters and sensitive products with a total installed annual capacity of 123 million unit cases (7.6% of our total installed annual capacity);

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● through Andina Empaques Argentina S.A. in the Argentine territory, one production facility for bottles, preforms and plastic caps that covers the needs of the Coca-Cola system in that country. It has 13 preform injectors, 2 bottle blowers, 2 injectors for plastic caps and one production line for cases, with a total installed annual capacity of 1,947 million units considering PET bottles, preforms, plastic caps and cases;

● through PARESA in the Paraguayan territory, one production facility located in San Lorenzo, with 8 soft drink and other beverages production lines with a total installed annual capacity of 142 million unit cases (8.8% of our total installed annual capacity); and 3 tetra pack lines with a total installed annual capacity of 48 million unit cases (3.0% of our total installed annual capacity).

ITEM 4A.UNRESOLVED SECURITIES AND EXCHANGE COMMISSION STAFF COMMENTS

Not applicable.

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. OPERATING RESULTS 2022

Results of operation

Set forth below is a discussion and analysis of our results of operation for the years ended December 31, 2022, 2021 and 2020.

Our consolidated financial results for the years ended December 31, 2022, 2021 and 2020 include the results of our subsidiaries in Chile, Brazil, Argentina and Paraguay. Our consolidated financial statements reflect the results of the subsidiaries outside Chile, converted into Chilean pesos (our functional and reporting currency).

IFRS requires that assets and liabilities of our subsidiaries outside of Chile be converted from the functional currency to the presentation currency (Chilean peso) at year-end exchange rates, and that income and expense accounts are converted at monthly average exchange rates for the month in which they are recognized for those subsidiaries that do not operate in hyperinflationary economies.

In the case of our Argentine subsidiaries, which have been operating in an environment that during 2020, 2021 and 2022 was classified as hyperinflationary, the conversion criteria from the functional currency of those subsidiaries to our presentation currency is the following:

● First adoption of a hyperinflationary economy was in 2018: Losses and gains by correction of current non-monetary items the previous year are recorded in accumulated results as of January 1, 2018.

● The statement of financial position (balance sheet): Non-cash items are expressed in the current currency at the balance sheet date and translated to the presentation currency at the closing exchange rate. Losses and gains are included in net earnings (fiscal year income).

● The income statement: Income statement items are expressed in the current currency unit at the end of the reporting period, using the variation of the general price index from the date on which the expenses and revenues were accrued, and translated to the presentation currency at closing exchange rate.

● Cash flow statement: Cash flow statement items are expressed in the current currency unit at the end of the reporting period and translated to the presentation currency at closing exchange rate.

For more information on the effects of the hyper-inflationary environment in Argentina, see note 2.5 of our consolidated financial statements included herein.

The Impact of the COVID-19 Pandemic

During 2022, the COVID-19 pandemic did not affect our operations in a significant manner, as the infection rate in the countries we operate decreased, and the measures taken by the governments to contain the spread of the pandemic were less restrictive. Our channel mix reached pre-pandemic levels, and we didn´t have any significant effects of the pandemic in our sales volume nor in our costs.

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Nevertheless, the Company has continued to adopt some measures to protect the health and safety of our employees, such as:

● sending home any employee that has been exposed to the virus;

● implementation of additional cleaning protocols for our facilities;

● modifying certain work practices and activities, without affecting our operational standards; for instance, home office has been implemented for those employees whose work can be performed remotely;

● Maintaining the polyclinic services inside the facilities to respond preventively in case of infection and apply established protocols.

Due to uncertainty regarding the evolution of the COVID-19 pandemic (and potential variants thereof) and the extent to which government measures to contain the pandemic we cannot predict the effect of the pandemic on our financial performance. We believe that the Company will have no liquidity problems. To date, we also do not anticipate significant provisions or write-offs. We continuously monitor our investment plans, and we cannot assure you that we will fully abide by our current plans, especially in the event of a stronger flare-up of the virus in the countries in which we operate, or for some other unforeseen circumstance.

Summary of Results of Operations for the Years ended December 31, 2021 and 2022

The following tables set forth our sales volume, net sales and gross profit for the years ended December 31, 2021 and 2022:

	Year ended December 31,
	2021	2022
	(millions of unit cases (1))
Sales volume:
Chile
Soft drinks	168.6	166.1
Mineral water	51.0	57.4
Juices and other non-alcoholic	47.9	54.5
Beer & Spirits	39.5	41.7
Total	307.0	319.8
Brazil
Soft drinks	204.3	224.5
Mineral water	18.6	20.4
Juices and other non-alcoholic	22.0	28.5
Beer & Spirits	21.5	4.7
Total	266.4	278.0
Argentina
Soft drinks	157.4	169.8
Mineral water	14.1	16.4
Juices and other non-alcoholic	13.1	15.2
Total	184.7	201.4
Paraguay
Soft drinks	57.6	59.9
Mineral water	7.8	8.7
Juices and other non-alcoholic	4.9	5.8
Total	70.3	74.4

(1) Unit cases refer to 192 ounces of finished beverage product (24 eight-ounce servings) or 5.68 liters.

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Note: Totals may not sum due to rounding.

	Year ended December 31,
	2021		2022
	Ch$ millions	% of Total	Ch$ millions	% of Total
Net sales:
Chile	975,296	44.0	1,123,665	42.3
Brazil	539,257	24.3	636,860	24.0
Argentina	536,955	24.2	688,705	25.9
Paraguay	169,216	7.6	212,339	8.0
Inter-country eliminations (1)	(3,993)	(0.2)	(4,691)	(0.2)
Total net sales	2,216,733	100.0	2,656,878	100.0

(1) Eliminations represent intercompany sales.

Note: Totals may not sum due to rounding.

The following tables set forth our results of operations for the years ended December 31, 2021 and 2022.

	Year ended December 31,
	2021		2022
		% of net		% of net
	Ch$ millions	sales	Ch$ millions	sales
Net sales	2,216,733	100.0	2,656,878	100.0
Cost of sales	(1,375,393)	(62.0)	(1,628,702)	(61.3)
Gross profit	841,340	38.0	1,028,177	38.7
Distribution and administrative expenses	(548,902)	(24.8)	(683,032)	(25.7)
Other (expense) income, net (1)	(89,229)	(4.0)	(112,341)	(4.2)
Income taxes	(46,177)	(2.1)	(104,345)	(3.9)
Net income	157,032	7.1	128,459	4.8

(1) Includes other income (expenses), financial income (expenses), share in profit of investees accounted for under the equity method, foreign exchange gains (losses) and gains (losses) from indexed financial assets and liabilities.

	Chile		Brazil		Argentina		Paraguay		Eliminations		Total (1)
Millons Ch$	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022
Net Sales	975,296	1,123,665	539,257	636,860	536,955	688,705	169,216	212,339	(3,993)	(4,691)	2,216,733	2,656,878
Cost of sales	(630,862)	(743,227)	(361,323)	(403,696)	(296,090)	(367,880)	(91,109)	(118,591)	3,993	4,691	(1,375,393)	(1,628,702)
Gross profit	344,434	380,439	177,934	233,164	240,865	320,825	78,107	93,748	—	—	841,340	1,028,177
Distribution and administrative expenses	(209,202)	(245,598)	(108,592)	(151,958)	(190,538)	(234,326)	(34,177)	(44,040)	—	—	(542,509)	(675,922)
Corporate expenses	—	—	—	—	—	—	—	—	—	—	(6,393)	(7,110)

(1) Totals may not sum due to rounding.

Net Sales

Our sales volume was 873.6 million unit cases during the year ended December 31, 2022, a 5.5% increase compared to 828.3 million unit cases in 2021, explained by the volume increase in our four operations. Volume for soft drinks, waters and juices/other non-alcoholic beverages increased 5.5%, 12.3% and 18.2%, respectively, while volume for beer and spirits decreased 23.8%, in each case during the year ended December 31, 2022 compared to 2021. The decrease of sales volume of beer and spirits is mainly due to the reduction of the volume in the Brazilian operation (as a consequence of the change in the portfolio of Heineken brands we commercialize), which was partially offset by the growth of the volume in the Chilean operation. Excluding wine volume in Chile, resulting from the new agreement with Viña Santa Rita, sales volume would have increased by 5.1% during the year.

Our net sales were Ch$2,656,878 million during the year ended December 31, 2022, a 19.9% increase compared to Ch$2,216,733 million during 2021. Our net sales increased mainly as a result of an increase in sales in Argentina, Chile and Paraguay, and a positive effect upon translation of figures from our operations in Argentina, Brazil and Paraguay. This was partially offset by lower sales in Brazil, mainly as a result of a decrease in the sales of beer.

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Soft drinks represented 64.0% of net sales during the year ended December 31, 2022, compared to 60.7% during 2021.

Chile

Our sales volume in Chile was 319.8 million unit cases during the year ended December 31, 2022, a 4.2% increase compared to 307.0 million unit cases during 2021. Volume for waters, juices/other non-alcoholic beverages and beer/spirits in Chile increased 12.5%, 13.8% and 5.6%, respectively, while volume for soft drinks decreased 1.5%, in each case during the year ended December 31, 2022, compared to 2021. Excluding wine volume in Chile resulting from the new agreement with Viña Santa Rita, sales volume would have increased by 3.0% during the year.

Our average market share for soft drinks in Chile during the year ended December 31, 2022, according to A.C. Nielsen Company, was 64.4% (in terms of volume), compared to 64.1% for 2021, and 67.4% in terms of average sales, same figure as 2021.

Our net sales in Chile were Ch$1,123,665 million during the year ended December 31, 2022, a 15.2% increase compared to Ch$975,296 million during 2021, which is explained by a higher average price in the period, and to a lesser extent, by the aforementioned increase in sales volume. The higher average price for the period is mainly explained by a higher average price of the non-alcoholic categories.

Our net sales of soft drinks in Chile were Ch$539,334 million during the year ended December 31, 2022, a 12.3% increase when compared to Ch$480,158 million in 2021, as a result of higher revenues per unit case, partially offset by the lower volume sold. Our net sales of water and juices/other non-alcoholic beverages in Chile were Ch$313,074 million during the year ended December 31, 2022, a 27.6% increase compared to Ch$245,400 million during 2021, primarily as a result of higher revenues per unit case and by the volume increase. Our net sales of beer and spirits in Chile were Ch$271,257 million during the year ended December 31, 2022, a 8.6% increase compared to Ch$249,738 million during 2021, mainly as a result of the increase in volume.

Brazil

Our sales volume in Brazil was 278.0 million unit cases during the year ended December 31, 2022, a 4.4% increase compared to 266.4 million unit cases during 2021. Volume for soft drinks, waters and juices/other non-alcoholic beverages in Brazil increased 9.9%, 9.4% and 29.5%, respectively, while volume for beer and spirits decreased 78.2%, in each case during the year ended December 31, 2022 compared to 2021. The decrease of sales volume of beer and spirits is mainly explained by the new agreement with Heineken, by virtue of which, as of October 2021, we no longer distribute the Heineken and Amstel brands.

Our average market share for soft drinks in Brazil, during the year ended December 31, 2022, according to A.C. Nielsen Company, was 63.3% (in terms of volume), compared to 62.2% for 2021, and 69.2% in terms of average sales, compared to 68.4% for 2021.

Our net sales in Brazil were Ch$636,860 million during the year ended December 31, 2022, an 18.1% increase compared to Ch$539,257 million during 2021.

Our net sales of soft drinks in Brazil were Ch$472,404 million during the year ended December 31, 2022, a 50.9% increase compared to Ch$313,148 million during 2021. In local currency, net sales of soft drinks increased 25.2%, primarily as a result of higher revenues per unit case and by the volume increase. Our net sales of water and juices/other non-alcoholic beverages in Brazil were Ch$133,138 million during the year ended December 31, 2022, a 66.9% increase compared to Ch$79,760 million during 2021. In local currency, net sales of water and juices/other non-alcoholic beverages increased 40.9%, primarily as a result of higher revenues per unit case and by the volume increase. Our net sales of beer and spirits in Brazil were Ch$31,318 million during the year ended December 31, 2022, a 78.6% decrease compared to Ch$146,350 million during 2021. In local currency, net sales of beer and spirits decreased 82.4%, mainly as a result of lower volume sold, explained by the new agreement with Heineken, by virtue of which, as of October 2021, we no longer distribute the Heineken and Amstel brands.

Argentina

Our sales volume in Argentina was 201.4 million unit cases during the year ended December 31, 2022, a 9.1% increase compared to 184.7 million unit cases during 2021. Volume for soft drinks, waters and juices/other non-alcoholic beverages in Argentina increased 7.9%, 16.3% and 15.0%, respectively, during the year ended December 31, 2022 compared to 2021.

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Our average market share for soft drinks in Argentina during the year ended December 31, 2022, according to A.C. Nielsen Company, was 59.2% (in terms of volume), compared to 59.3% for 2021¹, and 69.8% in terms of average sales, compared to 69.5% for 2021¹.

Our net sales in Argentina were Ch$688,705 million during the year ended December 31, 2022, a 28.3% increase compared to Ch$536,955 million during 2021. This was mainly explained by the increase in sales volume, by a positive effect upon translation of Argentinian pesos to Chilean pesos, and by a higher average revenue per unit case sold.

Our net sales of soft drinks in Argentina were Ch$523,908 million during the year ended December 31, 2022, a 24.8% increase compared to Ch$419,724 million during 2021. In local currency, net sales of soft drinks increased 7.9% in real terms, as a result of the increase in sales volume. Our net sales of juices/other non-alcoholic beverages, waters and beer/spirits in Argentina were Ch$140,095 million during the year ended December 31, 2022, a 43.3% increase compared to Ch$97,742 million during 2021. In local currency, net sales of juices/other non-alcoholic beverages, water and beer/spirits increased 30.4% in real terms, mainly due to higher revenues per unit case and by the volume increase.

Paraguay

Our sales volume in Paraguay was 74.4 million unit cases during the year ended December 31, 2022, a 5.9% increase compared to 70.3 million unit cases during 2021. Volume for soft drinks, water and juices/other non-alcoholic beverages in Paraguay increased 4.1%, 11.0% and 18.5%, respectively, in each case during the year ended December 31, 2022, compared to 2021.

Our average market share for soft drinks in Paraguay during the year ended December 31, 2022, according to A.C. Nielsen Company, was 75.3% in terms of volume, compared to 75.9% for 2021, and 80.9% in terms of average sales, compared to 81.0% for 2021 according to the same source.

Our net sales in Paraguay were Ch$212,339 million during the year ended December 31, 2022, a 25.5% increase compared to Ch$169,216 million during 2021, mainly explained by a positive effect upon translation of Paraguayan Guaranies to Chilean pesos, and by higher volumes and revenues per unit case.

Our net sales of soft drinks in Paraguay were Ch$166,489 million during the year ended December 31, 2022, a 24.0% increase compared to Ch$134,284 million during 2021. In local currency, our net sales of soft drinks increased 12.5%, due to higher revenues per unit case and by the volume increase. Our net sales of water and juices/other non-alcoholic beverages in Paraguay were Ch$45,850 million during the year ended December 31, 2022, a 31.3% increase compared to Ch$34,932 million during 2021. In local currency, net sales of water and juices/other non-alcoholic beverages increased by 19.4%, primarily as a result of the increase in sales volume, and by a higher average revenue per unit case sold.

Cost of Sales

Our cost of sales was Ch$1,628,702 million during the year ended December 31, 2022, an 18.4% increase, compared to Ch$1,375,393 million during 2021. This increase is mainly explained by (i) the higher volume sold in Argentina, Chile and Paraguay, (ii) a higher cost of Pet resin in all four operations, (iii) a higher cost of sugar in Brazil, Chile and Paraguay, (iv) the negative effect of the devaluation of the Argentine peso and Chilean peso on dollarized costs, and (v) the effect of translating figures from Brazil, Argentina and Paraguay into Chilean pesos. This was partially offset by (i) a lower cost of sugar in Argentina and (ii) the positive effect of the appreciation of the real on dollarized costs. The cost of sales per unit case increased 12.3% in the same period. Our cost of sales represented 61.3% of net sales for the year ended December 31, 2022, compared to 62.0% for 2021.

¹ During 2022, Nielsen carried out a reprocessing of data from 2020 and 2021. Said reprocessing arose from a quality review carried out jointly by A. C. Nielsen and The Coca-Cola Company based on the detection of certain improvement opportunities on the survey carried out during the COVID-19 pandemic.

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Chile

Our cost of sales in Chile was Ch$743,227 million during the year ended December 31, 2022, a 17.8% increase compared to Ch$630,862 million during 2021. The increase in the cost of sales was mainly due to (i) the higher volume sold, (ii) the increase in the cost of certain raw materials, especially resin and sugar, (iii) the devaluation of the exchange rate, which has a negative effect on dollarized costs, and (iv) a higher cost of concentrate due to price increases. The cost of sales per unit case increased 13.1% in the same period. Our cost of sales in Chile represented 66.1% of net sales in Chile for the year ended December 31, 2022, compared to 64.7% for 2021.

Brazil

Our cost of sales in Brazil was Ch$403,696 million during the year ended December 31, 2022, a 11.7% increase compared to Ch$361,323 million during 2021. The cost of sales per unit case increased 7.0% in the same period. In local currency, total cost of sales decreased 7.5%, mainly due to (i) the decrease in beer volumes, which has a high unit cost, and (ii) the positive effect of the appreciation of the real on our dollarized costs. These effects were partially offset by (i) a higher cost of concentrate due to price increases, and (ii) a higher cost of raw materials, such as sugar, resin and aluminum. Our cost of sales in Brazil represented 63.4% of net sales in Brazil for the year ended December 31, 2022, compared to 67.0% for 2021.

Argentina

Our cost of sales in Argentina was Ch$367,880 million during the year ended December 31, 2022, a 24.2% increase compared to Ch$296,090 million during 2021. The cost of sales per unit case increased 13.9% in the same period. In local currency (in real terms, based on currency rates as of December 2022) cost of sales increased 7.4% mainly due to (i) the increase in volume sold, (ii) the negative effect of the devaluation of the Argentine peso on our dollarized costs, and (iii) a change in the mix towards higher unit value products. This was partially offset by lower sugar costs. Our cost of sales in Argentina represented 53.4% of net sales in Argentina for the year ended December 31, 2022, compared to 55.1% for 2021.

Paraguay

Our cost of sales in Paraguay was Ch$118,591 million during the year ended December 31, 2022, a 30.2% increase compared to Ch$91,109 million during 2021. Cost of sales per unit case increased 23.0% during the same period. In local currency, cost of sales increased 17.8%, mainly explained by (i) the higher volume sold, (ii) a change in the mix towards higher unit cost products, and (iii) a higher cost of sugar, fructose and Pet resin. Our cost of sales in Paraguay represented 55.8% of net sales in Paraguay for the year ended December 31, 2022, compared to 53.8% for 2021.

Gross Profit

Due to the factors described above, our gross profit was Ch$1,028,177 million during the year ended December 31, 2022, a 22.2% increase compared to Ch$841,340 million during 2021. Our gross profit represented 38.7% of our net sales during the year ended December 31, 2022, compared to 38.0% of our net sales in 2021.

Distribution, administrative and sales expenses

We had distribution, administrative and sales expenses of Ch$683,032 million during the year ended December 31, 2022, a 24.4% increase compared to Ch$548,902 million during 2021. This increase is explained mainly by (i) an increase in distribution expenses, (ii) higher labor costs, and (iii) the effect of translating figures from Brazil, Paraguay and Argentina to Chilean pesos. Our distribution, administrative and sales expenses represented 25.7% of our net sales during the year ended December 31, 2022, compared to 24.8% for 2021.

Chile

In Chile, our distribution, administrative and sales expenses were Ch$245,598 million during the year ended December 31, 2022, a 17.4% increase compared to Ch$209,202 million during 2021. This was mainly due to (i) increased distribution and hauling expenses, resulting from the higher volume sold and higher tariffs, and (ii) a higher expense in labor and services provided by third parties. Our distribution, administrative and sales expenses in Chile represented 21.9% of our net sales in Chile during the year ended December 31, 2022, compared to 21.5% for 2021.

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Brazil

In Brazil, our distribution, administrative and sales expenses were Ch$151,958 million during the year ended December 31, 2022, a 39.9% increase compared to Ch$108,592 million during 2021. In local currency, they increased 16.3%, mainly explained by (i) higher labor costs and (ii) increased distribution and hauling expenses. This was partially offset by lower marketing expenses. Our distribution, administrative and sales expenses in Brazil represented 23.9% of our net sales in Brazil during the year ended December 31, 2022, compared to 20.1% for 2021.

Argentina

In Argentina, our distribution, administrative and sales expenses were Ch$234,326 million during the year ended December 31, 2022, a 23.0% increase compared to Ch$190,538 million during 2021. In local currency (in real terms, based on currency rates as of December 2022), the distribution, administrative and sales expenses increased 6.3%, which is mainly explained by (i) an increase in freight costs due to higher sales volumes, and (ii) higher labor expenses. This was partially offset by higher other operating income, which is classified under this item. Our distribution, administrative and sales expenses in Argentina represented 34.0% of our net sales in Argentina during the year ended December 31, 2022, compared to 35.5% for 2021.

Paraguay

In Paraguay, our distribution, administrative and sales expenses were Ch$44,040 million during the year ended December 31, 2022, a 28.9% increase, compared to Ch$34,177 million during 2021. The distribution, administrative and sales expenses in local currency in Paraguay increased 16.0%, which is mainly explained by (i) higher distribution expenses, due to the higher volume sold, (ii) higher costs in labor and services provided by third parties, and (iii) higher marketing expenses. Our distribution, administrative and sales expenses in Paraguay represented 20.7% of our net sales in Paraguay during the year ended December 31, 2022, compared to 20.2% for 2021.

Other Income (Expense), Net

The following table sets forth our other income (expense), net for the year ended December 31, 2021 and 2022:

	Year Ended December 31,
	2021	2022
	(in millions of Ch$)
Other income (expense)	(13,874)	(23,373)
Financial income	7,792	39,722
Financial expenses	(52,992)	(59,548)
Share of profit of investments in associates and joint ventures accounted for using the equity method	3,093	1,409
Foreign exchange differences	(5,508)	(11,608)
Income (loss) by indexation units	(27,739)	(58,944)
Other income (expense), net	(89,229)	(112,341)

We had other expenses, net, of Ch$112,341 million during the year ended December 31, 2022, a 25.9% increase compared to Ch$89,229 million during 2021. The increase in other expenses, net, is mainly explained by an increase in losses from financial debt indexed to inflation in Chile, because of higher inflation compared to the previous period. In addition, we experienced an increase in Other expenses due to losses of Ch$24,983 million explained by the sale of a receivable owned by Embotelladora Andina S.A. to a financial institution at a discount. The receivable of Embotelladora Andina was originally generated as a result of dividends from subsidiaries declared in Argentinian pesos. We also had an increase in financial income mainly as a result of higher financial income from investments held in portfolio management.

Income Taxes

We had income taxes of Ch$104,345 million during the year ended December 31, 2022, a 126.0% increase compared to Ch$46,177 million during 2021. This increase is mainly explained by (i) the effect of a reversal of a deferred tax liability in Brazil in 2021, which was not present in 2022, (ii) a negative tax effect of the exchange rate variation in Chile, (iii) higher operating income, and (iv) higher taxable profits from monetary correction due to the increase in the inflation rate in Chile.

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Net Income

Due to the factors described above, we had a net income of Ch$128,459 million during the year ended December 31, 2022, a 18.2% decrease compared to Ch$157,032 million during 2021. Our net income represented 4.8% of our net sales during the year ended December 31, 2022, compared to 7.1% for 2021.

Summary of Results of Operations for the Years ended December 31, 2020 and 2021

For information regarding the results of operations for the years ended December 31, 2020 and December 31, 2021, See “Item 5. Operating and Financial Review and Prospects –A. Operating Results 2021 –Summary of Results of Operations for the years ended December 31, 2020 and 2021” in our Company’s annual report on Form 20-F for the fiscal year ended December 31, 2021.

Basis of Presentation

The aforementioned discussion should be read in conjunction with and is qualified in its entirety by reference to the consolidated financial statements, including the notes thereto.

These consolidated financial statements have been prepared in accordance with IFRS issued by the IASB.

These financial statements reflect the consolidated financial position of Embotelladora Andina S.A. and its subsidiaries as of December 31, 2022 and 2021 as well as the operating results, changes in shareholders’ equity and cash flows for the years ended December 31, 2022, 2021 and 2020, all of which were approved by the board of directors on April 25, 2023.

Our consolidated financial results include the results of our subsidiaries located in Chile, Brazil, Argentina and Paraguay. Our subsidiaries outside Chile prepare their financial statements in accordance with IFRS and to comply with local regulations in accordance with generally accepted accounting principles of the country in which they operate. The consolidated financial statements reflect the results of the subsidiaries outside of Chile, converted to Chilean pesos (functional and reporting currency of the parent company) and are presented in accordance with IFRS. The IFRS require that balances of subsidiaries be converted from their functional currency to the presentation currency (Chilean peso). The conversion for subsidiaries operating in non-hyperinflationary environments (Brazil and Paraguay) is performed by converting the assets and liabilities of subsidiaries at year-end exchange rates, and income and expense accounts must be converted at monthly average exchange rates of the month in which they are recognized. In the case of subsidiaries operating in hyperinflationary environments (Argentina), non-monetary assets and liabilities and income statements are restated by the inflation rate of the hyperinflationary economy, bringing its effects to the income statement. These restated balances are converted from the functional currency to the presentation currency at the closing exchange rate of each year.

Critical Accounting Estimates

Discussion of critical accounting estimates

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of our results of operations and financial position in the preparation of financial statements in conformity with IFRS. We cannot assure you that actual results will not differ from those estimates. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates and assumptions about the effect of matters that are inherently uncertain. For a more detailed discussion of accounting policies significant to our operations, please see note 2.22 to our Consolidated Financial Statements.

B. LIQUIDITY AND CAPITAL RESOURCES

Capital Resources, Treasury and Funding Policies

The products we sell are usually paid for in cash or short-term credit, and therefore our main source of financing comes from the cash flow of our operations. This cash flow has been generally sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved at our general shareholders’ meeting. Should additional funding be required for potential future investments in geographic expansion or other needs, our main sources of financing are expected to be: (i) debt offerings in the Chilean and international capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where we have operations; and; (iii) public equity offerings.

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Certain restrictions could exist to transfer funds from our operating subsidiaries to our parent company, however during 2022, we received dividends from subsidiaries in Argentina, Brazil and Paraguay. In July 2021, the Argentine government reinstated exchange restrictions. Aside from these restrictions that we will likely continue to face during 2023, we cannot assure you that we will not face restrictions in the future regarding the distribution of dividends from any other foreign subsidiaries.

Our management believes that we have access to financial resources to maintain our current operations and provide for our current capital expenditure and working capital requirements, scheduled debt payments, interest and income tax payments and dividend payments to shareholders.

The amount and frequency of future dividends to our shareholders will be determined at the general shareholders’ meeting upon the proposal of our board of directors in light of our earnings and financial condition at such time, and we cannot assure you that dividends will be declared in the future. However, it should be noted that Chilean Corporate Law requires us to distribute at least 30% of any profits generated each year.

Our board of directors has been empowered by our shareholders to define our financing and investment policies. Our bylaws do not define a strict financing structure, nor do they limit the types of investments we may make. Traditionally, we have preferred to use our own resources to finance our investments.

Our financing policy contemplates that each subsidiary finances its own operations. From this perspective, each subsidiary’s management focuses on cash generation and should establish clear targets for operating income, capital expenditures and levels of working capital. These targets are reviewed on a monthly basis to ensure that their objectives are met. Should additional financing needs arise, either as a result of a cash deficit or to take advantage of market opportunities, our general policy is to prefer local financing to allow for natural hedging. If local financing conditions are not acceptable, because of costs or other constraints, Andina will provide financing, or our subsidiary could finance itself in a currency different than the local one and will use derivative instruments to hedge against the operation’s functional currency.

Our cash management policy contemplates that cash surpluses be invested in low risk securities that are mainly short-term and easily liquidated assets until such time that this surplus should be needed.

Derivative instruments are utilized only for business purposes, and not for speculative purposes. Pursuant to our currency hedge policy, forward currency contracts are used in some operations to cover the risk of local currency devaluation relative to the U.S. dollar in an amount not greater than the budgeted purchases of U.S. dollar-denominated raw materials. Depending on market conditions, instead of forward currency contracts, from time to time we prefer to utilize our cash surplus to purchase raw materials in advance to obtain better prices and a fixed exchange rate.

The Company believes its balances of cash and cash equivalents, which totaled Ch$291,681 million as of December 31, 2022, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next twelve months and beyond.

The Company’s material cash requirements include the following contractual and other obligations.

Debt

As of December 31, 2022, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of Ch$1,104,136 million (collectively the “Notes”), with Ch$340.768 million payable within 12 months. Future interest payments associated with the Notes total Ch$495,574 million, with Ch$25,874 million payable within 12 months.

Leases

The Company has lease arrangements for certain equipment and facilities, including machinery and production lines, building and installations and technology equipment. As of December 31, 2022, the Company had fixed lease payment obligations of Ch$22,993 million, with Ch$7,100 million payable within 12 months.

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Manufacturing Purchase Obligations

The Company has agreements with its collaborating entities for its operation, which are mainly related to contracts entered into to supply products and/or support services in purchase of supplies for production like sugar, beverage cans and payments to obtain rights over mineral spring waters, among others. As of December 31, 2022, the Company had manufacturing purchase obligations of Ch$128,135 million, with Ch$90,704 million payable within 12 months.

Other Purchase Obligations

The Company’s other purchase obligations primarily consist of contracts entered into to supply information technology services, company commitments with its franchisor to make investments or expenses related to the development of the franchise, staff support services, security services, maintenance services for fixed assets. As of December 31, 2022, the Company had other purchase obligations of Ch$54,981 million, with Ch$36,907 million payable within 12 months.

Cash Flows from Operating Activities 2022 vs. Cash Flows from Operating Activities 2021 and 2020

Cash flows from operating activities during 2022 amounted to Ch$397,452 million compared to Ch$305,055 million in 2021. The increase in cash flow generation was mainly due higher collections from sales, partially offset by higher payment to suppliers and employees and income taxes.

For information regarding the cash flows from operating activities 2021 vs 2020, see “Item 5.Operating and Financial Review and Prospects –B. Liquidity and Capital Resources –Capital Resources, Treasury and Funding Policies,” in our Company’s annual report on Form 20-F for the fiscal year ended December 31, 2021.

Cash Flows from Investing Activities 2022 vs. Cash Flows from Investing Activities 2021 and 2020

Cash flows for investment activities (includes purchase and sale of property, plant and equipment; investments in associated companies; and financial investments) generated a negative cash flow of Ch$85,168 million in 2022 compared to a negative cash flow of Ch$198,253 million during 2021. The positive variation of Ch$113,084 million with respect to the previous year is mainly explained by the purchase of financial instruments for Ch$54,567 million in 2021 not present in 2022, added to the fact that in the current period investments for an amount of Ch$101,191 million have been redeemed, which increased cash and cash equivalents. This is partially offset by an increase in Capex.

For information regarding the cash flows from investing activities 2021 vs 2020, see “Item 5.Operating and Financial Review and Prospects –B. Liquidity and Capital Resources –Capital Resources, Treasury and Funding Policies,” in our Company’s annual report on Form 20-F for the fiscal year ended December 31, 2021.

Cash Flows from Financing Activities 2022 vs. Cash Flows from Financing Activities 2021 and 2020

Financing activities generated a negative cash flow of Ch$286,963 million in 2022, with a negative variation of Ch$171,644 million with respect to the previous year, which is mainly explained by the payment of additional dividends.

As of December 31, 2022, 19 short-term credit lines are available for an amount equivalent to Ch$178,230 million, of which all of them are unused lines of credit that remain available. In Argentina, we had the equivalent of Ch$48,527 million in credit available from nine lines of credit, which have not been used. In Brazil, we had the equivalent of Ch$100,879 million in credit available from seven lines of credit, which remained unused as of December 31, 2022. In Chile, we had the equivalent of Ch$7,000 million in credit available from one line of credit, which has not been used. In Paraguay, we had the equivalent of Ch$21,824million in credit available from two lines of credit, which have not been used.

For information regarding the cash flows from financing activities 2021 vs 2020, see “Item 5. Operating and Financial Review and Prospects –B. Liquidity and Capital Resources –Capital Resources, Treasury and Funding Policies,” in our Company’s annual report on Form 20-F for the fiscal year ended December 31, 2021.

Liabilities

As of December 31, 2022, our total liabilities, excluding non-controlling interest, were Ch$2,127,298 million, representing a 13.1% increase compared to December 31, 2021.

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Current liabilities increased by Ch$419,678 million, 79.2% compared to December 2021, mainly due to the increase in Other current financial liabilities (Ch$319,539 million) explained by the reclassification to short term of the principal of the bond issued in the United States in 2013, which matures in October 2023. In addition, there was an increase in Trade and other current accounts payable (Ch$57,392 million), due to the increase in local currencies of trade accounts payable in Chile, Paraguay and Argentina due to higher activity in 2022 compared to 2021, and higher inflation.

Non-current liabilities decreased by Ch$137,073 million, 10.4% compared to December 2021, mainly due to the decrease in Other non-current financial liabilities (-Ch$136,247 million), which is mainly explained by the aforementioned reclassification to short-term of the bond issued in the United States in 2013. The above is partially offset by the increase in mark to market liabilities of the cross currency swaps of the bond placed in the U.S. market in January 2020 and by the increase in debt with the public due to the increase in the UF and the U.S. dollar.

As of December 31, 2022, our bond obligation had a weighted average interest rate of 3.6% in UF and 4.5% in US$ while our bank obligation had a weighted average interest rate of 5.05% for the debts in Chilean pesos.

The following table presents future expirations for additional long-term liabilities. These expirations have been estimated based on accounting estimates because the liabilities do not have specific dates of future payment, as allowance for severance indemnities, contingencies, and liabilities are included.

	Maturity Years
	Total	1-3 Years	3-5 Years	More than 5 Years
	(Millions Ch$2022)
Provisions	48,695	1,592	1,397	45,706
Other long-term liabilities	17,410	269	483	16,036
Total long-term liabilities	66,105	1,860	1,880	61,742

Summary of Significant Debt Instruments

As of December 31, 2022, the Company is in compliance with all its debt covenants which are summarized below:

Series B Local Bonds (BANDI-B1; BANDI-B2)

During 2001, we issued in Chile Series B bonds. This issuance was structured into two series, one of which matured in 2008. As of December 31, 2022, Series B is the outstanding series with sub-series B1 and B2. During 2001, UF 3.7 million in bonds were issued with final maturity in 2026, bearing an annual interest rate of 6.5%. The Series B Local Bonds are subject to the following restrictive covenants:

● In October 2020, the covenant of Consolidated Financial Liabilities / Consolidated Equity was amended as the following: Maintain an indebtedness level where Net Consolidated Financial Liabilities shall not exceed Consolidated Equity by 1.20 times. For these purposes Net Consolidated Financial Liabilities will be the result of: (i) Other Current Financial Liabilities, plus (ii) Other Non-Current Financial Liabilities, less (iii) the sum of Cash and Cash Equivalents; plus, Other Current Financial Assets; plus Other Non-Current Financial Assets (to the extent that they correspond to the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities).

● Maintain and not lose, sell, assign, or transfer to a third party the geographical area today called the “Metropolitan Region”, as franchised territory in Chile by The Coca-Cola Company, for the development, production, sale and distribution of products and brands of such licensor, in accordance with the respective bottling agreement or license, renewable from time to time.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which to date is franchised to the Company by The Coca-Cola Company for the manufacture, production, sale and distribution of products and brands of such licensor; as long as these territories account for more than 40% of the Company’s Adjusted Consolidated Operating Flow.

● Maintain consolidated assets free of any pledge, mortgage or other lien by an amount, less than or equal to 1.3 times the Company’s unsecured consolidated current liabilities.

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Unsecured consolidated current liabilities are the Company’s total liabilities, obligations and debts that are not secured with real guarantees on goods and assets of the latter, made voluntarily or by agreement by the Company less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

Consolidated Assets are assets free of any pledge, mortgage or other lien, as well as those assets that have real liens, mortgage or encumbrances that operate only by law less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

In July 2020, derivatives have been contracted (Cross Currency Swaps) that cover 100% of UF denominated financial obligations, redenominating them to Chilean pesos.

Series C Local Bonds (BEKOP-C)

As a consequence of our merger with Polar, we became an obligor under the following outstanding bonds issued by Polar in Chile in 2010.

● Series C bonds due 2031, bearing interest at a fixed annual rate equal to 4.00%.

This series is subject to the following restrictions:

● Maintain a level of Net Financial Indebtedness within its quarterly financial statements that may not exceed 1.5 times, measured by figures included in the Company Consolidated Statement of Financial Position. For these purposes, net financial indebtedness level is defined as the ratio of net financial debt to total equity of the Company (equity attributable to the owners of the controllers plus non-controlling interests). Net financial debt means the difference between the Company financial debt and cash.

● Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the Company unsecured consolidated liabilities.

Unencumbered Assets are (a) assets that meet the following conditions: (i) they are the property of the Company, (ii) they are classified under Total Assets in the Company’s Financial Statement and, (iii) they are free of any pledge, mortgage or other levies constituted in favor of third parties, less (b) Other Current Financial Assets and Other Non-Current Financial Assets included in the Company’s Financial Statements (to the extent they correspond to the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities).

Unsecured Total Liabilities are (a) liabilities included under Total Current Liabilities and Total Non-Current Liabilities on the Company Financial Statements which do not benefit from preferences or privileges, less (b) Other Current Financial Assets and Other Non-Current Financial Assets of the Company’s Financial Statements (to the extent they correspond to the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities).

● Not invest in instruments issued by related parties or carry out operations with related parties other than those related to the general purpose of the entities, in conditions that are less favorable to those of the Company in relation to those prevailing in the market.

● Maintain a Net Financial Coverage ratio greater than 3.0 times. Net financial coverage is the ratio between the Company’s EBITDA for the past 12 months and the Company’s Net Financial Expenses. Net financial Expenses is defined as the difference between the absolute value of the interest expenses associated with the issuer’s financial debt recorded in the “Financial Costs” account; and interest income associated with the issuer’s cash, recorded in the Financial Income account, for the past 12 months. However, this restriction will be considered breached when the mentioned net financial coverage ratio is lower than the ratio previously indicated during two consecutive quarters.

In July 2020, derivatives have been contracted (Cross Currency Swaps) that cover 100% of UF denominated financial obligations, redenominating them to Chilean pesos.

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Series D and E Local Bonds (BANDI-D; BANDI-E)

During 2013 and 2014, Andina placed local bonds in the Chilean market. The issuance was structured into three series, one of which matured in 2020.

● UF 4.0 million of Series D Bonds due 2034 were issued in August 2013, bearing an annual interest rate of 3.8%;

● UF 3.0 million of Series E Bonds due 2035 were issued in March 2014, bearing an annual interest rate of 3.75%.

The Series D and E local bonds are subject to the following restrictions:

● Maintain an indebtedness level where Net Consolidated Financial Liabilities shall not exceed Consolidated Equity by 1.20 times.

For these purposes Net Consolidated Financial Liabilities will be the result of: (i) Other Current Financial Liabilities, plus (ii) Other Non-Current Financial Liabilities, less (iii) the sum of Cash and Cash Equivalents; plus, Other Current Financial Assets; plus, Other Non-Current Financial Assets (to the extent that they correspond to the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities).

Consolidated Equity is total equity including non-controlling interests.

● Maintain Consolidated Assets free of any pledge, mortgage or other lien by an amount, at least equal to 1.3 times of the Issuer’s unsecured consolidated current liabilities.

Unsecured Consolidated Current Liabilities are the Company’s total liabilities, obligations and debts that are not secured with real guarantees on goods and assets of the latter, made voluntarily or by agreement by the Company, less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

For purposes of determining Consolidated Assets these will consider assets free of any pledge, mortgage or other lien, as well as those assets that have real liens, mortgage or encumbrances that operate only by law. Therefore, Consolidated Assets free of any lien, mortgage or other encumbrance are regarded as those assets for which no real lien, mortgage or other encumbrance has been made voluntarily or by agreement by the Company, less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

● Maintain and not lose, sell, assign, or transfer to a third party the Metropolitan Region, as franchised territory in Chile by The Coca-Cola Company for the production, sale and distribution of products and brands of the licensor. Losing said territory means the non-renewal, cancellation, early termination or annulment of the license agreement granted by The Coca-Cola Company for the Metropolitan Region.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of the Series D and E local bonds were franchised to the Company by The Coca-Cola Company for the manufacture, production, sale and distribution of products and brands of The Coca-Cola Company; as long as these territories account for more than 40% of the Company’s Adjusted Consolidated Operating Flow of the audited fiscal year immediately prior to the moment when such loss, sale, assignment or transfer occurs. For these purposes Adjusted Consolidated Operating Flow is the addition of the following accounting items of the Issuer’s Consolidated Statement of Financial Position: (i) Gross Income, including revenue and cost of sales, less (ii) Distribution Costs, less (iii) Administrative Expenses, plus (iv) Participation in Earnings (Losses) of Associates and Joint Ventures accounted for using the Equity Method, plus (v) Depreciation, plus (vi) Amortization of Intangibles.

In July 2020, derivatives have been contracted (Cross Currency Swaps) that cover 100% of UF denominated financial obligations, redenominating them to Chilean pesos.

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Series F Local Bonds (BANDI-F)

During 2018, Andina undertook the partial repurchase (US$210 million) of the Senior Notes due 2023, which was refinanced with the placement of the Series F Local Bonds in the Chilean local market. These bonds were issued in October 2018, in the amount of UF 5.7 million, accruing an annual interest rate of 2.8% and with a maturity of 2039.

The Series F local bonds are subject to the following restrictions:

● Maintain an indebtedness level where Net Consolidated Financial Liabilities shall not exceed Consolidated Equity by 1.20 times.

For these purposes Net Consolidated Financial Liabilities will be the result of: (i) Other Current Financial Liabilities, plus (ii) Other Non-Current Financial Liabilities, less (iii) the sum of Cash and Cash Equivalents; plus, Other Current Financial Assets; plus, Other Non-Current Financial Assets (to the extent that they correspond to the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities).

Consolidated Equity is total equity including non-controlling interests.

● Maintain Consolidated Assets free of any pledge, mortgage or other lien by an amount, at least equal to 1.3 times of the Issuer’s unsecured consolidated current liabilities.

