Coca Cola 2004 Annual Report Download - page 26

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
(‘‘MD&A’’) is intended to help the reader understand The Coca-Cola Company, our operations and our present
business environment. MD&A is provided as a supplement to—and should be read in conjunction with—our
consolidated financial statements and the accompanying notes (‘‘Notes’’). This overview summarizes the
MD&A, which includes the following sections:
•Our Business — a general description of our business and the beverage industry; our strengths and
strategic initiatives; our value drivers; measurements of our financial performance; and challenges, risks
and opportunities of our business.
•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 consolidated financial statements. Our Company operates in one business sector—
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 the
MD&A on a consolidated basis.
•Liquidity, Capital Resources and Financial Position — an analysis of cash flows, sources and uses of cash,
off-balance sheet arrangements and contractual obligations, the potential impact of currency exchange,
an overview of financial position and the impact of inflation and changing prices.
•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 largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups
in the world. Along with Coca-Cola, which is recognized as the world’s most valuable brand, we market four of the
world’s top five soft-drink brands, including Diet Coke, Fanta and Sprite. We provide a wide variety of
nonalcoholic beverages, including carbonated soft drinks, juices and juice drinks, sports drinks, water products,
teas, coffees and other beverages to meet consumers’ desires, needs and lifestyle choices. Our goal is to use our
formidable assets—brands, financial strength, unrivaled distribution system and the strong commitment by our
management and employees worldwide—to become more competitive. In so doing, we expect to accelerate growth
in a way that creates value for our shareowners and renewed enthusiasm among our employees.
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 have three types of
bottling relationships: bottlers in which our Company has no ownership interest, bottlers in which our Company
has a noncontrolling ownership interest and bottlers in which our Company has a controlling ownership interest.
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
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