EX-99.1 2 a2145262zex-99_1.htm EXHIBIT 99.1
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Exhibit 99.1

LOGO   Media Relations Department
P.O. Box 1734, Atlanta, GA 30301
Telephone (404) 676-2121

news
release

FOR IMMEDIATE RELEASE

    CONTACT:   Media: Ben Deutsch
          (404) 676-2683

 
 
 
 
Investors:
Ann Taylor
          (404) 676-5383

THE COCA-COLA COMPANY REPORTS
THIRD QUARTER AND YEAR-TO-DATE 2004 RESULTS

    •
    Reported earnings per share of $0.39 for the third quarter and $1.50 for the first nine months.

    •
    Third quarter earnings per share includes a net reduction of $0.11 per share due to impairment charges, previously announced, and tax adjustments.

    •
    Cash from operations for the first nine months increased 11 percent to $4.6 billion and the Company expects strong cash flows to continue in the future.

    •
    Strong growth in key countries including China, Brazil and Japan offset by poor performance in North America, Germany and Northern Europe.

        ATLANTA, Oct. 21, 2004 — The Coca-Cola Company today reported third quarter earnings per share of $0.39, compared with $0.50 for the prior year third quarter. Current quarter results include reductions of $0.10 per share due to the previously announced non-cash charges related primarily to the impairment of intangible assets in Germany and $0.01 per share due to the net impact of certain tax adjustments, primarily related to the impairments. Reported earnings per share for the first nine months were $1.50, compared with prior year period earnings of $1.39 per share.

        Operating income declined 24 percent in the third quarter due to other operating charges and the impact of weak operating conditions in key business units, particularly North America, Germany and in Northern Europe. For the first nine months, operating income increased 5 percent, reflecting the impact of the other operating charges, stronger results in the first half of the year and a positive currency benefit.

        Worldwide unit case volume increased 1 percent in the third quarter and 2 percent in the first nine months. Key contributors to unit case volume growth in the quarter included Japan, China, Brazil, Argentina, South Africa and Turkey. Partially offsetting these trends were unit case volume declines in North America, Germany, the Philippines, Nigeria and Northern Europe.

        On September 15, 2004, the Company provided an update on key trends impacting the business. As follow up to that update, the Company is currently anticipating reported earnings per share for the full year 2004 to be in the range of $1.88 to $1.90. This estimate includes the impact of a net charge of $0.10 per share, previously recorded in the second and third quarters, related to the impairment of intangible assets, the provision against deferred tax assets, the write-downs of various manufacturing investments, favorable tax settlements and a gain on the issuance of stock by an equity investee.

        Neville Isdell, chairman and chief executive officer, commented, "As we have said, our performance has fallen short of the goals we have set for ourselves. While we are seeing positive results in some regions, we are not yet fulfilling our potential. We are taking the necessary steps to return our Company to its proper growth course."

Financial Highlights

    •
    Cash from operations for the first nine months was $4.6 billion, compared with $4.1 billion in the prior year period.

    •
    Reported third quarter earnings per share were $0.39, compared with $0.50 for the prior year third quarter. The current quarter results include a non-cash charge of $392 million pre-tax ($251 million after tax), or approximately $0.10 per share, related primarily to the impairment of intangible assets in Germany as previously announced. The current quarter results also reflect a net reduction of $0.01 per share related to German deferred tax assets partially offset by the favorable resolution of other tax matters. The prior year third quarter earnings included a reduction of $0.05 per share related to streamlining initiatives and the write down of assets in Latin America by an equity investee.

    •
    Reported earnings per share for the first nine months were $1.50, compared to prior year period earnings per share of $1.39. Year-to-date results include a net charge of $0.10 per share related to the third quarter non-cash charge and tax items described above, the write-downs of various manufacturing investments, favorable tax settlements and a gain on the issuance of stock by an equity investee. The prior year period earnings included a net reduction of $0.10 per share related to streamlining initiatives, the write down of assets by an equity investee and a gain related to a litigation settlement.