Unsecured Consolidated Current Liabilities are the Company’s total liabilities, obligations and debts that are not secured with real guarantees on goods and assets of the latter, made voluntarily or by agreement by the Company, less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

For purposes of determining Consolidated Assets these will consider assets free of any pledge, mortgage or other lien, as well as those assets that have real liens, mortgage or encumbrances that operate only by law. Therefore, Consolidated Assets free of any lien, mortgage or other encumbrance shall be regarded as those assets for which no real lien, mortgage or other encumbrance has been made voluntarily or by agreement by the Company, less the active balances of derivative financial instruments, taken to cover exchange rate risks or interest rate risks on financial liabilities accounted for under Other Current Financial Assets and Other Non-current Financial Assets of the Company’s Consolidated Statement of Financial Position.

● Maintain and not lose, sell, assign, or transfer to a third party the Metropolitan Region, as franchised territory in Chile by The Coca-Cola Company for the production, sale and distribution of products and brands of the licensor. Losing said territory means the non-renewal, cancellation, early termination or annulment of the license agreement granted by The Coca-Cola Company for the Metropolitan Region.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of the Series F local bonds, is franchised to the Company by The Coca-Cola Company for the manufacture, production, sale and distribution of products and brands of The Coca-Cola Company; as long as these territories account for more than 40% of the Company’s Adjusted Consolidated Operating Flow of the audited fiscal year immediately prior to the moment when said loss, sale, assignment or transfer occurs. For these purposes Adjusted Consolidated Operating Flow is the addition of the following accounting items of the Issuer’s Consolidated Statement of Financial Position: (i) Gross Income, including revenue and cost of sales, less (ii) Distribution Costs, less (iii) Administrative Expenses, plus (iv) Participation in Earnings (Losses) of Associates and Joint Ventures accounted for using the Equity Method, plus (v) Depreciation, plus (vi) Amortization of Intangibles.

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In addition, on November 11, 2021, bondholders’ meetings were held for the series C, D, E and F bonds issued in the Chilean local market under the lines registered in the Securities Registry of the CMF under No. 641 (Series C), No. 760 (Series D and E) and No. 912 (Series F), and for the series B bonds corresponding to the fixed amount issue registered in the Securities Registry of the CMF under No. 254. As a result of the aforementioned bondholders’ meetings, the issuance contracts of the aforementioned bond issues were amended. Furthermore, the issuance contracts of the bond lines registered in the Securities Registry of the CMF under No. 911, No. 971 and No. 972 were also amended, because there were no bonds outstanding. In this respect, the modifications were made to financial indebtedness covenants that existed in the aforementioned issuance contracts, to be substituted by a new indebtedness level obligation defined as follows:

Indebtedness Level: Maintain an indebtedness level, measured and calculated quarterly, presented in the manner and within the terms determined by the Financial Market Commission, no greater than 3.5 times.

The following terms shall be construed as:

● “Indebtedness Level” the ratio between (a) the average of the Consolidated Net Financial Liabilities, calculated on the last four “Consolidated Financial Statements of Financial Position” contained in the Issuer’s Consolidated Financial Statements filed by the Issuer with the Financial Market Commission as of the calculation date; and (b) the accumulated EBITDA in the twelve consecutive month period ending at the close of the last of the “Consolidated Financial Statements of Results by Function” contained in the Consolidated Financial Statements that the Issuer has filed with the Financial Market Commission as of the calculation date;

● “Consolidated Net Financial Liabilities” means the result of the following transactions on the accounting items of the “Consolidated Statements of Financial Position” contained in the Issuer’s Consolidated Financial Statements indicated below: (i) ”Other Financial Liabilities, Current”, which include short-term obligations with banks and financial institutions, bond liabilities at face rate, issuance costs and discounts associated with the placement and other minor items that in accordance with IFRS regulations must be included in this heading; plus (ii) ”Other Non-Current Financial Liabilities”, which include long-term obligations with banks and financial institutions, bond liabilities at face rate, issuance costs and discounts associated with the placement and other minor items that according to IFRS standards should be included in this heading; less (iii) the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to asset balances for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);

● “EBITDA” means the sum of the following accounts of the “Consolidated Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, deducting the value of “Depreciation” and “Amortization for the Fiscal Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.

Senior Notes due 2023

In October 2013, we issued US$575 million of Senior Notes in the U.S. market under 144A/Reg S regulations. These notes are unsecured obligations with the whole principal amount due in 2023. The proceeds from these notes were used to finance a portion of the purchase price for our acquisition of Ipiranga and for general corporate purposes.

In October 2018, as part of the Company’s debt reprofiling, Andina undertook a partial repurchase of the Senior Notes in the amount of US$210 million (which was refinanced with the placement of Series F Local Bonds in the Chilean local market), with a total remaining outstanding amount of Senior Notes of US$365 million.

In parallel, derivatives have been contracted (cross currency swaps) to partially redenominate US$360 million dollar-denominated financial obligations to Brazilian reais.

Senior Notes due 2050

On January 21, 2020, the Company issued a 30-year corporate bond in the international markets for US$300 million due 2050, with an annual coupon rate of 3.950%. The use of funds from this operation are general corporate purposes which could include an eventual payment of existing liabilities, financing of potential acquisitions and improvement of the company’s liquidity position.

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At the same time, derivative contracts (cross currency swaps) have been entered into to fully redenominate financial obligations denominated in U.S. dollars to UF.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

Given the nature of the business and the support provided by The Coca-Cola Company as franchisor to its bottlers, the Company’s research and development expenses are not meaningful. For more information on patents and licenses, see “Item 4. Information on the Company – Bottler Agreements.”

D. TREND INFORMATION

Our results will likely continue to be influenced by changes in the level of consumer demand in the countries in which we operate, resulting from governmental economic measures that are or may be implemented in the future. Additionally, the main raw materials used in the production of soft drinks, such as sugar and resin, may experience price increases in the future. Such price increases may affect our results if we are unable to pass the cost increases on to the sales price of our products due to depressed consumer demand and/or heightened competition.

Increased competition from low-price brands is another factor that could limit our ability to grow, and thus negatively affect our results.

Additionally, exchange rate fluctuations, in particular the potential devaluations relative to the U.S. dollar of local currencies in the countries in which we operate, may adversely affect our results because of the impact on the cost of U.S. dollar-denominated raw materials and the conversion of monetary assets.

The outbreak of the COVID-19 pandemic and the extraordinary measures adopted by the government to contain the spread of the virus, could adversely affect our business and results of operations. For more information see “Item 3. Key Information – D. Risk Factors – Our business is subject to risks arising from the COVID-19 pandemic”.

E.[Reserved]

F.[Reserved]

G.SAFE HARBOR

See “Introduction - Presentation of Financial and Certain Other Information—Forward-Looking Statements.”

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ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

Pursuant to Chilean law, we are managed by a group of executive officers under the supervision of our board of directors. The Company’s operations in Chile, Brazil, Argentina and Paraguay report to the corporate headquarters in Chile.

Board of Directors

In accordance with our current bylaws, the board of directors is comprised of fourteen (14) directors. The directors may or may not be shareholders and are elected at general shareholders’ meetings for a three-year term, with re-election permitted. Cumulative voting is permitted for the election of directors.

In the event of a vacancy, the board of directors may appoint a replacement to fill the vacancy, and the entire board of directors must be elected or re-elected at the next regularly scheduled general shareholders’ meeting.

The shareholders agreement regulates the election of directors of the Company by the controlling shareholders (See “Item 7. Major Shareholders and Transactions with Related Companies”). In addition, pursuant to the terms and conditions of the deposit agreement entered between The Company and the Bank of New York dated as of December 14, 2000, (the “Deposit Agreement”), if no instructions are received by The Bank of New York, as depositary (the “Depositary”), it shall give a discretionary proxy to a person designated by the chairman of our board of directors with respect to the shares or other deposited securities that represent the ADRs.

The following table sets forth information with respect to the current directors of the Company, which have been elected at our general shareholders’ meeting dated April 15, 2021:

		Date of expiration
Name	Age(3)	current term	Position
Juan Claro	72	April 15, 2024	Chairman
Eduardo Chadwick	63	April 15, 2024	Vice Chairman
Salvador Said(1)	58	April 15, 2024	Director
José Antonio Garcés	56	April 15, 2024	Director
Gonzalo Said(1)	58	April 15, 2024	Director
Roberto Mercadé	54	April 15, 2024	Director
Gonzalo Parot(2)	70	April 15, 2024	Director
Georges de Bourguignon	60	April 15, 2024	Director
Domingo Cruzat (2)	66	April 15, 2024	Director
Rodrigo Vergara	60	April 15, 2024	Director
Felipe Joannon	63	April 15, 2024	Director
Marco Antonio Araujo	56	April 15, 2024	Director
Mariano Rossi	56	April 15, 2024	Director
Carmen Román	55	April 15, 2024	Director

(1) Salvador Said is first cousin of Gonzalo Said.

(2) Independent from controlling shareholder pursuant to Article 50 bis, paragraph 6 of the Chilean Public Company Law N° 18,046.

(3) Age at December 31, 2022.

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The following are brief biographies of each of the Company’s directors:

Juan Claro González

Appointment: He has been a member of the board of directors, and also the Chairman since 2004.

Experience: He has studies of civil engineering at the Pontificia Universidad Católica de Chile. He has developed an outstanding business representation activity by chairing the Sociedad de Fomento Fabril (SOFOFA), between 2001 and 2005, the Confederación de la Producción y del Comercio (CPC), between 2002 and 2005, and the Chile-China Bilateral Business Council, between 2005 and 2007. He has served on the boards of Gasco S.A. (1991-2000), CMPC S.A. (2005-2011) and Entel S.A. (2005-2011). He was Chairman of Metrogas S.A. (1994-2000) and Emel S.A. (2001-2007).

Other positions: With more than 17 years of experience in the mass consumption and beverage industry, he is currently a member of the Risk Committee at Agrosuper S.A., the Sustainability and Stakeholders Committee at Antofagasta PLC and a director at Cemento Melón. He is also an honorary member of the Centro de Estudios Públicos (CEP).

José Antonio Garcés Silva

Appointment: He has been a member of the board of directors of the Company since 1992.

Experience: He holds a business administration degree from the Universidad Gabriela Mistral with a specialization in Finance. He has an Executive MBA and PADE from the ESE of the Universidad de Los Andes and a master’s in philosophy and ethics from the Universidad Adolfo Ibáñez. He is Chairman of the Board of Banvida S.A., Past President of USEC and director of Fundación Paternitas, as well as General Manager of Inversiones San Andrés (family holding) and member of the Board of SOFOFA. He has 25 years of experience in the beverage and mass consumption industry and a vast experience in risk and cybersecurity in the financial sector.

Other positions: He is also currently a director of Banco Consorcio, CN Life Compañía de Seguros, Consorcio Nacional de Seguros, Banvida S.A. and Andes Iron SpA.

Marco Antonio Araujo

Appointment: He has been a member of the board of directors of the Company since April 2020.

Experience: He holds a systems and industrial engineering degree, and a master’s in finance from the Pontificia Universidad Católica de Rio de Janeiro, Brazil. He also holds a postgraduate degree in Accounting FGV in Rio de Janeiro, Brazil. With 30 years of experience in the mass consumption and beverage industry, focusing on finance, mergers and acquisitions, risk management and sustainability, he is currently Chief Financial Officer (CFO) in the Latin America Operating Unit at The Coca-Cola Company.

Other positions: At The Coca-Cola Company he has served as Finance VP & CFO Japan Business Unit; Finance VP & CFO Brazil Business Unit; Finance VP & CFO Mexico Business Unit; M&A Manager for Latin America, Atlanta-USA; Finance Director, Madrid, Spain; Finance Manager SE Region, Brazil Division; and Financial Planning Analyst/Manager, Brazil Division.

Georges De Bourguignon Arndt

Appointment: He has been a member of the board of directors of the Company since April 2016.

Experience: He holds an economist degree from the Pontificia Universidad Católica de Chile and has an MBA from Harvard University. In the academic field, he has been a professor of Economics at the Universidad Católica de Chile, while in the business world, he is co-founder and currently President of Asset Chile S.A., a corporate finance consulting firm, and Asset AGF, an investment fund management company. He also serves as a Director in several companies, including Vivo Spa, where he has been Chairman since August 2022, and Tanica S.A., since May 2017. With more than 10 years of experience in mass consumption issues, he was a Director of Soquimich S.A. (2019 - April 2022), Empresas La Polar S.A. (2011-2015), Sal Lobos S.A. (2006-2018) and Chairman of the Directors’ Committee of Latam Airlines Group (2012-2019).

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Eduardo Chadwick Claro

Appointment: He has been member of the board of directors of the Company since June 2012.

Experience: He holds a civil industrial engineering degree from the Pontificia Universidad Católica de Chile and was elected UC Engineer of the Year in 2017. He is a recognized entrepreneur in the agricultural sector, mainly in the wine, beverage and mass consumption industries, with more than 30 years of experience, both in Chile and abroad. He is considered one of the main modernizers of the wine industry in Chile. He also successfully participated at Oxford University in The Oxford Strategic Leadership Programme in 2013. He was President of Coca-Cola Polar until 2012 and is currently a member of the Ethics, Culture and Sustainability Committee of Coca-Cola Andina. He was also President of Cervecería Austral until 2007 and Director of SOFOFA until 2015.

Other Positions: He is Chairman of Holding Chadwick Group, Founder and Director of Hatch Mansfield Co. in England and Maltexco S.A. He was ABAC/APEC representative since 2018 and selected in 2021 as one of the 25 people chosen from Imagen de Chile to be part of the “Chilen@s Creando Futuro” Network, which helps to represent the different sectors with which the image of our country is built abroad. Currently, he is a Fellow member of the Advance Leadership Initiative Program at Harvard University, which he is attending during the year 2022.

Domingo Cruzat Amunátegui

Appointment: He has been member of the board of directors of the Company since 2021.

Experience: He holds a civil industrial engineering degree from the Universidad de Chile and an MBA from The Wharton School of the University of Pennsylvania. With more than 12 years of experience in the beverage and mass consumption industry, he served as Commercial Manager at Pesquera Coloso-San José; CEO of Watt’s Alimentos; CEO of Loncoleche, CEO of Bellsouth Chile and Deputy General Manager of Compañía Sudamericana de Vapores. He is a university professor in the areas of marketing and sales at the ESE of Universidad de Los Andes. He has also served on the Boards of Conpax, Construmart, Copefrut, Essal, Principal Financial Group, Compañía Sudamericana de Vapores and Viña San Pedro de Tarapacá. In addition, he was Chairman of the Board of Correos de Chile and Chairman of the Sistema de Empresas Públicas (SEP).

Other positions: Currently, he is member of the board of directors of Enel Américas, IP Chile, SEP and Stars (Family Office). Additionally, he is founding partner of Fundación La Esperanza, a foundation dedicated to rehabilitating young drug addicts.

Roberto Mercadé

Appointment: He has been member of the board of directors of the Company since April 2019.

Experience: He holds an industrial engineering degree from the Georgia Institute of Technology, Atlanta (United States). Previously, he was member of the board of directors of ARCA-Lindley in Peru, Escuela Campo Alegre in Venezuela and American International School of Johannesburg in South Africa. He has 29 years of experience in the beverage and mass consumption industry. He was responsible for the risk management operation at The Coca-Cola Company’s Latin Center. In the sustainability area, he was responsible for co-creating and managing the World Without Waste strategy for the same unit. He has developed his experience in the regions of Latin America, Africa and Asia.

Other positions: Currently serves as president of Coca-Cola Mexico in The Coca-Cola Company.

Gonzalo Parot Palma

Appointment: He has been member of the board of directors of the Company since 2009.

Experience: He holds a civil industrial engineering and economist degree from the Universidad de Chile, a master’s in industrial engineering degree from the Universidad de Chile and a master’s in economics from the University of Chicago. His areas of specialization are business economics and finance. With 17 years of experience in the beverage and mass consumption industry, he has worked as Head of Studies at CCU S.A., Corporate Manager of Studies and Development at Empresas CMPC S.A., Executive President of Filiales Envases y Productos de Papel CMPC S.A., General Manager and Director of Celulosa del Pacífico, Corporate General Manager of CMPC Tissue S.A. and Director and Corporate General Manager of Copesa S.A. During his career he has served as Director, Chief Executive Officer and Advisor of the Corporación Municipal and Teatro Municipal de Santiago; Director of the National Press Association and of the Chilean-Argentine Chamber of Business, Professor and Director of the School of Economics and Business of the Universidad de Chile; Professor and Dean of Economics and Administration of the Universidad Gabriela Mistral.

Other positions: Currently serves as Director of AES Andes S.A.

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Mariano Rossi

Appointment: He has been member of the board of directors of the Company since June 2012.

Experience: He holds a business administration degree from the School of Economics of the Universidad de Buenos Aires, specializing in Finance. He has participated in Executive Programs at the University of Michigan and IESE (Switzerland) as well as in Executive Development Programs at The Coca-Cola Company of Emory & Wharton Universities (USA). With 31 years of experience in the beverage and mass consumption industry, he has been Chief Financial Officer in Spain, Chief Financial Officer (CFO) in Latin America and General Manager in Argentina at The Coca-Cola Company. He has participated as Director in different bottlers of the Coca-Cola System: Chile (Embonor and Polar), Peru (JRL Lindley) and Uruguay (Monresa), between 1999 and 2008.

Salvador Said Somavía

Appointment: He has been member of the board of directors of the Company since 1992.

Experience: He holds a business administration degree from Universidad Gabriela Mistral, with specialization in business management. He was a member of the board of Envases del Pacífico S.A. and Envases CMF S.A. He also participates in non-profit organizations oriented to entrepreneurship, such as Endeavor Chile, where he was the chairman for six years and currently he continues as a member of the board. He is advisor of the Centro de Estudios Públicos (CEP). He has 30 years of experience in the beverage and mass consumption industry, he has knowledge and experience in risk management, due to his capacity as director of banks since 2011 and member of committees related to that matter.

Other positions: Currently, he is the chairman of Scotiabank Chile S.A. and of Parque Arauco S.A., member of the board of Inversiones Caburga SpA, Inversiones Cabildo SpA, SM-Salud S.A., Idelpa Energía S.A., Inversiones Sevillana S.A., Inmobiliaria Atlantis S.A., Inversiones del Pacífico S.A., and Administradora Costanera S.A.

Gonzalo Said Handal

Appointment: He has been member of the board of directors of the Company since April 1993.

Experience: He holds a business administration degree from Universidad Gabriela Mistral, with specialization in finance, best practices and corporate governance. He is advisor of SOFOFA and chairman of the board of directors of Fundación Generación Empresarial, from where he promotes his vision on Corporate Governance and good business practices. With 30 years of experience in the beverage and mass consumption industry, he is a member of the Risk Committee of Scotiabank Chile and of the Ethics and Sustainability Committee of Coca-Cola Andina, contributing with his experience in Corporate Risk and ESG matters.

Other positions: He serves as director of Scotiabank Chile S.A. and of Holding de Empresas Said Handal.

Felipe Joannon Vergara

Appointment: He has been member of the board of directors of the Company since April 2018.

Experience: He holds a business administration degree with a major in economics from the Pontificia Universidad Católica de Chile and an MBA from The Wharton School. Previously, he was member of the board of directors of the companies of Grupo Luksic, development manager of Quiñenco S.A., general manager of Viña Santa Rita and assistant general manager of Cristalerías de Chile S.A. In the academic field, he is a professor at the School of Administration and Economics of the Pontificia Universidad Católica de Chile.

Other positions: Currently, he is a member of the board of Forestal O’Higgins (parent company of the Matte Group), Quimetal Industrial S.A., Icom Gestión Inmobiliaria SpA, Altis S.A. AGF, Maquinarias y Construcciones Río Loa S.A., Almendral S.A., Constructora e Inmobiliaria EBCO S.A., Wenco S.A and VIVO S.A.

Rodrigo Vergara Montes

Appointment: He has been member of the board of directors of the Company since April 2018.

Experience: He holds a business administration degree from the Pontificia Universidad Católica de Chile and a PhD in Economics from Harvard University. In the academic field, he is a professor at the Economics Institute of the Universidad Católica de Chile, while in his professional career he was President of the Central Bank of Chile (2011-2016) and advisor of the same entity (2009-2011). He was a director at Moneda S.A., Moneda AGF, Entel S.A. and Banco Internacional. Due to his experience in the Central Bank, he has extensive knowledge of Risk Management and Financial Matters, as well as Cybersecurity and Sustainability.

Other positions: He is a Director of Banco Santander Chile and Besalco S.A. He holds the position of Senior Economist at the Centro de Estudios Públicos (CEP) and Research Associate at the Mossavar- Rahmani Center at Harvard University’s School of Governance. He is also Director of the Fundación Nacional para la Superación de la Pobreza (National Foundation for Overcoming Poverty).

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Carmen Román Arancibia

Appointment: She has been member of the board of directors of the Company since 2021.

Experience: She holds a law degree from Universidad Gabriela Mistral. Former chief legal officer and head of corporate affairs of Walmart Chile. She has developed a solid experience in the retail industry, working for 11 years at Walmart, seven years at Cencosud and 4 years at Santa Isabel. She has knowledge and experience in risk management, due to her role as Director of Compliance and Ethics at Walmart. Due to her knowledge and experience in Corporate Governance, Sustainability and Shared Value, she was appointed Co-Chair of the Sustainability and Corporate Governance Committee of SOFOFA. In the area of diversity and inclusion, she has knowledge and experience as a mentor and trainer of women’s leadership programs.

Other positions: She is currently a member of the Legal Sustainability Council of the Universidad Católica, member of the Legal Circle of Icare, advisor in Comunidad Mujer and Director of Fundación Generación Empresarial.

Executive Officers

The following table includes information regarding our senior executives:

Name	Age(1)	Position
Miguel Ángel Peirano	63	Chief Executive Officer
Andrés Wainer	52	Chief Financial Officer
Fernando Jaña	45	Chief Strategic Planning Officer
Jaime Cohen	55	Chief Legal Officer
Martín Idígoras	47	Chief IT Officer
Gonzalo Muñoz	61	Chief Human Resources Officer
Fabián Castelli	57	General Manager of Embotelladora del Atlántico S.A.
Renato Barbosa	62	General Manager of Rio de Janeiro Refrescos Ltda.
José Luis Solórzano	52	General Manager of Embotelladora Andina S.A.
Francisco Sanfurgo	68	General Manager of Paraguay Refrescos S.A.

(1) Age at December 31, 2022.

Miguel Ángel Peirano

Chief Executive Officer

He holds an electronic engineer degree from the Instituto Tecnológico de Buenos Aires and has postgraduate studies at Harvard Business School and Stanford University. He joined the Company and became Executive Vice President in 2011. Previously, he was senior engagement manager at McKinsey & Company and was president of Coca-Cola Femsa Mercosur.

Andrés Wainer

Chief Financial Officer

He holds a business administration degree with a major in economics from the Pontificia Universidad Católica de Chile and a master’s degree in finance from the London Business School. He joined the Company in 1996 and since 2011 he has been Chief Financial Officer. Previously, he was development manager at Coca-Cola Andina Argentina, administration and finance manager at Coca-Cola Andina Chile and research and development corporate manager at the Corporate Office.

Jaime Cohen

Chief Legal Officer

He holds a law degree from the Universidad de Chile and a master law degree from the University of Virginia, United States. He joined the Company in 2008. Previously, he was manager of legal affairs at Socovesa S.A. (2004-2008); corporate banking lawyer at Citibank N.A., Santiago de Chile (2000-2004); international associate at Milbank, Tweed, Hadley & McCloy, New York (2001-2002); associate lawyer at Cruzat, Ortúzar & Mackenna, Baker & McKenzie (1996-1999) and lawyer in the area of financial and real estate advisory at Banco Edwards (1993-1996).

Gonzalo Muñoz

Chief Human Resources Officer

He holds an auditor accountant degree from Universidad de Chile. He joined the Company in 2015. Previously, he was director of finance, general manager and director of human resources in various Latin American countries in the British American Tobacco company. He has also served as a professor of marketing at Universidad de Chile.

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Martín Idígoras

Chief Information Technology Officer

He holds a bachelor’s degree in systems from Universidad John F. Kennedy in Argentina, with a specialization in information technology. He joined the Company in 2018. Previously he worked for 18 years at Cencosud. During that time, he served as CIO for the home improvement division (2015-2018), regional manager of the SAP center of expertise (2014-2015) and regional CTO (2010- 2014). He also worked in different technology positions in different companies such as Correo Argentino and Arcor.

Fernando Jaña

Chief Strategic Planning Officer

He holds an industrial civil engineering degree from Universidad Adolfo Ibáñez and a master’s degree in logistics and supply chain management from The University of Sydney, Australia. He joined the Company in 2014 and has held his current position since 2019. He was general manager of Coca-Cola del Valle, manager of innovation and projects in Coca-Cola Andina Chile, ecommerce manager at Cencosud Supermercados and logistics and distribution manager at CCU. He has also worked as a teacher and researcher at Universidad Adolfo Ibáñez.

Jose Luis Solórzano

General Manager Coca-Cola Andina Chile

He holds a business administration degree from Universidad Adolfo Ibáñez, with specialization in the areas of marketing and finance. He joined the Company in 2003 and since 2014 he has been general manager of Coca-Cola Andina Chile. He previously held the positions of general manager of Coca-Cola Andina Argentina and commercial manager of Coca-Cola Andina Chile. Prior to that, he was commercial manager of Coca-Cola Polar.

Fabián Castelli

General Manager Coca-Cola Andina Argentina

He holds an industrial engineering degree from Universidad Nacional de Cuyo, with specialization in a management development program at IAE, Argentina and Donald R. Keough System Leadership Academy. He joined the Company in 1994 and since 2014 he has been general manager of Coca-Cola Andina Argentina. Previously he held the positions of head of the Mendoza sales department, business development and planning manager, marketing manager and commercial manager. He was also director of AdeS in Argentina, vice president of Asociación de Fabricantes Argentinos de Coca-Cola (AFAC) and Director of Cámara Argentina de Industria de Bebidas sin Alcohol (Argentine Chamber of Non-Alcoholic Beverages Industry).

Renato Barbosa

General Manager Coca-Cola Andina Brazil

He holds an economist degree from Universidade do Distrito Federal Brazil, with specialization in business and post-graduation studies in business from FGV Sao Paulo, Brazil and an MBA in marketing from the FGV Rio de Janeiro, Brazil. He joined the Company in 2012 as general manager of Coca-Cola Andina Brazil. Previously held the position of general manager of Brasal Refrigerantes (Coca-Cola bottler in the central-eastern region of Brazil).

Francisco Sanfurgo

General Manager Coca-Cola Paresa

He holds a mechanical engineering degree from Universidad de Concepción and a specialization in project management from Universidad Adolfo Ibáñez. He joined the Company in 1988 and has been general manager of Coca-Cola Paresa since 2005. Previously, he was manager of Comercial Dimetral in Punta Arenas, branch manager of Citicorp Punta Arenas and general manager of Cervecería Austral in Punta Arenas.

B. COMPENSATION

Compensation of Executive Officers

For our executive officers, the compensation plans are composed of a fixed compensation and a performance bonus, which are adapted to the reality and competitive conditions of each market, and whose amounts vary according to the position and/or responsibility exercised. The performance bonuses are payable only to the extent that the personal goals of each executive and the Company, previously defined, are met.

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For the Company’s Chief Executive Officer, the main performance indicators that affect its performance bonus are consolidated EBITDA. For general managers of operations, the main performance indicators are EBITDA generated by their operation in local currency, consolidated EBITDA in Chilean pesos, market share, sustainability indicators (Water Use Ratio; % returnability and % resin recycled in bottles in the operations that applied), safety, talent and succession and certain individualized goals in the event that the Company’s Chief Executive Officer so determines.

For corporate officers, the main performance indicators are consolidated EBITDA in Chilean pesos and certain individualized goals in the event that the Company’s Chief Executive Officer so determines. Particularly, for those executive officers who, by the nature of their position, are directly related to the Company’s investors, there is a payment scheme for their performance bonus that is partly deferred over four years indexed to the Company’s share price. Additionally, within the compensation structure for certain executive officers, there are permanence bonuses, which are paid out upon completion of the agreed terms of service.

For 2022, the fixed remuneration paid to Coca-Cola Andina’s executive officers amounted to Ch$5,406 million (Ch$4,401 million in 2021). Similarly, the remuneration paid for performance bonuses amounted to Ch$3,400 million (Ch$3,107 million in 2021). During 2022, there were no severance indemnities paid to the Company’s executive officers. During 2021, there were no severance indemnities paid to the Company’s executive officers.

We do not make available to the public information as to the compensation of our executive officers on an individual basis, as disclosure of such information is not required under Chilean law.

Compensation of Directors

Directors receive an annual fee for their services and participation as members of the board of directors and committees. The amounts paid to each director varies in accordance with the position held and the period of time during which such position is held. Total compensation paid to each director during 2022, which was approved by our shareholders, was as follows:

				Culture,
			Directors’	Ethics &
	Directors’	Executive	and Audit	Sustainability
	Compensation	Committee	Committee	Committee	Total
2022	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Juan Claro González(1)	144,000				144,000
Gonzalo Said Handal	72,000	90,000		12,000	174,000
José Antonio Garcés Silva	72,000	90,000		12,000	174,000
Salvador Said Somavía	72,000	90,000	24,000		186,000
Eduardo Chadwick Claro	72,000	90,000		12,000	174,000
Gonzalo Parot Palma(2)	72,000		24,000		96,000
Georges de Bourguignon Arndt	72,000				72,000
Rodrigo Vergara Montes	72,000				72,000
Felipe Joannon Vergara	72,000				72,000
Carmen Román	72,000			12,000	84,000
Domingo Cruzat(2)	72,000		24,000		96,000
Mariano Rossi	72,000				72,000
Roberto Mercadé Rovira	72,000				72,000
Marco Antonio Fernández De Araujo	72,000				72,000
Total Gross	1,080,000	360,000	72,000	48,000	1,560,000

(1) Includes Ch$72 million additional as Chairman of the Board.

(2) Independent from controlling shareholder pursuant to Article 50 bis, paragraph 6 of the Chilean Public Company Law N° 18,046.

For the year that ended December 31, 2022, the aggregate amount of compensation we paid to all directors and executive officers as a group was Ch$10,366 million of which Ch$8,806 million was paid to our executive officers. We do not disclose to our shareholders or otherwise make available to the public information as to the compensation of our executive officers on an individual basis, as disclosure of such information is not required under Chilean law. We only maintain a retirement plan for our chief executive officer.

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C. BOARD PRACTICES

Our board of directors has regularly scheduled meetings at least once a month, and extraordinary meetings are convened when called by the chairman or when requested by one or more directors. The quorum for a meeting of the board of directors is established by the presence of an absolute majority of its directors. Directors serve terms of three years from the date they are elected. Resolutions are adopted by the affirmative vote of a majority of those directors present at the meeting, with the chairman determining the outcome of any tie vote.

Benefits upon Termination of Employment

There are no contracts providing benefits to directors upon termination of employment.

Executive Committee

Our board of directors is counseled by an Executive Committee that proposes Company policies and is currently comprised by the following Directors: Mr. Eduardo Chadwick Claro, Mr. José Antonio Garcés Silva (junior), Mr. Gonzalo Said Handal, and Mr. Salvador Said Somavía, who were elected during the ordinary Board Meeting held on April 27, 2021. The Executive Committee is also comprised by the Chairman of the Board, Mr. Juan Claro González and our chief executive officer. This committee meets permanently throughout the year and normally holds one or two monthly sessions.

Directors’ Committee

Pursuant to Article 50 bis of Chilean Company Law N°18,046 and in accordance with the dispositions of Circular N°1,956 of the Financial Market Commission (Comisión para el Mercado Financiero – “CMF”) a new Directors’ Committee was elected during the Board Meeting held on April 27, 2021, applying the same election criteria set forth by Circular N°1,956. The directors Mr. Domingo Cruzat Amunátegui and Mr. Gonzalo Parot Palma (both as Independent Directors), and Mr. Salvador Said Somavía comprised the Committee. Mr. Gonzalo Parot Palma is the Chairman of the Company’s Directors’ Committee.

The duties performed by this Committee during 2022, following the same categorization of faculties and responsibilities established by Article 50 bis of Law N°18,046, were the following:

● Subject to the duties of the Audit Committee, examine the reports of external auditors, the balance sheets and other financial statements, presented by the administrators of the Company, and take a position on such reports before they were presented to the board of directors and shareholders for their approval.

● Subject to the duties of the Audit Committee, analyze and prepare proposal of external auditors and private rating agencies to the Board of Directors, which were suggested to the respective shareholders’ meeting.

● Examine background information regarding the operations referred to by Title XVI of Law N°18,046 (related parties’ transactions) and issue a report on those operations.

● Examine the salary systems and compensation plans of the Company’s managers, executive officers and employees.

● Review anonymous reports.

● Subject to the duties of the Audit Committee, review and approve the 20F and compliance with Section 404 of the Sarbanes-Oxley Act.

● Prepare the budget proposal for the Committee’s operation.

● Review internal audit reports.

● Subject to the duties of the Audit Committee, periodically interview the Company’s external auditors’ representatives.

● Review operating budget between related companies (production joint ventures).

● Review corporate insurances.

● Review and approve press releases that refer to the Company’s communications.

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● Review the Company’s four operations’ internal control standards, including critical risks in accounting processes, compliance of corporate policies, tax contingencies and status of internal and external audit observations.

● Analyze risk management model.

● Review Crime Prevention Model Law No. 20,393.

● Review advances in Cybersecurity and IT.

● Review judicial procedures and contingency analysis.

● Review tax status.

● Authorization of non-prohibited services.

● Analysis of impairment test.

● Review of “Oficio CMF”.

● Prepare the Annual Management Report.

Audit Committee

In accordance with NYSE and SEC requirements, the Board of Directors established an Audit Committee on July 26, 2005. The current Audit Committee was elected during the Board Meeting held on April 27, 2021. The Committee is comprised by the directors Mr. Domingo Cruzat Amunátegui, Mr. Gonzalo Parot Palma, and Mr. Salvador Said Somavía, with the Board of Directors determining that Mr. Domingo Cruzat Amunátegui and Mr. Gonzalo Parot Palma fulfill the independence standards set forth in Rule 10A-3 of the U.S. Exchange Act and applicable NYSE rules. Mr. Salvador Said Somavía has non-voting observer status, as described in Item 16D. Also, Mr. Parot Palma was determined the Board of Directors to qualify as the audit committee financial expert in accordance with the definitions of the SEC.

The resolutions, agreements and organization of the Audit Committee are governed by the rules relating to Board Meetings and to the Company’s Directors’ Committee. Since its creation, the sessions of the Audit Committee have been held with the Directors’ Committee since some of the functions are very similar and the members of both of these Committees are the same.

The Audit Committee Charter, which is available on our website: www.koandina.com, defines the duties and responsibilities of this Committee. The Audit Committee is responsible for analyzing the Company’s financial statements; supporting the financial supervision and rendering of accounts; ensuring management’s development of reliable internal controls; ensuring compliance by the audit department and external auditors of their respective roles; and reviewing auditing practices.

Culture, Ethics & Sustainability Committee

The Culture, Ethics and Sustainability Committee was established during the Board Meeting held on January 28, 2014. This Committee is comprised by four directors, who are appointed by the Board of Directors and will occupy their posts until their successors are elected, or until resignation or dismissal. The current members of the Culture, Ethics and Sustainability Committee are Mr. José Antonio Garcés Silva, Mr. Eduardo Chadwick Claro, Mrs. Carmen Román Arancibia and Mr. Gonzalo Said Handal. In addition, the Chairman of the Board also participates in this Committee.

D. EMPLOYEES

Overview

As of December 31, 2022, we had 19,281 employees (full time equivalent), including 5,286 in Chile (3,939 own and 1,347 outsourced), 8,250 in Brazil (7,933 own and 317 outsourced), 3,399 en Argentina (3,300 own y 99 outsourced) and 1,651 in Paraguay (1,155 own and 496 outsourced). From these employees, 1,106 were temporary employees in Chile, 582 were temporary employees in Argentina, 0 were temporary in Brazil and 130 were temporary employees in Paraguay. During the South American Summer, it is customary for us to increase the number of employees in order to meet peak demand. Additionally, in Vital Jugos, Vital Aguas, ECSA and Re-Ciclar we had 373, 77, 195 and 4 employees, respectively, for a total aggregate amount of 649 employees for those four companies. Additionally, the corporate office had 45 employees.

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As of December 31, 2022, 2,085, 1,147, 2.301 and 352 of our employees in Chile² , Brazil, Argentina and Paraguay, respectively, were members of unions. 437 of our employees in Vital Jugos, Vital Aguas and ECSA were members of unions.

Management believes that the Company has good relations with its employees.

The following table represents a breakdown of our employees for the years ended December 31, 2021 and 2022:

	2021
	Chile(1)			Brazil			Argentina(2)			Paraguay
	Total	Union	Non-Union	Total	Union	Non-Union	Total	Union	Non-Union	Total	Union	Non-Union
Executives	55	—	55	48	1	47	95	—	95	40	—	40
Technicians and professionals	674	42	631	1,108	94	1,014	731	10	721	324	52	272
Workers	3,561	1,827	1,734	6,734	806	5,928	1,874	1,754	120	1,122	356	766
Temporary workers	1,018	—	1,018	—	—	—	510	408	102	116	—	116
Total	5,308	1,869	3,439	7,890	901	6,989	3,210	2,172	1,038	1,602	408	1,194

	2022
	Chile(1)			Brazil			Argentina(2)			Paraguay
	Total	Union	Non-Union	Total	Union	Non-Union	Total	Union	Non-Union	Total	Union	Non-Union
Executives	56	—	56	7	—	7	96	—	96	42	—	42
Technicians and professionals	769	100	669	1,217	108	1,109	781	10	771	306	56	250
Workers	3,356	1,985	1,371	7,026	1,039	5,987	1,940	1,825	115	1,173	296	877
Temporary workers	1,106	—	1,106	—	—	—	582	466	116	130	—	130
Total	5,287	2,085	3,202	8,250	1,147	7,103	3,399	2,301	1,098	1,651	352	1,299

	2021
	Vital Aguas/Vital Jugos/Envases Central
	Total	Union	Non-Union
Executives	10	—	10
Technicians and professionals	233	175	58
Workers	243	223	20
Temporary workers	98	—	98
Total	584	398	186

	2022
	Vital Aguas/Vital Jugos/Envases Central
	Total	Union	Non-Union
Executives	10	2	8
Technicians and professionals	225	183	42
Workers	266	252	14
Temporary workers	144	—	144
Total	645	437	208

(1) Information for Chile includes only Andina Chile.

(2) Argentina includes AEASA.

Note: The number of employees is calculated as equivalent to full time hours, which means that extraordinary hours are considered as additional employees.

Chile

In Chile, we have continued with the severance indemnity provision that employees are entitled to according to collective bargaining agreements and current legislation, which grants all employees one month per year of service with certain limits. Additionally, we benefit our employees with a contribution to a supplementary health insurance system in addition to that paid by the worker, which contributes to reducing the health costs of their families. On the other hand, employees are required to contribute funds to finance their retirement pensions. These pension funds are mostly managed by private entities.

² Andina Chile.

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In Chile, 58.98% of employees with indefinite employment contracts are affiliated with a labor union organization, with a total of 13 labor unions organizations and a total of 17 collective bargaining agreements.

Brazil

In Brazil, 13.90% of our employees are members of labor unions. Collective bargaining agreements are negotiated on an industry-wide basis, although companies can negotiate special terms for their affiliates that apply to all employees in each jurisdiction where companies have a plant. Collective bargaining agreements are generally binding for one year.

With respect to Andina Brazil, there are 33 collective bargaining agreements in force as of December 31, 2022.

The agreements do not require us to increase wages on a collective basis. Selected increases were granted, however, according to inflation. We provide benefits to our employees according to the relevant legislation and to the collective bargaining agreements. Andina Brazil experienced its most recent work stoppages in December 2014, for three days organized by the drivers of internal buses in the Espirito Santo operation. However, as this operation no longer uses internal buses, such work stoppages are not expected to occur in the future.

Argentina

In Argentina, 67.7% of EDASA’s employees are parties to collective bargaining agreements and are represented by local workers’ unions associated with a national federation of unions. The Argentine Chamber of Non-Alcoholic Beverages of the Argentine Republic (Cámara Argentina de Industria de Bebidas sin Alcohol de la República Argentina) (the “Chamber”) and the Argentine Workers Federation of Carbonated Water (Federación Argentina de Trabajadores de Aguas Gaseosas) (the “Federation”) are parties to a collective bargaining agreement that began July 29, 2008. On July 28, 2022, the Chamber and the Federation entered into a new collective bargaining agreement establishing new salaries, new non- salary benefits and a new complementary regulation on company contributions.

Argentine law requires severance payments upon dismissal without cause in an amount at least equal to an average of one-month’s wages for each year of employment or a fraction thereof if employed longer than three months. Severance payments are subject to maximum and minimum amounts fixed by legislations and jurisprudence of the Justice Supreme Court of Argentina.

On December 13, 2019, a public emergency in occupational matters was declared, which was in force throughout 2021. Consequently, during this period in the event of an employee’s dismissal without just cause, the employees shall be entitled to receive double the compensation referred to in the preceding paragraph. Along with this, on March 31, 2020, by means of a Decree of Need and Urgency, the national government banned dismissals without just cause and on the grounds of lack or decrease in labor and force majeure. This measure was originally valid for 90 days, but then had successive extensions, such that the measure was in force throughout 2021, but not in 2022.

All employee contributions are made to the state social security system. Most of the health system in the Argentine territory is run by the unions through contributions from employees within the Collective Work Agreements (CCT — Convenios Colectivos de Trabajo).

Paraguay

In Paraguay, 21.3% of PARESA’s employees are members of labor unions. Collective bargaining agreements are negotiated with the company (Coca-Cola Paresa Paraguay). Unions can negotiate special terms for their members, which are applicable to all employees. Collective bargaining agreements generally have a two year term of duration.

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E. SHARE OWNERSHIP

The following table sets forth the amount and percentage of our shares beneficially owned by our directors and executive officers as of December 31, 2022.

