Coca Cola 2004 Annual Report Download - page 114

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 18: ACQUISITIONS AND INVESTMENTS (Continued)
The Company and CCBPI agreed to restructure the ownership of the operations of CBC, and this
transaction was completed in April 2003. This transaction resulted in the Company acquiring all the trademarks
of CBC, and CCBPI owning approximately 99 percent of the outstanding shares of CBC. Accordingly, CBC was
deconsolidated by the Company. No gain or loss was recorded by our Company upon completion of the
transaction, as the fair value of the assets exchanged was approximately equal. Additionally, there was no impact
on our cash flows related to this transaction.
Our Company acquired controlling interests in CCDA and CBC for a total combined consideration of
approximately $328 million. As of December 31, 2003, the Company allocated approximately $56 million of the
purchase price for these acquisitions to goodwill and $208 million to other indefinite-lived intangible assets,
primarily trademarks, brands and licenses. This goodwill is all related to the CCDA acquisition and is allocated
to our North America operating segment.
The combined 2002 net operating revenues of CCEAG, CBC and CCDA were approximately $1.3 billion.
The acquisitions and investments have been accounted for by the purchase method of accounting. Their
results have been included in our consolidated financial statements from their respective dates of acquisition.
Assuming the results of these businesses had been included in operations commencing with 2002, pro forma
financial data would not be required due to immateriality.
NOTE 19: OPERATING SEGMENTS
Our Company’s operating structure includes the following operating segments: North America; Africa;
Asia; Europe, Eurasia and Middle East; Latin America; and Corporate. North America includes the United
States, Canada and Puerto Rico. Prior-period amounts have been reclassified to conform to the current-
period presentation.
Segment Products and Services
The business of our Company is nonalcoholic beverages. Our operating segments derive a majority of their
revenues from the manufacture and sale of beverage concentrates and syrups and, in some cases, the sale of
finished beverages. The following table summarizes the contribution to net operating revenues from Company
operations (in millions):
Year Ended December 31, 2004 2003 2002
Company operations, excluding bottling operations $ 18,871 $ 18,177 $ 17,123
Company-owned bottling operations 3,091 2,867 2,441
Consolidated net operating revenues $ 21,962 $ 21,044 $ 19,564
Method of Determining Segment Profit or Loss
Management evaluates the performance of our operating segments separately to individually monitor the
different factors affecting financial performance. Segment profit or loss includes substantially all the segment’s
costs of production, distribution and administration. Our Company typically manages and evaluates equity
investments and related income on a segment level. However, we manage certain significant investments, such as
our equity interests in CCE, within the Corporate operating segment. Our Company manages income taxes on a
global basis. We manage financial costs, such as interest income and expense, on a global basis within the
Corporate operating segment. Thus, we evaluate segment performance based on profit or loss before income
taxes and cumulative effect of accounting change.
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