    •
    Reported operating income decreased 24 percent compared to the prior year third quarter and increased 5 percent in the first nine months of the year, compared to the prior year period. Operating income was impacted by other operating charges, poor performance in certain key markets, and continuing investments in marketing activities, offset by solid results in several key markets and positive currency fluctuations. The currency benefit to operating income was approximately 6 percent in the quarter and 8 percent for the first nine months, compared to comparable prior year periods.

    •
    The Company repurchased approximately $1.4 billion of its common stock during the first nine months of the year and intends to repurchase at least $2 billion of its stock during 2004.

    •
    In February, the Company approved its 42nd consecutive annual dividend increase, a 14 percent increase of the quarterly dividend from $0.22 to $0.25 per common share. This is equivalent to an annual dividend of $1.00 per share, up from $0.88 per share in 2003.

Operational Highlights

North America

    •
    The North America business unit's volume and profits were impacted by weak performance in the bottle and can business due to soft retail traffic, poor weather in key regions, and higher wholesale and retail pricing versus the prior year. For the entire business unit, unit case volume in the quarter decreased by 3 percent, cycling 1 percent growth in the prior year.

    •
    The Retail division's unit case volume declined 4 percent in the quarter as the trends discussed above impacted all areas of the business. Specifically, in the third quarter, retail pricing of the Company's brands in measured channels increased 6 percent to the consumer.

    •
    The Foodservice division's unit case volume decreased 1 percent in the quarter as effective customer programs were mitigated by slowing restaurant industry traffic compared to the prior year.

    •
    From a consumer standpoint, the launch of Coca-Cola C2 has achieved positive results in terms of awareness, trial and repeat measures. More competitive pricing and packaging strategies are

Page 2 of 15

      being implemented in order to improve the volume and value contribution of Coca-Cola C2 in North America.

    •
    Noncarbonated beverage performance in the third quarter was led by unit case volume growth of Powerade and Dasani. Warehouse delivered juices declined by 2 percent in the third quarter as overall category softness, as well as some distribution interruption from the hurricanes in Florida, impacted results.

Europe, Eurasia and Middle East

    •
    The Europe, Eurasia and Middle East business unit was impacted by previously discussed factors, including poor weather conditions in the highly-profitable Northern European markets and the lack of availability of the Company's brands in hard discounters in Germany. The business unit's third quarter unit case volume declined by 3 percent, cycling 9 percent growth in the prior year.

    •
    Offsetting the weakness in the Northern European markets were solid results in Central Europe, Turkey and Middle East markets. As weather has improved in September and several initiatives with bottlers gained traction, the Company's brands have returned to growth in several key markets.

    •
    In Germany, unit case volume declined 16 percent in the third quarter. In the rapidly growing discounter channel, the Company's brands have had limited availability since the imposition of Mandatory Deposit legislation. The Company is also addressing significant structural issues that limit the system's ability to respond effectively to evolving retail and consumer dynamics. The solutions are complex, requiring implementation over the next several years, and making short-term benefits unlikely.

    •
    As the Company addresses the issues in Germany, it continues to emphasize the more profitable low-calorie carbonated soft drinks and immediate consumption packages. In addition, the Company is achieving some success in entering the discount channel using uniquely-shaped, non-refillable bottles.

Asia

    •
    Unit case volume growth in Asia during the quarter was driven by important markets such as Japan, China, India and Australia. Unit case volume for the business unit was up 9 percent for the third quarter.

    •
    In Japan, the Company executed its strategy of investing in core brands, driving profitability through a focus on higher margin packages, products and channels, and a continued emphasis on reducing costs throughout the supply chain. Japan also benefited from favorable weather in the third quarter cycling poor weather in the prior year. Overall unit case volume grew 8 percent in the third quarter with 5 percent growth in Trademark Coca-Cola and double-digit increases in Sokenbicha, Marocha and Aquarius. Coca-Cola C2 performed well and contributed to share growth in the cola category. Offsetting some of the benefit in CSDs and teas was a decline in Georgia coffee; however, growth returned in September and will be supported by innovation and marketing programs for the remainder of the year.

