Coca Cola 2004 Annual Report Download - page 53

During 2004, 2003 and 2002, the Company repurchased common stock under the 1996 Plan. As strong cash
flows are expected to continue in the future, the Company currently expects to increase its 2005 share
repurchase levels to at least $2 billion. Refer to the heading ‘‘Financial Strategies and Risk Management.’’
Dividends have increased every year for each of the last 43 years, and we believe that for the foreseeable
future, our Board of Directors intends to increase our dividends.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Off-Balance Sheet Arrangements. In accordance with the definition under SEC rules, the following qualify as
off-balance sheet arrangements:
• any obligation under certain guarantees or contracts;
• a retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or
similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;
• any obligation under certain derivative instruments; and
• any obligation under a material variable interest held by the registrant in an unconsolidated entity that
provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing,
hedging or research and development services with the registrant.
The following discussion addresses each of the above items for our Company. On December 31, 2004, our
Company was contingently liable for guarantees of indebtedness owed by third parties in the amount of
$257 million. Management concluded that the likelihood of any material amounts being paid by our Company is
not probable. As of December 31, 2004, we were not directly liable for the debt of any unconsolidated entity, and
we did not have any retained or contingent interest in assets as defined above. Additionally, our Company
recognizes all derivative instruments as either assets or liabilities at fair value in our consolidated balance sheets.
Refer to Notes 10 and 11.
In December 2003, we granted a $250 million standby line-of-credit to Coca-Cola FEMSA with normal
market terms. As of December 31, 2004, no amounts have been drawn against this line-of-credit. This standby
letter of credit expires in December 2006.
Our Company has equity ownership interests in bottlers that we account for under the equity method of
accounting. For certain entities, primarily bottlers, our Company holds variable interests, such as providing
financing and guarantees, in addition to our equity investments. The results of those entities in which our
Company holds a variable interest, and where we determined that our Company is the primary beneficiary, have
been consolidated as of March 31, 2004. Our Company’s investment, plus any loans and guarantees, related to
these variable interest entities totaled approximately $313 million at December 31, 2004, representing our
maximum exposure to loss.
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