Coca Cola 2007 Annual Report Download - page 34

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 thereto contained in “Item 8. Financial Statements and Supplementary
Data” of this report. This overview summarizes the MD&A, which includes the following sections:
•Our Business—a general description of our business and the nonalcoholic beverages segment of the
commercial beverages industry, our objective, our strategic priorities, our core capabilities, and challenges
and risks of our business.
•Critical Accounting Policies and Estimates—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. Except to the extent that differences among our 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; off-balance sheet
arrangements and aggregate contractual obligations; foreign exchange; an overview of financial position; and
the impact of inflation and changing prices.
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 nonalcoholic sparkling brands, including Diet Coke, Fanta and Sprite. Our Company owns or licenses more
than 450 brands, including diet and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and
energy and sports drinks. Through the world’s largest beverage distribution system, consumers in more than 200
countries enjoy the Company’s beverages at a rate of approximately 1.5 billion servings each day. Our Company
generates revenues, income and cash flows by selling beverage concentrates and syrups as well as finished beverages.
We generally sell these products to bottling and canning operations, fountain wholesalers and some fountain retailers,
and, in the case of finished products, to distributors. Our bottlers sell our branded products to businesses and
institutions including retail chains, supermarkets, restaurants, small neighborhood grocers, sports and entertainment
venues, and schools and colleges. We continue to expand our marketing presence and increase our unit case volume in
both developed and emerging markets. Our strong and stable system helps us to capture growth by manufacturing,
distributing and marketing existing, enhanced and new innovative products to our consumers throughout the world.
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. In 2007, bottling partners in
which our Company has no ownership interest or a noncontrolling ownership interest produced and distributed
approximately 79 percent of our worldwide unit case volume.
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