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Jimmy Style
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SEC Filings - COCA COLA CO (KO) The following EDGAR Online Glimpse is the Management's Discussion and Analysis section in the full 10-Q / 10-K report Recent Glimpses: Aug 2003 (Qtrly Rpt) | Apr 2003 (Qtrly Rpt) | Mar 2003 (Annual Rpt) | Nov 2002 (Qtrly Rpt) | All filings for KO COCA COLA CO Filed on Aug 13 2003 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS BEVERAGE VOLUME We measure our sales volume in two ways: (1) gallons and (2) unit cases of finished products. "Gallons" represent our primary business and measure the volume of concentrates, syrups, beverage bases, finished beverages and powders (in all cases, expressed in equivalent gallons of syrup) for all beverage products which are reportable as unit case volume. Most of our revenues are based on this measure of primarily wholesale activity, which consists mainly of our sales to bottlers and customers. We also measure volume in unit cases. "Unit case" means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings). "Unit case volume" means the number of unit cases (or unit case equivalents) of Company trademark or licensed beverage products directly or indirectly sold by the Coca-Cola system to customers. Volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to our Company or owned by our bottling partners, for which our Company provides marketing support and derives profit from the sales. Such products licensed to our Company or owned by our bottling partners account for a minimal portion of total unit case volume. Although most of our Company's revenues are not based directly on unit case volume, we believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. In the second quarter of 2003, our worldwide unit case volume increased 5 percent compared to the second quarter of 2002. The increase in unit case volume was driven by 5 percent volume growth for international operations and 3 percent growth for North American operations. The worldwide volume growth was driven by growth in certain markets and also benefited from several recent strategic acquisitions and license agreements. The North America volume growth resulted almost entirely from 2002 transactions involving the Danone and Evian water brands and Seagram's mixers. Unit case volume increases for products such as diet Vanilla Coke and diet Coke, as well as the launch of Sprite Remix, were partially offset by a 1 percent decline in Foodservice and Hospitality Division unit cases, compared to the prior year second quarter, resulting from weak overall restaurant traffic in the quarter. Second quarter 2003 unit case volume for the Company's international operating segments included 3 percent growth for Africa; 7 percent growth for Europe, Eurasia and Middle East; 5 percent growth for Latin America; and 4 percent growth for Asia. In Africa, growth was driven by increased volume in Southern Africa, partially offset by the impact of a challenging operating environment in parts of North and West Africa due to the ongoing political and economic instability in those regions. The Company had increased volume in West Europe, in markets such as Spain, Great Britain, France, Belgium and Italy, as well as in key markets in Central and Eastern Europe. In Germany, unit case volume in the second quarter of 2003 was flat compared to the second quarter of 2002, reflecting improvement from first quarter trends that were impacted by the implementation of a deposit law on non-returnable packages. The 5 percent growth in Latin RESULTS OF OPERATIONS (Continued) BEVERAGE VOLUME (Continued) America was due to volume growth in Argentina and Mexico. The growth in Mexico was driven by core brands resulting from packaging innovations and new flavor introductions as well as growth in the water category primarily through the introduction of Ciel in additional territories. These positive factors in Latin America were partially offset by a 12 percent decline in unit case volume in Brazil as a result of significant price increases that were implemented to address raw material price increases, devaluation and the overall profitability of the Company and its bottling partners. The 4 percent growth in Asia was driven by growth in Australia, India, the Philippines and Thailand, partially offset by a 3 percent decline in Japan which was impacted by a product recall surrounding two successful new products, BOCO and Pooh Honey Lemon. The products have been reformulated and are back in the market. Our unit case volume for the first six months of 2003 increased 4 percent compared to the first six months of 2002. This increase in unit case volume was driven by 5 percent volume growth for international operations and 3 percent growth for North American operations. Unit case volume for the first six months of 2003 for the Company's international operating segments included 3 percent growth for Africa; 4 percent growth for Europe, Eurasia and Middle East; 5 percent growth for Latin America; and 6 percent growth for Asia. The Company is focused on continuing to broaden its family of brands. In particular, we are expanding and growing our noncarbonated offerings to provide more alternatives to consumers. The Company's unit case volume for 2003 as compared to 2002 has been favorably impacted by several strategic acquisitions and license agreements involving noncarbonated brands such as Evian and Danone waters in North America and Risco, a water brand in Mexico. The Company also entered into a long-term license agreement involving Seagram's mixers, a carbonated line of drinks. These brands and other acquired brands that have impacted volume growth for 2003 as compared to 2002, had annual volume in the year before we acquired them of approximately 450 million unit cases. Gallon sales increased 1 percent and 3 percent, respectively, for the three-month and six-month periods ended June 30, 2003, as compared to the same periods in 2002. The growth rates for gallon sales are not in line with the growth rates for unit case volume due primarily to the timing of shipments. On a full-year basis the Company expects the growth in gallons to be similar to the growth in unit case volume. RESULTS OF OPERATIONS (Continued) NET OPERATING REVENUES AND GROSS MARGIN Net Operating Revenues were $5,691 million in the second quarter of 2003, compared to $5,368 million in the second quarter of 2002, an increase of $323 million or 6 percent. The following table indicates, on a percentage basis, the estimated impact of key factors resulting in significant increases (decreases) in Net Operating Revenues: Three months ended June 30, 2003 vs. 2002 Increase in gallon shipments, including acquisitions 1% Favorable impact of the weaker U.S. dollar 5 Price and product/geographic mix 1 Structural changes (1) Total percentage increase 6% ================================================================================ The increase in gallon shipments includes the favorable impact of acquisitions, primarily the Danone and Evian water brands and Seagram's mixers. The unfavorable impact of structural changes was primarily due to the deconsolidation of Cosmos Bottling Corporation (CBC) during the second quarter of 2003.
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Paper Information
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Title: Jimmy Style
Words: 5849
Rating: None
Pages: 23.4
submitted by: Jim123
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