    •
    Profit growth in China continued, driven by unit case volume growth of 20 percent during the quarter, cycling 24 percent growth in the prior year period. Trademark Coca-Cola unit case volume increased by 15 percent in the quarter as a result of the implementation of a new advertising campaign, innovative packaging and promotions in the cities and the affordable 200 ml glass package in towns. Trademark Coca-Cola results, along with solid growth in Sprite and Fanta brands, have led to year-to-date share of sales gains of 3 points in carbonated soft drinks.

Page 3 of 15

    •
    Unit case volume growth in the business unit was partially reduced by the negative impact of continued strategic pricing and packaging initiatives in the Philippines.

Latin America

    •
    Latin America continued to deliver solid unit case volume and profit growth by executing a long-term investment strategy with an emphasis on brand building, new package alternatives, and close coordination with bottling partners to drive superior local marketplace execution. Unit case volume growth of 5 percent in the quarter reflects strong growth in Brazil, Argentina, and Venezuela.

    •
    In Mexico, unit case volume increased 1 percent in the quarter cycling 10 percent growth in the third quarter of the previous year. Performance reflects improvement over the previous two quarters as carbonated soft drinks increased 1 percent, but a strategic decision to reduce large format water packages and strong competition affected overall volume.

    •
    The Company continued to strengthen its position with consumers in Mexico by focusing on new personal consumption packages and by enhancing brand equity through integrated marketing programs.

    •
    The Coca-Cola system's continuing strategy in Brazil to focus on core brands and to provide greater packaging choices to consumers generated positive results. For the third quarter unit case volume increased 14 percent, with Trademark Coca-Cola growing 15 percent. In addition, by emphasizing packages and channels with higher profitability, Brazil delivered double-digit earnings growth while increasing carbonated soft drink share of sales in both volume and retail dollar terms.

    •
    In Argentina, marketing activities and an emphasis on revenue growth management led to unit case volume growth of 13 percent during the quarter, cycling 12 percent growth in the prior year period. Core brands drove over 80 percent of the growth in the quarter.

Africa

    •
    Africa delivered double-digit operating income growth in the third quarter led by unit case volume growth of 6 percent and positive country mix due to double digit unit case volume gains in South Africa.

    •
    Throughout Africa, the Company continued to focus on business fundamentals to drive profitable volume for the system. Solid revenue and profit growth for the business unit came from new cold outlet creation, improvements in market execution, balancing price and package strategies with a focus on affordable packaging, and positive currency trends. Africa unit case volume of core brands including Trademark Coca-Cola, Sprite and Fanta, grew 14 percent in the quarter, while noncarbonated beverages declined due to a de-emphasis of less-profitable water packages.

    •
    In South Africa, unit case volume grew 14 percent in the third quarter, led by growth in core brands. Profit growth was driven by solid execution, integrated marketing plans and close coordination with the bottler.

    •
    Unit case volume in the North and West Africa Division declined 2 percent in the quarter, as performance in Nigeria was impacted by the Company's decision to de-emphasize certain less-profitable packages within the water category. In Egypt, the Company balanced total profitability by focusing on a new price and package strategy, the introduction of noncarbonated products, and the rationalization of the supply chain.

Page 4 of 15

Financial Review

Operating Results

        Revenues for the third quarter were even with the prior year at $5.7 billion, reflecting a decrease in gallon sales of 1 percent and the impact of structural changes, offset by improved pricing of concentrate and positive currency trends. Structural changes related to the impact of creating a supply chain management company in Japan and the consolidation of certain bottling operations, which are considered variable interest entities. For the first nine months of the year, gallon sales increased more than 3 percent, which is similar to the 4 percent growth in year-to-date reported unit cases. During the fourth quarter of 2004, gallon sales are expected to trend below unit case growth on an average daily sales basis due to the timing of shipping days.