	Series A						Series B
	Beneficial		Direct		Indirect		Beneficial		Direct		Indirect
	Owner	% Class	Owner	% Class	Owner	% Class	Owner	% Class	Owner	% Class	Owner	% Class
Shareholder
José Antonio Garcés Silva	—	—	—	—	65,487,786	13.84	—	—	—	—	13,028,183	2.75
Salvador Said Somavía	—	—	—	—	65,487,786	13.84	—	—	—	—	37,000,463	7.82
Gonzalo Said Handal	—	—	—	—	65,489,786	13.84	---	---	—	—	25,214,463	5.33
Eduardo Chadwick Claro	—	—	63,327	0.01	65,900,274	13.92	—	—	63,327	0.01	10,614,291	2.24

F. DISCLOSURE OF REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION

[RESERVED]

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ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

The following table sets forth certain information concerning beneficial ownership of our capital stock with respect to the principal shareholders known to us who maintain at least a 5% beneficial ownership in our shares and with respect to all of our directors and executive officers as a group as of December 31, 2022:

	Series A		Series B
Shareholder	Shares	% Class	Shares	% Class
Controlling shareholders(1)	262,428,986	55.45	85,920,727	18.15
The Bank of New York Mellon(2)	3,430,062	0.72	24,686,934	5.22
The Coca-Cola Company, directly or through subsidiaries	69,348,241	14.65	—	—
AFPs as a group (Chilean pension funds)	30,066,330	6.35	40,402,490	8.54
International Shareholders	17,879,834	3.78	131,928,273	27.88
Executive officers as a group	—	—	—	—
Directors as a group(3)	262,428,986	55.45	85,920,727	18.15

(1) For further information of our controlling shareholders, see below.

(2) Acting as Depositary for ADRs.

(3) Represents shares held directly and indirectly by Mr. Gonzalo Said Handal, Mr. José Antonio Garcés Silva (junior), Mr. Salvador Said Somavía and Mr. Eduardo Chadwick Claro.

As of December 31, 2022, approximately 96.22% of our Series A shares and 71.12% of our Series B shares are held in Chile. It is not practicable for us to determine the number of record holders in Chile.

Our controlling shareholders are: Inversiones SH Seis Limitada (controlled by family Said Handal), Inversiones Cabildo SpA (controlled by the Said Somavía family), Inversiones Nueva Delta S.A. (controlled by the Garcés Silva family), Inversiones Nueva Delta Dos S.A. (controlled by the Garcés Silva family), Inversiones Don Alfonso Limitada (controlled by María de la Luz Chadwick Hurtado), Inversiones El Campanario Limitada (controlled by María Soledad Chadwick Claro), Inversiones Los Robles Limitada (controlled by María Carolina Chadwick Claro), Inversiones Las Niñas Dos SpA (controlled by Eduardo Chadwick Claro).

Below is a summary of the members of our controlling shareholders or their related persons and the number of shares and percentage they hold in Andina (including series A and series B shares):

Controlling Shareholder Entity	Series A		Series B
Inversiones SH Seis Limitada(1)	65,489,786		25,164,863
Estate of Mr. Jaime Said Demaría (1)	—		49,600
Total of shares percentage of Andina:	13.8371	%	5.3275	%
Inversiones Cabildo SpA(2)	65,487,786		36,950,863
Estate of Mr. José Said Saffie(2)	—		49,600
Total of shares percentage of Andina:	13.8367	%	7.8178	%
Inversiones Nueva Delta S.A.(3)	58,927,056		—
Inversiones Nueva Delta Dos S.A.(3)	3,574,999		—
Inversiones Nueva Sofía Limitada(3)	2,985,731		12,978,583
José Antonio Garcés Silva(3)	—		49,600
Total of shares percentage of Andina:	13.8367	%	2.7527	%
Inversiones El Campanario Limitada(4)	6,475,069		—
Inversiones Los Robles Limitada(4)	6,475,069		6,638,363
Inversiones Las Niñas Dos SpA(4)	6,475,068		—
Inversiones Don Alfonso Limitada(4)	6,475,068		3,975,928
Eduardo Chadwick Claro(4)	63,327		63,327
Total of shares percentage of Andina:	13.9372	%	2.2560	%

(1) Inversiones SH Seis Limitada is controlled by the Said Handal family. The family members are: Jaime, Gonzalo, Javier, Bárbara, Marisol and Cristina Said Handal.

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(2) Inversiones Cabildo SpA is controlled by the Said Somavía family. The family members are: Isabel Margarita Somavía Dittborn and Salvador, Isabel, Constanza and Loreto Said Somavía.

(3) Inversiones Nueva Delta S.A., Inversiones Nueva Delta Dos S.A. and Inversiones Nueva Sofía Limitada are controlled by the Garcés Silva family. The family members are: José Antonio Garcés Silva (father), María Teresa Silva Silva and María Teresa, María Paz, José Antonio (Jr.), Matías Alberto and Andrés Sergio Garcés Silva.

(4) Inversiones Don Alfonso Limitada is controlled by María de la Luz Chadwick Hurtado; Inversiones El Campanario Limitada is controlled by María Soledad Chadwick Hurtado; Inversiones Los Robles Limitada is controlled by María Carolina Chadwick Claro; and Inversiones Las Niñas Dos SpA is controlled by Eduardo Chadwick Claro.

Our controlling shareholders act pursuant to a shareholders’ agreement that establishes that this group will exercise joint control in order to ensure a majority vote at shareholders’ meetings and board meetings. Our controlling shareholders pass resolutions with the simply majority approval except with respect to the following matters, which require an unanimous decision:

● carrying out of new business activities different from our current line of business (unless related to “ready to drink products” or Coca-Cola products);

● amendment of the number of our directors;

● issuances of new shares;

● spin-offs or mergers;

● capital increases (subject to certain indebtedness thresholds); and

● the joint acquisition of our Series A shares.

In connection with The Coca-Cola Company’s investment in us, The Coca-Cola Company and our controlling shareholders entered into a Shareholders’ Agreement dated September 5, 1996, as amended (the “Amended and Restated Shareholders Agreement or Shareholders’ Agreement”, included as exhibit to this annual report), providing for certain restrictions on the transfer of shares of our capital stock by the Coca-Cola Shareholders and our controlling shareholders. Specifically, our controlling shareholders are restricted from transferring its Series A shares without the prior authorization of The Coca-Cola Company. The Shareholders’ Agreement also provides for certain corporate governance matters, including the right of the Coca-Cola shareholders to elect two members of our board of directors as long as The Coca-Cola Company and its subsidiaries collectively own, in aggregate, a certain percentage of the Series A shares. In addition, in related agreements, our controlling shareholders granted The Coca-Cola Company an option, exercisable upon the occurrence of certain changes in the beneficial ownership of the controlling shareholders, to acquire 100% of the Series A shares held by our controlling shareholders at a price and in accordance with procedures established in such agreements.

B. RELATED PARTY TRANSACTIONS

In the ordinary course of our business, we engage in a variety of transactions with certain of our affiliates and related parties. Financial information concerning these transactions is set forth in note 12.3 to our consolidated financial statements and were carried out under the following conditions: (i) they were previously approved by the Company’s Board of Directors, with the abstention of the director involved in the corresponding case; (ii) the purpose of these transactions was to contribute to the Company’s interest; and (iii) they were consistent with prevailing market price, terms and conditions at the time of their approval. Our Directors’ Committee is responsible for evaluating transactions with related parties and for reporting these transactions to the full board of directors. See “Item 6. Directors, Senior Management and Employees—Directors’ Committee.”

Our management believes, to the best of its knowledge, that it has complied in all material respects with the Chilean Public Company law regarding to the transactions with related parties in effect as of December 31, 2022. There can be no assurance, however, that these regulations will not be modified in the future.

C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

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ITEM 8.FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See “Item 18 - Financial Statements” for our consolidated financial statements filed as part of this annual report.

Contingencies

We are party to certain legal proceedings that have arisen during the normal course of business, and we believe none of them are likely to have a material adverse effect on our financial condition. In accordance with accounting principles, the provisions regarding legal proceedings and other contingencies must be recorded if such procedures or contingencies are reasonably probable to be resolved against the Company and it is probable that an outflow of economic benefits will be required to settle the corresponding obligation, and a reliable estimate can be made of the amount of such obligation.

The following table represents accounting provisions made as of December 31, 2021 and 2022, for probable loss contingencies stemming from labor, tax, commercial and other litigation faced by our Company:

	For the year ended December 31,
	2021	2022
	Million Ch$
Chile	1,488	1,552
Brazil	53,966	45,707
Argentina	1,918	1,397
Paraguay	41	39
Total	57,412	48,695

For more details, see note 23 of our consolidated financial statements included herein.

Dividend Policy

The declaration and payment of dividends are determined, subject to the limitations set forth below, by the affirmative vote of a majority of our shareholders at a general shareholders’ meeting, based upon the recommendation of our board of directors.

At our annual ordinary shareholders’ meeting, our board of directors submits our annual financial statements for the preceding fiscal year together with reports prepared by our Audit Committee for approval by our shareholders. Once our shareholders have approved our annual financial statements, they determine the allocation of our net income, after provision for income taxes and legal reserves for the preceding year and considering the accumulation of losses from prior periods. All shares of our capital stock outstanding at the time a dividend or other distribution is declared are entitled to share equally in that dividend or other distribution, except that holders of our Series B shares are entitled to a dividend 10% greater than any dividend on Series A shares.

Pursuant to Chilean law, we must distribute cash dividends equal to at least 30% of our annual net income, calculated in accordance with IFRS. If we do not record any net income in a given year, we are not legally required to distribute dividends from accumulated earnings. At the general shareholders’ meeting held on April 20, 2023, our shareholders authorized our board of directors to distribute dividends as described as follows: (i) a first dividend for a total amount of Ch$28,823 million that will be paid beginning on May 9th, 2023 corresponding to Ch$29 (twenty-nine Chilean Pesos) for each Series A share and Ch$31.9 (thirty-one point nine Chilean Pesos) for each Series B share; and (ii) a second dividend for a total amount of Ch$49,695 million that will be paid beginning on May 26th, 2023 corresponding to Ch$50 (fifty Chilean Pesos) for each Series A share and Ch$55 (fifty five Chilean Pesos) for each Series B share.

During 2020, 2021 and 2022, our respective general shareholders’ meetings approved additional dividend payments to be paid from retained earnings, given our significant cash generation. These additional dividend payments for 2020, 2021 and 2022 are not indicative of whether or not additional dividend payments will be made in any future period.

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The following table sets forth the amount in Chilean pesos of dividends declared and paid per share each year and the U.S. dollar amounts paid to shareholders (each ADR represents six shares), on each of the respective payment dates:

			Aggregate Amount
Dividend		Fiscal year with	of Dividends Declared
Approval	Dividend	respect to which	and Paid	Series A		Series B
Date	payment Date	dividend was declared	(Ch$ millions)	Ch$ per share	US$ per share	Ch$ per share	US$ per share
12-27-2022	01-27-2023	2022	28,823	29.00	0.03613	31.90	0.03975
09-27-2022	10-28-2022	2022	28,823	29.00	0.03068	31.90	0.03375
07-26-2022	08-26-2022	2022	28,823	29.00	0.03187	31.90	0.03505
04-13-2022	04-26-2022	Accumulated earnings	187,847	189.00	0.22213	207.90	0.24434
12-21-2021	01-28-2022	2021	28,823	29.00	0.03629	31.90	0.03992
09-28-2021	10-29-2021	2021	28,823	29.00	0.03600	31.90	0.03960
04-15-2021	08-27-2021	Accumulated earnings	25,841	26.00	0.03312	28.60	0.03643
04-15-2021	05-28-2021	2020	25,841	26.00	0.03560	28.60	0.03916
12-22-2020	01-29-2021	2020	25,841	26.00	0.03507	28.60	0.03858
10-27-2020	11-24-2020	2020	25,841	26.00	0.03394	28.60	0.03734
02-25-2020	08-28-2020	Accumulated earnings	25,841	26.00	0.03315	28.60	0.03647
02-25-2020	05-29-2020	2019	25,841	26.00	0.03199	28.60	0.03519
12-20-2019	01-23-2020	2019	22,462	22.60	0.02927	24.86	0.03220

At our general shareholders’ meeting held on April 20, 2023, the distribution of dividends corresponding to the year 2022 were approved. The general shareholders’ meeting approved to distribute dividends as described as follows: (i) a first dividend for a total amount of Ch$28,823 million that will be paid beginning on May 9th, 2023 corresponding to Ch$29 (twenty-nine Chilean Pesos) for each Series A share and Ch$31.9 (thirty-one point nine Chilean Pesos) for each Series B share; and (ii) a second dividend for a total amount of Ch$49,695 million that will be paid beginning on May 26th, 2023 corresponding to Ch$50 (fifty Chilean Pesos) for each Series A share and Ch$55 (fifty five Chilean Pesos) for each Series B share.

B. SIGNIFICANT CHANGES

We are not aware of any changes bearing upon our financial condition since the date of the financial statements included in this annual report.

ITEM 9.THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

Our common shares are listed and traded on the Santiago Stock Exchange and on the Bolsa Electrónica de Chile (the Chilean Electronic Stock Exchange) and, until October 2018, were listed on the Bolsa de Corredores de Valparaiso (the Valparaiso Brokers Stock Exchange), which closed operations in October 2018.

Also, our common shares have been traded in the United States on the New York Stock Exchange (“NYSE”) since July 14, 1994 in the form of ADRs, which represent six common shares each. The Depositary for the ADRs is The Bank of New York Mellon Corporation.

The total number of registered ADR holders we had at December 2022 was 27 (20 in the Series A ADRs and 7 in the Series B ADRs). As of that date the ADRs represented 2.97% of the total number of our issued and outstanding shares. On December 31, 2022 the closing price for the Series A shares on the Santiago Stock Exchange was Ch$1,640.00 per share (US$ 10.86 per Series A ADR) and Ch$2,079.90 for the Series B shares (US$ 14.51 per Series B ADR). At December 31, 2022, there were 571,677 Series A ADRs (equivalent to 3,430,062 Series A shares) and 4,114,489 Series B ADRs (equivalent to 24,686,934 Series B shares).

Trading activity on the Santiago Stock Exchange is on average substantially less than that on the principal national securities exchanges in the United States.

Other than as previously discussed in “Item 7 - Major Shareholders”, we are not aware of any other existing contracts or documents that impose material limitations or qualifications on the rights of shareholders of our listed securities.

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B. PLAN OF DISTRIBUTION

Not applicable.

C. MARKETS

See “Item 9. The Offer and Listing—A. Offer and Listing Details.”

D. SELLING SHAREHOLDERS

Not applicable.

E. DILUTION

Not applicable.

ITEM 10.ADDITIONAL INFORMATION

A. SHARE CAPITAL

Not applicable.

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

Our bylaws (“Estatutos”) are included as an exhibit to this annual report, and are also available on our website www.koandina.com, under Corporate Governance/Board of Directors/Deeds of Incorporation. The following is a summary of the material provisions of our bylaws. The last amendment of our bylaws was approved on July 12, 2012.

Organization

We are a publicly held company and were incorporated on February 7, 1946. Our legal domicile is the city of Santiago, Chile, notwithstanding the special domiciles of offices, agencies or branches that are established in the country as well as abroad. Our duration is indefinite.

Purposes

Our corporate purposes are to execute and develop the following:

● Develop one or more industrial establishments dedicated to the business, operations and activities to manufacture, produce, transform, bottle, can, distribute, transport, import, export, purchase, sell and market in general, in any form and in any way, any type of food product and in particular any type of mineral water, juice, beverage and drink in general or other similar products, and raw materials or semi-finished materials used in such activities and/or products complementary or related to the preceding businesses and activities;

● Develop one or more agricultural or agro industrial establishments and farmland dedicated to the business, operations and development of agricultural activities and agro industry in general;

● Produce, transform, distribute, transport, import, export, purchase, sell and market in general, in any form and in any way, any type of agricultural products and/or agro industrial products and raw materials, or semi-finished materials used in such activities, and/or products complementary or related to the preceding activities;

● Manufacture, distribute, transport, import, export, purchase, sell and market in general, in any form and in any way, any type of container; and execute and develop any type of material recycling process and activity;

● Accept from and/or grant the representation of trademarks, products and/or licenses related to such businesses, activities, operations and products to national or foreign companies;

● Provide any type of service and/or technical assistance in any way related to the goods, products, businesses and activities referred to in the preceding letters;

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● Invest cash surplus, even in the capital market; and

● In general, undertake all other businesses and activities supplementary or linked to the above mentioned operations.

We may execute our objectives directly or by participating as a partner or shareholder in other companies or by acquiring rights or interests in any other type of association related to the aforementioned activities.

Voting Rights

Our capital equity is divided into Series A shares and Series B shares, both preferred and with no par value, whose features, rights and privileges are the following:

● The preference of Series A shares consists solely of the right to elect twelve out of the fourteen board members of the Company. Series A shares are entitled to full voting rights without limitations.

● The preference of Series B shares consists solely of the right to receive all and any of the per share dividends we may distribute, whether temporary, definitive, minimum mandatory, additional, or eventual, increased by 10%. Series B shares are entitled to a limited voting right, voting only with respect to the election of two board members for the Company.

● The preferences of Series A and B shares will remain in effect through December 31, 2130. Once this period has expired, Series A and B will be eliminated and the shares which comprise them shall automatically become common shares without any preferences whatsoever, therefore eliminating the division of shares into series.

Board of Directors and Shareholder Meetings

The members of the board of Directors are proposed and elected every three years during the general annual shareholders’ meeting. Separate voting of the Series A and Series B shareholder elect board members. As mentioned, Series A shares elect twelve directors, and Series B shares elect two Directors.

Board members are elected by separate voting at Series A and Series B shareholders’ meeting and will hold their offices for three years with the possibility to be re-elected for an indefinite number of periods. Even though we have not established a formal process that allows our shareholders to communicate with the directors, shareholders desiring to do so may share their opinions, considerations or recommendations before or during the corresponding shareholders’ meeting which will be heard and attended by the Chairman of the Board, or by the Chief Executive Officer, as the case may be, and any such recommendations will be submitted for resolution by the shareholders in attendance during the meeting.

Regular general shareholders’ meetings are held once a year within the first four months following the date of the annual balance sheet. We prepare a balance sheet annually on our operations as of December 31, which is presented together with the profit and loss statement, the report by the auditors and annual report to the respective shareholders’ meeting. The board sends a copy of the balance sheet, annual report, report by the auditors and respective notes to each of the shareholders registered in the registry no later than by the date the first summons is published. Special shareholders’ meetings may be held at any time according to corporate needs and to discuss and decide upon any matter within the competence thereof, provided it is indicated in the summons. Being a shareholder of the Company is the only condition for entry to a shareholder’s meeting.

C. MATERIAL CONTRACTS

See “Item 4. Information on the Company - Bottler Agreements and Item 5. Operating and Financial Review and Prospects - Summary of Significant Debt Instruments”.

D. EXCHANGE CONTROLS

Foreign Investment and Exchange Controls in Chile

The Central Bank is responsible, among other matters, for setting monetary policies and exchange controls in Chile. As of April 19, 2001, the Chilean Central Bank (“CCB”) eliminated prior foreign exchange controls, imposed certain reporting requirements and determined that certain operations be conducted through the Formal Exchange Market (“FEM”). The main purpose of these amendments, as declared by the Central Bank, is to facilitate the flow of capital into Chile and outside the country and to foster foreign investment.

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Equity investments in Chile (including investments in stock) by non-resident persons or entities must comply with some existing exchange control restrictions.

Any foreign individual or legal entity, as well as Chileans with residence abroad, can invest in Chile through the New Direct Foreign Investment Statute or by Chapter XIV of the Foreign Exchange Regulations of the Central Bank.

Under the New Direct Foreign Investment Statute, any legal entity or individual that qualifies as foreign investor under the terms of the aforementioned Statute, may request a certificate to be issued by the Foreign Investment Promotion Agency, confirming its status as foreign investor, and enabling access to the new foreign investment regime.

During 2001, the CCB eliminated certain exchange controls. For instance, it revoked Chapter XXVI of the CFER, which regulated the issuance and placement of ADRs by Chilean corporations. Pursuant to the new rules, the Central Bank’s approval is no longer a pre-condition for ADR issuances or foreign investment contracts with the CCB. ADR issuances are now regarded as an ordinary foreign investment, and the only requirements are that the CCB be informed of the transaction, by fulfilling the rules of Chapter XIV of the CFER, that mainly establishes that the monies come in or leave the country exclusively through the Formal Exchange Market, if the recipient of the investment decides to enter the foreign currency to the country or if it carries out payments or remittances from Chile.

Notwithstanding these changes, exchange transactions authorized prior to April 19, 2001 remained subject to the rules in force as of the date of such transactions. The new exchange regime did not affect Chapter XXVI of the CFER and the Foreign Investment Contract (“FIC”) between Andina, the Central Bank and The Bank of New York Mellon (as Depositary of the shares represented by ADRs). Notwithstanding the previous, the parties to the FIC may choose to adopt the norms imposed by the CCB, resigning to those of the FIC, and which has been the option we have taken until this date. The FIC is the agreement by which access to the FEM is given to the Depositary and ADR holders. The FIC adopted the dispositions of Chapter XXVI and was celebrated pursuant to Article 47 of the Constitutional Organic Act of the CCB.

Under Chapter XXVI of the CFER, if the funds to purchase the common shares underlying the ADRs are brought into Chile, the Depositary must deliver, on behalf of foreign investors, an annex providing information on the transaction to the Formal Exchange Market entity involved, together with a letter instructing such entity to deliver the foreign currency or the equivalent amount in pesos, on or before the date the foreign currency is brought or is to be brought into Chile.

Repatriation of amounts received with respect to deposited common shares or common shares withdrawn from deposits on surrender of ADRs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying common shares and any rights arising there from) need be made through the FEM. The FEM entity intervening in the repatriation must provide certain information to the CCB on the following banking business day.

Under Chapter XXVI and the FIC, the CCB agreed to grant to the Depositary, on behalf of ADR holders, and to any investor not residing nor domiciled in Chile who acquire shares or replace ADRs for common stock, which we refer to as “Withdrawn Shares”, FEM access to convert Chilean pesos into U.S. dollars and to remit those dollars outside Chile including amounts received as: (i) cash dividends; (ii) proceeds from the sale in Chile of Withdrawn Shares; (iii) proceeds from the sale in Chile of preemptive rights to subscribe for additional shares; (iv) proceeds from the liquidation, merger or consolidation of Andina; (v) proceeds resulting from capital decreases or earnings or liquidations; and (vi) other distributions, including those in respect of any re-capitalization resulting from holding shares, ADRs or by Withdrawn Shares.

The guarantee of FEM access under the FIC will extend to the participants of the ADR offering if the following requirements are met: (i) that the funds to purchase the shares underlying the ADRs are brought into Chile and converted into Chilean pesos through the FEM; (ii) that the purchase of the underlying shares is made on a Chilean stock exchange; and (iii) that within five business days from the conversion of the funds into Chilean pesos, the CCB is informed that the funds converted were used to purchase the underlying shares, if those funds are not invested in shares within that period, it can access the FEM to reacquire foreign currency, provided that the request is submitted to the CCB within seven banking business days of the initial conversion into pesos.

Chapter XXVI provides that FEM access in connection with dividend payments is conditioned to our certifying to the CCB that a dividend payment has been made and that any applicable tax has been withheld. Chapter XXVI also provides that FEM access in connection with the sale of Withdrawn Shares, or distribution thereon, is conditioned upon receipt by the CCB (i) a certificate by the Depositary or custodian, as the case may be, that the shares have been withdrawn in exchange for delivery of the appropriate ADRs; and (ii) a waiver of the benefits of the FIC with respect to ADRs (except in connection with the proposed sale of the shares) until the Withdrawn Shares are re-deposited.

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FEM access under any of the circumstances described above is not automatic. Pursuant to Chapter XXVI, such access needs the CCB’s approval on a request submitted to that end through a banking institution established in Chile. The FIC provides that if the CCB has not acted upon the request within seven banking days, the request is deemed to have been granted.

Under current Chilean law, the CCB cannot unilaterally change the FIC. The Chilean Courts (although not binding on future judicial decisions) also have established that the FIC cannot be annulled by future legislative changes. No assurance can be given, however, that additional Chilean restrictions applicable to the holders of ADRs, to the disposition of underlying shares, or to the repatriation of proceeds from their disposition, will not be imposed in the future; nor can there be any assessment of the duration or impact of any restrictions that might be imposed. If for whatever reason, including changes in the FIC or Chilean law, the Depositary is prevented from converting Chilean pesos into U.S. dollars, the investors shall receive dividends or other payments in Chilean pesos, which shall subject the investors to exchange rate risks. It cannot be guaranteed that the CFER, as amended, or any other exchange regulation will not be amended in the future, or that if new regulations are enacted that they shall have no material bearing on Andina or the ADR holders.

No assurance can be given that Andina will be able to purchase U.S. dollars in the local exchange market at any time in the future, nor that any such purchase will be for the amounts necessary to pay any sum due under any of its capital or debt instruments. Likewise, it is not possible to guarantee that changes to the regulations of the CCB or other legislative changes relating to exchange controls will not restrict or impair Andina’s ability to purchase U.S. dollars in order to make payment on its debt instruments.

E. TAXATION

Tax Considerations Relating to Equity Securities

Chilean Tax Considerations.

The following discussion summarizes the material Chilean income tax consequences of an investment in Andina’s stock or ADRs by an individual who is not domiciled or resident in Chile or a legal entity that is not organized under the laws of Chile and does not have a permanent establishment in Chile (“foreign holder”). This discussion is based upon Chilean income tax laws presently in force and administrative jurisprudence, including Ruling No. 324 of January 29, 1990 of the Servicio de Impuestos Internos (the Chilean Internal Revenue Service or “SII”) and other applicable regulations and rulings that are subject to change without notice. The discussion is not intended as tax advice to any particular investor, which can be rendered only in light of that investor’s particular tax situation. Each investor or potential investor is encouraged to seek independent tax advice with respect to consequences of investing in Andina’s stock or ADRs.

Dividends

Dividend distributions to investors who are juridical or natural persons residing or domiciled abroad, are affected by an additional tax (“withholding at the source”) at a rate of 35%, with the right to credit for corporate income tax (First Category Tax) paid by Andina (today a rate of 27%). However, distributions made to investors residing or domiciled in countries that do not have a treaty to avoid double taxation with Chile, are taxed by an additional withholding equivalent to 35% of the corporate income tax credit, thus limiting the credit for this tax at 65%. This additional withholding does not apply to distributions made to residents of countries that have a treaty in force with Chile, which may allocate 100% of the credit. Until December 31, 2026, this additional withholding also does not apply to distributions made to shareholders who are residents of countries that have signed a treaty to avoid double taxation but was not in force to the extent that it was signed prior to January 1, 2020.

Distributions made to investors residing or domiciled in Chile are taxed by personal taxes (“Supplementary Global Tax”) which have progressive rates ranging from 0% to 40%. The tax credit limitation also applies to these investors; thus, they are taxed with an additional tax (“debit”) equivalent to 35% of the corporate tax credit.

Capital Gains

Gains recognized from the sale or exchange of ADRs by a foreign holder outside of Chile are not subject to Chilean taxation. Capital gains generated from the sale of shares are subject to general taxation, unless they are shares that are sold on the stock exchange and that have been acquired on the stock exchange, or are shares of first issue, in which case gains are not affected by income taxation in Chile. Regarding this exception, a bill is currently being discussed that would derogate it.

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The tax cost of common shares received in exchange for ADRs (“conversion”) is determined in accordance with the valuation procedure set out in the Deposit Agreement, which values common shares at the highest selling price according to transactions on the Santiago Stock Exchange on the date of withdrawal of common shares. Consequently, the conversion of ADRs into shares of common stock, and the immediate sale of the shares for the value established under the Deposit Agreement, will not generate a capital gain subject to taxation in Chile. However, in the case where the sale of the shares is made on a day that is different than the date in which the conversion is recorded, capital gain subject to taxation in Chile may be generated. In connection thereto, on October 1, 1999 the SII issued Ruling No. 3,708 whereby it allowed Chilean issuers of ADRs to amend the deposit agreements in order to include a clause that states that, in the case that the exchanged shares are sold by the ADRs’ holders on a Chilean stock exchange either on the same day in which the exchange is recorded or within the two business days prior to such date, the acquisition price of such exchanged shares shall be the price registered in the invoice issued by the stock broker that participated in the sale transaction. As this amendment has been included in the Deposit Agreement, the capital gain that may be generated if the date of conversion is different than the date of sale, would not be subject to taxation, to the extent that the SII’s criterion is maintained and the contributor in good faith adopts this criterion, which the contributor must certify to the satisfaction of the authority in case of observation.

The distribution and exercise of preemptive rights relating to the shares of common stock are not subject to taxation in Chile. Any capital gain from the sale or assignment of preemptive rights will be subject to general taxation.

Other Chilean Taxes

The transfer of ADRs by a foreign holder is not subject to inheritance tax or donation tax. These taxes may only apply in case of donation or hereditary transfer of common shares.

The issuance, registration or transfer of ADRs or common shares is not taxed with Stamp and Seal Tax or any other similar tax.

Withholding Tax Certificates

Upon request, we will provide to foreign holders appropriate documentation evidencing the payment of Chilean withholding taxes applied in Chile on earnings distributed to foreign holders.

U.S. Federal Income Tax Considerations Relating to ADRs or Shares of Common Stock.

The following discussion summarizes certain U.S. federal income tax consequences of an investment in ADRs or shares of common stock. This discussion is based upon U.S. federal income tax laws presently in force. The discussion is not a full description of all tax considerations that may be relevant to a decision to purchase ADRs or shares of common stock. In particular, the discussion is directed only to U.S. holders (as defined below) that hold ADRs or shares of common stock as capital assets, and it does not address the tax treatment of holders that are subject to special tax rules under the Internal Revenue Code of 1986 as amended (the “Code”), such as financial institutions, regulated investment companies, real estate investment trusts, partnerships or other pass-through entities, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, insurance companies, tax-exempt entities, persons holding ADRs or shares of common stock as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, holders that own or are deemed to own 10% or more of our shares (by vote or value), persons required to accelerate the recognition of any item of gross income with respect to ADRs or shares of common stock as a result of such income being recognized on an applicable financial statement, persons liable for alternative minimum tax or persons whose “functional currency” is not the U.S. dollar. Furthermore, the discussion below is based upon the provisions of the Code and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. In addition, the discussion below assumes that the Deposit Agreement, and all other related agreements, will be performed in accordance with their terms. If a partnership holds our ADRs or shares of common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partners in a partnership holding ADRs or shares of common stock should consult their tax advisors. This summary does not contain a detailed description of all the U.S. federal income tax consequences to a holder in light of its particular circumstances and does not address the Medicare tax on net investment income, U.S. federal estate and gift taxes or the effects of any state, local or non-United States tax laws.

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Prospective purchasers should consult their tax advisors about the federal, state, local and foreign tax consequences to them of the purchase, ownership and disposition of ADRs or shares of common stock.

As used herein, the term “U.S. holder” means a beneficial owner of ADRs or shares of common stock that is (i) an individual U.S. citizen or resident, (ii) a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust that: (a) is subject to the primary supervision of a court within the United States and with respect to which one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If the obligations contemplated by the Deposit Agreement are performed in accordance with its terms, ADR holders generally will be treated for U.S. federal income tax purposes as the owners of the shares of common stock represented by those ADRs. Deposits or withdrawals of shares of common stock by U.S. holders in exchange for ADRs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Cash Dividends and Other Distributions

Cash distributions (including the amount of any Chilean taxes withheld) paid to U.S. holders with respect to the ADRs or shares of common stock generally will be treated as dividend income to such U.S. holders, to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such income will be includable in the gross income of a U.S. holder as ordinary income on the day received by the Depositary, in the case of ADRs, or by the U.S. holder, in the case of shares of common stock. The dividends will not be eligible for the dividends received deduction allowed to corporations under the Code. Subject to applicable limitations (including a minimum holding period requirement), dividends received by non-corporate U.S. holders from a qualified foreign corporation may be treated as “qualified dividend income” that is subject to reduced rates of taxation. A foreign corporation is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares (or ADRs backed by such shares) that are readily tradable on an established securities market in the United States. U.S. Treasury Department guidance indicates that our ADRs (which are listed on the New York Stock Exchange), but not our shares of common stock, are readily tradable on an established securities market in the United States. Thus, we do not believe that dividends that we pay on our shares of our common stock that are not represented by ADRs currently meet the conditions required for these reduced tax rates. There also can be no assurance that our ADRs will be considered readily tradable on an established securities market in the United States in later years. Non-corporate U.S. holders should consult their own tax advisors regarding the application of these rules given their particular circumstances.

Dividends paid in Chilean pesos will be includable in income in a U.S. dollar amount based on the exchange rate in effect on the day of receipt by the Depositary, in the case of ADRs, or by the U.S. holder, in the case of shares of common stock, regardless of whether the Chilean pesos are converted into U.S. dollars. If the Chilean pesos received as dividends are not converted into U.S. dollars on the date of receipt, a U.S. holder will have a basis in the Chilean pesos equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the Chilean pesos will be treated as U.S. source ordinary income or loss, regardless of whether the pesos are converted into U.S. dollars.

Subject to certain conditions and limitations, including a minimum holding period requirement, any Chilean withholding tax (net of any credit for the corporate income tax) paid by or for the account of any U.S. holder may be eligible for credit against the U.S. holder’s U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid with respect to the ADRs or shares of common stock will generally be foreign source income and will generally constitute passive category income. However, recently issued U.S. Treasury regulations (the “Foreign Tax Credit Regulations”) impose additional requirements for foreign taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied. Instead of claiming a foreign tax credit, a U.S. holder may be able to deduct any Chilean withholding tax in computing its taxable income, subject to generally applicable limitations under U.S. law (including that a U.S. holder is not eligible for a deduction for otherwise creditable foreign income taxes paid or accrued in a taxable year if such U.S. holder claims a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year). The rules governing the foreign tax credit and deductions for foreign taxes are complex. Investors are urged to consult their tax advisors regarding the availability of the foreign tax credit or a deduction under their particular circumstances.

Distributions to U.S. holders of additional shares of common stock or preemptive rights with respect to shares of common stock that are made as part of a pro rata distribution to all shareholders of the Company generally should not be subject to U.S. federal income tax.

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To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the ADRs or shares of common stock, and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange. However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax principles. Therefore, a U.S. holder should expect that a distribution will generally be treated as a dividend (as discussed above).

Passive Foreign Investment Company

We do not believe that we are, for U.S. federal income tax purposes, a passive foreign investment company (a “PFIC”) and expect to continue our operations in such a manner that we will not be a PFIC. If, however, we are or become a PFIC, U.S. holders could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADRs or shares of common stock and on certain distributions, plus an interest charge on certain taxes treated as having been deferred by the U.S. holder under the PFIC rules of the U.S. federal income tax laws.

Non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

Capital Gains

U.S. holders that hold ADRs or shares of common stock as capital assets will recognize capital gain or loss for U.S. federal income tax purposes on the sale or other disposition of such ADRs or shares (or preemptive rights with respect to such shares) held by the U.S. holder or the Depositary. Capital gains of non-corporate U.S. holders (including individuals) derived with respect to capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder generally will be treated as U.S. source gain or loss. Consequently, in the case of a disposition of shares of common stock (which, unlike a disposition of ADRs, may be taxable in Chile), the U.S. holder may not be able to use a foreign tax credit for any Chilean tax imposed on the disposition unless such credit can be applied (subject to applicable limitations) against tax due on other income from foreign sources. However, pursuant to the Foreign Tax Credit Regulations, any such Chilean tax would generally not be a foreign income tax eligible for a foreign tax credit (regardless of any other income that a U.S. holder may have that is from foreign sources). In such case, however, the non-creditable Chilean tax may reduce the amount realized on the disposition of the shares. Investors are urged to consult their tax advisors regarding the Foreign Tax Credit Regulations and the availability of the foreign tax credit under their particular circumstances.

Information Reporting and Backup Withholding

In general, information reporting requirements will apply to dividends in respect of ADRs or shares of common stock or the proceeds received on the sale, exchange, or other disposition of ADRs or shares of common stock paid within the United States (and in certain cases, outside of the United States) to U.S. holders other than certain exempt recipients. Likewise, a backup withholding tax may apply to such payments if the U.S. holder fails to provide an accurate taxpayer identification number and a certification that it is not subject to backup withholding or fails to report interest and dividends required to be shown on its federal income tax returns. The amount of any backup withholding from a payment to a U.S. holder will be allowed as a refund or a credit against the U.S. holder’s U.S. federal income tax liability, provided the required information is furnished to the U.S. Internal Revenue Service.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENT BY EXPERTS

Not applicable.

H. DOCUMENTS ON DISPLAY

We are subject to the informational reporting requirements of the U.S. Securities Exchange Act of 1934, as amended, which requires that we file periodic reports and other information with the SEC. As a foreign private issuer, we file annual reports on Form 20-F as opposed to Form 10-K. We do not file quarterly reports on Form 10-Q but furnish quarterly reports and reports in relation to material events on Form 6-K. As a foreign private issuer, we are exempt from the rules under the U.S. Securities Exchange Act of 1934, as amended, prescribing the furnishing and content of proxy statements and short-swing profit disclosure and liability.

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You may read and copy all or any portion of the annual report or other information in our files in the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can also access to these documents through the SEC’s website at www.sec.gov, and access –and request– a hard copy of them through our corporate website www.koandina.com. You can also request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms.

We also file reports with the Chilean Comisión para el Mercado Financiero (“CMF”). You may read and copy any materials filed with the CMF directly from its website www.cmfchile.cl or from our corporate website www.koandina.com. The documents referred to in this annual report can be inspected at Miraflores 9153, Piso 7, Renca, Santiago, Chile.

I. SUBSIDIARY INFORMATION

Not applicable.

J. ANNUAL REPORT TO SECURITY HOLDERS

Not applicable.

ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The main sources of systematic risks that the Company is exposed to are: changes in interest rates and changes in currency exchange rates.

Particularly, interest rates increase, and currency exchange rates depreciation may affect the Company financial strategy given the various currency denominated debt the Company currently holds. To protect the Company against market volatility, hedging policies have been set with the objective to regulate the use of financial derivatives by management. The use of these instruments had been strictly designed for hedging purposes, leaving out any speculation and trading use.

Interest Rate Risk

The Company’s debt is mainly denominated in UF (local inflation indexed Chilean currency) and U.S. dollar fixed rate bonds. Bank debt represents a smaller proportion of the total debt and it’s denominated in various local currencies in either fixed or variable rates. Given that the main portion of the debt is in fixed rate, the main risk is the interest rate increase at the moment of refinancing mature debt.

On the other side, our cash is invested in certain short-term securities mainly in fixed interest rate.

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The following table provides information about the Company’s debt (bonds & bank debt) and short-term investments that have exposure to changes in interest rates as of December 31, 2022.

	Expected Maturity Date							Fair Value
						2028
	2023	2024	2025	2026	2027	Onwards	Total	Total
	(in millions Ch$)
Interest Earning Assets
Short term investments - Chile - CLP	71,690	—	—	—	—	—	71,690
Interest rate (weighted average)	0.20%	0.00%	0.00%	0.00%	0.00%	0.00%	0.20%
Short term investments - Chile - USD	9,161	—	—	—	—	—	9,161
Interest rate (weighted average)	2.4%	0.00%	0.00%	0.00%	0.00%	0.00%	2.4%
Short term investments - Brazil	66,661	—	—	—	—	—	66,661
Interest rate (weighted average)	12.39%	0.00%	0.00%	0.00%	0.00%	0.00%	12.39%
Short term investments - Argentina	26,650	—	—	—	—	—	26,650
Interest rate (weighted average)	40.18%	0.00%	0.00%	0.00%	0.00%	0.00%	40.18%
Interest Bearing Liabilities
International bonds (144A/RegS) (1)	320,184	—	—	—	—	251,344	571,528	510,698
Fixed Rate [US$] 144A Bonds	4.99%	0.00%	0.00%	0.00%	0.00%	3.95%	4.53%
Local Chilean Bonds (1)	20,584	15,748	16,553	10,988	4,863	463,972	532,708	565,678
Fixed Rate [UF] - Local Chilean Bonds (weighted average)	5.14%	5.72%	5.76%	5.39%	4.00%	3.37%	3.63%
Total public debt (Bonds)	340,768	15,748	16,553	10,988	4,863	715,316	1,104,236	1,076,376
Bank debt - Chile	689	9,366	4,000	—	—	—	14,055
Weighted average interest rate Ch$	0.98%	6.28%	2.00%	0.00%	0.00%	0.00%	5.05%
Total bank debt	689	9,366	4,000	—	—	—	14,055

(1) Includes issuance deferred costs:

International Bonds Issuance Costs: Current: Ch$589 million, Non-Current: Ch$5,476 million.

Local Chilean Bonds: Current: Ch$121 million, Non-Current: Ch$921 million.

Foreign Currency Risk

As of December 31, 2022, the only foreign currency used by the Company to finance its operation is the U.S dollar, all the rest of the Company’s debt is denominated in local operation currencies (UF, Chilean peso, Argentinean peso, Brazilian real and Paraguayan guaraníes).

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The following table summarizes the financial instruments held to December 31, 2022, denominated in U.S. dollars:

						2028		Fair
(Denominated in U.S. Dollars instruments)	2023	2024	2025	2026	2027	Onwards	Total	Value
	(in millions Ch$)
Assets
Cash and cash equivalents	14,266	—	—	—	—	—	14,266	14,266
Liabilities
Bonds debt (1)	320,184	—	—	—	—	251,344	571,528	510,698
Leasing debt	1,209	770	842	—	514	335	3,671	3,671
Net debt	335,660	770	842	—	514	251,679	589,465	528,635

(1) Includes issuance deferred costs:

International Bonds Issuance Costs: Current: Ch$589 million, Non-Current: Ch$5,476 million.

In order to protect the Company from the effects on results due to the volatility of the Brazilian real against the U.S. dollar (bond due 2023), we have entered into currency swaps that cover 99% of our dollar-denominated financial obligations, thereby mitigating our exchange rate exposure. Additionally, to protect the Company from the effects on results due to the volatility of the Chilean peso against the U.S. dollar (bond due 2023 and bond due 2050), derivatives have been contracted (cross currency swaps) to fully redenominate the US dollar-denominated financial obligations to UF’s.

As of December 31, 2022, the Company’s net exposure to existing assets and liabilities in foreign currencies, discounting our derivatives contracts, was Ch$13,158 million.

ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. DEBT SECURITIES

Not applicable.

B. WARRANTS AND RIGHTS

Not applicable.

C. OTHER SECURITIES

Not applicable.

D. AMERICAN DEPOSITARY RECEIPTS

Fees and Charges

The Bank of New York Mellon serves as the depositary for our ADRs. ADR holders are required to pay various fees to the depositary, and the depositary may refuse to provide any service for which a fee is assessed until the applicable fee has been paid.

ADR holders are required to pay the depositary amounts in respect of expenses incurred by the depositary or its agents on behalf of ADR holders, including expenses arising from compliance with applicable law, taxes or other governmental charges, or conversion of foreign currency into U.S. dollars. The depositary may decide in its sole discretion to seek payment by either billing holders or by deducting the fee from one or more cash dividends or other cash distributions.

