Coca Cola 2004 Annual Report Download - page 96

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 11: COMMITMENTS AND CONTINGENCIES (Continued)
Company expects final resolution of certain matters in 2005. Management believes that any gains to the
Company that may arise as a result of the final resolutions of these matters will not have a material effect on the
financial condition of the Company taken as a whole.
NOTE 12: NET CHANGE IN OPERATING ASSETS AND LIABILITIES
Net cash provided by operating activities attributable to the net change in operating assets and liabilities is
composed of the following (in millions):
2004 2003 2002
Decrease (increase) in trade accounts receivable $(5)$ 80 $ (83)
Decrease (increase) in inventories (57) 111 (49)
Decrease (increase) in prepaid expenses and other assets (397) (276) 74
Increase (decrease) in accounts payable and accrued expenses 45 (164) (442)
Increase (decrease) in accrued taxes (194) 53 20
Increase (decrease) in other liabilities (9) 28 73
$ (617) $ (168) $ (407)
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS
Prior to 2002, our Company accounted for our stock option plans and restricted stock plans under the
recognition and measurement provisions of APB Opinion No. 25 and related interpretations. Effective
January 1, 2002, our Company adopted the preferable fair value recognition provisions of SFAS No. 123. Our
Company selected the modified prospective method of adoption described in SFAS No. 148. Compensation cost
recognized in 2002 was the same as that which would have been recognized had the fair value method of SFAS
No. 123 been applied from its original effective date. Refer to Note 1.
In accordance with the provisions of SFAS No. 123 and SFAS No. 148, $345 million, $422 million and
$365 million were recorded for total stock-based compensation expense in 2004, 2003 and 2002, respectively.
The $345 million and $365 million recorded in 2004 and 2002, respectively, were recorded in selling, general and
administrative expenses. Of the $422 million recorded in 2003, $407 million was recorded in selling, general and
administrative expenses and $15 million was recorded in other operating charges. Refer to Note 17.
Stock Option Plans
Under our 1991 Stock Option Plan (the ‘‘1991 Option Plan’’), a maximum of 120 million shares of our
common stock was approved to be issued or transferred to certain officers and employees pursuant to stock
options granted under the 1991 Option Plan. Options to purchase common stock under the 1991 Option Plan
have been granted to Company employees at fair market value at the date of grant.
The 1999 Stock Option Plan (the ‘‘1999 Option Plan’’) was approved by shareowners in April 1999. Following
the approval of the 1999 Option Plan, no grants were made from the 1991 Option Plan, and shares available under
the 1991 Option Plan were no longer available to be granted. Under the 1999 Option Plan, a maximum of
120 million shares of our common stock was approved to be issued or transferred to certain officers and employees
pursuant to stock options granted under the 1999 Option Plan. Options to purchase common stock under the 1999
Option Plan have been granted to Company employees at fair market value at the date of grant.
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