        The following reflects net operating revenues from the Company's operations:

 
   Third Quarter

   Nine Months Ended
September 30
(in millions)

   2004
   2003
   2004
   2003
Company Operations, Excluding Bottling   $ 4,831   $ 4,937   $ 14,292   $ 13,698
Company-Owned Bottling Operations     831     734     2,413     2,170
   
Consolidated Net Operating Revenues   $ 5,662   $ 5,671   $ 16,705   $ 15,868

        Cost of goods sold decreased by 5 percent in the quarter, primarily reflecting the benefit of creating a supply chain management company in Japan and supply chain efficiencies.

        Selling, general and administrative expenses increased 6 percent during the quarter reflecting the impact of foreign currency fluctuations, structural changes, increased costs in the finished products business, and investments in marketing activities. The Company also had other operating charges in the third quarter amounting to $392 million pre-tax ($251 million after tax) related primarily to the impairment of intangible assets in Germany.

        Reported operating income for the quarter decreased 24 percent, reflecting the impact of other operating charges, challenging conditions in certain key markets, and investments in marketing activities, offset by solid results in several key markets and positive foreign currency. During the fourth quarter of 2004 and into 2005, currency benefits are expected to be substantially less as compared to the third quarter of this year.

        Equity income in the quarter improved in comparison to the prior year primarily due to charges in the third quarter of 2003 by Coca-Cola FEMSA, S.A. de C.V. (Coca-Cola FEMSA). The Company remains committed to maintaining a strong and healthy bottling system throughout the world.

        The reported tax rate for the third quarter was 24 percent. The underlying effective tax rate on operations was 25 percent, which was reduced by the tax benefit on the impairment charges recorded at a 36 percent tax rate and a $39 million benefit related to the reversal of previously accrued taxes resulting from favorable resolution of tax matters, but increased by a $75 million provision against deferred tax assets in Germany.

        In determining the quarterly provision for income taxes, the Company uses an annual effective tax rate based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. The effective tax rate also reflects the best estimate of the ultimate outcome of tax audits. The impact of significant or unusual items is separately recognized in the quarter in which they occur.

        New U.S. tax legislation has passed Congress and is awaiting Presidential approval. If approved, the legislation could have an impact on the Company in the fourth quarter. Excluding the impact of this legislation and significant or unusual items, which are separately recognized in the quarter in which

Page 5 of 15


they occur, the Company estimates its ongoing effective tax rate to be approximately 25 percent for the remainder of the year.

Prior Year Results

        In 2003, the Company took steps to streamline and simplify its operations, particularly in North America and Europe. These initiatives resulted in a third quarter 2003 pre-tax charge of $43 million, or $0.01 per share after tax. For the first nine months of 2003, streamlining charges impacted pre-tax net income by $272 million, or $0.07 per share after tax.

        During the third quarter of 2003, the Company recorded a non-cash charge of approximately $107 million, or $0.04 per share after tax, primarily reflected in equity income. This amount reflects the Company's portion of charges recorded by one of its equity method investees, Coca-Cola FEMSA, related to the streamlining and integration of their operations following a merger with Panamerican Beverages, Inc. and to their recording of intangible asset impairments in Venezuela.

        During the first quarter of 2003, the Company reached a settlement with certain defendants in a vitamin antitrust litigation and received approximately $52 million on a pre-tax basis, or $0.01 per share on an after tax basis. The amount was recorded in the income statement as a reduction of cost of goods sold.

Creation of a Supply Chain Management Company in Japan

        Effective October 1, 2003, the Company and all of its bottling partners in Japan created a nationally integrated supply chain management company to centralize procurement, production, and logistics operations for the entire Coca-Cola system in Japan. The resources generated from this effort are being invested in marketing activities and customer service programs to enhance the long-term growth of the Coca-Cola system in Japan.