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ADR holders are also required to pay additional fees for certain services provided by the depositary, as set forth in the table below.

Depositary service	Fee payable by ADR holders
Issuance and delivery of ADRs, including in connection with share distributions	Up to US$5.00 per 100 ADSs (or portion thereof)
Withdrawal of shares underlying ADRs	Up to US$5.00 per 100 ADSs (or portion thereof)
Registration for the transfer of shares	Registration or transfer fees that may from time to time be in effect
Cash distribution fees	US$0.02 or less per ADS
Transfers made pursuant to terms of Deposit Agreement	Fee not in excess of US$1.50 for an ADR

In addition, holders may be required to pay a fee for the distribution or sale of securities. Such fee (which may be deducted from such proceeds) would be for an amount equal to the lesser of (1) the fee for the issuance of ADRs that would be charged as if the securities were treated as deposited shares and (2) the amount of such proceeds.

Fees Incurred in Past Annual Period

From January 1, 2022 to December 31, 2022, we received US$5,609.37 from the depositary.

Fees to be Paid in the Future

The Bank of New York Mellon, as depositary, has agreed to reimburse us for expenses they incurred that are related to establishment and maintenance expenses of the ADR program. The depositary has agreed to reimburse us for continuing annual stock exchange listing fees. The depositary has also agreed to waive the standard out-of-pocket maintenance costs for the ADRs programs, which consist of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse us annually for certain investor relationship programs or special investor relations promotional activities. In certain instances, the depositary has agreed to provide additional payments to us based on any applicable performance indicators relating to the ADR facility. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors.

The depositary collects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

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PART II

ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

In 1996, our shareholders approved the reclassification of our common stock into two new series of shares. Pursuant to the reclassification, each outstanding share of our common stock was replaced by one newly issued Series A share and one newly issued Series B share.

The Series A and Series B shares are principally differentiated by their voting and economic rights. The modification of our bylaws as of June 25, 2012, increased the number of directors from 7 to 14. The holders of the Series A shares have full voting power and are entitled to elect 12 of 14 members of the board of directors, and the holders of the Series B shares have no voting rights but for the right to elect 2 members of the board of directors. In addition, holders of Series B shares are entitled to a dividend 10% greater than any dividend on Series A shares.

After the reclassification, the Superintendence of Pension Fund Managers (Superintendencia de Administradores de Fondos de Pensiones) decreed that Chilean pension funds would not be permitted to acquire Series B Shares due to their limited voting rights. In 2004, however, the Superintendence reversed, and approved Series B shares as investment instruments for Chilean Pension funds. Series A shares have always been eligible as investment instruments for Chilean pensions funds.

ITEM 15.CONTROLS AND DISCLOSURE PROCEDURES

Disclosure Controls and Procedures

We have evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of December 31, 2022. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a—15(f) and 15d—15(f) under the Securities Exchange Act of 1934, as amended. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB. Our internal control over financial reporting includes those policies and procedures that (i) pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions or our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS as issued by the IASB, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on our evaluation under the framework in Internal Controls—Integrated framework (2013) issued by the Committee of Sponsoring Organizations of the Tread way Commission, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by our registered independent accounting firm, which opinion is stated in their report, included on pages F-2 and F-3 herein.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required under Rules 13a-15 or 15d-15 that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.[Reserved]

ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has designated Mr. Gonzalo Parot Palma as our Audit Committee Financial Expert, as defined in the instructions to Item 16A of Form 20-F. Our board of directors has also determined that Mr. Domingo Cruzat Amunátegui and Mr. Gonzalo Parot Palma fulfills the independence standards set forth in Rule 10A-3 of the U.S. Exchange Act and applicable NYSE rules.

ITEM 16B.CODE OF ETHICS

We have adopted a Code of Ethics that constitutes a code of ethics for our directors and employees. This Code applies to our Board of Directors, chief executive officer and all senior financial officers of our Company, including the chief financial officer, or any other persons performing similar functions, as well as to all other officers and employees of the Company. Our Code of Ethics is available on our website www.koandina.com. If we make any substantive amendment to the Code or grant any waivers, including any implicit waiver, from a provision of the Code, we will disclose the nature of such amendment or waiver on the above mentioned website. On December 22, 2020, we amended our Code of Ethics to incorporate provisions related to criminal liability of legal entities, in accordance with Chilean Law N° 20,393, Argentine Law N° 27,401, and other compliance and anti-bribery provisions, including the Sarbanes-Oxley Act and the U.S. Foreign Corrupt Practices Act (FCPA). Additionally, we incorporated other provisions, making explicit reference to the importance of equal treatment and respect for each individual, diversity and non-discrimination, a healthy working environment, protection of our natural resources, sustainability, among others.

ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees Paid to Independent Public Accountants

The following table sets forth, for each of the years indicated, the kinds of fees paid to our external auditors and the percentage of each of the fees out of the total amount paid to them.

	Year ended December 31,
	2021			2022
	Fees millions	% of		Fees	% of
Services rendered	Ch$	Total Fees		millions Ch$	Total Fees
Audit fees (1)	935	98.4	%	929	100.0	%
Audit-related fees	—	—		—	—
Tax fees	2	0.2	%	—	—
All other fees (2)	13	1.4	%	—	—
Total	950	100	%	929	100	%

(1) Fees for audit services and related expenses, including fees associated with the Company’s annual audit, including the integrated audit of internal control over financial reporting, the reviews of the Company’s quarterly reports required to be filed in Chile and annual statutory audits required in Chile and internationally.

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(2) Fees for all other services and related expenses not included above and related to the audit of the Company’s sustainability reports.

Directors’ Committee and Audit Committee Pre-Approval Policies and Procedures

We have adopted pre-approval policies and procedures under which all non-audit services provided by our external auditors must be pre-approved by our Directors’ Committee. Once the proposed service is approved, our subsidiaries or we formalize the engagement of services. In addition, the members of our board of directors are briefed on matters discussed by the Directors’ Committee.

ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Our Audit Committee is comprised of Gonzalo Parot Palma, Salvador Said Somavía and Domingo Cruzat Amunátegui.

We disclose that, with respect to the current membership of Mr. Salvador Said Somavía on our Audit Committee, the Company has relied on the exemption from the independence requirements provided by Rule 10A-3(b)(1)(iv)(D) of the Securities and Exchange Act of 1934, as amended. Pursuant to said rule, a member of the Committee who is an affiliate of the foreign private issuer or a representative of such an affiliate that has only observer status on, and is not a voting member or the chair of, the audit committee, and neither the member nor the affiliate is an executive officer of the foreign private issuer, may be exempted from the independence requirement.

Mr. Salvador Said Somavía meets, for the duration of his membership, the requirements of Rule 10A-3(b)(1)(iv)(D) because he (i) is a representative of our controlling shareholder group; (ii) has an observer-only status on our Audit Committee; (iii) is not an officer of the Company or any of our subsidiaries; and (iv) does not receive, directly or indirectly, compensation from us or any of our subsidiaries other than in his capacity as member of our Audit Committee.

Our reliance on the exemption provided by Rule 10A-3 of the Exchange Act, with respect to Mr. Salvador Said Somavía, would not materially adversely affect the ability of our Audit Committee to act independently.

ITEM 16E.PURCHASERS OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

During 2022, no issuer or affiliated parties made purchases pursuant to publicly announced plans or programs or not pursuant to such plans.

ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

105

ITEM 16G.CORPORATE GOVERNANCE

NYSE and Chilean Corporate Governance Requirements

The following table sets forth significant differences between Chilean corporate governance practices and those corporate governance practices followed by domestic corporations under NYSE listing standards. Significant ways in which our corporate governance practices differ from those followed by U.S. companies under NYSE listing standards are also publicly available on our website at www.koandina.com.

REQUIREMENT	NYSE REQUIREMENTS FOR US LISTED COMPANIES	CHILEAN LAW REQUIREMENTS AND COMPANY PRACTICE
Independent Directors	Under NYSE rules, the board of directors is required to have a majority of independent directors. However, “controlled companies,” as defined under NYSE rules, are exempt from this requirement.	Under Chilean law, there is no legal obligation to have a Board of Directors composed of a majority of independent members. Our company does not have a majority independent board of directors, and as a “controlled company,” we would be exempt from NYSE’s requirement to do so.
	Article 50 bis of the Corporations Law requires appointing at least one independent director. Chilean Law considers independent such director that within the last 18 months is not involved in certain circumstances, such as: having an economic interest in the company or other group, having a relationship with such persons, be director of nonprofit organizations, among others, and comply with a declaration of independence. We have two such directors.
Executive Sessions of Independent Directors	Independent directors of a NYSE-listed company must have meetings at which only the independent directors are present.	No similar legal obligation exists under Chilean law. Under Chilean law, the position of director of a corporation is incompatible with the position of manager, auditor, accountant or president of the company. The Non-Management Director does not exist under Chilean law. Directors, however, are required to convene in legally established meetings to resolve matters required by Chilean Corporation Law. Since Non-Management Director does not exist under Chilean law, it is not possible to comply with the Section 303A.03.
Nominations of Directors	Listed companies must have a Nominating/Corporate Governance Committee composed entirely of independent directors. However, “controlled companies,” as defined under NYSE rules, are exempt from this requirement.	There is no similar legal obligation under Chilean law. Andina has a Directors’ Committee whose functions are set by Chilean Corporation Law. Our Company does not have a Nominating/Corporate Governance Committee composed entirely of independent directors and as a “controlled company,” we would be exempt from NYSE’s requirement to do so. The functions of the Directors’ Committee are described under Item 6C. “Directors, Senior Management and Employees-Board Practices”.

106

REQUIREMENT	NYSE REQUIREMENTS FOR US LISTED COMPANIES	CHILEAN LAW REQUIREMENTS AND COMPANY PRACTICE
Compensation of Executive Officers	Listed companies must have a Compensation Committee composed entirely of independent directors. However, “controlled companies,” as defined under NYSE rules, are exempt from this requirement.	There is no similar legal obligation under Chilean law. In accordance with Chilean law, the above-mentioned Directors’ Committee is in charge of reviewing management compensation. Our Company does not have a Compensation Committee composed entirely of independent directors and as a “controlled company,” we would be exempt from NYSE’s requirement to do so. The functions of the Directors’ Committee are described under Item 6C. “Directors, Senior Management and Employees-Board Practices”.
Audit Committee	Must have an audit committee with the specific responsibilities and authority necessary to comply with SEC rules. Members must meet all of the independence requirements of the NYSE, as well as SEC Rule 10A-3 independence requirements (subject to any available exemptions).	No similar legal obligation exists under Chilean law. However, in accordance with the Chilean Public Companies Law 18,046, public companies that have a net worth of more than 1.5 million UFs and/or at least a 12.5% of its issued shares with voting rights are held by individual shareholders who control or own less than 10% of such shares must have a Directors’ Committee, formed by three members who are in their majority independent of the controller. Andina designated an Audit Committee in accordance with SEC Rule 10A-3. As described in Item 6.C. “Board Practice –Audit Committee,” we rely on an exemption from the independence requirements of Rule 10A-3 with respect to one of our audit committee members. The functions of the audit committee are described under “Item 6C. Directors, Senior Management and Employees-Board Practices-Audit Committee”.
Internal Audit Function	Listed companies must maintain an Internal Audit Function to provide management and the Audit Committee with ongoing assessments of the company’s risk management processes and systems of internal control. A listed company may choose to outsource this function to a third party service provider other than its independent auditor.	There is no similar obligation under Chilean law. Chilean law requires that companies must have both account inspectors and external auditors. However, Andina has an Internal Auditor who reports to the Audit Committee.
Shareholder Approval of Equity Compensation Plans and Certain Other Share Issuances	Shareholders must approve all equity-compensation plans and material revisions thereto, with limited exemptions. Shareholder approval also required for certain other dilutive and related party equity issuances.	There is no similar obligation under Chilean law, with the exception of Directors’ compensation which annually approved during the general shareholders’ meeting. Other than the foregoing, we have not and do not intend to submit for shareholder approval any equity-compensation plans, or the other dilutive and related party equity issuances covered by NYSE rules.
Corporate Governance Guidelines	Listed companies must adopt and disclose Corporate Governance Guidelines.	Chilean Law does not require the adoption of Corporate Governance Practices because Chilean Corporate Law have established them. However, the CMF in General Rule No. 461 requires publicly traded corporations to report their corporate governance practices. Our Company has not adopted such Corporate Governance Guidelines.

107

REQUIREMENT	NYSE REQUIREMENTS FOR US LISTED COMPANIES	CHILEAN LAW REQUIREMENTS AND COMPANY PRACTICE
Code of Ethics and Business Conduct	A company must adopt a Code of Business Conduct for its directors, officers and employees. Such company must disclose any waiver of its code of conduct that is granted to an officer or director.	There is no legal obligation to adopt a Code of Business Conduct. Chilean law requires that a company have a set of internal regulations which regulate the company and its relations with personnel. Such regulations must contain, among other things, regulations related to ethics and good behavior. Notwithstanding the above, a company may create internal codes of conduct, provided they do not require or prohibit behavior that contravenes Chilean law. In 1996, Andina created a Code of Ethics and Business Conduct that applies to the entire Company, and that has been updated over the years. Andina has posted this information on its website at www.koandina.com. See Item 16B. “Code of Ethics.”

ITEM 16H.MINE SAFETY DISCLOSURE

Not applicable.

ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

ITEM 16J.INSIDER TRADING POLICIES

Not applicable.

PART III

ITEM 17.FINANCIAL STATEMENTS

Reference is made to Item 18 for a list of all financial statements filed as part of this annual report.

ITEM 18.FINANCIAL STATEMENTS

The following financial statements, together with the report of independent registered accounting firm, are filed as part of this annual report:

Index to Consolidated Financial Statements	Page
Reports of Independent Registered Public Accounting Firms (PCAOB ID: 1364)
Reports of Independent Registered Public Accounting Firms (PCAOB ID: 1431)
Consolidated Statements of Financial Position at December 31, 2022 and 2021	F-7
Consolidated Income Statements by function for the years ended December 31, 2022, 2021 and 2020	F-9
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020	F-10
Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020	F-11
Consolidated Statements of Direct Cash Flows for the years ended December 31, 2022, 2021 and 2020	F-13
Notes to the Consolidated Financial Statements	F-14

108

ITEM 19.EXHIBITS

The exhibits filed with or incorporated by reference in this annual report are listed in the exhibit index below.

EXHIBIT INDEX

Item	Description
1.1	Amended and restated Bylaws of Embotelladora Andina S.A. dated as of June 25, 2012 (English Translation) (incorporated by reference to Exhibit 1.1 to Andina’s annual report on Form 20-F filed on April 30, 2012 (File No. 001-13142))
2.1	Amended and restated Deposit Agreement, dated as of December 14, 2000, among Embotelladora Andina S.A., The Bank of New York as Depositary, and Holders and Beneficial Owners of American Depositary Receipts (incorporated by reference to Exhibit 1.3 to Andina’s annual report on Form 20-F filed on April 30, 2012 (File No. 001-13142))
2.2	Indenture dated as of October 1, 2013, among Embotelladora Andina S.A. and The Bank of New York Mellon (incorporated by reference to Exhibit 2.2 to Andina’s annual report on Form 20-F filed on April 28, 2021 (File No. 001-13142))
2.3	Description of Securities Registered under Section 12(b) of the Exchange Act (incorporated by reference to Exhibit 2.3 to Andina’s annual report on Form 20-F filed on April 29, 2020 (File No. 001-13142))
4.1	Amended and Restated Call Option Agreement, dated as of December 17, 1996, among Inversiones Freire Limitada, Inversiones Freire Dos Limitada, Coca-Cola Interamerican Corporation, Coca-Cola de Argentina S.A., The Coca-Cola Company, and Embotelladora Andina S.A. and Custody Agreement among Inversiones Freire Limitada and Inversiones Freire Dos Limitada and Citibank, N.A. (English translation) (incorporated by reference to Exhibit 1.5 to Andina’s annual report on Form 20-F filed on April 30, 2012 (File No. 001-13142))
4.2	Amendment dated as of August 31, 2012 to the Amended and Restated Shareholders’ Agreement, dated as of June 25, 2012, among Embotelladora Andina S.A., the Coca-Cola Company, Coca-Cola Interamerican Corporation, Coca-Cola de Argentina S.A., Bottling Investment Limited, Inversiones Freire Ltda., and Inversiones Freire Dos Ltda (incorporated by reference to Exhibit 4.2 to Andina’s annual report on Form 20-F filed on May 15, 2014 (File No. 001-13142))
4.3	Bottler Agreement dated as of October 1, 2017 among Embotelladora del Atlántico S.A. and The Coca-Cola Company (incorporated by reference to Exhibit 4.30 to Andina’s annual report on Form 20-F filed on April 27, 2018 (File No. 001-13142))
4.4	Bottler Agreement dated as of October 4, 2017 among Rio de Janeiro Refrescos Ltda. and The Coca-Cola Company (incorporated by reference to Exhibit 4.32 to Andina’s annual report on Form 20-F filed on April 25, 2019 (File No. 001-13142))
4.5	Bottler Agreement dated as of January 1, 2018 among Embotelladora Andina S.A. and The Coca-Cola Company (incorporated by reference to Exhibit 4.31 to Andina’s annual report on Form 20-F filed on April 27, 2018 (File No. 001-13142))
4.6	Amendment to the Bottler Agreement between Embotelladora Andina S.A. and The Coca-Cola Company dated November 7, 2019 (incorporated by reference to Exhibit 4.35 to Andina’s annual report on Form 20-F filed on April 29, 2020 (File No. 001-13142))
4.7	Bottler Agreement dated as of September 1, 2015 among Paraguay Refrescos S.A. and The Coca-Cola Company (incorporated by reference to Exhibit 4.28 to Andina’s annual report on Form 20-F filed on April 30, 2015 (File No. 001-13142))

109

Item	Description
4.8	Amendment dated as of August 27, 2020 to Bottler Agreement dated as of September 1, 2015 among Paraguay Refrescos S.A. and The Coca-Cola Company (incorporated by reference to Exhibit 4.8 to Andina’s annual report on Form 20-F filed on April 28, 2021 (File No. 001-13142))
4.9	Amendment dated September 27, 2022 to the Bottler Agreement between Embotelladora del Atlántico S.A. and The Coca-Cola Company dated October 1, 2017 (filed herein)
4.10	Amendment dated September 20, 2022 to the Bottler Agreement between Rio de Janeiro Refrescos Limitada and The Coca-Cola Company dated October 4, 2017 (filed herein)
8.1	List of our subsidiaries (filed herein)
12.1	Certification of Miguel Ángel Peirano, Chief Executive Officer, pursuant to Rule 13-a14(a) (17 CFR 240.13a-12(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)) (filed herein)
12.2	Certification of Andrés Wainer, Chief Financial Officer pursuant to Rule 13-a14(a) (17 CFR 240.13a-12(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)) (filed herein)
13.1	Certification of Miguel Ángel Peirano, Chief Executive Officer, pursuant to 18 U.S.C. Chapter 63, Section 1350, (filed herein)
13.2	Certification of Andrés Wainer, Chief Financial Officer, pursuant to 18 U.S.C. Chapter 63, Section 1350, (filed herein)
Omitted from the exhibits filed with this annual report are certain instruments and agreements with respect to long-term debt of Embotelladora Andina S.A., none of which authorizes securities in a total amount that exceeds 10.0% of the total assets of Embotelladora Andina S.A. We hereby agree to furnish to the SEC copies of any such omitted instruments or agreements upon request by the SEC.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

110

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Embotelladora Andina S.A.

(Registrant)

/s/ Miguel Ángel Peirano

(Signature)

/s/ Andrés Wainer

(Signature)

Date: April 26, 2023

111

Consolidated Financial Statements

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Santiago, Chile

December 31, 2022 and 2021

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

Embotelladora Andina S.A.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statement of financial position of Embotelladora Andina S.A. and its subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of income by function, comprehensive (loss) income, changes in equity and cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).  We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-1

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Tax Contingencies in Brazil

As described in Notes 2.22.5 and 23 to the consolidated financial statements,  provisions for litigation and other contingencies are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.  No provision for an estimated loss is recorded in the consolidated financial statements for unfavorable outcomes when, after assessing the information available, (i) management concludes that it is not probable that a loss has been incurred in any of the pending litigation; or (ii) management is unable to estimate the loss for any of the pending matters. The Company also discloses the contingency in circumstances where management concludes no loss is probable or reliably estimable, but it is reasonably possible that a loss may be incurred.

The principal considerations for our determination that performing procedures relating to tax contingencies in Brazil is a critical audit matter are (i) the significant judgment by management when assessing the likelihood of a loss being incurred and when determining whether a reasonable estimate of the loss for each claim can be made, which in turn led to a high degree of auditor judgment and effort in evaluating management’s assessment of the loss contingencies associated with litigation claims; and (ii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s evaluation of tax contingencies in Brazil, including controls over determining whether a loss is probable and whether the amount of loss can be reliably estimated. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsels, evaluating the reasonableness of management's assessment regarding whether an unfavorable outcome is reasonably possible or probable and reliably estimable, and evaluating the sufficiency of the Company's litigation and contingencies disclosures. Professionals with specialized skill and knowledge were used to assist in evaluating the audit evidence obtained.

Intangible Assets with Indefinite Useful Life (Distribution Rights) and Goodwill Impairment Assessment

As described in Notes 2.7.1, 2.7.2, 2.8, 2.22.1, 15 and 16 to the consolidated financial statements, the Company’s consolidated intangible assets with indefinite useful life (distribution rights) and goodwill balances, as of December 31, 2022, were ThCh$ 650,963,285 and ThCh$ 129,023,922 respectively. Management carries out an impairment test annually, or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognized for the amount by which the carrying amount of the cash generating unit exceeds its recoverable amount. The recoverable amount of the cash generating unit is the higher of value in use and fair value less costs to sell. The value in use is determined by management using a discounted cash flow model. Management’s cash flow projections included significant judgments and assumptions relating to sales volumes, prices, discount rates and inflation.

The principal considerations for our determination that performing procedures relating to intangible assets with indefinite useful life (distribution rights) and goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the value-in-use calculation of the cash generating units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s cash flow projections and significant judgements and assumptions related to sales volumes, prices, discount rates and inflation; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with

F-2

forming our overall opinion on the consolidated financial statements. These procedures included testing

the effectiveness of controls relating to management’s intangible assets with indefinite useful life (distribution rights) and goodwill impairment assessment, including controls over the valuation of the Company’s cash generating units. These procedures also included, among others (i) testing management’s process for developing the estimate; (ii) evaluating the appropriateness of the discounted cash flow model; (iii) testing the completeness and accuracy of underlying data used in the model; and (iv) evaluating the reasonableness of the significant judgements and assumptions used by management related to the sales volumes, prices, discount rate and inflation. Evaluating management’s significant assumptions related to the sales volumes, prices, discount rates and inflation involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the cash generating units, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and the discount rates assumptions.

/s/ PricewaterhouseCoopers Consultores, Auditores y Compañía Limitada

Santiago, Chile

April 25, 2023

We have served as the Company’s auditor since 2022

F-3

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Embotelladora Andina S.A.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Embotelladora Andina S.A. and subsidiaries (the Company) as of December 31, 2021, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ EY Audit Ltda.

We served as the Company's auditor from 2017 to 2022.

Santiago, Chile

April 26, 2022

F-4

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Financial Statements

I.	Consolidated Statements of Financial Position	F-7
II.	Consolidated Statements of Income by Function	F-9
III.	Consolidated Statements of Comprehensive (Loss) Income	F-10
IV.	Consolidated Statements of Changes in Equity	F-11
V.	Consolidated Statements of Cash Flows	F-13
VI.	Notes to the Consolidated Financial Statements	F-14
1 –	Corporate Information	F-14
2 –	Basis of preparation of Consolidated Financial Statements and application of accounting criteria	F-14
3 –	Financial Reporting by Segment	F-31
4 –	Cash and cash equivalents	F-35
5 –	Other current and non-current financial assets	F-36
6 –	Other current and non-current non-financial assets	F-37
7 –	Trade accounts and other accounts receivable	F-38
8 –	Inventories	F-39
9 –	Tax assets and liabilities	F-39
10 –	Income tax epense and deferred taxes	F-40
11 –	Property, plant and equipment	F-43
12 –	Related parties	F-45
13 –	Current and non-current employee benefits	F-47
14 –	Investments in associates accounted for using the equity method	F-49
15 –	Intangible assests other than goodwill	F-52
16 –	Goodwill	F-53
17 –	Other current and non-current financial liabilities	F-54
18 –	Trade and other accounts payable	F-63
19 –	Other provisions, current and non-current	F-63
20 –	Other non-financial liabilities	F-64
21 –	Equity	F-64
22 –	Derivatives assets and liabilities	F-69
23 –	Litigations and contingencies	F-71
24 –	Financial risk management	F-74
25 –	Expenses by nature	F-78
26 –	Other income	F-78
27 –	Other expenses by function	F-78
28 –	Financial income and expenses	F-79
29 –	Other (losses) gains	F-79
30 –	Local and foreign currency	F-80
31 –	Subsequent events	F-83

F-5

Consolidated Financial Statements

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

December 31, 2022 and 2021

F-6

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Financial Position

as of December 31, 2022 and 2021

ASSETS	NOTE	12.31.2022	12.31.2021
		ThCh$	ThCh$
Current assets:
Cash and cash equivalents	4	291,681,987	304,312,020
Other financial assets	5	263,044,869	195,470,749
Other non-financial assets	6	26,957,000	14,719,104
Trade and other accounts receivable, net	7	279,770,286	265,490,626
Accounts receivable from related companies	12.1	15,062,167	9,419,050
Inventory	8	245,886,656	191,350,206
Current tax assets	9	39,326,427	10,224,368
Total Current Assets		1,161,729,392	990,986,123
Non-Current Assets:
Other financial assets	5	94,852,711	296,632,012
Other non-financial assets	6	59,672,266	70,861,616
Trade and other receivables	7	539,920	126,464
Accounts receivable from related parties	12.1	109,318	98,941
Investments accounted for under the equity method	14	92,344,598	91,489,194
Intangible assets other than goodwill	15	671,778,888	659,631,543
Goodwill	16	129,023,922	118,042,900
Property, plant and equipment	11	798,221,259	716,379,127
Deferred tax assets	10.2	2,428,333	1,858,727
Total Non-Current Assets		1,848,971,215	1,955,120,524
Total Assets		3,010,700,607	2,946,106,647

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements

F-7

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Financial Position

as of December 31, 2022 and 2021

LIABILITIES AND EQUITY	NOTE	12.31.2022	12.31.2021
		ThCh$	ThCh$
LIABILITIES
Current Liabilities
Other financial liabilities	17	367,302,080	47,763,039
Trade and other accounts payable	18	384,801,630	327,409,207
Accounts payable to related parties	12.2	90,248,067	56,103,461
Other provisions	19	1,591,644	1,528,879
Tax liabilities	9	14,615,447	30,512,787
Employee benefits current provisions	13	48,391,806	35,012,072
Other non-financial liabilities	20	42,294,460	31,237,834
Total Current Liabilities		949,245,134	529,567,279
Other financial liabilities	17	904,802,058	1,041,048,972
Trade accounts and other accounts payable	18	3,015,284	256,273
Accounts payable to related companies	12.2	10,354,296	11,557,723
Other provisions	19	47,103,783	55,883,527
Deferred tax liabilities	10.2	165,778,556	168,454,827
Employee benefits non-current provisions	13	17,409,793	14,139,670
Other non-financial liabilities	20	29,589,051	23,784,817
Total Non-current liabilities		1,178,052,821	1,315,125,809
EQUITY	21
Issued capital		270,737,574	270,737,574
Retained earnings		716,975,127	768,116,920
Other reserves		(132,452,557)	37,289,310
Equity attributable to owners of the parent		855,260,144	1,076,143,804
Non-controlling interests		28,142,508	25,269,755
Total Equity		883,402,652	1,101,413,559
Total Liabilities and Equity		3,010,700,607	2,946,106,647

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements.

F-8

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Income by Function

For the fiscal years ended December 31, 2022, 2021 and 2020

		01.01.2022	01.01.2021	01.01.2020
	NOTE	12.31.2022	12.31.2021	12.31.2020
		ThCh$	ThCh$	ThCh$
Net sales		2,656,878,395	2,216,732,593	1,698,281,237
Cost of sales	8 - 25	(1,628,701,823)	(1,375,392,773)	(1,022,498,659)
Gross Profit		1,028,176,572	841,339,820	675,782,578
Other income	26	2,497,520	1,337,878	8,356,298
Distribution expenses	25	(253,514,676)	(199,952,373)	(152,532,018)
Administrative expenses	25	(429,517,716)	(348,949,863)	(283,638,935)
Other expenses	27	(886,331)	(15,211,790)	(17,430,256)
Other (loss) gains	29	(24,983,899)	—	287
Financial income	28	39,722,410	7,791,869	14,945,879
Financial expenses	28	(59,547,953)	(52,992,456)	(54,772,837)
Share of profit of investments in associates and joint ventures accounted for using the equity method	14.3	1,409,069	3,093,102	2,228,763
Foreign exchange differences		(11,607,728)	(5,508,311)	(3,088,278)
Income by indexation units		(58,943,643)	(27,738,888)	(11,828,762)
Net income before income taxes		232,803,625	203,208,988	178,022,719
Income tax expense	10.1	(104,344,638)	(46,177,320)	(54,905,399)
Net income		128,458,987	157,031,668	123,117,320
Net income attributable to
Owners of the parent		125,497,642	154,698,150	121,999,805
Non-controlling interests		2,961,345	2,333,518	1,117,515
Net income		128,458,987	157,031,668	123,117,320
Earnings per Share, basic and diluted in ongoing operations
Earnings per Series A Share	21.5	126.27	155.65	122.75
Earnings per Series B Share	21.5	138.89	171.21	135.02

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements

F-9

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Comprehensive (Loss) Income

For the fiscal years ended December 31, 2022, 2021 and 2020

	01.01.2022	01.01.2021	01.01.2020
	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Net Income	128,458,987	157,031,668	123,117,320
Other Comprehensive (Loss) Income:
Components of other comprehensive income that will not be reclassified to net income for the period, before taxes
Actuarial Gains (losses) from defined benefit plans	(3,960,084)	(357,840)	(3,146,362)
Components of other comprehensive income that will be reclassified to net income for the period, before taxes
Gain (losses) from exchange rate translation differences	(78,009,918)	98,973,862	(264,119,093)
Gain (losses) from cash flow hedges	(155,206,655)	104,232,055	(12,203,755)
Income tax related to components of other comprehensive income that will not be reclassified to net income for the period
Income tax benefit related to defined benefit plans	1,069,223	96,617	849,518
Income tax related to components of other comprehensive income that will be reclassified to net income for the period
Income tax related to exchange rate translation differences	23,777,899	(22,103,267)	84,571,922
Income tax related to cash flow hedges	42,276,806	(28,944,992)	2,334,037
Other comprehensive (loss)income, total	(170,052,729)	151,896,435	(191,713,733)
Total comprehensive (loss) income	(41,593,742)	308,928,103	(68,596,413)
Total comprehensive (loss) income attributable to:
Owners of the parent	(44,244,225)	305,715,046	(68,721,632)
Non-controlling interests	2,650,483	3,213,057	125,219
Total comprehensive (loss) income	(41,593,742)	308,928,103	(68,596,413)

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements.

F-10

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the fiscal years ended December 31, 2022, 2021 and 2020

		Other reserves
		Reserves for		Actuarial gains or				Equity attributable
		exchange rate	Cash flow hedge	losses in employee		Total other	Retained	to owners of	Non-controlling
	Issued Capital	differences	reserve	benefits	Other reserves	reserves	earnings	the parent	interests	Total equity
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance as of 01.01.2022	270,737,574	(441,580,088)	50,603,698	(4,885,926)	433,151,626	37,289,310	768,116,920	1,076,143,804	25,269,755	1,101,413,559
Changes in equity
Comprehensive income
Net income	—	—	—	—	—	—	125,497,642	125,497,642	2,961,345	128.458.987
Other comprehensive (loss) income	—	(53,903,278)	(112,948,199)	(2,890,390)	—	(169,741,867)	—	(169,741,867)	(310,862)	(170.052.729)
Total comprehensive (loss) income	—	(53,903,278)	(112,948,199)	(2,890,390)	—	(169,741,867)	125,497,642	(44,244,225)	2,650,483	(41.593.742)
Dividends	—	—	—	—	—	—	(274,316,049)	(274,316,049)	(1,057,730)	(275,373,779)
Increase (decrease) from other changes *	—	—	—	—	—	—	97,676,614	97,676,614	1,280,000	98,956,614
Total changes in equity	—	(53,903,278)	(112,948,199)	(2,890,390)	—	(169,741,867)	(51,141,793)	(220,883,660)	2,872,753	(218,010,907)
Ending balance as of 12.31.2022	270,737,574	(495,483,366)	(62,344,501)	(7,776,316)	433,151,626	(132,452,557)	716,975,127	855,260,144	28,142,508	883,402,652

		Other reserves
		Reserves for		Actuarial gains or				Equity attributable
		exchange rate	Cash flow hedge	losses in employee		Total other		to owners of	Non-controlling
	Issued Capital	differences	reserve.	benefits.	Other reserves	reserves	Retained earnings	the parent	interests	Total equity
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance as of 01.01.2021	270,737,574	(517,496,486)	(24,719,533)	(4,663,193)	433,151,626	(113,727,586)	654,171,126	811,181,114	20,379,477	831,560,591
Changes in equity
Comprehensive income
Net income	—	—	—	—	—	—	154,698,150	154,698,150	2,333,518	157.031.668
Other comprehensive (loss) income	—	75,916,398	75,323,231	(222,733)	—	151,016,896	—	151,016,896	879,539	151.896.435
Total comprehensive (loss) income	—	75,916,398	75,323,231	(222,733)	—	151,016,896	154,698,150	305,715,046	3,213,057	308.928.103
Dividends	—	—	—	—	—	—	(109,328,860)	(109,328,860)	(1,386,857)	(110,715,717)
Increase (decrease) from other changes *	—	—	—	—	—	—	68,576,504	68,576,504	3,064,078	71,640,582
Total changes in equity	—	75,916,398	75,323,231	(222,733)	—	151,016,896	113,945,794	264,962,690	4,890,278	269,852,968
Ending balance as of 12.31.2021	270,737,574	(441,580,088)	50,603,698	(4,885,926)	433,151,626	37,289,310	768,116,920	1,076,143,804	25,269,755	1,101,413,559

*Corresponds mainly to inflation effects on the equity of our Subsidiaries in Argentina (see Note 2.5.1)

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements.

F-11

		Other reserves
		Reserves for		Actuarial gains or				Equity attributable
		exchange rate	Cash flow hedge	losses in employee		Total other	Retained	to owners of	Non-controlling
	Issued Capital	differences	reserve.	benefits.	Other reserves	reserves	earnings	the parent	interests	Total equity
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance as of 01.01.2020	270,737,574	(339,076,340)	(14,850,683)	(2,230,752)	433,151,626	76,993,851	600,918,265	948,649,690	20,254,258	968,903,948
Changes in equity
Comprehensive income
Net income	—	—	—	—	—	—	121,999,805	121,999,805	1,117,515	123.117.320
Other comprehensive (loss) income	—	(178,420,146)	(9,868,850)	(2,432,441)	—	(190,721,437)	—	(190,721,437)	(992,296)	(191.713.733)
Total comprehensive (loss) income	—	(178,420,146)	(9,868,850)	(2,432,441)	—	(190,721,437)	121,999,805	(68,721,632)	125,219	(68.596.413)
Dividends	—	—	—	—	—	—	(103,365,468)	(103,365,468)	—	(103,365,468)
Increase (decrease) from other changes *	—	—	—	—	—	—	34,618,524	34,618,524	—	34,618,524
Total changes in equity	—	(178,420,146)	(9,868,850)	(2,432,441)	—	(190,721,437)	53,252,861	(137,468,576)	125,219	(137,343,357)
Ending balance as of 12.31.2020	270,737,574	(517,496,486)	(24,719,533)	(4,663,193)	433,151,626	(113,727,586)	654,171,126	811,181,114	20,379,477	831,560,591

*Corresponds mainly to inflation effects on the equity of our Subsidiaries in Argentina (see Note 2.5.1)

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements.

F-12

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the fiscal years ended December 31, 2022, 2021 and 2020

		01.01.2022	01.01.2021	01.01.2020
	NOTE	12.31.2022	12.31.2021	12.31.2020
Cash flows provided by (used in) Operating Activities		ThCh$	ThCh$	ThCh$
Cash flows provided by Operating Activities
Receipts from the sale of goods and the rendering of services (including taxes)		3,682,470,527	2,953,813,799	2,321,999,131
Payments for Operating Activities
Payments to suppliers for goods and services (including taxes)		(2,551,652,407)	(2,048,185,735)	(1,517,256,079)
Payments to and on behalf of employees		(258,202,599)	(216,192,088)	(189,758,823)
Other payments for operating activities (value-added taxes on purchases, sales and others)		(363,740,268)	(278,367,683)	(266,228,165)
Dividends received		4,079,309	1,441,355	1,176,079
Interest payments		(44,822,402)	(55,497,167)	(44,299,001)
Interest received		24,649,593	5,373,494	7,538,364
Income tax payments		(87,757,706)	(46,100,050)	(29,474,900)
Other cash movements (tax on bank debits Argentina and others)		(7,571,623)	(11,230,942)	(4,927,608)
Cash flows provided by (used in) Operating Activities		397,452,424	305,054,983	278,768,998
Cash flows provided by (used in) Investing Activities
Proceeds from sale of Property, plant and equipment		92,253	39,919	3,570
Purchase of Property, plant and equipment		(186,702,179)	(138,856,157)	(85,874,958)
Purchase of intangible assets		—	(5,171,139)	(207,889)
Payments from futures, forwards, options and swaps agreements		—	(375,579)	(472,551)
Collection on forward, term, option and financial exchange agreements		146,070	678,274	2,122,954
Other (payments) redemptions for (purchases) of financial instruments		101,191,506	(54,567,998)	(139,449,884)
Other cash inflows (outflows)		103,879	—	—
Net cash flows used in Investing Activities		(85,168,471)	(198,252,680)	(223,878,758)
Cash Flows generated from (used in) Financing Activities
Collection for changes in ownership interest in subsidiaries		—	3,000,000	—
Proceeds (payments) from short term loans		23,625,853	—	27,633,156
Loan payments		(13,934,477)	(797,428)	(25,197,737)
Lease liability payments		(5,385,167)	(4,008,924)	(3,974,086)
Dividend payments by the reporting entity		(274,316,050)	(106,347,165)	(99,985,500)
Other cash inflows (outflows) (placement and payment of public debt)		(16,953,541)	(7,165,997)	214,565,128
Net cash flows (used in) generated by Financing Activities		(286,963,382)	(115,319,514)	113,040,961
Net increase in cash and cash equivalents before exchange differences		25,320,571	(8,517,211)	167,931,201
Effects of exchange differences on cash and cash equivalents		(21,352,255)	9,501,803	(13,574,854)
Effects of inflation in cash and cash equivalents in Argentina		(16,598,349)	(6,203,271)	(2,393,634)
Net increase (decrease) in cash and cash equivalents		(12,630,033)	(5,218,679)	151,962,713
Cash and cash equivalents - beginning of period	4	304,312,020	309,530,699	157,567,986
Cash and cash equivalents - end of period	4	291,681,987	304,312,020	309,530,699

The accompanying notes 1 to 31 form an integral part of these Consolidated Financial Statements

F-13

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

1 . CORPORATE INFORMATION

Embotelladora Andina S.A. RUT (Chilean Taxpayer Id. N°) 91.144.000-8 (hereinafter “Andina,” and together with its subsidiaries, the “Company”) is an open stock corporation, whose corporate address and principal offices are located at Miraflores 9153, borough of Renca, Santiago, Chile. The Company is registered under No. 00124 of the Securities Registry and is regulated by Chile’s Financial Market Commission (hereinafter “CMF”) and pursuant to Chile’s Law 18,046 is subject to the supervision of this entity. It is also registered with the U.S. Securities and Exchange Commission (hereinafter “SEC”) and its stock is traded on the New York Stock Exchange since 1994.

The principal activity of Embotelladora Andina S.A. is to produce, bottle, commercialize and distribute the products under registered trademarks of The Coca-Cola Company (TCCC), as well as commercialize and distribute some brands of other companies such as Monster, AB InBev, Diageo and Capel, among others. The Company maintains operations and is licensed to produce, commercialize and distribute such products in certain territories in Chile, Brazil, Argentina and Paraguay

In Chile, the territories in which it has such a franchise are the Metropolitan Region; the province of San Antonio, the V Region; the province of Cachapoal including the commune of San Vicente de Tagua-Tagua, the VI Region; the II Region of Antofagasta; the III Region of Atacama, the IV Region of Coquimbo XI Region de Aysén del General Carlos Ibáñez del Campo; XII Region of Magallanes and Chilean Antarctic. In Brazil, the aforementioned franchise covers much of the state of Rio de Janeiro, the entire state of Espirito Santo, and part of the states of Sao Paulo and Minas Gerais. In Argentina it includes the provinces of Córdoba, Mendoza, San Juan, San Luis, Entre Ríos, as well as part of the provinces of Santa Fe and Buenos Aires, Chubut, Santa Cruz, Neuquén, Río Negro, La Pampa, Tierra del Fuego, Antarctica and South Atlantic Islands. Finally, in Paraguay the territory comprises the whole country. The bottling agreement for the territories in Argentina expires in September 2027; for the territories in Brazil, it expires in October 2027; for the territories in Chile, it is under the normal process of renewal; and for Paraguay it expires in March 2023. Said agreements are renewable upon the request of Embotelladora Andina S.A. and at the sole discretion of The Coca-Cola Company.

As of the date of these consolidated financial statements, regarding Andina’s principal shareholders, the Controlling Group holds 55.25% of the outstanding shares with voting rights, corresponding to the Series A shares. The Controlling Group is composed of the Chadwick Claro, Garcés Silva, Said Handal and Said Somavía families, who control the Company in equal parts.

These Consolidated Financial Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries, which were approved by the Board of Directors on April 25, 2023.

2 – BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND APPLICATION OF ACCOUNTING CRITERIA

2.1          Accounting principles and basis of preparation

The Company’s Consolidated Financial Statements for the fiscal years ended December 31, 2022, 2021  and 2020, have been prepared in accordance with the International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”).

These Consolidated Financial Statements have been prepared following the going concern principle by applying the historical cost method, with the exception, according to IFRS, of those assets and liabilities that are recorded at fair value.

