Coca Cola 2008 Annual Report Download - page 35

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 nearly 500 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 1.6 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 developed, developing 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.
While we primarily manufacture, market and sell concentrates and syrups to our bottling partners, from
time to time we have viewed it as advantageous to acquire a controlling interest in a bottling operation, often on
a temporary basis. Often, though not always, these acquired bottling operations are in underperforming markets
where we believe we can use our resources and expertise to improve performance. Owning such a controlling
interest has allowed us to compensate for limited local resources and has enabled us to help focus the bottler’s
sales and marketing programs and assist in the development of the bottler’s business and information systems
and the establishment of appropriate capital structures. Acquisitions and consolidation of controlled bottling
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