        As a result of this venture, a portion of The Coca-Cola Company's business has essentially been converted from a finished product business model to a concentrate business model. This shift of certain products to a concentrate business model resulted in a reduction of revenues and cost of goods sold, each in the same amount. This change in the business model did not impact gross profit. Had the change occurred as of January 1, 2003, both revenues and cost of goods sold for the three and nine months ended September 30, 2003 would have been reduced by approximately $310 million and $780 million, respectively. No future impact to the Company's results is anticipated from this change in the business model.

Conference Call

        The Company will host a conference call with financial analysts to discuss the third quarter and year-to-date 2004 results on October 21, 2004, at 4:30 p.m. (EDT). The Company invites investors to listen to the live audiocast of the conference call at the Company's website, www.coca-cola.com in the "investors" section. Further, the "investors" section of the Company's website includes a disclosure and reconciliation of non-GAAP financial measures that may be used periodically by management when discussing the Company's financial results with investors and analysts.

        In addition, the Company will be hosting an investor meeting on November 11, 2004 at 9:00 a.m. (EST). The Company invites investors to listen to the live audiocast of the conference call at the Company's website, www.coca-cola.com in the "investors" section.

Page 6 of 15

THE COCA-COLA COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(UNAUDITED)
(In millions, except per share data)

 
   Three Months Ended
September 30,
  
 
   2004
   2003
   % Change
  
Net Operating Revenues   $ 5,662   $ 5,671   —  
Cost of goods sold     2,052     2,168   (5 )
   
 
     
Gross Profit     3,610     3,503   3  
Selling, general and administrative expenses     2,121     1,997   6  
Other operating charges     392     55   —  
   
 
     
Operating Income     1,097     1,451   (24 )
Interest income     39     37   5  
Interest expense     47     42   12  
Equity income     180     86   109  
Other income (loss) — net     (34 )   (42 ) —  
Gain on issuance of stock by equity investee     —     8   —  
   
 
     
Income Before Income Taxes     1,235     1,498   (18 )
Income taxes     300     275   9  
   
 
     
Net Income   $ 935   $ 1,223   (24 )
   
 
     
Diluted Net Income Per Share*   $ 0.39   $ 0.50   (22 )
   
 
     
Average Shares Outstanding — Diluted*     2,424     2,458   (1 )
   
 
     
*
For the third quarter, "Basic Net Income Per Share" was $0.39 for 2004 and $0.50 for 2003 based on "Average Shares Outstanding — Basic" of 2,421 and 2,455 for 2004 and 2003, respectively.

Page 7 of 15

THE COCA-COLA COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(UNAUDITED)
(In millions, except per share data)

 
   Nine Months Ended
September 30,
  
 
   2004
   2003
   % Change
  
Net Operating Revenues   $ 16,705   $ 15,868   5  
Cost of goods sold     5,835     5,912   (1 )
   
 
     
Gross Profit     10,870     9,956   9  
Selling, general and administrative expenses     6,039     5,543   9  
Other operating charges     480     284   —  
   
 
     
Operating Income     4,351     4,129   5  
Interest income     106     138   (23 )
Interest expense     138     130   6  
Equity income     496     325   53  
Other income (loss) — net     (64 )   (99 ) —  
Gain on issuance of stock by equity investee     49     8   —  
   
 
     
Income Before Income Taxes     4,800     4,371   10  
Income taxes     1,154     951   21  
   
 
     
Net Income   $ 3,646   $ 3,420   7  
   
 
     
Diluted Net Income Per Share*   $ 1.50   $ 1.39   8  
   
 
     
Average Shares Outstanding — Diluted*     2,434     2,465   (1 )
   
 
     
*
For the first nine months, "Basic Net Income Per Share" was $1.50 for 2004 and $1.39 for 2003 based on "Average Shares Outstanding — Basic" of 2,431 and 2,462 for 2004 and 2003, respectively.