These Consolidated Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries as of December 31, 2022 and 2021 and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the periods between January 1 and December 31, 2022, 2021 and 2020 and the related notes.

F-14

The Company’s 2022 local statutory consolidated financial statements in Spanish were approved by the Company’s Board of Directors on January 30, 2023, with subsequent events first being considered through that date. Those local statutory consolidated financial statements consisted of consolidated statement of financial position as of December 31, 2022 and 2021 along with consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows (and related disclosures), each for the two years then ended. Those consolidated financial statements were then subsequently approved by the Company’s shareholders during its April 20, 2023 meeting.

Included in this 2022 consolidated financial statements are consolidated statement of financial position as of December 31, 2022 and 2021, along with consolidated income statement, consolidated statement of comprehensive (loss) income, consolidated statement of changes in equity and consolidated statement of cash flows (and the related disclosures) for each of the three years ended December 31, 2022, 2021 and 2020. This three-year presentation of operations, changes in equity and of cash flows is required by the rules of the United States Securities and Exchange Commission. The accompanying English language IFRS consolidated financial statements are consistent with the previously issued local statutory consolidated financial statements. This three-year English language IFRS consolidated financial statements were approved for issuances by the Board of Directors during a session held on April 25, 2023, with subsequent events considered through this later date.

These Consolidated Financial Statements have been prepared based on the accounting records maintained by the Parent Company and by the other entities that are part of the Company and are presented in thousands of Chilean pesos (unless expressly stated) as this is the functional and presentation currency of the Company. Foreign operations are included in accordance with the accounting policies established in Notes 2.5.

2.2          Subsidiaries and consolidation

Subsidiary entities are those companies directly or indirectly controlled by Embotelladora Andina. Control is obtained when the Company has power over the investee, when it has exposure or is entitled to variable returns from its involvement in the investee and when it has the ability to use its power to influence the amount of investor returns. They include assets and liabilities, results of operations, and cash flows for the periods reported. Income or losses from subsidiaries acquired or sold are included in the consolidated statements of income by function from the effective date of acquisition through the effective date of disposal, as applicable.

The acquisition method is used to account for the acquisition of subsidiaries. The consideration transferred for the acquisition of the subsidiary is the fair value of assets transferred, equity securities issued, liabilities incurred or assumed on the date that control is obtained. Identifiable assets acquired, and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

Intercompany transactions, balances and unrealized gains on transactions between Group entities are eliminated. Unrealized losses are also eliminated. When necessary, the accounting policies of the subsidiaries are modified to ensure uniformity with the policies adopted by the Group.

The interest of non-controlling shareholders is presented in the consolidated statement of changes in equity and the consolidated statement of income by function under “Non-Controlling Interest” and “Earnings attributable to non-controlling interests”, respectively.

F-15

The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows of the Company and its subsidiaries after eliminating balances and transaction among the Group’s entities, the subsidiary companies included in the consolidation are the following:

		Ownership interest
		12.31.2022			12.31.2021
Taxpayer ID	Company Name	Direct	Indirect	Total	Direct	Indirect	Total
96.842.970-1	Andina Bottling Investments S.A.	99.9	0.09	99.99	99.9	0.09	99.99
96.972.760-9	Andina Bottling Investments Dos S.A.	99.9	0.09	99.99	99.9	0.09	99.99
Foreign	Andina Empaques Argentina S.A.	—	99.98	99.98	—	99.98	99.98
96.836.750-1	Andina Inversiones Societarias S.A.	99.98	0.01	99.99	99.98	0.01	99.99
76.070.406-7	Embotelladora Andina Chile S.A.	99.99	—	99.99	99.99	—	99.99
Foreign	Embotelladora del Atlántico S.A.	0.92	99.07	99.99	0.92	99.07	99.99
96.705.990-0	Envases Central S.A.	59.27	—	59.27	59.27	—	59.27
Foreign	Paraguay Refrescos S.A.	0.08	97.75	97.83	0.08	97.75	97.83
76.276.604-3	Red de Transportes Comerciales Ltda.	99.9	0.09	99.99	99.9	0.09	99.99
77.427.659-9	Re-Ciclar S.A.	60.00	—	60.00	60.00	—	60.00
Foreign	Rio de Janeiro Refrescos Ltda.	—	99.99	99.99	—	99.99	99.99
78.536.950-5	Servicios Multivending Ltda.	99.9	0.09	99.99	99.9	0.09	99.99
78.861.790-9	Transportes Andina Refrescos Ltda.	99.9	0.09	99.99	99.9	0.09	99.99
96.928.520-7	Transportes Polar S.A.	99.99	—	99.99	99.99	—	99.99
76.389.720-6	Vital Aguas S.A.	66.50	—	66.50	66.50	—	66.50
93.899.000-k	VJ S.A.	15.00	50.00	65.00	15.00	50.00	65.00

2.3          Investments in associates

Ownership interest held by the Group in associates are recorded following the equity method. According to the equity method, the investment in an associate is initially recorded at cost. As of the date of acquisition, the investment in the statement of financial position is recorded by the proportion of its total assets, which represents the Group’s participation in its capital, once adjusted, where appropriate, the effect of the transactions made with the Group, plus capital gains that have been generated in the acquisition of the company.

Dividends received from these companies are recorded by reducing the value of the investment and the results obtained by them, which correspond to the Group according to its ownership, are recorded under the item “Participation in profit (loss) of associates accounted for by the equity method.”

Associates are all entities over which the Group exercises significant influence but does not have control. Significant influence is the power to intervene in the financial and operating policy decisions of the associate, without having control or joint control over it. The results of these associates are accounted for using the equity method. Accounting policies of the associates are changed, where necessary, to ensure conformity with the policies adopted by the Company and unrealized gains are eliminated.

For associates located in Brazil, the financial statements accounted for using the equity method have a one-month lag because their reporting dates are different from those of Embotelladora Andina.

2.4          Financial reporting by operating segment

“IFRS 8 Operating Segments” requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:

● Operation in Chile

● Operation in Brazil

● Operation in Argentina

● Operation in Paraguay

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2.5          Functional currency and presentation currency

2.5.1       Functional currency

Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional currency of each of the Operations is the following:

Company	Functional Currency
Embotelladora del Atlántico	Argentine Peso (ARS)
Embotelladora Andina	Chilean Peso (CLP)
Paraguay Refrescos	Paraguayan Guaraní (PYG)
Rio de Janeiro Refrescos	Brazil Real (BRL)

Foreign currency-denominated monetary assets and liabilities are converted to the functional currency at the observed exchange rate of each central bank, in effect on the closing date.

All differences arising from the liquidation or conversion of monetary items are recorded in the income statement, with the exception of the monetary items designated as part of the hedging of the Group’s net investment in a business abroad. These differences are recorded under other comprehensive income until the disposal of the net investment, at which point they are reclassified to the income statement. Tax adjustments attributable to exchange differences in these monetary items are also recognized under other comprehensive income.

Non-monetary items that are valued at historical cost in a foreign currency are converted using the exchange rate in effect at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are converted using the exchange rate in effect at the date on which fair value is determined. Losses or gains arising from the conversion of non-monetary items measured at fair value are recorded in accordance with the recognition of losses or gains arising from the change in the fair value of the respective item (e.g., exchange differences arising from items whose fair value gains or losses are recognized in another overall result or in results are also recognized under comprehensive income ). Functional currency in hyperinflationary economies

Beginning July 2018, Argentina’s economy is considered as hyperinflationary, according to the criteria established in the International Accounting Standard No. 29 “Financial information in hyperinflationary economies” (IAS 29). This determination was carried out based on a series of qualitative and quantitative criteria, including an accumulated inflation rate of more than 100% for three years. In accordance with IAS 29, the financial statements of companies in which Embotelladora Andina S.A. participates in Argentina have been retrospectively restated by applying a general price index to the historical cost, in order to reflect the changes in the purchasing power of the Argentine peso, as of the closing date of these financial statements.

Non-monetary assets and liabilities were restated since February 2003, the last date an inflation adjustment was applied for accounting purposes in Argentina. In this context, it should be mentioned that the Group made its transition to IFRS on January 1, 2004, applying the attributed cost exemption for Property, plant and equipment.

For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial position of our Argentine subsidiaries were converted to the closing exchange rate (ARS/CLP) at the date of presentation of these financial statements, in accordance with IAS 21 “Effects of foreign currency exchange rate variations”, when dealing with a hyperinflationary economy.

The comparative amounts in the consolidated financial statements are those that were presented as current year amounts in the relevant financial statements of the previous year (i.e., not adjusted for subsequent changes in price level or exchange rates). This results in differences between the closing net equity of the previous year and the opening net equity of the current year and, as an accounting policy option, these changes are presented as follows: (a) the re-measurement of Opening balances under IAS 29 as an adjustment to equity and (b) subsequent effects, including re-expression under IAS 21 , as “Exchange rate differences in the conversion of foreign operations” under other comprehensive income.

Inflation for the periods from January to December 2022, 2021 and 2020 was 96.95%, 50.21% and 36.01%, respectively.

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2.5.2       Presentation currency

The presentation currency is the Chilean peso, which is the functional currency of the parent company, for such purposes, the financial statements of subsidiaries are translated from the functional currency to the presentation currency as indicated below:

a. Translation of financial statements whose functional currency does not correspond to hyperinflationary economies (Brazil and Paraguay)

Financial statements measured as indicated are translated to the presentation currency as follows:

● The statement of financial position is translated to the closing exchange rate at the financial statement date and the income statement is translated at the average monthly exchange rates, the differences that result are recognized in equity under other comprehensive income.

● Cash flow income statement are also translated at average exchange rates for each transaction.

● In the case of the disposal of an investment abroad, the component of other comprehensive income (OCI) relating to that investment is reclassified to the income statement.

b. Translation of financial statements whose functional currency corresponds to hyperinflationary economies (Argentina)

Financial statements of economies with a hyperinflationary economic environment, are recognized according to IAS 29 Financial Information in Hyperinflationary Economies, and subsequently converted to Chilean pesos as follows:

● The statement of financial position sheet is translated at the closing exchange rate at the financial statements date.

● The income statement is translated at the closing exchange rate at the financial statements date.

● The statement of cash flows is converted to the closing exchange rate at the date of the financial statements.

● For the disposal of an investment abroad, the component of other comprehensive income (OCI) relating to that investment is reclassified to the income statement.

2.5.3       Exchange rates

Exchange rates regarding the Chilean peso in effect at the end of each period are as follows:

Date	USD	BRL	ARS	PYG
12.31.2022	855.86	164.03	4.83	0.116
12.31.2021	844.69	151.36	8.22	0.123
12.31.2020	710.95	136.80	8.44	0.103

2.6          Property, plant, and equipment

The elements of Property, plant and equipment, are valued for their acquisition cost, net of their corresponding accumulated depreciation, and of the impairment losses they have experienced.

The cost of the items of Property, plant and equipment include in addition to the price paid for the acquisition: i) the financial expenses accrued during the construction period that are directly attributable to the acquisition, construction or production of qualified assets, which are those that require a substantial period of time before being ready for use, such as production facilities. The Group defines a substantial period as one that exceeds twelve months. The interest rate used is that corresponding to specific financing or, if it does not exist, the weighted average financing rate of the Company making the investment; and ii) personnel expenses directly related to the construction in progress.

Construction in progress is transferred to operating assets after the end of the trial period when they are available for use, from which moment depreciation begins.

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Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the items of Property, plant and equipment will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance are charged to expense in the reporting period in which they are incurred.

Land is not depreciated since it has an indefinite useful life. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.

The estimated useful lives by asset category are:

Assets	Range in years
Buildings	15-80
Plant and equipment	5-20
Warehouse installations and accessories	10-50
Furniture and supplies	4-5
Motor vehicles	4-10
IT equipment	3-5
Other Property, plant and equipment	3-10
Bottles and containers	1-8

The residual value and useful lives of Property, plant and equipment are reviewed and adjusted at the end of each fiscal year, if appropriate.

The Company assesses on each reporting date if there is evidence that an asset may be impaired. The Group estimates the recoverable amount of the asset, if there is evidence, or when an annual impairment test is required for an asset.

Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to other expenses by function or other gains, as appropriate in the statement of comprehensive income.

2.7          Intangible assets and Goodwill

2.7.1       Goodwill

Goodwill represents the excess of the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognized immediately as an expense and is not subsequently reversed. Goodwill is carried at cost less accumulated impairment losses.

Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.

Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units, from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of CGUs represent the lowest level in the organization at which goodwill is monitored for internal management purposes.

2.7.2       Distribution rights

Distribution rights are contractual rights to produce and/or distribute Coca-Cola brand products and other brands in certain territories in Argentina, Brazil, Chile and Paraguay. Distribution rights are born from the process of valuation at fair value of the assets and liabilities of companies acquired in business combinations. Distribution rights have an indefinite useful life and are not amortized, (as they are historically permanently renewed by The Coca-Cola Company) and therefore are subject to impairment tests on an annual basis.

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2.7.3       Software

Carrying amounts correspond to internal and external software development costs, which are capitalized once the recognition criteria in IAS 38, Intangible Assets, have been met. Their accounting recognition is initially realized for their acquisition or production cost and, subsequently, they are valued at their net cost of their corresponding accumulated amortization and of the impairment losses that, if applicable, they have experienced. The aforementioned software is amortized within four years.

2.8          Impairment of non-financial assets

Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units – CGU). Cash-generating unit’s recoverable amount has been determined on the basis of its value in use.

Regardless of what was stated in the previous paragraph, in the case of CGUs to which goodwill or intangible assets with an indefinite useful life have been assigned, the analysis of their recoverability is carried out systematically at the end of each fiscal year. These indications may include new legal provisions, change in the economic environment that affects business performance indicators, competition movements, or the disposal of an important part of a CGU.

Management reviews business performance based on geographic segments. Goodwill is monitored at the operating segment level that includes the different cash generating units in operations in Chile, Brazil, Argentina and Paraguay. The impairment of distribution rights is monitored geographically in the CGU or group of cash generating units, which correspond to specific territories for which Coca-Cola distribution rights have been acquired. These cash generating units or groups of cash generating units are composed of the following segments:

- Operation in Chile;

- Operation in Argentina;

- Operation in Brazil (State of Rio de Janeiro and Espirito Santo, Ipiranga territories, investment in the Sorocaba associate and investment in the Leão Alimentos S.A. associate);

- Operation in Paraguay

To check if goodwill has suffered a loss due to impairment of value, the Company compares the book value thereof with its recoverable value, and recognizes an impairment loss, for the excess of the asset’s carrying amount over its recoverable amount. To determine the recoverable values of the CGU, management considers the discounted cash flow method as the most appropriate.

The main assumptions used in the annual impairment test are:

a) Discount rate

The discount rate applied in the annual impairment test carried out in 2022 was estimated using the CAPM (Capital Asset Pricing Model) methodology, which allows estimating a discount rate according to the level of risk of the CGU in the country where it operates. A nominal discount rate in local currency before tax is used according to the following table:

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	2022 Discount		2021 Discount
	rates		rates
Argentina	33.1	%	27.2	%
Chile	9.3	%	7.1	%
Brazil	10.5	%	9.0	%
Paraguay	11.3	%	8.1	%

b) Other assumptions

The financial projections to determine the net present value of future cash flows of the CGUs are modeled based on the main historical variables and the respective budgets approved by management. In this regard, a conservative growth rate is used, taking into account the differences that exist in categories with high growth such as carbonated beverages, categories with medium growth such as waters and juices, and less developed categories such as alcohols. Additionally, the valuation model considers projections over 5 years based on perpetuity growth rates by operation, which range from 0.3% to 0.9% depending on the degree of maturity of the consumption of the products in each operation. In this sense, the variables with greatest sensitivity in these projections are the discount rates applied in the determination of the net present value of projected cash flows, growth perpetuities and EBITDA margins considered in each CGU.

In order to sensitize the impairment test, variations were made to the main variables used in the model. Ranges used for each of the modified variables are:

- Discount Rate: Increase / Decrease of up to 200 bps as a value in the rate at which future cash flows are discounted to bring them to present value

- Perpetuity: Increase / Decrease of up to 26 bps in the rate to calculate the perpetual growth of future cash flows

- EBITDA margin: Increase / Decrease of 200 bps of EBITDA margin of operations, which is applied per year for the projected periods, that is, for the years 2023-2027

After modeling and valuing the different CGUs in the annual impairment process that the Company performs, as a result of the tests performed as of December 31, 2022, no impairment were identified in any of the CGUs listed above, assuming conservative EBITDA margin projections and in line with market history.

In the 2021 annual review of other investments, it was identified that for the Verde Campo brand (producer of which is owned by Trop Frutas do Brasil Ltda.), the recoverable amount would be R$21.8 million, amount below the book value recorded in the financial statements of R$34.6 million in which Andina Brasil includes its participation proportionally. Given the difference, the losses of R$12.8 million were written down from their book value as of December 31, 2021, leaving a recoverable amount of R$21.8 million. The effects of impairment were included in the consolidated results under “Share of profit of investments in associates and joint ventures accounted for using the equity method”. The main reasons for the impairment are due to the lower cash flows expected for the dairy products segment for the local Brazilian market.

Thus, despite the deterioration in macroeconomic conditions experienced by the economic conditions of the countries in which operations are carried out , the impairment test yielded recovery values higher than the book values of assets, including those for the sensitivity calculations in the stress test conducted on the model for the 3 previously mentioned variables.

2.9          Financial instruments

A financial instrument is any contract that results in the recognition of a financial asset in one entity and a financial liability or equity instrument in another entity.

2.9.1          Financial assets

Pursuant to IFRS 9 “Financial Instruments”, except for certain trade accounts receivable, the Group initially measures a financial asset at its fair value plus transaction costs, in the case of a financial asset that is not at fair value, reflecting changes in P&L.

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The classification is based on two criteria: (a) the Group’s business model for the purpose of managing financial assets to obtain contractual cash flows; and (b) if the contractual cash flows of financial instruments represent “solely payments of principal and interest” on the outstanding principal amount (the “SPPI criterion”). According to IFRS 9, financial assets are subsequently measured at (i) fair value with changes in P&L (FVPL), (ii) amortized cost or (iii) fair value through other comprehensive income (FVOCI).

The subsequent classification and measurement of the Group’s financial assets are as follows:

● Financial asset at amortized cost for financial instruments that are maintained within a business model with the objective of maintaining the financial assets to collect contractual cash flows that meet the SPPI criterion. This category includes the Group’s trade and other accounts receivable.

Financial assets measured at fair value with changes in other comprehensive income (FVOCI), with gains or losses recognized in P&L at the time of liquidation. Financial assets in this category correspond to the Group’s instruments that meet the SPPI criterion and are kept within a business model both to collect cash flows and to sell.

Other financial assets are classified and subsequently measures as follows:

Equity instruments at fair value with changes in other comprehensive income (FVOCI) without recognizing earnings or losses in P&L at the time of liquidation. This category only includes equity instruments that the Group intends to keep in the foreseeable future and that the Group has irrevocably chosen to classify in this category in the initial recognition or transition.

Financial assets at fair value with changes in P&L (FVPL) include derivative instruments and equity instruments quoted that the Group had not irrevocably chosen to classify at FVOCI in the initial recognition or transition. This category also includes debt instruments whose cash flow characteristics do not comply with the SPPI criterion or are not kept within a business model whose objective is to recognize contractual cash flows or sale.

A financial asset (or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets) is initially disposed (for example, canceled in the Group’s consolidated financial statements) when:

- The rights to receive cash flows from the asset have expired,

- The Group has transferred the rights to receive the cash flows of the asset or has assumed the obligation to pay all cash flows received without delay to a third party under a transfer agreement; and the Group (a) has substantially transferred all risks and benefits of the asset, or (b) has not substantially transferred or retained all risks and benefits of the asset but has transferred control of the asset.

2.9.2        Financial Liabilities

Financial liabilities are classified as a fair value financial liability at the date of their initial recognition, as appropriate, with changes in results, loans and credits, accounts payable or derivatives designated as hedging instruments in an effective coverage.

All financial liabilities are initially recognized at fair value and transaction costs directly attributable are netted from loans and credits and accounts payable.

The Group’s financial liabilities include trade and other accounts payable, loans and credits, including those discovered in current accounts, and derivative financial instruments.

The classification and subsequent measurement of the Group’s financial liabilities are as follows:

- Fair value financial liabilities with changes in results include financial liabilities held for trading and financial liabilities designated in their initial recognition at fair value with changes in results. The losses or gains of liabilities held for trading are recognized in the income statement.

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- Loans and credits are valued at cost or amortized using the effective interest rate method. Gains and losses are recognized in the income statement when liabilities are disposed, as well as interest accrued in accordance with the effective interest rate method.

A financial liability is disposed of when the obligation is extinguished, cancelled or expires. Where an existing financial liability is replaced by another of the same lender under substantially different conditions, or where the conditions of an existing liability are substantially modified, such exchange or modification is treated as a disposal of the original liability and the recognition of the new obligation. The difference in the values in the respective books is recognized in the statement of income.

2.9.3        Offsetting financial instruments

Financial assets and financial liabilities are offset with the corresponding net amount presenting the corresponding net amount in the statement of financial position, if:

- There is currently a legally enforceable right to offset the amounts recognized, and

- It is intended to liquidate them for the net amount or to realize the assets and liquidate the liabilities simultaneously.

2.10        Derivatives financial instruments and hedging activities

The Company and its subsidiaries use derivative financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, and loan obligations.

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at each closing date. Derivatives are accounted as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

2.10.1     Derivative financial instruments designated as cash flow hedges

At the inception of the transaction, the group documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated income statement within “other gains (losses)”.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when foreign currency denominated financial liabilities are translated into their functional currencies). The gain or loss relating to the effective portion of cross currency swaps hedging the effects of changes in foreign exchange rates are recognized in the consolidated income statement within “foreign exchange differences.” When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated income statement.

2.10.2     Derivative financial instruments not designated for hedging

The fair value of derivative financial instruments that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the income statement under “Other income and losses”.  The fair value of these derivatives is recorded under “other current financial assets” or “other current financial liabilities” in the statement of financial position.”

The Company does not use hedge accounting for its foreign investments.

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The Company also evaluates the existence of embedded derivativesin contracts and financial instruments as stipulated by IFRS 9 and classifies them pursuant to their contractual terms and the business model of the group. As of December 31, 2022 and 2021, the Company had no embedded derivatives.

2.10.3     Fair value hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the date of the transaction. Fair value is based on the presumption that the transaction to sell the asset or to transfer the liability takes place;

- In the asset or liability main market, or

- In the absence of a main market, in the most advantageous market for the transaction of those assets or liabilities.

The Company maintains assets related to foreign currency derivative contracts which were classified as Other current and non-current financial assets and Other current and non-current financial liabilities, respectively, and are accounted at fair value within the statement of financial position. The Company uses the following hierarchy to determine and disclose the fair value of financial instruments with assessment techniques:

Level 1: Quote values (unadjusted) in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is not observable.

During the reporting periods there were no transfers of items between fair value measurement categories. All of which were valued during the periods using Level 2.

2.11        Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead (based on operating capacity) to bring the goods to marketable condition, but it excludes interest expense. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Spare parts and production materials are stated at the lower of cost or net realizable value.

The initial cost of inventories includes the transfer of losses and gains from cash flow hedges, related to the purchase of raw materials.

Estimates are also made for obsolescence of raw materials and finished products based on turnover and age of the related goods.

2.12        Trade accounts receivable and other accounts receivable

Trade accounts receivable and other accounts receivable are measured and recognized at the transaction price at the time they are generated less the provision for expected credit losses, pursuant to the requirements of IFRS 15, since they do not have a significant financial component, less the provision of expected credit losses. The provision for expected credit losses is made applying a value impairment model based on expected credit losses for the following 12 months. The Group applies a simplified focus for trade receivables, thereby impairment is always recorded referring to expected losses during the whole life of the asset. The carrying amount of the asset is reduced by the provision of expected credit losses, and the loss is recognized in administrative expenses in the consolidated income statement by function.

2.13        Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank balances, time deposits and other short-term highly liquid and low risk of change in value investments.

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2.14        Other financial liabilities

Resources obtained from financial institutions as well as the issuance of debt securities are initially recognized at fair value, net of costs incurred during the transaction. Then, liabilities are valued by accruing interests in order to equal the current value with the future value of liabilities payable, using the effective interest rate method.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, considered as those that require a substantial period of time in order to get ready for their forecasted use or sale, are added to the cost of those assets until the period in which the assets are substantially ready to be used or sold.

2.15        Income tax

The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated based on the rules in the Income Tax Law. Subsidiaries in other countries account for income taxes according to the tax regulations of the country in which they operate.

Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements, using the tax rates that have been enacted or substantively enacted on the balance sheet date and are expected to apply when the deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries in which the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the near future.

The Group offsets deferred tax assets and liabilities if and only if it has legally recognized a right to offset against the tax authority the amounts recognized in those items; and intends to settle the resulting net debts, or to realize the assets and simultaneously settle the debts that have been offset by them.

2.16        Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

2.17        Leases

In accordance with IFRS 16 “Leases” Embotelladora Andina analyzes, at the beginning of the contract, the economic background of the agreement, to determine if the contract is, or contains, a lease, evaluating whether the agreement transfers the right to control the use of an identified asset for a period of time in exchange for a consideration. Control is considered to exist if the client has i) the right to obtain substantially all the economic benefits from the use of an identified asset; and ii) the right to direct the use of the asset.

The Company when operating as a lessee, at the beginning of the lease (on the date the underlying asset is available for use) records an asset for the right-of-use in the statement of financial position (under Property, plant and equipment) and a lease liability (under Other financial liabilities).

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This asset is initially recognized at cost, which includes: i) value of the initial measurement of the lease liability; ii) lease payments made up to the start date less lease incentives received; iii) the initial direct costs incurred; and iv) the estimation of costs for dismantling or restoration. Subsequently, the right-of-use asset is measured at cost, adjusted by any new measurement of the lease liability, less accumulated depreciation and accumulated losses due to impairment of value. The right-of-use asset is depreciated in the same terms as the rest of similar depreciable assets, if there is reasonable certainty that the lessee will acquire ownership of the asset at the end of the lease. If such certainty does not exist, the asset depreciates at the shortest period between the useful life of the asset or the lease term.

On the other hand, the lease liability is initially measured at the present value of the lease payments, discounted at the incremental loan rate of the Company, if the interest rate implicit in the lease could not be easily determined. Lease payments included in the measurement of the liability include: i) fixed payments, less any lease incentive receivable; ii) variable lease payments; iii) residual value guarantees; iv) exercise price of a purchase option; and v) penalties for lease termination.

The lease liability is increased to reflect the accumulation of interest and is reduced by the lease payments made. In addition, the carrying amount of the liability is measured again if there is a modification in the terms of the lease (changes in the term, in the amount of payments or in the evaluation of an option to buy or change in the amounts to be paid). Interest expense is recognized as an expense and is distributed among the periods that constitute the lease period, so that a constant interest rate is obtained in each year on the outstanding balance of the lease liability.

Short-term leases, equal to or less than one year, or lease of low-value assets are excepted from the application of the recognition criteria described above, recording the payments associated with the lease as an expense in a linear manner throughout the lease term. The Company does not act as lessor, nor does it have variable payments as lessee.

2.18        Deposits for returnable containers

This liability comprises cash collateral, or deposit, received from customers for bottles and other returnable containers made available to them.

This liability pertains to the deposit amount that would be reimbursed when the customer or distributor returns the bottles and containers in good condition, together with the original invoice.

This liability is presented under Other current financial liabilities since the Company does not have legal rights to defer settlement for a period in excess of one year. However, the Company does not anticipate any material cash settlements for such amounts during the upcoming year.

2.19        Revenue recognition

The Company recognizes revenue when control over a good or service is transferred to the client. Control refers to the ability of the client to direct the use and obtain substantially all the benefits of the goods and services exchanged. Revenue is measured based on the consideration to which it is expected to be entitled for such transfer of control, excluding amounts collected on behalf of third parties.

Management has defined the following indicators for revenue recognition, applying the five-step model established by IFRS 15 “Revenue from contracts with customers”: 1) Identification of the contract with the customer; 2) Identification of performance obligations; 3) Determination of the transaction price; 4) Assignment of the transaction price; and 5) Recognition of revenue.

All the above conditions are met at the time the products are delivered to the customer. Net sales reflect the units delivered at list price, net of promotions, discounts and taxes.

The revenue recognition criteria of the good provided by Embotelladora Andina corresponds to a single performance obligation that transfers the product to be received to the customer.

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2.20        Contributions of The Coca-Cola Company

The Company receives certain discretionary contributions from The Coca-Cola Company (TCCC) mainly related to the financing of advertising and promotional programs for its products in the territories where the Company has distribution licenses. The contribution received from TCCC are recognized in net income after the conditions agreed with TCCC in order to become a creditor to such incentive have been fulfilled, they are recorded as a reduction in the marketing expenses included in the Administration Expenses account. Given its discretionary nature, the portion of contributions received in one period does not imply it will be repeated in the following period.

2.21        Dividend distribution

The minimum mandatory dividend established by the Chilean Corporations Law is 30% of net income for the year, which must be ratified unanimously by the General Shareholders’ Meeting. Net income is determined as of December 31 of each year, at which time the liability is recognized in the Company’s consolidated financial statements.

Interim and final dividends are recorded at the time of their approval by the competent body, which in the first case is normally the Board of Directors of the Company, while in the second case it is the responsibility of General Shareholders’ Meeting.

2.22        Critical accounting estimates and judgments

In preparing the Consolidated Financial Statements, the Company has used certain judgments and estimates made to quantify some of the assets, liabilities, income, expenses and commitments. Following is an explanation of the estimates and judgments that might have a material impact on future financial statements.

2.22.1     Impairment of goodwill and intangible assets with indefinite useful lives

The Company tests annually whether goodwill and intangible assets with indefinite useful life (such as distribution rights) have suffered any impairment. The recoverable amounts of cash generating units are determined based on value in use calculations. The significant judgments and assumptions used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors. The estimation of these variables requires a use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company’s internal planning and past results. Therefore, management evaluates, and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the lowest discounted cash flows analysis. On an annual basis and close to each fiscal year end discounted cash flows in the Company’s cash generating units in Chile, Brazil, Argentina and Paraguay generated a higher value than the carrying values of the respective net assets, including goodwill of the Brazilian, Argentinian and Paraguayan subsidiaries.

2.22.2     Fair Value of Assets and Liabilities

IFRS require in certain cases that assets and liabilities be recorded at their fair value. Fair value is the price that would be received for selling an asset or paid to transfer a liability in a transaction ordered between market participants at the date of measurement.

The basis for measuring assets and liabilities at fair value are their current prices in an active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.

In the case of the valuation of intangibles recognized as a result of acquisitions from business combinations, the Company estimates the fair value based on the “multi-period excess earning method”, which involves the estimation of future cash flows generated by the intangible assets, adjusted by cash flows that do not come from these, but from other assets. The Company also applies estimations over the period during which the intangible assets will generate cash flows, cash flows from other assets, and a discount rate.

Other assets acquired, and liabilities assumed in a business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances. Assumptions include the depreciated cost of recovery and recent transaction values for comparable assets, among others. These valuation techniques require certain inputs to be estimated, including the estimation of future cash flows.

F-27

2.22.3     Allowances for doubtful accounts

The Group uses a provision matrix to calculate expected credit losses for trade receivables. Provisions are based on due days for various groups of customer segments that have similar loss patterns (i.e., by geography region, product type, customer type and rating, and credit letter coverage and other forms of credit insurance).

The provision matrix is initially based on the historically observed non-compliance rates for the Group. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For example, if expected economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year, which can lead to more non-compliances in the industry, historical default rates are adjusted. At each closing date, the observed historical default rates are updated and changes in prospective estimates are analyzed. The assessment of the correlation between observed historical default rates, expected economic conditions and expected credit losses are significant estimates.

2.22.4     Useful life, residual value and impairment of property, plant, and equipment

Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of Property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company’s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.

2.22.5 Contingent liabilities

Provisions for litigation and other contingencies are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the current obligation at the date of issuance of the financial statements, considering the risks and uncertainties surrounding the obligation. When a provision is measured using estimated cash flows to settle the current obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). The accrual of the discount is recognized as a finance cost. Incremental legal costs expected to be incurred in settling the legal claim are included in the measurement of the provision. If management is unable to reliably estimate the obligation or conclude no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but the contingency is disclosed in the notes to the consolidated financial statements.

Provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic benefits will be required to settle the obligation, the provision is reversed.

A contingent liability does not imply the recognition of a provision. Legal costs expected to be incurred in defending the legal claim are recognized in profit or loss when incurred.

2.22.6. Employee benefits

The Company records a liability regarding indemnities for years of service that will be paid to employees in accordance with individual and collective agreements subscribed with employees, which is recorded at actuarial value in accordance with IAS 19 “Employee Benefits”. At year-end there have been no modifications to the agreements.

F-28

Results from updated of actuarial variables are recorded within other comprehensive income in accordance with IAS 19.

Additionally, the Company has retention plans for some officers, which have a provision pursuant to the guidelines of each plan. These plans grant the right to certain officers to receive a cash payment on a certain date once they have fulfilled with the required years of service.

The Company and its subsidiaries have recorded a provision to account for the cost of vacations and other employee benefits on an accrual basis. These liabilities are recorded under current non-financial liabilities.

2.23 New Standards, Interpretations and Amendments to IFRS

2.23.1     New Standards, Interpretations and Amendments for annual periods beginning on January 1, 2022.

Amendments to IFRS which have been issued and are effective from January 1, 2022, are detailed below.

	Amendments	Date of application
IFRS 3	Reference to the Conceptual Framework	January 1, 2022
IAS 16	Property, Plant and Equipment — Proceeds before Intended Use	January 1, 2022
IAS 37	Onerous Contracts—Cost of Fulfilling a Contract	January 1, 2022

IFRS 3 Reference to the Conceptual Framework

Amendment to IFRS 3, “Business Combinations” minor amendments were made to IFRS 3 to update the references to the Conceptual Framework for Financial Reporting, without changing the requirements for business combinations.

IAS 16 Property, Plant and Equipment — Proceeds before Intended Use

Amendment to IAS 16, “Property, plant and equipment” prohibits companies from deducting from the cost of property, plant and equipment the proceeds received from the sale of items produced while the company is preparing the asset for its intended use. The company must recognize such sales revenue and related costs in the respective annual profit or loss statement.

IAS 37 Onerous Contracts—Cost of Fulfilling a Contract

In May 2020, the IASB issued amendments to IAS 37 Provisions, Contingent Liabilities, and Contingent Assets to specify the costs an entity needs to include when assessing whether a contract is onerous, or it generates losses.

The amendment shall be effective for periods beginning on or after January 1, 2022. The amendment should be applied retrospectively to existing contracts at the beginning of the annual reporting period in which the entity first applies the amendment (date of initial application). Early application is permitted and must be disclosed.

The amendments are intended to provide clarity and help ensure consistent implementation of the standard. Entities that previously applied the incremental cost approach will see an increase in provisions to reflect the inclusion of costs directly related to contract activities, while entities that previously recognized contractual loss provisions using the guidance to the previous standard, IAS 11 Construction Contracts, should exclude the allocation of indirect costs from their provisions.

The adoption of the standards, amendments and interpretations described above do not have a significant impact on the Company’s consolidated financial statements.

F-29

2.223.2New Accounting Standards, Interpretations and Amendments with effective application for annual periods beginning on or after January 1, 2023.

Standards and interpretations, as well as IFRS amendments, which have been issued, but have still not become effective as of the date of these financial statements are set forth below. The Company has not made an early adoption of these standards.

	Standards and Interpretations	Mandatory application date
IFRS 17	Insurance Contracts	January 1, 2023

IFRS 17 - Insurance Contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts, a new accounting standard IFRS 17 “Insurance Contracts”. Issued in May 2017, it replaces the current IFRS 4. IFRS 17 will primarily change the accounting for all entities that issue insurance contracts and investment contracts with discretionary participation features. The standard applies to annual periods beginning on or after January 1, 2023, with early application permitted provided IFRS 9, “Financial Instruments”, is applied.

Amendments to IFRS that have been issued to become effective in the near future are detailed below.

	Amendments and improvements	Date of application
IAS 1	Classification of liabilities as current or non-current	January 1, 2024
IAS 1	Non-current liabilities with covenants	January 1, 2024
IAS 12	Deferred taxes regarding assets and liabilities that arise from a single transaction	January 1, 2023
IAS 8	Definition of Accounting estimate	January 1, 2023
IFRS 16	Lease Liability in a Sale and Leaseback	January 1, 2024

IAS 1 Presentation of Financial Statements Classification of liabilities as current or non-current

Amendment to IAS 1 “Presentation of Financial Statements” on classification of liabilities. This amendment clarifies that liabilities are classified as current or non-current depending on the rights that exist at the end of the reporting period. The classification is not affected by the entity’s expectations or events after the reporting date (e.g., receipt of a waiver or covenant breach). The amendment also clarifies what IAS 1 means when it refers to the “settlement” of a liability.  The amendment should be applied retrospectively in accordance with IAS 8.  Effective date of initial application January 1, 2022, however, this date was deferred to January 1, 2024.

IAS 1 Presentation of Financial Statements – Non-Current Liabilities with Covenants

Amendment to IAS 1 “Non-current liabilities with covenants”, the amendment aims to improve the information that an entity provides when the payment terms of its liabilities may be deferred depending on the fulfillment of covenants within twelve months after the date of issuance of the financial statements.

IAS 12 Deferred tax related to assets and liabilities arising from a single transaction

Amendment to IAS 12 - Deferred Tax Relating to Assets and Liabilities Arising from a Single Transaction. These amendments require companies to recognize deferred taxes on transactions that, on initial recognition, result in equal amounts of taxable and deductible temporary differences.

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, issued in February 2021. The amendments are intended to improve disclosures of accounting policies and help users of financial statements to distinguish between changes in accounting estimates and changes in accounting policies.

F-30

IFRS 16 - Lease Liability in a Sale and Leaseback

Amendments to IFRS 16 “Leases” on sale and leaseback, which explains how an entity should recognize the rights to use the asset and how gains or losses arising from the sale and leaseback should be recognized in the financial statements.

The Company’s management estimates that the adoption of the standards, interpretations and amendments described above will not have a significant impact on the consolidated financial statements of the Company during the first period of their application.

3 – FINANCIAL REPORTING BY SEGMENT

The Company provides financial information by segments according to IFRS 8 “Operating Segments,” which establishes standards for reporting by operating segment and related disclosures for products and services, and geographic areas.

The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are Coca-Cola franchises.

The operating segments are determined based on the presentation of internal reports to the Company´s chief strategic decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company’s strategic decisions.

The following operating segments have been determined for strategic decision making based on geographic location:

● Operation in Chile

● Operation in Brazil

● Operation in Argentina

● Operation in Paraguay

The four operating segments conduct their businesses through the production and sale of soft drinks and other beverages, as well as packaging materials.

Expenses and revenue associated with the Corporate Officer were assigned to the operation in Chile in the soft drinks segment because Chile is the country that manages and pays the corporate expenses, which would also be substantially incurred, regardless of the existence of subsidiaries abroad.

Total revenues by segment include sales to unrelated customers and inter-segments, as indicated in the consolidated statement of income of the Company.

F-31

A summary of the Company’s operations by segment according to IFRS is as follows:

					Inter-
	Operation in	Operation in	Operation in	Operation	segment	Consolidated,
For the period ended December 31, 2022	Chile	Argentina	Brazil	in Paraguay	eliminations	total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Softdrinks	539.333.772	523.908.152	472.403.987	166.489.111	(1.055.254)	1.701.079.768
Other beverages	584.331.424	140.094.880	164.455.895	45.850.020	(639)	934.731.580
Packaging	—	24.701.879	—	—	(3.634.832)	21.067.047
Revenues from ordinary activities	1,123,665,196	688,704,911	636,859,882	212,339,131	(4,690,725)	2,656,878,395
Cost of sales	(743,226,587)	(367,879,756)	(403,695,516)	(118,590,689)	4,690,725	(1,628,701,823)
Distribution expenses	(94,155,809)	(98,238,512)	(48,572,718)	(12,547,637)	—	(253,514,676)
Administrative expenses	(165,139,607)	(133,696,312)	(100,060,355)	(30,621,442)	—	(429,517,716)
Financial income	18,783,930	9,853,565	10,307,344	777,571	—	39,722,410
Financial costs	(28,065,600)	(1,628,221)	(29,854,132)	—	—	(59,547,953)
Net financial costs	(9,281,670)	8,225,344	(19,546,788)	777,571	—	(19,825,543)
Share of entity in income of associates accounted for using the equity method, total	1,743,656	—	(334,587)	—	—	1,409,069
Income tax expense	(38,497,541)	(38,651,371)	(21,342,331)	(5,853,395)	—	(104,344,638)
Oher income (expenses) (*)	(83,536,145)	(20,652,710)	10,213,711	51,063	—	(93,924,081)
Net income of the segment reported	(8,428,507)	37,811,594	53,521,298	45,554,602	—	128,458,987
Depreciation and amortization	40,714,017	33,442,921	31,888,435	13,320,058	—	119,365,431
Current assets	564,695,230	141,715,280	383,021,238	72,297,644	—	1,161,729,392
Non-current assets	762,292,569	251,248,261	566,116,288	269,314,097	—	1,848,971,215
Segment assets, total	1,326,987,799	392,963,541	949,137,526	341,611,741	—	3,010,700,607
Carrying amount in associates accounted for using the equity method, total	53,869,983	—	38,474,615	—	—	92,344,598
Segment disbursements of non-monetary assets	85,998,605	40,479,269	42,173,211	18,051,094	—	186,702,179
Current liabilities	629,575,497	138,572,190	140,642,493	40,454,954	—	949,245,134
Non-current liabilities	600,735,999	24,584,021	536,281,288	16,451,513	—	1,178,052,821
Segment liabilities, total	1,230,311,496	163,156,211	676,923,781	56,906,467	—	2,127,297,955
Cash flows (used in) provided by in Operating Activities	255,357,664	59,379,474	58,391,224	24,324,062	—	397,452,424
Cash flows (used in) provided by Investing Activities	15,619,565	(40,479,269)	(42,173,211)	(18,135,556)	—	(85,168,471)
Cash flows (used in) provided by Financing Activities	(283,394,600)	(41,768)	(3,064,412)	(462,602)	—	(286,963,382)

(*) Other income (expenses) is the sum of the other income, other expenses, other (loss) gains, foreign exchange differences and income by indexation units.

