Coca Cola 2003 Annual Report Download - page 83

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 10: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
The following table presents the fair values, carrying values and maturities of the Company’s foreign
currency derivative instruments outstanding (in millions):
Carrying
Values
Assets Fair
December 31, (Liabilities) Values Maturity
2003
Forward contracts $ (25) $ (25) 2004
Options and collars 3 3 2004
$ (22) $ (22)
Carrying
Values
Assets Fair
December 31, (Liabilities) Values Maturity
2002
Forward contracts $ (10) $ (10) 2003
Options and collars 60 60 2003–2004
$50 $50
The Company estimates the fair value of its foreign currency derivatives based on quoted market prices or
pricing models using current market rates. This amount is primarily reflected in prepaid expenses and other
assets within our balance sheets.
NOTE 11: COMMITMENTS AND CONTINGENCIES
On December 31, 2003, we were contingently liable for guarantees of indebtedness owed by third parties in
the amount of $280 million. These guarantees are related to third-party customers, bottlers and vendors and
have arisen through the normal course of business. These guarantees have various terms, and none of these
guarantees is individually significant. The amount represents the maximum potential future payments that we
could be required to make under the guarantees; however, we do not consider it probable that we will be
required to satisfy these guarantees.
Additionally in December 2003, we granted a $250 million stand-by line of credit to Coca-Cola FEMSA
with normal market terms.
We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas
covered by our operations.
We have committed to make future marketing and other expenditures of approximately $3,144 million, of
which the majority is payable over the next 12 years. This amount includes our long-term agreements with the
National Collegiate Athletic Association and CBS, and with the Houston Astros Baseball Club, for a combined
value of approximately $600 million to $750 million.
The Company is also involved in various legal proceedings and tax matters. Management believes that any
liability to the Company that may arise as a result of currently pending legal proceedings and tax matters,
including those discussed below, will not have a material adverse effect on the financial condition of the
Company taken as a whole.
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