Page 8 of 15

THE COCA-COLA COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
(UNAUDITED)
(In millions)

Assets

 
   September 30,
2004
   December 31,
2003
  
Current Assets              
  Cash and cash equivalents   $ 5,365   $ 3,362  
  Marketable securities     155     120  
   
 
 
      5,520     3,482  
  Trade accounts receivable, less allowances of $59 in 2004 and $61 in 2003     1,985     2,091  
  Inventories     1,414     1,252  
  Prepaid expenses and other assets     1,501     1,571  
   
 
 
Total Current Assets     10,420     8,396  
   
 
 
Investments and Other Assets              
  Equity method investments              
    Coca-Cola Enterprises Inc.     1,541     1,260  
    Coca-Cola Hellenic Bottling Company S.A.     1,026     941  
    Coca-Cola FEMSA, S.A. de C.V.     736     674  
    Coca-Cola Amatil Limited     629     652  
    Other, principally bottling companies     1,635     1,697  
  Cost method investments, principally bottling companies     323     314  
  Other assets     3,101     3,322  
   
 
 
      8,991     8,860  
   
 
 
Property, Plant and Equipment              
  Land     456     419  
  Building and improvements     2,738     2,615  
  Machinery and equipment     6,621     6,159  
  Containers     456     429  
   
 
 
      10,271     9,622  
  Less allowances for depreciation     (4,100 )   (3,525 )
   
 
 
      6,171     6,097  
   
 
 
Trademarks With Indefinite Lives     2,004     1,979  
Goodwill     1,039     1,029  
Other Intangible Assets     675     981  
   
 
 
    $ 29,300   $ 27,342  
   
 
 

Page 9 of 15

THE COCA-COLA COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
(UNAUDITED)
(In millions)

Liabilities and Share-Owners' Equity

 
   September 30,
2004
   December 31,
2003
  
Current Liabilities              
  Accounts payable and accrued expenses   $ 4,021   $ 4,058  
  Loans and notes payable     3,946     2,583  
  Current maturities of long-term debt     1,384     323  
  Accrued income taxes     862     922  
   
 
 
Total Current Liabilities     10,213     7,886  
   
 
 
Long-Term Debt     1,188     2,517  
   
 
 
Other Liabilities     2,628     2,512  
   
 
 
Deferred Income Taxes     317     337  
   
 
 
Share-Owners' Equity              
  Common Stock, $0.25 par value
    Authorized: 5,600,000,000 shares
    Issued: 3,499,404,085 shares in 2004; 3,494,799,258 shares in 2003		     875     874  
  Capital surplus     4,837     4,395  
  Reinvested earnings     28,509     26,687  
  Accumulated other comprehensive income (loss)     (1,963 )   (1,995 )
   
 
 
      32,258     29,961  
  Less treasury stock, at cost
    (1,083,223,778 shares in 2004; 1,053,267,474 shares in 2003)		     (17,304 )   (15,871 )
   
 
 
      14,954     14,090  
   
 
 
    $ 29,300   $ 27,342  
   
 
 

Page 10 of 15

THE COCA-COLA COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(UNAUDITED)
(In millions)

 
   Nine Months Ended
September 30,
  
 
   2004
   2003
  
Operating Activities              
  Net income   $ 3,646   $ 3,420  
  Depreciation and amortization     630     622  
  Stock-based compensation expense     271     329  
  Deferred income taxes     (44 )   (69 )
  Equity income or loss, net of dividends     (359 )   (246 )
  Foreign currency adjustments     (35 )   (121 )
  Gain on issuance of stock by equity investee     (49 )   (8 )
  Gains on sales of assets     (17 )   (22 )
  Other operating charges     480     164  
  Other items     245     281  
  Net change in operating assets and liabilities     (178 )   (229 )
   
 
 
    Net cash provided by operating activities     4,590     4,121  
   
 
 
Investing Activities              
  Purchases of property, plant and equipment     (520 )   (565 )
  Proceeds from disposals of property, plant and equipment     56     54  
  Acquisitions and investments, principally trademarks and bottling companies     (243 )   (306 )
  Purchases of investments and other assets     (53 )   (190 )
  Proceeds from disposals of investments and other assets     57     95  
  Other investing activities     76     29  
   