F-32

					Inter-
	Operation in	Operation in	Operation in	Operation	segment	Consolidated,
For the period ended December 31, 2021	Chile	Argentina	Brazil	Paraguay in	eliminations	total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Softdrinks	480,157,607	419,724,122	313,147,740	134,284,020	(904,603)	1,346,408,886
Other beverages	495,138,445	97,742,388	226,109,683	34,932,160	(587)	853,922,089
Packaging	—	19,488,958	—	—	(3,087,340)	16,401,618
Revenues from ordinary activities	975,296,052	536,955,468	539,257,423	169,216,180	(3,992,530)	2,216,732,593
Cost of sales	(630,862,197)	(296,090,157)	(361,323,450)	(91,109,499)	3,992,530	(1,375,392,773)
Distribution expenses	(78,995,679)	(78,019,531)	(33,458,924)	(9,478,239)	—	(199,952,373)
Administrative expenses	(142,762,661)	(110,329,089)	(71,995,712)	(23,862,401)	—	(348,949,863)
Financial income	(2,936,819)	5,011,888	5,327,527	389,273	—	7,791,869
Financial costs	(27,669,541)	(577,941)	(24,744,974)	—	—	(52,992,456)
Net financial costs	(30,606,360)	4,433,947	(19,417,447)	389,273	—	(45,200,587)
Share of entity in income of associates accounted for using the equity method, total	2,799,437	—	293,665	—	—	3,093,102
Income tax expense	(15,756,620)	(25,697,558)	82,395	(4,805,537)	—	(46,177,320)
Oher income (expenses) (*)	(29,072,689)	(10,652,582)	(7,834,863)	439,023	—	(47,121,111)
Net income of the segment reported	50,039,283	20,600,498	45,603,087	40,788,800	—	157,031,668
Depreciation and amortization	38,189,190	32,863,821	23,647,789	10,074,503	—	104,775,303
Current assets	626,277,188	117,319,226	183,268,173	64,121,536	—	990,986,123
Non-current assets	739,113,114	216,757,538	720,101,674	279,148,198		1,955,120,524
Segment assets, total	1,365,390,302	334,076,764	903,369,847	343,269,734	—	2,946,106,647
Carrying amount in associates accounted for using the equity method, total	52,519,831	—	38,969,363	—	—	91,489,194
Segment disbursements of non-monetary assets	53,513,835	33,789,235	30,171,387	21,381,700	—	138,856,157
Current liabilities	283,835,866	101,832,549	109,691,047	34,207,817	—	529,567,279
Non-current liabilities	743,108,008	20,388,886	534,386,761	17,242,154	—	1,315,125,809
Segment liabilities, total	1,026,943,874	122,221,435	644,077,808	51,449,971	—	1,844,693,088
Cash flows (used in) provided by in Operating Activities	181,679,320	55,490,096	36,121,074	31,764,493	—	305,054,983
Cash flows (used in) provided by Investing Activities	(108,283,362)	(33,789,408)	(32,875,359)	(23,304,551)	—	(198,252,680)
Cash flows (used in) provided by Financing Activities	(111,533,388)	(940,318)	(2,455,073)	(390,735)	—	(115,319,514)

(*) Other income (expenses) is the sum of the other income, other expenses, other (loss) gains, foreign exchange differences and income by indexation units

F-33

					Inter-
	Operation in	Operation in	Operation in	Operation	segment	Consolidated,
For the period ended December 31, 2020	Chile	Argentina	Brazil	Paraguay in	eliminations	total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Softdrinks	407,191,500	260,118,269	317,712,571	126,057,797	(578,764)	1,110,501,373
Other beverages	237,570,385	49,817,791	262,350,736	31,094,787	(359,666)	580,474,033
Packaging	—	8,891,560	—	—	(1,585,729)	7,305,831
Revenues from ordinary activities	644,761,885	318,827,620	580,063,307	157,152,584	(2,524,159)	1,698,281,237
Cost of sales	(392,720,439)	(172,065,726)	(373,444,835)	(86,791,818)	2,524,159	(1,022,498,659)
Distribution expenses	(59,897,972)	(49,112,014)	(34,784,528)	(8,737,504)	—	(152,532,018)
Administrative expenses	(112,306,460)	(69,668,104)	(79,674,089)	(21,990,282)	—	(283,638,935)
Financial income	6,437,945	1,169,193	7,068,396	270,345	—	14,945,879
Financial costs	(23,938,992)	(729,164)	(30,104,681)	—	—	(54,772,837)
Net financial costs	(17,501,047)	440,029	(23,036,285)	270,345	—	(39,826,958)
Share of entity in income of associates accounted for using the equity method, total	1,248,478	—	980,285	—	—	2,228,763
Income tax expense	(23,057,195)	(7,668,059)	(20,536,914)	(3,643,231)	—	(54,905,399)
Oher income (expenses) (*)	(21,231,223)	(6,046,069)	3,064,104	222,477	—	(23,990,711)
Net income of the segment reported	19,296,027	14,707,677	52,631,045	36,482,571	—	123,117,320
Depreciation and amortization	50,271,626	22,895,329	27,339,714	10,413,848	—	110,920,517

F-34

Current assets	532,713,969	70,215,594	149,709,603	44,658,550	—	797,297,716
Non-current assets	636,275,547	144,802,176	643,447,811	226,241,150	—	1,650,766,684
Segment assets, total	1,168,989,516	215,017,770	793,157,414	270,899,700	—	2,448,064,400
Carrying amount in associates accounted for using the equity method, total	50,628,307	—	37,328,047	—	—	87,956,354
Segment disbursements of non-monetary assets	41,114,189	15,803,061	17,075,672	11,882,036	—	85,874,958
Current liabilities	198,669,957	58,904,281	96,144,933	24,337,015	—	378,056,186
Non-current liabilities	748,105,248	10,717,606	465,225,175	14,399,594	—	1,238,447,623
Segment liabilities, total	946,775,205	69,621,887	561,370,108	38,736,609	—	1,616,503,809
Cash flows (used in) provided by in Operating Activities	191,911,595	24,603,123	36,409,227	25,845,053	—	278,768,998
Cash flows (used in) provided by Investing Activities	(178,910,100)	(16,010,950)	(17,075,672)	(11,882,036)	—	(223,878,758)
Cash flows (used in) provided by Financing Activities	117,081,470	(167,606)	(3,443,826)	(429,077)	—	113,040,961

(*) Other income (expenses) is the sum of the other income, other expenses, other (loss) gains, foreign exchange differences and income by indexation units.

4 – CASH AND CASH EQUIVALENTS

The composition of cash and cash equivalents is as follows:

By item	12.31.2022	12.31.2021
	ThCh$	ThCh$
Cash	203,931	503,687
Bank balances	108,486,568	94,472,637
Other fixed rate instruments	182,991,488	209,335,696
Cash and cash equivalents	291,681,987	304,312,020

F-35

Other fixed income instruments correspond primarily to investments in short-term instruments with good credit ratings, such as Time Deposits and Mutual Funds, which are highly liquid, with insignificant risk of change in value and easily converted into known amounts of cash. There are no restrictions for significant amounts available to cash.

By currency	12.31.2022	12.31.2021
	ThCh$	ThCh$
USD	14,266,343	13,640,823
EUR	870,613	2,838,102
ARS	29,215,288	22,425,407
CLP	138,205,025	176,278,025
PYG	39,201,097	32,856,836
BRL	69,923,621	56,272,827
Cash and cash equivalents	291,681,987	304,312,020

5 – OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS

The composition of other financial assets is as follows:

	Balance
	Current		Non-current
Other financial assets	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Financial assets (1)	92,838,315	194,509,044	3,317,778	1,216,865
Financial assets at fair value (2)	170,206,554	961,705	75,297,737	281,337,127
Other financial assets measured at amortized cost (3)	—	—	16,237,196	14,078,020
Total	263,044,869	195,470,749	94,852,711	296,632,012

(1) Financial instrument that does not meet the definition of cash equivalents as defined in Note 2.13.

(2) Market value of hedging instruments. See details in Note 22.

(3) Correspond to the rights in the Argentinean company Alimentos de Soya S.A., manufacturing company of “AdeS” products, which are framed in the purchase of the “AdeS” brand managed by The Coca-Cola Company at the end of 2016.

F-36

6 ��� OTHER CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS

The composition of other non-financial assets is as follows:

	Balance
	Current		Non-current
Other non-financial assets	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Prepaid expenses	6,059,201	7,860,112	1,074,940	1,254,775
Tax credit remainder (1)	905,826	2,022,493	40,922,425	52,746,937
Judicial deposits	—	—	15,723,829	15,259,876
Others (2)	19,991,973	4,836,499	1,951,072	1,600,028
Total	26,957,000	14,719,104	59,672,266	70,861,616

(1) (a) In November 2006, Rio de Janeiro Refrescos Ltda. (“RJR”) filed a court order No. 0021799-23.2006.4.02.5101 seeking recognition of the right to exclude ICMS (Tax on Commerce and Services) from the PIS (Program of Social Integration) and COFINS (Contribution for the Financing of Social Security) calculation base, as well as recognition of the right to obtain reimbursement of amounts unduly collected since November 14, 2001, duly restated using the Selic interest rate. On May 20, 2019, the ruling favoring RJR became final, allowing the recovery of amounts overpaid from November 14, 2001 to August 2017. It is worth noting that in September 2017, RJR had already obtained a Security Mandate, which granted it the right to exclude, from that date, the ICMS from the PIS and COFINS calculation base.

The company took steps to assess the total amount of the credit at issue for the period of unduly collection of taxes from November 2001 to August 2017, totaling approximately CLP 100,550 million (CLP 92,783 million at December 2021) (BRL 613 million, of which BRL 370 million corresponds to capital and BRL 243 million to interest and monetary restatement. These amounts were recorded as of December 31, 2019. In addition, the company acknowledged the indirect costs (attorneys’ fees, consulting, auditing, indirect taxes and other obligations) resulting from the recognition of the right acquired in court, totaling BRL 175 million.

The payment of income tax occurs when liquidating the credit, therefore the respective deferred tax liability recorded was CLP 24,276 million (BRL 148 million). Amounts already offset until December 31, 2022 were CLP 92,841 million (BRL 566 million).

Companhia de Bebidas Ipiranga (“CBI”) acquired in September 2013, also filed a court order No. 0014022-71.2000.4.03.6102 in order to recognize the same issue as the one previously described for RJR. In September 2019, the ruling favoring CBI became final, allowing the recovery of the amounts overpaid from September 12, 1989 to December 1, 2013 (date when CBI was incorporated by RJR). CBI’s credit will be generated in the name of RJR, however, pursuant to the contractual clause (“Subscription Agreement for Shares and Exhibits”), as soon as collected by RJR, this payment should be immediately paid to former CBI shareholders (supervention favoring former CBI shareholders). Based on supporting documents found, for the August 1993-November 2013 period, the amount of credits related to this process have been calculated and totaled CLP 27,229 million (BRL 166 million, of which BRL 86 million corresponds to capital and BRL 84 million correspond to interest and monetary restatement), from this amount, CLP 1,148 million (BRL 7 million) must be deducted from indirect taxes, thus generating an account payable to former shareholders for CLP 27,229 million (CLP 25,125 million at December 2021) (BRL 156 billion) and a government receivables related to credits for that same amount. It is worth mentioning that for the September 1989-July 1993 period, the Company did not account the credit due to the lack of supporting documents.

(2) Other non-financial assets are mainly composed of advances to suppliers.

F-37

7 – TRADE ACCOUNTS AND OTHER ACCOUNTS RECEIVABLE

The composition of trade and other accounts receivable is as follows:

	Current		Non-current
Trade debtors and other accounts receivable, Net	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Trade debtors	238,146,331	205,466,469	56,781	42,726
Other debtors	39,798,245	55,281,501	483,139	83,738
Other accounts receivable	1,825,710	4,742,656	—	—
Total	279,770,286	265,490,626	539,920	126,464

	Current		Non-current
Trade debtors and other accounts receivable, Gross	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Trade debtors	242,638,974	210,175,775	56,781	42,726
Other debtors	40,206,431	55,281,501	483,139	83,738
Other accounts receivable	1,921,211	4,744,721	—	—
Total	284,766,616	270,201,997	539,920	126,464

The stratification of the portfolio for current and non-current trade debtors without impairment impact, is as follows:

	12.31.2022	12.31.2021
	ThCh$	ThCh$
Less than one month	229,587,868	195,325,587
Between one and three months	4,577,833	6,843,836
Between three and six months	2,418,252	1,808,425
Between six and eight months	5,392,862	2,235,866
Older than eight months	718,940	4,004,787
Total	242,695,755	210,218,501

The Company has approximately 292,153 clients, which may have balances in the different sections of the stratification. The number of clients is distributed geographically with 70,000 in Chile, 84,153 in Brazil, 67,580 in Argentina and 70,420 in Paraguay.

The provision for expected credit losses associated with each tranche of the portfolio for current and non-current trade receivables is as follows:

	12.31.2022
		Impairment
	Credit amount	provision	Percentage
	ThCh$	ThCh$	%
Less than one month	229,587,868	(701,701)	0.31	%
Between one and three months	4,577,833	(431,630)	9.43	%
Between three and six months	2,418,252	(786,856)	32.54	%
Between six and eight months	5,392,862	(2,402,146)	44.54	%
Older than eight months	718,940	(170,310)	23.69	%
Total	242,695,755	(4,492,643)

F-38

The movement in the allowance for expected credit losses is presented below:

	12.31.2022	12.31.2021
	ThCh$	ThCh$
Opening balance	4,711,371	6,795,663
Increase (decrease)	(150,671)	1,697,887
Provision reversal	(654,381)	(3,832,220)
Increase (decrease) for changes of foreign currency	586,324	50,041
Sub – total movements	(218,728)	(2,084,292)
Ending balance	4,492,643	4,711,371

The provision for expected credit losses is recorded as an administrative expense in the statements of income by function.

8 – INVENTORIES

The composition of inventories is detailed as follows:

Details	12.31.2022	12.31.2021
	ThCh$	ThCh$
Raw materials (1)	104,833,902	86,914,422
Finished goods	114,164,680	81,461,680
Spare parts and supplies	27,109,494	23,063,797
Work in progress	216,164	109,467
Other inventories	4,020,372	3,358,474
Obsolescence provision (2)	(4,457,956)	(3,557,634)
Total	245,886,656	191,350,206

The cost of inventory recognized as cost of sales amounts to CLP 1,388,536,599 thousand and CLP 1,192,363,804 thousand as of December 31, 2022 and 2021, respectively.

(1) Approximately 80% is composed of concentrate and sweeteners used in the preparation of beverages, as well as caps and PET supplies used in the packaging of the product.

(2) The obsolescence provision is related mainly with the obsolescence of spare parts classified as inventories and to a lesser extent to finished products and raw materials. The general standard is to provision all those multi-functional spare parts without utility in rotation in the last four years prior to the technical analysis technical to adjust the provision. In the case of raw materials and finished products, the obsolescence provision is determined according to maturity.

9 – TAX ASSETS AND LIABILITIES

The composition of current tax accounts receivable is the following:

Tax assets	12.31.2022	12.31.2021
	ThCh$	ThCh$
Monthly provisional payments	25,428,344	915,864
Tax credits	6,640,888	5,367,115
Recoverable taxes from prior years	473,424	—
Surplus Tax Credit	6,387,530	3,941,279
Other Recoverable Taxes	396,241	110
Total	39,326,427	10,224,368

The composition of current tax accounts payable is the following:

F-39

	Current
Tax liabilities	12.31.2022	12.31.2021
	ThCh$	ThCh$
Income tax expense	14,615,447	30,512,787
Total	14,615,447	30,512,787

10 – INCOME TAX EXPENSE AND DEFERRED TAXES

10.1        Income tax expense

The current and deferred income tax expenses are detailed as follows:

Details	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Current income tax expense	(63,245,293)	(45,614,890)	(55,522,189)
Current tax adjustment previous period	311,931	2,284,477	735,907
Foreign dividends tax withholding expense	(11,129,734)	(2,877,817)	(6,987,142)
Other current tax expense (income)	—	114,130	47,569
Current income tax expense	(74,063,096)	(46,094,100)	(61,725,855)
Expense (income) for the creation and reversal of temporary differences of deferred tax and others	(30,281,542)	(83,220)	6,820,456
Expense (income) for deferred taxes	(30,281,542)	(83,220)	6,820,456
Total income tax expense	(104,344,638)	(46,177,320)	(54,905,399)

The distribution of national and foreign tax expenditure is as follows:

Income taxes	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Current taxes
Foreign	(61,250,403)	(37,363,624)	(39,128,690)
National	(12,812,693)	(8,730,476)	(22,597,165)
Current tax expense	(74,063,096)	(46,094,100)	(61,725,855)
Deferred taxes
Foreign	(4,596,695)	6,942,925	7,280,487
National	(25,684,847)	(7,026,145)	(460,031)
Deferred tax expense	(30,281,542)	(83,220)	6,820,456
Income Tax expense	(104,344,638)	(46,177,320)	(54,905,399)

F-40

The reconciliation of the tax expense using the statutory rate with the tax expense using the effective rate is as follows:

Reconciliation of effective rate	12.31.2022		12.31.2021		12.31.2020
	ThCh$		ThCh$		ThCh$
Net income before taxes	232,803,625		203,208,988		178,022,719
Tax expense at legal rate (27.0%)	(62,856,979)		(54,866,427)		(48,066,134)
Effect of tax rate in other jurisdictions	(2,820,546)		860,745		1,032,950
Permanent differences:
Withholding and other non-taxable income	(11,536,654)		(10,868,055)		(2,417,582)
Non-deductible expenses	(3,622,958)		(2,935,310)		(6,007,898)
Tax effect on excess tax provision in previous periods	(81,258)		13,250,594		113,747
Tax effect of price-level restatement for Chilean companies	(33,196,408)		(15,794,098)		(5,936,464)
Subsidiaries tax withholding expense and other legal tax debits and credits	9,770,165		24,175,231		6,375,982
Adjustments to tax expense	(38,667,113)		7,828,362		(7,872,215)
Tax expense at effective rate	(104,344,638)		(46,177,320)		(54,905,399)
Effective rate	44.8	%	22.7	%	30.8	%

The applicable income tax rates in each of the jurisdictions where the Company operates are the following:

	Rate
Country	2022		2021		2020
Chile	27.00	%	27.00	%	27.00	%
Brazil	34.00	%	34.00	%	34.00	%
Argentina	35.00	%	35.00	%	30.00	%
Paraguay	10.00	%	10.00	%	10.00	%

The entry into force of Argentine Law No. 27.630 amended the Income Tax Law and established corporate income tax rates. The Law replaces the fixed tax rate of 30% applicable for 2021 and 25% for 2022 onwards with a progressive tax scale according to the following scheme: earnings up to ARS 5,000,000 are taxed at 25%, earnings between ARS 5,000,000 and ARS 50,000,000 are taxed at 30% and earnings above ARS 50,000,000 are taxed at 35%.

F-41

10.2        Deferred taxes

The net cumulative balances of temporary differences resulted in deferred tax assets and liabilities, which are detailed as follows:

	12.31.2022		12.31.2021
Temporary differences	Assets	Liabilities	Assets	Liabilities
	ThCh$	ThCh$	ThCh$	ThCh$
Property, plant and equipment	5,351,293	(58,230,728)	5,944,185	(52,435,301)
Obsolescence provision	1,871,168	—	1,696,051	—
ICMS exclusion credit(1)	2,686,693	—	—	(4,925,230)
Employee benefits	5,033,868	(3,348)	3,163,172	(115,828)
Provision for severance indemnity	2,789,893	(42,264)	271,789	(271,367)
Tax loss carry forwards (2)	5,569,124	—	4,292,863	(698)
Tax goodwill Brazil	—	(9,081,512)	—	(3,126,125)
Contingency provision	27,145,591	—	30,216,275	—
Foreign Exchange differences (3)	11,478,538	—	7,165,844	—
Allowance for doubtful accounts	803,608	—	638,484	—
Coca-Cola incentives (Argentina)	633,919	—	—	—
Assets and liabilities for placement of bonds	—	(610,594)	—	(2,081,271)
Financial expense	—	(1,894,010)	—	—
Lease liabilities	1,874,166	—	1,781,922	—
Inventories	1,312,833	—	652,669	—
Distribution rights	—	(154,669,995)	—	(151,228,739)
Hedge derivatives	—	—	—	—
Prepaid income	5,339,265	(8,287)	1,711,461	—
Spare parts	—	(4,142,782)	—	(3,374,376)
Intangibles	69,395	(7,388,202)	130	(5,440,229)
Others	5,282,818	(4,520,673)	4,194,697	(5,326,478)
Subtotal	77,242,172	(240,592,395)	61,729,542	(228,325,642)
Offsetting of deferred tax assets/(liabilities)	(74,813,839)	74,813,839	(59,870,815)	59,870,815
Total assets and liabilities net	2,428,333	(165,778,556)	1,858,727	(168,454,827)

(1) See Note 6 for more information about ICMS exclusion credit.

(2) Tax losses mainly associated with entities in Chile. Tax losses have no expiration date in Chile.

(3) Corresponds to deferred taxes for exchange rate differences generated on the translation of debts expressed in foreign currency that for tax purposes are recognized when incurred.

Deferred tax account movements are as follows:

Movement	12.31.2022	12.31.2021
	ThCh$	ThCh$
Opening balance	166,596,100	151,743,678
Increase (decrease) in deferred tax	(8,090,171)	4,507,688
Increase (decrease) due to foreign currency translation(*)	4,844,294	10,344,734
Total movements	(3,245,877)	14,852,422
Ending balance	163,350,223	166,596,100

(*)    Includes IAS 29 effects due to inflation in Argentina

F-42

11 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at the close of each period is detailed as follows:

Property, plant and equipment, gross	12.31.2022	12.31.2021
	ThCh$	ThCh$
Construction in progress	49,169,567	56,280,594
Land	104,906,878	101,286,107
Buildings	337,689,681	306,300,748
Plant and equipment	693,153,093	613,537,377
Information technology equipment	34,992,575	29,470,242
Fixed installations and accessories	69,798,556	61,264,172
Vehicles	75,759,020	56,346,552
Leasehold improvements	362,243	322,036
Rights of use (1)	73,946,435	69,616,828
Other properties, plant and equipment (2)	448,561,681	383,403,363
Total Property, plant and equipment, gross	1,888,339,729	1,677,828,019

Accumulated depreciation of Property, plant and equipment	12.31.2022	12.31.2021
	ThCh$	ThCh$
Buildings	(117,237,092)	(102,957,623)
Plant and equipment	(499,070,234)	(443,885,822)
Information technology equipment	(27,257,028)	(23,857,025)
Fixed installations and accessories	(44,057,493)	(38,165,051)
Vehicles	(44,600,066)	(37,161,952)
Leasehold improvements	(282,057)	(208,747)
Rights of use	(53,350,442)	(45,962,853)
Other properties, plant and equipment (2)	(304,264,058)	(269,249,819)
Total accumulated depreciation	(1,090,118,470)	(961,448,892)
Total Property, plant and equipment, net	798,221,259	716,379,127

(2) The net balance of each of these categories is presented below:

Other Property, plant and equipment, net	12.31.2022	12.31.2021
	ThCh$	ThCh$
Bottles	46,351,209	36,546,377
Marketing and promotional assets (market assets)	70,149,875	55,210,620
Other Property, plant and equipment	27,796,539	22,396,547
Total	144,297,623	114,153,544

F-43

11.1     Movements

Movements in Property, plant and equipment are detailed as follows:

						Fixed installations
					IT	and		Leasehold			Property, plant
	Construction in			Plant and	equipment	accessories,		improvements,		Rights-of-use,	and equipment,
	progress	Land	Buildings, net	equipment, net	net	net	Vehicles, net	net	Others	net (1)	net
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance at 01.01.2022	56,280,594	101,286,107	203,343,125	169,651,555	5,613,217	23,099,121	19,184,600	113,289	114,153,544	23,653,975	716.379.127
Additions	75,269,957	—	867,990	21,280,010	922,233	74,995	636,420	10,275	68,730,337	—	167.792.217
Right-of use additions	—	—	—	—	—	—	—	—	—	5,883,061	5.883.061
Disposals	(32,456)	—	(16,174)	(538,429)	(15,105)	—	(4,522)	—	(2,249,837)	(67,398)	(2,923,921)
Transfers between items of Property, plant and equipment	(84,598,804)	159,232	10,014,587	33,485,897	3,487,406	3,384,472	16,037,695	51,403	17,940,342	37,770	—
Right-of-use transfers	—	—	—	—	—	—	—	—	—	—	—
Depreciation expense	—	—	(8,477,029)	(35,372,214)	(2,641,086)	(3,365,827)	(5,524,208)	(68,741)	(49,526,391)	—	(104,975,496)
Amortization	—	—	—	—	—	—	—	—	—	(9,993,249)	(9,993,249)
Increase (decrease) due to foreign currency translation differences	4,263,117	3,461,539	11,105,445	7,324,221	43,790	1,282,713	852,241	10,324	6,450,271	1,235,657	36,029,318
Other increase (decrease) (2)	(2,012,841)	—	3,614,645	(1,748,181)	325,092	1,265,589	(23,272)	(36,364)	(11,200,643)	(153,823)	(9,969,798)
Total movements	(7,111,027)	3,620,771	17,109,464	24,431,304	2,122,330	2,641,942	11,974,354	(33,103)	30,144,079	(3,057,982)	81,842,132
Ending balance al 12.31.2022	49,169,567	104,906,878	220,452,589	194,082,859	7,735,547	25,741,063	31,158,954	80,186	144,297,623	20,595,993	798,221,259

(1) Right of use assets is composed as follows:

		Accumulated
Right-of-use	Gross asset	depreciation	Net asset
	ThCh$	ThCh$	ThCh$
Constructions and buildings	6,694,251	(3,452,700)	3,241,551
Plant and Equipment	47,377,683	(33,624,676)	13,753,007
IT Equipment	1,214,851	(1,081,741)	133,110
Motor vehicles	9,395,320	(6,066,615)	3,328,705
Others	9,264,330	(9,124,710)	139,620
Total	73,946,435	(53,350,442)	20,595,993

Lease liabilities interest expense for the year ended December 31, 2022 reached CLP 2,092,868 thousand.

(2) Corresponds mainly to the effect of adopting IAS 29 in Argentina.

F-44

						Fixed
				Plant and	IT	facilities and		Leasehold			Property, plant
	Construction			equipment,	equipment,	accessories,		improvements,		Rights-of-use,	and equipment,
	in progress	Land	Buildings, net	net	net	net	Vehicles, net	net	Others	net (1)	net
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance at 01.01.2021	34,194,083	94,321,726	180,916,878	145,790,203	4,878,307	17,647,892	16,410,784	59,142	90,020,253	21,337,277	605,576,545
Additions	61,100,226	—	3,708,881	19,025,057	1,428,080	12,068	171,420	8,738	47,426,736	—	132,881,206
Right-of use additions	—	—	—	—	—	—	—	—	—	9,070,997	9,070,997
Disposals	(74,476)	—	(276,312)	(277,845)	(3,896)	(11)	(9,573)	—	(3,156,795)	—	(3,798,908)
Transfers between items of Property, plant and equipment	(39,845,790)	—	4,370,826	21,182,049	751,603	606,279	4,771,885	88,345	8,074,803	—	—
Right-of-use transfers	—	—	—	—	—	—	—	—	—	—	—
Depreciation expense	—	—	(7,862,888)	(32,058,439)	(2,219,235)	(3,700,948)	(4,054,092)	(51,774)	(43,651,397)	—	(93,598,773)
Amortization	—	—	—	—	—	—	—	—	—	(8,386,063)	(8,386,063)
Increase (decrease) due to foreign currency translation differences	6,513,216	6,964,382	21,941,520	23,364,406	658,167	3,080,061	2,264,353	8,840	16,399,966	1,759,346	82,954,257
Other increase (decrease) (2)	(5,606,665)	(1)	544,220	(7,373,876)	120,191	5,453,780	(370,177)	(2)	(960,022)	(127,582)	(8,320,134)
Total movements	22,086,511	6,964,381	22,426,247	23,861,352	734,910	5,451,229	2,773,816	54,147	24,133,291	2,316,698	110,802,582
Ending balance al 12.31.2021	56,280,594	101,286,107	203,343,125	169,651,555	5,613,217	23,099,121	19,184,600	113,289	114,153,544	23,653,975	716,379,127

(1) Right of use assets is composed as follows:

		Accumulated
Right-of-use	Gross asset	depreciation	Net asset
	ThCh$	ThCh$	ThCh$
Constructions and buildings	4,042,921	(2,140,590)	1,902,331
Plant and Equipment	43,450,544	(27,325,328)	16,125,216
IT Equipment	997,458	(750,993)	246,465
Motor vehicles	12,171,762	(7,065,299)	5,106,463
Others	8,954,143	(8,680,643)	273,500
Total	69,616,828	(45,962,853)	23,653,975

Lease liabilities interest expense for the year ended December 31, 2021reached CLP 1,816,506 thousand.

(2) Corresponds mainly to the effect of adopting IAS 29 in Argentina.

12 – RELATED PARTIES

Balances and main transactions with related parties are detailed as follows:

12.1        Accounts receivable:

					12.31.2022		12.31.2021
Taxpayer ID	Company	Relationship	Country	Currency	Current	Non-current	Current	Non-current
					ThCh$	ThCh$	ThCh$	ThCh$
96.891.720-K	Embonor S.A.	Shareholder related	Chile	CLP	10,852,709	—	3,870,800	—
96.714.870-9	Coca-Cola de Chile S.A.	Shareholder	Chile	CLP	15,444	109,318	62,756	98,941
Foreign	Coca-Cola de Argentina	Director related	Argentina	ARS	—	—	2,490,194	—
Foreign	Alimentos de Soja S.A.U.	Shareholder related	Argentina	ARS	237,439	—	166,813	—
96.517.210-2	Embotelladora Iquique S.A.	Shareholder related	Chile	CLP	745,048	—	155,264	—
86.881.400-4	Envases CMF S.A.	Associate	Chile	CLP	925,189	—	1,266,871	—
77.526.480-2	Comercializadora Nova Verde	Common shareholder	Chile	CLP	2,048,054	—	934,350	—
76.572.588-7	Coca-Cola del Valle New Ventures S.A.	Associate	Chile	CLP	143,002	—	371,907	—
76.140.057-6	Monster	Associate	Chile	CLP	86,492	—	87,865	—
79.826.410-9	Guallarauco	Associate	Chile	CLP	8,790	—	12,230	—
Total					15,062,167	109,318	9,419,050	98,941

F-45

12.2     Accounts payable:

					12.31.2022		12.31.2021
Taxpayer ID	Company	Relationship	Country	Currency	Current	Non-current	Current	Non-current
					ThCh$	ThCh$	ThCh$	ThCh$
96.714.870-9	Coca-Cola de Chile S.A.	Shareholder	Chile	CLP	32,205,880	—	19,134,864	—
Foreign	Recofarma do Indústrias Amazonas Ltda.	Shareholder related	Brazil	BRL	30,998,682	10,354,296	13,770,200	11,557,723
86.881.400-4	Envases CMF S.A.	Associate	Chile	CLP	8,186,248	—	7,609,951	—
Foreign	Ser. y Prod. para Bebidas Refrescantes S.R.L.	Shareholder	Argentina	ARS	8,587,487	—	9,893,495	—
Foreign	Leão Alimentos e Bebidas Ltda.	Associate	Brazil	BRL	232,216	—	577,723	—
Foreign	Monster Energy Brasil Com de Bebidas Ltda.	Shareholder related	Brazil	BRL	3,811,908	—	2,173,901	—
76.572.588-7	Coca-Cola del Valle New Ventures S.A.	Associate	Chile	CLP	1,089,592	—	367,186	—
96.891.720-K	Embonor S.A.	Shareholder related	Chile	CLP	589,127	—	378,718	—
Foreign	Alimentos de Soja S.A.U.	Shareholder related	Argentina	ARS	628,842	—	277,708	—
77.526.480-2	Comercializadora Nova Verde	Common shareholder	Chile	CLP	2,198,317	—	1,858,682	—
Foreign	Monster Energy Argentina S.A.	Shareholder related	Argentina	PYG	—	—	2,365	—
Foreign	Monster Energy Company – USA	Shareholder related	Argentina	PYG	28,910	—	58,668	—
Foreign	Coca-Cola Company	Shareholder	Paraguay	PYG	1,690,858	—	—	—
Total					90,248,067	10,354,296	56,103,461	11,557,723

12.3        Transactions:

						Accumulated	Accumulated
Taxpayer ID	Company	Relationship	Country	Transaction Description	Currency	at 12.31.2022	at 12.31.2021
						ThCh$	ThCh$
96.714.870-9	Coca-Cola de Chile S.A.	Shareholders	Chile	Concentrate purchase	CLP	198,045,624	174,892,744
96.714.870-9	Coca-Cola de Chile S.A.	Shareholders	Chile	Purchase of advertising services	CLP	—	3,290,184
96.714.870-9	Coca-Cola de Chile S.A.	Shareholders	Chile	Water source lease	CLP	5,958,076	4,727,676
96.714.870-9	Coca-Cola de Chile S.A.	Shareholders	Chile	Sale of raw materials and others	CLP	9,980,390	1,720,061
96.714.870-9	Coca-Cola de Chile S.A.	Shareholders	Chile	Minimum dividend	CLP	47,262	35,474
86.881.400-4	Envases CMF S.A.	Associate	Chile	Purchase of containers	CLP	24,441,192	17,713,063
86.881.400-4	Envases CMF S.A.	Associate	Chile	Purchase of raw materials	CLP	33,637,921	24,883,194
86.881.400-4	Envases CMF S.A.	Associate	Chile	Purchase of caps	CLP	—	153,142
86.881.400-4	Envases CMF S.A.	Associate	Chile	Purchase of services and others	CLP	2,270,006	1,325,941
86.881.400-4	Envases CMF S.A.	Associate	Chile	Sale of services and others	CLP	13,914	1,430
86.881.400-4	Envases CMF S.A.	Associate	Chile	Purchase of packaging	CLP	9,391,000	7,625,273
86.881.400-4	Envases CMF S.A.	Associate	Chile	Sale of packaging/raw materials	CLP	13,360,534	11,939,711
93.281.000-K	Coca-Cola Embonor S.A.	Common shareholder	Chile	Sale of finished products	CLP	79,205,926	59,018,653
93.281.000-K	Coca-Cola Embonor S.A.	Common shareholder	Chile	Sale of services and others	CLP	585,448	359,739
93.281.000-K	Coca-Cola Embonor S.A.	Common shareholder	Chile	Sale of inputs and materials	CLP	956,036	523,958
96.891.720-K	Embonor S.A.	Shareholder related	Chile	Minimum dividend	CLP	589,127	339,562
96.891.720-K	Embonor S.A.	Shareholder related	Chile	Sale of fixed asset	CLP	—	357,000
96.891.720-K	Embonor S.A.	Shareholder related	Chile	Dividend distribution	CLP	—	541,188
96.517.310-2	Embotelladora Iquique S.A.	Shareholder related	Chile	Sale of finished products	CLP	5,807,466	4,220,323
89.996.200-1	Envases del Pacífico S.A.	Director related	Chile	Purchase of inputs and materials	CLP	204,933	265,503
94.627.000-8	Parque Arauco S.A	Director related	Chile	Lease of space	CLP	101,981	69,151
Foreign	Recofarma do Indústrias Amazonas Ltda.	Shareholder related	Brazil	Purchase of concentrate	BRL	100,199,500	69,785,833
Foreign	Recofarma do Indústrias Amazonas Ltda.	Shareholder related	Brazil	Reimbursement and other purchases	BRL	—	100,072
Foreign	Serv. y Prod. para Bebidas Refrescantes S.R.L.	Shareholder related	Argentina	Purchase of concentrate	ARS	159,807,006	129,275,444
Foreign	Serv. y Prod. para Bebidas Refrescantes S.R.L.	Shareholder related	Argentina	Advertising rights, prizes and others	ARS	3,002,061	3,230,351
Foreign	Serv. y Prod. para Bebidas Refrescantes S.R.L.	Shareholder related	Argentina	Advertising participation	ARS	—	5,201,881
Foreign	KAIK Participações	Associate	Brazil	Reimbursement and other purchases	BRL	96,511	21,180
Foreign	Leao Alimentos e Bebidas Ltda.	Associate	Brazil	Purchase of products	BRL	636,938	293,677
Foreign	Sorocaba Refrescos S.A.	Associate	Brazil	Purchase of products	BRL	419,515	2,667,326
89.862.200-2	Latam Airlines Group S.A.	Director related	Chile	Sale of products	CLP	93,320	269,688
89.862.200-2	Latam Airlines Group S.A.	Director related	Chile	Purchase of products	CLP	—	18,695
76.572.588-7	Coca-Cola Del Valle New Ventures SA	Associate	Chile	Sale of services and others	CLP	288,264	442,566
76.572.588-7	Coca-Cola Del Valle New Ventures SA	Associate	Chile	Purchase of services and others	CLP	4,306,419	4,436,600
Foreign	Alimentos de Soja S.A.U.	Shareholder related	Argentina	Payment of commissions and services	ARS	4,128,865	2,973,907
Foreign	Alimentos de Soja S.A.U.	Shareholder related	Argentina	Purchase of products	ARS	2,107,354	11,658
Foreign	Alimentos de Soja S.A.U.	Shareholder related	Argentina	Marketing services	ARS	286,488	—
Foreign	Trop Frutas do Brasil Ltda.	Associate	Brazil	Purchase of products	BRL	368,127	2,736,529
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Sale of raw materials	CLP	781,901	6,210
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Sale of finished products	CLP	12,867,822	8,937,506
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Sale of services and others	CLP	4,512,714	11,183
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Purchase of finished products	CLP	25,440,668	—
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Advertising	CLP	2,367,626	—
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Cold equipment maintenance	CLP	619,419	—
77526480-2	Comercializadora Novaverde S.A.	Common shareholder	Chile	Purchase of raw materials	CLP	952,699	4,519,948
96.633.550-5	Sinea S.A.	Director related	Chile	Purchase of raw materials	CLP	--	2,294,594
97.036.000-K	Banco Santander Chile.	Director/Manager/Executive	Chile	Purchase of services	CLP	6,776,225	1,852,076
Foreign	Monster Energy Brasil Comercio de Bebidas Ltda	Affiliated company	Brazil	Purchase of products	BRL	2,352,550	1,571,632

F-46

12.4        Salaries and benefits received by key management

Salaries and benefits paid to the Company’s key management personnel including directors and managers are detailed as follows:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Executive wages, salaries and benefits	8,536,107	7,253,863
Director allowances	1,560,000	1,512,500
Benefits accrued in the last five years and payments made during the period	269,952	254,240
Total	10,366,059	9,020,603

13 – CURRENT AND NON-CURRENT EMPLOYEE BENEFITS

Employee benefits are detailed as follows:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Accrued vacation	25,773,244	18,630,043
Participation in profits and bonuses	22,618,562	15,538,771
Severance indemnity	17,409,793	14,982,928
Total	65,801,599	49,151,742

	ThCh$	ThCh$
Current	48,391,806	35,012,072
Non-current	17,409,793	14,139,670
Total	65,801,599	49,151,742

13.1        Severance indemnities

The movements of employee benefits, valued pursuant to Note 2 are detailed as follows:

Movements	12.31.2022	12.31.2021
	ThCh$	ThCh$
Opening balance	14,982,928	14,086,575
Service costs	1,018,080	(8,917)
Interest costs	737,566	1,672,491
Actuarial variations	2,905,020	1,216,808
Benefits paid	(2,233,801)	(1,984,029)
Total	17,409,793	14,982,928

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13.1.1        Assumptions

The actuarial assumptions used are detailed as follows:

Assumptions	12.31.2022		12.31.2021
Discount rate	1.71	%	2.30	%
Expected salary increase rate	2.0	%	2.0	%
Turnover rate	7.68	%	7.68	%
Mortality rate	RV-2014		RV-2014
Retirement age of women	60 years		60 years
Retirement age of men	65 years		65 years

The result of the changes in severance indemnities arising from the sensitization of the actuarial assumptions at the valuation date is presented below:

Sensitivity to discount rate	ThCh$
Variation in the provision for an increase of up to 100 bps	(1,084,387)
Variation in the provision for a decrease of up to 100 bps	1,088,927
Sensitivity to salary increase	ThCh$
Variation in the provision for an increase of up to 100 bps	1,133,083
Variation in the provision for a decrease of up to 100 bps	(1,164,934)

13.2        Personnel expenses

Personnel expenses included in the consolidated statement of income are as follows:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Wages and salaries	277,271,540	225,883,645
Employee benefits	71,566,763	53,340,673
Severance benefits	6,052,239	4,163,608
Other personnel expenses	21,305,979	18,134,494
Total	376,196,521	301,522,420

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14 – INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD

14.1Description

Investments in associates are accounted for using the equity method.  Investments in associates are detailed as follows:

						Ownership
			Functional	Investment value		interest
TAXPAYER ID	Name	Country	currency	12.31.2022	12.31.2021	12.31.2022		12.31.2021
86.881.400-4	Envases CMF S.A. (1)	Chile	CLP	23,519,277	21,863,790	50.00	%	50.00	%
Foreign	Leão Alimentos e Bebidas Ltda. (2)	Brazil	BRL	8,460,307	11,359,597	10.26	%	10.26	%
Foreign	Kaik Participações Ltda. (2)	Brazil	BRL	1,293,219	1,107,007	11.32	%	11.32	%
Foreign	SRSA Participações Ltda.	Brazil	BRL	55,072	51,615	40.00	%	40.00	%
Foreign	Sorocaba Refrescos S.A.	Brazil	BRL	26,694,836	24,258,224	40.00	%	40.00	%
Foreign	Trop Frutas do Brasil Ltda. (2)	Brazil	BRL	1,971,055	2,192,920	7.52	%	7.52	%
76.572.588.7	Coca-Cola del Valle New Ventures S.A.	Chile	CLP	30,350,832	30,656,041	35.00	%	35.00	%
Total				92,344,598	91,489,194

(1) In Envases CMF S.A., regardless of the percentage of ownership interest, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.

(2) In these companies, regardless of the ownership interest, it has been defined that the Company has significant influence, given that it has the right to appoint directors.

Envases CMF S.A.

Chilean entity whose corporate purpose is to manufacture and sell plastic material products and beverage bottling and packaging services. The business relationship is to supply plastic bottles, preforms and caps to Coca-Cola bottlers in Chile.

Leão Alimentos e Bebidas Ltda.

Brazilian entity whose corporate purpose is to manufacture and commercialize food, beverages in general and beverage concentrates. Invest in other companies. The business relationship is to produce non-carbonated products for Coca-Cola bottlers in Brazil.

Kaik Participações Ltda.

Brazilian entity whose corporate purpose is to invest in other companies with its own resources.

