Coca Cola 2003 Annual Report Download - page 25

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
The following Management’s Discussion and Analysis (‘‘MD&A’’) is intended to help the reader understand
The Coca-Cola Company. MD&A is provided as a supplement to—and should be read in conjunction with—our
financial statements and the accompanying notes (‘‘Notes’’). This overview provides our perspective on the
individual sections of MD&A, as well as a few helpful hints for reading these pages. MD&A includes the
following sections:
•Our Business — a general description of our business; the value drivers of our business; measurements;
and opportunities, challenges and risks.
•Financial Strategies and Risk Management — information about debt financing, share repurchases,
dividend policy and financial risk management.
•Application of Critical Accounting Policies — a discussion of accounting policies that require critical
judgments and estimates.
•Operations Review — an analysis of our Company’s consolidated results of operations for the three years
presented in our financial statements. Our Company operates in one business – nonalcoholic beverages.
Except to the extent that differences between our five geographic operating segments are material to an
understanding of our business as a whole, we present the discussion in this MD&A on a
consolidated basis.
•Liquidity, Capital Resources and Financial Position — an analysis of cash flows, sources and uses of cash,
contractual obligations, and financial position.
•Forward-Looking Statements — cautionary information about forward-looking statements and a
description of certain risks and uncertainties that could cause our actual results to differ materially from
the Company’s historical results or our current expectations or projections.
Our Business
General
We are the world’s largest beverage company, with four of the world’s top five soft-drink brands—
Coca-Cola, Diet Coke, Fanta and Sprite. Because we believe in offering choices, we provide a wide variety of
nonalcoholic beverages to meet consumers’ desires and needs. Our Company owns or licenses nearly 400
trademarked brands—including carbonated soft drinks, juices and juice drinks, sports drinks, water products,
teas, coffees and other beverages. Finished beverage products bearing our trademarks are sold in more than
200 countries.
Our Company generates revenues, income and cash flows by manufacturing and selling beverage
concentrates and syrups as well as some finished beverages. We generally sell these products to bottling and
canning operations, distributors, fountain wholesalers and some fountain retailers. We authorize our bottling
partners to manufacture and package products made from our concentrates and syrups into branded finished
products, that they then distribute and sell. Bottling partners, in which our Company has no ownership interest
or a noncontrolling ownership interest, produced and distributed 82 percent of our 2003 worldwide unit
case volume.
We make significant marketing expenditures in support of our brands, including advertising costs,
sponsorship fees and special promotional events. Retailers and distributors receive rebates, promotions and
point-of-sale displays. Our bottling partners receive advertising support and funds designated for cold-drink
equipment. Consumers receive coupons, discounts and promotional incentives. These marketing expenditures
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