 
 
    Net cash used in investing activities     (627 )   (883 )
   
 
 
Financing Activities              
  Issuances of debt     2,380     1,121  
  Payments of debt     (1,247 )   (1,007 )
  Issuances of stock     171     48  
  Purchases of stock for treasury     (1,472 )   (938 )
  Dividends     (1,809 )   (1,086 )
   
 
 
    Net cash (used in) provided by financing activities     (1,977 )   (1,862 )
   
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents     17     91  
   
 
 
Cash and Cash Equivalents              
  Net increase during the period     2,003     1,467  
  Balance at beginning of period     3,362     2,260  
   
 
 
    Balance at end of period   $ 5,365   $ 3,727  
   
 
 

Page 11 of 15

The Coca-Cola Company
Third Quarter and Year-To-Date 2004
Unit Case Volume Results

 
   Unit Case Volume Growth
(Based on Average Daily Sales)

   Reported Unit Case Volume Growth*
 
   2004 vs. 2003
% Change
   2004 vs. 2003
% Change
 
   Third Quarter
   Year-to-Date
   Year-to-Date
Worldwide   1   2   4
International Operations   3   2   4
  Africa   6   2   5
  Asia   9   6   8
  Europe, Eurasia and Middle East   (3)   (1)   1
  Latin America   5   3   5
North America Operations   (3)   Even   2

Unit case volume growth based on average daily sales is computed by comparing the average daily sales in each of the corresponding periods. Average daily sales for each quarter are the actual unit cases shipped during the quarter divided by the number of days in the quarter.

Reported unit case volume growth is computed by comparing the actual unit cases shipped in the first nine months of 2004 to the actual unit cases shipped in the first nine months of 2003. In the first nine months of 2004, these amounts are greater than the amounts computed on an average daily sales basis because of extra days in the first quarter of 2004 as compared to the first quarter of 2003. The difference in days will be largely offset in the fourth quarter of 2004.

* Note:   For the third quarter, "unit case volume growth based on average daily sales" is identical to "reported unit case volume growth" because there are no differences in the number of days. Therefore, a separate column is not included above for "reported unit case volume growth" in the third quarter.

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THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments (In millions)
(UNAUDITED)
Third Quarter

 
   Net Operating Revenues
   Operating Income
   Income Before Income Taxes
  
 
   Third
Quarter
2004
   Third
Quarter
2003
   % Fav./
(Unfav.)
   Third
Quarter
2004 (1)
   Third
Quarter
2003 (2)
   % Fav./
(Unfav.)
   Third
Quarter
2004 (1)
   Third
Quarter
2003 (2)(3)
   % Fav./
(Unfav.)
  
North America   $ 1,683   $ 1,699   (1 ) $ 377   $ 361   4   $ 379   $ 370   2  
Africa     279     197   42     83     65   28     79     67   18  
Asia     1,265     1,382   (8 )   451     410   10     462     417   11  
Europe, Eurasia & Middle East     1,847     1,820   1     160     589   (73 )   193     617   (69 )
Latin America     522     522   —     266     250   6     310     168   85  
Corporate     66     51   29     (240 )   (224 ) (7 )   (188 )   (141 ) (33 )
   
 
Consolidated   $ 5,662   $ 5,671   —   $ 1,097   $ 1,451   (24 ) $ 1,235   $ 1,498   (18 )
 
(1)
Operating income and income before income taxes for the third quarter of 2004 were reduced by $15 million for Asia, $371 million for Europe, Eurasia & Middle East, and $6 million for Corporate as a result of other operating charges recorded for asset impairments.

(2)
Operating income and Income before income taxes for the third quarter of 2003 were reduced by $13 million for North America, $1 million for Africa, $23 million for Europe, Eurasia & Middle East, $13 million for Latin America, and $5 million for Corporate as a result of other operating charges.