SRSA Participações Ltda.

Brazilian entity whose corporate purpose is the purchase and sale of real estate investments and property management, supporting the business of Rio De Janeiro Refrescos Ltda. (Andina Brazil).

Sorocaba Refrescos S.A.

Brazilian entity whose corporate purpose is to manufacture and commercialize food, beverages in general and beverage concentrates, in addition to investing in other companies. It has commercial relationship with Rio de Janeiro Refrescos Ltda. (Andina Brazil).

Trop Frutas do Brasil Ltda.

Brazilian entity whose corporate purpose is to manufacture, commercialize and export natural fruit pulp and coconut water. The business relationship is to produce products for Coca-Cola bottlers in Brazil.

Coca-Cola del Valle New Ventures S.A.

Chilean entity whose corporate purpose is to manufacture, distribute and commercialize all kinds of juices, waters and beverages in general. The business relationship is to produce waters and juices for Coca-Cola bottlers in Chile.

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14.2        Movements

The movement of investments in other entities accounted for using the equity method is shown below:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Opening balance	91,489,194	87,956,354
Dividends received	(4,383,645)	(3,236,541)
Share in operating income	2,118,728	4,041,118
Amortization unrealized income in associates	—	(435,884)
Other increase (decrease) in investments in associates+	3,120,321	3,164,147
Ending balance	92,344,598	91,489,194

*Mainly due to foreign exchange rates

The main movements are explained below:

● Dividends declared in 2022 correspond to Envases CMF S.A.

● Dividends declared in 2021 correspond to Sorocaba Refrescos S.A., Envases CMF S.A. and Coca-Cola del Valle New Ventures S.A.

● In 2021 it was identified that for the brand Verde Campo (Trop Frutas do Brasil Ltda.) the recoverable value would be R$ 21.8 million, an amount below the book value recorded, proportionally impacting the result of Andina Brazil according to its participation (for more information see Note 2.8).

14.3        Reconciliation of share of profit in investments in associates:

Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Share in operating income	2,118,728	4,041,118	3,248,680
Unrealized earnings from product inventory acquired from associates and not sold at the end of the period, which is presented as a discount in the respective asset account (containers and / or inventory)	(568,767)	(512,131)	(528,122)
Amortization goodwill in the sale of fixed assets of Envases CMF S.A.	—	42,633	85,266
Amortization goodwill preferred rights CCDV S.A.	(140,892)	(478,518)	(523,061)
Income statement balance	1,409,069	3,093,102	2,228,763

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14.4        Summary financial information of associates:

The tables below reflects the amounts presented in the financial statements of the relevant associates and not the Company’s share of those amounts.

At December 31, 2022

	Envases CMF	Sorocaba Refrescos	Kaik Participaçōes	SRSA Participaçōes	Leão Alimentos e	Trop Frutas do Brasil	Coca-Cola del Valle New
	S.A.	S.A.	Ltda.	Ltda.	Bebidas Ltda.	Ltda.	Ventures S,A,
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Short term assets	63,615,517	41,997,646	—	22,376	77,547,906	22,235,713	26,927,496
Long term assets	52,964,004	89,524,823	11,424,515	317,159	54,195,351	27,128,282	75,247,746
Total assets	116,579,521	131,522,469	11,424,515	339,535	131,743,257	49,363,995	102,175,242
Short term liabilities	45,222,022	21,366,336	—	201,853	16,269,385	14,693,964	9,038,769
Long term liabilities	24,318,944	45,013,681	31	—	11,698,126	12,270,207	5,480,067
Total liabilities	69,540,966	66,380,017	31	201,853	27,967,511	26,964,171	14,518,836
Total Equity	47,038,555	65,142,452	11,424,484	137,682	103,775,746	22,630,444	87,656,406
Total revenue from ordinary activities	97,834,148	-741	782,772	134,401	65,797,238	45,104,125	25,249,336
Net income before taxes	6,640,224	478,458	782,772	134,401	3,804,172	(5,105,685)	(896,914)
Net income after taxes	5,517,062	243,170	782,772	134,401	1,427,601	(5,067,707)	163,561
Other comprehensive income	—	9,680,320	—	—	1,522	275,534	—
Total comprehensive income	5,517,062	9,923,490	782,772	134,401	1,429,123	(4,792,173)	163,561
Reporting date (See Note 2.3)	12.31.2022	11.30.2022	11.30.2022	11.30.2022	11.30.2022	11.30.2022	12.31.2022

At December 31, 2021:

	Envases CMF	Sorocaba Refrescos	Kaik Participaçōes	SRSA Participaçōes	Leão Alimentos e	Trop Frutas do Brasil	Coca-Cola del Valle New
	S.A.	S.A.	Ltda.	Ltda.	Bebidas Ltda.	Ltda.	Ventures S.A.
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Short term assets	72,400,404	19,468,334	—	20,648	68,192,154	16,765,435	29,227,758
Long term assets	42,875,230	92,639,217	9,779,486	294,662	50,034,496	33,021,014	75,706,352
Total assets	115,275,634	112,107,551	9,779,486	315,310	118,226,650	49,786,449	104,934,110
Short term liabilities	57,080,891	21,255,566	—	186,266	12,991,480	10,009,915	10,181,664
Long term liabilities	14,467,165	34,960,269	28	—	6,489,944	18,294,787	7,164,058
Total liabilities	71,548,056	56,215,834	28	186,266	19,481,425	28,304,702	17,345,722
Total Equity	43,727,578	55,891,716	9,779,458	129,043	98,745,226	21,481,747	87,588,388
Total revenue from ordinary activities	77,805,312	(25,164,499)	204,624	126,016	94,169,579	35,224,230	46,509,329
Earnings before taxes	7,347,219	4,518,371	204,624	126,016	2,876,850	(31,042,731)	2,306,620
Earnings after taxes	5,509,658	2,573,415	204,624	126,016	1,556,223	(37,324,877)	2,869,945
Other comprehensive income	—	2,363,061	—	—	49,784	30,547,925	—
Total comprehensive income	5,509,658	4,936,476	204,624	126,016	1,606,007	(6,776,952)	2,869,945
Reporting date (See Note 2.3)	12.31.2021	11.30.2021	11.30.2021	11.30.2021	11.30.2021	11.30.2021	12.31.2021

F-51

15 – INTANGIBLE ASSETS OTHER THAN GOODWILL

Intangible assets other than goodwill are detailed as follows:

	December 31, 2022			December 31, 2021
		Accumulated			Accumulated
	Gross	Amortization	Net	Gross	Amortization	Net
Description	Value	/Impairment	Value	Value	/Impairment	Value
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Distribution rights (1) (2)	653,200,644	(2,237,359)	650,963,285	650,411,156	(3,896,827)	646,514,329
Software	56,968,738	(36,205,387)	20,763,351	44,084,900	(31,019,938)	13,064,962
Others	509,957	(457,705)	52,252	509,957	(457,705)	52,252
Total	710,679,339	(38,900,451)	671,778,888	695,006,013	(35,374,470)	659,631,543

(1) Correspond to brands, water rights and distribution rights. Distribution rights are contractual rights to produce and distribute Coca-Cola products in certain parts of Argentina, Brazil, Chile and Paraguay. Distribution rights result from the valuation process at fair value of the assets and liabilities of the companies acquired in business combinations. Production and distribution contracts are renewable for periods of 5 years with Coca-Cola. The nature of the business and renewals that Coca-Cola has permanently done on these rights, allow qualifying them as indefinite contracts.

(2)On September 21, 2021 Coca-Cola Andina together with Coca-Cola Femsa, acquired the Brazilian beer brand Therezópolis for BRL 70 million. Each bottler bought 50% of the brand. This transaction is part of the company’s long-term strategy to complement its beer portfolio in Brazil. The transaction was completed and approved by CADE (Brazilian Administrative Council of Economic

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Defense). In September, 2021 Andina recorded an intangible asset under the Therezópolis brand for BRL 35 million with an indefinite useful life.

Distribution rights together with the assets that are part of the cash-generating units, are annually subjected to the impairment test. Such distribution rights have an indefinite useful life, are not subject to amortization. Rights in Chile related to AdeS were provisioned for impairment pursuant to the annual tests performed.

	12.31.2022	12.31.2021
Distribution rights	ThCh$	ThCh$
Chile (excluding Metropolitan Region, Rancagua and San Antonio)	303,802,964	303,973,971
Brazil (Rio de Janeiro, Espirito Santo, Ribeirão Preto and Investments in Sorocaba and Leão Alimentos y Bebidas Ltda.)	171,411,484	158,175,979
Paraguay	172,548,023	181,675,993
Argentina (North and South)	3,200,814	2,688,386
Total	650,963,285	646,514,329

The movement and balances of identifiable intangible assets are detailed as follows:

	January 1 to December 31, 2022				January 1 to December 31, 2021
	Distribution				Distribution
Description	rights	Others	Software	Total	rights	Others	Software	Total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Opening balance	646,514,329	52,252	13,064,962	659,631,543	596,365,737	975	8,147,453	604,514,165
Additions	16,881	—	12,020,412	12,037,293	5,773,560	—	6,998,593	12,772,153
Amortization /Impairment	(187,888)	—	(4,208,798)	(4,396,686)	(152,644)	—	(2,637,823)	(2,790,467)
Other increases (decreases) (1)	4,619,963	—	(113,225)	4,506,738	44,527,676	51,277	556,739	45,135,692
Total	650,963,285	52,252	20,763,351	671,778,888	646,514,329	52,252	13,064,962	659,631,543

(1) Mainly corresponds to restatement due to the effects of translation of distribution rights of foreign subsidiaries.

16 – GOODWILL

Movement in Goodwill is detailed as follows:

		Foreign currency translation differences
		where functional currency is different from
Cash Generating Unit	01.01.2022	presentation currency	12.31.2022
	ThCh$	ThCh$	ThCh$
Chilean operation	8,503,023	—	8,503,023
Brazilian operation	61,851,449	5,090,059	66,941,508
Argentine operation	39,976,392	6,278,439	46,254,831
Paraguayan operation	7,712,036	(387,476)	7,324,560
Total	118,042,900	10,981,022	129,023,922

		Foreign currency translation differences
		where functional currency is different from
Cash Generating Unit	01.01.2021	presentation currency	12.31.2021
	ThCh$	ThCh$	ThCh$
Chilean operation	8,503,023	—	8,503,023
Brazilian operation	56,001,413	5,850,036	61,851,449
Argentine operation	27,343,642	12,632,750	39,976,392
Paraguayan operation	6,477,515	1,234,521	7,712,036
Total	98,325,593	19,717,307	118,042,900

F-53

		Foreign currency translation differences
		where functional currency is different from
Cash Generating Unit	01.01.2020	presentation currency	12.31.2020
	ThCh$	ThCh$	ThCh$
Chilean operation	8,503,023	—	8,503,023
Brazilian operation	75,674,072	(19,672,659)	56,001,413
Argentine operation	29,750,238	(2,406,596)	27,343,642
Paraguayan operation	7,294,328	(816,813)	6,477,515
Total	121,221,661	(22,896,068)	98,325,593

17  – OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

Liabilities are detailed as follows:

	Balance
	Current		Non-current
	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Bank loans (Note 17.1.1 - 3)	688,800	26,617	13,366,211	4,000,000
Bonds payable, net (1) (Note 17.2)	340,767,980	25,383,339	763,368,160	1,020,661,942
Bottle guaranty deposits	16,427,144	13,402,885	—	—
Derivative contract liabilities (Note 17.3)	2,317,577	758,663	112,175,058	—
Lease liabilities (Note 17.4.1 - 2)	7,100,579	8,191,535	15,892,629	16,387,030
Total	367,302,080	47,763,039	904,802,058	1,041,048,972

(1) Amounts net of issuance expenses and discounts related to issuance.

F-54

The fair value of financial assets and liabilities is presented below:

	Book value	Fair value	Book value	Fair value
Current	12.31.2022	12.31.2022	12.31.2021	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Cash and cash equivalent (2)	291,681,987	291,681,987	304,312,020	304,312,020
Financial assets at fair value (1)	170,206,554	170,206,554	961,705	961,705
Trade debtors and other accounts receivable (2)	279,770,286	279,770,286	265,490,626	265,490,626
Accounts receivable related companies (2)	15,062,167	15,062,167	9,419,050	9,419,050
Bank liabilities (2)	688,800	107,114	26,617	111,992
Bonds payable (2)	340,767,980	339,666,507	25,383,339	26,774,799
Bottle guaranty deposits (2)	16,427,144	16,427,144	13,402,885	13,402,885
Forward contracts liabilities (see Note 22) (1)	2,317,577	2,317,577	758,663	758,663
Leasing agreements (2)	7,100,579	7,100,579	8,191,535	8,191,535
Accounts payable (2)	384,801,630	384,801,630	327,409,207	327,409,207
Accounts payable related companies (2)	90,248,067	90,248,067	56,103,461	56,103,461

Non-current	12.31.2022	12.31.2022	12.31.2021	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$
Financial assets at fair value (1)	75,297,737	75,297,737	281,337,127	281,337,127
Non-current accounts receivable (2)	539,920	539,920	126,464	126,464
Accounts receivable related companies (2)	109,318	109,318	98,940	98,940
Bank liabilities (2)	13,366,211	13,921,569	4,000,000	4,056,753
Bonds payable (2)	763,368,160	729,602,210	1,020,661,942	1,041,841,338
Leasing agreements (2)	15,892,629	15,892,629	16,387,030	16,387,030
Non-current accounts payable (2)	3,015,284	3,015,284	256,273	256,273
Derivative contracts liabilities (see Note 22) (1)	112,175,058	112,175,058	—	—
Accounts payable related companies (2)	10,354,296	10,354,296	11,557,723	11,557,723

(1) Fair values are based on discounted cash flows using market discount rates at the close of the six-month and one-year period and are classified as Level 2 of the fair value measurement hierarchies.

(2) Financial instruments such as: Cash and Cash Equivalents, Trade debtors and Other Accounts Receivable, Accounts Receivable related companies, Bottle Guarantee Deposits Trade Accounts Payable, and Other Accounts Payable related companies present a fair value that approximates their carrying value, considering the nature and term of the obligation. The business model is to maintain the financial instrument in order to collect/pay contractual cash flows, in accordance with the terms of the contract, where cash flows are received/cancelled on specific dates that exclusively constitute payments of principal plus interest on that principal. These instruments are revalued at amortized cost.

17.1 Bank liabilities

17.1.1     Bank liabilities, current

										Maturity		Total
Indebted Entity			Creditor Entity				Type of	Nominal		Up to	90 days to	At	At
Taxpayer ID	Name	Country	Taxpayer ID	Name	Country	Currency	Amortization	Rate		90 days	1 year	12.31.2022	12.31.2021
										ThCh$	ThCh$	ThCh$	ThCh$
96.705.990-0	Envases Central S.A.	Chile	97.006.000-6	Banco Estado	Chile	CLP	Semiannually	2.00	%	28,683	—	28,683	26,617
77.427.659-9	Re-Ciclar S.A.	Chile	97.018.000-1	Scotiabank Chile S.A.	Chile	CLP	Semiannually	9.49	%	—	53,350	53,350	—
91.144.000-8	Embotelladora Andina S.A.	Chile	97.023.000-9	Itaú Corpbanca	Chile	UF	At maturity	0.18	%	21,207	—	21,207	—
91.144.000-8	Embotelladora Andina S.A.	Chile	97.023.000-9	Itaú Corpbanca	Chile	UF	At maturity	0.18	%	585,560	—	585,560	—
Total												688,800	26,617

F-55

17.1.2     Bank liabilities, non-current

Maturity

Indebted entity

Creditor entity

Type of

Nominal

1 year up to

More than 2

More than 3

More than 4

More than 5

At

Taxpayer ID

Name

Country

Taxpayer ID

Name

Country

Currency

Amortization

Rate

2 years

Up to 3 years

Up to 4 years

Up to 5 years

years

12.31.2022

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

96.705.990-0

Envases Central S.A.

Chile

97.006.000-6

Banco Estado

Chile

CLP

Semiannually

2.00

%

—

—

4,000,000

—

—

4,000,000

77.427.659-9

Re-Ciclar S.A.

Chile

97.018.000-1

Scotiabank Chile S.A.

Chile

CLP

Semiannually

9.49

%

—

4,500,000

—

—

—

4,500,000

77.427.659-9

Re-Ciclar S.A.

Chile

97.018.000-1

Scotiabank Chile S.A.

Chile

UF

Semiannually

3.32

%

—

4,866,211

—

—

—

4,866,211

Total

13,366,211

17.1.3     Bank liabilities, non-current previous year

Maturity

Indebted entity

Creditor entity

Type of

Nominal

1 year up to

More than 2

More than 3

More than 4

More than 5

At

Taxpayer ID

Name

Country

Taxpayer ID

Name

Country

Currency

Amortization

Rate

2 years

Up to 3 years

Up to 4 years

Up to 5 years

years

12.31.2021

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

96.705.990-0

Envases Central S.A.

Chile

97.006.000-6

Banco Estado

Chile

CLP

Semiannually

2.00

%

—

—

4,000,000

—

—

4,000,000

Total

4,000,000

17.1.4 Current and non-current bank obligations “Restrictions”

Bank obligations are not subject to restrictions for the reported periods.

17.2     Bond obligations

	Current		Non-current		Total
Composition of bonds payable	12.31.2022	12.31.2021	12.31.2022	12.31.2021	12.31.2022	12.31.2021
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Bonds face value 1	341,478,129	26,103,215	769,765,783	1,027,864,462	1,104,136,139	1,053,970,677

17.2.1     Current and non-current balances

Bonds payable correspond to bonds in UF issued by the parent company on the Chilean market and bonds in U.S. dollars issued by the Parent Company on the international market. A detail of these instruments is presented below:

		Current nominal	Adjustment	Interest		Final	Interest	Current		Non-current
Bonds	Series	amount	unit	rate		maturity	payment	12.31.2022	12.31.2021	12.31.2022	12.31.2021
								ThCh$	ThCh$	ThCh$	ThCh$
CMF Registration 254 06.13.2001	B	1,253,683	UF	6.50	%	12.01.2026	Semiannually	10,513,470	8,769,787	28,795,438	34,515,188
CMF Registration 641 08.23.2010	C	1,227,273	UF	4.00	%	08.15.2031	Semiannually	5,427,888	4,853,856	38,302,888	38,035,317
CMF Registration 760 08.20.2013	D	4,000,000	UF	3.80	%	08.16.2034	Semiannually	1,967,995	1,737,109	140,443,920	123,966,960
CMF Registration 760 04.02.2014	E	3,000,000	UF	3.75	%	03.01.2035	Semiannually	1,304,513	1,151,467	105,332,951	92,975,229
CMF Registration 912 10.10.2018	F	5,700,000	UF	2.83	%	09.25.2039	Semiannually	1,491,144	1,316,202	200,132,586	176,652,918
Bonds USA 2023 10.01.2013	—	365,000,000	USD	5.00	%	10.01.2023	Semiannually	316,293,761	3,853,898	—	308,311,850
Bonds USA 2050 01.01.2020	—	300,000,000	USD	3.95	%	01.21.2050	Semiannually	4,479,358	4,420,896	256,758,000	253,407,000
							Total	341,478,129	26,103,215	769,765,783	1,027,864,462

F-56

17.2.2     Non-current maturities

		Year of maturity				Total Non-
		More than 1	More than 2	More than 3		current
	Series	up to 2	up to 3	up to 4	More than 5	12.31.2022
		ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
CMF Registration 254 06.13.2001	B	10,977,281	11,690,803	6,127,354	—	28,795,438
CMF Registration 641 08.23.2010	C	4,787,861	4,787,861	4,787,861	23,939,305	38,302,888
CMF Registration 760 08.20.2013	D	—	—	—	140,443,920	140,443,920
CMF Registration 760 04.02.2014	E	—	—	—	105,332,951	105,332,951
CMF Registration 912 10.10.2018	F	—	—	—	200,132,586	200,132,586
Bonds USA 2050	—	—	—	—	256,758,000	256,758,000
Total		15,765,142	16,478,664	10,915,215	726,606,762	769,765,783

17.2.3     Market rating

The bonds issued on the Chilean market had the following rating:

AA+	:	ICR Compañía Clasificadora de Riesgo Ltda. rating
AA+	:	Fitch Chile Clasificadora de Riesgo Limitada rating

The rating of bonds issued on the international market had the following rating:

BBB	:	Standard&Poors Global Ratings
BBB+	:	Fitch Ratings Inc.

17.2.4     Restrictions

17.2.4.1  Restrictions regarding bonds placed abroad.

Obligations with bonds placed abroad are not affected by financial restrictions for the periods reported.

17.2.4.2  Restrictions regarding bonds placed in the local market.

The following financial information was used for calculating restrictions:

	12.31.2022
	ThCh$
Average net financial debt last 4 quarters	566.228.101
Net financial debt	642.079.544
Unencumbered assets	2.739.790.315
Total unsecured liabilities	1.881.793.665
EBITDA LTM	463.623.280
Net financial expenses LTM	23.350.639

Restrictions on the issuance of bonds for a fixed amount registered under number 254, series B1 and B2.

● Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Income by Function”. Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);

F-57

EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.

As of December 31, 2022 , this ratio was 1.20 times.

● Maintain, and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” (Región Metropolitana) as a territory in Chile in which we have been authorized by The Coca-Cola Company for the development, production, sale and distribution of products and brands of the licensor, in accordance to the respective bottler or license agreement, renewable from time to time.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of this date is franchised by TCCC to the Company for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow.

● Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities.

Unsecured consolidated liabilities payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2022, this ratio is 1.46 times.

Restrictions to bond lines registered in the Securities Registered under number 641, series C

● Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Income by Function”.

Consolidated Net Financial Liabilities” will be considered as the result of: /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);

“EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.

As of December 31, 2022, this ratio was 1.20 times.

● Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities.

F-58

Unencumbered assets refer to the assets that are the property of the issuer; classified under Total Assets of the Issuer’s Financial Statements; and that are free of any pledge, mortgage or other liens constituted in favor of third parties, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).

Unsecured total liabilities correspond to liabilities from Total Current Liabilities and Total Non-Current Liabilities of Issuer’s Financial Statement which do not benefit from preferences or privileges, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).

As of December 31, 2022, this ratio was 1.46 times.

● Maintain a level of “Net Financial Coverage” greater than 3 times in its quarterly financial statements. Net financial coverage means the ratio between the issuer’s EBITDA of the last 12 months and the issuer’s Net Financial Expenses in the last 12 months. Net Financial Expenses will be regarded as the difference between the absolute value of interest expense associated with the issuer’s financial debt account accounted for under “Financial Costs”; and interest income associated with the issuer’s cash accounted for under the Financial Income account. However, this restriction shall be deemed to have been breached where the mentioned level of net financial coverage is lower than the level previously indicated during two consecutive quarters.

As of December 31, 2022, Net Financial Coverage was 19.85 times.

Restrictions to bond lines registered in the Securities Registrar under number 760, series D and E.

● Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Results by Function”.

Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);

EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.

As of December 31, 2022, this ratio was 1.20 times.

● Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities payable.

Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

The following will be considered in determining Consolidated Assets:  assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial Statements. Therefore, Consolidated Assets free of any

F-59

pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2022, this ratio was 1.46 times.

● Maintain, and in no manner, lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” as a territory franchised to the Issuer in Chile by The Coca-Cola Company, hereinafter also referred to as “TCCC” or the “Licensor” for the development, production, sale and distribution of products and brands of said licensor, in accordance to the respective bottler or license agreement, renewable from time to time. Losing said territory, means the non-renewal, early termination or cancellation of this license agreement by TCCC, for the geographical area today called “Metropolitan Region”. This reason shall not apply if, as a result of the loss, sale, transfer or disposition, of that licensed territory is purchased or acquired by a subsidiary or an entity that consolidates in terms of accounting with the Issuer.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of these instruments is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates that are accounted for using the equity method”; plus (v) ”Depreciation”; plus (vi) ”Intangibles Amortization”.

Restrictions to bond lines registered in the Securities Registrar under number 912, series F.

● Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Results by Function”.

“Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);

“EBITDA” will be considered as the sum of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.

As of December 31, 2022, this ratio was 1.20 times.

● Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities payable. Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position. The following will be considered in determining Consolidated Assets:  assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial

F-60

Statements. Therefore, Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2022, this ratio was 1.46 times.

● Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of local bonds Series C, D and E is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”.

As of December 31, 2022 and 2021 the Company complies with all financial covenants.

17.3     Derivative contract obligations

Please see details in Note 22.

17.4 Liabilities for leasing agreements

17.4.1     Current liabilities for leasing agreements

									Maturity		Total
Indebted entity		Creditor entity				Amortization	Nominal		Up to	90 days up to	at	at
Name	Country	Taxpayer ID	Name	Country	Currency	Type	Rate		90 days	1 year	12.31.2022	12.31.2021
									ThCh$	ThCh$	ThCh$	ThCh$
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Cogeração - Light ESCO	Brazil	BRL	Monthly	12.28	%	255,231	814,197	1,069,428	873,321
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Tetra Pack	Brazil	BRL	Monthly	7.39	%	29,490	91,801	121,291	180,136
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Real estate	Brazil	BRL	Monthly	8.10	%	67,708	87,905	155,613	267,752
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Leão Alimentos e Bebidas Ltda.	Brazil	BRL	Monthly	3.50	%	74,841	224,521	299,362	289,409
Embotelladora del Atlántico S.A.	Argentina	Foreign	Tetra Pak SRL	Argentina	USD	Monthly	12.00	%	61,435	435,873	497,308	148,347
Embotelladora del Atlántico S.A.	Argentina	Foreign	Banco Comafi	Argentina	USD	Monthly	12.00	%	—	—	—	24,779
Embotelladora del Atlántico S.A.	Argentina	Foreign	Real estate	Argentina	ARS	Monthly	50.00	%	206,444	416,130	622,574	486,793
Embotelladora del Atlántico S.A.	Argentina	Foreign	Systems	Argentina	USD	Monthly	12.00	%	43,225	80,028	123,253	138,103
VJ S.A.	Chile	93.899.000-k	De Lage Landen Chile S.A.	Chile	USD	Linear	12.16	%	145,000	443,820	588,820	558,872
Vital Aguas S.A.	Chile	76.389.720-6	Coca-Cola del Valle New Ventures S.A.	Chile	CLP	Linear	7.50	%	262,042	736,459	998,501	1,107,139
Envases Central S.A.	Chile	96.705.990-0	Coca-Cola del Valle New Ventures S.A.	Chile	CLP	Linear	5.56	%	602,887	—	602,887	2,364,977
Paraguay Refrescos S.A.	Paraguay	80.003.400-7	Tetra Pack Ltda. Suc. Py	Paraguay	PGY	Monthly	1.00	%	—	—	—	185,345
Transportes Polar S.A.	Chile	96.928.520-7	Cons. Inmob. e Inversiones Limitada	Chile	UF	Monthly	2.89	%	—	118,883	118,883	101,950
Embotelladora Andina S.A.	Chile	91.144.000-8	Central de Restaurante Aramark Ltda.	Chile	CLP	Monthly	1.30	%	—	—	—	13,997
Transportes Andina Refrescos Ltda	Chile	78.861.790-9	Arrendamiento De Maquinaria SPA	Chile	UF	Monthly	1.00	%	77,216	232,224	309,440	274,063
Transportes Andina Refrescos Ltda	Chile	78.861.790-9	Comercializadora Novaverde Limitada	Chile	UF	Monthly	0.08	%	106,674	71,128	177,802	376,446
Transportes Andina Refrescos Ltda	Chile	78.861.790-9	Jungheinrich Rentalift SPA	Chile	UF	Monthly	0.24	%	230,716	702,187	932,903	800,106
Red de Transportes Comerciales S.A.	Chile	76.276.604-3	Inmobiliaria Ilog Avanza Park	Chile	UF	Monthly	0.21	%	119,510	363,004	482,514	—
										Total	7,100,579	8,191,535

The Company maintains leases on forklifts, vehicles, real estate and machinery. These leases have an average lifespan of between one and eight years without including a renewal option in the contracts.

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17.4.2    Non-current liabilities for leasing agreements

							Maturity
Indebted entity		Creditor entity				Amortization	Nominal		1 year up to	2 years up to	3 years up to	4 years up to	More than	at
Name	Country	Taxpayer ID	Name	Country	Currency	Type	Rate		2 years	3 years	4 years	5 years	5 years	12.31.2022
									ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Rio de Janeiro Refrescos Ltda.	Brasil	Foreign	Cogeração - Light ESCO	Brazil	BRL	Monthly	12.28	%	1,208,453	1,365,552	1,543,074	1,743,674	2,501,730	8,362,483
Rio de Janeiro Refrescos Ltda.	Brasil	Foreign	Tetra Pack	Brazil	BRL	Monthly	7.39	%	130,569	140,558	151,311	162,886	409,959	995,283
Rio de Janeiro Refrescos Ltda.	Brasil	Foreign	Real estate	Brazil	BRL	Monthly	8.10	%	57,105	8,702	—	—	—	65,807
Rio de Janeiro Refrescos Ltda.	Brasil	Foreign	Leao Alimentos e Bebidas Ltda.	Brazil	BRL	Monthly	3.50	%	292,445	270,586	31,538	29,618	—	624,187
Embotelladora del Atlántico S.A.	Argentina	Foreign	Tetra Pak SRL	Argentina	USD	Monthly	12.00	%	—	842,297	—	513,737	335,293	1,691,327
Embotelladora del Atlántico S.A.	Argentina	Foreign	Real estate	Argentina	ARS	Monthly	50.00	%	—	136,139	—	—	—	136,139
VJ S.A.	Chile	Foreign	De Lage Landen Chile S.A	Chile	USD	Monthly	12.16	%	769,982	—	—	—		769,982
Transportes Andina Refrescos Ltda	Chile	85.275.700-0	Arrendamiento De Maquinaria SPA	Chile	UF	Monthly	1.00	%	—	355,952	—	—	—	355,952
Transportes Polar S.A.	Chile	76.413.243-2	Cons. Inmob. e Inversiones Limitada	Chile	UF	Monthly	2.89	%	—	195,393	—	—	—	195,393
Red de Transportes Comerciales S.A.	Chile	76.276.604-3	Inmobiliaria Ilog Avanza Park	Chile	UF	Monthly	0.21	%	—	831,235	—	—	—	831,235
Transportes Andina Refrescos Ltda	Chile	78.861.790-9	Jungheinrich Rentalift SPA	Chile	UF	Monthly	0.24	%	—	1,864,841	—	—	—	1,864,841
													Total	15,892,629

17.4.3 Non-current liabilities for leasing agreements (previous year)

							Maturity
Indebted entity		Creditor entity				Type of	Nominal		1 year up to	2 years up to	3 years up to	4 years up to	More than	at
Name	Country	Taxpayer ID	Name	Country	Currency	Amortization	Rate		2 years	3 years	4 years	5 years	5 years	12.31.2021
									THCH$	THCH$	THCH$	THCH$	THCH$	THCH$
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Cogeração - Light ESCO	Brazil	BRL	Monthly	12.28	%	986,852	1,115,143	1,260,112	1,423,926	3,917,596	8,703,629
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Tetra Pack|	Brazil	BRL	Monthly	7.39	%	64,906	69,872	75,217	80,971	256,055	547,021
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Real estate	Brazil	BRL	Monthly	8.20	%	115,321	28,670	—	—	—	143,991
Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Leão Alimentos e Bebidas Ltda.	Brazil	BRL	Monthly	6.56	%	276,248	269,864	249,693	29,102	27,331	852,238
Embotelladora del Atlántico S.A.	Argentina	Foreign	Banco Comafi	Argentina	USD	Monthly	12.00	%	—	86,276	—	—	—	86,276
Embotelladora del Atlántico S.A.	Argentina	Foreign	Tetra Pak SRL	Argentina	USD	Monthly	12.00	%	—	296,693	—	234,882	—	531,575
Embotelladora del Atlántico S.A.	Argentina	Foreign	Real estate	Argentina	ARS	Monthly	50.00	%	—	86,139	—	—	—	86,139
Embotelladora del Atlántico S.A.	Argentina	Foreign	Real estate	Argentina	ARS	Monthly	50.00	%	1,343,457	—	—	—	—	1,343,457
Vital Aguas S.A.	Chile	76.572.588-7	Coca-Cola del Valle New Ventures S.A.	Chile	CLP	Monthly	8.20	%	602,887	—	—	—	—	602,887
Envases Central S.A.	Chile	76.572.588-7	Coca-Cola del Valle New Ventures S.A.	Chile	CLP	Monthly	9.00	%	—	541,264	—	44,696	—	585,960
Paraguay Refrescos S.A.	Paraguay	80.003.400-7	Tetra Pack Ltda. Suc. Py	Paraguay	PGY	Monthly	1.00	%	—	212,945	—	64,460	—	277,405
Transportes Polar S.A.	Chile	76.413.243-2	Cons. Inmob. e Inversiones Limitada	Chile	UF	Monthly	2.89	%	—	156,942	—	—	—	156,942
Embotelladora Andina S.A.	Chile	76.178.360-2	Central de Restaurante Aramark Ltda.	Chile	CLP	Monthly	1.30	%	—	1,670,939	—	798,571	—	2,469,510
													Total	16,387,030

Leasing agreement obligations are not subject to financial restrictions for the reported periods.

F-62

18  – TRADE AND OTHER ACCOUNTS PAYABLE

Trade and other accounts payable are detailed as follows:

Classification	12.31.2022	12.31.2021
	ThCh$	ThCh$
Current	384,801,630	327,409,207
Non-current	3,015,284	256,273
Total	387,816,914	327,665,480
Item	12.31.2022	12.31.2021
	ThCh$	ThCh$
Trade accounts payable	298,298,731	248,163,428
Withholding tax	60,738,656	54,812,365
Others	28,779,527	24,689,687
Total	387,816,914	327,665,480

19  – OTHER PROVISIONS, CURRENT AND NON-CURRENT

19.1        Balances

The composition of provisions is as follows:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Litigation (1)	48,695,427	57,412,406
Total	48,695,427	57,412,406
Current	1,591,644	1,528,879
Non-current	47,103,783	55,883,527
Total	48,695,427	57,412,406

(1) Correspond to the provision made for the probable losses of tax, labor and commercial contingencies, based on the opinion of Management and our legal advisors, according to the following detail:

Description (see note 23.1)	12.31.2022	12.31.2021
	ThCh$	ThCh$
Tax contingencies	27,339,444	28,673,105
Labor contingencies	11,374,753	9,502,630
Civil contingencies	9,981,230	19,236,671
Total	48,695,427	57,412,406

F-63

19.2        Movements

The movement of principal provisions over litigation is detailed as follows:

Description	12.31.2022	12.31.2021
	ThCh$	ThCh$
Opening balance at January 1st	57,412,406	50,070,273
Additional provisions	48,639	948,632
Increase (decrease) in existing provisions	6,359,467	5,903,714
Used provision (payments made charged to the provision)	(3,108,988)	(3,717,687)
Reversal of unused provision*	(15,654,522)	(788,215)
Increase (decrease) due to foreign exchange rate differences	3,638,425	4,995,689
Total	48,695,427	57,412,406

(*) During 2022, the provision constituted by a defendant of the Government of the State of Rio de Janeiro related to the Advertising Contract was reversed. This is due to a review of the balances involved where the amounts claimed are reduced in favor of Rio de Janeiro Refrescos Ltda.

20  – OTHER NON-FINANCIAL LIABILITIES

Other current and non-current non-financial liabilities at each reporting period end are detailed as follows:

	Current			Non-current
Description	12.31.2022		12.31.2021	12.31.2022		12.31.2021
	ThCh$		ThCh$	ThCh$		ThCh$
Dividends payable	29,042,469		29,020,899	—		—
Other	13,251,991	(1)	2,216,935	29,589,051	(2)	23,784,817
Total	42,294,460		31,237,834	29,589,051		23,784,817

(1) Corresponds to an advance payment from Coca-Cola de Chile S.A. for a marketing co-participation plan for the penetration of market equipment, which will be developed between 2022 and until 2024.

(2) Other non-current corresponds mainly to accounts payable to former shareholders of Companhia de Bebidas Ipiranga (“CBI”). See Note 6 for further information.

21  – EQUITY

21.1        Number of shares:

	Number of subscribed, paid-in and voting shares
Series	2022	2021
A	473,289,301	473,289,301
B	473,281,303	473,281,303

21.1.1     Capital:

	Paid-in and subscribed capital
Series	2022	2021
	ThCh$	ThCh$
A	135,379,504	135,379,504
B	135,358,070	135,358,070
Total	270,737,574	270,737,574

F-64

21.1.2     Rights of each series:

● Series A: Elects 12 of the 14 Directors.

● Series B: Receives an additional 10% of dividends distributed to Series A and elects 2 of the 14 Directors.

21.2        Dividend policy

Under Chilean law, we must distribute cash dividends equivalent to at least 30% of our annual net profit, barring an unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company shall not be legally obligated to distribute dividends from accumulated earnings, unless approved by the General Shareholders Meeting. At the General Shareholders’ Meeting held in April 2022, shareholders agreed to pay out of the 2021 earnings a final dividend additional  to the 30% required by Chile’s Law on Corporations and an eventual final dividend, which were paid on April 26, 2022.

The dividends declared and/or paid per share are presented below:

Approval-Payment		Dividend	Profits imputable	CLP	CLP
Periods		type	to dividends	Series A	Series B
02-25-2020	05-29-2020	Final	2019 Earnings	26.00	28.60
02-25-2020	08-28-2020	Additional	Accumulated Earnings	26.60	28.60
10-27-2020	11-24-2020	Interim	2020 Earnings	26.60	28.60
12-22-2020	01-29-2021	Interim	2020 Earnings	26.00	28.60
04-15-2021	05-28-2021	Final	2020 Earnings	26.00	28.60
04-15-2021	08-27-2021	Additional	2020 Earnings	26.00	28.60
09-28-2021	10-29-2021	Interim	2021 Earnings	29.00	31.90
12.21.2021	01.28.2022	Interim	2021 Earnings	29.00	31.90
04.13.2022	04.26.2022	Final	Accumulated Earnings	189.00	207.9
07.27.2022	08.26.2022	Interim	2022 Earnings	29.00	31.90
09.28.2022	10.28.2022	Interim	2022 Earnings	29.00	31.90
12.27.2022	01.27.2023	Interim	2022 Earnings	29.00	31.90

21.3        Other reserves

The balance of other reserves includes the following:

Concept	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Polar acquisition	421,701,520	421,701,520	421,701,520
Foreign currency translation reserves	(495,483,366)	(441,580,088)	(517,496,486)
Cash flow hedge reserve	(62,344,501)	50,603,698	(24,719,533)
Reserve for employee benefit actuarial gains or losses	(7,776,316)	(4,885,926)	(4,663,193)
Legal and statutory reserves	5,435,538	5,435,538	5,435,538
Other	6,014,568	6,014,568	6,014,568
Total	(132,452,557)	37,289,310	(113,727,586)

21.3.1     Polar acquisition

This amount corresponds to the difference between the valuation at fair value of the issuance of shares of Embotelladora Andina S.A. and the book value of the paid capital of Embotelladoras Coca-Cola Polar S.A., which was finally the value of the capital increase notarized in legal terms.

F-65

21.3.2     Cash flow hedge reserve

They arise from the fair value of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period (see Note 22).

21.3.3     Reserve for employee benefit actuarial gains or losses

Corresponds to the restatement effect of employee benefits actuarial losses that according to IAS 19 amendments must be carried to other comprehensive income.

21.3.4     Legal and statutory reserves

In accordance with Official Circular N° 456 issued by the Chilean Financial Market Commission (CMF), the legally required price-level restatement of paid-in capital for 2009 is presented as part of other equity reserves and is accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled CLP 5,435,538 thousand as of December 31, 2009.

21.3.5     Foreign currency translation reserves

This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the Consolidated Financial Statements. Additionally, exchange differences between accounts receivable kept by the companies in Chile with foreign subsidiaries are presented in this account, which have been treated as investment accounted for using the equity method, Translation reserves are detailed as follows:

Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Brazil	(140,762,397)	(167,447,389)	(203,657,392)
Argentina	(360,988,849)	(294,696,228)	(291,332,402)
Paraguay	6,267,880	20,563,529	(22,506,692)
Total	(495,483,366)	(441,580,088)	(517,496,486)

The movement of this reserve for the periods ended on the dates indicated below, is detailed as follows:

Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Brazil	26,684,992	36,210,003	(104,863,274)
Argentina	(66,292,621)	(3,363,826)	(44,916,480)
Paraguay	(14,295,649)	43,070,221	(28,640,392)
Total	(53,903,278)	75,916,398	(178,420,146)

21.3.6     Consolidated statements of comprehensive income

The detail of the comprehensive income and expense for the periods ended on the dates indicated below, is detailed as follows:

	Gross
Balance as of 2022	Balance	Tax	Net Balance
Cash Flow for hedge (1)	(155.206.655)	42.276.806	(112.929.849)
Exchange rate translation differences (1)	(78.009.918)	23.777.899	(54.232.019)
Benefit related to defined benefit plans	(3.960.084)	1.069.223	(2.890.861)
Total Comprehensive income as of December 31, 2022	(237.176.657)	67.123.928	(170.052.729)

F-66

	Gross
Balance as of 2021	Balance	Tax	Net Balance
Cash Flow for hedge (1)	104,232,055	(28,944,992)	75,287,063
Exchange rate translation differences (1)	98,973,862	(22,103,267)	76,870,595
Benefit related to defined benefit plans	(357,840)	96,617	(261,223)
Total Comprehensive income as of December 31, 2021	202,848,077	(50,951,642)	151,896,435

	Gross
Balance as of 2020	Balance	Tax	Net Balance
Cash Flow for hedge (1)	(12,203,755)	2,334,037	(9.869.718)
Exchange rate translation differences (1)	(264,119,093)	84,571,922	(179.547.171)
Benefit related to defined benefit plans	(3,146,362)	849,518	(2.296.844)
Total Comprehensive income as of December 31, 2020	(279.469.210)	87.755.477	(191.713.733)

(1)These concepts will be reclassified to the statements of income when it is settled.

