Coca Cola 2003 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2003 Coca Cola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

approximately 38% of its unit case volume was other Company Trademark Beverages, approximately 8% of its
unit case volume was beverage products of Coca-Cola Amatil and less than 1% of its unit case volume was
beverage products of other companies.
Other Interests. We own a 50% interest in a joint venture with Nestl´
e S.A. (‘‘Nestl´
e’’) and certain of its
subsidiaries which is focused upon the ready-to-drink tea and coffee businesses. The joint venture, known as
Beverage Partners Worldwide (‘‘BPW’’), currently has sales in the United States and approximately 45 other
countries. BPW serves as the exclusive vehicle through which our Company and Nestl´
e participate in the
ready-to-drink tea and coffee business, except in Japan. BPW markets ready-to-drink tea products under the
Nestea, Belt´
e, Yang Guang, Nagomi, Heaven and Earth, Funchum, Frestea, Ten Ren and Tian Tey trademarks,
and ready-to-drink coffee products under the Nescaf´
e, Taster’s Choice and Georgia Club trademarks.
In July 2002, our Company and Danone Waters of North America, Inc. (‘‘DWNA’’) formed a new company,
CCDA Waters, L.L.C. (‘‘CCDA’’), for the production, marketing and distribution of DWNA’s bottled spring and
source water business in the United States. In forming CCDA, DWNA contributed assets including five
production facilities, a license for the use of the Dannon and Sparkletts brands, and ownership of several value
brands. Our Company made a cash payment to acquire a controlling 51% equity interest in CCDA and is also
providing marketing, distribution and management expertise. The results of CCDA’s operations have been
included in our Company’s consolidated financial statements since July 2002.
Other Developments
During 2003, the Company took steps to streamline and simplify its operations, primarily in North America
and Germany. In North America, the Company integrated the operations of our three separate North American
business units: Coca-Cola North America, The Minute Maid Company and Fountain. In Germany, our
consolidated subsidiary, Coca-Cola Erfrischungsgetraenke AG (‘‘CCEAG’’), took steps to improve efficiency in
sales, distribution and manufacturing, and our German Division office also implemented streamlining initiatives.
Selected other operations also took steps to streamline their operations to improve overall efficiency and
effectiveness. As of December 31, 2003, approximately 3,700 employees had been separated from the Company
pursuant to these streamlining initiatives.
In March 2003, our Company acquired Truesdale Packaging Company LLC (‘‘Truesdale’’) from CCE for
approximately $58 million. Truesdale owns a noncarbonated beverage production facility.
In March 2003, we sold 50% of our interest in the Piedmont Coca-Cola Bottling Partnership to our partner,
Coca-Cola Ventures, Inc., a subsidiary of Coca-Cola Bottling Co. Consolidated, for approximately $54 million.
Following the sale, our ownership interest in Piedmont Coca-Cola Bottling Partnership was approximately 23%.
In April 2003, the Company and Coca-Cola Bottlers Philippines, Inc. (‘‘CCBPI’’) completed a transaction
that restructured the ownership of the operations of Cosmos Bottling Corporation (‘‘CBC’’), a publicly traded
Philippine beverage company. Prior to this transaction, our Company and CCBPI together owned approximately
99% of the outstanding shares of CBC. The April transaction resulted in our Company acquiring all trademarks
of CBC and CCBPI owning approximately 99% of the outstanding shares of CBC.
In December 2002, one of the Company’s equity method investees, Coca-Cola FEMSA, entered into a
merger agreement with another of the Company’s equity method investees, Panamerican Beverages, Inc.
(‘‘Panamco’’). This merger proposal was approved by share owners of Panamco in April 2003, and the merger
was consummated effective May 6, 2003. Under the terms of the merger, the Company received new Coca-Cola
FEMSA shares in exchange for all Panamco shares previously held by the Company. The Company’s ownership
interest in Coca-Cola FEMSA increased from 30% to approximately 40% as a result of this merger.
In July 2003, we made a convertible loan in the amount of approximately $133 million to The Coca-Cola
Bottling Company of Egypt (‘‘TCCBCE’’). The loan is convertible into preferred shares of TCCBCE upon
receipt of required governmental approvals. Additionally, upon certain defaults under either the loan agreement
9