(3)
Income before income taxes for the third quarter of 2003 for Latin America was reduced by $95 million primarily for a charge related to one of the equity method investees.

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THE COCA-COLA COMPANY AND SUBSIDIARIES
Operating Segments (In millions)
(UNAUDITED)
Nine Months Ended September 30

 
   Net Operating Revenues
   Operating Income
   Income Before Income Taxes
  
 
   YTD
2004
   YTD
2003
   % Fav./
(Unfav.)
   YTD
2004 (1)
   YTD
2003 (2)
   % Fav./
(Unfav.)
   YTD
2004 (1)(3)
   YTD
2003 (2)(4)
   % Fav./
(Unfav.)
  
North America   $ 5,081   $ 4,827   5   $ 1,248   $ 1,017   23   $ 1,256   $ 1,051   20  
Africa     736     553   33     239     183   31     232     179   30  
Asia     3,642     3,912   (7 )   1,411     1,244   13     1,463     1,279   14  
Europe, Eurasia & Middle East     5,527     4,947   12     1,422     1,531   (7 )   1,469     1,562   (6 )
Latin America     1,544     1,490   4     781     725   8     922     695   33  
Corporate     175     139   26     (750 )   (571 ) (31 )   (542 )   (395 ) (37 )
   
 
Consolidated   $ 16,705   $ 15,868   5   $ 4,351   $ 4,129   5   $ 4,800   $ 4,371   10  
 
(1)
Operating income and income before income taxes for the nine months ended September 30, 2004 were reduced by $18 million for North America, $15 million for Asia, $377 million for Europe, Eurasia & Middle East, $6 million for Latin America, and $64 million for Corporate as a result of other operating charges recorded for asset impairments.

(2)
Operating income and income before income taxes for the nine months ended September 30, 2003 were reduced by $147 million for North America, $1 million for Africa, $92 million for Europe, Eurasia & Middle East, $16 million for Latin America, and $28 million for Corporate as a result of other operating charges. Operating income and income before income taxes for the nine months ended September 30, 2003 for Corporate were increased by $52 million as a result of a settlement related to a vitamin antitrust litigation matter.

(3)
Income before income taxes for the nine months ended September 30, 2004 for Latin America benefited by approximately $37 million for our proportionate share of a favorable tax settlement related to Coca-Cola FEMSA, S.A. de C.V. Income before income taxes for the nine months ended September 30, 2004 for Corporate benefited by approximately $49 million due to the issuances of stock by Coca-Cola Enterprises Inc.

(4)
Income before income taxes for the nine months ended September 30, 2003 for Latin America was reduced by $95 million primarily for a charge related to one of the equity method investees.

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The Coca-Cola Company

        The Coca-Cola Company is the world's largest beverage company. Along with Coca-Cola, recognized as the world's best-known brand, The Coca-Cola Company markets four of the world's top five soft drink brands, including diet Coke, Fanta and Sprite, and a wide range of other beverages, including diet and light soft drinks, waters, juices and juice drinks, teas, coffees and sports drinks. Through the world's largest distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate exceeding 1 billion servings each day. For more information about The Coca-Cola Company, please visit our website at www.coca-cola.com.

Forward-Looking Statements

This press release may contain statements, estimates or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company's historical experience and our present expectations or projections. These risks include, but are not limited to, changes in economic and political conditions; changes in the non-alcoholic beverages business environment, including actions of competitors and changes in consumer preferences; product boycotts; foreign currency and interest rate fluctuations; adverse weather conditions; the effectiveness of our advertising and marketing programs; fluctuations in the cost and availability of raw materials or necessary services; our ability to avoid production output disruptions; our ability to achieve earnings goals; our ability to effectively align ourselves with our bottling system; regulatory and legal changes; our ability to penetrate developing and emerging markets; litigation uncertainties; and other risks discussed in our Company's filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report on Form 10-K, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company undertakes no obligation to publicly update or revise any forward-looking statements.

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