The movement of comprehensive income and expense is as follows:

			Benefit related
	Cash Flow	Exchange rate	to defines
As of December 31, 2022:	Hedge	Differences	benefit plans
	M$	M$	M$
Increase (decrease)	(155,007,121)	(78,009,918)	(3,617,931)
Deferred taxes	43,070,637	23,777,899	976,841
Reclassification to the result by function	(993,365)	—	(249,771)
Total Changes in Equity	(112,929,849)	(54,232,019)	(2,890,861)
Majority Equity holders	(112,948,199)	(53,903,278)	(2,890,390)
Non-Controlling interests	18,350	(328,741)	(471)
Total Changes in equity as of December 31, 2022	(112,929,849)	(54,232,019)	(2,890,861)

			Benefit related
	Cash Flow	Exchange rate	to defines
As of December 31, 2021:	Hedge	Differences	benefit plans
	M$	M$	M$
Increase (decrease)	102,529,128	98,973,862	3,026,996
Deferred taxes	(28,469,748)	(22,103,267)	(817,289)
Reclassification to the result by function	1,227,683	—	(2,470,930)
Total Changes in Equity	75,287,063	76,870,595	(261,223)
Majority Equity holders	75,323,231	75,916,398	(222,733)
Non-Controlling interests	(36,168)	954,197	(38,490)
Total Changes in equity as of December 31, 2021	75,287,063	76,870,595	(261,223)

			Benefit related
	Cash Flow	Exchange rate	to defines
As of December 31, 2020:	Hedge	Differences	benefit plans
	M$	M$	M$
Increase (decrease)	(11,029,171)	(264,119,093)	(3,338,354)
Deferred taxes	2,029,363	84,571,923	901,356
Reclassification to the result by function	(869,910)	—	140,153
Total Changes in Equity	(9,869,718)	(179,547,170)	(2,296,845)
Major Equity holders	(9,686,850)	(178,420,146)	(2,432,441)
Non-Controlling interests	(868)	(1,127,024)	135,596
Total Changes in equity as of December 31, 2020	(9,869,718)	(179,547,170)	(2,296,845)

F-67

21.4        Non-controlling interests

This is the recognition of the portion of equity and income from subsidiaries owned by third parties. This account is detailed as follows:

	Non-controlling Interests
	Ownership %			Shareholders’ Equity			Income
				December	December	December	December	December	December
Details	2022	2021	2020	2022	2021	2020	2022	2021	2020
				ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Embotelladora del Atlántico S.A.	0.0171	0.0171	0.0171	36,451	33,794	23,662	6,410	3,463	2,312
Andina Empaques Argentina S.A.	0.0209	0.0209	0.0209	4,346	3,761	2,349	(5)	326	244
Paraguay Refrescos S.A.	2.1697	2.1697	2.1697	6,177,360	6,331,726	5,037,332	988,416	885,010	791,576
Vital S.A.	35.0000	35.0000	35.0000	8,848,927	8,056,551	8,176,999	923,228	499,923	285,269
Vital Aguas S.A.	33.5000	33.5000	33.5000	2,216,115	2,041,837	1,912,023	198,195	130,522	109,110
Envases Central S.A.	40.7300	40.7300	40.7300	6,669,936	5,738,008	5,227,112	999,807	750,192	(70,996)
Re-Ciclar S.A.*	60.0000	40.0000	—	4,189,373	3,064,078	—	(154,706)	64,082	—
Total				28,142,508	25,269,755	20,379,477	2,961,345	2,333,518	1,117,515

(*) Re-Ciclar is a company incorporated in September 2021 whose purpose is to produce recycled resin for the Coca-Cola system and third parties.

The following tables presents summarized information regarding the Company´s subsidiaries that have non-controlling interest:

		Andina
	Embotelladora	Empaques	Paraguay
	Del Atlantico	Argentina	Refrescos	VJ	Vital Aguas	Envases	Re-Ciclar
December 31,2022	S.A.	S.A.	S.A.	S.A	S.A.	Central S.A.	S.A.
Total current assets	132,214,927	16,481,794	72,297,644	27,190,771	7,326,742	22,918,372	14,595,558
Total non-current assets	243,866,619	11,897,459	269,314,097	19,346,711	5,516,881	22,057,335	5,626,492
Total current liabilities	138,653,369	6,679,478	40,454,954	20,026,609	6,073,685	21,712,326	382,408
Total non-current liabilities	23,668,595	915,427	16,451,513	1,228,226	154,669	6,887,495	9,366,211
Net sales	664,003,032	37,915,166	212,339,131	85,067,864	22,026,721	100,227,739	—
Net Income	37,589,788	(25,095)	45,554,603	2,637,795	591,626	2,454,710	(386,764)

		Andina
	Embotelladora	Empaques	Paraguay
	Del Atlantico	Argentina	Refrescos	VJ	Vital Aguas	Envases	Re-Ciclar
December 31,2021	S.A.	S.A.	S.A.	S.A	S.A.	Central S.A.	S.A.
Total current assets	107,589,399	13,197,912	64,121,536	25,441,586	5,575,990	17,976,170	4,135,677
Total non-current assets	209,051,488	11,865,984	279,148,198	16,832,859	5,789,335	20,945,892	3,560,269
Total current liabilities	98,942,717	6,210,788	34,207,817	17,498,997	4,934,841	20,091,524	35,751
Total non-current liabilities	19,520,634	868,253	17,242,154	1,756,730	335,449	4,742,707	—
Net sales	517,466,510	30,750,914	169,216,180	64,513,412	16,005,176	77,475,816	—
Net Income	20,307,709	1,558,476	40,788,801	1,428,350	389,619	1,841,867	160,195

			��
		Andina
	Embotelladora	Empaques	Paraguay
	Del Atlantico	Argentina	Refrescos	VJ	Vital Aguas	Envases
December 31,2020	S.A.	S.A.	S.A.	S.A	S.A.	Central S.A.
Total current assets	65,077,621	6,212,726	44,658,550	21,175,722	3,798,228	15,600,566
Total non-current assets	140,891,069	8,247,288	226,241,150	14,306,662	7,297,306	18,205,899
Total current liabilities	56,982,545	2,733,092	24,337,015	11,812,384	3,897,100	13,908,411
Total non-current liabilities	10,226,241	491,364	14,399,594	307,146	1,490,904	7,064,568
Net sales	309,936,060	15,148,572	157,152,584	42,955,659	12,929,160	62,267,424
Net Income	13,386,097	1,168,507	36,482,572	815,053	325,700	(174,313)

F-68

21.5        Earnings per share

The basic earnings per share presented in the statement of comprehensive income is calculated as the quotient between income for the period and the weighted average number of shares outstanding during the same period.

Earnings per share used to calculate basic and diluted earnings per share is detailed as follows:

Earnings per share	12.31.2022
	SERIES A	SERIES B	TOTAL
Earnings attributable to shareholders (CLP 000’s)	59,761,287	65,736,355	125,497,642
Weighted average number of shares	473,289,301	473,281,303	946,570,604
Earnings per basic and diluted share (CLP)	126.27	138.89	132.58

Earnings per share	12.31.2021
	SERIES A	SERIES B	TOTAL
Earnings attributable to shareholders (CLP 000’s)	73,666,409	81,031,741	154,698,150
Weighted average number of shares	473,289,301	473,281,303	946,570,604
Earnings per basic and diluted share (CLP)	155.65	171.21	163.43

22  – DERIVATIVE ASSETS AND LIABILITIES

Embotelladora Andina currently maintains “Cross Currency Swaps” and “Currency Forward” agreements as derivative financial instruments.

Cross Currency Swaps (“CCS”), also known as interest rate and currency swaps are valued by the method of discounted future cash flows at a market rate corresponding to the currencies and rates of the transaction.

On the other hand, the fair value of forward currency contracts is calculated in reference to current forward exchange rates for contracts with similar maturity profiles.

As of December 31, 2022, the Company holds the following derivative instruments:

22.1Accounting recognition of cross currency and rate swaps

Cross Currency Swaps, associated with local Bonds (Chile)

As of December 31, 2022, the Company maintains derivative contracts to secure some of its bond debt issued in Unidades de Fomento totaling UF 9,340,963 (UF 9,752,973 as of December 31, 2021), to convert those obligations to CLP.

These contracts were valued at fair value, yielding a net asset as of December 31, 2022 of CLP 75,297,737 thousand (CLP 34,239,224 thousand as of December 31, 2021) which is presented in Other non-current financial assets. Maturity dates of derivative contracts are distributed throughout 2026, 2031, 2034 and 2035.

Cross Currency Swaps, associated with international Bonds (U.S.A.)

As of December 31, 2022, the Company maintains derivative contracts to secure US Dollar public bond obligations of USD 360 million due in 2023, to convert such obligations into Brazilian Real. In addition, derivative contracts amounting to USD 300 million are held to convert such obligation into Unidades de Fomento (UF - CLP re-adjustable by the Consumer Price Index) due in 2050. The valuation of the first contract at its fair value generates an asset of CLP 170,143,055 thousand as of December 31, 2022 (CLP 192,844,908 thousand as of December 31, 2021), while the valuation of the second contract at its fair value generates a liability of CLP 112,175,058 thousand as of December 31, 2022 (CLP 54,252,995 thousand asset at December 31, 2021).

F-69

The amount of exchange differences recognized in the statement of income related to financial liabilities in U.S. dollars are absorbed by the amounts recognized under comprehensive income.

22.2        Forward currency transactions expected to be very likely

During 2022 and 2021, Embotelladora Andina entered into forward contracts to ensure the exchange rate on future commodity purchasing needs for its 4 operations, i.e., closing forward instruments in USD/ARS, USD/BRL, USD/CLP and USD/GYP. As of December 31, 2022, outstanding contracts amount to USD 80.2 million (USD 70.2 million as of December 31, 2021).

Futures contracts that ensure prices of future raw materials have not been designated as hedge agreements, since they do not fulfill IFRS documentation requirements, whereby its effects on variations in fair value are accounted for directly under other comprehensive income.

Fair value hierarchy

As of December 31, 2022, the Company held assets for derivative contracts for CLP 245,504,291 thousand (CLP 282,298,832 thousand as of December 31, 2021) and held liabilities for derivative contracts for CLP 114,492,635 thousand (CLP 758,663 thousand as of December 31, 2021). Those contracts covering existing items have been classified in the same category of hedged, the net amount of derivative contracts by concepts covering forecasted items have been classified in current and non-current financial assets and financial liabilities. All the derivative contracts are carried at fair value in the consolidated statement of financial position.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1:    quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2:    Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)

Level 3:    Inputs for assets and liabilities that are not based on observable market data.

During the reporting period, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.

	Fair Value Measurement at December 31, 2022
	Quoted prices in
	active markets for
	identical assets or	Observable	Unobservable
	liabilities	market data	market data
	(Level 1)	(Level 2)	(Level 3)	Total
	ThCh$	ThCh$	ThCh$	ThCh$
Assets
Current assets
Other current financial assets	—	170,206,554	—	170,206,554
Other non-current financial assets	—	75,297,737	—	75,297,737
Total assets	—	245,504,291	—	245,504,291
Liabilities
Other current financial liabilities	—	2,317,577	—	2,317,577
Other non-current financial liabilities	—	112,175,058	—	112,175,058
Total Liabilities	—	114,492,635	—	114,492,635

F-70

	Fair Value Measurement at December 31, 2021
	Quoted prices in
	active markets for
	identical assets or	Observable	Unobservable
	liabilities	market data	market data
	(Level 1)	(Level 2)	(Level 3)	Total
	ThCh$	ThCh$	ThCh$	ThCh$
Assets
Current and non-current assets
Other current financial assets	—	961,705	—	961,705
Other non-current financial assets	—	281,337,127	—	281,337,127
Total assets	—	282,298,832	—	282,298,832
Liabilities
Current and non-current liabilities
Other current financial liabilities	—	758,663	—	758,663
Other non-current financial liabilities	—	—	—	—
Total liabilities	—	758,663	—	758,663

23  – LITIGATION AND CONTINGENCIES

23.1        Lawsuits and other legal actions:

In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face legal or extrajudicial contingencies that might result in material or significant losses or gains, except for the following:

1) Embotelladora del Atlántico S.A. and Andina Empaques Argentina S.A. face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,397,149 thousand (CLP 1,917,657 thousand as of December 31, 2021). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally, Embotelladora del Atlántico S.A. maintains time deposits for an amount of CLP 288,399 thousand to guaranty judicial liabilities.

2) Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 45,706,634 thousand (CLP 53,965,870 thousand as of December 31, 2021). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains Deposit in courts and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible, probable or remote. The amounts deposited or pledged as legal guarantees amounted to CLP 23,260,412 thousand (CLP 23,502,962 thousand as of December 31, 2021).

Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. as of December 31, 2014, are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 1,950,203,388, with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.55%. and become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, if the warranty and bond letters are executed, Rio de Janeiro Refrescos Ltda. promises to reimburse to the financial institutions and Insurance Companies any amounts disbursed by them to the Brazilian government.

Main contingencies faced by Rio de Janeiro Refrescos are as follows:

a) Tax contingencies resulting from credits on tax on industrialized products (IPI).

Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) totaling BRL 2,867,475,111 as of December 31, 2022.

F-71

The Company does not share the position of the Brazilian tax authority in these procedures and considers that it was entitled to claim IPI tax credits in connection with purchases of certain exempt raw materials from suppliers located in the Manaus free trade zone.

Based on the opinion of its advisers, and legal outcomes to date, Management estimates that these procedures do not represent probable losses and has not recorded a provision on these matters.

Notwithstanding the above, the IFRS related to business combination in terms of distribution of the purchase price establish that contingencies must be measured one by one according to their probability of occurrence and discounted at fair value from the date on which it is deemed the loss can be generated. As a result of the acquisition of Companhia de Bebidas Ipiranga in 2013 and pursuant to this criterion and although there are contingencies listed only as possible for BRL 552,722,424 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 125,421,068.

b) Other tax contingencies.

They refer to ICMS-SP tax administrative processes that challenge the credits derived from the acquisition of tax-exempt products acquired by the Company from a supplier located in the Manaus Free Zone. The total amount is BRL 464,269,491 being assessed by external attorneys as a remote loss, so it has no accounting provision.

The company was challenged by the federal tax authority for tax deductibility of a portion of goodwill in the 2014-2016 period arising from the acquisition of Companhia de Bebidas Ipiranga. The tax authority understands that the entity that acquired Companhia de Bebidas Ipiranga is Embotelladora Andina and not Rio de Janeiro Refrescos Ltda. In the view of external lawyers, such a statement is erroneous, classifying it as a possible loss. The value of this process is BRL 546,082,453, as of the date of these financial statements.

3) Embotelladora Andina S.A. and its Chilean subsidiaries face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,552,353 thousand (CLP 1,487,509 thousand as of December 31, 2021). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.

4) Paraguay Refrescos S.A. faces tax, trade, labor and other lawsuits. Accounting provisions have been made for the contingency of any loss because of these lawsuits amounting to CLP 39,291 thousand (CLP 41,370, thousand as of December 31, 2021). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.

F-72

23.2        Direct guarantees and restricted assets:

Guarantees and restricted assets are detailed as follows:

Guarantees that commit assets recognized in the financial statements:

			Committed assets		Accounting value
Guaranty Creditor	Debtor name	Relationship	Guaranty	Type	12.31.2022	12.31.2021
					ThCh$	ThCh$
Administradora Plaza Vespucio S.A.	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	98,170	86,416
Cooperativa Agricola Pisquera Elqui Limitada	Embotelladora Andina S.A.	Parent company	Cash	Other non-current financial assets	1,056,320	1,216,865
Mall Plaza	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	330,298	290,890
Serv. Nacional Aduanas	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable		18,583
Metro S.A.	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	21,207	24,335
Parque Arauco S.A.	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	142,901	126,136
Lease agreement	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	103,711	—
Others	Embotelladora Andina S.A.	Parent company	Cash	Trade accounts and other accounts receivable	14,183	—
Several retail	Vending	Subsidiary	Cash	Trade accounts and other accounts receivable	61,395	63,792
Several retail	Transportes Refrescos	Subsidiary	Cash	Trade accounts and other accounts receivable	693	628
Several retail	Transportes Polar	Subsidiary	Cash	Trade accounts and other accounts receivable	22,235	69,745
Workers’ claims	Rio de Janeiro Refrescos Ltda.	Subsidiary	Judicial deposit	Other non-current non-financial assets	6,605,781	6,057,282
Civil and tax claims	Rio de Janeiro Refrescos Ltda.	Subsidiary	Judicial deposit	Other non-current non-financial assets	6,457,702	6,562,747
Governmental entities	Rio de Janeiro Refrescos Ltda.	Subsidiary	Plant and equipment	Property, plant and equipment	10,196,929	10,882,933
Distribuidora Baraldo S.H.	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	97	164
Acuña Gomez	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	145	247
Nicanor López	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	104	176
Municipalidad Bariloche	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	2,428	2,230
Municipalidad San Antonio Oeste	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	10,664	18,153
Municipalidad Carlos Casares	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	431	734
Municipalidad Chivilcoy	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	66,697	113,530
Granada Maximiliano	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	870	1,480
Municipalidad de Junin	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	139	237
Almada Jorge	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	1,180	2,009
Farias Matias Luis	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	541	922
Temas Industriales SA - Embargo General de Fondos	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	60,575	103,110
DBC SA C CERVECERIA ARGENTINA SA ISEMBECK	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	10,870	18,502
Coto Cicsa	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	1,932	3,289
Cencosud	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	1,208	2,056
Jose Luis Kreitzer, Alexis Beade Y Cesar Bechetti	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	4,784	8,143
Bariloche Case	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	—	1,902
Vicentin	Embotelladora del Atlántico S.A.	Subsidiary	Judicial deposit	Other non-current non-financial assets	125,683	—
Marcus A.Peña	Paraguay Refrescos	Subsidiary	Real estate	Property, plant and equipment	4,965	5,692
Mauricio J Cordero C	Paraguay Refrescos	Subsidiary	Real estate	Property, plant and equipment	—	987
José Ruoti Maltese	Paraguay Refrescos	Subsidiary	Real estate	Property, plant and equipment	—	712
Alejandro Galeano	Paraguay Refrescos	Subsidiary	Real estate	Property, plant and equipment	—	1,365
Ana Maria Mazó	Paraguay Refrescos	Subsidiary	Real estate	Property, plant and equipment	1,113	1,300

F-73

Guarantees that do not commit assets recognized in the Financial Statements:

			Committed assets		Amounts involved
Guaranty creditor	Debtor name	Relationship	Guaranty	Type	12.31.2022	12.31.2021
					ThCh$	ThCh$
Labor procedures	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Legal proceeding	1,936,493	1,593,498
Administrative procedures	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Legal proceeding	7,616,498	4,717,824
Federal government	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Legal proceeding	186,607,491	153,491,717
State government	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Legal proceeding	117,027,313	64,725,638
Sorocaba Refrescos	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Guarantor	3,280,603	3,027,291
Others	Rio de Janeiro Refrescos Ltda.	Subsidiary	Guaranty receipt	Legal proceeding	3,423,715	3,390,177
Aduana de EZEIZA	Andina Empaques Argentina S.A.	Subsidiary	Surety insurance	Faithful compliance of contract	3,791	637,631

24  – FINANCIAL RISK MANAGEMENT

The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, interest rate risk and price risk). The Company’s global risk management program focuses on the uncertainty of financial markets and seeks to minimize potential adverse effects on the performance of the Company. The Company uses derivatives to hedge certain risks. A description of the primary policies established by the Company to manage financial risks are provided below:

Interest Rate Risk

As of December 31, 2022, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of Ch$1,104,136 million (collectively the “Notes”), with Ch$340.768 million payable within 12 months. Future interest payments associated with the Notes total Ch$495,574 million, with Ch$25,874 million payable within 12 months.

The Company’s greatest indebtedness corresponds to six contracts for own issued Chilean local bonds at a fixed rate, which currently have an outstanding balance of UF 15.45 million denominated in UF (“UF”), debt indexed to inflation in Chile (Company sales are correlated with the UF variation), of which five of these Local Bonds have been redenominated through Cross Currency Swaps to Chilean Pesos (CLP).

On the other hand, there is also the Company’s indebtedness on the international market through two 144A/RegS Bonds at a fixed rate, one for USD 365 million, denominated in dollars, and practically 100% of which has been re-denominated to BRL through Cross Currency Swaps, and another one for USD 300 million denominated in USD, and practically 100% of which has been re-denominated to Unidades de Fomento (UF) through Cross Currency Swaps.

Credit risk

The credit risk to which the Company is exposed comes mainly from trade accounts receivable maintained with retailers, wholesalers and supermarket chains in domestic markets; and the financial investments held with banks and financial institutions, such as time deposits, mutual funds and derivative financial instruments.

a)     Trade accounts receivable and other current accounts receivable

Credit risk related to trade accounts receivable is managed and monitored by the area of Finance and Administration of each business unit. The Company has a wide base of more than 283 thousand clients implying a high level of atomization of accounts receivable, which are subject to policies, procedures and controls established by the Company. In accordance with such policies, credits must be based objectively, non-discretionary and uniformly granted to all clients of a same segment and channel, provided these will allow generating economic benefits to the Company. The credit limit is checked periodically considering payment behavior. Trade accounts receivable pending of payment are monitored on a monthly basis,

F-74

i. Sale Interruption

In accordance with Corporate Credit Policy, the interruption of sale must be within the following framework: when a customer has outstanding debts for an amount greater than USD 250,000, and over 60 days expired, sale is suspended. The General Manager in conjunction with the Finance and Administration Manager authorize exceptions to this rule, and if the outstanding debt should exceed USD 1,000,000, and in order to continue operating with that client, the authorization of the Chief Financial Officer is required. Notwithstanding the foregoing, each operation can define an amount lower than USD 250,000 according to the country’s reality.

ii. Impairment

The impairment recognition policy establishes the following criteria for provisions: 30% is provisioned for 31 to 60 days overdue, 60% between 60 and 91 days, 90% between 91 and 120 days overdue and 100% for more than 120 days. Exemption of the calculation of global impairment is given to credits whose delays in the payment correspond to accounts disputed with the customer whose nature is known and where all necessary documentation for collection is available, therefore, there is no uncertainty on recovering them. However, these accounts also have an impairment provision as follows: 40% for 91 to 120 days overdue, 80% between 120 and 170, and 100% for more than 170 days.

iii. Prepayment to suppliers

The Policy establishes that USD 25,000 prepayments can only be granted to suppliers if its value is properly and fully provisioned. The Treasurer of each subsidiary must approve supplier warranties that the Company receives for prepayments before signing the respective service contract, In the case of domestic suppliers, a warranty ballot (or the instrument existing in the country) shall be required, in favor of Andina executable in the respective country, non-endorsable, payable on demand or upon presentation and its validity will depend on the term of the contract. In the case of foreign suppliers, a stand-by credit letter will be required which shall be issued by a first line bank; in the event that this document is not issued in the country where the transaction is done, a direct bank warranty will be required. Subsidiaries can define the best way of safeguarding the Company’s assets for prepayments under USD 25,000.

iv. Guarantees

In Chile, we have insurance with Compañía de Seguros de Crédito Continental S.A (AA rating -according to Fitch Chile and Humphreys rating agencies) covering the credit risk regarding trade debtors in Chile.

The rest of the operations do not have credit insurance, instead mortgage guarantees are required for volume operations of wholesalers and distributors in the case of trade accounts receivables. In the case of other debtors, different types of guarantees are required according to the nature of the credit granted.

Historically, uncollectible trade accounts have been lower than 0.5% of the Company’s total sales,

b)    Financial investment.

The Company has a Policy that is applicable to all the companies of the group in order to cover credit risks for financial investments, restricting both the types of instruments as well as the institutions and degree of concentration. The companies of the group can invest in:

i. Time deposits: only in banks or financial institutions that have a risk rating equal or higher than Level 1 (Fitch) or equivalent for deposits of less than 1 year and rated A or higher (S&P) or equivalent for deposits of more than 1 year.

ii. Mutual funds: investments with immediate liquidity and no risk of capital (funds composed of investments at a fixed-term, current account, fixed rate Tit BCRA, negotiable obligations, Over Night, etc.,) in all those counter-parties that have a rating greater than or equal to AA-(S&P) or equivalent, Type 1 Pacts and Mutual Funds, with a rating greater than or equal to AA+ (S&P) or equivalent.

F-75

iii. Other investment alternatives must be evaluated and authorized by the office of the Chief Financial Officer.

Exchange Rate Risk

The company is exposed to three types of risk caused by exchange rate volatility:

a)    Exposure of foreign investment

This risk originates from the translation of net investment from the functional currency of each country (Brazilian Real, Paraguayan Guaraní, and Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not hedge this risk.

	BRL/CLP		ARS/CLP		PGY/CLP
Parity variation at December 31, 2022	+8.4%		-41.3%		-5.0%
	Brazil		Argentina		Paraguay
	ThCh$		ThCh$		ThCh$
Total assets	949,137,527		392,963,540		341,611,741
Total liabilities	676,923,781		163,156,211		56,906,467
Net investment	272,213,746		229,807,329		284,705,274
Share on income	24.0	%	25.7	%	8.0	%
-5% variation impact on currency translation
Impact on results for the period	(2,548,633)		(1,800,552)		(2,169,267)
Impact on equity at closing	(12,962,559)		(10,943,206)		(13,557,394)

Net exposure of assets and liabilities in foreign currency

This risk stems mostly from carrying liabilities in US dollar, so the volatility of the US dollar with respect to the functional currency of each country generates a variation in the valuation of these obligations, with consequent effect on results.

In order to protect the Company from the effects on income resulting from the volatility of the Brazilian Real and the Chilean Peso against the U,S, dollar, the Company maintains derivative contracts (cross currency swaps) to cover almost 100% of US dollar-denominated financial liabilities.

By designating such contracts as hedging derivatives, the effects on income for variations in the Chilean Peso and the Brazilian Real against the US dollar, are mitigated annulling its exposure to exchange rates.

b) Exposure of assets purchased or indexed to foreign currency

This risk originates from purchases of raw materials and investments in Property, plant and equipment, whose values are expressed in a currency other than the functional currency of the subsidiary. Changes in the value of costs or investments can be generated through time, depending on the volatility of the exchange rate.

In order to minimize this risk, the Company maintains a currency hedging policy stipulating that it is necessary to enter into foreign currency derivatives contracts to lessen the effect of the exchange rate over cash expenditures expressed in US dollars, corresponding mainly to payment to suppliers of raw materials in each of the operations. This policy stipulates up to 12-month forward horizon.

F-76

Commodities risk

The Company is subject to a risk of price fluctuations in the international markets mainly for sugar, PET resin and aluminum, which are inputs used to produce beverages and containers, which together, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. To minimize this risk or stabilize often supply contracts and anticipated purchases are made when market conditions warrant.

Liquidity risk

The products we sell are mainly paid for in cash and short-term credit; therefore, the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings.

The following table presents an analysis of the Company’s committed maturities for liability payments throughout the coming years, with interest calculated for each period:

As of December 31, 2022	Payments on the year of maturity
		More than 1	More than 2	More than 3
Item	1 year	up to 2	up to 3	up to 4	More than 5
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Bank debt	741,228	—	4,081,333	—	—
Bonds payable	340,767,980	15,765,142	16,478,664	10,915,215	720,209,139
Lease obligations	7,100,579	2,854,106	5,615,704	6,887,353	535,465
Contractual obligations (1)	127,611,501	39,242,308	5,973,129	5,339,005	4,950,895
Total	476,221,288	57,861,556	32,148,830	23,141,573	725,695,499

As of December 31, 2021	Payments on the year of maturity
		More than 1	More than 2	More than 3
Item	1 year	up to 2	up to 3	up to 4	More than 5
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Bank debt	26,617	—	—	4,000,000	—
Bonds payable	25,383,339	321,636,043	13,915,567	14,545,378	670,564,954
Lease obligations	8,191,535	4,949,066	2,975,353	2,641,096	5,821,515
Contractual obligations (1)	85,354,594	31,678,743	9,036,380	8,992,060	4,950,895
Total	118,956,085	358,263,852	25,927,300	30,178,534	681,337,364

(1)    Agreements that the Andina Group has with collaborating entities for its operation, which are mainly related to contracts entered into to supply products and/or support services in information technology services, commitments of the company with its franchisor to make investments or expenses related to the development of the franchise, support services to personnel, security services, maintenance services of fixed assets, purchase of inputs for production, among others.

F-77

25  – EXPENSES BY NATURE

Other expenses by nature are:

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Direct production costs	(1,388,536,599)	(1,192,363,804)	(862,383,664)
Payroll and employee benefits	(376,196,521)	(301,522,420)	(252,337,262)
Transportation and distribution	(224,190,549)	(174,253,526)	(126,683,586)
Advertisement	(26,575,951)	(28,475,957)	(6,917,300)
Depreciation and amortization	(119,365,431)	(104,775,303)	(110,920,517)
Repairs and maintenance	(43,847,581)	(38,631,914)	(25,971,485)
Other expenses	(133,021,583)	(84,272,085)	(73,455,798)
Total (1)	(2,311,734,215)	(1,924,295,009)	(1,458,669,612)

(1) Corresponds to the addition of cost of sales, administrative expenses and distribution costs.

26  – OTHER INCOME

Other income by function is detailed as follows:

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Gain due to disposal of Property, plant and equipment	79,650	480,401	16,005
Recovery of PIS credit and COFINS (1)	—	—	6,744,341
Credit recovery in Brazil (2)	1,856,762	—	—
Others	561,108	857,477	1,595,952
Total	2,497,520	1,337,878	8,356,298

(1) See Note 6 for more information on recovery.

(2) restitution of credits for the payment of coffee quota (cota café).

27  – OTHER EXPENSES BY FUNCTION

Other expenses by function are detailed as follows:

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Contingencies and non-operating fees	6,316,102	(7,950,093)	(1,081,812)
Tax on bank debits and other bank expenses	(7,150,739)	(5,270,040)	(3,367,615)
Write-offs, disposals and loss of property, plant and equipment	—	(417,623)	(7,972,976)
Others	(51,694)	(1,574,034)	(5,007,853)
Total	(886,331)	(15,211,790)	(17,430,256)

F-78

28  – FINANCIAL INCOME AND EXPENSES

Financial income and costs are detailed as follows:

a)    Financial income

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Interest income	32,388,801	2,196,886	7,931,055
Ipiranga purchase warranty restatement	39,509	11,290	7,674
From PIS credit and COFINS (1)	2,054,586	1,312,930	5,124,810
Other financial income	5,239,514	4,270,763	1,882,340
Total	39,722,410	7,791,869	14,945,879

(1) See Note 6 for more information on recovery.

b)    Financial expenses

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Bond interest	(51,863,601)	(48,624,062)	(45,927,500)
Bank loan interest	(1,782,972)	(267,012)	(1,186,731)
Lease interest	(2,092,868)	(1,816,506)	(1,873,571)
Other financial costs	(3,808,512)	(2,284,876)	(5,785,035)
Total	(59,547,953)	(52,992,456)	(54,772,837)

29  – OTHER (LOSSES) GAINS

Other (losses) gains are detailed as follows:

	01.01.2022	01.01.2021	01.01.2020
Description	12.31.2022	12.31.2021	12.31.2020
	ThCh$	ThCh$	ThCh$
Other gains and losses*	(24,983,899)	—	287
Total	(24,983,899)	—	287

* During the first half of 2022, losses of CLP 24,982,887 thousand were recorded due to the sale of a receivable owned by Embotelladora Andina S.A. to a financial institution at a discount. The receivable of Embotelladora Andina was originally generated as a result of dividends from subsidiaries declared in Argentinian pesos.

F-79

30 – LOCAL AND FOREIGN CURRENCY

Local and foreign currency balances are the following:

CURRENT ASSETS	12.31.2022	12.31.2021
	ThCh$	ThCh$
Cash and cash equivalent	291,681,987	304,312,020
USD	14,266,343	13,640,823
EUR	870,613	2,838,102
CLP	138,205,025	176,278,025
BRL	69,923,621	56,272,827
ARS	29,215,288	22,425,407
PGY	39,201,097	32,856,836
Other current financial assets	263,044,869	195,470,749
CLP	92,826,375	194,834,125
BRL	170,154,995	140,544
ARS	—	481,148
PGY	63,499	14,932
Other non-current financial assets	26,957,000	14,719,104
USD	847,149	1,141,780
EUR	329,535	77,526
UF	517,748	256,912
CLP	12,478,839	6,282,535
BRL	2,382,575	1,183,076
ARS	8,596,540	3,831,513
PGY	1,804,614	1,945,762
Trade debtors and other accounts payable	279,770,286	265,490,626
USD	1,467,851	2,347,439
EUR	6,770	—
UF	49,469	69,142
CLP	155,443,395	147,478,959
BRL	74,851,690	76,173,944
ARS	39,795,968	32,330,010
PGY	8,155,143	7,091,132
Accounts receivable related entities	15,062,167	9,419,050
CLP	14,738,236	6,674,178
BRL	86,492	87,865
ARS	237,439	2,657,007
Inventory	245,886,656	191,350,206
CLP	103,719,764	77,225,374
BRL	60,074,387	44,848,239
ARS	62,655,300	54,376,217
PGY	19,437,205	14,900,376
Current tax assets	39,326,427	10,224,368
CLP	33,296,214	5,574,826
BRL	5,633,971	4,649,542
ARS	396,242	—
Total current assets	1,161,729,392	990,986,123
USD	16,581,343	17,130,042
EUR	1,206,918	2,915,628
UF	567,217	326,054
CLP	550,707,848	614,348,022
BRL	383,107,731	183,356,037
ARS	140,896,777	116,101,302
PGY	68,661,558	56,809,038

F-80

NON-CURRENT ASSETS	12.31.2022	12.31.2021
	CLP (000’s)	ThCh$
Other non-current assets	94,852,711	296,632,012
UF	75,297,737	34,239,224
CLP	3,317,778	55,469,858
BRL	—	192,844,909
ARS	16,237,196	14,078,021
Other non-current, non-financial assets	59,672,266	70,861,616
USD	91,220	673,524
CLP	483,530	419,910
BRL	55,060,849	66,621,741
ARS	2,367,042	1,836,280
PGY	1,669,625	1,310,161
Non-current accounts receivable	539,920	126,464
UF	249,366	7,089
CLP	233,773	76,649
ARS	56,781	—
PGY	—	42,726
Non-current accounts receivable related entities	109,318	98,941
CLP	109,318	98,941
Investments accounted for using the equity method	92,344,598	91,489,194
CLP	53,869,966	52,519,699
BRL	38,474,632	38,969,495
Intangible assets other than goodwill	671,778,888	659,631,543
CLP	312,981,971	311,086,862
BRL	177,173,694	159,307,806
ARS	9,075,200	7,560,882
PGY	172,548,023	181,675,993
Goodwill	129,023,922	118,042,900
CLP	9,523,768	9,523,767
BRL	65,920,764	60,830,705
ARS	46,254,831	39,976,392
PGY	7,324,559	7,712,036
Property, plant and equipment	798,221,259	716,379,127
EUR	3,146	404,450
CLP	303,797,013	273,812,253
BRL	229,486,365	201,527,151
ARS	177,219,624	152,227,991
PGY	87,715,111	88,407,282
Deferred tax assets	2,428,333	1,858,727
CLP	2,428,333	1,858,727
Total non-current assets	1,848,971,215	1,955,120,524
USD	91,220	673,524
EUR	3,146	404,450
UF	75,547,103	34,246,313
CLP	686,745,450	704,866,666
BRL	566,116,304	720,101,807
ARS	251,153,893	215,679,566
PGY	269,314,099	279,148,198

F-81

	12.31.2022			12.31.2021
CURRENT LIABILITIES	Up to 90 days	90 days up to 1 year	Total	Up to 90 days	90 days up to 1 year	Total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Other current financial liabilities	13,431,339	353,870,741	367,302,080	10,887,752	36,875,287	47,763,039
USD	249,660	321,143,849	321,393,509	233,993	8,329,598	8,563,591
UF	11,047,586	11,557,808	22,605,394	9,155,688	10,086,725	19,242,413
CLP	893,612	14,216,358	15,109,970	923,663	13,491,768	14,415,431
BRL	427,270	1,703,193	2,130,463	413,835	1,381,397	1,795,232
ARS	813,211	3,910,926	4,724,137	94,094	2,272,643	2,366,737
PGY	—	1,338,607	1,338,607	66,479	1,313,156	1,379,635
Current trade accounts and other accounts payable	369,548,991	15,252,639	384,801,630	312,643,627	14,765,580	327,409,207
USD	34,223,389	33,046	34,256,435	20,438,936	1,309,678	21,748,614
EUR	3,148,088	899,198	4,047,286	6,093,006	—	6,093,006
UF	2,263,175	—	2,263,175	2,359,381	—	2,359,381
CLP	166,847,281	14,320,395	181,167,676	142,370,837	13,455,902	155,826,739
BRL	78,514,701	—	78,514,701	74,142,872	—	74,142,872
ARS	69,945,679	—	69,945,679	52,030,144	—	52,030,144
PGY	14,606,678	—	14,606,678	15,208,451	—	15,208,451
Other currencies
Current accounts payable to related entities	90,248,067	—	90,248,067	56,103,461	—	56,103,461
CLP	44,298,074	—	44,298,074	29,349,401	—	29,349,401
BRL	35,671,648	—	35,671,648	16,799,532	—	16,799,532
ARS	8,587,487	—	8,587,487	9,893,495	—	9,893,495
PGY	1,690,858	—	1,690,858	61,033	—	61,033
Other current provisions	1,319,935	271,709	1,591,644	1,082,929	445,950	1,528,879
CLP	1,319,935	232,418	1,552,353	1,082,929	404,580	1,487,509
PGY	—	39,291	39,291	—	41,370	41,370
Current tax liabilities	627,257	13,988,190	14,615,447	20,733,623	9,779,164	30,512,787
CLP	627,257	7,301	634,558	20,038,643	8,452	20,047,095
ARS	—	13,479,571	13,479,571	694,980	8,524,083	9,219,063
PGY	—	501,318	501,318	—	1,246,629	1,246,629
Current employee benefit provisions	45,482,776	2,909,030	48,391,806	13,434,697	21,577,375	35,012,072
CLP	8,115,837	1,052,395	9,168,232	1,181,717	7,327,637	8,509,354
BRL	19,586,150	—	19,586,150	11,649,154	—	11,649,154
ARS	17,780,789	—	17,780,789	603,826	12,529,323	13,133,149
PGY	—	1,856,635	1,856,635	—	1,720,415	1,720,415
Other current non-financial liabilities	1,054,187	41,240,273	42,294,460	612,391	30,625,443	31,237,834
CLP	1,043,048	41,072,576	42,115,624	612,391	30,472,381	31,084,772
ARS	11,139	—	11,139	—	18,234	18,234
PGY	—	167,697	167,697	—	134,828	134,828
Total current liabilities	521,712,552	427,532,582	949,245,134	415,498,480	114,068,799	529,567,279
USD	34,473,049	321,176,895	355,649,944	20,672,929	9,639,276	30,312,205
EUR	3,148,088	899,198	4,047,286	6,093,006	—	6,093,006
UF	13,310,761	11,557,808	24,868,569	11,515,069	10,086,725	21,601,794
CLP	223,145,044	70,901,442	294,046,486	195,559,581	65,160,720	260,720,301
BRL	134,199,769	1,703,193	135,902,962	103,005,393	1,381,397	104,386,790
ARS	97,138,305	17,390,497	114,528,802	63,316,539	23,344,283	86,660,822
PGY	16,297,536	3,903,548	20,201,084	15,335,963	4,456,398	19,792,361

F-82

	31.12.2021				31.12.2020
	More than 1 year	More than  3 and			More than 1 year	More than  3 and	More  than
NON-CURRENT LIABILITIES	up to 3	up to 5	More  than 5 years	Total	up to 3	up to 5	5 years	Total
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Other non-current financial liabilities	40,713,614	28,457,265	835,631,179	904,802,058	35,164,178	331,118,858	674,765,936	1,041,048,972
USD	1,612,279	513,738	251,617,079	253,743,096	1,726,426	308,546,732	247,094,136	557,367,294
UF	35,491,226	15,781,426	468,927,353	520,200,005	29,821,850	15,453,105	423,470,818	468,745,773
CLP	—	8,500,000	112,175,058	120,675,058	602,887	4,000,000	—	4,602,887
BRL	3,473,970	3,662,101	2,911,689	10,047,760	2,926,876	3,119,021	4,200,982	10,246,879
ARS	136,139	—	—	136,139	86,139	—	—	86,139
Non-current accounts payable	3,015,284	—	—	3,015,284	256,273	—	—	256,273
CLP	3,015,284	—	—	3,015,284	256,273	—	—	256,273
Accounts payable related entities	10,354,296	—	—	10,354,296	11,557,723	—	—	11,557,723
BRL	10,354,296	—	—	10,354,296	11,557,723	—	—	11,557,723
Other non-current provisions	1,397,148	45,706,635	—	47,103,783	1,917,655	53,965,872	—	55,883,527
BRL	—	45,706,635		45,706,635	—	53,965,872	—	53,965,872
ARS	1,397,148	—	—	1,397,148	1,917,655	—	—	1,917,655
Deferred tax liabilities	26,966,210	34,088,989	104,723,357	165,778,556	21,365,277	35,470,702	111,618,848	168,454,827
CLP	5,617,287	38,945	88,895,598	94,551,830	3,619,149	1,845,868	95,076,888	100,541,905
BRL	—	34,050,044	—	34,050,044	—	33,624,834	—	33,624,834
ARS	21,348,923	—	—	21,348,923	17,746,128	—	—	17,746,128
PGY	—	—	15,827,759	15,827,759	—	—	16,541,960	16,541,960
Non-current employee benefit provisions	1.299.511	60,560	16,049,722	17,409,793	1,329,992	62,456	12,747,222	14,139,670
CLP	665,274	60,560	16,049,722	16,775,556	629,798	62,456	12,747,222	13,439,476
ARS	10,484	—	—	10,484
PGY	623,753	—	—	623,753	700,194	—	—	700,194
Other non-financial liabilities	—	29,589,051	—	29,589,051	21,113	23,763,704	—	23,784,817
BRL	—	29,589,051	,	29,589,051	—	23,763,704	—	23,763,704
ARS					21,113	—	—	21,113
Total non-current liabilities	83,746,063	137,902,500	956,404,258	1,178,052,821	71,612,211	444,381,592	799,132,006	1,315,125,809
USD	1,612,279	513,738	251,617,079	253,743,096	1,726,426	308,546,732	247,094,136	557,367,294
UF	35,491,226	15,781,426	468,927,353	520,200,005	29,821,850	15,453,105	423,470,818	468,745,773
CLP	9,297,845	8,599,505	217,120,378	235,017,728	5,108,107	5,908,324	107,824,110	118,840,541
BRL	13,828,266	113,007,831	2,911,689	129,747,786	14,484,599	114,473,431	4,200,982	133,159,012
ARS	22,892,694	—	—	22,892,694	19,771,035	—	—	19,771,035
PGY	623,753	—	15,827,759	16,451,512	700,194	—	16,541,960	17,242,154

31  – SUBSEQUENT EVENTS

No other events have occurred subsequent to December 31, 2022 that may significantly affect the Company’s consolidated financial position.

F-83